Registration No. 2-69308
811-3097

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-1A

	REGISTRATION STATEMENT UNDER THE
	SECURITIES ACT OF 1933	[X]

	Pre-Effective Amendment  No.	[   ]

	Post-Effective Amendment No.    36    	[X]

	REGISTRATION STATEMENT UNDER THE
	INVESTMENT COMPANY ACT OF 1940	[X]

	Amendment No.    36     	[X]

SMITH BARNEY MANAGED MUNICIPALS FUND INC.
(Exact name of Registrant as specified in Charter)

388 Greenwich Street, New York, New York 10013
(Address of Principal Executive Offices) (Zip Code)

(212) 816-6474
Registrant's Telephone Number, including area code

Christina T. Sydor, 388 Greenwich Street, New York, New York
10013
(Name and Address of Agent for Service)

Continuous
(Approximate Date of Proposed Public Offering)


It is proposed that this filing becomes effective (check
appropriate box):


[  ]  Immediately upon filing pursuant to paragraph b	of Rule 485
[X ]  on August 21, 2000 pursuant to paragraph b of Rule 485

[  ]  60 days after filing pursuant to paragraph (a)(1)

[  ]  on (date) pursuant to paragraph(a)(1)

[  ]  75 days after filing pursuant to paragraph (a)(2)

[  ]  on (date) pursuant to paragraph (a)(2)


If appropriate, check the following box:

[  ]  This post-effective amendment designates a new
effective date for a previously filed post-effective
amendment

Part A  PROSPECTUS


<PAGE>

[GRAPHIC]

[SB]Smith Barney
[MF]Mutual Funds
Your Serious Money. Professionally Managed.(SM)



P R O S P E C T U S


Managed
Municipals
Fund

Class A, B, L, Y and 1 Shares
--------------------------------------------------------------------------------
June 28, 2000,
as amended August 21, 2000












The Securities and Exchange Commission has not approved or disapproved these
securities or determined whether this prospectus is accurate or complete. Any
statement to the contrary is a crime.
<PAGE>

Managed Municipals Fund

 Contents

<TABLE>
<S>                                                                          <C>
Investments, risks and performance..........................................   2

More on the fund's investments..............................................   8

Management..................................................................   9

Choosing a class of shares to buy...........................................  10

Comparing the fund's classes................................................  11

Sales charges...............................................................  12

More about deferred sales charges...........................................  16

Buying shares...............................................................  17

Exchanging shares...........................................................  18

Redeeming shares............................................................  20

Other things to know about share transactions...............................  23

Dividends, distributions and taxes..........................................  25

Share price.................................................................  26

Financial highlights........................................................  27
</TABLE>
You should know: An investment in the fund is not a bank deposit and is not
insured or guaranteed by the FDIC or any other government agency.

                                                       Smith Barney Mutual Funds

                                                                              1
<PAGE>

 Investments, risks and performance

Investment objective
The fund seeks to maximize current interest income which is excluded from gross
income for regular federal income tax purposes to the extent consistent with
prudent investment management and the preservation of capital.

Principal investment strategies
Key investments The fund invests at least 80% of its assets in municipal secu-
rities. Municipal securities include securities issued by any of the 50 states
and certain other municipal issuers, political subdivisions, agencies and pub-
lic authorities that pay interest which is exempt from federal income tax. The
fund focuses primarily on intermediate-term and long-term municipal securities
which have remaining maturities at the time of purchase of from three to more
than thirty years. The fund can invest up to 20% of its assets in below invest-
ment grade bonds or in unrated securities of equivalent quality (commonly known
as "junk bonds"). Investment grade bonds are those rated in any of the four
highest long-term rating categories, or if unrated, of comparable quality.

Selection process The manager selects securities primarily by identifying
undervalued sectors and individual securities, while also selecting securities
it believes will benefit from changes in market conditions. In selecting indi-
vidual securities, the manager:

 .  Uses fundamental credit analysis to estimate the relative value and attrac-
   tiveness of various securities and sectors and to exploit opportunities in
   the municipal bond market
 .  Measures the potential impact of supply/demand imbalances for obligations of
   different states, the yields available for securities with different maturi-
   ties and a security's maturity in light of the outlook for interest rates to
   identify individual securities that balance potential return and risk
 .  May trade between general obligation and revenue bonds and among various
   revenue bond sectors, such as housing, hospital and industrial development,
   based on their apparent relative values
 .  Identifies individual securities with the most potential for added value,
   such as those involving unusual situations, new issuers, the potential for
   credit upgrades, unique structural characteristics or innovative features

Managed Municipals Fund

 2
<PAGE>

Principal risks of investing in the fund
Investors could lose money on their investment in the fund, or the fund may not
perform as well as other investments, if:

 .  Interest rates rise, causing the value of the fund's portfolio to decline
 .  The issuer of a security owned by the fund defaults on its obligation to pay
   principal and/or interest or the security's credit rating is downgraded
 .  Municipal securities fall out of favor with investors
 .  Unfavorable legislation affects the tax-exempt status of municipal bonds
 .  The manager's judgment about the attractiveness, value or income potential
   of a particular security proves to be incorrect

It is possible that some of the fund's income distributions may be, and distri-
butions of the fund's gains generally will be, subject to federal taxation. The
fund may realize taxable gains on the sale of its securities or on transactions
in derivatives. Some of the fund's income may be subject to the federal alter-
native minimum tax. In addition, distributions of the fund's income and gains
will be subject to state personal income taxation.

Who may want to invest The fund may be an appropriate investment if you:

 .  Are a taxpayer in a high federal tax bracket seeking income exempt from fed-
   eral taxation
 .  Currently have exposure to other asset classes and are seeking to broaden
   your investment portfolio
 .  Are willing to accept the risks of municipal securities

                                                       Smith Barney Mutual Funds

                                                                               3
<PAGE>


Risk return bar chart
This bar chart indicates the risks of investing in the fund by showing changes
in the fund's performance from year to year. Past performance does not neces-
sarily indicate how the fund will perform in the future. The bar chart shows
the performance of the fund's Class A shares for each of the past 10 calendar
years. Class B, L and Y shares have different performance because of different
expenses. The performance information in the chart does not reflect sales
charges, which would reduce your return.

                          Total Return: Class A Shares


                                    [GRAPH]

                               90          5.16%
                               91         14.28%
                               92          9.40%
                               93         15.91%
                               94         (4.49)%
                               95         20.27%
                               96          5.61%
                               97         10.89%
                               98          4.58%
                               99         (7.17)%

                       Calendar years ended December 31

Quarterly returns:
Highest: 9.75% in 1st quarter 1995; Lowest: (3.53)% in 1st quarter 1994

Year to date: 5.98% through 6/30/00

Managed Municipals Fund

 4
<PAGE>


Risk return table
This table indicates the risks of investing in the fund by comparing the aver-
age annual total return of each class for the periods shown with that of the
Lehman Brothers Municipal Bond Index (the "Lehman Index"), a broad-based unman-
aged index of municipal bonds and the Lipper General Muni Debt Funds (the
"Lipper Average"), an average composed of the fund's peer group of mutual
funds. This table assumes imposition of the maximum sales charge applicable to
the class, redemption of shares at the end of the period, and reinvestment of
distributions and dividends.

                          Average Annual Total Returns
                     Calendar Years Ended December 31, 1999
<TABLE>
<CAPTION>
Class            1 year  5 years 10 years Since inception Inception date+
<S>             <C>      <C>     <C>      <C>             <C>
 A              (10.90)%  5.59%   6.69%        9.53%          3/4/81
 B              (11.66)%  5.76%    n/a         5.93%          11/6/92
 L               (9.51)%  5.64%    n/a         6.19%         11/19/94
 Y               (6.87)%   n/a     n/a         4.83%          4/4/95
 1                n/a      n/a     n/a          n/a              *
Lehman Index      2.06 %  6.91%   6.89%        9.05%            **
Lipper Average    4.62 %  5.77%   6.18%        8.85%            **
</TABLE>

**Index comparison begins on 3/31/81

 *Class 1 shares are currently not being offered. The inception date will be
 September 11, 2000.

                                                       Smith Barney Mutual Funds

                                                                              5
<PAGE>

Fee table
This table sets forth the fees and expenses you will pay if you invest in fund
shares.

                                Shareholder fees
<TABLE>
<CAPTION>
(fees paid directly from your
investment)                             Class A Class B Class L Class Y Class 1
<S>                                     <C>     <C>     <C>     <C>     <C>
Maximum sales charge (load) imposed on
purchases (as a % of offering price)     4.00%    None   1.00%   None    4.75%
Maximum deferred sales charge (load)
(as a % of the lower of net asset
value at purchase or redemption)         None*   4.50%   1.00%   None     None
</TABLE>

                         Annual fund operating expenses
<TABLE>
<CAPTION>
(expenses deducted from fund assets)   Class A Class B Class L Class Y Class 1
<S>                                    <C>     <C>     <C>     <C>     <C>
Management fees                         0.48%   0.48%   0.48%   0.48%   0.48%
Distribution and service (12b-1) fees   0.15%   0.65%   0.70%    None    None
Other expenses**                        0.05%   0.08%   0.07%   0.03%   0.24%
                                        -----   -----   -----   -----   -----
Total annual fund operating expenses    0.68%   1.21%   1.25%   0.51%   0.72%
                                        =====   =====   =====   =====   =====
</TABLE>

*You may buy Class A shares in amounts of $500,000 or more at net asset value
(without an initial sales charge) but if you redeem those shares within 12
months of their purchase, you will pay a deferred sales charge of 1.00%.

**"Other expenses" for Class 1 shares have been estimated for the first full
fiscal year of performance.

Managed Municipals Fund

 6
<PAGE>


Example
This example helps you compare the costs of investing in the fund with the
costs of investing in other mutual funds. Your actual costs may be higher or
lower. The example assumes:

 . You invest $10,000 in the fund for the period shown
 . Your investment has a 5% return each year
 . You reinvest all distributions and dividends without a sales charge
 . The fund's operating expenses remain the same

                      Number of years you own your shares
<TABLE>
<CAPTION>
                                       1 year 3 years 5 years 10 years
<S>                                    <C>    <C>     <C>     <C>
Class A (with or without redemption)    $467   $609    $764    $1,213
Class B (redemption at end of period)   $573   $684    $765    $1,319
Class B (no redemption)                 $123   $384    $665    $1,319
Class L (redemption at end of period)   $326   $493    $779    $1,596
Class L (no redemption)                 $226   $493    $779    $1,596
Class Y (with or without redemption)    $ 52   $164    $285    $  640
Class 1 (with or without redemption)    $545   $694     n/a     n/a
</TABLE>

                                                       Smith Barney Mutual Funds

                                                                              7
<PAGE>

 More on the fund's investments

Municipal securities Municipal securities are debt obligations issued by any of
the 50 states and their political subdivisions, agencies and public authorities
(together with certain other governmental issuers such as Puerto Rico, the Vir-
gin Islands and Guam). The interest on these bonds is exempt from federal
income tax. As a result, the interest rate on these bonds normally is lower
than it would be if the bonds were subject to taxation. The municipal securi-
ties in which the fund invests include general obligation bonds, revenue bonds
and notes, and municipal leases. These securities may pay interest at fixed,
variable or floating rates. The fund may also hold zero coupon securities which
pay no interest during the life of the obligation but trade at prices below
their stated maturity value.

Below investment grade securities Below investment grade securities, also known
as "junk bonds", are considered speculative with respect to the issuer's abil-
ity to pay interest and principal, involve a high risk of loss and are suscep-
tible to default or decline in market value because of adverse economic and
business developments. The market value for these securities tends to be very
volatile, and these securities are less liquid than investment grade debt secu-
rities.

Derivative contracts The fund may, but need not, use derivative contracts, such
as financial futures and options on financial futures, for any of the following
purposes:

 .  To hedge against the economic impact of adverse changes in the market value
   of portfolio securities because of changes in interest rates
 .  As a substitute for buying or selling securities

A futures contract will obligate or entitle the fund to deliver or receive an
asset or cash payment based on the change in value of one or more securities.
Even a small investment in futures can have a big impact on a fund's interest
rate exposure. Therefore, using futures can disproportionately increase losses
and reduce opportunities for gains when interest rates are changing. The fund
may not fully benefit from or may lose money on futures if changes in their
value do not correspond accurately to changes in the value of the fund's hold-
ings. The other parties to certain futures present the same types of default
risk as issuers of fixed income securities. Futures can also make a fund less
liquid and harder to value, especially in declining markets.

Defensive investing The fund may depart from its principal investment strate-
gies in response to adverse market, economic or political conditions by taking
temporary defensive positions in all types of money market and short-term debt
securities. If the fund takes a temporary defensive position, it may be unable
to achieve its investment goal.

Managed Municipals Fund

 8
<PAGE>

 Management

Manager The fund's investment adviser and administrator is SSB Citi Fund Man-
agement LLC (successor to SSBC Fund Management Inc.), an affiliate of Salomon
Smith Barney Inc. The manager's address is 388 Greenwich Street, New York, New
York 10013. The manager selects the fund's investments and oversees its opera-
tions. The manager and Salomon Smith Barney are subsidiaries of Citigroup Inc.
Citigroup businesses produce a broad range of financial services--asset manage-
ment, banking and consumer finance, credit and charge cards, insurance, invest-
ments, investment banking and trading--and use diverse channels to make them
available to consumer and corporate customers around the world.

Joseph P. Deane, investment officer of the manager and senior vice president
and managing director of Salomon Smith Barney, has been responsible for the
day-to-day management of the fund's portfolio since November 1988. Mr. Deane
has 30 years of securities business experience.

Management fees During the fiscal year ended February 29, 2000, the manager
received an advisory fee and an administrative fee equal to 0.31% and 0.17%,
respectively, of the fund's average daily net assets.

Distributor The fund has entered into agreements with Salomon Smith Barney,
Inc. and PFS Distributors Inc. to distribute the fund's shares.

Distribution plan The fund has adopted a Rule 12b-1 distribution plan for its
Class A, B and L shares. Under the plan, the fund pays distribution and/or
service fees. These fees are an ongoing expense and, over time, may cost you
more than other types of sales charges.

A distributor may make payments for distribution and/or shareholder servicing
activities out of its past profits and other available sources. A distributor
may also make payments for marketing, promotional or related expenses to deal-
ers. The amount of these payments is determined by the distributor and may be
substantial. SSB Citi or an affiliate may make similar payments under similar
arrangements.

Transfer agent and shareholder servicing agent Citi Fiduciary Trust Company
serves as the fund's transfer agent and shareholder servicing agent (the
"transfer agent"). The transfer agent has entered into sub-transfer agency and
services agreements with PFPC Global Fund Services and PFS Shareholder Services
to serve as the fund's sub-transfer agent (the "sub-transfer agents"). The sub-
transfer agents will perform certain functions including shareholder record
keeping and accounting services.

                                                       Smith Barney Mutual Funds

                                                                              9
<PAGE>

 Choosing a class of shares to buy

You can choose among four classes of shares: Classes A, B, L and Y. In addi-
tion, you can buy additional Class 1 shares if you are a Class 1 shareholder.
Each class has different sales charges and expenses, allowing you to choose the
class that best meets your needs. Which class is more beneficial to an investor
depends on the amount and intended length of the investment.

 .  If you plan to invest regularly or in large amounts, buying Class A shares
   may help you reduce sales charges and ongoing expenses.
 .  For Class B shares, all of your purchase amount and, for Class L shares,
   more of your purchase amount (compared to Class A shares) will be immedi-
   ately invested. This may help offset the higher expenses of Class B and
   Class L shares, but only if the fund performs well.
 .  Class L shares have a shorter deferred sales charge period than Class B
   shares. However, because Class B shares convert to Class A shares, and Class
   L shares do not, Class B shares may be more attractive to long-term invest-
   ors.

You may buy shares from:

 .  A broker-dealer, financial intermediary, financial institution or a
   distributor's financial consultants (each called a "Service Agent")

 .  The fund, but only if you are investing through certain dealer
   representatives

All Classes of shares are not available through all Service Agents. You should
contact your Service Agent for further information.

Investment minimums Minimum initial and additional investment amounts vary
depending on the class of shares you buy and the nature of your investment
account.

<TABLE>
<CAPTION>
                                             Initial        Additional
                                       Classes
                                       A, B, L    Class Y   All Classes
<S>                                    <C>      <C>         <C>
General                                 $1,000  $15 million     $50
Monthly Systematic Investment Plans      $25        n/a         $25
Quarterly Systematic Investment Plans    $50        n/a         $50
Uniform Gift to Minor Accounts           $250   $15 million     $50
</TABLE>

Managed Municipals Fund

10
<PAGE>

 Comparing the fund's classes

Your Service Agent can help you decide which class meets your goals. The Serv-
ice Agent may receive different compensation depending upon which class you
choose.

       Class A         Class B    Class L    Class Y
                                                       Class 1

Key
features
     . Initial       . No ini-
       sales           tial                          . Only
       charge          sales charge                    available
                                . Initial              to
                                  sales                eligible
                                  charge               Class 1
                                  is                   shareholders
                                  lower than
                                  Class A
                                           . No ini-
                                             tial or
                                             deferred
     . You may       . Deferred              sales
       qualify         sales                 charge
       for             charge              . Must
       reduction       declines . Deferred   invest
       or              over time  sales      at least
       waiver                     charge     $15
       of            . Converts   for        million . Higher
       initial         to         only 1               initial
       sales           Class A    year     . Lower     sales
       charge          after                 annual    charge
                       8 years               expenses
                                . Does       than the
     . Lower         . Higher     not        other   . Lower
       annual          annual     convert    classes   annual
       expenses        expenses   to                   expenses
       than            than       Class A              than
       Class B         Class A  . Higher               Class
       and                        annual               A, B
       Class L                    expenses             and L
                                  than
                                  Class A
--------------------------------------------------------------------------------
Initial
sales                                                Up to
charge                                               4.75%
     Up to           None       1.00%      None      reduced
     4.00%;                                          for large
     reduced                                         purchases
     for large
     purchases
     and
     waived
     for
     certain
     investors.
     No charge
     for
     purchases
     of
     $500,000
     or more
--------------------------------------------------------------------------------
Deferred
sales                                                None
charge
     1.00% on        Up to      1.00% if   None
     purchases       4.50%      you
     of              charged    redeem
     $500,000        when you   within
     or more         redeem     1 year of
     if you          shares.    purchase
     redeem          The
     within 1        charge is
     year of         reduced
     purchase        over time
                     and there
                     is no
                     deferred
                     sales
                     charge
                     after 6
                     years
--------------------------------------------------------------------------------
Annual
distribution                                         None
and
service
fees
     0.15% of        0.65% of   0.70% of   None
     average         average    average
     daily net       daily net  daily net
     assets          assets     assets
--------------------------------------------------------------------------------
Exchange
privilege*                                           Class 1
     Class A         Class B    Class L    Class Y   Shares of
     shares of       shares of  shares of  shares of Smith
     most            most       most       most      Barney
     Smith           Smith      Smith      Smith     funds
     Barney          Barney     Barney     Barney    that
     funds           funds      funds      funds     offer
                                                     Class 1
                                                     shares
                                                     and
                                                     Class A
                                                     shares of
                                                     other
                                                     certain
                                                     Smith
                                                     Barney
                                                     mutual
                                                     funds

--------------------------------------------------------------------------------

* Ask your Service Agent for the Smith Barney funds available for exchange.

                                                       Smith Barney Mutual Funds

                                                                              11
<PAGE>

 Sales charges

Class A shares
You buy Class A shares at the offering price, which is the net asset value plus
a sales charge. You pay a lower sales charge as the size of your investment
increases to certain levels called breakpoints. You do not pay a sales charge
on the fund's distributions or dividends you reinvest in additional Class A
shares.

The table below shows the rate of sales charge you pay, depending on the amount
you purchase.

The table below also shows the amount of broker/dealer compensation that is
paid out of the sales charge. This compensation includes commissions and other
fees Service Agents that sell shares of the Fund receive. The distributors keep
up to approximately 10% of the sales charge imposed on Class A shares. Service
Agents also will receive the service fee payable on Class A shares at an annual
rate equal to 0.25% of the average daily net assets represented by the Class A
shares sold by them.

<TABLE>
<CAPTION>
                                 Sales Charge as a % of
                                 Offering  Net amount
Amount of purchase               price (%) invested (%)
<S>                              <C>       <C>
Less than $25,000                  4.00        4.17
$25,000 but less than $50,000      3.50        3.63
$50,000 but less than $100,000     3.00        3.09
$100,000 but less than $250,000    2.50        2.56
$250,000 but less than $500,000    1.50        1.52
$500,000 or more                    -0-         -0-
</TABLE>

Investments of $500,000 or more You do not pay an initial sales charge when you
buy $500,000 or more of Class A shares. However, if you redeem these Class A
shares within one year of purchase, you will pay a deferred sales charge of 1%.

Qualifying for a reduced Class A sales charge There are several ways you can
combine multiple purchases of Class A shares of Smith Barney funds to take
advantage of the breakpoints in the sales charge schedule.

Managed Municipals Fund

12
<PAGE>


Accumulation privilege - lets you combine the current value of Class A shares
owned

 .  by you, or
 .  by members of your immediate family,

 and for which a sales charge was paid, with the amount of your next purchase
 of Class A shares for purposes of calculating the initial sales charge. Cer-
 tain trustees and fiduciaries may be entitled to combine accounts in deter-
 mining their sales charge.

Letter of intent - lets you purchase Class A shares of the fund and other Smith
Barney funds over a 13-month period and pay the same sales charge, if any, as
if all shares had been purchased at once. You may include purchases on which
you paid a sales charge within 90 days before you sign the letter.

Waivers for certain Class A investors Class A initial sales charges are waived
for certain types of investors, including:

 .  Employees of NASD members

 .  Investors participating in a fee-based program sponsored by certain broker-
   dealers affiliated with Citigroup

 .  Investors who redeemed Class A shares of a Smith Barney fund in the past 60
   days, if the investor's Service Agent is notified

If you want to learn about additional waivers of Class A initial sales charges,
contact your Service Agent or consult the Statement of Additional Information
("SAI").

                                                       Smith Barney Mutual Funds

                                                                              13
<PAGE>


Class B shares
You buy Class B shares at net asset value without paying an initial sales
charge. However, if you redeem your Class B shares within six years of pur-
chase, you will pay a deferred sales charge. The deferred sales charge
decreases as the number of years since your purchase increases.

<TABLE>
<CAPTION>
Year after purchase    1st  2nd 3rd 4th 5th 6th through 8th
<S>                    <C>  <C> <C> <C> <C> <C>
Deferred sales charge  4.5%  4%  3%  2%  1%        0%
</TABLE>

Class B conversion After 8 years, Class B shares automatically convert into
Class A shares. This helps you because Class A shares have lower annual
expenses. Your Class B shares will convert to Class A shares as follows:

<TABLE>
<CAPTION>
Shares issued:                          Shares issued:     Shares issued:
At initial                              On reinvestment of Upon exchange from
purchase                                dividends and      another Smith
                                        distributions      Barney fund
<S>                                     <C>                <C>
Eight years after the date of purchase  In same proportion On the date the
                                        as the number of   shares originally
                                        Class B shares     acquired would
                                        converting is to   have converted
                                        total Class B      into Class A
                                        shares you own     shares
                                        (excluding shares
                                        issued as a
                                        dividend)
</TABLE>

Managed Municipals Fund

14
<PAGE>


Class 1 sales charge

Class 1 shares are offerred to eligible Class 1 shareholders at the next deter-
mined net asset value plus a sales charge. You do not pay a sales charge on a
fund's distributions or dividends that you reinvest in additional Class 1
shares.

You pay a lower sales charge as the size of your investment increases to cer-
tain levels called breakpoints.

<TABLE>
<CAPTION>
                                                             Broker/Dealer
                                     Sales Charge as a % of    Commission
                                     Offering  Net amount      as a % of
Amount of investment                 price (%) invested (%) Offering Price)*
<S>                                  <C>       <C>          <C>
Less than $100,000                     4.75        4.99          4.25%
$100,000 but less than $250,000        3.75        3.90          3.25%
$250,000 but less than $500,000        3.00        3.09          2.50%
$500,000 but less than $1,000,000      2.00        2.04          1.60%
$1,000,000 but less than $2,500,000    1.00        1.01          0.75%
$2,500,000 but less than $5,000,000    0.50        0.50          0.40%
$5,000,000 or more                     0.25        0.25          0.20%
</TABLE>

Class L shares (available through certain Service Agents)
You buy Class L shares at the offering price, which is the net asset value plus
a sales charge of 1% (1.01% of the net amount invested). In addition, if you
redeem your Class L shares within one year of purchase, you will pay a deferred
sales charge of 1%. If you held Class C shares of the fund and/or other Smith
Barney mutual funds on June 12, 1998, you will not pay an initial sales charge
on Class L shares you buy before June 22, 2001.

Class Y shares (available through certain Service Agents)
You buy Class Y shares at net asset value with no initial sales charge and no
deferred sales charge when you redeem. You must meet the $15,000,000 initial
investment requirement. You can use a letter of intent to meet this requirement
by buying Class Y shares of the fund over a 13-month period. To qualify, you
must initially invest $5,000,000.

                                                       Smith Barney Mutual Funds

                                                                              15
<PAGE>


 More about deferred sales charges

The deferred sales charge is based on the net asset value at the time of pur-
chase or redemption, whichever is less. Therefore you do not pay a sales charge
on amounts representing appreciation or depreciation.

In addition, you do not pay a deferred sales charge on:

 .  Shares exchanged for shares of another Smith Barney fund
 .  Shares representing reinvested distributions and dividends
 .  Shares no longer subject to the deferred sales charge

Each time you place a request to redeem shares, the fund will first redeem any
shares in your account that are not subject to a deferred sales charge and then
the shares in your account that have been held the longest.

If you redeemed shares of a Smith Barney fund in the past 60 days and paid a
deferred sales charge, you may buy shares of the fund at the current net asset
value and be credited with the amount of the deferred sales charge, if you
notify your Service Agent.

The fund's distributors receive deferred sales charges as partial compensation
for their expenses in selling shares, including the payment of compensation to
your Service Agent.

Service Agents selling Class B shares receive a commission of up to 4.50% of
the purchase price of the Class B shares they sell, except for sales exempt
from the deferred sales charge. Service Agents also receive a service fee at an
annual rate equal to 0.25% of the average daily net assets represented by the
Class B shares they are servicing.

Service Agents selling Class L shares receive commission of up to 2.00% of the
purchase price of the Class L shares they sell.

Deferred sales charge waivers

The deferred sales charge for each share class will generally be waived:

 .  On payments made through certain systematic withdrawal plans
 .  For involuntary redemptions of small account balances
 .  For 12 months following the death or disability of a shareholder

If you want to learn more about additional waivers of deferred sales charges,
contact your Service Agent or consult the SAI.

Managed Municipals Fund

16
<PAGE>


 Buying shares

     Through a   You should contact your Service Agent to open a brokerage
 Service Agent   account and make arrangements to buy shares.

                 If you do not provide the following information, your order
                 will be rejected:
                 .  Class of shares being bought
                 .  Dollar amount or number of shares being bought

                 Your Service Agent may charge an annual account maintenance
                 fee.
--------------------------------------------------------------------------------

   Through the   Certain other investors who are clients of certain Service
     fund        Agents are eligible to buy shares directly from the fund.

                 .  Write the fund at the following address:
                      Smith Barney Managed Municipals Fund Inc.
                      (Specify class of shares)
                      c/o PFPC Global Fund Services
                      P.O. Box 9699
                      Providence, RI 02940-9699

                 .  Enclose a check made payable to the fund to pay for the
                    shares. For initial purchases, complete and send an
                    account application.

                 .  For more information, call, as applicable, PFS Shareholder
                    Services at 1-800-544-5445 or PFPC Global Fund Services at
                    1-800-451-2010.

--------------------------------------------------------------------------------
     Through a
    systematic   You may authorize your Service Agent or a sub-transfer agent
    investment   to transfer funds automatically from (i) a regular bank
          plan   account, (ii) cash held in a brokerage account opened with a
                 Service Agent or (iii) certain money market funds, in order
                 to buy shares on a regular basis.

                 .  Amounts transferred should be at least: $25 monthly or $50
                    quarterly

                 .  If you do not have sufficient funds in your account on a
                    transfer date, your Service Agent or the sub-transfer
                    agent may charge you a fee

                 For more information, contact your Service Agent or the
                 transfer agent or consult the SAI.

                                                       Smith Barney Mutual Funds

                                                                              17
<PAGE>


 Exchanging shares

  Smith Barney
      offers a   You should contact your Service Agent to exchange into other
   distinctive   Smith Barney funds. Be sure to read the prospectus of the
     family of   Smith Barney fund you are exchanging into. An exchange is a
         funds   taxable transaction.
   tailored to   .  You may exchange shares only for shares of the same class
 help meet the      of another Smith Barney fund. Not all Smith Barney funds
 varying needs      offer all classes.
 of both large
     and small   .  Not all Smith Barney funds may be offered in your state of
     investors      residence. Contact your Service Agent or the transfer
                    agent.

                 .  You must meet the minimum investment amount for each fund
                    (except for systematic investment plan exchanges).

                 .  If you hold share certificates, the transfer agent must
                    receive the certificates endorsed for transfer or with
                    signed stock powers (documents transferring ownership of
                    certificates) before the exchange is effective.
                 .  The fund may suspend or terminate your exchange privilege
                    if you engage in an excessive pattern of exchanges.
--------------------------------------------------------------------------------
     Waiver of   Your shares will not be subject to an initial sales charge at
    additional   the time of the exchange.
 sales charges

                 Your deferred sales charge (if any) will continue to be mea-
                 sured from the date of your original purchase. If the fund
                 you exchange into has a higher deferred sales charge, you
                 will be subject to that charge. If you exchange at any time
                 into a fund with a lower charge, the sales charge will not be
                 reduced.
--------------------------------------------------------------------------------
  By telephone
                 If you do not have a brokerage account with a Service Agent
                 you may be eligible to exchange shares through the fund. You
                 must complete an authorization form to authorize telephone
                 transfers. If eligible, you may make telephone exchanges on
                 any day the New York Stock Exchange is open. For clients of a
                 PFS Investments Registered Representative, call PFS Share-
                 holder Services at 1-800-544-5445 between 8:00 a.m. and 8:00
                 p.m. (Eastern time). All other shareholders should call

                                                       Smith Barney Mutual Funds

                                                                              18
<PAGE>


                 the transfer agent at 1-800-451-2010 between 9:00 a.m. and
                 4:00 p.m. (Eastern time). Requests received after the close
                 of regular trading on the Exchange are priced at the net
                 asset value next determined.

                 You can make telephone exchanges only between accounts that
                 have identical registrations.
--------------------------------------------------------------------------------
       By mail
                 If you do not have a brokerage account, contact your Service
                 Agent or write to a sub-transfer agent at the address on the
                 following page.

                                                       Smith Barney Mutual Funds

                                                                              19
<PAGE>

 Redeeming shares

     Generally
                 Contact your Service Agent to redeem shares of the fund.

                 If you hold share certificates, the sub-transfer agent must
                 receive the certificates endorsed for transfer or with signed
                 stock powers before the redemption is effective.

                 If the shares are held by a fiduciary or corporation, other
                 documents may be required.

                 Your redemption proceeds will be sent within three business
                 days after your request is received in good order. However,
                 if you recently purchased your shares by check, your redemp-
                 tion proceeds will not be sent to you until your original
                 check clears, which may take up to 15 days.

                 If you have a brokerage account with a Service Agent, your
                 redemption proceeds will be placed in your account and not
                 reinvested without your specific instruction. In other cases,
                 unless you direct otherwise, your redemption proceeds will be
                 paid by check mailed to your address of record.
--------------------------------------------------------------------------------
       By mail
                 For accounts held directly at the fund, send written requests
                 to the fund at either of the following addresses:

                 For clients of a PFS Investments Registered Representative,
                 write PFS Shareholder Services at the following address:

                      PFS Shareholder Services

                      P.O. Box 105043

                      Atlanta, GA 30348-5043

Managed Municipals Fund

20
<PAGE>


                 For all other investors, send your request to PFPC Global
                 Fund Services at the following address:

                      Smith Barney Managed Municipals Fund Inc.
                      (Specify class of shares)
                      c/o PFPC Global Fund Services
                      P.O. Box 9699
                      Providence, RI 02940-9699

                 Your written request must provide the following:

                 .  The fund and account number
                 .  The class of shares and the dollar amount or number of
                    shares to be redeemed
                 .  Signatures of each owner exactly as the account is regis-
                    tered
--------------------------------------------------------------------------------
  By telephone
                 If you do not have a brokerage account, you may be eligible
                 to redeem shares in amounts up to $50,000 per day through the
                 fund. You must complete an authorization form to authorize
                 telephone redemptions. If eligible, you may request redemp-
                 tions by telephone on any day the New York Stock Exchange is
                 open. For clients of PFS Investments Registered Representa-
                 tive, call PFS Shareholder Services at 1-800-544-5445 between
                 8:00 a.m. and 8:00 p.m. (Eastern time). All other sharehold-
                 ers should call the transfer agent at 1-800-451-2010 between
                 9:00 a.m. and 4:00 p.m. (Eastern time). Requests received
                 after the close of regular trading on the Exchange are priced
                 at the net asset value next determined.

                 Your redemption proceeds can be sent by check to your address
                 of record or by wire or electronic transfer (ACH) to a bank
                 account designated on your authorization form. You must sub-
                 mit a new authorization form to change the bank account des-
                 ignated to receive wire or electronic transfers and you may
                 be asked to provide certain other documents. The sub-transfer
                 agent may charge a fee on an electronic transfer (ACH).
--------------------------------------------------------------------------------
     Automatic   You can arrange for the automatic redemption of a portion of
          cash   your shares on a monthly or quarterly basis. To qualify you
    withdrawal   must own shares of the fund with a value of at least $10,000
         plans   and each automatic redemption must be at least $50. If your
                 shares are subject to a deferred sales charge, the sales
                 charge will be waived if

                                                       Smith Barney Mutual Funds

                                                                              21
<PAGE>

                 your automatic payments do not exceed 1% per month of the
                 value of your shares subject to a deferred sales charge.

                 The following conditions apply:

                 .  Your shares must not be represented by certificates
                 .  All dividends and distributions must be reinvested

                 For more information, contact your Service Agent or consult
                 the SAI.

Managed Municipals Fund

22
<PAGE>

 Other things to know about share transactions

When you buy, exchange or redeem shares, your request must be in good order.
This means you have provided the following information, without which your
request will not be processed:

 .  Name of the fund
 .  Account number
 .  Class of shares being bought, exchanged or redeemed
 .  Dollar amount or number of shares being bought, exchanged or redeemed
 .  Signature of each owner exactly as the account is registered

The fund will try to confirm that any telephone exchange or redemption request
is genuine by recording calls, asking the caller to provide certain personal
identification information, sending you a written confirmation or requiring
other confirmation procedures from time to time.

Signature guarantees To be in good order, your redemption request must include
a signature guarantee if you:

 .  Are redeeming over $50,000
 .  Are sending signed share certificates or stock powers to the sub-transfer
   agent
 .  Instruct the sub-transfer agent to mail the check to an address different
   from the one on your account
 .  Changed your account registration
 .  Want the check paid to someone other than the account owner(s)
 .  Are transferring the redemption proceeds to an account with a different reg-
   istration

You can obtain a signature guarantee from most banks, dealers, brokers, credit
unions and federal savings and loan institutions, but not from a notary public.

The fund has the right to:

 .  Suspend the offering of shares
 .  Waive or change minimum and additional investment amounts
 .  Reject any purchase or exchange order
 .  Change, revoke or suspend the exchange privilege
 .  Suspend telephone transactions

                                                       Smith Barney Mutual Funds

                                                                              23
<PAGE>

 .  Suspend or postpone redemptions of shares on any day when trading on the New
   York Stock Exchange is restricted, or as otherwise permitted by the Securi-
   ties and Exchange Commission
 .  Pay redemption proceeds by giving you securities. You may pay transaction
   costs to dispose of the securities

Small account balances If your account falls below $500 because of a redemption
of fund shares, the fund may ask you to bring your account up to $500. If your
account is still below $500 after 60 days, the fund may close your account and
send you the redemption proceeds.

Excessive exchange transactions The manager may determine that a pattern of
frequent exchanges is detrimental to the fund's performance and other share-
holders. If so, the fund may limit additional purchases and/or exchanges by the
shareholder.

Share certificates The fund does not issue share certificates unless a written
request signed by all registered owners is made to the sub-transfer agent. If
you hold share certificates it will take longer to exchange or redeem shares.

Managed Municipals Fund

24
<PAGE>

 Dividends, distributions and taxes

Dividends The fund pays dividends each month from its net investment income.
The fund generally makes capital gain distributions, if any, once a year, typi-
cally in December. The fund may pay additional distributions and dividends at
other times if necessary for the fund to avoid a federal tax. Capital gain dis-
tributions and dividends are reinvested in additional fund shares of the same
class you hold. The fund expects distributions to be primarily from income. You
do not pay a sales charge on reinvested distributions or dividends. Alterna-
tively, you can instruct your Service Agent or the transfer agent to have your
distributions and/or dividends paid in cash. You can change your choice at any
time to be effective as of the next distribution or dividend, except that any
change given to the transfer agent less than five days before the payment date
will not be effective until the next distribution or dividend is paid.

Taxes In general, redeeming shares, exchanging shares and receiving distribu-
tions (whether in cash or additional shares) are all taxable events.

<TABLE>
<CAPTION>
Transaction                            Federal tax status
<S>                                    <C>
Redemption or exchange of shares       Usually capital gain or
                                       loss; long-term only if
                                       shares owned more than one
                                       year
Long-term capital gain distributions   Taxable gain
Short-term capital gain distributions  Ordinary income
Dividends                              Exempt if from interest on
                                       tax-exempt securities,
                                       otherwise ordinary income
</TABLE>

Any taxable dividends and capital gain distributions are taxable whether
received in cash or reinvested in fund shares. Long-term capital gain distribu-
tions are taxable to you as long-term capital gain regardless of how long you
have owned your shares. You may want to avoid buying shares when the fund is
about to declare a capital gain distribution or a taxable dividend, because it
will be taxable to you even though it may actually be a return of a portion of
your investment.

After the end of each year, the fund will provide you with information about
the distributions and dividends you received and any redemptions of shares dur-
ing the previous year. If you do not provide the fund with your correct tax-
payer identification number and any required certifications, you may be subject
to back-up withholding of 31% of your distributions, divi-

                                                       Smith Barney Mutual Funds

                                                                              25
<PAGE>

dends, and redemption proceeds. Because each shareholder's circumstances are
different and special tax rules may apply, you should consult your tax adviser
about your investment in the fund.

 Share price

You may buy, exchange or redeem shares at their net asset value, plus any
applicable sales charge, next determined after receipt of your request in good
order. The fund's net asset value is the value of its assets minus its liabili-
ties. Net asset value is calculated separately for each class of shares. The
fund calculates its net asset value every day the New York Stock Exchange is
open. The Exchange is closed on certain holidays listed in the SAI. This calcu-
lation is done when regular trading closes on the Exchange (normally 4:00 p.m.,
Eastern time).

Generally, the fund's investments are valued by an independent pricing service.
If market quotations or a valuation from the pricing service is not readily
available for a security or if a security's value has been materially affected
by events occurring after the close of the Exchange or market on which the
security is principally traded, that security may be valued by another method
that the fund's board believes accurately reflects fair value. A fund that uses
fair value to price securities may value those securities higher or lower than
another fund using market quotations to price the same securities. A security's
valuation may differ depending on the method used for determining value.

In order to buy, redeem or exchange shares at that day's price, you must place
your order with your Service Agent or the fund's sub-transfer agents before the
New York Stock Exchange closes. If the Exchange closes early, you must place
your order prior to the actual closing time. Otherwise, you will receive the
next business day's price.

Service Agents must transmit all orders to buy, exchange or redeem shares to
the fund's sub-transfer agent before the sub-transfer agent's close of busi-
ness.

Managed Municipals Fund

26
<PAGE>

 Financial highlights

The financial highlights tables are intended to help you understand the perfor-
mance of each class for the past 5 years (or since inception if less than 5
years). Certain information reflects financial results for a single share.
Total return represents the rate that a shareholder would have earned (or lost)
on a fund share assuming reinvestment of all dividends and distributions. The
information in the following tables was audited by KPMG LLP, independent audi-
tors, whose report, along with the fund's financial statements, is included in
the annual report (available upon request).

 For a Class A share of capital stock outstanding throughout each year ended
 February 28, except where noted:
<TABLE>
<CAPTION>
                            2000(/1/)(/2/) 1999(/2/)   1998    1997  1996(/3/)
------------------------------------------------------------------------------
 <S>                        <C>            <C>       <C>     <C>     <C>
 Net asset value,
 beginning of year              $15.93      $16.19   $15.61  $16.20   $15.47
------------------------------------------------------------------------------
 Income (loss) from
 operations:
 Net investment income            0.75        0.74     0.79    0.88     0.91
 Net realized and
 unrealized gain (loss)          (1.79)      (0.10)    1.06   (0.18)    0.80
------------------------------------------------------------------------------
 Total income (loss) from
 operations                      (1.04)       0.64     1.85    0.70     1.71
------------------------------------------------------------------------------
 Less distributions from:
 Net investment income           (0.73)      (0.74)   (0.79)  (0.91)   (0.90)
 Excess of net investment
 income                            --        (0.05)     --      --       --
 Net realized gains                --        (0.11)   (0.48)  (0.38)   (0.08)
------------------------------------------------------------------------------
 Total distributions             (0.73)      (0.90)   (1.27)  (1.29)   (0.98)
------------------------------------------------------------------------------
 Net asset value, end of
 year                           $14.16      $15.93   $16.19  $15.61   $16.20
------------------------------------------------------------------------------
 Total return                    (6.62)%      4.07%   12.30%   4.51%   11.34%
------------------------------------------------------------------------------
 Net assets, end of year
 (millions)                     $1,778      $2,476   $2,367  $2,000   $1,892
------------------------------------------------------------------------------
 Ratios to average net
 assets:
 Expenses                         0.68%       0.67%    0.68%   0.68%    0.70%
 Net investment income            5.02        4.63     4.98    5.60     5.47
------------------------------------------------------------------------------
 Portfolio turnover rate            55%         45%     110%    103%      80%
------------------------------------------------------------------------------
</TABLE>
(/1/) For the year ended February 29, 2000
(/2/) Per share amounts are calculated using the monthly average shares method.
(/3/) For the year ended February 29, 1996.

                                                       Smith Barney Mutual Funds

                                                                              27
<PAGE>

 For a Class B share of capital stock outstanding throughout each year ended
 February 28, except where noted:
<TABLE>
<CAPTION>
                            2000(/1/)(/2/) 1999(/2/)   1998    1997  1996(/3/)
------------------------------------------------------------------------------
 <S>                        <C>            <C>       <C>     <C>     <C>
 Net asset value,
 beginning of year              $15.92      $16.19   $15.60  $16.20   $15.47
------------------------------------------------------------------------------
 Income (loss) from
 operations:
 Net investment income            0.68        0.66     0.72    0.79     0.82
 Net realized and
 unrealized gain (loss)          (1.79)      (0.11)    1.06   (0.18)    0.81
------------------------------------------------------------------------------
 Total income (loss) from
 operations                      (1.11)       0.55     1.78    0.61     1.63
------------------------------------------------------------------------------
 Less distributions from:
 Net investment income           (0.65)      (0.66)   (0.71)  (0.83)   (0.82)
 Excess of net investment
 income                            --        (0.05)     --      --       --
 Net realized gains                --        (0.11)   (0.48)  (0.38)   (0.08)
------------------------------------------------------------------------------
 Total distributions             (0.65)      (0.82)   (1.19)  (1.21)   (0.90)
------------------------------------------------------------------------------
 Net asset value, end of
 year                           $14.16      $15.92   $16.19  $15.60   $16.20
------------------------------------------------------------------------------
 Total return                    (7.08)%      3.48%   11.81%   3.92%   10.78%
------------------------------------------------------------------------------
 Net assets, end of year
 (millions)                     $  850      $1,206   $1,125  $  905   $  730
------------------------------------------------------------------------------
 Ratios to average net
 assets:
 Expenses                         1.21%       1.19%    1.20%   1.19%    1.22%
 Net investment income            4.50        4.11     4.46    5.09     4.94
------------------------------------------------------------------------------
 Portfolio turnover rate            55%         45%     110%    103%      80%
------------------------------------------------------------------------------
</TABLE>
(/1/) For the year ended February 29, 2000.
(/2/) Per share amounts are calculated using the monthly average shares method.
(/3/) For the year ended February 29, 1996.

Managed Municipals Fund

28
<PAGE>

 For a Class L share of capital stock outstanding throughout each year ended
 February 28, except where noted:
<TABLE>
<CAPTION>
                            2000(/1/)(/2/) 1999(/2/)(/3/) 1998(/2/)     1997
1996(/4/)
--------------------------------------------------------------------------------
-------
 <S>                        <C>            <C>            <C>        <C>
<C>
 Net asset value,
 beginning of year               $15.92         $16.18      $15.60    $16.20
$15.47
--------------------------------------------------------------------------------
-------
 Income (loss) from
 operations:
 Net investment income             0.67           0.65        0.70      0.79
0.82
 Net realized and
 unrealized gain (loss)           (1.80)         (0.10)       1.06     (0.18)
0.81
--------------------------------------------------------------------------------
-------
 Total income (loss) from
 operations                       (1.13)          0.55        1.76      0.61
1.63
--------------------------------------------------------------------------------
-------
 Less distributions from:
 Net investment income            (0.64)         (0.65)      (0.70)    (0.83)
(0.82)
 Excess of net investment
 income                             --           (0.05)        --        --
--
 Net realized gains                 --           (0.11)      (0.48)    (0.38)
(0.08)
--------------------------------------------------------------------------------
-------
 Total distributions              (0.64)         (0.81)      (1.18)    (1.21)
(0.90)
--------------------------------------------------------------------------------
-------
 Net asset value, end of
 year                            $14.15         $15.92      $16.18    $15.60
$16.20
--------------------------------------------------------------------------------
-------
 Total return                     (7.19)%         3.49%      11.69%     3.88%
10.76%
--------------------------------------------------------------------------------
-------
 Net assets, end of year
 (000)'s                       $141,570       $183,578    $126,766   $72,597
$33,411
--------------------------------------------------------------------------------
-------
 Ratios to average net
 assets:
 Expenses                          1.25%          1.24%       1.25%     1.24%
1.27%
 Net investment income             4.46           4.06        4.38      5.04
4.86
--------------------------------------------------------------------------------
-------
 Portfolio turnover rate             55%            45%        110%      103%
80%
--------------------------------------------------------------------------------
-------
</TABLE>
(/1/) For the year ended February 29, 2000.
(/2/) Per share amounts are calculated using the monthly average shares method.
(/3/) On June 12, 1998, Class C shares were renamed Class L shares.
(/4/) For the year ended February 29, 1996.

                                                       Smith Barney Mutual Funds

                                                                              29
<PAGE>

 For a Class Y share of capital stock outstanding throughout each year ended
 February 28, except where noted:
<TABLE>
<CAPTION>
                            2000(/1/)(/2/) 1999(/2/) 1998(/2/) 1997(/2/)
1996(/3/)
--------------------------------------------------------------------------------
----
 <S>                        <C>            <C>       <C>       <C>       <C>
 Net asset value,
 beginning of year              $15.95       $16.19    $15.60   $16.20
$15.63
--------------------------------------------------------------------------------
----
 Income (loss) from
 operations:
 Net investment income            0.79         0.73      0.82     0.90
0.85
 Net realized and
 unrealized gain (loss)          (1.80)       (0.04)     1.07    (0.18)
0.65
--------------------------------------------------------------------------------
----
 Total income (loss) from
 operations                      (1.01)        0.69      1.89     0.72
1.50
--------------------------------------------------------------------------------
----
 Less distributions from:
 Net investment income           (0.76)       (0.76)    (0.82)   (0.94)
(0.85)
 Excess of net investment
 income                            --         (0.06)      --       --         --
 Net realized gains                --         (0.11)    (0.48)   (0.38)
(0.08)
--------------------------------------------------------------------------------
----
 Total distributions             (0.76)       (0.93)    (1.30)   (1.32)
(0.93)
--------------------------------------------------------------------------------
----
 Net asset value, end of
 year                           $14.18       $15.95    $16.19   $15.60
$16.20
--------------------------------------------------------------------------------
----
 Total return                    (6.44)%       4.39%    12.56%    4.59%
9.84%++
--------------------------------------------------------------------------------
----
 Net assets, end of year
 (000)'s                       $38,110      $11,626   $11,893   $5,350
$12,314
--------------------------------------------------------------------------------
----
 Ratio to average net
 assets:
 Expenses                         0.51%        0.50%     0.52%    0.52%
0.57%+
 Net investment income            5.27         4.84      5.06     5.76
5.62+
--------------------------------------------------------------------------------
----
 Portfolio turnover rate            55%          45%      110%     103%
80%
--------------------------------------------------------------------------------
----
</TABLE>
(/1/) For the year ended February 29, 2000.
(/2/) Per share amounts are calculated using the monthly average shares method.
(/3/) For the period from April 4, 1995 (inception date) to February 29, 1996.
 ++   Total return is not annualized, as it may not be representative of the
      total return for the year.
 +    Annualized.

Managed Municipals Fund

30
<PAGE>

                    (This page is intentionally left blank.)
<PAGE>
[SB]Smith Barney
[MF]Mutual Fund

Your Serious Money. Professionally Managed./SM/


Managed Municipals Fund

Shareholder reports Annual and semiannual reports to shareholders provide addi-
tional information about the fund's investments. These reports discuss the mar-
ket conditions and investment strategies that affected the fund's performance.

The fund sends only one report to a household if more than one account has the
same address. Contact your Service Agent or the transfer agent if you do not
want this policy to apply to you.

Statement of additional information The statement of additional information
provides more detailed information about the fund and is incorporated by refer-
ence into (is legally part of) this prospectus.

You can make inquiries about the fund or obtain shareholder reports or the
statement of additional information (without charge) by contacting your Service
Agents by calling the fund's sub-transfer agents (PFS Shareholder Services at
1-800-544-5445 or PFPC Global Fund Services at 1-800-451-2010), or by writing
to the fund at Smith Barney Mutual Funds, 388 Greenwich Street, MF2, New York,
New York 10013.

Information about the fund (including the SAI) can be reviewed and copied at
the Securities andExchange Commission's (the "Commission") Public Reference
Room in Washington, D.C. In addition, information on the operation of the Pub-
lic Reference Room may be obtained by calling the Commission at 1-202-942-8090.
Reports and other information about the Fund are available on the EDGAR Data-
base on the Commission's Internet site at http://www.sec.gov. Copies of this
information may be obtained for a duplicating fee by electronic request at the
following E-mail address: publicinfo@sec.gov, or by writing the Commission's
Public Reference Section, Washington, D.C. 20549-0102.

If someone makes a statement about the fund that is not in this prospectus, you
should not rely upon that information. Neither the fund nor the distributor is
offering to sell shares of the fund to any person to whom the fund may not law-
fully sell its shares.

(Investment Company Act
file no. 811-03097)
FD0261 6/00




Part B  STATEMENT OF ADDITIONAL INFORMATION


June 28, 2000,
as amended on August 21, 2000

STATEMENT OF ADDITIONAL INFORMATION

SMITH BARNEY MANAGED MUNICIPALS FUND INC.

388 Greenwich Street
New York, New York 10013
(800) 451-2010


This Statement of Additional Information ("SAI") is
not a prospectus and is meant to be read in
conjunction with the Prospectus of the Smith Barney
Managed Municipals Fund Inc. (the "fund") dated June
28, 2000, as amended or supplemented from time to time
(the "prospectus"), and is incorporated by reference
in its entirety into the prospectus.  Additional
information about the fund's investments is available
in the fund's annual and semi-annual reports to
shareholders that are incorporated herein by
reference.  The prospectus and copies of the reports
may be obtained free of charge by contacting a Salomon
Smith Barney Financial Consultant, or a registered
representative of PFS Distributors, Inc., or by
writing or calling Salomon Smith Barney Inc. at the
address or telephone number above.

TABLE OF CONTENTS

Directors and Executive Officers of the Fund	2
Investment Objective and Management Policies	5
Investment
Restrictions................................13
Risk Factors and Special Considerations Relating
to Municipal Securities...................15
Portfolio
Transactions................................16
Portfolio
Turnover..................................17
Purchase of Shares.......................18
	PFS Accounts
	...........................................24
Determination of Net Asset
Value.................................................................26
Redemption of Shares	27
Investment Management and Other Services	30
Valuation of Shares	36
Exchange Privilege	36
Performance Data	38
Dividends, Distributions and Taxes	43
Additional Information	47
Financial
Statements.......................48
Other
Information.....................48
Appendix A....................50


DIRECTORS AND EXECUTIVE OFFICERS OF THE FUND

The names of the directors of the fund and executive
officers of the fund, together with information as to
their principal business occupations, are set forth
below.  The executive officers of the fund are
employees of organizations that provide services to
the fund.  Each director who is an "interested person"
of the fund, as defined in the 1940 Act, is indicated
by an asterisk. The address of the "non-interested"
directors and executive officers of the fund is 388
Greenwich Street, New York, New York 10013, except as
noted otherwise.

Herbert Barg (Age 77).  Director
Private Investor.  Director or trustee of 16
investment companies associated with Citigroup Inc.
("Citigroup") His address is 273 Montgomery Avenue,
Bala Cynwyd, Pennsylvania 19004.

*Alfred J. Bianchetti (Age 77).  Director
Retired; formerly Senior Consultant to Dean Witter
Reynolds Inc. Director or trustee of 11 investment
companies associated with Citigroup. His address is 19
Circle End Drive, Ramsey, New Jersey 07466.

Martin Brody (Age 78).  Director
Consultant, HMK Associates; Retired Vice Chairman of
the Board of Restaurant Associates Corp. Director or
trustee of 21 investment companies associated with
Citigroup. His address is c/o HMK Associates, 30
Columbia Turnpike, Florham Park, New Jersey 07932.

Dwight B. Crane (Age 62).  Director
Professor, Harvard Business School. Director or
trustee of 24 investment companies associated with
Citigroup. His address is c/o Harvard Business School,
Soldiers Field Road, Boston, Massachusetts 02163.

Burt N. Dorsett (Age 69).  Director
Managing Partner of Dorsett McCabe Management. Inc.,
an investment counseling firm; Director of Research
Corporation Technologies, Inc., a nonprofit patent
clearing and licensing firm. Director or trustee of 11
investment companies associated with Citigroup. His
address is 201 East 62nd Street, New York, New York
10021.

Elliot S. Jaffe (Age 74).  Director
Chairman of the Board and President of The Dress Barn,
Inc. Director or trustee of 11 investment companies
associated with Citigroup.  His address is 30 Dunnigan
Drive, Suffern, New York 10901.

Stephen E. Kaufman (Age 68).  Director
Attorney. Director or trustee of 13 investment
companies associated with Citigroup. His address is
277 Park Avenue, New York, New York 10172.



Joseph J. McCann (Age 69).  Director
Financial Consultant; Retired Financial Executive,
Ryan Homes, Inc. Director or trustee of 11 investment
companies associated with Citigroup. His address is
200 Oak Park Place, Pittsburgh, Pennsylvania 15243.

*Heath B. McLendon (Age 67).  Chairman of the Board,
President and Chief Executive Officer
Managing Director of Salomon Smith Barney Inc.;
President of SSB Citi Fund Management LLC (successor
to SSBC Fund Management, Inc.) ("SSB Citi" or the
"manager") and Travelers Investment Adviser, Inc.
("TIA"); Chairman or Co-Chairman of the Board and
director or trustee of 78 investment companies
associated with Citigroup. His address is 7 World
Trade Center, New York, New York 10048.

Cornelius C. Rose, Jr. (Age 66).  Director
President, Cornelius C. Rose Associates, Inc.,
financial consultants, and Chairman and Director of
Performance Learning Systems, an educational
consultant. Director or trustee of 11 investment
companies associated with Citigroup.  His address is
Meadowbrook Village, Building 4, Apt 6, West Lebanon,
New Hampshire 03784.

Lewis E. Daidone (Age 42).  Senior Vice President and
Treasurer
Managing Director of Salomon Smith Barney; Chief
Financial Officer of the Smith Barney Mutual funds;
Director and Senior Vice President of SSB Citi and
TIA. Senior Vice President or Executive Vice President
and Treasurer of 61 investment companies associated
with Citigroup. His address is 125 Broad Street, New
York, New York 10004.

Joseph P. Deane (Age 52).  Vice President and
Investment Officer
Investment Officer of SSB Citi;  Managing Director of
Salomon Smith Barney; Investment Officer of 9 Smith
Barney Mutual Funds.  His address is 7 World Trade
Center, New York, New York 10048.

Paul Brook (Age 46). Controller
Director of Salomon Smith Barney; from 1997-1998
Managing Director of AMT Capital Services Inc.; prior
to 1997, Partner with Ernst & Young LLP. Controller or
Assistant Treasurer of 43 investment companies
associated with Citigroup. His address is 125 Broad
Street, New York, New York 10004.

Christina T. Sydor (Age 49).  Secretary
Managing Director of Salomon Smith Barney; General
Counsel and Secretary of SSB Citi and TIA. Secretary
of 61 investment companies associated with Citigroup.
Her address is 388 Greenwich Street, New York, New
York  10013.

No officer, director or employee of Salomon Smith
Barney or any of its affiliates receives any
compensation from the fund for serving as an officer
of the funds or director of the fund.  The fund pays
each director who is not an officer, director or
employee of Salomon Smith Barney or any of its
affiliates a fee of $4,000 per annum plus $500 per in-
person meeting and $100 per telephonic meeting.  Each
director emeritus who is not an officer, director or
employee of Salomon Smith Barney or its affiliates
receives a fee of $2,000 per annum plus $250 per in-
person meeting and $50 per telephonic meeting.  All
directors are reimbursed for travel and out-of-pocket
expenses incurred to attend such meetings. For the
fiscal year ended February 29, 2000, the directors
were reimbursed, in the aggregate, $14,438 for travel
and out-of-pocket expenses.

For the fiscal year ended February 29, 2000, the
directors of the fund were paid the following
compensation:






Name of Person




Aggregate
Compensati
on
From Fund
Total
Pension or
Retirement
Benefits
Accrued
As part of
Fund
Expenses


Compensati
on
From Fund
And Fund
Complex
Paid to
Directors+


Number of
Funds for
Which
Directors
Serve Within
Fund Complex

Herbert Barg **
$6,3 00
$0
$114,288
16
Alfred
Bianchetti *
 5,800
  0
   53,900
11
Martin Brody **
 5,600
  0
 138,600
21
Dwight B. Crane
**
 6,100
  0
 155,363
24
Burt N. Dorsett
**
 6,300
  0
   57,950
11
Elliot S. Jaffe
**
 5,600
  0
   45,100
11
Stephen E.
Kaufman **
 6,300
  0
   110,650
13
Joseph J. McCann
**
 6,300
  0
   58,050
11
Heath B.
McLendon *
0
 0
0
71
Cornelius C.
Rose, Jr. **
 6,200
  0
   53,500
11

+	For the calendar year ended December 31, 1999.
*	Designates an "interested" director.
**	Designates member of Audit Committee.
	Upon attainment of age 80, fund directors are
required to change to emeritus status. Directors
emeritus are entitled to serve in emeritus
status for a maximum of 10 years.  A director
emeritus may attend meetings but has no voting
rights. During the fund's last fiscal year,
aggregate compensation paid by the fund to
directors achieving emeritus status totaled
$3,000.

As of August 11, 2000, the directors and officers of
the funds, as a group, owned less than 1% of the
outstanding shares of beneficial interest of the fund.


To the best knowledge of the directors, as of August
11, 2000, the following shareholders or "groups" (as
such term is defined in Section 13(d) of the
Securities Exchange Act of 1934, as amended) owned
beneficially or of record more than 5% of the shares
of the following classes:

Shareholder
        Class
Shares Held

Mr. David J. Heerensperger
96 Cascade Key
Bellevue, WA  98006-1030

Barry Baker
USA Networks, Inc.
152 W. 57th Street
42nd Floor
New York, NY 10019

Randolph McCormick, Sr.
Broussard Poche, Lewis
And Breaux, CPAs
Attn: Peter Borello
994 E. Prudhomme St.
Opelousas, LA 70570-8239

Lawrence J. Bogan
632 Club Lane
Marietta, GA  30067-4618


Y



Y






Y






Y

Owned 1,183,284.435
66.36% of shares


Owned 4,687,142.94
17.50% of shares





Owned 2,175,953.46
8.12% of shares





Owned 2,136,838.12
7.97% of shares

INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES

The prospectus discusses the fund's investment
objective and the policies it employs to achieve its
objective.  The following discussion supplements the
description of the fund's investment objective and
management policies in the prospectus.  For purposes
of this SAI, intermediate- and long-term debt
obligations issued by or on behalf of states,
territories and possessions of the United States and
the District of Columbia and their political
subdivisions, agencies or instrumentalities, or
multistate agencies or authorities, are collectively
referred to as "Municipal Bonds.''  SSB Citi serves as
investment manager and administrator to the fund.

The fund will operate subject to a fundamental
investment policy providing that, under normal market
conditions, the fund will invest at least 80% of its
net assets in Municipal Bonds.  For temporary
defensive purposes, the fund may invest without limit
in "Temporary Investments" as described below.
Diversified Classification

The fund is classified as a diversified fund under the
Investment Company Act of 1940, as amended (the "1940
Act").  In order to be classified as a diversified
investment company under the 1940 Act, the fund may
not, with respect to 75% of its assets, invest more
than 5% of its total assets in the securities of any
one issuer (except U.S. government securities) or own
more than 10% of the outstanding voting securities of
any one issuer.  For the purposes of diversification
under the 1940 Act, the identification of the issuer
of Municipal Bonds depends upon the terms and
conditions of the security.  When the assets and
revenues of an agency, authority, instrumentality or
other political subdivision are separate from those of
the government creating the issuing entity and the
security is backed only by the assets and revenues of
such entity, such entity is deemed to be the sole
issuer. Similarly, in the case of a private activity
bond, if that bond is backed only by the assets and
revenues of the nongovernmental user, then such
nongovernmental user is deemed to be the sole issuer.
 If, however, in either case, the creating government
or some other entity guarantees a security, such a
guarantee would be considered a separate security and
is to be treated as an issue of such government or
other entity.

Use of Ratings as Investment Criteria

In general, the ratings of Moody's Investors Service,
Inc. ("Moody's") and Standard & Poor's Ratings Group
("S&P") and other nationally recognized statistical
ratings organizations ("NRSROs") represent the
opinions of those agencies as to the quality of the
Municipal Bonds and short-term investments which they
rate.  It should be emphasized, however, that such
ratings are relative and subjective, are not absolute
standards of quality and do not evaluate the market
risk of securities. These ratings will be used by the
fund as initial criteria for the selection of
portfolio securities, but the fund also will rely upon
the independent advice of the manager to evaluate
potential investments. Among the factors that will be
considered are the long-term ability of the issuer to
pay principal and interest and general economic
trends.  To the extent the fund invests in lower-rated
and comparable unrated securities, the fund's
achievement of its investment objective may be more
dependent on the manager's credit analysis of such
securities than would be the case for a portfolio
consisting entirely of higher-rated securities.  The
Appendix contains further information concerning the
ratings of Moody's and S&P and their significance.

Subsequent to its purchase by the fund, an issue of
Municipal Bonds may cease to be rated or its rating
may be reduced below the rating given at the time the
securities were acquired by the fund. Neither event
will require the sale of such Municipal Bonds by the
fund, but the manager will consider such event in its
determination of whether the fund should continue to
hold such Municipal Bonds.  In addition, to the extent
the ratings change as a result of changes in such
organizations, in their rating systems or because of a
corporate restructuring of Moody's, S&P or any NRSRO,
the fund will attempt to use comparable ratings as
standards for its investments in accordance with its
investment objective and policies.

The fund generally will invest at least 80% of its
total assets in investment grade debt obligations
rated no lower than Baa, MIG 3 or Prime-1 by Moody's
or BBB,  SP-2 or A-1 by S&P, or have the equivalent
rating by any NRSRO or in unrated obligations of
comparable quality.  Unrated obligations will be
considered to be of investment grade if deemed by the
manager to be comparable in quality to instruments so
rated, or if other outstanding obligations of the
issuers thereof are rated Baa or better by Moody's or
BBB or better by S&P.  The balance of the fund's
assets may be invested in securities rated as low as C
by Moody's or D by S&P or have the equivalent rating
by any NRSRO, or deemed by the manager to be
comparable unrated securities, which are sometimes
referred to as "junk bonds."  Securities in the fourth
highest rating category, though considered to be
investment grade, have speculative characteristics.
Securities rated as low as D are extremely speculative
and are in actual default of interest and/or principal
payments.  It should be emphasized that ratings are
relative and subjective and are not absolute standards
of quality.

Although these ratings are initial criteria for
selection of portfolio investments, the fund also will
make its own evaluation of these securities.  Among
the factors that will be considered are the long-term
ability of the issuers to pay principal and interest
and general economic trends. The value of debt
securities varies inversely to changes in the
direction of interest rates.  When interest rates
rise, the value of debt securities generally falls,
and when interest rates fall, the value of debt
securities generally rises.

Low and Comparable Unrated Securities.  While the
market values of low-rated and comparable unrated
securities tend to react less to fluctuations in
interest rate levels than the market values of higher
rated securities, the market values of certain low-
rated and comparable unrated municipal securities also
tend to be more sensitive than higher-rated securities
to short-term corporate and industry developments and
changes in economic conditions (including recession)
in specific regions or localities or among specific
types of issuers,  In addition, low-rated securities
and comparable unrated securities generally present a
higher degree of credit risk.  During an economic
downturn or a prolonged period of rising interest
rates, the ability of issuers of low-rated and
comparable unrated securities to service their payment
obligations, meet projected goals or obtain additional
financing may be impaired.  The risk of loss because
of default by such issuers is significantly greater
because low-rated and comparable unrated securities
generally are unsecured and frequently are
subordinated to the prior payment of senior
indebtedness.  The fund may incur additional expenses
to the extent it is required to seek recovery upon a
default in payment of principal or interest on its
portfolio holdings.

While the market for municipal securities is
considered to be generally adequate, the existence of
limited markets for particular low-rated and
comparable unrated securities may diminish the fund's
ability to (a) obtain accurate market quotations for
purposes of valuing such securities and calculating
its net asset value and (b) sell the securities at
fair value either to meet redemption requests or to
respond to changes in the economy or in the financial
markets.  The market for certain low-rated and
comparable unrated securities has not fully weathered
a major economic recession. Any such recession,
however, would likely disrupt severely the market for
such securities and adversely affect the value of the
securities and the ability of the issuers of such
securities to repay principal and pay interest
thereon.

Fixed-income securities, including low-rated
securities and comparable unrated securities,
frequently have call or buy-back features that permit
their issuers to call or repurchase the securities
from their holders, such as the fund.  If an issuer
exercises these rights during periods of declining
interest rates, the fund may have to replace the
security with a lower yielding security, thus
resulting in a decreased return to the fund.

Municipal Bonds  Municipal Bonds generally are
understood to include debt obligations issued to
obtain funds for various public purposes, including
construction of a wide range of public facilities,
refunding of outstanding obligations, payment of
general operating expenses and extensions of loans to
public institutions and facilities.  Private activity
bonds issued by or on behalf of public authorities to
finance various privately operated facilities are
included within the term Municipal Bonds if the
interest paid thereon qualifies as excluded from gross
income (but not necessarily from alternative minimum
taxable income) for federal income tax purposes in the
opinion of bond counsel to the issuer.

The yield on Municipal Bonds is dependent on a variety
of factors, including general economic and monetary
conditions, general money market factors, general
conditions of the Municipal Bond market, the financial
condition of the issuer, the size of a particular
offering, maturity of the obligation offered and the
rating of the issue.

Municipal Bonds also may be subject to the provisions
of bankruptcy, insolvency and other laws affecting the
rights and remedies of creditors, such as the federal
Bankruptcy Code, and laws, if any, which may be
enacted by Congress or state legislatures extending
the time for payment of principal or interest, or
both, or imposing other constraints upon enforcement
of such obligations or upon the ability of
municipalities to levy taxes.  The possibility also
exists that, as a result of litigation or other
conditions, the power or ability of any one or more
issuers to pay, when due, the principal of and
interest on its or their Municipal Bonds may be
materially and adversely affected.

Municipal Leases. The fund may invest without limit in
"municipal leases", which are obligations issued by
state and local governments or authorities to finance
the acquisition of equipment or facilities.  The
interest on such obligations is, in the opinion of
counsel to the issuers, excluded from gross income for
federal income tax purposes.  Although lease
obligations do not constitute general obligations of
the municipality for which the municipality's taxing
power is pledged, a lease obligation is ordinarily
backed by the municipality's covenant to budget for,
appropriate and make the payments due under the lease
obligation.  However, certain lease obligations
contain "non-appropriation" clauses which provide that
the municipality has no obligation to make lease or
installment purchase payments in future years unless
money is appropriated for such purpose on a yearly
basis.  In addition to the "non-appropriation" risk,
these securities represent a relatively new type of
financing that has not yet developed the depth of
marketability associated with more conventional bonds.
 Although "non-appropriation" lease obligations are
often secured by the underlying property, disposition
of the property in the event of foreclosure might
prove difficult. There is no limitation on the
percentage of the fund's assets that may be invested
in municipal lease obligations.  In evaluating
municipal lease obligations, the manager will consider
such factors as it deems appropriate, which may
include:  (a) whether the lease can be canceled; (b)
the ability of the lease obligee to direct the sale of
the underlying assets; (c) the general
creditworthiness of the lease obligor; (d) the
likelihood that the municipality will discontinue
appropriating funding for the leased property in the
event such property is no longer considered essential
by the municipality; (e) the legal recourse of the
lease obligee in the event of such a failure to
appropriate funding; (f) whether the security is
backed by a credit enhancement such as insurance; and
(g) any limitations which are imposed on the lease
obligor's ability to utilize substitute property or
services rather than those covered by the lease
obligation.

The fund may invest without limit in debt obligations
which are repayable out of revenue streams generated
from economically-related projects or facilities or
debt obligations whose issuers are located in the same
state.  Sizeable investments in such obligations could
involve an increased risk to the fund should any of
the related projects or facilities experience
financial difficulties.

Private Activity Bonds.  The fund may invest without
limit in private activity bonds.  Interest income on
certain types of private activity bonds issued after
August 7, 1986 to finance non-governmental activities
is a specific tax preference item for purposes of the
federal individual and corporate alternative minimum
taxes. Individual and corporate shareholders may be
subject to a federal alternative minimum tax to the
extent the fund's dividends are derived from interest
on those bonds. Dividends derived from interest income
on Municipal Securities are a component of the
"current earnings" adjustment item for purposes of the
federal corporate alternative minimum tax.

Zero Coupon Bonds.  The fund may also invest in zero
coupon bonds.  Zero coupon securities are debt
obligations which do not entitle the holder to any
periodic payments of interest prior to maturity on a
specified cash payment date when the securities begin
paying current interest (the "cash payment date") and
therefore are issued and traded at a discount from
their face amounts or par values.  The discount varies
depending on the time remaining until maturity or cash
payment date, prevailing interest rates, liquidity of
the security and the perceived credit quality of the
issuer.  The discount, in the absence of financial
difficulties of the issuer, decreases as the final
maturity or cash payment date of the security
approaches.  The market prices of zero coupon
securities generally are more volatile than the market
prices of other debt securities that pay interest
periodically and are likely to respond to changes in
interest rates to a greater degree than do debt
securities having similar maturities and credit
quality.  The credit risk factors pertaining to low-
rated securities also apply to low-rated zero coupon
bonds.  Such zero coupon bonds carry an additional
risk in that, unlike bonds which pay interest
throughout the period to maturity, the fund will
realize no cash until the cash payment date unless a
portion of such securities is sold and, if the issuer
defaults, the fund may obtain no return at all on its
investment.

When-Issued Securities.  The fund may purchase
Municipal Bonds on a "when-issued" basis (i.e., for
delivery beyond the normal settlement date at a stated
price and yield).  The payment obligation and the
interest rate that will be received on the Municipal
Bonds purchased on a when-issued basis are each fixed
at the time the buyer enters into the commitment.
Although the fund will purchase Municipal Bonds on a
when-issued basis only with the intention of actually
acquiring the securities, the fund may sell these
securities before the settlement date if it is deemed
advisable as a matter of investment strategy.
Municipal Bonds are subject to changes in value based
upon the public's perception of the creditworthiness
of the issuers and changes, real or anticipated, in
the level of interest rates. In general, Municipal
Bonds tend to appreciate when interest rates decline
and depreciate when interest rates rise. Purchasing
Municipal Bonds on a when-issued basis, therefore, can
involve the risk that the yields available in the
market when the delivery takes place may actually be
higher than those obtained in the transaction itself.
To account for this risk, a separate account of the
fund consisting of cash or liquid debt securities
equal to the amount of the when-issued commitments
will be established on the fund's books. For the
purpose of determining the adequacy of the securities
in the account, the deposited securities will be
valued at market or fair value. If the market or fair
value of such securities declines, additional cash or
securities will be placed in the account on a daily
basis so the value of the account will equal the
amount of such commitments by the fund. Placing
securities rather than cash in the segregated account
may have a leveraging effect on the fund's net assets.
 That is, to the extent the fund remains substantially
fully invested in securities at the same time it has
committed to purchase securities on a when-issued
basis, there will be greater fluctuations in its net
assets than if it had set aside cash to satisfy its
purchase commitments. Upon the settlement date of the
when-issued securities, the fund will meet obligations
from then-available cash flow, sale of securities held
in the segregated account, sale of other securities
or, although it normally would not expect to do so,
from the sale of the when-issued securities themselves
(which may have a value greater or less than the
fund's payment obligations). Sales of securities to
meet such obligations may involve the realization of
capital gains, which are not exempt from federal
income tax.

When the fund engages in when-issued transactions, it
relies on the seller to consummate the trade. Failure
of the seller to do so may result in the fund's
incurring a loss or missing an opportunity to obtain a
price considered advantageous.
Repurchase Agreements.  The fund may agree to purchase
securities from a bank or recognized securities dealer
and simultaneously commit to resell the securities to
the bank or dealer at an agreed-upon date and price
reflecting a market rate of interest unrelated to the
coupon rate or maturity of the purchased securities
("repurchase agreements"). The fund would maintain
custody of the underlying securities prior to their
repurchase; thus, the obligation of the bank or dealer
to pay the repurchase price on the date agreed to
would be, in effect, secured by such securities.  If
the value of such securities were less than the
repurchase price, plus interest, the other party to
the agreement would be required to provide additional
collateral so that at all times the collateral is at
least 102% of the repurchase price plus accrued
interest. Default by or bankruptcy of a seller would
expose the fund to possible loss because of adverse
market action, expenses and/or delays in connection
with the disposition of the underlying obligations.
The financial institutions with which the fund may
enter into repurchase agreements will be banks and
non-bank dealers of U.S. Government securities that
are on the Federal Reserve Bank of New York's list of
reporting dealers, if such banks and non-bank dealers
are deemed creditworthy by the fund's manager.  The
manager will continue to monitor creditworthiness of
the seller under a repurchase agreement, and will
require the seller to maintain during the term of the
agreement the value of the securities subject to the
agreement to equal at least 102% of the repurchase
price (including accrued interest).  In addition, the
manager will require that the value of this
collateral, after transaction costs (including loss of
interest) reasonably expected to be incurred on a
default, be equal to 102% or greater than the
repurchase price (including accrued premium) provided
in the repurchase agreement or the daily amortization
of the difference between the purchase price and the
repurchase price specified in the repurchase
agreement.  The manager will mark-to-market daily the
value of the securities.
Temporary Investments.  Under normal market
conditions, the fund may hold up to 20% of its total
assets in cash or money market instruments, including
taxable money market instruments. When the fund is
maintaining a defensive position, the fund may invest
in short-term investments ("Temporary Investments")
consisting of: (a) tax-exempt securities in the form
of notes of municipal issuers having, at the time of
purchase, a rating within the three highest grades of
Moody's, S&P or the equivalent rating from an NRSRO
or, if not rated, having an issue of outstanding
Municipal Bonds rated within the three highest grades
by Moody's, S&P or the equivalent rating from an
NRSRO; and (b) the following taxable securities:
obligations of the United States government, its
agencies or instrumentalities ("U.S. government
securities"), repurchase agreements, other debt
securities rated within the three highest grades by
Moody's, S&P or the equivalent rating from an NRSRO,
commercial paper rated in the highest grade by any of
such rating services, and certificates of deposit of
domestic banks with assets of $1 billion or more. The
fund may invest in Temporary Investments for defensive
reasons in anticipation of a market decline. At no
time will more than 20% of the fund's total assets be
invested in Temporary Investments unless the fund has
adopted a defensive investment policy. The fund
intends, however, to purchase tax-exempt Temporary
Investments pending the investment of the proceeds of
the sale of portfolio securities or shares of the
fund's common stock, or in order to have highly liquid
securities available to meet anticipated redemptions.
For the fiscal year ended February 29, 2000, the fund
did not invest in taxable Temporary Investments.

Financial Futures and Options Transactions.  To hedge
against a decline in the value of Municipal Bonds it
owns or an increase in the price of Municipal Bonds it
proposes to purchase, the fund may enter into
financial futures contracts and invest in options on
financial futures contracts that are traded on a
domestic exchange or board of trade.  The futures
contracts or options on futures contracts that may be
entered into by the fund will be restricted to those
that are either based on an index of Municipal Bonds
or relate to debt securities the prices of which are
anticipated by the manager to correlate with the
prices of the Municipal Bonds owned or to be purchased
by the fund.

In entering into a financial futures contract, the
fund will be required to deposit with the broker
through which it undertakes the transaction an amount
of cash or cash equivalents equal to approximately 5%
of the contract amount.  This amount, which is known
as "initial margin," is subject to change by the
exchange or board of trade may charge a higher amount.
 Initial margin is in the nature of a performance bond
or good faith deposit on the contract that is returned
to the fund upon termination of the futures contract,
assuming all contractual obligations have been
satisfied. In accordance with a process known as
"marking-to-market," subsequent payments, known as
"variation margin," to and from the broker will be
made daily as the price of the index or securities
underlying the futures contract fluctuates, making the
long and short positions in the futures contract more
or less valuable.  At any time prior to the expiration
of a futures contract, the fund may elect to close the
position by taking an opposite position, which will
operate to terminate the fund's existing position in
the contract.
A financial futures contract provides for the future
sale by one party and the purchase by the other party
of a certain amount of a specified property at a
specified price, date, time and place.  Unlike the
direct investment in a futures contract, an option on
a financial futures contract gives the purchaser the
right, in return for the premium paid, to assume a
position in the financial futures contract at a
specified exercise price at any time prior to the
expiration date of the option.  Upon exercise of an
option, the delivery of the futures position by the
writer of the option to the holder of the option will
be accompanied by delivery of the accumulated balance
in the writer's futures margin account, which
represents the amount by which the market price of the
futures contract exceeds, in the case of a call, or is
less than, in the case of a put, the exercise price of
the option in the futures contract.  The potential
loss related to the purchase of an option on financial
futures contracts is limited to the premium paid for
the option (plus transaction costs).  The value of the
option may change daily and that change would be
reflected in the net asset value of the fund.

Regulations of the Commodity Futures Trading
Commission applicable to the fund require that its
transactions in financial futures contracts and
options on financial futures contracts be engaged in
for bona fide hedging purposes, or if the fund enters
into futures contracts for speculative purposes, that
the aggregate initial margin deposits and premiums
paid by the fund will not exceed 5% of the market
value of its assets.  In addition, the fund will, with
respect to its purchases of financial futures
contracts, establish a segregated account consisting
of cash or cash equivalents in an amount equal to the
total market value of the futures contracts, less the
amount of initial margin on a deposit for the
contracts.  The fund's ability to trade in financial
futures contracts and options on financial futures
contracts may be limited to some extent by the
requirements of the Internal Revenue Code of 1986, as
amended (the "Code"), applicable to a regulated
investment company that are described below under
"Dividends, Distributions and Taxes."

Although the fund intends to enter into financial
futures contracts and options on financial futures
contracts that are traded on a domestic exchange or
board of trade only if an active market exists for
those instruments, no assurance can be given that an
active market will exist for them at any particular
time.  If closing a futures position in anticipation
of adverse price movements is not possible, the fund
would be required to make daily cash payments of
variation margin.  In those circumstances, an increase
in the value of the portion of the fund's investments
being hedged, if any, may offset partially or
completely losses on the futures contract.  No
assurance can be given, however, that the price of the
securities being hedged will correlate with the price
movements in a futures contract and, thus, provide an
offset to losses on the futures contract or option on
the futures contract.  In addition, in light of the
risk of an imperfect correlation between securities
held by the fund that are the subject of a hedging
transaction and the futures or options used as a
hedging device, the hedge may not be fully effective
because, for example, losses on the securities held by
the fund may be in excess of gains on the futures
contract or losses on the futures contract may be in
excess of gains on the securities held by the fund
that were the subject of the hedge.  In an effort to
compensate for the imperfect correlation of movements
in the price of the securities being hedged and
movements in the price of futures contracts, the fund
may enter into financial futures contracts or options
on financial futures contracts in a greater or lesser
dollar amount than the dollar amount of the securities
being hedged if the historical volatility of the
futures contract has been less or greater than that of
the securities.  This "over hedging" or under hedging"
may adversely affect the fund's net investment results
if market movements are not as anticipated when the
hedge is established.

If the fund has hedged against the possibility of an
increase in interest rates adversely affecting the
value of securities it holds and rates decrease
instead, the fund will lose part or all of the benefit
of the increased value of securities that it has
hedged because it will have offsetting losses in its
futures or options positions.  In addition, in those
situations, if the fund has insufficient cash, it may
have to sell securities to meet daily variation margin
requirements on the futures contracts at a time when
it may be disadvantageous to do so.  These sales of
securities may, but will not necessarily, be at
increased prices that reflect the decline in interest
rates.

Other Investments.   The fund shall not invest more
than 10% of its assets in securities (excluding those
subject to Rule 144A under the Securities Act of 1933,
as amended (the "1933 Act")), that are determined to
be illiquid by the manager. Also, the fund may invest
up to an aggregate of 15% of its total assets in
securities with contractual or other restrictions on
resale and other instruments which are not readily
marketable. The fund also is authorized to borrow an
amount of up to 10% of its total assets (including the
amount borrowed) valued at market less liabilities
(not including the amount borrowed) in order to meet
anticipated redemptions and to pledge its assets to
the same extent in connection with the borrowings.

INVESTMENT RESTRICTIONS

The fund has adopted the following investment
restrictions for the protection of shareholders.
Restrictions 1 through 7 cannot be changed without
approval by the holders of a majority of the
outstanding shares of the fund, defined as the lesser
of (a) 67% of the fund's shares present at a meeting
if the holders of more than 50% of the outstanding
shares of the fund are present or represented by proxy
or (b) more than 50% of the fund's outstanding shares.
 The remaining restrictions may be changed by the
Board of Directors at any time.  The fund may not:

	1.	Invest in a manner that would cause it to
fail to be a "diversified company" under
the 1940 Act and the rules, regulations
and orders thereunder.

	2.	Issue "senior securities" as defined in
the 1940 Act and the rules, regulations
and orders thereunder, except as permitted
under the 1940 Act and the rules,
regulations and orders thereunder

	3.	Invest more than 25% of its total assets
in securities, the issuers of which are in
the same industry.  For purposes of this
limitation, U.S. government securities and
securities of state or municipal
governments and their political
subdivisions are not considered to be
issued by members of any industry.

	4.	Borrow money, except that (a) the fund may
borrow from banks for temporary or
emergency (not leveraging) purposes,
including the meeting of redemption
requests which might otherwise require the
untimely disposition of securities, and
(b) the fund may, to the extent consistent
with its investment policies, enter into
reverse repurchase agreements, forward
roll transactions and similar investment
strategies and techniques.  To the extent
that it engages in transactions described
in (a) and (b), the fund will be limited
so that no more than 33 1/3% of the value
of its total assets (including the amount
borrowed), valued at the lesser of cost or
market, less liabilities (not including
the amount borrowed) is derived from such
transactions.

	5.	Make loans.  This restriction does not
apply to: (a) the purchase of debt
obligations in which the fund may invest
consistent with its investment objectives
and policies; (b) repurchase agreements;
and (c) loans of its portfolio securities,
to the fullest extent permitted under the
1940 Act.

	6.	Engage in the business of underwriting
securities issued by other persons, except
to the extent that the fund may
technically be deemed to be an underwriter
under the 1933 Act, in disposing of
portfolio securities.

	7.	Purchase or sell real estate, real estate
mortgages, commodities or commodity
contracts, but this restriction shall not
prevent the fund from (a) investing in
securities of issuers engaged in the real
estate business or the business of
investing in real estate (including
interests in limited partnerships owning
or otherwise engaging in the real estate
business or the business of investing in
real estate) and securities which are
secured by real estate or interests
therein; (b) holding or selling real
estate received in connection with
securities it holds or held; (c) trading
in futures contracts and options on
futures contracts (including options on
currencies to the extent consistent with
the fund's investment objective and
policies); or (d) investing in real estate
investment trust securities.

	8.	Purchase any securities on margin (except
for such short-term credits as are
necessary for the clearance of purchases
and sales of portfolio securities) or sell
any securities short (except "against the
box").  For purposes of this restriction,
the deposit or payment by the fund of
underlying securities and other assets in
escrow and collateral agreements with
respect to initial or maintenance margin
in connection with futures contracts and
related options and options on securities,
indexes or similar items is not considered
to be the purchase of a security on
margin.

	9.	Purchase or otherwise acquire any security
if, as a result, more than 15% of its net
assets would be invested in securities
that are illiquid.

	10.	Invest more than 5% of the value of its
total assets in the securities of issuers
having a record, including predecessors,
of less than three years of continuous
operation, except U.S. government
securities.  (For purposes of this
restriction, issuers include predecessors,
sponsors, controlling persons, general
guarantors and originators of underlying
assets.)

	11.	Invest in companies for the purpose of
exercising control.

	12.	Invest in securities of other investment
companies, except as they may be acquired
as part of a merger, consolidation or
acquisition of assets and except for the
purchase, to the extent permitted by
Section 12 of the 1940 Act, of shares of
registered unit investment trusts whose
assets consist substantially of Municipal
Bonds.

	13.	Purchase or sell oil and gas interests.

	14.	Engage in the purchase and sale of put,
call, straddle or spread options or in
writing of such options, except that the
fund may purchase and sell options on
interest rate futures contracts.

Certain restrictions listed above permit the fund to
engage in investment practices the fund does not
currently pursue.  The fund has no present intention
of altering its current investment practices as
otherwise described in the prospectus and this SAI and
any future change in those practices would require
Board approval and appropriate notice to shareholders.
 If a percentage restriction is complied with at the
time of an investment, a later increase or decrease in
the percentage of assets resulting from a change in
the values of portfolio securities or in the amount of
the fund's assets will not constitute a violation of
such restriction.

For the purposes of Investment Restriction 3, private
activity bonds, where the payment of principal and
interest is the ultimate responsibility of companies
within the same industry, are grouped together as an
"industry."

RISK FACTORS AND SPECIAL CONSIDERATIONS RELATING TO
MUNICIPAL SECURITIES

Alternative Minimum Tax

Under current federal income tax law, (1) interest on
tax-exempt municipal securities issued after August 7,
1986 which are "specified private activity bonds," and
the proportionate share of any exempt-interest
dividend paid by a regulated investment company which
receives interest from such specified private activity
bonds, will be treated as an item of tax preference
for purposes of the alternative minimum tax ("AMT")
imposed on individuals and corporations, though for
regular Federal income tax purposes such interest will
remain fully tax-exempt, and (2) interest on all tax-
exempt obligations will be included in "adjusted
current earnings" of corporations for AMT purposes.
Such private activity bonds ("AMT-Subject bonds"),
which include industrial development bonds and bonds
issued to finance such projects as airports, housing
projects, solid waste disposal facilities, student
loan programs and water and sewage projects, have
provided, and may continue to provide, somewhat higher
yields than other comparable municipal securities.

Investors should consider that, in most instances, no
state, municipality or other governmental unit with
taxing power will be obligated with respect to AMT-
Subject bonds.  AMT-Subject bonds are in most cases
revenue bonds and do not generally have the pledge of
the credit or the taxing power, if any, of the issuer
of such bonds.  AMT-Subject bonds are generally
limited obligations of the issuer supported by
payments from private business entities and not by the
full faith and credit of a state or any governmental
subdivision.  Typically the obligation of the issuer
of AMT-Subject bonds is to make payments to bond
holders only out of and to the extent of, payments
made by the private business entity for whose benefit
the AMT-Subject bonds were issued.  Payment of the
principal and interest on such revenue bonds depends
solely on the ability of the user of the facilities
financed by the bonds to meet its financial
obligations and the pledge, if any, of real and
personal property so financed as security for such
payment.  It is not possible to provide specific
detail on each of these obligations in which fund
assets may be invested.

Municipal Market Volatility.  Municipal securities can
be significantly affected by political changes as well
as uncertainties in the municipal market related to
taxation, legislative changes, or the rights of
municipal security holders. Because many municipal
securities are issued to finance similar projects,
especially those relating to education, health care,
transportation and utilities, conditions in those
sectors can affect the overall municipal market. In
addition, changes in the financial condition of an
individual municipal insurer can affect the overall
municipal market.

Interest Rate Changes.  Debt securities have varying
levels of sensitivity to changes in interest rates. In
general, the price of a debt security can fall when
interest rates rise and can rise when interest rates
fall. Securities with longer maturities can be more
sensitive to interest rate changes. In other words,
the longer the maturity of a security, the greater the
impact a change in interest rates could have on the
security's price. In addition, short-term and long-
term interest rates do not necessarily move in the
same amount or the same direction. Short-term
securities tend to react to changes in short-term
interest rates, and long-term securities tend to react
to changes in long-term interest rates.

Issuer-Specific Changes.  Changes in the financial
condition of an issuer, changes in specific economic
or political conditions that affect a particular type
of security or issuer, and changes in general economic
or political conditions can affect the credit quality
or value of an issuer's securities. Lower-quality debt
securities (those of less than investment-grade
quality) tend to be more sensitive to these changes
than higher-quality debt securities. Entities
providing credit support or a maturity-shortening
structure also can be affected by these types of
changes. Municipal securities backed by current or
anticipated revenues from a specific project or
specific assets can be negatively affected by the
discontinuance of the taxation supporting the project
or assets or the inability to collect revenues for the
project or from the assets. If the Internal Revenue
Service determines an issuer of a municipal security
has not complied with applicable tax requirements,
interest from the security could become taxable and
the security could decline significantly in value. In
addition, if the structure of a security fails to
function as intended, interest from the security could
become taxable or the security could decline in value.

PORTFOLIO TRANSACTIONS

Newly issued securities normally are purchased
directly from the issuer or from an underwriter acting
as principal.  Other purchases and sales usually are
placed with those dealers from which it appears that
the best price or execution will be obtained; those
dealers may be acting as either agents or principals.
 The purchase price paid by the fund to underwriters
of newly issued securities usually includes a
concession paid by the issuer to the underwriter, and
purchases of after-market securities from dealers
normally are executed at a price between the bid and
asked prices. For the 1998, 1999 and 2000 fiscal
years, the fund has paid no brokerage commissions.

Allocation of transactions, including their frequency,
to various dealers is determined by the manager in its
best judgment and in a manner deemed fair and
reasonable to shareholders.  The primary
considerations are availability of the desired
security and the prompt execution of orders in an
effective manner at the most favorable prices.
Subject to these considerations, dealers that provide
supplemental investment research and statistical or
other services to the manager may receive orders for
portfolio transactions by the fund.  Information so
received is in addition to, and not in lieu of,
services required to be performed by the manager, and
the fees of the manager are not reduced as a
consequence of its use of such supplemental
information.  Such information may be useful to the
manager in serving both the fund and other clients
and, conversely, supplemental information obtained by
the placement of business of other clients may be
useful to the manager in carrying out its obligations
to the fund.

The fund will not purchase Municipal Obligations
during the existence of any underwriting or selling
group relating thereto of which Salomon Smith Barney
is a member, except to the extent permitted by the
SEC. Under certain circumstances, the fund may be at a
disadvantage because of this limitation in comparison
with other investment companies which have a similar
investment objective but which are not subject to such
limitation.  The fund also may execute portfolio
transactions through Salomon Smith Barney and its
affiliates in accordance with rules promulgated by the
SEC.

While investment decisions for the fund are made
independently from those of the other accounts managed
by the manager, investments of the type the fund may
make also may be made by those other accounts.  When
the fund and one or more other accounts managed by the
manager are prepared to invest in, or desire to
dispose of, the same security, available investments
or opportunities for sales will be allocated in a
manner believed by the manager to be equitable to
each. In some cases, this procedure may adversely
affect the price paid or received by the fund or the
size of the position obtained or disposed of by the
fund.

PORTFOLIO TURNOVER

The fund's portfolio turnover rate (the lesser of
purchases or sales of portfolio securities during the
year, excluding purchases or sales of short-term
securities, divided by the monthly average value of
portfolio securities) generally is not expected to
exceed 100%, but the portfolio turnover rate will not
be a limiting factor whenever the fund deems it
desirable to sell or purchase securities. Securities
may be sold in anticipation of a rise in interest
rates (market decline) or purchased in anticipation of
a decline in interest rates (market rise) and later
sold.  In addition, a security may be sold and another
security of comparable quality may be purchased at
approximately the same time in order to take advantage
of what the fund believes to be a temporary disparity
in the normal yield relationship between the two
securities.  These yield disparities may occur for
reasons not directly related to the investment quality
of particular issues or the general movement of
interest rates, such as changes in the overall demand
for or supply of various types of tax-exempt
securities.  For the 1999 and 2000 fiscal years, the
fund's portfolio turnover rates were 45% and 55%,
respectively.

PURCHASE OF SHARES

Sales Charge Alternatives

The following classes of shares are available for
purchase.  See the prospectus for a discussion of
factors to consider in selecting which Class of shares
to purchase.

Class A Shares.  Class A shares are sold to investors
at the public offering price, which is the net asset
value plus an initial sales charge as follows:




Amount of
Investment

Sales Charge as
a %
Of Transaction

Sales Charge as
a %
of Amount
Invested
Dealers'
Reallowance as %
of Offering Price
Less than $25,000
   4.00%
   4.17%
   3.60%
$ 25,000 - 49,999
3.50
3.63
3.15
50,000 - 99,999
3.00
3.09
2.70
100,000 - 249,999
2.50
2.56
2.25
250,000 - 499,999
1.50
1.52
1.35
500,000 and over
*
*
*

*  Purchases of Class A shares of $500,000 or more
will be made at net asset value without any initial
sales charge, but will be subject to a deferred
sales charge of 1.00% on redemptions made within 12
months of purchase. The deferred sales charge on
Class A shares is payable to Salomon Smith Barney,
which compensates Salomon Smith Barney Financial
Consultants and other dealers whose clients make
purchases of $500,000 or more. The deferred sales
charge is waived in the same circumstances in which
the deferred sales charge applicable to Class B and
Class L shares is waived. See "Purchase of Shares-
Deferred Sales Charge Alternatives" and "Purchase of
Shares-Waivers of Deferred Sales Charge."

Members of the selling group may receive up to 90% of
the sales charge and may be deemed to be underwriters
of the fund as defined in the Securities Act of 1933.
 The reduced sales charges shown above apply to the
aggregate of purchases of Class A shares of the fund
made at one time by "any person," which includes an
individual and his or her immediate family, or a
trustee or other fiduciary of a single trust estate or
single fiduciary account.

Purchases of Class 1 Shares.   Class 1 shares are
offered only through PFS Accounts, and only to
Eligible Class 1 Purchasers, at the next determined
net asset value plus a sales charge, as set forth
below.




Size of Investment



As % of
Net Amount
Invested



As % of
Offering
Price


Reallowed
to PFS   (as
a % of
Offering
Price)*
Less than $100,000
4.99%
4.75%
4.25%
$   100,000 but less than
$   250,000
3.90%
3.75%
3.25%
$   250,000 but less than
$   500,000
3.09%
3.00%
2.50%
$   500,000 but less than
$1,000,000
2.04%
2.00%
1.60%
$1,000,000 but less than
$2,500,000
1.01%
1.00%
0.75%
$2,500,000 but less than
$5,000,000
0.50%
0.50%
0.40%
$5,000,000 or more
0.25%
0.25%
0.20%

*	Additionally, PFS Distributors, Inc. pays to PFS
Investments a promotional fee calculated as a
percentage of the sales charge reallowed to PFS.  The
percentage used in the calculation is 3%.

Class 1 shares may be purchased at net asset value by
the Primerica Plan for Eligible Class 1 Purchasers
participating in the Primerica Plan, subject to the
provisions of ERISA. Shares so purchased are purchased
for investment purposes and may not be resold except
by redemption or repurchase by or on behalf of the
Primerica Plan. Class 1 Shares are also offered at net
asset value to accounts opened for shareholders by PFS
Investments Registered Representatives where the
amounts invested represent the redemption proceeds
from investment companies distributed by an entity
other than the Distributor, if such redemption has
occurred no more than 60 days prior to the purchase of
shares of the Trust and the shareholder paid an
initial sales charge and was not subject to a deferred
sales charge on the redeemed account. Shares are
offered at net asset value to such persons because of
anticipated economies in sales efforts and sales
related expenses. The fund may terminate, or amend the
terms of, offering shares of the fund at net asset
value to such persons at any time. PFS may pay PFS
Investment Registered Representatives through whom
purchases are made at net asset value an amount equal
to 0.40% of the amount invested if the purchase
represents redemption proceeds from an investment
company distributed by an entity other than the
Distributor. Contact the Sub-Transfer Agent at (800)
544-5445 for further information and appropriate
forms.

Class B Shares.  Class B shares are sold without an
initial sales charge but are subject to a deferred
sales charge payable upon certain redemptions.  See
"Deferred Sales Charge Provisions" below.

Class L Shares.  Class L shares are sold with an
initial sales charge of 1.00% (which is equal to 1.01%
of the amount invested) and are subject to a deferred
sales charge payable upon certain redemptions.  See
"Deferred Sales Charge Provisions" below.  Until June
22, 2001 purchases of Class L shares by investors who
were holders of Class C shares of the fund on June 12,
1998 will not be subject to the 1% initial sales
charge.

Class Y Shares.  Class Y shares are sold without an
initial sales charge or deferred sales charge and are
available only to investors investing a minimum of
$15,000,000 (except purchases of Class Y shares by
Smith Barney Concert Allocation Series Inc., for which
there is no minimum purchase amount).

General

Investors may purchase shares from a Salomon Smith
Barney Financial Consultant or a Dealer
Representative.  In addition, certain investors may
purchase shares directly from the fund.  When
purchasing shares of the fund, investors must specify
whether the purchase is for Class A, Class B, Class L
or Class Y shares.  Salomon Smith Barney and Dealer
Representatives may charge their customers an annual
account maintenance fee in connection with a brokerage
account through which an investor purchases or holds
shares.  Accounts held directly at PFPC Global Fund
Services ("PFPC" or "sub-transfer agent") are not
subject to a maintenance fee.

Investors in Class A, Class B and Class L shares may
open an account in the fund by making an initial
investment of at least $1,000 for each account.
Investors in Class Y shares may open an account by
making an initial investment of $15,000,000.
Subsequent investments of at least $50 may be made for
all Classes. For shareholders purchasing shares of the
fund through the Systematic Investment Plan on a
monthly basis, the minimum initial investment
requirement for Class A, Class B and Class L shares
and subsequent investment requirement for all Classes
is $25. For shareholders purchasing shares of the fund
through the Systematic Investment Plan on a quarterly
basis, the minimum initial investment required for
Class A, Class B and Class L shares and the subsequent
investment requirement for all Classes is $50.  There
are no minimum investment requirements for Class A
shares for employees of Citigroup and its
subsidiaries, including Salomon Smith Barney,
unitholders who invest distributions from a Unit
Investment Trust ("UIT") sponsored by Salomon Smith
Barney, and Directors/Trustees of any of the Smith
Barney mutual funds, and their spouses and children.
The fund reserves the right to waive or change
minimums, to decline any order to purchase its shares
and to suspend the offering of shares from time to
time. Shares purchased will be held in the
shareholder's account by PFPC.  Share certificates are
issued only upon a shareholder's written request to
PFPC. It is not recommended that the fund be used as a
vehicle for Keogh, IRA or other qualified retirement
plans.

Purchase orders received by the fund or a Salomon
Smith Barney Financial Consultant prior to the close
of regular trading on the NYSE, on any day the fund
calculates its net asset value, are priced according
to the net asset value determined on that day (the
''trade date'').  Orders received by a Dealer
Representative prior to the close of regular trading
on the NYSE on any day the fund calculates its net
asset value, are priced according to the net asset
value determined on that day, provided the order is
received by the fund or the fund's agent prior to its
close of business. For shares purchased through
Salomon Smith Barney or a Dealer Representative
purchasing through Salomon Smith Barney, payment for
shares of the fund is due on the third business day
after the trade date. In all other cases, payment must
be made with the purchase order.

Systematic Investment Plan.  Shareholders may make
additions to their accounts at any time by purchasing
shares through a service known as the Systematic
Investment Plan.  Under the Systematic Investment
Plan, Salomon Smith Barney or the sub-transfer agent
is authorized through preauthorized transfers of at
least $25 on a monthly basis or at least $50 on a
quarterly basis to charge the shareholder's account
held with a bank or other financial institution on a
monthly or quarterly basis as indicated by the
shareholder, to provide for systematic additions to
the shareholder's fund account. A shareholder who has
insufficient funds to complete the transfer will be
charged a fee of up to $25 by Salomon Smith Barney or
the sub-transfer agent.  The Systematic Investment
Plan also authorizes Salomon Smith Barney to apply
cash held in the shareholder's Salomon Smith Barney
brokerage account or redeem the shareholder's shares
of a Smith Barney money market fund to make additions
to the account. Additional information is available
from the fund or a Salomon Smith Barney Financial
Consultant or a Dealer Representative.

Sales Charge Waivers and Reductions

Initial Sales Charge Waivers.  Purchases of Class A
shares may be made at net asset value without a sales
charge in the following circumstances: (a) sales to
(i) Board Members and employees of Citigroup and its
subsidiaries and any Citigroup affiliated funds
including the Smith Barney mutual funds (including
retired Board Members and employees); the immediate
families of such persons (including the surviving
spouse of a deceased Board Member or employee); and to
a pension, profit-sharing or other benefit plan for
such persons and (ii) employees of members of the
National Association of Securities Dealers, Inc.,
provided such sales are made upon the assurance of the
purchaser that the purchase is made for investment
purposes and that the securities will not be resold
except through redemption or repurchase; (b) offers of
Class A shares to any other investment company to
effect the combination of such company with the fund
by merger, acquisition of assets or otherwise;
(c) purchases of Class A shares by any client of a
newly employed Salomon Smith Barney Financial
Consultant (for a period up to 90 days from the
commencement of the Financial Consultant's employment
with Salomon Smith Barney), on the condition the
purchase of Class A shares is made with the proceeds
of the redemption of shares of a mutual fund which (i)
was sponsored by the Financial Consultant's prior
employer, (ii) was sold to the client by the Financial
Consultant and (iii) was subject to a sales charge;
(d) purchases by shareholders who have redeemed Class
A shares in the fund (or Class A shares of another
Smith Barney mutual fund that is offered with a sales
charge) and who wish to reinvest their redemption
proceeds in the fund, provided the reinvestment is
made within 60 calendar days of the redemption; (e)
purchases by accounts managed by registered investment
advisory subsidiaries of Citigroup; (f) investments of
distributions from or proceeds from a sale of a UIT
sponsored by Salomon Smith Barney; and (g) purchases
by investors participating in a Salomon Smith Barney
fee-based arrangement. In order to obtain such
discounts, the purchaser must provide sufficient
information at the time of purchase to permit
verification that the purchase would qualify for the
elimination of the sales charge.

Right of Accumulation.  Class A shares of the fund may
be purchased by ''any person'' (as defined above) at a
reduced sales charge or at net asset value determined
by aggregating the dollar amount of the new purchase
and the total net asset value of all Class A shares of
the fund and of other Smith Barney mutual funds that
are offered with a sales charge as currently listed
under ''Exchange Privilege'' then held by such person
and applying the sales charge applicable to such
aggregate.  In order to obtain such discount, the
purchaser must provide sufficient information at the
time of purchase to permit verification that the
purchase qualifies for the reduced sales charge.  The
right of accumulation is subject to modification or
discontinuance at any time with respect to all shares
purchased thereafter.

Letter of Intent - Class A Shares.  A Letter of Intent
for an amount of $50,000 or more provides an
opportunity for an investor to obtain a reduced sales
charge by aggregating investments over a 13 month
period, provided the investor refers to such Letter
when placing orders.  For purposes of a Letter of
Intent, the ''Amount of Investment'' as referred to in
the preceding sales charge table includes (i) all
Class A shares of the fund and other Smith Barney
mutual funds offered with a sales charge acquired
during the term of the letter plus (ii) the value of
all Class A shares previously purchased and still
owned.  Each investment made during the period
receives the reduced sales charge applicable to the
total amount of the investment goal.  If the goal is
not achieved within the period, the investor must pay
the difference between the sales charges applicable to
the purchases made and the charges previously paid, or
an appropriate number of escrowed shares will be
redeemed.  The term of the Letter will commence upon
the date the Letter is signed, or at the option of the
investor, up to 90 days before such date.  Please
contact a Salomon Smith Barney Financial Consultant or
Citi Fiduciary Trust Company (the "transfer agent") to
obtain a Letter of Intent application.

Letter of Intent - Class Y Shares.  A Letter of Intent
may also be used as a way for investors to meet the
minimum investment requirement for Class Y shares
(except purchases of Class Y shares by Smith Barney
Concert Allocation Series Inc., for which there is no
minimum purchase amount).  Such investors must make an
initial minimum purchase of $5,000,000 in Class Y
shares of the fund and agree to purchase a total of
$15,000,000 of Class Y shares of the fund within 13
months from the date of the Letter. If a total
investment of $15,000,000 is not made within the 13-
month period, all Class Y shares purchased to date
will be transferred to Class A shares, where they will
be subject to all fees (including a service fee of
0.15%) and expenses applicable to the fund's Class A
shares, which may include a deferred sales charge of
1.00%. Please contact a Salomon Smith Barney Financial
Consultant or the transfer agent for further
information.

Deferred Sales Charge Provisions

''Deferred Sales Charge Shares'' are: (a) Class B
shares; (b) Class L shares; and (c) Class A shares
were purchased without an initial sales charge but
subject to a deferred sales charge.  A deferred sales
charge may be imposed on certain redemptions of these
shares.

Any applicable deferred sales charge will be assessed
on an amount equal to the lesser of the original cost
of the shares being redeemed or their net asset value
at the time of redemption. Deferred Sales Charge
Shares that are redeemed will not be subject to a
deferred sales charge to the extent the value of such
shares represents: (a) capital appreciation of fund
assets; (b) reinvestment of dividends or capital gain
distributions; (c) with respect to Class B shares,
shares redeemed more than five years after their
purchase; or (d) with respect to Class L shares and
Class A shares that are Deferred Sales Charge Shares,
shares redeemed more than 12 months after their
purchase.

Class L shares and Class A shares that are Deferred
Sales Charge Shares are subject to a 1.00% deferred
sales charge if redeemed within 12 months of purchase.
In circumstances in which the deferred sales charge is
imposed on Class B shares, the amount of the charge
will depend on the number of years since the
shareholder made the purchase payment from which the
amount is being redeemed.  Solely for purposes of
determining the number of years since a purchase
payment, all purchase payments made during a month
will be aggregated and deemed to have been made on the
last day of the preceding Salomon Smith Barney
statement month. The following table sets forth the
rates of the charge for redemptions of Class B shares
by shareholders.



Year Since Purchase Payment Was
Made

Deferred sales charge

First

4.50%

Second

4.00

Third

3.00

Fourth

2.00

Fifth

1.00

Sixth and thereafter

0.00

Class B shares will convert automatically to Class A
shares eight years after the date on which they were
purchased and thereafter will no longer be subject to
any distribution fees. There will also be converted at
that time such proportion of Class B Dividend Shares
owned by the shareholders as the total number of his
or her Class B shares converting at the time bears to
the total number of outstanding Class B shares (other
than Class B Dividend Shares) owned by the
shareholder.

In determining the applicability of any deferred sales
charge, it will be assumed that redemption is made
first of shares representing capital appreciation,
next of shares representing the reinvestment of
dividends and capital gain distributions and finally
of other shares held by the shareholder for the
longest period of time.  The length of time Deferred
Sales Charge Shares acquired through an exchange have
been held will be calculated from the date the shares
exchanged were initially acquired in one of the other
Smith Barney mutual funds, and fund shares being
redeemed will be considered to represent, as
applicable, capital appreciation or dividend and
capital gain distribution reinvestments in such other
funds. For Federal income tax purposes, the amount of
the deferred sales charge will reduce the gain or
increase the loss, as the case may be, on the amount
realized on redemption. The amount of any deferred
sales charge will be paid to Salomon Smith Barney.

To provide an example, assume an investor purchased
100 Class B shares of the fund at $10 per share for a
cost of $1,000.  Subsequently, the investor acquired 5
additional shares of the fund through dividend
reinvestment.  During the fifteenth month after the
purchase, the investor decided to redeem $500 of his
or her investment.  Assuming at the time of the
redemption the net asset value had appreciated to $12
per share, the value of the investor's shares would be
$1,260 (105 shares at $12 per share). The deferred
sales charge would not be applied to the amount which
represents appreciation ($200) and the value of the
reinvested dividend shares ($60).  Therefore, $240 of
the $500 redemption proceeds ($500 minus $260) would
be charged at a rate of 4.00% (the applicable rate for
Class B shares) for a total deferred sales charge of
$9.60.
Waivers of Deferred Sales Charge

The deferred sales charge will be waived on: (a)
exchanges (see "Exchange Privilege"); (b) automatic
cash withdrawals in amounts equal to or less than
1.00% per month of the value of the shareholder's
shares at the time the withdrawal plan commences (see
"Automatic Cash Withdrawal Plan") (however, automatic
cash withdrawals in amounts equal to or less than
2.00% per month of the value of the shareholder's
shares will be permitted for withdrawal plans
established prior to November 7, 1994); (c)
redemptions of shares within 12 months following the
death or disability of the shareholder; (d)
involuntary redemptions; and (e) redemptions of shares
to effect a combination of the fund with any
investment company by merger, acquisition of assets or
otherwise. In addition, a shareholder who has redeemed
shares from other Smith Barney mutual funds may, under
certain circumstances, reinvest all or part of the
redemption proceeds within 60 days and receive pro
rata credit for any deferred sales charge imposed on
the prior redemption.

Deferred sales charge waivers will be granted subject
to confirmation (by Salomon Smith Barney in the case
of shareholders who are also Salomon Smith Barney
clients or by the transfer agent in the case of all
other shareholders) of the shareholder's status or
holdings, as the case may be.

Volume Discounts

The schedule of sales charges on Class A shares
described in the prospectus applies to purchases made
by any "purchaser," which is defined to include the
following: (a) an individual; (b) an individual's
spouse and his or her children purchasing shares for
their own account; (c) a trustee or other fiduciary
purchasing shares for a single trust estate or single
fiduciary account; and (d) a trustee or other
professional fiduciary (including a bank, or an
investment adviser registered with the SEC under the
Investment Advisers Act of 1940, as amended)
purchasing shares of the fund for one or more trust
estates or fiduciary accounts.  Purchasers who wish to
combine purchase orders to take advantage of volume
discounts on Class A shares should contact a Salomon
Smith Barney Financial Consultant.

PFS ACCOUNTS

Initial purchase of shares of the fund must be made
through a PFS Investments Registered Representative by
completing the appropriate application found in the
propectus. The completed application should be
forwarded to PFS Shareholder Services, P.O. Box
105033, Atlanta, GA 30348. Checks drawn on foreign
banks must be payable in U.S. dollars and have the
routing number of the U.S. bank encoded on the check.
Subsequent investments may be sent directly to PFS
Shareholder Services.  In processing applications and
investments, PFS Shareholder Services acts as agent
for the investor and for PFS Investments Inc. ("PFSI")
and also as agent for the distributor, in accordance
with the terms of the prospectus.  If the transfer
agent ceases to act as such, a successor company named
by the fund will act in the same capacity so long as
the account remains open.

Shares purchased will be held in the shareholder's
account by PFS Shareholder Services. Share
certificates are issued only upon a shareholder's
written request to the sub-transfer agent. A
shareholder that has insufficient funds to complete
any purchase will be charged a fee of up to $30 per
returned purchase by PFS Shareholder Services.

Investors in Class A and Class B shares may open an
account by making an initial investment of at least
$1,000 for each account in each Class (except for
Systematic Investment Plan accounts. Subsequent
investments of at least $50 may be made for each
Class. For the fund's Systematic Investment Plan, the
minimum initial investment requirement for Class A and
Class B shares and the subsequent investment
requirement for each Class is $25. There are no
minimum investment requirements in Class A shares for
employees of Citigroup and its subsidiaries, including
Salomon Smith Barney, Directors or Trustees of any of
the Smith Barney Mutual Funds, and their spouses and
children. The fund reserves the right to waive or
change minimums, to decline any order to purchase its
shares and to suspend the offering of shares from time
to time.  Purchase orders received by the transfer
agent or sub-transfer agent prior to the close of
regular trading on the NYSE, on any day the fund
calculates its net asset value, are priced according
to the net asset value determined on that day.

Initial purchases of fund shares may be made by wire.
 The minimum investment that can be made by wire is
$10,000. Before sending the wire, the PFS Investments
Registered Representative must contact the PFS
Shareholder Services at (800) 665-8677 to obtain
proper wire instructions.  Once an account is open, a
shareholder may make additional investments by wire.
The shareholder should contact PFS Shareholder
Services at (800) 544-5445 to obtain proper wire
instructions.

Upon completion of certain automated systems,
shareholders who establish telephone transaction
authority on their account and supply bank account
information may make additions to their accounts at
any time.  Shareholders should contact PFS Shareholder
Services at (800) 544-5445 between 8:00 a.m. and 8:00
p.m. eastern time any day that the NYSE is open.  If a
shareholder does not wish to allow telephone
subsequent investments by any person in his account,
he should decline the telephone transaction option on
the account application.  The minimum telephone
subsequent investment is $250 and can be up to a
maximum of $10,000.  By requesting a subsequent
purchase by telephone, you authorize PFS Shareholder
Services to transfer funds from the bank account
provided for the amount of the purchase.  A
shareholder that has insufficient funds to complete
the transfer will be charged a fee of up to $30 by PFS
Shareholder Services.  A shareholder who places a stop
payment on a transfer or the transfer is returned
because the account has been closed, will also be
charged a fee of up to $30 by PFS Shareholder
Services.  Subsequent investments by telephone may not
be available if the shareholder cannot reach PFS
Shareholder Services whether because all telephone
lines are busy or for any other reason; in such case,
a shareholder would have to use the fund's regular
subsequent investment procedure described above.

Redemption proceeds can be sent by check to the
address of record, by wire transfer to a bank account
designated on the application or to a bank account
designated on the application via the Automated
Clearinghouse (ACH).  A shareholder will be charged a
$25 service fee for wire transfers and a nominal
service fee for transfers made directly to the
shareholder's bank by the ACH. PFS Shareholder
Services will process and mail a shareholder's
redemption check usually within two to three business
days after receiving the redemption request in good
order.  The shareholder may request the proceeds to be
mailed by two-day air express for an $8 fee that will
be deducted from the shareholder's account or by one-
day air express for a $15 fee that will be deducted
from the shareholder's account.

An Account Transcript is available at a shareholder's
request, which identifies every financial transaction
in an account since it has opened.  To defray
administrative expenses involved with providing
multiple years worth of information, there is a $15
charge for each Account Transcript requested.
Additional copies of tax forms are available at the
shareholder's request.  A $10 fee for each tax form
will be assessed.

Additional information regarding PFS Shareholder
Services may be obtained by contacting the Client
Services Department at (800) 544-5445.

DETERMINATION OF NET ASSET VALUE

Each class' net asset value per share is calculated on
each day, Monday through Friday, except days on which
the NYSE is closed.  The NYSE currently is scheduled
to be closed on New Year's Day, Martin Luther King,
Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and
Christmas, and on the preceding Friday or subsequent
Monday when one of these holidays falls on a Saturday
or Sunday, respectively.  Because of the differences
in distribution fees and class-specific expenses, the
per share net asset value of each class may differ.
The following is a description of the procedures used
by the fund in valuing its assets.

Generally, the fund's investments are valued at market
value or, in the absence of a market value with
respect to any securities, at fair value as determined
by or under the direction of the Board of Directors. A
security that is primarily traded on a domestic or
foreign exchange is valued at the last sale price on
that exchange or, if there were no sales during the
day, at the mean between the bid and asked price.
Over-the-counter securities are valued at the mean
between the bid and asked price.  If market quotations
for those securities are not readily available, they
are valued at fair value, as determined in good faith
by the fund's Board of Directors.  An option is
generally valued at the last sale price or, in the
absence of a last sale price, the last offer price.

U.S. government securities will be valued at the mean
between the closing bid and asked prices on each day,
or, if market quotations for those securities are not
readily available, at fair value, as determined in
good faith by the fund's Board of Directors.

Short-term investments maturing in 60 days or less are
valued at amortized cost whenever the Board of
Directors determines that amortized cost reflects fair
value of those investments. Amortized cost valuation
involves valuing an instrument at its cost initially
and thereafter assuming a constant amortization to
maturity of any discount or premium, regardless of the
effect of fluctuating interest rates on the market
value of the instrument.

All other securities and other assets of the fund will
be valued at fair value as determined in good faith by
the fund's Board of Directors.
Determination of Public Offering Price

The fund offers its shares to the public on a
continuous basis. The public offering price per Class
A and Class Y share of the fund is equal to the net
asset value per share at the time of purchase plus,
for Class A shares, an initial sales charge based on
the aggregate amount of the investment. The public
offering price per Class B and Class L share (and
Class A share purchases, including applicable rights
of accumulation, equaling or exceeding $500,000) is
equal to the net asset value per share at the time of
purchase and no sales charge is imposed at the time of
purchase.  The method of computing the public offering
price is shown in the fund's financial statements,
incorporated by reference in their entirety into this
SAI.

REDEMPTION OF SHARES

The fund is required to redeem the shares of the fund
tendered to it, as described below, at a redemption
price equal to their net asset value per share next
determined after receipt of a written request in
proper form at no charge other than any applicable
deferred sales charge. Redemption requests received
after the close of regular trading on the NYSE are
priced at the net asset value next determined.

If a shareholder holds shares in more than one Class,
any request for redemption must specify the Class
being redeemed.  In the event of a failure to specify
which Class, or if the investor owns fewer shares of
the Class than specified, the redemption request will
be delayed until the transfer agent receives further
instructions from Salomon Smith Barney, or if the
shareholder's account is not with Salomon Smith
Barney, from the shareholder directly.  The redemption
proceeds will be remitted on or before the third
business day following receipt of proper tender,
except on any days on which the NYSE is closed or as
permitted under the 1940 Act in extraordinary
circumstances. Generally, if the redemption proceeds
are remitted to a Salomon Smith Barney brokerage
account, these funds will not be invested for the
shareholder's benefit without specific instruction and
Salomon Smith Barney will benefit from the use of
temporarily uninvested funds. Redemption proceeds for
shares purchased by check, other than a certified or
official bank check, will be remitted upon clearance
of the check, which may take up to ten days or more.

Shares held by Salomon Smith Barney as custodian must
be redeemed by submitting a written request to a
Salomon Smith Barney Financial Consultant. Shares
other than those held by Salomon Smith Barney as
custodian may be redeemed through an investor's
Financial Consultant, Dealer Representative or by
submitting a written request for redemption to:

Smith Barney Managed Municipals Fund Inc.
Class A, B, L or Y (please specify)
c/o PFPC Global Fund Services
P.O. Box 9699
Providence, Rhode Island 02940-9699

A written redemption request must (a) state the Class
and number or dollar amount of shares to be redeemed,
(b) identify the shareholder's account number and (c)
be signed by each registered owner exactly as the
shares are registered. If the shares to be redeemed
were issued in certificate form, the certificates must
be endorsed for transfer (or be accompanied by an
endorsed stock power) and must be submitted to the
sub-transfer agent together with the redemption
request. Any signature appearing on a share
certificate, stock power or written redemption request
in excess of $10,000 must be guaranteed by an eligible
guarantor institution, such as a domestic bank,
savings and loan institution, domestic credit union,
member bank of the Federal Reserve System or member
firm of a national securities exchange. Written
redemption requests of $10,000 or less do not require
a signature guarantee unless more than one such
redemption request is made in any 10-day period.
Redemption proceeds will be mailed to an investor's
address of record. The transfer agent may require
additional supporting documents for redemptions made
by corporations, executors, administrators, trustees
or guardians. A redemption request will not be deemed
properly received until the transfer agent receives
all required documents in proper form.

Automatic Cash Withdrawal Plan.  The fund offers
shareholders an automatic cash withdrawal plan, under
which shareholders who own shares with a value of at
least $10,000 may elect to receive cash payments of at
least $50 monthly or quarterly.  Retirement plan
accounts are eligible for automatic cash withdrawal
plans only where the shareholder is eligible to
receive qualified distributions and has an account
value of at least $5,000.  The withdrawal plan will be
carried over on exchanges between Classes of a fund.
Any applicable deferred sales charge will not be
waived on amounts withdrawn by a shareholder that
exceed 1.00% per month of the value of the
shareholder's shares subject to the deferred sales
charge at the time the withdrawal plan commences.
(With respect to withdrawal plans in effect prior to
November 7, 1994, any applicable deferred sales charge
will be waived on amounts withdrawn that do not exceed
2.00% per month of the value of the shareholder's
shares subject to the deferred sales charge.)  For
further information regarding the automatic cash
withdrawal plan, shareholders should contact a Salomon
Smith Barney Financial Consultant.

Telephone Redemption and Exchange Program.
Shareholders who do not have a brokerage account may
be eligible to redeem and exchange shares by
telephone. To determine if a shareholder is entitled
to participate in this program, he or she should
contact the transfer agent at 1-800-451-2010.  Once
eligibility is confirmed, the shareholder must
complete and return a Telephone/Wire Authorization
Form, along with a signature guarantee, that will be
provided by the transfer agent upon request.
(Alternatively, an investor may authorize telephone
redemptions on the new account application with the
applicant's signature guarantee when making his/her
initial investment in a fund.)

Redemptions.   Redemption requests of up to $10,000 of
any class or classes of shares of a fund may be made
by eligible shareholders by calling the transfer agent
at 1-800-451-2010. Such requests may be made between
9:00 a.m. and 4:00 p.m. (Eastern time) on any day the
NYSE is open.  Redemptions of shares (i) by retirement
plans or (ii) for which certificates have been issued
are not permitted under this program.

A shareholder will have the option of having the
redemption proceeds mailed to his/her address of
record or wired to a bank account predesignated by the
shareholder.  Generally, redemption proceeds will be
mailed or wired, as the case may be, on the next
business day following the redemption request.  In
order to use the wire procedures, the bank receiving
the proceeds must be a member of the Federal Reserve
System or have a correspondent relationship with a
member bank.  The fund reserves the right to charge
shareholders a nominal fee for each wire redemption.
Such charges, if any, will be assessed against the
shareholder's account from which shares were redeemed.
 In order to change the bank account designated to
receive redemption proceeds, a shareholder must
complete a new Telephone/Wire Authorization Form and,
for the protection of the shareholder's assets, will
be required to provide a signature guarantee and
certain other documentation.

Exchanges.  Eligible shareholders may make exchanges
by telephone if the account registration of the shares
of the fund being acquired is identical to the
registration of the shares of the fund exchanged.
Such exchange requests may be made by calling the
transfer agent at 1-800-451-2010 between 9:00 a.m. and
4:00 p.m. (Eastern time) on any day on which the NYSE
is open.

Additional Information Regarding Telephone Redemption
and Exchange Program.   Neither the fund nor its
agents will be liable for following instructions
communicated by telephone that are reasonably believed
to be genuine.  The fund and its agents will employ
procedures designed to verify the identity of the
caller and legitimacy of instructions (for example, a
shareholder's name and account number will be required
and phone calls may be recorded).  The fund reserves
the right to suspend, modify or discontinue the
telephone redemption and exchange program or to impose
a charge for this service at any time following at
least seven (7) days' prior notice to shareholders.

Redemptions in Kind.  In conformity with applicable
rules of the SEC, redemptions may be paid in portfolio
securities, in cash or any combination of both, as the
Board of Directors may deem advisable; however,
payments shall be made wholly in cash unless the Board
of Directors believes economic conditions exist that
would make such a practice detrimental to the best
interests of the fund and its remaining shareholders.
 If a redemption is paid in portfolio securities, such
securities will be valued in accordance with the
procedures described under "Determination of Net Asset
Value" in the Prospectus and a shareholder would incur
brokerage expenses if these securities were then
converted to cash.

Distributions in Kind

If the fund's Board of Directors determines that it
would be detrimental to the best interests of the
remaining shareholders of the fund to make a
redemption payment wholly in cash, the fund may pay,
in accordance with SEC rules, any portion of a
redemption in excess of the lesser of $250,000 or
1.00% of the fund's net assets by a distribution in
kind of portfolio securities in lieu of cash.
Securities issued as a distribution in kind may incur
brokerage commissions when shareholders subsequently
sell those securities.

Automatic Cash Withdrawal Plan

An automatic cash withdrawal plan (the "Withdrawal
Plan") is available to shareholders who own shares
with a value of at least $10,000 and who wish to
receive specific amounts of cash monthly or quarterly.
Withdrawals of at least $50 may be made under the
Withdrawal Plan by redeeming as many shares of the
fund as may be necessary to cover the stipulated
withdrawal payment. Any applicable deferred sales
charge will not be waived on amounts withdrawn by
shareholders that exceed 1.00% per month of the value
of a shareholder's shares at the time the Withdrawal
Plan commences. (With respect to Withdrawal Plans in
effect prior to November 7, 1994, any applicable
deferred sales charge will be waived on amounts
withdrawn that do not exceed 2.00% per month of the
value of a shareholder's shares at the time the
Withdrawal Plan commences.) To the extent withdrawals
exceed dividends, distributions and appreciation of a
shareholder's investment in the fund, there will be a
reduction in the value of the shareholder's
investment, and continued withdrawal payments will
reduce the shareholder's investment and may ultimately
exhaust it. Withdrawal payments should not be
considered as income from investment in the fund.
Furthermore, as it generally would not be advantageous
to a shareholder to make additional investments in the
fund at the same time he or she is participating in
the Withdrawal Plan, purchases by such shareholder in
amounts of less than $5,000 ordinarily will not be
permitted.

Shareholders who wish to participate in the Withdrawal
Plan and who hold their shares in certificate form
must deposit their share certificates with the
Transfer Agent as agent for Withdrawal Plan members.
All dividends and distributions on shares in the
Withdrawal Plan are reinvested automatically at net
asset value in additional shares of the fund. For
additional information, shareholders should contact a
Salomon Smith Barney Financial Consultant.  Withdrawal
Plans should be set up with a Salomon Smith Barney
Financial Consultant. A shareholder who purchases
shares directly through the Transfer Agent may
continue to do so and applications for participation
in the Withdrawal Plan must be received by the
Transfer Agent no later than the eighth day of the
month to be eligible for participation beginning with
that month's withdrawals.  For additional information,
shareholders should contact a Salomon Smith Barney
Financial Consultant.

INVESTMENT MANAGEMENT AND OTHER SERVICES

Investment Adviser and Administrator - SSB Citi
(Manager)

SSB Citi (successor to SSBC Fund Management Inc.)
serves as investment adviser to the fund pursuant to
an investment advisory agreement (the "Investment
Advisory Agreement") with the fund which was approved
by the Board of Directors, including a majority of
directors who are not "interested persons" of the fund
or the manager.  The manager is a wholly owned
subsidiary of Salomon Smith Barney Holdings Inc.
("Holdings"), which in turn, is a wholly owned
subsidiary of Citigroup.  Subject to the supervision
and direction of the fund's Board of Directors, the
manager manages the fund's portfolio in accordance
with the fund's stated investment objective and
policies, makes investment decisions for the fund,
places orders to purchase and sell securities, and
employs professional portfolio managers and securities
analysts who provide research services to the fund.
The manager pays the salary of any officer and
employee who is employed by both it and the fund. The
manager bears all expenses in connection with the
performance of its services.  SSB Citi (through its
predecessor entities) has been in the investment
counseling business since 1968 and renders investment
advice to a wide variety of individual, institutional
and investment company clients that had aggregate
assets under management as of May 31, 2000 of
approximately $218 billion.

As compensation for investment advisory services, the
fund pays the manager a fee computed daily and payable
monthly at the following annual rates of the fund's
average daily net assets: 0.35% up to $500 million;
0.32% of the next $1.0 billion and 0.29% in excess of
$1.5 billion.  For the fiscal years ended February 28,
1998 and 1999 and February 29, 2000, the fund incurred
$10,103,778, $11,563,790 and $10,576,937 respectively,
in investment advisory fees.

The manager also serves as administrator to the fund
pursuant to a written agreement (the "Administration
Agreement"). As administrator SSB Citi: (a) assists in
supervising all aspects of the fund's operations; b)
supplies the fund with office facilities (which may be
in SSB Citi'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, (c) internal auditing and
legal services, internal executive and administrative
services, and stationary and office supplies; and (d)
prepares reports to shareholders of the fund, tax
returns and reports to and filings with the SEC and
state blue sky authorities.

As compensation for administrative services rendered
to the fund, the manager receives a fee computed daily
and payable monthly at the following annual rates of
average daily net assets: 0.20% up to $500 million;
and 0.18% of the next $1.0 billion, and 0.16% in
excess of $1.5 billion.  For the fiscal years ended
February 28, 1998 and 1999 and February 29, 2000, the
fund paid the manager  $5,643,278, $6,448,802 and
$5,904,963, respectively, in administration fees.

The fund bears expenses incurred in its operations
including: taxes, interest, brokerage fees and
commissions, if any; fees of directors of the fund who
are not officers, directors, shareholders or employees
of Salomon Smith Barney or the manager; SEC fees and
state Blue Sky notice fees; charges of custodians;
transfer and dividend disbursing agent's fees; certain
insurance premiums; outside auditing and legal
expenses; costs of maintaining corporate existence;
costs of investor services (including allocated
telephone and personnel expenses); costs of preparing
and printing of prospectuses for regulatory purposes
and for distribution to existing shareholders; costs
of shareholders' reports and shareholder meetings; and
meetings of the officers or Board of Directors of the
fund.

Counsel

Willkie Farr & Gallagher, 787 Seventh Avenue, New
York, New York 10019, serves as counsel to the fund.

Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New
York, New York, serves as counsel to the directors who
are not "interested persons" of the fund.

Auditors

KPMG LLP, independent auditors, 757 Third Avenue, New
York, New York 10017 have been selected to serve as
auditors of the fund and to render an opinion on the
fund's financial statements for the fiscal year ended
February 28, 2001.

Custodian, Transfer Agent and Sub-Transfer Agents

PNC Bank, National Association located at 17th and
Chestnut Streets, Philadelphia, Pennsylvania 19103,
serves as the fund's custodian. Under the custody
agreement, PNC holds the fund's portfolio securities
and keeps all necessary accounts and records.  For its
services, PNC receives a monthly fee based upon the
month-end market value of securities held in custody
and also receives securities transaction charges.  The
assets of the fund are held under bank custodianship
in compliance with the 1940 Act.

Citi Fiduciary Trust Company, located at 125 Broad
Street, New York, New York 10048, serves as the fund's
transfer and dividend-paying agent.  Under the
transfer agency agreement, the transfer agent
maintains the shareholder account records for the
fund, handles certain communications between
shareholders and the fund, distributes dividends and
distributions payable by the fund and produces
statements with respect to account activity for the
fund and its shareholders.  For these services, the
transfer agent receives fees from the fund computed on
the basis of the number of shareholder accounts that
the transfer agent maintains for the fund during the
month and is reimbursed for out-of-pocket expenses.

PFPC Global Fund Services, located at P.O. Box 9699,
Providence, RI 02940-9699, serves as the fund's sub-
transfer agent.  Under the transfer agency agreement,
PFPC maintains the shareholder account records for the
fund, handles certain communications between
shareholders and the fund, and distributes dividends
and distributions payable by the fund.  For these
services, PFPC receives a monthly fee computed on the
basis of the number of shareholder accounts it
maintains for the fund during the month, and is
reimbursed for out-of-pocket expenses.

The Fund has engaged the services of PFS Shareholder
Services, located at 3100 Breckinridge Blvd., Bldg
200, Duluth, Georgia 30099-0062, as the Sub-Transfer
Agent for PFS Accounts.

Code of Ethics

Pursuant to Rule 17j-1 of the 1940 Act, the fund, the
investment adviser and principal underwriter have
adopted a code of ethics that permits personnel to
invest in securities for their own accounts, including
securities that may be purchased or held by the fund.
 All personnel must place the interests of clients
first and avoid activities, interests and
relationships that might interfere with the duty to
make decisions in the best interests of the clients.
All personal securities transactions by employees must
adhere to the requirements of the code and must be
conducted in such a manner as to avoid any actual or
potential conflict of interest, the appearance of such
a conflict, or the abuse of an employee's position of
trust and responsibility. A copy of the fund's code of
ethics is on file with the SEC.

Distributor

Effective June 5, 2000, Salomon Smith Barney and PFS
Distributors, Inc. replaced CFBDS, Inc. as the fund's
distributor. Prior to June 5, 2000, CFBDS, Inc.,
located at 20 Milk Street, Boston, Massachusetts
02109-5408 served as the fund's distributor pursuant
to a written agreement dated October 8, 1998 (the
"Distribution Agreement") which was approved by the
fund's Board of Directors, including a majority of the
independent directors on July 15, 1998.  Prior to the
merger of Travelers Group, Inc. and Citicorp Inc. on
October 8, 1998, Salomon Smith Barney served as the
fund's distributor.  For the 1998 fiscal year, Salomon
Smith Barney, received $68,000, in sales charges from
the sale of Class A shares, and did not reallow any
portion thereof to dealers. For the period February
28, 1998 through October 7, 1998 the aggregate dollar
amount of initial sales charges on Class A shares was
$55,400 all of which was paid to Salomon Smith Barney.
 For the period October 8, 1998 through February 28,
1999 the aggregate dollar amount of initial sales
charges on Class A shares was $48,000, $43,200 of
which was paid to Salomon Smith Barney. For the fiscal
year ended February 29, 2000 the aggregate dollar
amount of initial sales charges on Class A shares was
$1,597,000, $1,437,300 of which was paid to Salomon
Smith Barney.

For the period June 12, 1998 through October 7, 1998
the aggregate dollar amount of initial sales charges
on Class L shares was $1,000, all of which was paid to
Salomon Smith Barney. For the period October 8, 1998
through February 28, 1999 the aggregate dollar amount
of sales charges on Class L shares was $198,000,
$178,200 of which was paid to Salomon Smith Barney.
For the fiscal year ended February 29, 2000 the
aggregate dollar amount of initial sales charges on
Class L shares was $197,000, $177,300 of which was
paid to Salomon Smith Barney.

For the fiscal years ended February 28, 1998 and 1999
and February 29, 2000, Salomon Smith Barney or its
predecessor received from shareholders $194,000,
$72,000 and $178,000, respectively, in deferred sales
charges on the redemption of Class A shares. For the
fiscal years ended February 28, 1998 and 1999 and
February 29, 2000, Salomon Smith Barney or its
predecessor received from shareholders $1,275,000,
$1,404,000 and $2,384,000, respectively, in deferred
sales charges on the redemption of Class B shares.
For the fiscal years ended February 28, 1998 and 1999
and February 29, 2000, Salomon Smith Barney or its
predecessor received from shareholders $29,000,
$32,000 and $46,000, respectively, in deferred sales
charges on redemption of Class L shares.

When payment is made by the investor before the
settlement date, unless otherwise noted by the
investor, the funds will be held as a free credit
balance in the investor's brokerage account and
Salomon Smith Barney may benefit from the temporary
use of the funds.  The fund's Board of Directors has
been advised of the benefits to Salomon Smith Barney
resulting from these settlement procedures and will
take such benefits into consideration when reviewing
the Investment Advisory Agreement for continuance.
The Distributor has entered into a selling agreement
with PFS and PFS has entered into an agreement with
PFSI giving PFSI the right to sell shares of each
portfolio of the fund on behalf of the Distributor.
The Distributor's obligation is an agency or "best
efforts" arrangement under which the Distributor is
required to take and pay only for such shares of each
portfolio as may be sold to the public.  The
Distributor is not obligated to sell any stated number
of shares.  The Distribution Agreement is renewable
from year to year if approved (a) by the directors or
by a vote of a majority of the fund's outstanding
voting securities, and (b) by the affirmative vote of
a majority of directors who are not parties to the
Distribution Agreement or interested persons of any
party by votes cast in person at a meeting called for
such purpose.  The Distribution Agreement provides
that it will terminate if assigned, and that it may be
terminated without penalty by either party on 60 days'
written notice.

Distribution Arrangements.  To compensate Salomon
Smith Barney for the service it provides and for the
expense it bears, the fund has adopted a services and
distribution plan (the "Plan") pursuant to Rule 12b-1
under the 1940 Act.  Under the Plan, the fund pays
Salomon Smith Barney a service fee, accrued daily and
paid monthly, calculated at the annual rate of 0.15%
of the value of the fund's average daily net assets
attributable to the Class A, Class B and Class L
shares.  In addition, the fund pays Salomon Smith
Barney a distribution fee with respect to Class B and
Class L shares primarily intended to compensate
Salomon Smith Barney for its initial expense of paying
Financial Consultants a commission upon sales of those
shares.  The Class B and Class L distribution fee is
calculated at the annual rate of 0.50% and 0.55%,
respectively, of the value of the fund's average net
assets attributable to the shares of each Class.

For the fiscal year ended February 29, 2000, Salomon
Smith Barney incurred distribution expenses totaling
$9,230,361 consisting of $676,417 for advertising,
$85,521 for printing and mailing of prospectuses,
$4,455,473 for support services, $3,943,403 to Salomon
Smith Barney Financial Consultants, and $69,547 in
accruals for interest on the excess of Salomon Smith
Barney expenses incurred in distributing the fund's
shares over the sum of the distribution fees and
deferred sales charge received by Salomon Smith Barney
from the fund.

The following service and distribution fees were
incurred pursuant to a Distribution Plan during the
periods indicated:




Distribution Plan Fees





Fiscal Year
Ended
2/29/00

Fiscal Year
Ended 2/28/99

Fiscal Year
Ended 2/28/98

Class A

$
3,264,176

$   3,651,852

$   3,247,646

Class B

$
6,863,675

$   7,588,761

$   6,535,992

Class L*

$
1,199,500

$   1,106,096

$
683,634

* Class L shares were called Class C shares
until June 12, 1998.

Under its terms, the Plan continues from year to year,
provided such continuance is approved annually by vote
of the Board of Directors, including a majority of the
independent directors.  The Plan may not be amended to
increase the amount of the service and distribution
fees without shareholder approval, and all material
amendments of the Plan also must be approved by the
directors and independent directors in the manner
described above.  The Plan may be terminated with
respect to a Class of the fund at any time, without
penalty, by vote of a majority of the independent
directors or by a vote of a majority of the
outstanding voting securities of the Class (as defined
in the 1940 Act).  Pursuant to the Plan, Salomon Smith
Barney will provide the fund's Board of Directors with
periodic reports of amounts expended under the Plan
and the purpose for which such expenditures were made.

The only classes of shares being offered for sale
through PFS Distributors is Class 1 shares, Class A
shares and Class B shares. Pursuant to the Plan
(described above), PFS Distributors is paid an annual
service fee with respect to Class A and Class B shares
of the fund sold through PFS Distributors at the
annual rate of 0.25% of the average daily net assets
of the respective class.  PFS Distributors is also
paid an annual distribution fee with respect to Class
B shares at the annual rate of 0.75% of the average
daily net assets attributable to that Class.  Class B
shares that automatically convert to Class A shares
eight years after the date of original purchase will
no longer be subject to a distribution fee. Class 1
shares do not have a service fee.  The fees are paid
to PFS Distributors, which in turn, pays PFS
Investments Inc. ("PFS Investments") to pay its PFS
Investments Registered Representatives for servicing
shareholder accounts and, in the case of Class B
shares, to cover expenses primarily intended to result
in the sale of those shares.  These expenses include:
advertising expenses; the cost of printing and mailing
prospectuses to potential investors; payments to and
expenses of PFS Investments Registered Representatives
and other persons who provide support services in
connection with the distribution of shares; interest
and/or carrying charges; and indirect and overhead
costs of PFS Investments associated with the sale of
fund shares, including lease, utility, communications
and sales promotion expenses.

The payments to PFS Investments Registered
Representatives for selling shares of a class include
a commission or fee paid by the investor or PFS at the
time of sale and, with respect to Class A and Class B
shares, a continuing fee for servicing shareholder
accounts for as long as a shareholder remains a holder
of that class.  PFS Investments Registered
Representatives may receive different levels of
compensation for selling different classes of shares.

PFS Investments may be deemed to be an underwriter for
purposes of the Securities Act of 1933. From time to
time, PFS or its affiliates may also pay for certain
non-cash sales incentives provided to PFS Investments
Registered Representatives.  Such incentives do not
have any effect on the net amount invested.  In
addition to the reallowances from the applicable
public offering price described above, PFS may from
time to time, pay or allow additional reallowances or
promotional incentives, in the form of cash or other
compensation to PFS Investments Registered
Representatives who sell shares of the fund.



VALUATION OF SHARES

The fund's net asset value per share is determined as
of close of regular trading on the NYSE, on each day
that the NYSE is open, by dividing value of the fund's
net assets attributable to each Class by the total
number of shares of that Class outstanding.

When, in the judgment of the pricing service, quoted
bid prices for investments are readily available and
are representative of the bid side of the market,
these investments are valued at the mean between the
quoted bid and asked prices.  Investments for which,
in the judgment of the pricing service, there is no
readily obtainable market quotation (which may
constitute a majority of the portfolio securities) are
carried at fair value of securities of similar type,
yield and maturity.  Pricing services generally
determine value by reference to transactions in
municipal obligations, quotations from municipal bond
dealers, market transactions in comparable securities
and various relationships between securities.  Short-
term investments that mature in 60 days or less are
valued at amortized cost whenever the Board of
Directors determines that amortized cost is fair
value.  Amortized cost valuation involves valuing an
instrument at its cost initially and, thereafter,
assuming a constant amortization to maturity of any
discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the
instrument.  Securities and other assets that are not
priced by a pricing service and for which market
quotations are not available will be valued in good
faith at fair value by or under the direction of the
fund's Board of Directors.

EXCHANGE PRIVILEGE

Shares of each Class of the fund may be exchanged for
shares of the same Class of certain Smith Barney
mutual funds, to the extent shares are offered for
sale in the shareholder's state of residence.
Exchanges of Class A, Class B and Class L shares are
subject to minimum investment requirements and all
shares are subject to the other requirements of the
fund into which exchanges are made.

Class B Exchanges.  If a Class B shareholder wishes to
exchange all or a portion of his or her shares in any
of the funds imposing a higher deferred sales charge
than that imposed by the fund, the exchanged Class B
shares will be subject to the higher applicable
deferred sales charge. Upon an exchange, the new Class
B shares will be deemed to have been purchased on the
same date as the Class B shares of the fund that have
been exchanged.

Class L Exchanges.  Upon an exchange, the new Class L
shares will be deemed to have been purchased on the
same date as the Class L shares of the fund that have
been exchanged.

Class A and Class Y Exchanges.  Class A and Class Y
shareholders of the fund who wish to exchange all or a
portion of their shares for shares of the respective
Class in any of the funds identified above may do so
without imposition of any charge.

Additional Information Regarding the Exchange
Privilege.  Although the exchange privilege is an
important benefit, excessive exchange transactions can
be detrimental to the fund's performance and its
shareholders. The manager may determine that a pattern
of frequent exchanges is excessive and contrary to the
best interests of the fund's other shareholders. In
this event, the fund may, at its discretion, decide to
limit additional purchases and/or exchanges by the
shareholder. Upon such a determination, the fund will
provide notice in writing or by telephone to the
shareholder at least 15 days prior to suspending the
exchange privilege and during the 15 day period the
shareholder will be required to (a) redeem his or her
shares in the fund or (b) remain invested in the fund
or exchange into any of the funds of the Smith Barney
mutual funds ordinarily available, which position the
shareholder would be expected to maintain for a
significant period of time. All relevant factors will
be considered in determining what constitutes an
abusive pattern of exchanges.

Certain shareholders may be able to exchange shares by
telephone. See ''Redemption of Shares-Telephone
Redemptions and Exchange Program.'' Exchanges will be
processed at the net asset value next determined.
Redemption procedures discussed below are also
applicable for exchanging shares, and exchanges will
be made upon receipt of all supporting documents in
proper form.  If the account registration of the
shares of the fund being acquired is identical to the
registration of the shares of the fund exchanged, no
signature guarantee is required.  An exchange involves
a taxable redemption of shares, subject to the tax
treatment described in "Dividends, Distributions and
Taxes" below, followed by a purchase of shares of a
different fund.  Before exchanging shares, investors
should read the current prospectus describing the
shares to be acquired.  The fund reserves the right to
modify or discontinue exchange privileges upon 60
days' prior notice to shareholders.

Additional Information Regarding Telephone Redemption
and Exchange Program

Neither the fund nor its agents will be liable for
instructions communicated by telephone that are
reasonably believed to be genuine.  The fund or its
agents will employ procedures designed to verify the
identity of the caller and legitimacy of instructions
(for example, a shareholder's name and account number
will be required and phone calls may be recorded).
The fund reserves the right to suspend, modify or
discontinue the telephone redemption and exchange
program or to impose a charge for this service at any
time following at least seven (7) days' prior notice
to shareholders.



PERFORMANCE DATA

From time to time, the fund may quote total return of
a class in advertisements or in reports and other
communications to shareholders.  The fund may include
comparative performance information in advertising or
marketing the fund's shares.  Such performance
information may include data from the following
industry and financial publications: Barron's,
Business Week, CDA Investment Technologies, Inc.,
Changing Times, Forbes, Fortune, Institutional
Investor, Investors Business Daily, Money, Morningstar
Mutual Fund Values, The New York Times, USA Today and
The Wall Street Journal.

Yield and Equivalent Taxable Yield

A Class' 30-day yield figure described below is
calculated according to a formula prescribed by the
SEC. The formula can be expressed as follows:

YIELD =2 [(a-b +1)6-1]
						        cd

Where:	 a	=  	dividends and interest earned
during the period.
		 b	=  	expenses accrued for the
period (net of reimbursement).
 c	=  	the average daily number of
shares outstanding during the
period that were entitled to
receive dividends.
	 d	=  	the maximum offering price per
share on the last day of the period.

For the purpose of determining the interest earned
(variable "a'' in the formula) on debt obligations
that were purchased by the fund at a discount or
premium, the formula generally calls for amortization
of the discount or premium. The amortization schedule
will be adjusted monthly to reflect changes in the
market values of the debt obligations.

The fund's equivalent taxable 30-day yield for a Class
of shares is computed by dividing that portion of the
Class' 30-day yield which is tax-exempt by one minus a
stated income tax rate and adding the product to that
portion, if any, of the Class' yield that is not tax-
exempt.

The yields on municipal securities are dependent upon
a variety of factors, including general economic and
monetary conditions, conditions of the municipal
securities market, size of a particular offering,
maturity of the obligation offered and rating of the
issue. Investors should recognize that in periods of
declining interest rates the fund's yield for each
Class of shares will tend to be somewhat higher than
prevailing market rates, and in periods of rising
interest rates the fund's yield for each Class of
shares will tend to be somewhat lower. Also, when
interest rates are falling, the inflow of net new
money to the fund from the continuous sale of its
shares will likely be invested in portfolio
instruments producing lower yields than the balance of
the fund's portfolio, thereby reducing the current
yield of the fund. In periods of rising interest
rates, the opposite can be expected to occur.

The fund's yield for Class A, Class B and Class L
shares for the 30-day period ended February 29, 2000
was 5.89%, 5.62%, 5,52% and 6.32%, respectively.  The
equivalent taxable yield for Class A, Class B, Class L
and Class Y shares for that same period was 9.20%,
8.78%, 8.63% and 9.88%, respectively, assuming the
payment of Federal income taxes at a rate of 36%.

Average Annual Total Return

"Average annual total return," as described below, is
computed according to a formula prescribed by the SEC.
 The formula can be expressed as follows:

	P (1+T)n = ERV

Where:		 	P	= 	a hypothetical
initial payment of $1,000.
T	= 	average annual total
return.
N	=	number of years.
ERV	=	Ending Redeemable Value
of a hypothetical $1,000
investment made at the
beginning of a 1-, 5-,
or 10-year period at the
end of a 1-, 5-, or 10-
year period (or
fractional portion
thereof), assuming
reinvestment of all
dividends and
distributions.

The fund's average annual total return for Class A
shares assuming the maximum applicable sales charge
was as follows for the periods indicated (reflecting
the waiver of the fund's investment advisory and
administration fees and reimbursement of expenses):

(10.33)% for the one-year period ended February
29, 2000.

4.05% for the five-year period ended February
29, 2000.

6.81% for the ten-year period ended February 29,
2000.

9.50% per annum during the period from the
fund's commencement of operations on  March 4,
1981 through February 29, 2000.

A Class' average annual total return assumes that the
maximum applicable sales charge or deferred sales
charge assessed by the fund has been deducted from the
hypothetical investment.  If the maximum 4.00% sales
charge had not been deducted, Class A's average annual
total return would have been (6.62)%, 4.90%, 7.26% and
9.74%, respectively, for those same periods.

The fund's average annual total return for Class B
shares assuming the maximum applicable deferred sales
charge was as follows for the periods indicated
(reflecting the waiver of the fund's investment
advisory and administration fees and reimbursement of
expenses):

(11.09)% for the one-year period ended February
29, 2000.

4.20% for the five-year period ended February
29, 2000.

5.92% per annum during the period from the
fund's commencement of operations on November 6,
1992 through February 29, 2000.

If the maximum applicable deferred sales charge had
not been deducted at the time of redemption, Class B's
average annual total return would have been (7.08)%,
4.36% and 5.92%, respectively, for the same periods.

The fund's average annual total return for Class L
shares assuming the maximum applicable deferred sales
charge was as follows for the periods indicated
(reflecting the waiver of the fund's investment
advisory and administration fees and reimbursement of
expenses):

(8.99)% for the one-year period ended February
29, 2000.

	4.09% for the five-year period ended February
29, 2000.

6.16% per annum during the period from the
fund's commencement of operations on November 9,
1994 through February 29, 2000.

If the maximum applicable deferred sales charge had
not been deducted at the time of redemption, Class L's
average annual total return would have been (7.19)%,
4.30% and 6.35%.

The fund's average annual total return for Class Y
shares assuming the maximum applicable deferred sales
charge was as follows for the periods indicated
(reflecting the waiver of the fund's investment
advisory and administration fees and reimbursement of
expenses):

(6.44)% for the one-year period ended February
29, 2000.

4.87% per annum during the period from the
fund's commencement of operations on      April
4, 1995 through February 29, 2000.

Class Y's shares do not incur sales charges or
deferred sales charges.

Aggregate Total Return

"Aggregate total return" represents the cumulative
change in the value of an investment in the Class for
the specified period and is computed by the following
formula:

	ERV-P
	P

Where: 	P 	=	a hypothetical initial payment
of $10,000.
ERV	=	Ending Redeemable Value of a
hypothetical $10,000
investment made at the
beginning of a 1-, 5-, or 10-
year period at the end of a 1-
, 5-, or 10-year period (or
fractional portion thereof),
assuming reinvestment of all
dividends and distributions.

The fund's aggregate total return for Class A shares
was as follows for the periods indicated (reflecting
the waiver of the fund's investment advisory and
administration fees and reimbursement of expenses):

(10.33)% for the one-year period ended February
29, 2000.

21.95% for the five-year period ended February
29, 2000.

	93.34% for the ten-year period ended February
29, 2000.

460.92% for the period from the fund's
commencement of operations on March 4, 1981
through February 29, 2000.

Class A's aggregate total return assumes that the
maximum applicable sales charge or maximum applicable
deferred sales charge has been deducted from the
investment.  If the maximum sales charge had not been
deducted at the time of purchase, Class A's aggregate
total return for the same periods would have been
(6.62)%, 27.00%, 101.46% and 484.41%, respectively.

The fund's aggregate total return for Class B shares
was as follows for the periods indicated (reflecting
the waiver of the fund's investment advisory and
administration fees and reimbursement of expenses):

(11.09)% for the one-year period ended February
29, 2000.

22.84% for the five-year period ended February
29, 2000.

52.30% for the period from commencement of
operations on November 6, 1992 through February
29, 2000.

If the maximum applicable deferred sales charge had
not been deducted at the time of redemption, Class B's
aggregate total return for the same periods would have
been (7.08)%, 23.76% and 52.30%, respectively.

The fund's aggregate total return for Class L shares
was as follows for the period indicated (reflecting
the waiver of the fund's investment advisory and
administration fees and reimbursement of expenses):

(8.99)% for the one-year period ended February
29, 2000.

22.18% for the five-year period ended February
29, 2000.

37.34% for the period from commencement of
operations on November 09, 1994 through February
29, 2000.

If the maximum applicable deferred sales charge had
not been deducted at the time of redemption, Class L's
aggregate total return for the same periods would have
been (7.19)%, 23.44 and 38.69%.

The fund's aggregate total return for Class Y shares
was as follows for the period indicated (reflecting
the waiver of the fund's investment advisory and
administration fees and reimbursement of expenses):

(6.44)% for the one-year period ended February
29, 2000.

26.31% for the period from commencement of
operations on April 4, 1995 through
February 29, 2000.

Class Y shares do not incur sales charges or deferred
sales charges.

Performance will vary from time to time depending on
market conditions, the composition of the fund's
portfolio and operating expenses and the expenses
exclusively attributable to the Class.  Consequently,
any given performance quotation should not be
considered as representative of the Class' performance
for any specified period in the future.  Because
performance will vary, it may not provide a basis for
comparing an investment in the Class with certain bank
deposits or other investments that pay a fixed yield
for a stated period of time. Investors comparing a
Class' performance with that of other mutual funds
should give consideration to the quality and maturity
of the respective investment companies' portfolio
securities.

It is important to note that the total return figures
set forth above are based on historical earnings and
are not intended to indicate future performance.  Each
Class' net investment income changes in response to
fluctuations in interest rates and the expenses of the
fund.



DIVIDENDS, DISTRIBUTIONS AND TAXES

Dividends and Distributions.  The fund's policy is to
declare and pay exempt-interest dividends monthly.
Dividends from net realized capital gains, if any,
will be distributed annually.  The fund may also pay
additional dividends shortly before December 31 from
certain amounts of undistributed ordinary income and
capital gains, in order to avoid a Federal excise tax
liability.  If a shareholder does not otherwise
instruct, exempt-interest dividends and capital gain
distributions will be reinvested automatically in
additional shares of the same Class at net asset
value, with no additional sales charge or deferred
sales charge.

The per share amounts of the exempt-interest dividends
on Class B and Class L shares may be lower than on
Class A and Class Y shares, mainly as a result of the
distribution fees applicable to Class B and Class L
shares.  Similarly, the per share amounts of exempt-
interest dividends on Class A shares may be lower than
on Class Y shares, as a result of the service fee
attributable to Class A shares. Capital gain
distributions, if any, will be the same across all
Classes of fund shares (A, B, L and Y).

Taxes. The following is a summary of the material
United States federal income tax considerations
regarding the purchase, ownership and disposition of
shares of the fund.  Each prospective shareholder is
urged to consult his own tax adviser with respect to
the specific federal, state and local consequences of
investing in the fund.  The summary is based on the
laws in effect on the date of this SAI, which are
subject to change.

The fund and its investments

As described in the fund's prospectus, the fund is
designed to provide shareholders with current income
which is excluded from gross income for federal income
tax purposes.  The fund is not intended to constitute
a balanced investment program and is not designed for
investors seeking capital gains or maximum tax-exempt
income irrespective of fluctuations in principal.
Investment in the fund would not be suitable for tax-
exempt institutions, qualified retirement plans, H.R.
10 plans and individual retirement accounts because
such investors would not gain any additional tax
benefit from the receipt of tax-exempt income.

The fund intends to continue to qualify to be treated
as a regulated investment company each taxable year
under the Code.  To so qualify, the fund must, among
other things: (a) derive at least 90% of its gross
income in each taxable year from dividends, interest,
payments with respect to securities loans, and gains
from the sale or other disposition of stock or
securities or foreign currencies, or other income
(including, but not limited to, gains from options,
futures or forward contracts) derived with respect to
its business of investing in such stock, securities or
currencies; and (b) diversify its holdings so that, at
the end of each quarter of the fund's taxable year,
(i) at least 50% of the market value of the fund's
assets is represented by cash, securities of other
regulated investment companies, United States
government securities and other securities, with such
other securities limited, in respect of any one
issuer, to an amount not greater than 5% of the fund's
assets and not greater than 10% of the outstanding
voting securities of such issuer and (ii) not more
than 25% of the value of its assets is invested in the
securities (other than United States government
securities or securities of other regulated investment
companies) of any one issuer or any two or more
issuers that the fund controls and are determined to
be engaged in the same or similar trades or businesses
or related trades or businesses.

As a regulated investment company, the fund will not
be subject to United States federal income tax on its
investment company taxable income (i.e., taxable
income other than any expenses of its net realized
long-term capital gains over its net realized short-
term capital losses ("net realized capital gains"))
and on its net realized capital gains, if any, that it
distributes to its shareholders, provided an amount
equal to at least the sum of 90% of its investment
company taxable income, plus or minus certain other
adjustments as specified in the Code, and 90% of its
net tax-exempt income for the taxable year is
distributed in compliance with the Code's timing and
other requirements but will be subject to tax at
regular corporate rates on any taxable income or gains
it does not distribute.

The Code imposes a 4% nondeductible excise tax on the
fund to the extent it does not distribute by the end
of any calendar year at least 98% of its net
investment income for that year and 98% of the net
amount of its capital gains (both long-and short-term)
for the one-year period ending, as a general rule, on
October 31 of that year.  For this purpose, however,
any income or gain retained by the fund that is
subject to corporate income tax will be considered to
have been distributed by year-end.  In addition, the
minimum amounts that must be distributed in any year
to avoid the excise tax will be increased or decreased
to reflect any underdistribution or overdistribution,
as the case may be, from the previous year.  The fund
anticipates it will pay such dividends and will make
such distributions as are necessary in order to avoid
the application of this tax.

On February 29, 2000, the unused capital loss
carryovers of the fund were approximately $76,312,000.
For Federal income tax purposes, this amount is
available to be applied against future capital gains
of the fund, if any, that are realized prior to the
expiration of the applicable carryover. The amount,
$11,499,000 of the total unused capital loss carryover
expires in 2007 and the remaining $64,813,000 expires
in 2008.

If, in any taxable year, the fund fails to qualify as
a regulated investment company under the Code or fails
to meet the distribution requirement, it would be
taxed in the same manner as an ordinary corporation
and distributions to its shareholders would not be
deductible by the fund in computing its taxable
income.  In addition, in the event of a failure to
qualify, the fund's distributions, to the extent
derived from the fund's current or accumulated
earnings and profits would constitute dividends
(eligible for the corporate dividends-received
deduction) which are taxable to shareholders as
ordinary income, even though those distributions might
otherwise (at least in part) have been treated in the
shareholders' hands as tax-exempt interest.  If the
fund fails to qualify as a regulated investment
company in any year, it must pay out its earnings and
profits accumulated in that year in order to qualify
again as a regulated investment company. In addition,
if the fund failed to qualify as a regulated
investment company for a period greater than one
taxable year, the fund may be required to recognize
any net built-in gains with respect to certain of its
assets (the excess of the aggregate gains, including
items of income, over aggregate losses that would have
been realized if it had been liquidated) in order to
qualify as a regulated investment company in a
subsequent year.

The fund's transactions in municipal bond index and
interest rate futures contracts and options on these
futures contracts (collectively "section 1256
contracts") will be subject to special provisions of
the Code (including provisions relating to "hedging
transactions" and "straddles") that, among other
things, may affect the character of gains and losses
realized by the fund (i.e., may affect whether gains
or losses are ordinary or capital), accelerate
recognition of income to the fund and defer fund
losses. These rules could therefore affect the
character, amount and timing of distributions to
shareholders. These provisions also (a) will require
the fund to mark-to-market certain types of positions
in its portfolio (i.e., treat them as if they were
closed out) and (b) may cause the fund to recognize
income without receiving cash with which to pay
dividends or make distributions in amounts necessary
to satisfy the distribution requirements for avoiding
income and excise taxes.  The fund will monitor its
transactions, will make the appropriate tax elections
and will make the appropriate entries in its books and
records when it engages in these transactions in order
to mitigate the effect of these rules and prevent
disqualification of the fund as a regulated investment
company.

All section 1256 contracts held by the fund at the end
of its taxable year are required to be marked to their
market value, and any unrealized gain or loss on those
positions will be included in the fund's income as if
each position had been sold for its fair market value
at the end of the taxable year.  The resulting gain or
loss will be combined with any gain or loss realized
by the fund from positions in section 1256 contracts
closed during the taxable year.  Provided such
positions were held as capital assets and were not
part of a "hedging transaction" nor part of a
"straddle," 60% of the resulting net gain or loss will
be treated as long-term capital gain or loss, and 40%
of such net gain or loss will be treated as short-term
capital gain or loss, regardless of the period of time
the positions were actually held by the fund.

Taxation of Shareholders

Because the fund will distribute exempt-interest
dividends, interest on indebtedness incurred by a
shareholder to purchase or carry fund shares is not
deductible for Federal income tax purposes. If a
shareholder receives exempt-interest dividends with
respect to any share and if such share is held by the
shareholder for six months or less, then, for Federal
income tax purposes, any loss on the sale or exchange
of such share may, to the extent of exempt-interest
dividends, be disallowed.  In addition, the Code may
require a shareholder, if he or she receives exempt-
interest dividends, to treat as Federal taxable income
a portion of certain otherwise non-taxable social
security and railroad retirement benefit payments.
Furthermore, that portion of any exempt-interest
dividend paid by the fund which represents income
derived from private activity bonds held by the fund
may not retain its Federal tax-exempt status in the
hands of a shareholder who is a "substantial user" of
a facility financed by such bonds or a "related
person" thereof.  Moreover, some or all of the fund's
dividends may be a specific preference item, or a
component of an adjustment item, for purposes of the
Federal individual and corporate alternative minimum
taxes.  In addition, the receipt of the fund's
dividends and distributions may affect a foreign
corporate shareholder's Federal "branch profits" tax
liability and Federal "excess net passive income" tax
liability of a shareholder of a Subchapter S
corporation. Shareholders should consult their own tax
advisors to determine whether they are (a) substantial
users with respect to a facility or related to such
users within the meaning of the Code or (b) subject to
a federal alternative minimum tax, the Federal branch
profits tax or the Federal "excess net passive income"
tax.

The fund does not expect to realize a significant
amount of capital gains.  Net realized short-term
capital gains are taxable to a United States
shareholder as ordinary income, whether paid in cash
or in shares.  Distributions of net-long-term capital
gains, if any, that the fund designates as capital
gains dividends are taxable as long-term capital
gains, whether paid in cash or in shares and
regardless of how long a shareholder has held shares
of the fund.

Upon the sale or exchange of his shares, a shareholder
will realize a taxable gain or loss equal to the
difference between the amount realized and his basis
in his shares.  Such gain or loss will be treated as
capital gain or loss, if the shares are capital assets
in the shareholder's hands, and will be long-term
capital gain or loss if the shares are held for more
than one year and short-term capital gain or loss if
the shares are held for one year or less.  Any loss
realized on a sale or exchange will be disallowed to
the extent the shares disposed of are replaced,
including replacement through the reinvesting of
dividends and capital gains distributions in the fund,
within a 61-day period beginning 30 days before and
ending 30 days after the disposition of the shares. In
such a case, the basis of the shares acquired will be
increased to reflect the disallowed loss. Any loss
realized by a shareholder on the sale of a fund share
held by the shareholder for six months or less (to the
extent not disallowed pursuant to the six-month rule
described above relating to exempt-interest dividends)
will be treated for United States federal income tax
purposes as a long-term capital loss to the extent of
any distributions or deemed distributions of long-term
capital gains received by the shareholder with respect
to such share.

If a shareholder incurs a sales charge in acquiring
shares of the fund, disposes of those shares within 90
days and then acquires shares in a mutual fund for
which the otherwise applicable sales charge is reduced
by reason of a reinvestment right (e.g., an exchange
privilege), the original sales charge will not be
taken into account in computing gain or loss on the
original shares to the extent the subsequent sales
charge is reduced.  Instead, the disregarded portion
of the original sales charge will be added to the tax
basis in the newly acquired shares.  Furthermore, the
same rule also applies to a disposition of the newly
acquired shares made within 90 days of the second
acquisition.  This provision prevents a shareholder
from immediately deducting the sales charge by
shifting his or her investment in a family of mutual
funds.

Backup Withholding.  The fund may be required to
withhold, for United States federal income tax
purposes, 31% of dividends, distributions and
redemption proceeds payable to shareholders who fail
to provide the fund with their correct taxpayer
identification number or to make required
certifications, or who have been notified by the IRS
that they are subject to backup withholding. Certain
shareholders are exempt from backup withholding.
Backup withholding is not an additional tax and any
amount withheld may be credited against a
shareholder's United States federal income tax
liabilities.

Notices.  Shareholders will be notified annually by
the fund as to the United States federal income tax
and personal income tax status of the dividends and
distributions made by the fund to its shareholders.
These statements also will designate the amount of
exempt-interest dividends that is a preference item
for purposes of the Federal individual and corporate
alternative minimum taxes. The dollar amount of
dividends excluded or exempt from Federal income
taxation and the dollar amount of dividends subject to
Federal income taxation, if any, will vary for each
shareholder depending upon the size and duration of
each shareholder's investment in the fund. To the
extent the fund earns taxable net investment income,
it intends to designate as taxable dividends the same
percentage of each day's dividend as its taxable net
investment income bears to its total net investment
income earned on that day.

The foregoing is only a summary of certain material
tax consequences affecting the fund and its
shareholders.  Shareholders are advised to consult
their own tax advisers with respect to the particular
tax consequences to them of an investment in the fund.

ADDITIONAL INFORMATION

The fund was incorporated under the laws of the State
of Maryland on September 16, 1980, and is registered
with the SEC as a diversified, open-end management
investment company.

Each Class of the fund's shares represents an
identical interest in the fund's investment portfolio.
 As a result, the Classes have the same rights,
privileges and preferences, except with respect to:
(a) the designation of each Class; (b) the effect of
the respective sales charges for each Class; (c) the
distribution and/or service fees borne by each Class;
(d) the expenses allowable exclusively to each Class;
(e) voting rights on matters exclusively affecting a
single class; (f) the exchange privilege of each
Class; and (g) the conversion feature of the Class B
shares.  The Board of Directors does not anticipate
that there will be any conflicts among the interests
of the holders of the different Classes. The
directors, on an ongoing basis, will consider whether
any such conflict exists and, if so, take appropriate
action.

The fund does not hold annual shareholder meetings.
There normally will be no meetings of shareholders for
the purpose of electing directors unless and until
such time as less than a majority of the directors
holding office have been elected by shareholders.  The
directors will call a meeting for any purpose upon
written request of shareholders holding at least 10%
of the fund's outstanding shares and the fund will
assist shareholders in calling such a meeting as
required by the 1940 Act. When matters are submitted
for shareholder vote, shareholders of each Class will
have one vote for each full share owned and a
proportionate, fractional vote for any fractional
share held of that Class. Generally, shares of the
fund will be voted on a fund-wide basis on all matters
except matters affecting only the interests of one
Class.

The fund was incorporated on September 16, 1980 under
the name Shearson Managed Municipals Inc.  On December
15, 1988, November 6, 1992, July 30, 1993 and October
14, 1994, the fund's name was changed to SLH Managed
Municipals Fund Inc., Shearson Lehman Brothers Managed
Municipals Fund Inc., Smith Barney Shearson Managed
Municipals Fund Inc.  and Smith Barney Managed
Municipals Fund Inc., respectively.

FINANCIAL STATEMENTS

The fund's annual report for the fiscal year ended
February 29, 2000 is incorporated herein by reference
in its entirety.  The annual report was filed on April
25, 2000, Accession Number 950130-00-002283.

OTHER INFORMATION

In an industry where the average portfolio manager has
seven years of experience (source: ICI, 1998), the
portfolio managers of Smith Barney mutual funds
average 21 years in the industry and 15 years with the
firm.


Styles of Fund Management:  In an industry where the
average portfolio manager has seven years of
experience (source: ICI, 1998), the portfolio managers
of Smith Barney mutual funds average 21 years in the
industry and 15 years with the firm.

Smith Barney mutual funds offers more than 60 mutual
funds.  We understand that many investors prefer an
active role in allocating the mix of funds in their
portfolio, while others want the asset allocation
decisions to be made by experienced managers.

That's why we offer four "styles" of fund management
that can be tailored to suit each investor's unique
financial goals.

Style Pure Series - Our Style Pure Series funds stay
fully invested within their asset class and investment
style, enabling investors to make asset allocation
decisions in conjunction with their Salomon Smith
Barney Financial Consultant.

Classic Investor Series - Our Classic Investor Series
funds offer a range of equity and fixed income
strategies that seek to capture opportunities across
asset classes and investment styles using disciplined
investment approaches.

The Concert Allocation Series - As a fund of funds,
investors can select a Concert Portfolio that may help
their investment needs.  As needs change, investors
can easily choose another long-term, diversified
investment from our Concert family.

Special Discipline Series - Our Special Discipline
Series funds are designed for investors who are
looking beyond more traditional market categories:
from natural resources to a roster of state-specific
municipal funds.





APPENDIX A

Description of S&P and Moody's ratings:

S&P Ratings for Municipal Bonds

S&P's Municipal Bond ratings cover obligations of
states and political subdivisions.  Ratings are
assigned to general obligation and revenue bonds.
General obligation bonds are usually secured by all
resources available to the municipality and the
factors outlined in the rating definitions below are
weighed in determining the rating.  Because revenue
bonds in general are payable from specifically pledged
revenues, the essential element in the security for a
revenue bond is the quantity and quality of the
pledged revenues available to pay debt service.

Although an appraisal of most of the same factors that
bear on the quality of general obligation bond credit
is usually appropriate in the rating analysis of a
revenue bond, other factors are important, including
particularly the competitive position of the municipal
enterprise under review and the basic security
covenants.  Although a rating reflects S&P's judgment
as to the issuer's capacity for the timely payment of
debt service, in certain instances it may also reflect
a mechanism or procedure for an assured and prompt
cure of a default, should one occur, i.e., an
insurance program, Federal or state guarantee or the
automatic withholding and use of state aid to pay the
defaulted debt service.

	AAA

Prime - These are obligations of the highest quality.
 They have the strongest capacity for timely payment
of debt service.

General Obligation Bonds - In a period of economic
stress, the issuers will suffer the smallest declines
in income and will be least susceptible to autonomous
decline.  Debt burden is moderate. A strong revenue
structure appears more than adequate to meet future
expenditure requirements.  Quality of management
appears superior.

Revenue Bonds - Debt service coverage has been, and is
expected to remain, substantial.  Stability of the
pledged revenues is also exceptionally strong, due to
the competitive position of the municipal enterprise
or to the nature of the revenues.  Basic security
provisions (including rate covenant, earnings test for
issuance of additional bonds, and debt service reserve
requirements) are rigorous. There is evidence of
superior management.

	AA

High Grade - The investment characteristics of general
obligation and revenue bonds in this group are only
slightly less marked than those of the prime quality
issues.  Bonds rated "AA'' have the second strongest
capacity for payment of debt service.


	A

Good Grade - Principal and interest payments on bonds
in this category are regarded as safe.  This rating
describes the third strongest capacity for payment of
debt service.  It differs from the two higher ratings
because:

General Obligation Bonds - There is some weakness,
either in the local economic base, in debt burden, in
the balance between revenues and expenditures, or in
quality of management.  Under certain adverse
circumstances, any one such weakness might impair the
ability of the issuer to meet debt obligations at some
future date.

Revenue Bonds - Debt service coverage is good, but not
exceptional.  Stability of the pledged revenues could
show some variations because of increased competition
or economic influences on revenues.  Basic security
provisions, while satisfactory, are less stringent.
Management performance appears adequate.

	BBB

Medium Grade - Of the investment grade ratings, this
is the lowest.

General Obligation Bonds - Under certain adverse
conditions, several of the above factors could
contribute to a lesser capacity for payment of debt
service.  The difference between "A'' and "BBB"
ratings is that the latter shows more than one
fundamental weakness, or one very substantial
fundamental weakness, whereas the former shows only
one deficiency among the factors considered.

Revenue Bonds - Debt coverage is only fair.  Stability
of the pledged revenues could show substantial
variations, with the revenue flow possibly being
subject to erosion over time.  Basic security
provisions are no more than adequate.  Management
performance could be stronger.

	BB, B, CCC and CC

Bonds rated BB, B, CCC and CC are regarded, on
balance, as predominately speculative with respect to
capacity to pay interest and repay principal in
accordance with the terms of the obligation.  BB
indicates the lowest degree of speculation and CC the
highest degree of speculation.  While such bonds will
likely have some quality and protective
characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse
conditions.

	C

The rating C is reserved for income bonds on which no
interest is being paid.




	D

Bonds rated D are in default, and payment of interest
and/or repayment of principal is in arrears.

S&P's letter ratings may be modified by the addition
of a plus or a minus sign, which is used to show
relative standing within the major rating categories,
except in the AAA-Prime Grade category.

S&P Ratings for Municipal Notes

Municipal notes with maturities of three years or less
are usually given note ratings (designated SP-1, -2 or
-3) by S&P to distinguish more clearly the credit
quality of notes as compared to bonds.  Notes rated
SP-1 have a very strong or strong capacity to pay
principal and interest.  Those issues determined to
possess overwhelming safety characteristics are given
the designation of SP-1+.  Notes rated SP-2 have a
satisfactory capacity to pay principal and interest.

Moody's Ratings for Municipal Bonds

	Aaa

Bonds that are Aaa are judged to be of the best
quality.  They carry the smallest degree of investment
risk and are generally referred to as "gilt edge.''
Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure.
While the various protective elements are likely to
change, such changes as can be visualized are most
unlikely to impair the fundamentally strong position
of such issues.

	Aa

Bonds that are rated Aa are judged to be of high
quality by all standards.  Together with the Aaa group
they comprise what are generally known as high grade
bonds.  They are rated lower than the best bonds
because margins of protection may not be as large as
in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be
other elements present which make the long-term risks
appear somewhat larger than in Aaa securities.

	A

Bonds that are rated A possess many favorable
investment attributes and are to be considered as
upper medium-grade obligations.  Factors giving
security to principal and interest are considered
adequate, but elements may be present which suggest a
susceptibility to impairment sometime in the future.

	Baa

Bonds that are rated Baa are considered as medium-
grade obligations, i.e., they are neither highly
protected nor poorly secured; interest payments and
principal security appear adequate for the present but
certain protective elements may be lacking or may be
characteristically unreliable over any great length of
time.  Such bonds lack outstanding investment
characteristics and in fact have speculative
characteristics as well.

	Ba

Bonds that are rated Ba are judged to have speculative
elements; their future cannot be considered as well
assured.  Often the protection of interest and
principal payments may be very moderate and thereby
not well safeguarded during both good and bad times
over the future.  Uncertainty of position
characterizes bonds in this class.

	B

Bonds that are rated B generally lack characteristics
of the desirable investment.  Assurance of interest
and principal payments or of maintenance of other
terms of the contract over any long period of time may
be small.

	Caa

Bonds that are rated Caa are of poor standing.  These
issues may be in default or present elements of danger
may exist with respect to principal or interest.

	Ca

Bonds that are rated Ca represent obligations that are
speculative in a high degree.  These issues are often
in default or have other marked short-comings.

	C

Bonds that are rated C are the lowest rated class of
bonds, and issues so rated can be regarded as having
extremely poor prospects of ever attaining any real
investment standing.

Moody's Ratings for Municipal Notes

Moody's ratings for state and municipal notes and
other short-term loans are designated Moody's
Investment Grade (MIG) and for variable rate demand
obligations are designated Variable Moody's Investment
Grade (VMIG).  This distinction is in recognition of
the differences between short- and long-term credit
risk.  Loans bearing the designation MIG 1 or VMIG 1
are of the best quality, enjoying strong protection by
established cash flows of funds for their servicing,
from established and broad-based access to the market
for refinancing, or both.  Loans bearing the
designation MIG 2 or VMIG 2 are of high quality, with
margins of protection ample although not as large as
the preceding group.  Loans bearing the designation
MIG 3 or VMIG 3 are of favorable quality, with all
security elements accounted for but lacking the
undeniable strength of the preceding grades.
Liquidity and cash flow may be narrow and market
access for refinancing is likely to be less well
established.

Description of S&P A-1+ and A-1 Commercial Paper
Rating

The rating A-1+ is the highest, and A-1 the second
highest, commercial paper rating assigned by S&P.
Paper rated A-1+ must have either the direct credit
support of an issuer or guarantor that possesses
excellent long-term operating and financial strengths
combined with strong liquidity characteristics
(typically, such issuers or guarantors would display
credit quality characteristics which would warrant a
senior bond rating of "AA-'' or higher), or the direct
credit support of an issuer or guarantor that
possesses above-average long-term fundamental
operating and financing capabilities combined with
ongoing excellent liquidity characteristics.  Paper
rated A-1 by S&P has the following characteristics:
liquidity ratios are adequate to meet cash
requirements; long-term senior debt is rated "A'' or
better; the issuer has access to at least two
additional channels of borrowing; basic earnings and
cash flow have an upward trend with allowance made for
unusual circumstances; typically, the issuer's
industry is well established and the issuer has a
strong position within the industry; and the
reliability and quality of management are
unquestioned.

Description of Moody's Prime-1 Commercial Paper Rating

The rating Prime-1 is the highest commercial paper
rating assigned by Moody's.  Among the factors
considered by Moody's in assigning ratings are the
following: (1) evaluation of the management of the
issuer; (2) economic evaluation of the issuer's
industry or industries and an appraisal of
speculative-type risks which may be inherent in
certain areas; (3) evaluation of the issuer's products
in relation to competition and customer acceptance;
(4) liquidity; (5) amount and quality of long-term
debt; (6) trend of earnings over a period of ten
years; (7) financial strength of a parent company and
the relationships which exist with the issuer; and (8)
recognition by the management of obligations which may
be present or may arise as a result of public interest
questions and preparations to meet such obligations.


SMITH BARNEY MANAGED MUNICIPALS FUND INC.



Statement of


Additional
Information























June 28, 2000,
as amended on
August 21, 2000




Smith Barney Managed Municipals Fund Inc.
388 Greenwich Street
New York, NY  10013
									SALOMON
SMITH BARNEY
									A
Member of Citigroup [Symbol]


69




G:\Fund Accounting\Legal\FUNDS\SMMU\2000\SMMU SAI 2000 AMENDED 081600e.doc





Part C. Other Information

Item 23. Exhibits

	Unless otherwise noted, all references are to
the Registrant's Registration Statement on Form
N-1A (the "Registration Statement") as filed
with the SEC on September 26, 1980 (File Nos. 2-
69308 and 811-3097).

(a) (1)		Articles of Amendment to the Articles of
Incorporation dated July 30, 1993, are
incorporated by reference to Post-Effective
Amendment No. 25 filed on February 25, 1994
("Post-Effective Amendment No. 25").

(a) (2)		Form of Amendment to Articles of
Incorporation, Form of Articles Supplementary,
Form of Amendment and Articles of Correction
dated October 14, 1994, are incorporated by
reference to Post-Effective Amendment No. 27
filed on November 7, 1994 ("Post-Effective
Amendment No. 27").

(a) (3)	Articles of Amendment dated June 1, 1998 to
the Articles of Incorporation is incorporated by
reference to Post-Effective Amendment No. 33
filed on April 28, 1999 ("Post-Effective
Amendment No. 33")

(a)(4)	Articles Supplementary dated July 12, 2000
are filed herein.

(b) (1)		Registrant's By-Laws are incorporated by
reference to Post-Effective Amendment No. 3 as
filed on June 17, 1982

  (2)		Amendments to Registrant's By-Laws are
incorporated by reference to Post-Effective
Amendment No. 12, as filed on April 29, 1988.

(c)	Registrant's form of stock certificate is
incorporated by reference to Post-Effective
Amendment No. 22 filed on October 23, 1992
("Post-Effective Amendment No. 22").

(d) (1) 		Investment Advisory Agreement dated July
30, 1993 between the Registrant and
	Greenwich Street Advisors is incorporated by reference
to Post-Effective Amendment No. 25.

(d) (2)	Form of Transfer of Investment Advisory
Agreement dated as of November 7, 1994 among
Registrant, Mutual Management Corp. and Smith
Barney Mutual Funds Management Inc. is
incorporated by reference to Post-Effective
Amendment No. 28.

(e) (1)	Distribution Agreement between the Registrant
and Smith Barney Shearson Inc. dated July 30,
1993, is incorporated by reference to Post-
Effective Amendment No. 25.

(e) (2)	Form of Distribution Agreement between
Registrant and CFBDS, Inc. is incorporated by
reference to Post-Effective Amendment No.
33.

(e) (3)	Form of Distribution Agreement between
Registrant and Salomon Smith Barney Inc. is incorporated
by reference to Post-Effective Amendment No. 35 filed on
June 27, 2000 ("Post-Effective Amendment No. 35").

(e)(4)		Form of Distribution Agreement with PFS
Distributors, Inc. is filed herein.




(f)		Not applicable.

(g)	Form of Custody Agreement between the Registrant
and PNC Bank, National Association is
incorporated by reference to Post-Effective
Amendment No. 29 filed on February 27, 1996
("Post-Effective Amendment No. 29")

(h) (1)	Administration Agreement dated April 20, 1994,
between the Registrant and Smith, Barney
Advisers, Inc., is incorporated by reference to
Post-Effective Amendment No. 27.

(h) (2)	Transfer Agency Agreement dated August 2, 1993
between the Registrant and The Shareholder
Services Group, Inc., is incorporated by
reference to Post-Effective Amendment No. 25.

(h) (3)	Transfer Agency Agreement dated October 1, 1999
between the Registrant and Citi Fiduciary Trust Company
(f/k/a Smith Barney Private Trust Company) is incorporated
by reference to Post-Effective Amendment No. 35.

(h)(4)	Sub-Transfer Agency Agreement dated October 1, 1999
between Citi Fiduciary Trust Company ( f/k/a Smith Barney
Private Trust Company) and First Data Investor Services Group,
Inc. is filed herein.


(i)	Opinion of Counsel as to the legality of
securities is incorporated by reference to the
Post-Effective Amendment No. 17 filed on April
29, 1990 and Post-Effective Amendment No. 22.

(j) Auditor's Consent is filed herein.


(k)		Not applicable.

(l)	Not applicable.

(m) (1)	Amended Services and Distribution Plan pursuant
to Rule 12b-1 between the Registrant and Smith
Barney Inc. is incorporated by reference to
Post-Effective Amendment No. 27.

(m) (2)	Form of Amended Service and Distribution Plan
pursuant to Rule 12b-1 between the Registrant
and Salomon Smith Barney Inc. is incorporated by
reference to Post-Effective Amendment No. 33.

(n)		Financial Data Schedule is filed herein.

(o) (1)		Form of Rule 18f-3(d) Multiple Class Plan
of the Registrant is incorporated by reference
	to Post-Effective Amendment No. 16.

(o) (2)	Form of Rule 18f-3(d) Multiple Class Plan of the
Registrant is incorporated by reference to Post-
Effective Amendment No. 32 dated June 26, 1998.

(p)Code of Ethics - North America is incorporated
by reference to Post-Effective Amendment No. 35.

Item 24.		Persons Controlled by or Under Common
Control with Registrant

		None.


Item 25.		Indemnification.

The response to this item is incorporated by reference to
Post-Effective Amendment No. 22.

Item 26.		Business and Other Connections of
Investment Adviser


Investment Adviser - - SSB Citi Fund Management LLC
(Successor to SSBC Fund Management Inc.)

SSB Citi Fund Management LLC ("SSB Citi")
(Successor to SSBC Fund Management Inc. formerly known as
Mutual Management Corp.) was incorporated in December 1968
under the laws of the State of Delaware and converted to a
Delaware limited liability company in 1999. SSB Citi is a wholly
owned subsidiary of Salomon Smith Barney Holdings Inc.
(formerly known as Smith Barney Holdings Inc.), which in
turn is a wholly owned subsidiary of Citigroup Inc.
SSB Citi is registered as an investment adviser
under the Investment Advisers Act of 1940 (the "Advisers
Act") and has, through its predecessors, been in the
investment counseling business since 1968.

The list required by this Item 26 of the officer and
directors of SSB Citi together with information as to any other
business, profession, vocation or employment of a
substantial nature engaged in by such officer and directors
during the past two fiscal years, is incorporated by
reference to Schedules A and D of Form ADV filed by SSB Citi
pursuant to the Advisers Act (SEC File No. 801-8314).


Item 27.		Principal Underwriters

(a)

Salomon Smith Barney, Inc., ("Salomon Smith Barney")
the Registrant's Distributor,
is also the distributor for the following Smith Barney
funds: Concert Investment Series, Consulting Group Capital
Markets Funds, Greenwich Street Series Fund, Smith Barney
Adjustable Rate Government Income Fund, Smith Barney
Aggressive Growth Fund Inc., Smith Barney Appreciation Fund
Inc., Smith Barney Arizona Municipals Fund Inc., Smith
Barney California Municipals Fund Inc., Smith Barney Concert
Allocation Series Inc., Smith Barney Equity Funds, Smith
Barney Fundamental Value Fund Inc., Smith Barney Funds,
Inc., Smith Barney Income Funds, Smith Barney Institutional
Cash Management Fund, Inc., Smith Barney Investment Funds
Inc., Smith Barney Investment Trust, Smith Barney Managed
Governments Fund Inc., Smith Barney Massachusetts Municipals Fund,
Smith Barney Money Funds, Inc., Smith Barney Muni Funds, Smith
Barney Municipal Money Market Fund, Inc., Smith Barney New
Jersey Municipals Fund Inc., Smith Barney Oregon Municipals
Fund Inc., Smith Barney Principal Return Fund,
Smith Barney Sector Series Inc., Smith Barney
Small Cap Blend Fund, Inc., Smith Barney Telecommunications
Trust, Smith Barney Variable Account Funds, Smith Barney
World Funds, Inc., Travelers Series Fund Inc., and various
series of unit investment trusts.

In addition, Salomon Smith Barney is also the distributor for the Centurion
Funds, Inc.

(b) The information required by
this Item 27 with respect to each director, officer and partner
of Salomon Smith Barney is incorporated by reference
to Schedule A of FORM BD filed by Salomon Smith Barney pursuant to
the Securities Exchange Act of 1934 (SEC File No. 812-8510).


(c)	Not applicable.

Item 28.		Location of Accountants and Records

(1)		Smith Barney Managed Municipals Fund Inc.
		388 Greenwich Street
		New York, New York 10013


(2)		SSB Citi Fund Management LLC
		388 Greenwich Street
		New York, New York 10013


(3)		PNC Bank, National Association
		17th and Chestnut Streets
		Philadelphia, Pennsylvania  19103

(4)		Citi Fiduciary Trust Company
		388 Greenwich Street
		New York, New York 10013

(5)		PFPC Global Fund Services
		P. O. Box 9699
		Providence, RI 02940-9699


PFS Shareholder Services
3100 Breckinridge Boulevard, Building 200
Duluth, Georgia 30099-0062


(6) 		Salomon Smith Barney Inc.
		388 Greenwich Street
		New York, New York 10013


Item 29.		Management Services

		Not Applicable.

Item 30.		Undertakings

		None.



SIGNATURES

	Pursuant to the requirements of the Securities Act of
1933 and the Investment Company Act of 1940, the Registrant,
SMITH BARNEY MANAGED MUNICIPALS FUND INC., certifies that it meets all
the requirements for effectiveness of this Registration Statement pursuant
to Rule 485(b)under the 1933 Act and has duly caused
this registration statement to be signed on its behalf by
the undersigned, thereto duly authorized in the City of New
York, and State of New York as of the 16th day of August,
2000.


			SMITH BARNEY MANAGED MUNICIPALS FUND INC.

				/s/Heath B. McLendon
				Heath B. McLendon,
Chief Executive Officer

	Pursuant to the requirements of the Securities Act of
1933, this registration statement has been signed below by
the following persons in the capacities and on the date
indicated.


/s/Heath B. McLendon
Heath B. McLendon			Chairman of the Board		August 16,2000
					(Chief Executive Officer)

/s/Lewis E. Daidone *
Lewis E. Daidone			Treasurer			August 16,2000
					(Chief Financial and
					 Accounting Officer)

/s/Herbert Barg *
Herbert Barg				Director		August 16,2000



/s/Alfred Bianchetti *
Alfred J. Bianchetti			Director		August 16,2000


/s/Martin Brody *
Martin Brody				Director		August 16,2000


/s/Dwight B. Crane *
Dwight B. Crane				Director		August 16,2000


/s/Burt N. Dorsett *
Burt N. Dorsett				Director		August 16,2000

/s/Elliot S. Jaffe *
Elliot S. Jaffe				Director		August 16,2000


/s/Stephen E. Kaufman *
Stephen E. Kaufman			Director		August 16,2000


/s/Joseph J. McCann *
Joseph J. McCann			Director			August 16,2000


/s/Cornelius C. Rose, Jr. *
Cornelius C. Rose, Jr.			Director		August 16,2000


Signed by Heath B. McLendon, their duly authorized attorney-
in-fact, pursuant to the power of attorney.

/s/Heath B. McLendon
Heath B. McLendon


We, the undersigned, hereby severally constitute and appoint Heath
B. McLendon, Christina T. Sydor, Lewis E. Daidone and Michael
Kocur and each of them individually, our true and lawful
attorneys, with full power to them and each of them to sign for
us, and in our hands and in the capacities indicated below, any
and all Registration Statements on behalf of the Smith Barney Managed
Municipals Fund Inc. including any and all Amendments
thereto and to file the same, with all exhibits thereto, and other
documents therewith, with the Securities and Exchange Commission,
granting unto said attorneys and each of them, acting alone, full
authority and power to do and perform each and every act and thing
requisite or necessary to be done in the premises, as fully to all
intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys or any of them
may lawfully do or cause to be done by virtue thereof.

	WITNESS our hands on the date set forth below.

Pursuant to the requirements of the Securities Act of 1933, as
amended, this Power of Attorney has been signed below by the
following persons in the capacities and as of the dates indicated.


Signature:



Title:

Date:
/s/ Heath B. McLendon
Heath B. McLendon

Chairman of the
Board
(Chief Executive
Officer)

August 16, 2000



/s/ Lewis E. Daidone
Lewis E. Daidone

Senior Vice
President and
Treasurer (Chief
Financial and Accounting
Officer)

August 16, 2000

Signature:



Title:

Date:
/s/ Herbert Barg
Herbert Barg

Director

August 16, 2000


/s/ Alfred J.
Bianchetti
Alfred J. Bianchetti

Director

August 16, 2000


/s/ Martin Brody
Martin Brody

Director

August 16, 2000


/s/ Dwight B. Crane
Dwight B. Crane

Director

August 16, 2000


/s/ Burt N. Dorsett
Burt N. Dorsett

Director

August 16, 2000


/s/ Elliot S. Jaffe
Elliot S. Jaffe

Director

August 16, 2000


/s/ Stephen E.
Kaufman
Stephen E. Kaufman

Director

August 16, 2000


/s/ Joseph J. McCann
Joseph J. McCann

Director

August 16, 2000


/s/ Cornelius C.
Rose, Jr.
Cornelius C. Rose,
Jr.

Director

August 16, 2000





Exhibit Index

Exhibit No. 	Exhibit


(a)(4)  Articles Supplementary

(e)(4)Form of Distribution Agreement with PFS Distributors Inc.

(h)(4)  Sub-Transfer Agency Agreement

(j) Auditor's Consent

(n)	Financial Data Schedule