February 27, 1998
   
As Amended March 20, 1998 and
July 23, 1998
    
TRAVELERS SERIES FUND INC.
388 Greenwich Street
New York, New York  10013

STATEMENT OF ADDITIONAL INFORMATION

Shares of the Travelers Series Fund Inc. (the "Fund") are offered 
with a choice of thirteen Portfolios:


The Smith Barney Large Cap Value Portfolio (formerly known as the 
Smith Barney Income and Growth Portfolio) seeks current income and 
long-term growth of income and capital.  This Portfolio invests 
primarily, but not exclusively, in common stocks.


The Alliance Growth Portfolio seeks long-term growth of capital.  
Current income is only an incidental consideration.

The AIM Capital Appreciation Portfolio seeks capital appreciation 
by investing principally in common stocks, with emphasis on 
medium-sized and smaller emerging growth companies.

The Van Kampen American Capital Enterprise Portfolio seeks capital 
appreciation through investment in securities believed by its 
investment adviser to have above average potential for capital 
appreciation.

The Smith Barney International Equity Portfolio seeks total return 
on its assets from growth of capital and income and will invest at 
least 65% of its assets in a diversified portfolio of equity 
securities of established non-U.S. issuers.   

The Smith Barney Pacific Basin Portfolio seeks long-term capital 
appreciation through investment primarily in equity securities of 
the Asian Pacific Countries.

The TBC Managed Income Portfolio seeks high current income 
consistent with what its investment adviser believes to be prudent 
risk of capital through investment in various types of debt 
securities.

The Putnam Diversified Income Portfolio seeks high current income 
consistent with preservation of capital.

The GT Global Strategic Income Portfolio primarily seeks high 
current income and, secondarily, capital appreciation by investing 
in the debt securities of issuers in the United States, developed 
foreign countries and emerging markets.

The Smith Barney High Income Portfolio seeks high current income 
by investing at least 65% of its assets in high-yielding corporate 
debt obligations.  Capital appreciation is a secondary objective.

The MFS Total Return Portfolio seeks above-average income 
(compared to a portfolio invested entirely in equity securities) 
consistent with prudent employment of capital.  While current 
income is the primary objective, the Portfolio believes that there 
should be a reasonable opportunity for growth of capital and 
income. 

The Smith Barney Large Capitalization Growth Portfolio seeks long-
term growth of capital by investing in equity securities of 
companies with large market capitalizations.

The Smith Barney Money Market Portfolio seeks maximum current 
income and preservation of capital.  

	This Statement of Additional Information (the "SAI") is not 
a Prospectus.  It is intended to provide more detailed information 
about Travelers Series Fund Inc. as well as matters already 
discussed in the Prospectus and therefore should be read in 
conjunction with the February 27, 1998 Prospectus which may be 
obtained from the Fund or your Financial Consultant.  Shares of 
the Fund may only be purchased by insurance company separate 
accounts.

TABLE OF CONTENTS

Directors and Officers 	 2
Investment Policies 	 5
Investment Restrictions 	 26
Performance Information 	 43
Determination of Net Asset Value 	 44
Redemption of Shares 	 44
Custodians 	 44
Independent Auditors 	 45
The Fund 	 45
Management Agreements 	 46
Voting Rights 	 52
Financial Statements 	 53


DIRECTORS AND OFFICERS

VICTOR K. ATKINS, Director  (Age 75)
Retired; Former President of Lips Propellers, Inc.  Director of  
two investment companies associated with Smith Barney Inc. ("Smith 
Barney");  His address is 120 Montgomery Street, Suite 1880, San 
Francisco, California, 94104.

ABRAHAM E. COHEN, Director (Age 61)
Consultant to MeesPierson, Inc., a Dutch investment bank; 
Consultant to and Board Member, Chugai Pharmaceutical Co. Ltd.;  
Director of Agouron Pharmaceuticals, Inc., Akzo Nobel NV, 
Vasomedical, Inc., Teva Pharmaceutical Ind., Ltd., Neurobiological 
Technologies Inc., Vion Pharmaceuticals, Inc., BlueStone Capital 
Partners, LP. and The Population Council, an international public 
interest organization. His address is c/o Chugai Pharma USA, 444 
Madison Ave., 12th Floor, New York, New York, 10022.

ROBERT A. FRANKEL, Director (Age 70)
Managing Partner of Robert A. Frankel Management Consultants; 
former Corporate Vice President of The Reader's Digest 
Association, Inc. Director of eight investment companies 
associated with Smith Barney; His address is 102 Grand Street, 
Croton-on-Hudson, New York, 10520.

RAINER GREEVEN, Director (Age 60)
Attorney, Greeven & Ercklentz;  Director of two investment 
companies associated with Smith Barney.  His address is 630 Fifth 
Avenue, Suite 1905, New York, New York, 10111.

SUSAN M. HEILBRON, Director (Age 52)
Attorney;  Director of two investment companies associated with 
Smith Barney.  Her address is c/o Lacey & Heilbron, 3 East 54th 
Street, 9th Floor, New York, New York, 10022.
*HEATH B. McLENDON, Chairman of the Board and Chief Executive 
Officer  (Age 64)
Managing Director of Smith Barney; President and Director of 
Mutual Management Corp. ("MMC"), formerly known as Smith Barney 
Mutual Funds Management Inc. and Travelers Investment Adviser, 
Inc. ("TIA"); Chairman of Smith Barney Strategy Advisers Inc., 
prior to July 1993, Senior Executive Vice President of Shearson 
Lehman Brothers, Inc.; Vice Chairman of Shearson Asset Management. 
Director of forty-two investment companies associated with Smith 
Barney.

JAMES M. SHUART, Director (Age 66)
President, Hofstra University; Director of European American Bank; 
Director of Long Island Tourism and Convention Commission; and 
Director of Association of Colleges and Universities of the State 
of New York.  Director of two investment companies associated with 
Smith Barney.  His address is c/o Hofstra University, 101 Hofstra 
University, Hempstead, New York, 11550.

*BRUCE D. SARGENT, Vice President  (Age 53)
Managing Director of Smith Barney and Vice President of MMC; Vice 
President of three investment companies associated with Smith 
Barney.

*LEWIS E. DAIDONE, Senior Vice President and Treasurer  (Age 40)
Managing Director of Smith Barney and Director and Senior Vice 
President of MMC and TIA; Senior Vice President and Treasurer of 
forty-two investment companies associated with Smith Barney.

*JAMES B. CONHEADY, Vice President  (Age 61)
Managing Director of Smith Barney; Vice President of Smith Barney 
World Funds, Inc.

*JEFFREY RUSSELL, Vice President  (Age 39)
Managing Director of Smith Barney; Vice President of Smith Barney 
World Funds, Inc.

*JOHN C. BIANCHI, Vice President  (Age 42)
Managing Director of Smith Barney;  prior to July 1993, Managing 
Director of Shearson Lehman Advisors ("SLA"); Vice President of 
certain other investment companies associated with Smith Barney; 

*MARTIN HANLEY, Vice President  (Age 31)
Vice President of Smith Barney; Vice President of certain other 
investment companies associated with Smith Barney. 

*DAVID ISHIBASHI, Vice President  (Age 42)
Vice President of Smith Barney;  prior to 1993, Vice President of 
S.G. Warburg.

*SCOTT KALB, Vice President  (Age 41)
Managing Director of Smith Barney;  prior to 1993,  Managing 
Director of SLA.

*PHYLLIS M. ZAHORODNY, Vice President (Age 39)
Managing Director of Smith Barney;  prior to July 1993,  Managing 
Director of SLA; Vice President of certain other investment 
companies associated with Smith Barney.

*IRVING DAVID, Controller and Assistant Secretary (Age 37)
Director of Smith Barney. Controller and Assistant Secretary of 
certain other investment companies associated with Smith Barney. 
Formerly Assistant of First Investment Management Company.

*THOMAS M. REYNOLDS, Controller and Assistant Secretary (Age 37)
Director of Smith Barney; Controller and Assistant Secretary. 
Controller and Assistant Secretary of certain other investment 
companies associated with Smith Barney.

*CHRISTINA T. SYDOR, Secretary  (Age 45)
Managing Director of Smith Barney, General Counsel and Secretary 
of MMC and TIA and Secretary of forty-two investment companies 
associated with Smith Barney.

___________________
* Designates "interested persons" as defined in the Investment 
Company Act of 1940, as amended (the "1940 Act") whose business 
address is 388 Greenwich Street, New York, New York 10013 unless 
otherwise noted.  Such persons are not separately compensated 
for their services as Fund officers or Directors.

	Thomas M. Reynolds is the Controller and Assistant Secretary 
for each of the following Portfolios: the Smith Barney Large Cap 
Value Portfolio, the AIM Capital Appreciation Portfolio, the 
Alliance Growth Portfolio, the MFS Total Return Portfolio, the 
Putnam Diversified Income Portfolio, the Smith Barney High Income 
Portfolio, the Smith Barney Large Capitalization Growth Portfolio, 
the TBC Managed Income Portfolio and the Van Kampen American 
Enterprise Portfolio.

	Irving P. David is the Controller and Assistant Secretary 
for each of the following Portfolios: the GT Global Strategic 
Income Portfolio, the Smith Barney International Equity Portfolio, 
the Smith Barney Pacific Basin Portfolio and the Smith Barney 
Money Market Portfolio.

	On February 12, 1998 Directors and officers owned in the 
aggregate less than 1% of the outstanding securities of the Fund.

	The following table shows the compensation paid by the Fund 
to each director during the Fund's last fiscal year.  None of the 
officers of the Fund received any compensation from the Fund for 
such period. Officers and interested directors of the Fund are 
compensated by Smith Barney.


<TABLE>
<CAPTION>

Total
                                                               Number 
                                  Pension or                   of Funds
                                  Retirement                   for Which
                                  Benefits                     Director
                                  Accrued as     Total         Serves
                  Aggregate       Part of       Compensation   within
                  Compensation    Fund's        from Fund      Fund
Director          From the Fund   Expenses	Complex        Complex
<S>			<C>			<C>		<C>		    <C>
Victor K. Atkins   $15,454         $0          $27,400          2
Abraham E. Cohen    13,700          0           13,700          1
Robert A. Frankel   15,454          0           65,900          8
Rainer Greeven      15,454          0           25,600          2
Susan M. Heilbron   15,454          0           27,400          2
Heath B. McLendon        0          0                0         42
James M. Shuart     15,454          0           25,600          2
</TABLE>


INVESTMENT POLICIES

	Repurchase and Reverse Repurchase Agreements.  Each 
Portfolio may on occasion enter into repurchase agreements, 
wherein the seller agrees to repurchase a security from the 
Portfolio at an agreed-upon future date, normally the next 
business day.  The resale price is greater than the purchase 
price, which reflects the agreed-upon rate of return for the 
period the Portfolio holds the security and which is not related 
to the coupon rate on the purchased security.  Each Portfolio 
requires continual maintenance of the market value of the 
collateral in amounts at least equal to the repurchase price plus 
accrued interest, thus risk is limited to the ability of the 
seller to pay the agreed-upon amount on the delivery date; 
however, if the seller defaults, realization upon the collateral 
by the Portfolio may be delayed or limited or the Portfolio might 
incur a loss if the value of the collateral securing the 
repurchase agreement declines and might incur disposition costs in 
connection with liquidating the collateral.  A Portfolio will only 
enter into repurchase agreements with broker/dealers or other 
financial institutions that are deemed creditworthy by the Manager 
under guidelines approved by the Board of Directors.  It is the 
policy of each Portfolio (except the Smith Barney Money Market 
Portfolio) not to invest in repurchase agreements that do not 
mature within seven days if any such investment together with any 
other illiquid assets held by a Portfolio amount to more than 15% 
of that Portfolio's net assets.  The Smith Barney Money Market 
Portfolio may not invest in such securities if, together with any 
other illiquid assets held by it amount to more than 10% of its 
total assets.

	The Smith Barney International Equity Portfolio and the 
Smith Barney Pacific Basin Portfolio may each enter into reverse 
repurchase agreements with broker/dealers and other financial 
institutions with up to 5% of its net assets.  The GT Global 
Strategic Income Portfolio may enter into such transactions with 
up to 33-1/3% of its total assets, so long as the total amount of 
that Portfolio's borrowings do not exceed 33-1/3% of its total 
assets.  Such agreements involve the sale of portfolio securities 
with an agreement to repurchase the securities at an agreed-upon 
price, date and interest payment and have the characteristics of 
borrowing.  Since the proceeds of borrowings under reverse 
repurchase agreements are invested, this would introduce the 
speculative factor known as "leverage."  The securities purchased 
with the funds obtained from the agreement and securities 
collateralizing the agreement will have maturity dates no later 
than the repayment date.  Generally the effect of such a 
transaction is that the Portfolio can recover all or most of the 
cash invested in the portfolio securities involved during the term 
of the reverse repurchase agreement, while in many cases it will 
be able to keep some of the interest income associated with those 
securities.  Such transactions are only advantageous if the 
Portfolio has an opportunity to earn a greater rate of interest on 
the cash derived from the transaction than the interest cost of 
obtaining that cash.  Opportunities to realize earnings from the 
use of the proceeds equal to or greater than the interest required 
to be paid may not always be available, and the Portfolio intends 
to use the reverse repurchase technique only when management 
believes it will be advantageous to the Portfolio.  The use of 
reverse repurchase agreements may exaggerate any interim increase 
or decrease in the value of the participating Portfolio's assets. 
 The Portfolio's custodian bank will maintain a separate account 
for the Portfolio with securities having a value equal to or 
greater than such commitments.

	Securities Lending.  Each Portfolio (except the Van Kampen 
American Capital Enterprise Portfolio and the Smith Barney Money 
Market Portfolio), may seek to increase its net investment income 
by lending its securities provided such loans are callable at any 
time and are continuously secured by cash or U.S. government 
securities equal to no less than the market value, determined 
daily, of the securities loaned.  The Portfolio will receive 
amounts equal to dividends or interest on the securities loaned.  
It will also earn income for having made the loan because cash 
collateral pursuant to these loans will be invested in short-term 
money market instruments.  In connection with lending of 
securities the Portfolio may pay reasonable finders, 
administrative and custodial fees.  Management will limit such 
lending to not more than:  (a) 33 1/3% of the value of the total 
assets of each of the TBC Managed Income Portfolio and the AIM  
Capital Appreciation Portfolio; (b) 30% of the value of the total 
assets of each of the GT Global Strategic Income Portfolio and the 
MFS Total Return Portfolio; (c) 20% of the value of the total 
assets of each of the Smith Barney Large Cap Value Portfolio and 
the Smith Barney High Income Portfolio; (d) 25% of the value of 
the total assets of each of the Alliance Growth Portfolio and the 
Putnam Diversified Income Portfolio; and (e) 15% of the value of 
the total assets of each of the Smith Barney International Equity 
Portfolio and the Smith Barney Pacific Basin Portfolio.  Where 
voting or consent rights with respect to loaned securities pass to 
the borrower, management will follow the policy of calling the 
loan, in whole or in part as may be appropriate, to permit the 
exercise of such voting or consent rights if the issues involved 
have a material effect on the Portfolio's investment in the 
securities loaned.  Apart from lending its securities and 
acquiring debt securities of a type customarily purchased by 
financial institutions, none of the foregoing Portfolios will make 
loans to other persons.  The risks in lending portfolio 
securities, as with other extensions of secured credit, consist of 
possible delay in receiving additional collateral or in the 
recovery of the securities or possible loss of rights in the 
collateral should the borrower fail financially.  Loans will only 
be made to borrowers whom management deems to be of good standing 
and will not be made unless, in the judgment of management, the 
interest to be earned from such loans would justify the risk.

	By lending its securities, a Portfolio can increase its 
income by continuing to receive interest on the loaned securities, 
by investing the cash collateral in short-term instruments or by 
obtaining yield in the form of interest paid by the borrower when 
U.S. government securities are used as collateral.  Each Portfolio 
will adhere to the following conditions whenever it lends its 
securities:  (1) the Portfolio must receive at least 100% cash 
collateral or equivalent securities from the borrower, which 
amount of collateral will be maintained by daily marking to 
market; (2) the borrower must increase the collateral whenever the 
market value of the securities loaned rises above the level of the 
collateral; (3) the Portfolio must be able to terminate the loan 
at any time; (4) the Portfolio must receive reasonable interest on 
the loan, as well as any dividends, interest or other 
distributions on the loaned securities, and any increase in market 
value; (5) the Portfolio may pay only reasonable custodian fees in 
connection with the loan; and (6) voting rights on the loaned 
securities may pass to the borrower, except that, if a material 
event adversely affecting the investment in the loaned securities 
occurs, the Portfolio's Board of Directors must terminate the loan 
and regain the Portfolio's right to vote the securities.

	Foreign Investments.  Each Portfolio may invest its assets 
in the securities of foreign issuers as described in the 
Prospectus.  Investments in foreign securities involve certain 
risks not ordinarily associated with investments in securities of 
domestic issuers.  Such risks include currency exchange control 
regulations and costs, the possibility of expropriation, seizure, 
or nationalization of foreign deposits, less liquidity and volume 
and more volatility in foreign securities markets and the impact 
of political, social, economic or diplomatic developments or the 
adoption of other foreign government restrictions that might 
adversely affect the payment of principal and interest on 
securities in a Portfolio.  If it should become necessary, a 
Portfolio might encounter greater difficulties in invoking legal 
processes abroad than would be the case in the United States.  
Because a Portfolio may invest in securities denominated or quoted 
in currencies other than the U.S. dollar, changes in foreign 
currency exchange rates may adversely affect the value of 
portfolio securities and the appreciation or depreciation of 
investments.   In addition, there may be less publicly available 
information about a non-U.S. company, and non-U.S. companies are 
not generally subject to uniform accounting and financial 
reporting standards, practices and requirements comparable to 
those applicable to U.S. companies.  Investments in foreign 
securities also may result in higher expenses due to the cost of 
converting foreign currency to U.S. dollars, the payment of fixed 
brokerage commission on foreign exchanges, the expense of 
maintaining securities with foreign custodians, the imposition of 
transfer taxes or transaction charges associated with foreign 
exchanges or foreign withholding taxes.

	For many foreign securities, there are U.S. dollar-
denominated American Depositary Receipts ("ADRs"), which are 
traded in the United States on exchanges or over the counter and 
are sponsored and issued by domestic banks.  ADRs represent the 
right to receive securities of foreign issuers deposited in a 
domestic bank or a correspondent bank.  Because ADRs trade on 
United States securities exchanges, they are not generally treated 
as foreign securities. Although investment in the form of ADRs or 
EDRs (see definition below) facilitates trading in foreign 
securities,  it does not mitigate the risks associated with 
investing in foreign securities.  By investing in ADRs rather than 
directly in foreign issuers' stock, a Portfolio can avoid currency 
risks during the settlement period for either purchases or sales. 
 In general, there is a large, liquid market in the United States 
for many ADRs.  The information available for ADRs is subject to 
the accounting, auditing and financial reporting standards of the 
domestic market or exchange on which they are traded, which 
standards are more uniform and more exacting that those to which 
many foreign issuers may be subject.

	The AIM Capital Appreciation Portfolio, which may not invest 
more than 20% of its total assets in foreign securities, includes 
ADRs as well as European Depositary Receipts ("EDRs") and other 
securities representing underlying securities of foreign issuers 
as foreign securities for purposes of this limitation.  EDRs, 
which sometimes are referred to as Continental Depositary Receipts 
("CDRs") are receipts issued in Europe typically by foreign banks 
and trust companies that evidence ownership of either foreign or 
domestic securities. Generally, ADRs, in registered form, are 
designed for use in the United States securities markets, and 
EDRs, in bearer form, are designed for use in European securities 
markets.

	The Smith Barney Large Capitalization Growth Portfolio may 
invest in securities of non-U.S. issuers in the form of ADRs, 
EDRs, CDRs or similar securities representing interests in the 
common stock of foreign issuers.  Management intends to limit the 
Portfolio's investment in these types of securities to 10% of the 
Portfolio's net assets. 

	 Emerging Markets.  The Putnam Diversified Income Portfolio, 
the GT Global Strategic Income Portfolio, the MFS Total Return 
Portfolio and the Smith Barney High Income Portfolio may invest in 
debt securities in emerging markets. Investing in securities in 
emerging countries may entail greater risks than investing in debt 
securities in developed countries. These risks include: (i) less 
social, political and economic stability; (ii) the small current 
size of the markets for such securities and the currently low or 
nonexistent volume of trading, which result in a lack of liquidity 
and in greater price volatility; (iii) certain national policies 
which may restrict the each such Portfolio's investment 
opportunities, including restrictions on investment in issuers or 
industries deemed sensitive to national interests; (iv) foreign 
taxation; and (v) the absence of developed structures governing 
private or foreign investment or allowing for judicial redress for 
injury to private property. 

	Investors should note that upon the accession to power of 
authoritarian regimes, the governments of a number of emerging 
market countries previously expropriated large quantities of real 
and personal property similar to the property which maybe 
represented by the securities purchased by the Portfolios. The 
claims of property owners against those governments were never 
finally settled.  There can be no assurance that any property 
represented by securities purchased by Portfolios will not also be 
expropriated, nationalized, or otherwise confiscated. If such 
confiscation were to occur, the Portfolios could lose a 
substantial portion of their investments in such countries. Each 
Portfolio's investments would similarly be adversely affected by 
exchange control regulation in any of those countries. 

	Certain countries in which the Portfolios may invest may 
have vocal minorities that advocate radical religious or 
revolutionary philosophies or support ethnic independence. Any 
disturbance on the part of such individuals could carry the 
potential for wide-spread destruction or confiscation of property 
owned by individuals and entities foreign to such country and 
could cause the loss of the Portfolios' investment in those 
countries. 

	Settlement mechanisms in emerging market securities may be 
less efficient and reliable than in more developed markets.  In 
such emerging securities markets there may be share registration 
and delivery delays and failures.

	U.S. Government Securities.  Each Portfolio may invest in 
direct obligations of the United States and obligations issued by 
U.S. government agencies and instrumentalities.  Included among 
direct obligations of the United States are Treasury Bills, 
Treasury Notes and Treasury Bonds, which differ principally in 
terms of their maturities.  Included among the securities issued 
by U.S. government agencies and instrumentalities are:  Securities 
that are supported by the full faith and credit of the United 
States (such as Government National Mortgage Association 
certificates); securities that are supported by the right of the 
issuer to borrow from the U.S. Treasury (such as securities of 
Federal Home Loan Banks); and securities that are supported by the 
credit of the instrumentality (such as Federal National Mortgage 
Association and Federal Home Loan Mortgage Corporation bonds).

	Zero Coupon, Pay-In-Kind and Delayed Interest Securities.  
The Alliance Growth Portfolio, the TBC Managed Income Portfolio, 
the Putnam Diversified Income Portfolio, the GT Global Strategic 
Income Portfolio and the MFS Total Return Portfolio may invest in 
zero coupon, pay-in-kind and delayed interest securities as well 
as custodial receipts or certificates underwritten by securities 
dealers or banks that evidence ownership of future interest 
payments, principal payments or both on certain U.S. government 
securities.  Zero coupon securities pay no cash income to their 
holders until they mature and are issued at substantial discounts 
from their value at maturity.  When held to maturity, their entire 
return comes from the difference between their purchase price and 
their maturity value.  Pay-in-kind securities pay interest through 
the issuance to the holders of additional securities, and delayed 
interest securities are securities which do not pay interest for a 
specified period.  Because interest on zero coupon, pay-in-kind 
and delayed interest securities is not paid on a current basis, 
the values of securities of this type are subject to greater 
fluctuations than are the values of securities that distribute 
income regularly and may be more speculative than such securities. 
 Accordingly, the values of these securities may be highly 
volatile as interest rates rise or fall.  In addition, the 
Portfolio's investments in zero coupon, pay-in-kind and delayed 
interest securities will result in special tax consequences.  
Although zero coupon securities do not make interest payments, for 
tax purposes a portion of the difference between a zero coupon 
security's maturity value and its purchase price is taxable income 
of the Portfolio each year.

	Custodial receipts evidencing specific coupon or principal 
payments have the same general attributes as zero coupon U.S. 
government securities but are not considered to be U.S. government 
securities.  Although under the terms of a custodial receipt a 
Portfolio is typically authorized to assert its rights directly 
against the issuer of the underlying obligation, the Portfolio may 
be required to assert through the custodian bank such rights as 
may exist against the underlying issuer.  Thus, in the event the 
underlying issuer fails to pay principal and/or interest when due, 
a Portfolio may be subject to delays, expenses and risks that are 
greater than those that would have been involved if the Portfolio 
had purchased a direct obligation of the issuer.  In addition, in 
the event that the trust or custodial account in which the 
underlying security has been deposited is determined to be an 
association taxable as a corporation, instead of a non-taxable 
entity, the yield on the underlying security would be reduced in 
respect of any taxes paid.

	Loan Participations and Other Direct Indebtedness.  The 
Putnam Diversified Income Portfolio, the GT Global Strategic 
Income Portfolio and the MFS Total Return Portfolio may purchase 
loan participations and other direct claims against a borrower. In 
purchasing a loan participation, a Portfolio acquires some or all 
of the interest of a bank or other lending institution in a loan 
to a corporate borrower. Many such loans are secured, although 
some may be unsecured. Such loans may be in default at the time of 
purchase. Loans that are fully secured offer a Portfolio more 
protection than an unsecured loan in the event of non-payment of 
scheduled interest or principal. However, there is no assurance 
that the liquidation of collateral from a secured loan would 
satisfy the corporate borrower's obligation, or that the 
collateral can be liquidated.

	These loans are made generally to finance internal growth, 
mergers, acquisitions, stock repurchases, leveraged buy-outs and 
other corporate activities. Such loans are typically made by a 
syndicate of lending institutions, represented by an agent lending 
institution which has negotiated and structured the loan and is 
responsible for collecting interest, principal and other amounts 
due on its own behalf and on behalf of the others in the 
syndicate, and for enforcing its and their other rights against 
the borrower. Alternatively, such loans may be structured as a 
novation, pursuant to which a Portfolio would assume all of the 
rights of the lending institution in a loan, or as an assignment, 
pursuant to which the Portfolio would purchase an assignment of a 
portion of a lender's interest in a loan either directly from the 
lender or through an intermediary.  A Portfolio may also purchase 
trade or other claims against companies, which generally represent 
money owed by the company to a supplier of goods or services. 
These claims may also be purchased at a time when the company is 
in default.

	Certain of the loan participations acquired by a Portfolio 
may involve revolving credit facilities or other standby financing 
commitments which obligate the Portfolio to pay additional cash on 
a certain date or on demand. These commitments may have the effect 
of requiring a Portfolio to increase its investment in a company 
at a time when it might not otherwise decide to do so (including 
at a time when the company's financial condition makes it unlikely 
that such amounts will be repaid). To the extent that a Portfolio 
is committed to advance additional funds, it will at all times 
hold and maintain in a segregated account cash or other high grade 
debt obligations in an amount sufficient to meet such commitments. 
 A Portfolio's ability to receive payments of principal, interest 
and other amounts due in connection with these investments will 
depend primarily on the financial condition of the borrower. In 
selecting the loan participations and other direct investments 
which a Portfolio will purchase, management will rely upon its 
(and not that of the original lending institution's) own credit 
analysis of the borrower. As a Portfolio may be required to rely 
upon another lending institution to collect and pass on to it 
amounts payable with respect to the loan and to enforce its rights 
under the loan, an insolvency, bankruptcy or reorganization of the 
lending institution may delay or prevent a Portfolio from 
receiving such amounts.  In such cases, a Portfolio will evaluate 
as well the creditworthiness of the lending institution and will 
treat both the borrower and the lending institution as an "issuer" 
of the loan participation for purposes of certain investment 
restrictions pertaining to the diversification of the Portfolio's 
portfolio investments. The highly leveraged nature of many such 
loans may make such loans especially vulnerable to adverse changes 
in economic or market conditions. Investments in such loans may 
involve additional risks to a Portfolio. For example, if a loan is 
foreclosed, a Portfolio could become part owner of any collateral, 
and would bear the costs and liabilities associated with owning 
and disposing of the collateral. In addition, it is conceivable 
that under emerging legal theories of lender liability, a 
Portfolio could be held liable as a co-lender. It is unclear 
whether loans and other forms of direct indebtedness offer 
securities law protection against fraud and misrepresentation. In 
the absence of definitive regulatory guidance, a Portfolio relies 
on management's research in an attempt to avoid situations where 
fraud or misrepresentation could adversely affect the Portfolio. 
In addition, loan participations and other direct investments may 
not be in the form of securities or may be subject to restrictions 
on transfer, and only limited opportunities may exist to resell 
such instruments. As a result, a Portfolio may be unable to sell 
such investments at an opportune time or may have to resell them 
at less than fair market value. To the extent that management 
determines that any such investments are illiquid, a Portfolio 
will include them in the investment limitations described below.

	Mortgage-Backed Securities.  The TBC Managed Income 
Portfolio, the Putnam Diversified Income Portfolio,  the Smith 
Barney High Income Portfolio and the MFS Total Return Portfolio 
may invest in mortgage backed securities, which are securities 
representing interests in "pools" of mortgage loans. Monthly 
payments of interest and principal by the individual borrowers on 
mortgages are "passed through" to the holders of the securities 
(net of fees paid to the issuer or guarantor of the securities) as 
the mortgages in the underlying mortgage pools are paid off. The 
average lives of mortgage pass-throughs are variable when issued 
because their average lives depend on prepayment rates. The 
average life of these securities is likely to be substantially 
shorter than their stated final maturity as a result of 
unscheduled principal prepayment. Prepayments on underlying 
mortgages result in a loss of anticipated interest, and all or 
part of a premium if any has been paid, and the actual yield (or 
total return) to a Portfolio may be different than the quoted 
yield on the securities. Mortgage prepayments generally increase 
with falling interest rates and decrease with rising interest 
rates. Like other fixed income securities, when interest rates 
rise the value of a mortgage pass-through security generally will 
decline; however, when interest rates are declining, the value of 
mortgage pass-through securities with prepayment features may not 
increase as much as that of other fixed-income securities.

	Payment of principal and interest on some mortgage pass-
through securities (but not the market value of the securities 
themselves) may be guaranteed by the full faith and credit of the 
U.S. government (in the case of securities guaranteed by the 
Government National Mortgage Association ("GNMA"); or guaranteed 
by agencies or instrumentalities of the U.S. government (such as 
the Federal National Mortgage Association ("FNMA") or the Federal 
Home Loan Mortgage Corporation, ("FHLMC") which are supported only 
by the discretionary authority of the U.S. government to purchase 
the agency's obligations). Mortgage pass-through securities may 
also be issued by non-governmental issuers (such as commercial 
banks, savings and loan institutions, private mortgage insurance 
companies, mortgage bankers and other secondary market issuers). 
Some of these mortgage pass-through securities may be supported by 
various forms of insurance or guarantees.

	Interests in pools of mortgage-related securities differ 
from other forms of debt securities, which normally provide for 
periodic payment of interest in fixed amounts with principal 
payments at maturity or specified call dates. Instead, these 
securities provide a monthly payment which consists of both 
interest and principal payments. In effect, these payments are a 
"pass-through" of the monthly payments made by the individual 
borrowers on their mortgage loans, net of any fees paid to the 
issuer or guarantor of such securities. Additional payments are 
caused by prepayments of principal resulting from the sale, 
refinancing or foreclosure of the underlying property, net of fees 
or costs which may be incurred. Some mortgage pass-through 
securities (such as securities issued by the GNMA) are described 
as "modified pass-through." These securities entitle the holder to 
receive all interests and principal payments owed on the mortgages 
in the mortgage pool, net of certain fees, at the scheduled 
payment dates regardless of whether the mortgagor actually makes 
the payment.

	The principal governmental guarantor of mortgage pass-
through securities is the GNMA. GNMA is a wholly owned U.S. 
government corporation within the Department of Housing and Urban 
Development. GNMA is authorized to guarantee, with the full faith 
and credit of the U.S. government, the timely payment of principal 
and interest on securities issued by institutions approved by GNMA 
(such as savings and loan institutions, commercial banks and 
mortgage bankers) and backed by pools of FHA-insured or VA-
guaranteed mortgages. These guarantees, however, do not apply to 
the market value or yield of mortgage pass-through securities. 
GNMA securities are often purchased at a premium over the maturity 
value of the underlying mortgages. This premium is not guaranteed 
and will be lost if prepayment occurs.

	Government-related guarantors (i.e., whose guarantees are 
not backed by the full faith and credit of the U.S. government) 
include the FNMA and the FHLMC. FNMA is a government-sponsored 
corporation owned entirely by private stockholders. It is subject 
to general regulation by the Secretary of Housing and Urban 
Development. FNMA purchases conventional residential mortgages 
(i.e., mortgages not insured or guaranteed by any governmental 
agency) from a list of approved seller/servicers which include 
state and federally-chartered savings and loan associations, 
mutual savings banks, commercial banks, credit unions and mortgage 
bankers. Pass-through securities issued by FNMA are guaranteed as 
to timely payment by FNMA of principal and interest.

	FHLMC is also a government-sponsored corporation owned by 
private stockholders. FHLMC issues Participation Certificates 
("PCs") which represent interests in conventional mortgages (i.e., 
not federally insured or guaranteed) from FHLMC's national 
portfolio. FHLMC guarantees timely payment of interest and 
ultimate collection of principal regardless of the status of the 
underlying mortgage loans. Commercial banks, savings and loan 
institutions, private mortgage insurance companies, mortgage 
bankers and other secondary market issuers also create pass-
through pools of mortgage loans. Such issuers may also be the 
originators and/or servicers of the underlying mortgage-related 
securities. Pools created by such non-governmental issuers 
generally offer a higher rate of interest than government and 
government-related pools because there are no direct or indirect 
government or agency guarantees of payments in the former pools. 
However, timely payment of interest and principal of mortgage 
loans in these pools may be supported by various forms of 
insurance or guarantees, including individual loan, title, pool 
and hazard insurance and letters of credit. The insurance and 
guarantees are issued by governmental entities, private insurers 
and the mortgage poolers. There can be no assurance that the 
private insurers or guarantors can meet their obligations under 
the insurance policies or guarantee arrangements. A Portfolio may 
also buy mortgage-related securities without insurance or 
guarantees.
	
	Other Asset-Backed Securities: The TBC Managed Income 
Portfolio, the Putnam Diversified Income Portfolio,  the Smith 
Barney High Income Portfolio and the MFS Total Return Portfolio 
may invest in other asset-backed securities. These securities, 
issued by trusts and special purpose corporations, are backed by a 
pool of assets, such as credit card and automobile loan 
receivables, representing the obligations of a number of different 
parties.

	Corporate asset-backed securities present certain risks. For 
instance, in the case of credit card receivables, these securities 
may not have the benefit of any security interest in the related 
collateral. Credit card receivables are generally unsecured and 
the debtors are entitled to the protection of a number of state 
and federal consumer credit laws, many of which give such debtors 
the right to set off certain amounts owed on the credit cards, 
thereby reducing the balance due. Most issuers of automobile 
receivables permit the servicers to retain possession of the 
underlying obligations. If the servicer were to sell these 
obligations to another party, there is a risk that the purchaser 
would acquire an interest superior to that of the holders of the 
related automobile receivables. In addition, because of the large 
number of vehicles involved in a typical issuance and technical 
requirements under state laws, the trustee for the holders of the 
automobile receivables may not have a proper security interest in 
all of the obligations backing such receivables. Therefore, there 
is the possibility that recoveries on repossessed collateral may 
not, in some cases, be available to support payments on these 
securities.

	Corporate asset-backed securities are often backed by a pool 
of assets representing the obligations of a number of different 
parties. To lessen the effect of failures by obligors to make 
payments on underlying assets, the securities may contain elements 
of credit support which fall into two categories: (i) liquidity 
protection and (ii) protection against losses resulting from 
ultimate default by an obligor on the underlying assets. Liquidity 
protection refers to the provision of advances, generally by the 
entity administering the pool of assets, to ensure that the 
receipt of payments on the underlying pool occurs in a timely 
fashion. Protection against losses resulting from ultimate default 
ensures payment through insurance policies or letters of credit 
obtained by the issuer or sponsor from third parties. A Portfolio 
will not pay any additional or separate fees for credit support. 
The degree of credit support provided for each issue is generally 
based on historical information respecting the level of credit 
risk associated with the underlying assets. Delinquency or loss in 
excess of that anticipated or failure of the credit support could 
adversely affect the return on an instrument in such a security.

	Real Estate Investment Trusts ("REITs").  The Alliance 
Growth Portfolio may invest without limitations in shares of  
REITs.  REITs are pooled investment vehicles which invest 
primarily in income producing real estate or real estate related 
loans or interests.  REITs are generally classified as equity 
REITs,  mortgage REITs or a combination of equity and mortgage 
REITs.  Equity REITs invest the majority of their assets directly 
in real property and derive income primarily from the collection 
or rents. Equity REITs  can also realize capital gains by selling 
properties that have appreciated in value.  Mortgage REITs invest 
the majority of their assets in real estate mortgages and derive 
income from the collection of interest payments.  REITs are not 
taxed on income distributed to shareholders provided they comply 
with several requirements of the Internal Revenue Code of 1986, as 
amended (the "Code").  Also, the Portfolio will indirectly bear 
its proportionate share of expenses incurred by REITs in which the 
Portfolio invests. REITs are sensitive to factors such as changes 
in real estate values and property taxes, interest rates, cash 
flow of underlying real estate assets,  overbuilding,  and the 
management skill and credit worthiness of the issuer.  REITs may 
also be affected by tax and regulatory requirements.  

	"Dollar Roll" Transactions.  As described in the Prospectus, 
the TBC Managed Income Portfolio, the Putnam Diversified Income 
Portfolio and the GT Global Strategic Income Portfolio may enter 
into "dollar roll" transactions pursuant to which they sell fixed 
income securities for delivery in the current month and 
simultaneously contract to repurchase substantially similar 
securities on a specified future date.  The MFS Total Return 
Portfolio may enter in similar transactions pursuant to which the 
Portfolio sells mortgage-backed securities for delivery in the 
future and simultaneously contracts to repurchase substantially 
similar securities on a specified future date. During the roll 
period, a Portfolio forgoes principal and interest paid on the 
securities. The Portfolio is compensated for the lost interest by 
the difference between the current sales price and the lower price 
for the future purchase (often referred to as the "drop") as well 
as by the interest earned on the cash proceeds of the initial 
sale. A Portfolio may also be compensated by receipt of a 
commitment fee.


	Convertible Securities and Synthetic Convertible Securities. 
 The Smith Barney Large Cap Value Portfolio, the Alliance Growth 
Portfolio, the AIM Capital Appreciation Portfolio, the Van Kampen 
American Capital Enterprise Portfolio, the Smith Barney 
International Equity Portfolio, the Smith Barney Pacific Basin 
Portfolio, the TBC Managed Income Portfolio, the Putnam 
Diversified Income Portfolio, the GT Global Strategic Income 
Portfolio, the Smith Barney High Income Portfolio, the MFS Total 
Return Portfolio and the Smith Barney Large Capitalization Growth 
Portfolio may invest in convertible securities and synthetic 
convertible securities.  Convertible securities are fixed-income 
securities that may be converted at either a stated price or 
stated rate into underlying shares of common stock.  Convertible 
securities have general characteristics similar to both fixed-
income and equity securities.  Although to a lesser extent than 
with fixed-income securities generally, the market value of 
convertible securities tends to decline as interest rates increase 
and, conversely, tends to increase as interest rates decline.  In 
addition, because of the conversion feature, the market value of 
convertible securities tends to vary with fluctuations in the 
market value of the underlying common stocks and, therefore, also 
will react to variations in the general market for equity 
securities.

	Like fixed-income securities, convertible securities are 
investments which provide for a stable stream of income with 
generally higher yields than common stocks.  Of course, like all 
fixed-income securities, there can be no assurance of current 
income because the issuers of the convertible securities may 
default on their obligations.  Convertible securities, however, 
generally offer lower interest or dividend yields than non-
convertible securities of similar quality because of the potential 
for capital appreciation.  A convertible security, in addition to 
providing fixed income, offers the potential for capital 
appreciation through the conversion feature, which enables the 
holder to benefit from increases in the market price of the 
underlying common stock.  However, there can be no assurance of 
capital appreciation because securities prices fluctuate.

	Convertible securities generally are subordinated to other 
similar but non-convertible securities of the same issuer, 
although convertible bonds enjoy seniority in right of payment to 
all equity securities, and convertible preferred stock  is senior 
to common stock of the same issuer.  Because of the subordination 
feature, however, convertible securities typically have lower 
ratings than similar non-convertible securities.

	Unlike a convertible security, which is a single security, a 
synthetic convertible security is comprised of distinct securities 
that together resemble convertible securities in certain respects. 
 Synthetic convertible securities are typically created by 
combining non-convertible bonds or preferred stocks with warrants 
or stock call options.  The options that will form elements of 
synthetic convertible securities may be listed on a securities 
exchange or on the National Association of Securities Dealers 
Automated Quotation System or may be privately traded.  The 
components of a synthetic convertible security generally are not 
offered as a unit and may be purchased and sold by the Portfolio 
at different times.  Synthetic convertible securities differ from 
convertible securities in certain respects, including that each 
component of a synthetic convertible security has a separate 
market value and responds differently to market fluctuations. 

	Investing in synthetic convertible securities involves the 
risk normally involved in holding the securities comprising the 
synthetic convertible security.

	When-Issued, Delayed-delivery and Forward Commitment 
Securities.  The Smith Barney Large Cap Value Portfolio, the 
Alliance Growth Portfolio, the TBC Managed Income Portfolio, the 
Putnam Diversified Income Portfolio, the GT Global Strategic 
Income Portfolio, the Smith Barney High Income Portfolio, the MFS 
Total Return Portfolio and the Smith Barney Large Capitalization 
Growth Portfolio may purchase securities on a when-issued basis, 
or may purchase or sell securities for delayed delivery.  In when-
issued or delayed-delivery transactions, delivery of the 
securities occurs beyond normal settlement periods, but no payment 
or delivery will be made by a Portfolio prior to the actual 
delivery or payment by the other party to the transaction.  A 
Portfolio will not accrue income with respect to a when-issued or 
delayed-delivery security prior to its stated delivery date.  A 
Portfolio will establish with its custodian a segregated account 
consisting of cash, U.S. government securities or other liquid 
securities, in an amount equal to the amount of the Portfolio's 
when-issued and delayed-delivery purchase commitments.  Placing 
securities rather than cash in the segregated account may have a 
leveraging effect on the Portfolio's net asset value per share; 
that is, to the extent that the Portfolio remains substantially 
fully invested in securities at the same time that it has 
committed to purchase securities on a when-issued or delayed-
delivery basis, greater fluctuations in its net asset value per 
share may occur than if it had set aside cash to satisfy its 
purchase commitments.  Securities purchased on a when-issued or 
delayed-delivery basis may expose a Portfolio to risk because the 
securities may experience fluctuations in value prior to their 
delivery.  Purchasing securities on a when-issued or delayed-
delivery basis can involve the additional risk that the yield 
available in the market when the delivery takes place may be 
higher than that obtained in the transaction itself.

	Short Sales Against the Box.  The Van Kampen American 
Capital Enterprise Portfolio, the GT Global Strategic Income 
Portfolio, the AIM Capital Appreciation Portfolio and the Smith 
Barney High Income Portfolio may each make short sales of 
securities in order to reduce market exposure and/or to increase 
its income if, at all times when a short position is open, (the 
"AIM Capital Appreciation Portfolio will limit investments such 
that nor more than 10% of the value of its nets assets will be 
deposited as collateral for such sales at any time) the Portfolio 
owns an equal or greater amount of such securities or owns 
preferred stock, debt or warrants convertible or exchangeable into 
an equal or greater number of the shares of the securities sold 
short.  Short sales of this kind are referred to as short sales 
"against the box."  The broker-dealer that executes a short sale 
generally invests the cash proceeds of the sale until they are 
paid to the Portfolio.  Arrangements may be made with the broker-
dealer to obtain a portion of the interest earned by the broker on 
the investment of short sale proceeds.  The Portfolio will 
segregate the securities against which short sales against the box 
have been made in a special account with its custodian.  

	Commercial Bank Obligations.  For the purposes of each 
Portfolio's investment policies with respect to bank obligations 
(such as certificates of deposit ("CDs"), time deposits ("TDs") 
and bankers' acceptances), obligations of foreign branches of U.S. 
banks and of foreign banks may be general obligations of the 
parent bank in addition to the issuing bank, or may be limited by 
the terms of a specific obligation and by government regulation.  
As with investment in non-U.S. securities in general, investments 
in the obligations of foreign branches of U.S. banks and of 
foreign banks may subject the Portfolio to investment risks that 
are different in some respects from those of investments in 
obligations of domestic issuers.  Although a Portfolio will 
typically acquire obligations issued and supported by the credit 
of U.S. or foreign banks having total assets at the time of 
purchase in excess of U.S. $1 billion (or the equivalent thereof), 
this U.S. $1 billion figure is not a fundamental investment policy 
or restriction of the Portfolio.  For calculation purposes with 
respect to the U.S. $1 billion figure, the assets of a bank will 
be deemed to include the assets of its U.S. and non-U.S. branches.

	Commercial Paper.  With respect to each Portfolio's 
investment policies with respect to commercial paper, such 
security consists of short-term (usually from 1 to 270 days) 
unsecured promissory notes issued by corporations in order to 
finance their current operations.  A variable amount master demand 
note (which is a type of commercial paper) represents a direct 
borrowing arrangement involving periodically fluctuating rates of 
interest under a letter agreement between a commercial paper 
issuer and an institutional lender, pursuant to which the lender 
may determine to invest varying amounts.  Transfer of such notes 
is usually restricted by the issuer, and there is no secondary 
trading market for such notes.  Each Portfolio (except the Smith 
Barney Money Market Portfolio), therefore, may not invest in a 
master demand note, if as a result more than 15% of the value of 
each such Portfolio's total assets would be invested in such notes 
and other illiquid securities.  The Smith Barney Money Market 
Portfolio may not invest in such notes if more than 10% of the 
value of its total assets would be invested in such notes and 
other illiquid securities.

	Options, Futures Contracts and Related Options.  The 
following information on options, futures contracts and related 
options applies to the Portfolios as described in the Prospectus. 
 In addition, new options and futures contracts and various 
combinations thereof continue to be developed and the Portfolios 
may invest in any such options and contracts as may be developed 
to the extent consistent with its investment objective and 
regulatory requirements applicable to investment companies.

	Writing Covered Call Options.  The Smith Barney Large Cap 
Value Portfolio, the Alliance Growth Portfolio, the AIM Capital 
Appreciation Portfolio, the Van Kampen American Capital Enterprise 
Portfolio, the Smith Barney International Equity Portfolio, the 
Smith Barney Pacific Basin Portfolio, the Putnam Diversified 
Income Portfolio, the GT Global Strategic Income Portfolio, the 
Smith Barney High Income Portfolio and the MFS Total Return 
Portfolio may write (sell) covered call options. A Portfolio may 
write (sell) covered call options for hedging purposes or to 
increase its portfolio return.  Covered call options will 
generally be written on securities and currencies which, in the 
opinion of management, are not expected to make any major price 
moves in the near future but which, over the long term, are deemed 
to be attractive investments for the Portfolio.  (the "AIM Capital 
Appreciation Portfolio" will not write covered call options for 
speculative purposes).

	A call option gives the holder (buyer) the right to purchase 
a security or currency at a specified price (the exercise price) 
at any time until a certain date (the expiration date).  So long 
as the obligation of the writer of a call option continues, he may 
be assigned an exercise notice by the broker-dealer through whom 
such option was sold, requiring him to deliver the underlying 
security or currency against payment of the exercise price.  This 
obligation terminates upon the expiration of the call option, or 
such earlier time at which the writer effects a closing purchase 
transaction by purchasing an option identical to that previously 
sold.  Management believes that the writing of covered call 
options is less risky than writing uncovered or "naked" options, 
which the Portfolios will not do.

	Portfolio securities or currencies on which call options may 
be written will be purchased solely on the basis of investment 
considerations consistent with each Portfolio's investment 
objective.  When writing a covered call option, the Portfolio, in 
return for the premium, gives up the opportunity for profit from a 
price increase in the underlying security or currency above the 
exercise price and retains the risk of loss should the price of 
the security or currency decline.  Unlike one who owns securities 
or currencies not subject to an option, the Portfolio has no 
control over when it may be required to sell the underlying 
securities or currencies, since the option may be exercised at any 
time prior to the option's expiration.  If a call option which the 
Portfolio has written expires, the Portfolio will realize a gain 
in the amount of the premium; however, such gain may be offset by 
a decline in the market value of the underlying security or 
currency during the option period.  If the call option is 
exercised, the Portfolio will realize a gain or loss from the sale 
of the underlying security or currency.  The security or currency 
covering the call option will be maintained in a segregated 
account of the Portfolio's custodian.  The Portfolio does not 
consider a security or currency covered by a call option to be 
"pledged" as that term is used in the Portfolio's policy which 
limits the pledging or mortgaging of its assets.

	The premium the Portfolio receives for writing a call option 
is deemed to constitute the market value of an option.  The 
premium the Portfolio will receive from writing a call option will 
reflect, among other things, the current market price of the 
underlying security or currency, the relationship of the exercise 
price to such market price, the historical price volatility of the 
underlying security or currency, and the length of the option 
period.  In determining whether a particular call option should be 
written on a particular security or currency, management will 
consider the reasonableness of the anticipated premium and the 
likelihood that a liquid secondary market will exist for those 
options.  The premium received by the Portfolio for writing 
covered call options will be recorded as a liability in the 
Portfolio's statement of assets and liabilities.  This liability 
will be adjusted daily to the option's current market value, which 
will be calculated as described in "Determination of Net Asset 
Value" in the Prospectus.  The liability will be extinguished upon 
expiration of the option or delivery of the underlying security or 
currency upon the exercise of the option.  The liability with 
respect to a listed option will also be extinguished upon the 
purchase of an identical option in a closing transaction.

	Closing transactions will be effected in order to realize a 
profit on an outstanding call option, to prevent an underlying 
security or currency from being called, or to permit the sale of 
the underlying security or currency.  Furthermore, effecting a 
closing transaction will permit the Portfolio to write another 
call option on the underlying security or currency with either a 
different exercise price, expiration date or both.  If the 
Portfolio desires to sell a particular security or currency from 
its portfolio on which it has written a call option or purchases a 
put option, it will seek to effect a closing transaction prior to, 
or concurrently with, the sale of the security or currency.  There 
is no assurance that the Portfolio will be able to effect such 
closing transactions at a favorable price.  If the Portfolio 
cannot enter into such a transaction, it may be required to hold a 
security or currency that it might otherwise have sold, in which 
case it would continue to be a market risk with respect to the 
security or currency.

	Each Portfolio will pay transaction costs in connection with 
the writing of options and in entering into closing purchase 
contracts.  Transaction costs relating to options activity are 
normally higher than those applicable to purchases and sales of 
portfolio securities.

	Call options written by each Portfolio will normally have 
expiration dates of less than nine months from the date written.  
The exercise price of the options may be below, equal to or above 
the current market values of the underlying securities or 
currencies at the time the options are written.  From time to 
time, the Portfolio may purchase an underlying security or 
currency for delivery in accordance with the exercise of an 
option, rather than delivering such security or currency from its 
portfolio.  In such cases, additional costs will be incurred.

	Each Portfolio will realize a profit or loss from a closing 
purchase transaction if the cost of the transaction is less or 
more, respectively, than the premium received from the writing of 
the option.  Because increases in the market price of a call 
option will generally reflect increases in the market price of the 
underlying security or currency, any loss resulting from the 
repurchase of a call option is likely to be offset in whole or in 
part by appreciation of the underlying security or currency owned 
by the Portfolio.


	Purchasing Put Options.  The Smith Barney Large Cap Value 
Portfolio, the Alliance Growth Portfolio, the Van Kampen American 
Capital Enterprise Portfolio, the Smith Barney International 
Equity Portfolio, the Smith Barney Pacific Basin Portfolio, the 
Putnam Diversified Income Portfolio, the GT Global Strategic 
Income Portfolio, the Smith Barney High Income Portfolio and the 
MFS Total Return Portfolio may purchase put options.  As the 
holder of a put option, the Portfolio has the right to sell the 
underlying security or currency at the exercise price at any time 
during the option period.  The Portfolio may enter into closing 
sale transactions with respect to such options, exercise them or 
permit them to expire.

	Each Portfolio may purchase a put option on an underlying 
security or currency (a "protective put") owned by the Portfolio 
as a hedging technique in order to protect against an anticipated 
decline in the value of the security or currency.  Such hedge 
protection is provided only during the life of the put option when 
the Portfolio, as the holder of the put option, is able to sell 
the underlying security or currency at the put exercise price 
regardless of any decline in the underlying security's market 
price or currency's exchange value.  For example, a put option may 
be purchased in order to protect unrealized appreciation of a 
security or currency when management deems it desirable to 
continue to hold the security or currency because of tax 
considerations.  The premium paid for the put option and any 
transaction costs would reduce any capital gain otherwise 
available for distribution when the security or currency is 
eventually sold.

	Each Portfolio may also purchase put options at a time when 
the Portfolio does not own the underlying security or currency.  
By purchasing put options on a security or currency it does not 
own, the Portfolio seeks to benefit from a decline in the market 
price of the underlying security or currency.  If the put option 
is not sold when it has remaining value, and if the market price 
of the underlying security or currency remains equal to or greater 
than the exercise price during the life of the put option, the 
Portfolio will lose its entire investment in the put option.  In 
order for the purchase of a put option to be profitable, the 
market price of the underlying security or currency must decline 
sufficiently below the exercise price to cover the premium and 
transaction costs, unless the put option is sold in a closing sale 
transaction.

	The premium paid by a Portfolio when purchasing a put option 
will be recorded as an asset in the Portfolio's statement of 
assets and liabilities.  This asset will be adjusted daily to the 
option's current market value, which will be calculated as 
described in "Determination of Net Asset Value" in the Prospectus. 
 The asset will be extinguished upon expiration of the option or 
the delivery of the underlying security or currency upon the 
exercise of the option.  The asset with respect to a listed option 
will also be extinguished upon the writing of an identical option 
in a closing transaction.

	Purchasing Call Options.  The Smith Barney Large Cap Value 
Portfolio, the Alliance Growth Portfolio, the Van Kampen American 
Capital Enterprise Portfolio, the Smith Barney International 
Equity Portfolio, the Smith Barney Pacific Basin Portfolio, the 
Putnam Diversified Income Portfolio, the GT Global Strategic 
Income Portfolio, the Smith Barney High Income Portfolio and the 
MFS Total Return Portfolio may purchase call options.  As the 
holder of a call option, a Portfolio has the right to purchase the 
underlying security or currency at the exercise price at any time 
during the option period.  The Portfolio may enter into closing 
sale transactions with respect to such options, exercise them or 
permit them to expire.  Call options may be purchased by the 
Portfolio for the purpose of acquiring the underlying security or 
currency for its portfolio.  Utilized in this fashion, the 
purchase of call options enables the Portfolio to acquire the 
security or currency at the exercise price of the call option plus 
the premium paid.  At times the net cost of acquiring the security 
or currency in this manner may be less than the cost of acquiring 
the security or currency directly.  This technique may also be 
useful to the Portfolio in purchasing a large block of securities 
that would be more difficult to acquire by direct market 
purchases.  So long as it holds such a call option rather than the 
underlying security or currency itself, the Portfolio is partially 
protected from any unexpected decline in the market price of the 
underlying security or currency and in such event could allow the 
call option to expire, incurring a loss only to the extent of the 
premium paid for the option.

	A Portfolio may also purchase call options on underlying 
securities or currencies it owns in order to protect unrealized 
gains on call options previously written by it.  A call option 
would be purchased for this purpose where tax considerations make 
it inadvisable to realize such gains through a closing purchase 
transaction.  Call options may also be purchased at times to avoid 
realizing losses that would result in a reduction of the 
Portfolio's current return.  It is a policy of the GT Global 
Strategic Income Portfolio that aggregate premiums paid for put 
and call options will not exceed 5% of the Portfolio's total 
assets at the time of purchase.

	Interest Rate, Securities Index, Financial Futures and 
Currency Futures Contracts.  The Alliance Growth Portfolio, the 
Smith Barney International Equity Portfolio, the Smith Barney 
Pacific Basin Portfolio, the Putnam Diversified Income Portfolio, 
the GT Global Strategic Income Portfolio, the Smith Barney High 
Income Portfolio and the MFS Total Return Portfolio may enter into 
interest rate, securities index, financial futures and currency 
futures contracts ("Futures" or "Futures Contracts").  The AIM 
Capital Appreciation Portfolio may enter into stock index futures 
contracts and the Van Kampen American Capital Enterprise Portfolio 
may enter in stock index and interest rate futures contracts.  A 
Portfolio may enter into Futures Contracts as a hedge against 
changes in prevailing levels of interest rates or currency 
exchange rates in order to establish more definitely the effective 
return on securities or currencies held or committed to be 
acquired by the Portfolio.  A Portfolio's hedging may include 
holding Futures as an offset against anticipated changes in 
interest or currency exchange rates.  A Portfolio may also enter 
into Futures Contracts based on financial indices including any 
index of U.S. government securities, foreign government securities 
or corporate debt securities.

	A Futures Contract provides for the future sale by one party 
and purchase by another party of a specified amount of a specific 
financial instrument or currency for a specified price at a 
designated date, time and place.  The purchaser of a Futures 
Contract on an index agrees to take or make delivery of an amount 
of cash equal to the difference between a specified dollar 
multiple of the value of the index on the expiration date of the 
contract ("current contract value") and the price at which the 
contract was originally struck.  No physical delivery of the debt 
securities underlying the index is made.  Brokerage fees are 
incurred when a Futures Contract is bought or sold, and margin 
deposits must be maintained at all times that the Futures Contract 
is outstanding.

	The principal interest rate and currency Futures exchanges 
in the United States are the Board of Trade of the City of Chicago 
and the Chicago Mercantile Exchange.  Futures exchanges and 
trading are regulated under the Commodity Exchange Act by the 
Commodity Futures Trading Commission.  Futures are traded in 
London at the London International Financial Futures Exchange.

	Although techniques other than sales and purchases of 
Futures Contracts could be used to reduce the Portfolio's exposure 
to interest rate and currency exchange rate fluctuations, the 
Portfolio may be able to hedge its exposure more effectively and 
at a lower cost through using Futures Contracts.

	Although Futures Contracts typically require future delivery 
of and payment for financial instruments or currencies, Futures 
Contracts are usually closed out before the delivery date.  
Closing out an open Futures Contract sale or purchase is effected 
by entering into an offsetting Futures Contract purchase or sale, 
respectively, for the same aggregate amount of the identical 
financial instrument or currency and the same delivery date.  If 
the offsetting purchase price is less than the original sale 
price, the Portfolio realizes a gain; if it is more, the Portfolio 
realizes a loss.  Conversely, if the offsetting sale price is more 
than the original purchase price, the Portfolio realizes a gain; 
if it is less, the Portfolio realizes a loss.  The transaction 
costs must also be included in these calculations.  There can be 
no assurance, however, that the Portfolio will be able to enter 
into an offsetting transaction with respect to a particular 
Futures Contract at a particular time.  If the Portfolio is not 
able to enter into an offsetting transaction, the Portfolio will 
continue to be required to maintain the margin deposits of the 
underlying financial instrument or currency on the relevant 
delivery date.

	As an example of an offsetting transaction, the contractual 
obligations arising from the sale of one Futures Contract of 
September Treasury Bills on an exchange may be fulfilled at any 
time before delivery under the Futures Contract is required (i.e., 
on a specific date in September, the "delivery month") by the 
purchase of another Futures Contract of September Treasury Bills 
on the same exchange.  In such instance the difference between the 
price at which the Futures Contract was sold and the price paid 
for the offsetting purchase, after allowance for transaction 
costs, represents the profit or loss to the Portfolio.

	Persons who trade in Futures Contracts may be broadly 
classified as "hedgers" and "speculators."  Hedgers, whose 
business activity involves investment or other commitment in 
securities or other obligations, use the Futures markets to offset 
unfavorable changes in value that may occur because of 
fluctuations in the value of the securities and obligations held 
or committed to be acquired by them or fluctuations in the value 
of the currency in which the securities or obligations are 
denominated.  Debtors and other obligors may also hedge the 
interest cost of their obligations.  The speculator, like the 
hedger, generally expects neither to deliver nor to receive the 
financial instrument underlying the Futures Contract, but, unlike 
the hedger, hopes to profit from fluctuations in prevailing 
interest rates or currency exchange rates.

	Each Portfolio's Futures transactions will be entered into 
for traditional hedging purposes; that is, Futures Contracts will 
be sold to protect against a decline in the price of securities or 
currencies that the Portfolio owns, or Futures Contracts will be 
purchased to protect a Portfolio against an increase in the price 
of securities or currencies it has committed to purchase or 
expects to purchase.  The Smith Barney International Equity 
Portfolio, the Smith Barney Pacific Basin Portfolio, the MFS Total 
Return Portfolio and the Smith Barney High Income Portfolio may 
each also enter into Futures transactions for non-hedging 
purposes, provided that the aggregate initial margin and premiums 
on such non-hedging positions does not exceed 5% of the 
liquidation value of a Portfolio's assets.

	"Margin" with respect to Futures Contracts is the amount of 
funds that must be deposited by the Portfolio with a broker in 
order to initiate Futures trading and to maintain the Portfolio's 
open positions in Futures Contracts.  A margin deposit made when 
the Futures Contract is entered into ("initial margin") is 
intended to assure the Portfolio's performance of the Futures 
Contract.  The margin required for a particular Futures Contract 
is set by the exchange on which the Futures Contract is traded, 
and may be significantly modified from time to time by the 
exchange during the term of the Futures Contract.  Futures 
Contracts are customarily purchased and sold on margins, which may 
be 5% or less of the value of the Futures Contract being traded.

	If the price of an open Futures Contract changes (by 
increase in the case of a sale or by decrease in the case of a 
purchase) so that the loss on the Futures Contract reaches a point 
at which the margin on deposit does not satisfy margin 
requirements, the broker will require an increase in the margin 
deposit ("variation margin").  If, however, the value of a 
position increases because of favorable price changes in the 
Futures Contract so that the margin deposit exceeds the required 
margin, it is anticipated that the broker will pay the excess to 
the Portfolio.  In computing daily net asset values, the Portfolio 
will mark to market the current value of its open Futures 
Contracts.  Each Portfolio expects to earn interest income on its 
margin deposits.

	Risks of Using Futures Contracts.  The prices of Futures 
Contracts are volatile and are influenced, among other things, by 
actual and anticipated changes in interest rates, which in turn 
are affected by fiscal and monetary policies and national and 
international political and economic events.

	At best, the correlation between changes in prices of 
Futures Contracts and of the securities or currencies being hedged 
can be only approximate.  The degree of imperfection of 
correlation depends upon circumstances such as: variations in 
speculative market demand for Futures and for debt securities or 
currencies, including technical influences in Futures trading; and 
differences between the financial instruments being hedged and the 
instruments underlying the standard Futures Contracts available 
for trading, with respect to interest rate levels, maturities, and 
creditworthiness of issuers.  A decision of whether, when, and how 
to hedge involves skill and judgment, and even a well-conceived 
hedge may be unsuccessful to some degree because of unexpected 
market behavior or interest rate trends.

	Because of the low margin deposits required, Futures trading 
involves an extremely high degree of leverage.  As a result, a 
relatively small price movement in a Futures Contract may result 
in immediate and substantial loss, as well as gain, to the 
investor.  For example, if at the time of purchase, 10% of the 
value of the Futures Contract is deposited as margin, a subsequent 
10% decrease in the value of the Futures Contract would result in 
a total loss of the margin deposit, before any deduction for the 
transaction costs, if the account were then closed out.  A 15% 
decrease would result in a loss equal to 150% of the original 
margin deposit, if the Futures Contract were closed out.  Thus, a 
purchase or sale of a Futures Contract may result in losses in 
excess of the amount invested in the Futures Contract.  The 
Portfolio, however, would presumably have sustained comparable 
losses if, instead of the Futures Contract, it had invested in the 
underlying financial instrument and sold it after the decline.  
Where the International Equity Portfolio enters into Futures 
transactions for non-hedging purposes, it will be subject to 
greater risks and could sustain losses which are net offset by 
gains on other portfolio assets.

	Furthermore, in the case of a Futures Contract purchase, in 
order to be certain that the Portfolio has sufficient assets to 
satisfy its obligations under a Futures Contract, the Portfolio 
sets aside and commits to back the Futures Contract an amount of 
cash, U.S. government securities and other liquid, high-grade debt 
securities equal in value to the current value of the underlying 
instrument less the margin deposit.  In the case of a Futures 
Contract sale, a Portfolio will either set aside amounts as in the 
case of a Futures Contract purchase, own the security underlying 
the Contract, or hold a call option permitting the Portfolio to 
purchase the same Futures Contract at a price no higher than the 
Contract price.  Assets used as cover cannot be sold while the 
position in the corresponding Futures Contract is open, unless 
they are replaced with similar assets.  As a result, the 
commitment of a significant portion of the Portfolio's assets to 
cover could impede portfolio management or the Portfolio's ability 
to meet redemption requests or other current obligations.

	Most United States Futures exchanges limit the amount of 
fluctuation permitted in Futures Contract prices during a single 
trading day.  The daily limit establishes the maximum amount that 
the price of a Futures Contract may vary either up or down from 
the previous day's settlement price at the end of a trading 
session.  Once the daily limit has been reached in a particular 
type of Futures Contract, no trades may be made on that day at a 
price beyond that limit.  The daily limit governs only price 
movement during a particular trading day and therefore does not 
limit potential losses, because the limit may prevent the 
liquidation of unfavorable positions.  Futures Contract prices 
have occasionally moved  to the daily limit for several 
consecutive trading days with little or no trading, thereby 
preventing prompt liquidation of Futures positions and subjecting 
some Futures traders to substantial losses.

	Options on Futures Contracts.  The Alliance Growth 
Portfolio, the Van Kampen American Capital Enterprise Portfolio, 
the Smith Barney International Equity Portfolio, the Smith Barney 
Pacific Basin Portfolio, the Putnam Diversified Income Portfolio, 
the GT Global Strategic Income Portfolio, the Smith Barney High 
Income Portfolio and the MFS Total Return Portfolio may enter into 
options on Futures Contracts.  Options on Futures Contracts are 
similar to options on securities or currencies except that options 
on Futures Contracts give the purchaser the right, in return for 
the premium paid, to assume a position in a Futures Contract (a 
long position if the option is a call and a short position if the 
option is a put), rather than to purchase or sell the Futures 
Contract, at a specified exercise price at any time during the 
period of the option.  Upon exercise of the 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, at 
exercise, exceeds (in the case of a call) or is less than (in the 
case of a put) the exercise price of the option on the Futures 
Contract.  If an option is exercised on the last trading day prior 
to the expiration date of the option, the settlement will be made 
entirely in cash equal to the difference between the exercise 
price of the option and the closing level of the securities or 
currencies upon which the Futures Contracts are based on the 
expiration date.  Purchasers of options who fail to exercise their 
options prior to the exercise date suffer a loss of the premium 
paid.

	As an alternative to purchasing call and put options on 
Futures, each Portfolio may purchase call and put options on the 
underlying securities or currencies themselves (see "Purchasing 
Put Options" and "Purchasing Call Options" above).  Such options 
would be used in a manner identical to the use of options on 
Futures Contracts.

	To reduce or eliminate the leverage then employed by the 
Portfolio or to reduce or eliminate the hedge position then 
currently held by the Portfolio, the Portfolio may seek to close 
out an option position by selling an option covering the same 
securities or currency and having the same exercise price and 
expiration date.  The ability to establish and close out positions 
on options on Futures Contracts is subject to the existence of a 
liquid market.  It is not certain that this market will exist at 
any specific time.

	In order to assure that the Portfolios will not be deemed to 
be "commodity pools" for purposes of the Commodity Exchange Act, 
regulations of the Commodity Futures Trading Commission ("CFTC") 
require that each Portfolio enter into transactions in Futures 
Contracts and options on Futures Contracts only (i) for bona fide 
hedging purposes (as defined in CFTC regulations), or (ii) for 
non-hedging purposes, provided that the aggregate initial margin 
and premiums on such non-hedging positions does not exceed 5% of 
the liquidation value of the Portfolio's assets.  

	Forward Currency Contracts and Options on Currency.  The 
Alliance Growth Portfolio, the Smith Barney International Equity 
Portfolio, the Smith Barney Pacific Basin Portfolio, the Putnam 
Diversified Income Portfolio, the GT Global Strategic Income 
Portfolio, the Smith Barney High Income Portfolio and the MFS 
Total Return Portfolio may enter into forward currency contracts 
and options on currency.  A forward currency contract is an 
obligation to purchase or sell a currency against another currency 
at a future date and price as agreed upon by the parties.  A 
Portfolio may either accept or make delivery of the currency at 
the maturity of the forward contract or, prior to maturity, enter 
into a closing transaction involving the purchase or sale of an 
offsetting contract.  A Portfolio engages in forward currency 
transactions in anticipation of, or to protect itself against, 
fluctuations in exchange rates.  The Portfolio might sell a 
particular foreign currency forward, for example, when it holds 
bonds denominated in that currency but anticipates, and seeks to 
be protected against,  decline in the currency against the U.S. 
dollar.  Similarly, the Portfolio might sell the U.S. dollar 
forward when it holds bonds denominated in U.S. dollars but 
anticipates, and seeks to be protected against, a decline in the 
U.S. dollar relative to other currencies.  Further, the Portfolio 
might purchase a currency forward to "lock in" the price of 
securities denominated in that currency which it anticipates 
purchasing.

	The matching of the increase in value of a forward contract 
and the decline in the U.S. dollar equivalent value of the foreign 
currency denominated asset that is the subject of the hedge 
generally will not be precise.  In addition, the Portfolio may not 
always be able to enter into foreign currency forward contracts at 
attractive prices and this will limit the Portfolio's ability to 
use such contract to hedge or cross-hedge its assets.  Also, with 
regard to the Portfolio's use of cross-hedges, there can be no 
assurance that historical correlations between the movement of 
certain foreign currencies relative to the U.S. dollar will 
continue.  Thus, at any time poor correlation may exist between 
movements in the exchange rates of the foreign currencies 
underlying the Portfolio's cross-hedges and the movements in the 
exchange rates of the foreign currencies in which the Portfolio's 
assets that are the subject of such cross-hedges are denominated. 
The MFS Total Return Portfolio may also enter into forward 
currency contracts for non-hedging purposes, subject to applicable 
law.

	Forward contracts are traded in an interbank market 
conducted directly between currency traders (usually large 
commercial banks) and their customers.  A forward contract 
generally has no deposit requirement and is consummated without 
payment of any commission.  A Portfolio, however, may enter into 
forward contracts with deposit requirements or commissions.

	A put option on currency gives the Portfolio, as purchaser, 
the right (but not the obligation) to sell a specified amount of 
currency at the exercise price until the expiration of the option. 
 A call option gives the Portfolio, as purchaser, the right (but 
not the obligation) to purchase a specified amount of currency at 
the exercise price until its expiration.  The Portfolio might 
purchase a currency put option, for example, to protect itself 
during the contract period against a decline in the value of a 
currency in which it holds or anticipates holding securities.  If 
the currency's value should decline, the loss in currency value 
should be offset, in whole or in part, by an increase in the value 
of the put.  If the value of the currency instead should rise, any 
gain to the Portfolio would be reduced by the premium it had paid 
for the put option.  A currency call option might be purchased, 
for example, in anticipation of, or to protect against, a rise in 
the value of a currency in which the Portfolio anticipates 
purchasing securities.

	A Portfolio's ability to establish and close out positions 
in foreign currency options is subject to the existence of a 
liquid market.  There can be no assurance that a liquid market 
will exist for a particular option at any specific time.  In 
addition, options on foreign currencies are affected by all of 
those factors that influence foreign exchange rates and 
investments generally.

	A position in an exchange-listed option may be closed out 
only on an exchange that provides a secondary market for identical 
options.  Exchange markets for options on foreign currencies exist 
but are relatively new, and the ability to establish and close out 
positions on the exchanges is subject to maintenance of a liquid 
secondary market.  Closing transactions may be effected with 
respect to options traded in the over-the-counter ("OTC") markets 
(currently the primary markets for options on foreign currencies) 
only by negotiating directly with the other party to the option 
contract or in a secondary market for the option if such market 
exists.  Although the Portfolio intends to purchase only those 
options for which there appears to be an active secondary market, 
there is no assurance that a liquid secondary market will exist 
for any particular option at any specific time.  In such event, it 
may not be possible to effect closing transactions with respect to 
certain options, with the result that the Portfolio would have to 
exercise those options which it has purchased in order to realize 
any profit.  Any OTC options acquired by each Portfolio and assets 
used as "cover" for OTC options written by the Portfolio would be 
considered illiquid and subject to each Portfolio's limitation on 
investing in such securities.

	Options on Securities Indices.  The Alliance Growth 
Portfolio, the Van Kampen American Capital Enterprise Portfolio, 
the Smith Barney International Equity Portfolio, the Smith Barney 
Pacific Basin Portfolio, the Putnam Diversified Income Portfolio, 
the GT Global Strategic Income Portfolio, the Smith Barney High 
Income Portfolio and the MFS Total Return Portfolio may enter into 
options on securities indices.  Through the writing or purchase of 
index options, a Portfolio can achieve many of the same objectives 
as through the use of options on individual securities.  Options 
on securities indices are similar to options on a security except 
that, rather than the right to take or make delivery of a security 
at a specified price, an option on a securities index gives the 
holder the right to receive, upon exercise of the option, an 
amount of cash if the closing level of the securities index upon 
which the option is based is greater than, in the case of a call, 
or less than, in the case of a put, the exercise price of the 
option.  This amount of cash is equal to the difference between 
the closing price of the index and the exercise price of the 
option.  The writer of the option is obligated, in return for the 
premium received, to make delivery of this amount.  Unlike options 
on securities (which require, upon exercise, delivery of the 
underlying security), settlements of options on securities 
indices, upon exercise thereof, are in cash, and the gain or loss 
of an option on an index depends on price movements in the market 
generally (or in a particular industry or segment of the market on 
which the underlying index base) rather than price movements in 
individual securities, as is the case with respect to options on 
securities.

	When the Portfolio writes an option on a securities index, 
it will be required to deposit with its custodian eligible 
securities equal in value to 100% of the exercise price in the 
case of a put, or the contract's value in the case of a call.  In 
addition, where the Portfolio writes a call option on a securities 
index at a time when the contract value exceeds the exercise 
price, the Portfolio will segregate, until the option expires or 
is closed out, cash or cash equivalents equal in value to such 
excess.

	Options on securities and index options involve risks 
similar to those risks relating to transactions in financial 
futures described above.  Also, an option purchased by the 
Portfolio may expire worthless, in which case the Portfolio would 
lose the premium paid therefor.

	The staff of the Securities and Exchange Commission ("SEC") 
has taken the position that purchased over-the-counter options and 
assets used to cover written over-the-counter options are illiquid 
and, therefore, together with other illiquid securities cannot, 
exceed a certain percentage of a Portfolio's assets (the "SEC 
illiquidity ceiling").  Although management disagrees with this 
position, it intends to limit each Portfolio's writing of over-
the-counter options in accordance with the following procedure.  
Except as provided below, each Portfolio intends to write over-
the-counter options only with primary U.S. government securities 
dealers recognized by the Federal Reserve Bank of New York.  Also, 
the contracts which each Portfolio has in place with such primary 
dealers will provide that each Portfolio has the absolute right to 
repurchase an option it writes at any time at a price which 
represents the fair market value, as determined in good faith 
through negotiation between the parties, but which in no event 
will exceed a price determined pursuant to a formula in the 
contract.  Although the specific formula may vary between 
contracts with different primary dealers, the formula will 
generally be based on a multiple of the premium received by a 
Portfolio for writing the option, plus the amount, if any, of the 
option's intrinsic value (i.e., the amount that the option is in-
the-money).  The formula may also include a factor to account for 
the difference between the price of the security and the strike 
price of the option if the option is written out-of-money.  Each 
Portfolio will treat all or a part of the formula price as 
illiquid for purposes of the SEC illiquidity ceiling.  Each 
Portfolio may also write over-the-counter options with non-primary 
dealers, including foreign dealers, and will treat the assets used 
to cover these options as illiquid for purposes of such SEC 
illiquidity ceiling.

	Yield Curve Options.  The MFS Total Return Portfolio may 
also enter into options on the "spread," or yield differential, 
between two fixed income securities, in transactions referred to 
as "yield curve" options.  In contrast to other types of options, 
a yield curve option is based on the difference between the yields 
of designated securities, rather than the prices of the individual 
securities, and is settled through cash payments.  Accordingly, a 
yield curve option is profitable to the holder if this 
differential widens (in the case of a call) or narrows (in the 
case of a put), regardless of whether the yields of the underlying 
securities increase or decrease.

	Yield curve options may be used for the same purposes as 
other options on securities.  Specifically, the Portfolio may 
purchase or write such options for hedging purposes.  For example, 
the Portfolio may purchase a call option on the yield spread 
between two securities, if it owns one of the securities and 
anticipates purchasing the other security and wants to hedge 
against an adverse change in the yield spread between the two 
securities.  The Portfolio may also purchase or write yield curve 
options for other than hedging purposes (i.e., in an effort to 
increase its current income) if, in the judgment of management, 
the Portfolio will be able to profit from movements in the spread 
between the yields of the underlying securities.  The trading of 
yield curve options is subject to all of the risks associated with 
the trading of other types of options.  In addition, however, such 
options present risk of loss even if the yield of one of the 
underlying securities remains constant, if the spread moves in a 
direction or to an extent which was not anticipated.  Yield curve 
options written by the Portfolio will be "covered".  A call (or 
put) option is covered if the Portfolio holds another call (or 
put) option on the spread between the same two securities and 
maintains in a segregated account with its custodian cash or cash 
equivalents sufficient to cover the Portfolio's net liability 
under the two options.  Therefore, the Portfolio's liability for 
such a covered option is generally limited to the difference 
between the amount of the Portfolio's liability under the option 
written by the Portfolio less the value of the option held by the 
Portfolio.  Yield curve options may also be covered in such other 
manner as may be in accordance with the requirements of the 
counterparty with which the option is traded and applicable laws 
and regulations.  Yield curve options are traded over-the-counter 
and because they have been only recently introduced, established 
trading markets for these securities have not yet developed.

	Swaps and Swap Related Products.  Among the hedging 
transactions into which the Smith Barney International Equity 
Portfolio, the Smith Barney Pacific Basin Portfolio, the GT Global 
Strategic Income Portfolio, the Smith Barney High Income Portfolio 
and the MFS Total Return Portfolio may enter are interest rate 
swaps, currency swaps and other types of swap agreements such as 
caps, collars and floors.  Each Portfolio expects to enter into 
these transactions primarily to preserve a return or spread on a 
particular investment or portion of its portfolio or to protect 
against any increase in the price of securities the Portfolio 
anticipates purchasing at a later date.  Each Portfolio intends to 
use these transactions as a hedge and not as a speculative 
investment.  Swap agreements may be individually negotiated and 
structured to include exposure to a variety of different types of 
investments or market factors.  Depending on their structure, swap 
agreements may increase or decrease a Portfolio's exposure to long 
or short-term interest rates (in the U.S. or abroad), foreign 
currency values, mortgage securities, corporate borrowing rates, 
or other factors such as securities prices or inflation rates.  
Swap agreements can take many different forms and are known by a 
variety of names.  A Portfolio is not limited to any particular 
form or variety of swap agreement if management determines it is 
consistent with the Portfolio's investment objective and policies.

	A Portfolio may enter into swaps, caps and floors on either 
an asset-based or liability-based basis, depending on whether it 
is hedging its assets or its liabilities, and will usually enter 
into interest rate swaps on a net basis, i.e., the two payment 
streams are netted but, with the Portfolio receiving or paying, as 
the case may be, only the net amount of the two payments.  
Inasmuch as these hedging transactions are entered into for good 
faith hedging purposes, management and the Portfolios believe such 
obligations do not constitute senior securities and, accordingly 
will not treat them as being subject to its borrowing 
restrictions.  The net amount of the excess, if any, of a 
Portfolio's obligations over its entitlements with respect to each 
interest rate swap will be accrued on a daily basis and an amount 
of cash or liquid securities having an aggregate net asset value 
at least equal to the accrued excess will be maintained in a 
segregated account by its custodian.  If a Portfolio enters into a 
swap agreement on other than a net basis, it will maintain cash or 
liquid assets with a value equal to the full amount of such 
Portfolio's accrued obligations under the agreement.  The 
Portfolios will not enter into any swap, cap, floor or collar 
transaction unless the unsecured senior debt or the claims-paying 
ability of the other party thereto is rated in the highest rating 
category of at least one nationally recognized rating organization 
at the time of entering into such transaction.  The most 
significant factor in the performance of swaps, caps, floors and 
collars is the change in specific interest rate, currency or other 
factor that determines the amount of payments to be made under the 
arrangement.  If management is incorrect in its forecasts of such 
factors, the investment performance of the Portfolio would be less 
than what it would have been if these investment techniques had 
not been used.  If a swap agreement calls for payments by the 
Portfolio the Portfolio must be prepared to make such payments 
when due.  In addition, if the counterparty's creditworthiness 
declined, the value of the swap agreement would be likely to 
decline, potentially resulting in losses.  If the counterparty 
defaults, the Portfolio's risk of loss consists of the net amount 
of payments that the Portfolio is contractually entitled to 
receive.  The Portfolio anticipates that it will be able to 
eliminate or reduce its exposure under these arrangements by 
assignment or other disposition or by entering into an offsetting 
agreement with the same or another counterparty.  The swap market 
has grown substantially in recent years with a large number of 
banks and investment banking firms acting both as principals and 
as agents utilizing swap documentation.  As a result, the swap 
market has become relatively liquid.  Caps and floors are more 
recent innovations for which standardized documentation has not 
yet been developed and, accordingly, they are less liquid than 
swaps.

Additional Policies  


	Options (Smith Barney Large Cap Value Portfolio).  Although 
the Smith Barney Large Cap Value Portfolio may buy or sell covered 
put and covered call options up to 15% of its net assets, provided 
such options are listed on a national securities exchange, the 
Portfolio does not currently intend to commit more than 5% of its 
assets to be invested in or subject to put and call options.  

	Selection of Debt Investments (GT Global Strategic Income 
Portfolio).  In determining the appropriate distribution of 
investments among various countries and geographic regions for the 
Portfolio, management ordinarily considers the following factors: 
prospects for relative economic growth among the different 
countries in which the Portfolio may invest; expected levels of 
inflation; government policies influencing business conditions; 
the outlook for currency relationships; and the range of the 
individual investment opportunities available to international 
investors. 

	Although the Portfolio values assets daily in terms of U.S. 
dollars, the Portfolio does not intend to convert holdings of 
foreign currencies into U.S. dollars on a daily basis. The 
Portfolio will do so from time to time, and investors should be 
aware of the costs of currency conversion. Although foreign 
exchange dealers do not charge a fee for conversion, they do 
realize a profit based on the difference ("spread") between the 
prices at which they are buying and selling various currencies. 
Thus, a dealer may offer to sell a foreign currency to the 
Portfolio at one rate, while offering a lesser rate of exchange 
should the Portfolio desire to sell that currency to the dealer. 

	The Portfolio may invest in the following types of money 
market instruments (i.e., debt instruments with less than 
12 months remaining until maturity) denominated in U.S. dollars or 
other currencies: (a) obligations issued or guaranteed by the U.S. 
or foreign governments, their agencies, instrumentalities or 
municipalities; (b) obligations of international organizations 
designed or supported by multiple foreign governmental entities to 
promote economic reconstruction or development; (c) finance 
company obligations, corporate commercial paper and other short-
term commercial obligations: (d) bank obligations (including CDs, 
TDs, demand deposits and bankers' acceptances) subject to the 
restriction that the Portfolio may not invest more than 25% of its 
total assets in bank securities; (e) repurchase agreements with 
respect to all the foregoing; and (f) other substantially similar 
short-term debt securities with comparable characteristics. 

	Investments in Other Investment Companies (GT Global 
Strategic Income Portfolio).  With respect to certain countries, 
investments by the Portfolio presently may be made only by 
acquiring shares of other investment companies with local 
governmental approval to invest in those countries. The Portfolio 
may invest in the securities of closed-end investment companies 
within the limits of the 1940 Act. These limitations currently 
provide that, in general, the Portfolio may purchase shares of a 
closed-end investment company unless (a) such a purchase would 
cause the Portfolio to own in the aggregate more than 3 percent of 
the total outstanding voting securities of the investment company 
or (b) such a purchase would cause the Portfolio to have more than 
5 percent of its total assets invested in the investment company 
or more than 10 percent of its aggregate assets invested in an 
aggregate of all such investment companies. Investment in such 
investment companies may also involve the payment of substantial 
premiums above the value of such companies' portfolio securities. 
The Portfolio does not intend to invest in such vehicles or funds 
unless, in the judgment of management, the potential benefits of 
such investments justify the payment of any applicable premiums. 
The yield of such securities will be reduced by operating expenses 
of such companies including payments to the investment managers of 
those investment companies. At such time as direct investment in 
these countries is allowed, the Portfolio will anticipate 
investing directly in these markets. 

	Samurai and Yankee Bonds (GT Global Strategic Income 
Portfolio and Putnam Diversified Income Portfolio).  Subject to 
their fundamental investment restrictions, these Portfolios may 
invest in yen-denominated bonds sold in Japan by non-Japanese 
issuers ("Samurai bonds"), and may invest in dollar-denominated 
bonds sold in the United States by non-U.S. issuers ("Yankee 
bonds").  It is the policy of the Portfolios to invest in Samurai 
or Yankee bond issues only after taking into account 
considerations of quality and liquidity, as well as yield.

	Warrants or Rights (GT Global Strategic Income Portfolio, 
AIM Capital Appreciation Portfolio and the Smith Barney Large 
Capitalization Growth Portfolio).  Warrants or rights may be 
acquired by each Portfolio in connection with other securities or 
separately and provide the Portfolio with the right to purchase at 
a later date other securities of the issuer.  Each Portfolio has 
undertaken that its investment in warrants or rights, valued at 
the lower of cost or market, will not exceed 5% of the value of 
its net assets and not more than 2% of such assets will be 
invested in warrants and rights which are not listed on the 
American or New York Stock Exchange.  Warrants or rights acquired 
by a Portfolio in units or attached to securities will be deemed 
to be without value for purposes of this restriction.

	Special Situations (AIM Capital Appreciation Portfolio).  
Although AIM Capital Appreciation Portfolio does not currently 
intend to do so, it may invest in "special situations."  A special 
situation arises when, in the opinion of management, the 
securities of a particular company will, within a reasonably 
estimable period of time, be accorded market recognition at an 
appreciated value solely by reason of a development applicable to 
that company, and regardless of general business conditions or 
movements of the market as a whole.  Developments creating special 
situations might include, among others: liquidations, 
reorganizations, recapitalizations, mergers, material litigation, 
technical breakthroughs and new management or management policies. 
 Although large and well known companies may be involved, special 
situations more often involve comparatively small or unseasoned 
companies. Investments in unseasoned companies and special 
situations often involve much greater risk than is inherent in 
ordinary investments securities.  The Portfolio will not, however, 
purchase securities of any company with a record of less than 
three year's continuous operation (including that of predecessors) 
if such purchase cause the Portfolio's investment in all such 
companies, taken at cost, to exceed 5% of the value of its total 
assets.

INVESTMENT RESTRICTIONS

	The Portfolios have adopted the following restrictions and 
fundamental policies that cannot be changed unless Sections 
8(b)(1) and 13(a) of the 1940 Act or any SEC or SEC staff 
interpretations thereof are amended or modified or unless approved 
by a "vote of a majority of the outstanding voting securities" of 
each Portfolio affected by the change as defined in the 1940 Act 
and Rule 18f-2 thereunder (see "Voting").  If a Portfolio adheres 
to a percentage restriction at the time of investment, a later 
increase or decrease in percentage resulting from a change in 
values of portfolio securities or amount of total or net assets 
will not be considered a violation of any of the following 
policies.


	Each of the Smith Barney Large Cap Value, Smith Barney 
International Equity and Smith Barney Pacific Basin Portfolios 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.  Invest more than 25% of its total assets in securities, 
 the issuers of which conduct their principal business activities 
in the same industry.  For purposes of this limitation,  
securities of the U.S. government (including its agencies and 
instrumentalities) and securities of state or municipal 
governments and their political subdivisions are not considered to 
be issued by members of any industry.

	3.  Purchase or sell real estate,  real estate mortgages,  
commodities or commodity contracts,  but this restriction shall 
not prevent the Portfolio 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 Portfolios' investment objective 
and policies);  or (d)  investing in real estate investment trust 
securities.

	4.  With respect to the Smith Barney Large Cap Value, borrow 
money,  except that (a)  the Portfolio 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 Portfolio 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 
Portfolio 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)  valued at the time the borrowing is made,  
is derived from such transactions.

	5.  With respect to both the Smith Barney International 
Equity and Smith Barney Pacific Basin Portfolios, borrow money, 
except that (a) the Portfolio may borrow from banks under certain 
circumstances where the Portfolio's Manager reasonably believes 
that (i) the cost of borrowing and related expenses will be 
exceeded by the Portfolio's return from investments of the 
proceeds of the borrowing in portfolio securities, or (ii) the 
meeting of redemption requests might otherwise require the 
untimely disposition of securities, in an amount not exceeding 33 
1/3% of the value of the Portfolio's total assets (including the 
amount borrowed),  valued at the lesser of cost or market, less 
liabilities (not including the amount borrowed) valued at the time 
the borrowing is made and (b) the Portfolio may, to the extent 
consistent with its investment policies, enter into reverse 
repurchase agreements,  forward roll transactions and similar 
investment strategies and techniques.

	6.  Make loans.  This restriction does not apply to: (a) the 
purchase of debt obligations in which the Portfolio 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.

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

	8.  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.


	Notwithstanding any other investment restriction of the 
Smith Barney Large Cap Value Portfolio, the Smith Barney 
International Equity Portfolio or the Smith Barney Pacific Basin 
Portfolio, each such Portfolio may invest all of its investable 
assets in an open-end management investment company having its 
same investment objective and restrictions.

	In addition, the following policies have also been adopted 
by the Smith Barney Large Cap Value Portfolio, the Smith Barney 
International Equity Portfolio and the Smith Barney Pacific Basin 
Portfolio, but are not fundamental and accordingly may be changed 
by approval of the Board of Directors.  The Portfolios' may not:

	1.  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 Portfolio 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.  

	2.  Have more than 15% of its net assets invested in puts, 
calls, straddles, spreads or combinations thereof.

	3. Purchase oil, gas or other mineral leases, rights or 
royalty contracts or exploration or development programs, except 
that the Portfolio may invest in the securities of companies which 
operate, invest in, or sponsor such programs.

	4.  Invest more than 5% of its total assets in any issuer 
with less than three years of continuous operation (including that 
of predecessors) or so-called "unseasoned" equity securities that 
are not either admitted for trading on a national stock exchange 
or regularly quoted in the over-the-counter market.

	5.  Invest in any company for the purpose of exercising 
control of management.

	6.  Acquire securities subject to restrictions on 
disposition or securities for which there is no readily available 
market, enter into repurchase agreements or purchase time deposits 
or variable amount master demand notes, if any of the foregoing 
have a term or demand feature of more than seven days, or purchase 
OTC options or set aside assets to cover OTC options written by 
the Portfolio if, immediately after and as a result, the value of 
such securities would exceed, in the aggregate, 15% of the 
Portfolio's net assets.  Subject to this limitation, the Fund's 
Board of Directors has authorized the Portfolio to invest in 
restricted securities if such investment is consistent with the 
Portfolio's investment objective and has authorized such 
securities to be considered to be liquid to the extent the Manager 
determines on a daily basis that there is a liquid institutional 
market for such securities.  The Board of Directors retains 
ultimate ongoing responsibility for the determination that a 
restricted security is liquid.
   
	7.  Invest in securities of another investment company 
except as permitted by Section 12(d)(1)(a) of the 1940 Act, or as 
part of a merger, consolidation, or acquisition.
    

The Smith Barney Money Market Portfolio may not:

	1. Borrow money,  except that (a)  the Portfolio 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 
Portfolio 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 Portfolio 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)  valued at the time the borrowing 
is made,  is derived from such transactions.

	2.  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.  

	3.  Purchase or sell real estate,  real estate mortgages,  
commodities or commodity contracts,  but this restriction shall 
not prevent the Portfolio 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 Portfolios' investment objective 
and policies);  or (d) investing in real estate investment trust 
securities.

	4. Invest more than 25% of its assets in the securities of 
issuers in any industry, except it may not invest less than 25% of 
its assets in bank obligations (including both domestic and 
foreign bank obligations) and it reserves freedom of action to 
concentrate in securities issued or guaranteed as to principal and 
interest by the U.S. Government, its agencies or 
instrumentalities.

	5. Make loans.  This restriction does not apply to: (a) the 
purchase of debt obligations in which the Portfolio 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 Portfolio may 
technically be deemed to be an underwriter under the Securities 
Act of 1933,  as amended,  in disposing of portfolio securities.

	7.  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.

	Notwithstanding any other investment restriction of the 
Smith Barney Money Market Portfolio, the Portfolio may invest all 
of its investable assets in an open-end management investment 
company having the same investment objective and restrictions as 
the Portfolio.

	In addition, the following policies have also been adopted 
by the Smith Barney Money Market Portfolio but are not fundamental 
and accordingly may be changed by approval of the Board of 
Directors.  The Portfolio may not:

	1.  Acquire securities subject to restrictions on 
disposition or securities for which there is no readily available 
market, enter into repurchase agreements or purchase time deposits 
or variable amount master demand notes, if any of the foregoing 
have a term or demand feature of more than seven days if, 
immediately after and as a result, the value of such securities 
would exceed, in the aggregate, 10% of the Portfolio's total 
assets.  Subject to this limitation, the Portfolio's Board of 
Directors has authorized the Portfolio to invest in restricted 
securities if such investment is consistent with the Portfolio's 
investment objective and has authorized such securities to be 
considered to be liquid to the extent the Manager determines on a 
daily basis that there is a liquid institutional market for such 
securities.  The Board of Directors retains ultimate ongoing 
responsibility for the determination that a restricted security is 
liquid.
	
	2.  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 Portfolio 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.  

	3.  Write or purchase put or call options.

	4.  Purchase or  otherwise acquire any security if,  as a 
result,  more than 10% of its net assets would be invested in 
securities that are illiquid.

	5.  Purchase or sell oil and gas interests.

	6.  Invest in companies for the purposes of exercising 
control.

	7.  Invest in securities of another investment company 
except as permitted by Section 12(d)(1) of the 1940 Act, or as 
part of a merger, consolidation, or acquisition. 

	The Alliance Growth Portfolio may not:

1.  Borrow money, except that (a) the Portfolio 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 
Portfolio 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 Portfolio 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)  valued at the time the borrowing 
is made,  is derived from such transactions.

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

	3.  Purchase or sell real estate,  real estate mortgages,  
commodities or commodity contracts,  but this restriction shall 
not prevent the Portfolio 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 Portfolios' investment objective 
and policies);  or (d)  investing in real estate investment trust 
securities.

	4.  Make loans.  This restriction does not apply to: (a) the 
purchase of debt obligations in which the Portfolio 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.

	5.  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.

	6.  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.

	7.  Invest more than 25% of its total assets in securities 
of any one industry. (Obligations of a foreign government and its 
agencies or instrumentalities constitute a separate "industry" 
from those of another foreign government.

	Notwithstanding any other investment restriction of the 
Alliance Growth Portfolio, the Portfolio may invest all of its 
investable assets in an open-end management investment company 
having the same investment objective and restrictions as the 
Portfolio.

	In addition, the following policies have also been adopted 
by the Alliance Growth Portfolio, but are not fundamental and 
accordingly may be changed by approval of the Board of Directors. 
 The Portfolio may not:
	
	1.  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 Portfolio 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.  

	2.  Purchase securities issued by any other registered 
investment company or investment trust except (a) by purchase in 
the open market where no commission or profit to a sponsor or 
dealer results from such purchase other than the customary 
broker's commission, or (b) where no commission or profit to a 
sponsor or dealer results from such purchase, or (c) when such 
purchase, though not in the open market, is part of a plan of 
merger or consolidation; provided, however, that the Portfolio 
will not purchase such securities if such purchase at the time 
thereof would cause more than 5% of its total assets (taken at 
market value) to be invested in the securities of such issuers; 
and, provided further, that the Portfolio's purchases of 
securities issued by an open-end investment company will be 
consistent with the provisions of the 1940 Act.

	3.  Make investments for the purpose of exercising control 
or management.

	4.  Invest in interests in oil, gas, or other mineral 
exploration or development programs, although the Portfolio may 
purchase securities which are secured by such interests and may 
purchase securities of issuers which invest in or deal in oil, gas 
or other mineral exploration or development programs.

	5.  Purchase warrants, if, as a result, the Portfolio would 
have more than 5% of its total assets invested in warrants or more 
than 2% of its total assets invested in warrants which are not 
listed on the New York Stock Exchange or the American Stock 
Exchange.

The AIM Capital Appreciation Portfolio 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.  Engage in the business of underwriting securities issued 
by other persons, except to the extent that the Portfolio may 
technically be deemed to be an underwriter under the Securities 
Act of 1933, as amended, in disposing of portfolio securities.

	4.  Purchase or sell real estate, real estate mortgages,  
commodities or commodity contracts, but this restriction shall not 
prevent the Portfolio 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 
Portfolios' investment objective and policies);  or (d) investing 
in real estate investment trust securities.

	5.  Make loans.  This restriction does not apply to: (a) the 
purchase of debt obligations in which the Portfolio 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.  Invest more than 25% of its total assets in securities, 
 the issuers of which conduct their principal business activities 
in the same industry.  For purposes of this limitation,  
securities of the U.S. government (including its agencies and 
instrumentalities) and securities of state or municipal 
governments and their political subdivisions are not considered to 
be issued by members of any industry.

	In addition, the AIM Capital Appreciation Portfolio treats 
as fundamental its policy concerning borrowing.  In accordance 
with this policy, the Portfolio may borrow funds from a bank 
(including its custodian bank) to purchase or carry securities 
only if, immediately after such borrowing, the value of the 
Portfolio's assets, including the amount borrowed, less its 
liabilities, is equal to at least 300% of the amount borrowed, 
plus all outstanding borrowings.  For the purpose of determining 
this 300% asset coverage requirement, the Portfolio's liabilities 
will not include the amount borrowed but will include the market 
value, at the time of computation, of all securities borrowed by 
the Portfolio in connection with short sales. The amount of 
borrowing will also be limited by the applicable margin 
limitations imposed by the Federal Reserve Board.  If at any time 
the value of the Portfolio's assets should fail to meet the 300% 
asset coverage requirement, the Portfolio will, within three days, 
reduce its borrowings to the extent necessary.  The Portfolio may 
be required to eliminate partially or totally its outstanding 
borrowings at times when it may not be desirable for it to do so.

	In addition, the following policies have also been adopted 
by the AIM Capital Appreciation Portfolio, but are not fundamental 
and accordingly may be changed by approval of the Board of 
Directors.  The Portfolio may not:

	1.  Purchase warrants, valued at the lower of cost or 
market, in excess of 5% of the value of the Fund's net assets, and 
no more than 2% of such value may be warrants which are not listed 
on the New York or American Stock Exchanges.  

	2.  Invest for the purpose of exercising control over or 
management of any company, except to the extent that in Portfolio 
may purchase securities of other investment companies.  

	3.  Invest in interests in oil, gas or other mineral 
exploration or development programs.

	The Van Kampen American Capital Enterprise Portfolio may 
not:

	1.  Make loans.  This restriction does not apply to: (a) the 
purchase of debt obligations in which the Portfolio 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.

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

	3.  Purchase or sell real estate,  real estate mortgages,  
commodities or commodity contracts,  but this restriction shall 
not prevent the Portfolio 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 Portfolios' investment objective 
and policies);  or (d) investing in real estate investment trust 
securities.

	4.  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 taking into account any rule or 
order of the SEC exempting the Portfolio from the limitation 
imposed by Section 12(d)(1) of the 1940 Act.

	5.  Invest more than 25% of its total assets in securities 
issued by companies in any one industry,  provided,  however,  
that this limitation excludes shares of other open-end investment 
companies owned by the Portfolio but includes the Portfolio's pro 
rata portion of the securities and other assets owned by any such 
company.

 	6.  Borrow money, except that (a)  the Portfolio 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 
Portfolio 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 Portfolio 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)  valued at the time the borrowing 
is made,  is derived from such transactions.

	7.  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.

	Notwithstanding any other investment restriction of the Van 
Kampen American Capital Enterprise Portfolio, the Portfolio may 
invest all of its investable assets in an open-end management 
investment company having the same investment objective and 
restrictions as the Portfolio.

	In addition, the following policies have also been adopted 
by the Van Kampen American Capital Enterprise Portfolio, but are 
not fundamental and accordingly may be changed by approval of the 
Board of Directors.  The Portfolio may not:

	1.  Invest more than 5% of the value of its total assets in 
securities of companies which (including predecessor companies or 
operations) have been in business less than three years, provided, 
however, that this limitation excludes shares of other open-end 
investment companies owned by the Portfolio but includes the 
Portfolio's pro rata portion of the securities and other assets 
owned by any such company.

	2.  Acquire any private placement if it would cause more 
than 2% of the net assets of the Portfolio, as determined at the 
time the Portfolio agrees to any such acquisition, to be invested 
in private placements and other assets not having readily 
available market quotations, provided, however, that this 
limitation excludes shares of other open-end investment companies 
owned by the Portfolio but includes the Portfolio's pro rata 
portion of the securities and other assets owned by any such 
company; and, provided further, that this limitation excludes 
securities that have been issued pursuant to Rule 144A under the 
1933 Act ("Rule 144A securities").

	3.  Invest more than 5% of its net assets in warrants or 
rights valued at the lower of cost or market, not more than 2% of 
its net assets in warrants or rights (valued on such basis) which 
are not listed on the New York or American Stock Exchanges.  
Warrants or rights acquired in units or attached to other 
securities are not subject to the foregoing limitations. 

	5.  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.

	6.  Invest in interests in oil, gas, or other mineral 
exploration or developmental programs.

	7.  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 Portfolio 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.

	8.  Make any investment in any security about which 
information is not available with respect to history, management, 
assets, earnings, and income of the issuer except to acquire 
shares of other open-end investment companies to the extent 
permitted by rule or order of the SEC exempting the Portfolio from 
the limitations imposed by Section 12(d)(1) of the 1940 Act.

	9.  Make any investment which involves promotion or business 
management by the Portfolio or which would subject the Portfolio 
to unlimited liability.

	10.  Invest in companies for the purpose of exercising 
control.
    
	11.  Acquire securities of any other domestic or foreign 
investment company or investment fund except in connection with a 
plan of merger or consolidation with or acquisition of 
substantially all the assets of such other investment company or 
to acquire shares of other open-end investment companies to the 
extent permitted by rule or order of the SEC exempting the 
Portfolio from the limitations imposed by Section 12(d)(1) of the 
1940 Act.

 	The TBC Managed Income Portfolio may not:

	1.  Concentrate the portfolio investments in any industry by 
investing more than 25% of its gross assets in any one industry.  
There shall be no limitation on the purchase of U.S. Government 
securities by the Portfolio when it adopts a defensive position.

	2.  Purchase or sell real estate,  real estate mortgages,  
commodities or commodity contracts,  but this restriction shall 
not prevent the Portfolio 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 Portfolios' investment objective 
and policies);  or (d) investing in real estate investment trust 
securities.

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

	4.  Make loans.  This restriction does not apply to: (a) the 
purchase of debt obligations in which the Portfolio 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.

	5.  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.
	
	6.  Borrow money, except that (a) the Portfolio 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 
Portfolio 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 Portfolio 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)  valued at the time the borrowing 
is made,  is derived from such transactions.

	7.  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.

	8.  Purchase securities from or sell securities to any of 
its officers or Directors, except with respect to its own shares 
and as is permissible under applicable statues, rules and 
regulations.

	Notwithstanding any other investment restriction of the TBC 
Managed Income Portfolio, the Portfolio may invest all of its 
investable assets in an open-end management investment company 
having the same investment objective and restrictions as the 
Portfolio.

In addition, the following policies have also been adopted by the 
TBC Managed Income Portfolio, but are not fundamental and 
accordingly may be changed by approval of the Board of Directors. 
 The Portfolio may not:

	1.  Purchase securities of any other investment company 
except as part of a plan of merger or consolidation.

	2.  Purchase securities of companies which together with 
predecessors have a record of less than three years' continuous 
operation, if, as a result, more than 5% of the Portfolio's net 
assets would then be invested in such securities.  

	3.  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 Portfolio 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.

	4.  Invest in puts, calls, straddles, spreads and any 
combination thereof. 

	5.  Invest in oil, gas or other mineral exploration or 
development programs, provided, however, this shall not prohibit 
the Portfolio from purchasing publicly traded securities of 
companies engaging in whole or in part in such activities.  

	6.  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.

	7.  Purchase securities of companies for the purpose of 
exercising control. 

	The Putnam Diversified Income Portfolio may not:

	1.  Borrow money, except that (a) the Portfolio 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 
Portfolio 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 Portfolio 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)  valued at the time the borrowing 
is made, is derived from such transactions.

	2.  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 Securities 
Act of 1933,  as amended,  in disposing of portfolio securities.

	3.  Purchase or sell real estate,  real estate mortgages,  
commodities or commodity contracts,  but this restriction shall 
not prevent the Portfolio 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 Portfolios' investment objective 
and policies);  or (d) investing in real estate investment trust 
securities.

	4.  Make loans.  This restriction does not apply to: (a) the 
purchase of debt obligations in which the Portfolio 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.

	5.  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.

	6.  Invest more than 25% of its total assets in any one 
industry. (U.S. Government securities and securities of any 
foreign government,  it agencies or instrumentalities,  securities 
of supranational entities,  and securities backed by the credit of 
a governmental entity are not considered to represent an industry.

	7.  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.

	In addition, the following policy has also been adopted by 
the Putnam Diversified Income Portfolio, but is not fundamental 
and accordingly may be changed by approval of the Board of 
Directors.  The Portfolio may not:
	
	1.  Invest in securities of other registered open-end 
investment companies except as they may be acquired as part of a 
merger or consolidation or acquisition of assets.

	2.  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 Portfolio 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.

	3.  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.

	4.  Buy or sell oil, gas or other mineral leases, rights or 
royalty contracts.   

	5.  Make investments for the purpose of gaining control of a 
company's management. 

	Notwithstanding any other investment restriction of the 
Putnam Diversified Income Portfolio, the Portfolio may invest all 
of its investable assets in an open-end management investment 
company having the same investment objective and restrictions as 
the Portfolio.




	The GT Global Strategic Income Portfolio may not:

	1.  Invest 25% or more of the value of its total assets in 
the securities of issuers conducting their principal business 
activities in the same industry, (provided, however, that the 
Portfolio may invest all of its investable assets in an open-end 
management investment company with substantially the same 
investment objectives, policies and limitations as the Portfolio) 
except that this limitation shall not apply to securities issued 
or guaranteed as to principal and interest by the U.S. government 
or any of its agencies or instrumentalities. 

	2.  Purchase or sell real estate,  real estate mortgages,  
commodities or commodity contracts,  but this restriction shall 
not prevent the Portfolio 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 Portfolios' investment objective 
and policies);  or (d) investing in real estate investment trust 
securities.

	3.  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 Securities 
Act of 1933,  as amended,  in disposing of portfolio securities.

	4.  Make loans.  This restriction does not apply to: (a) the 
purchase of debt obligations in which the Portfolio 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.

	5.  Borrow money in excess of 33 1/3% of its total assets 
(including the amount borrowed), less all liabilities and 
indebtedness (other than borrowing).  This restriction shall not 
prevent the Portfolio from entering into reverse repurchase 
agreements and engaging in "roll" transactions, provided that 
reverse repurchase agreements, "roll" transactions and any other 
transactions constituting borrowing by the Portfolio may not 
exceed 1/3 of its total assets.  In the event that the asset 
coverage for the Portfolio's borrowings falls below 300%, the 
Portfolio will reduce, within three days (excluding Sundays and 
holidays), the amount of its borrowings in order to provide for 
300% asset coverage. Transactions involving options, futures 
contracts, options on futures contracts and forward currency 
contracts, and collateral arrangements relating thereto will not 
be deemed to be borrowings. 

	6.  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.
	
	For purposes of the GT Global Strategic Income Portfolio's 
concentration policy contained in limitation (1) above, the 
Portfolio intends to comply with the SEC staff positions that 
securities issued or guaranteed as to principal and interest by 
any single foreign government or any supranational organizations 
in the aggregate are considered to be securities of issuers in the 
same industry. 

	In addition, the following investment policies are not 
fundamental investment policies and may be changed by the approval 
of the Fund's Board of Directors without shareholder approval.  
The Portfolio may not:

	1.  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.

	2. Invest in securities of an issuer if the investment would 
cause the Portfolio to own more than 10% of any class of 
securities of any one issuer (provided, however, that the 
Portfolio may invest all of its investable assets in an open-end 
management investment company with substantially the same 
investment objectives, policies, and limitations as the 
Portfolio). 

	3.  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.

	4.  Invest more than 10% of its total assets in shares of 
other investment companies and invest more than 5% of its total 
assets in any one investment company or acquire more than 3% of 
the outstanding voting securities of any one investment company 
(provided, however, that the Portfolio may invest all of its 
investable assets in an open-end management investment company 
with substantially the same investment objectives, policies, and 
limitations as the Portfolio). 

	5.  Invest in companies for the purpose of exercising 
control or management (provided, however, that the Portfolio may 
invest all of its investable assets in an open-end management 
investment company with substantially the same investment 
objectives, policies and limitations as the Portfolio). 

	6.  Invest in interests in oil, gas, or other mineral 
exploration or development programs.

	7.  Invest more than 5% of its total assets in securities of 
companies having, together with their predecessors, a record of 
less than three years of continuous operation (provided, however, 
that the Portfolio may invest all of its investable assets in an 
open-end management investment company with substantially the same 
investment objectives, policies, and limitations as the 
Portfolio). 

	The Smith Barney High Income Portfolio 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.  Borrow money, except that (a) the Portfolio 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 
Portfolio 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 Portfolio 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)  valued at the time the borrowing 
is made,  is derived from such transactions.

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

	4.  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.

	5.  Purchase or sell real estate,  real estate mortgages,  
commodities or commodity contracts,  but this restriction shall 
not prevent the Portfolio 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 Portfolios' investment objective 
and policies);  or (d) investing in real estate investment trust 
securities.

	6.  Make loans.  This restriction does not apply to: (a) the 
purchase of debt obligations in which the Portfolio 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.

	7.  Invest more than 25% of its total assets in securities, 
 the issuers of which conduct their principal business activities 
in the same industry.  For purposes of this limitation,  
securities of the U.S. government (including its agencies and 
instrumentalities) and securities of state an municipal 
governments and their political subdivisions are not considered to 
be issued by members of any industry.

	Notwithstanding any other investment restriction of the 
Smith Barney High Income Portfolio, the Portfolio may invest all 
of its investable assets in an open-end management investment 
company having the same investment objective and restrictions as 
the Portfolio.

	In addition, the following policies have also been adopted 
by the Smith Barney High Income Portfolio, but are not fundamental 
and accordingly may be changed by the approval of the Board of 
Directors.  The Portfolio may not:

	1.  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 Portfolio 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.

	2.  Invest in securities of other investment companies 
registered or required to be registered under the 1940 Act, except 
as they may be acquired as part of a merger, consolidation, 
reorganization, acquisition of assets or an offer of exchange, or 
to the extent permitted by the 1940 Act.

	The MFS Total Return Portfolio may not:

	1.  Borrow money, except that (a) the Portfolio 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 
Portfolio 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 Portfolio 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)  valued at the time the borrowing 
is made, is derived from such transactions.

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

	3.  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

	4.  Purchase or sell real estate, real estate mortgages, 
commodities or commodity contracts, but this restriction shall not 
prevent the Portfolio 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 
Portfolios' investment objective and policies);  or (d) investing 
in real estate investment trust securities.

	5.  Make loans.  This restriction does not apply to: (a) the 
purchase of debt obligations in which the Portfolio 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.  Purchase any securities of an issuer of a particular 
industry, if as a result, more than 25% of its gross assets would 
be invested in securities of issuers whose principal business 
activities are in the same industry except (i) there is no 
limitation with respect to obligations issued or guaranteed by the 
U.S. government or its agencies and instrumentalities and 
repurchase agreements collateralized by such obligations.

	Notwithstanding any other investment restriction of the MFS 
Total Return Portfolio, the Portfolio may invest all of its 
investable assets in an open-end management investment company 
having the same investment objective and restrictions as the 
Portfolio.

	In addition, the following policies have also been adopted 
by the MFS Total Return Portfolio, but are not fundamental and 
accordingly may be changed by approval of the Board of Directors. 
The Portfolio may not:
	
	1.  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.

	2.  Purchase securities issued by any other investment 
company in excess of the amount permitted by the 1940 Act, except 
when such purchase is part of a plan of merger or consolidation.

	3.  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 Portfolio 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.

	4.  Purchase or sell any put or call options or any 
combination thereof, provided, that this shall not prevent (a) the 
purchase, ownership, holding or sale of (i) warrants where the 
grantor of the warrants is the issuer of the underlying securities 
or (ii) put or call options or combinations thereof with respect 
to securities, foreign currencies, indexes of securities, any type 
of swap or any type of futures contract or (b) the purchase, 
ownership, holding or sale of contracts for the future delivery of 
securities or currencies.

	5.  Purchase or sell interests in oil,  gas or mineral 
leases.

	The Smith Barney Large Capitalization Growth Portfolio 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.  Invest more than 25% of its total assets in securities, 
 the issuers of which conduct their principal business activities 
in the same industry.  For purposes of this limitation,  
securities of the U.S. government (including its agencies and 
instrumentalities) and securities of state or municipal 
governments and their political subdivisions are not considered to 
be issued by members of any industry.

	3.  Borrow money, except that (a) the Portfolio 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 
Portfolio 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 Portfolio 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)  valued at the time the borrowing 
is made,  is derived from such transactions.

	4.  Make loans.  This restriction does not apply to: (a) the 
purchase of debt obligations in which the Portfolio 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.

	5.  Purchase or sell real estate, real estate mortgages, 
commodities or commodity contracts, but this restriction shall not 
prevent the Portfolio 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 
Portfolios' investment objective and policies); or (d) investing 
in real estate investment trust securities.

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

	7.  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

	In addition, the following policies have also been adopted 
by the Smith Barney Large Capitalization Growth Portfolio, but are 
not fundamental and accordingly may be changed by approval of the 
Board of Directors.  The Portfolio may not:

	1.  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 Portfolio 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.

	2.  Invest in oil, gas or other mineral leases or 
exploration or development programs.

	3.  Write or sell puts, calls, straddles, spreads or 
combinations of those transactions, except as permitted under the 
Portfolio's investment objective and policies.

	4.  Invest in securities of another investment company 
except as permitted by Section 12(d)(1)(a) of the 1940 Act,  or as 
part of a merger,  consolidation or acquisition

	5.  Purchase a security if, as a result, the Portfolio would 
then have more than 5% of its total assets invested in securities 
of issuers (including predecessors) that have been in continuous 
operation for fewer than three years, except that this limitation 
will be deemed to apply to the entity supplying the revenues from 
which the issue is to be paid, in the case of private activity 
bonds purchased.

	6.  Make investments for the purpose of exercising control 
of management.


PERFORMANCE INFORMATION

	From time to time the Fund may advertise a Portfolio's total 
return, average annual total return, yield and current 
distribution return in advertisements and other types of sales 
literature.  These figures are based on historical earnings and 
are not intended to indicate future performance.  In addition, 
these figures will not reflect the deduction of the charges that 
are imposed on a Contract by an insurance company separate account 
(see Contract prospectus) which, if reflected, would reduce the 
performance quoted.  The total return shows what an investment in 
the Portfolio would have earned over a specified period of time 
(one, five or ten years) assuming that all distributions and 
dividends by the Portfolio were invested on the reinvestment dates 
during the period less all recurring fees. 

	Each Portfolio's yield is computed by dividing the net 
investment income per share earned during a specified thirty day 
period by the net asset value per share on the last day of such 
period and annualizing the result.  For purposes of the yield 
calculation, interest income is determined based on a yield to 
maturity percentage for each long-term fixed income obligation in 
the portfolio; income on short-term obligations is based on 
current payment rate. 

	The Fund calculates current distribution return for each 
Portfolio by dividing the distributions from investment income 
declared during the most recent period by the net asset value on 
the last day of the period for which current distribution return 
is presented.   From time to time, a Portfolio may include its 
current distribution return in information furnished to present or 
prospective shareowners.

	A Portfolio's current distribution return may vary from time 
to time depending on market conditions, the composition of its 
investment portfolio and operating expenses.  These factors and 
possible differences in the methods used in calculating current 
distribution return, and the charges that are imposed on a 
Contracts by a separate account, should be considered when 
comparing a Portfolio's current distribution return to yields 
published for other investment companies and other investment 
vehicles.  Current distribution return should also be considered 
relative to changes in the value of the Portfolio's shares and to 
the risks associated with the Portfolio's investment objective and 
policies.  For example, in comparing current distribution returns 
with those offered by Certificates of Deposit ("CDs"), it should 
be noted that CDs are insured (up to $100,000) and offer a fixed 
rate of return.  

	Performance information may be useful in evaluating a 
Portfolio and for providing a basis for comparison with other 
financial alternatives.  Since the performance of each Portfolio 
changes in response to fluctuations in market conditions, interest 
rate and Portfolio expenses, no performance quotation should be 
considered a representation as to the Portfolio's performance for 
any future period.


DETERMINATION OF NET ASSET VALUE

	The net asset value of each Portfolio's share will be 
determined on any day that the New York Stock Exchange is open.  
The New York Stock Exchange is closed on the following holidays:  
New Year's Day, President's Day, Martin Luther King, Jr., Good 
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving 
Day and Christmas Day.


REDEMPTION OF SHARES

	Redemption payments shall be made wholly in cash unless the 
Directors believe that economic conditions exist that would make 
such a practice detrimental to the best interests of a Portfolio 
and its remaining shareowners.  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.


CUSTODIANS


	Portfolio securities and cash owned by the Fund on behalf of 
the Smith Barney Large Cap Value Portfolio, the Alliance Growth 
Portfolio, the AIM Capital Appreciation Portfolio, the Van Kampen 
American Capital Enterprise Portfolio, the TBC Managed Income 
Portfolio, the Putnam Diversified Income Portfolio, the Smith 
Barney High Income Portfolio, the MFS Total Return Portfolio, the 
Smith Barney Money Market Portfolio and the Smith Barney Large 
Capitalization Growth Portfolio are held in the custody of PNC 
Bank, National Association, 17th and Chestnut Streets, 
Philadelphia, Pennsylvania 19103 (foreign securities, if any, will 
be held in the custody of The Barclays Bank, PLC).


	Portfolio securities and cash owned by the Fund on behalf of 
the Smith Barney International Equity Portfolio, the Smith Barney 
Pacific Basin Portfolio and the GT Global Strategic Income 
Portfolio are held in the custody of Chase Manhattan Bank, Chase 
MetroTech Center, Brooklyn, New York 11245


INDEPENDENT AUDITORS

	KPMG Peat Marwick LLP, 345 Park Avenue, New York, New York 
10154, has been selected as the Fund's independent auditors for 
its fiscal year ending October 31, 1998, to examine and report on 
the financial statements and financial highlights of the Fund.


THE FUND


	Pursuant to the Articles of Incorporation, the Directors 
have authorized the issuance of thirteen series of shares, each 
representing shares in one of thirteen separate Portfolios - the 
Smith Barney Large Cap Value Portfolio, the Alliance Growth 
Portfolio, the AIM Capital Appreciation Portfolio, the Van Kampen 
American Capital Enterprise Portfolio, the Smith Barney 
International Equity Portfolio, the Smith Barney Pacific Basin 
Portfolio, the TBC Managed Income Portfolio, the Putnam 
Diversified Income Portfolio, the GT Global Strategic Income 
Portfolio, the Smith Barney High Income Portfolio, the MFS Total 
Return Portfolio, the Smith Barney Money Market Portfolio and the 
Smith Barney Large Capitalization Growth Portfolio.  Pursuant to 
such authority, the Directors may also authorize the creation of 
additional series of shares and additional classes of shares 
within any series (which would be used to distinguish among the 
rights of different categories of shareholders, as might be 
required by future regulations or other unforeseen circumstances). 
 The investment objectives, policies and restrictions applicable 
to additional Portfolios would be established by the Directors at 
the time such Portfolios were established and may differ from 
those set forth in the Prospectus and this Statement of Additional 
Information.  In the event of liquidation or dissolution of a 
Portfolio or of the Fund, shares of a Portfolio are entitled to 
receive the assets belonging to that Portfolio and a proportionate 
distribution, based on the relative net assets of the respective 
Portfolios, of any general assets not belonging to any particular 
Portfolio that are available for distribution.


	The Articles of Incorporation may be amended only upon the 
vote of a majority of the shares of capital stock of the Fund 
outstanding and entitled to vote, and in accordance with 
applicable law, except for certain amendments that may be made by 
the Directors.  

	The Articles of Incorporation further provide that the Fund 
shall indemnify its directors, officers and employees against any 
liability to the Fund or to a shareowner, except as such liability 
may arise from his or its own bad faith, willful misfeasance, 
gross negligence, or reckless disregard of his or its duties.  
With the exceptions stated, the Articles of Incorporation provide 
that a Director, officer or employee is entitled to be indemnified 
against all liability in connection with the affairs of the Fund. 

	The Fund shall continue without limitation of time subject 
to the provisions in the Articles of Incorporation concerning 
termination of the corporation or any of the series of the 
corporation  by action of the shareowners or by action of the 
Directors upon notice to the shareowners.


MANAGEMENT AGREEMENTS


	The Directors are responsible for the direction and 
supervision of the Fund's business and operations. Mutual 
Management Corp. ("MMC" or the "Manager") manages the investment 
operations of the Smith Barney Large Cap Value Portfolio, the 
Smith Barney International Equity Portfolio, the Smith Barney 
Pacific Basin Portfolio, the Smith Barney High Income Portfolio, 
Smith Barney Money Market Portfolio and the Smith Barney Large 
Capitalization Growth Portfolio pursuant to Management Agreements 
entered into by the Fund on behalf of each such Portfolio. 
Travelers Investment Adviser, Inc. ("TIA" or the "Manager"), an 
affiliate of MMC, manages the investment operations of the 
Alliance Growth Portfolio, the AIM Capital Appreciation Portfolio, 
the Putnam Diversified Income Portfolio, the MFS Total Return 
Portfolio, the GT Global Strategic Income Portfolio, the Van 
Kampen American Capital Enterprise Portfolio and the TBC Managed 
Income Portfolios (each, a "TIA Portfolio") pursuant to management 
agreements entered into by the Fund on behalf of each TIA 
Portfolio.  Under each management agreement MMC or TIA, as the 
case may be,  is responsible for furnishing or causing to be 
furnished to each Portfolio advice and assistance with respect to 
the acquisition, holding or disposal of investments and 
recommendations with respect and affairs of each Portfolio, 
bookkeeping, accounting and administrative services, office space 
and equipment, and the services of the officers and employees of 
the Fund.  Each Portfolio receives discretionary advisory services 
provided by the Manager or by a Sub-Adviser (pursuant to a 
Subadvisory Agreement) who is identified, retained, supervised and 
compensated by the Manager.  MMC and TIA are each located at 388 
Greenwich Street, New York, New York 10013.  MMC is a wholly owned 
subsidiary of Salomon Smith Barney Holdings Inc.  Salomon Smith 
Barney Holdings Inc., which is a wholly owned subsidiary of 
Travelers Group Inc. ("Travelers"), is also the parent company of 
Smith Barney Inc. ("Smith Barney"), the Fund's distributor.  TIA 
is a wholly owned subsidiary of The Plaza Corporation, a wholly 
owned subsidiary of the Travelers Insurance Company ("TIC").  TIC 
is a wholly owned subsidiary of Travelers.  


	Each Management Agreement provides that the Manager will 
administer the Portfolio's corporate affairs and, in connection 
therewith, shall furnish the Portfolio with office facilities and 
with clerical, bookkeeping and recordkeeping services at such 
office facilities. Subject to the provisions of any applicable 
Subadvisory Agreement, the Manager will also manage the investment 
operations of each Portfolio and will be responsible for 
furnishing or causing to be furnished to each Portfolio advice and 
assistance with respect to the purchase, retention and disposition 
of investments, in accordance with each Portfolio's investment 
objectives, policies and restrictions as stated in the Prospectus 
and Statement of Additional Information.

	By written agreement, research and other departments and 
staff of Smith Barney will furnish MMC with information, advice 
and assistance and will be available for consultation on the 
Fund's Portfolios. Thus, Smith Barney may also be considered an 
investment adviser to the Fund. Smith Barney's services are paid 
for by MMC; there is no charge to the Fund for such services.

	The Manager has agreed to waive its fee to the extent that 
the aggregate expenses of any of the Smith Barney Large Cap Value 
Portfolio, the Alliance Growth Portfolio, the AIM Capital 
Appreciation Portfolio, the Van Kampen American Capital Enterprise 
Portfolio, the TBC Managed Income Portfolio, the Putnam 
Diversified Income Portfolio, the Smith Barney High Income 
Portfolio, the MFS Total Return Portfolio and the Smith Barney 
Money Market Portfolio, exclusive of taxes, brokerage, interest 
and extraordinary expenses, such as litigation and indemnification 
expenses, exceed 1.25% of the average daily net assets for any 
fiscal year of each such Portfolio.  The Manager has agreed to 
waive its fee to the extent that the aggregate expenses of each of 
the Smith Barney International Equity Portfolio, the Smith Barney 
Pacific Basin Portfolio and the GT Global Strategic Income 
Portfolio exclusive of taxes, brokerage, interest and 
extraordinary expenses, exceed 1.50% of the average daily net 
assets for any fiscal year of each such Portfolio.  Each of these 
voluntary expense limitations shall be in effect until it is 
terminated by notice to shareowners and by supplement to the then 
current SAI.

	Each Management and Subadvisory Agreement (collectively, the 
"Investment Agreements") provides further that if in any fiscal 
year the aggregate expenses of a Portfolio (including fees 
pursuant to such agreements, but excluding interest, taxes, 
brokerage and extraordinary expenses) exceed the expense 
limitation of any state having jurisdiction over such Portfolio, 
MMC, TIA or Sub-Adviser, as the case may be, will reduce its fee 
by the proportion of such excess expenses equal to the proportion 
that its fee thereunder bears to the aggregate of fees paid by the 
Portfolio for investment advice or management and any 
administration in that year, to the extent required by state law. 
Each Management Agreement also provides that MMC or TIA shall not 
be liable to the Fund for any error of judgment or mistake of law 
or for any loss suffered by the Fund so long as it acted in good 
faith without willful misfeasance, bad faith or gross negligence 
in the performance of its duties or by reason of its reckless 
disregard of its obligations and duties under the Management 
Agreement.  Each Subadvisory Agreement also provides that the Sub-
Advisor shall not be liable to MMC, TIA or the Portfolio for any 
error of judgment or mistake of law or for any loss suffered by 
MMC, TIA, or the Portfolio so long as it acted in good faith 
without willful misfeasance, bad faith or gross negligence in the 
performance of its duties or by reason of its reckless disregard 
of its obligations and duties under the Subadvisory Agreement.


	Each Investment Agreement shall continue for an initial two-
year term and shall be continued from year to year if specifically 
approved at least annually as required by the 1940 Act.  Each 
Investment Agreement further provides that it shall terminate 
automatically in the event of its assignment (as defined in the 
1940 Act) and that it may be terminated without penalty by either 
party on not less than 60 days' written notice.

For the periods shown, each Portfolio paid the following 
management fee:


<TABLE>
<CAPTION>
				Fiscal		Fiscal		Fiscal
				Year		Year		Year
				Ended		Ended		Ended
				October 31,	October 31,	October 31,	
Fund				1995		1996		1997
<S>				<C>		<C>		<C>
Smith Barney Large Cap Value Portfolio	$116,605	$564,232	$1,399,650
Alliance Growth Portfolio	421,756	1,624,602	3,268,019
AIM Capital Appreciation Portfolio	2,595*	503,898	1,294,096
Van Kampen American Capital Enterprise Portfolio	93,346	482,803	1,045,925
Smith Barney International Equity Portfolio	263,820	887,397	1,692,179
Smith Barney Pacific Basin Portfolio+	47,987	117,581	175,112
TBC Managed Income Portfolio	47,986	123,774	176,499
Putnam Diversified Income Portfolio	122,559	428,803	753,736
GT Global Strategic Income Portfolio++	40,549	109,949	201,225
Smith Barney High Income Portfolio	53,173	262,657	558,996
MFS Total Return Portfolio	187,388	744,834	1,556,167
Smith Barney Money Market Portfolio+++	100,040	425,361	650,916
Smith Barney Large Capitalization Growth Portfolio	---     	---    	---     
</TABLE>		
*	From October 10, 1995 (commencement of operations) through 
October 31, 1995.
+	The Manager waived $21,803 in 1995 and $30,849 in 1996 of the 
management fees shown.
++	The Manager waived $23,349 in 1995 and $20,036 in 1996 of the 
management fees shown.
+++	The Manager waived $60,833 in 1996 and $24,546 in 1997 of 
the management fees shown.

	The Management Agreement for each Portfolio that does not 
have a Sub-Adviser provides that MMC will (a) manage the 
Portfolio's assets in accordance with the Portfolio's investment 
objectives and policies as stated in the Prospectus and the SAI, 
(b) make investment decisions for the Portfolio; (c) place 
purchase and sale orders for portfolio transactions on behalf of 
the Portfolio; (d) employ professional portfolio managers and 
securities analysts who provide research services to the 
Portfolio; and (e) administer the Portfolio's corporate affairs 
and, in connection therewith, furnish the Portfolio with office 
facilities and with clerical, bookkeeping and recordkeeping 
services at such office facilities.  


	The Fund has entered into a Subadvisory Agreement on behalf 
of each of the AIM Capital Appreciation Portfolio, Alliance Growth 
Portfolio, the Van Kampen American Capital Enterprise Portfolio, 
the TBC Managed Income Portfolio, the Putnam Diversified Income 
Portfolio, the GT Global Strategic Income Portfolio and the MFS 
Total Return Portfolio.  Pursuant to each Subadvisory Agreement 
among TIA, the Fund on behalf of the applicable Portfolio and the 
applicable Sub-Adviser, the Sub-Adviser is authorized, in its 
discretion and without prior consultation with TIA to: (a) manage 
the Portfolio's assets in accordance with the Portfolio's 
investment objectives and policies as stated in the Prospectus and 
the Statement of Additional Information, (b) make investment 
decisions for the Portfolio; (c) place purchase and sale orders 
for portfolio transactions on behalf of the Portfolio; and (d) 
employ professional portfolio managers and securities analysts who 
provide research services to the Portfolio.


	TIA has also entered into a Sub-Administrative Services 
Agreement with MMC pursuant to which MMC will: (a) assist TIA in 
supervising all aspects of each Portfolio's operations; (b) supply 
each Portfolio with office facilities, statistical and research 
services, data processing  services, clerical, accounting and 
bookkeeping services; and (c) prepare reports to each TIA 
Portfolio's shareholders and prepare reports to and filings with 
the SEC and state blue sky authorities, if applicable.  TIA pays 
MMC, as Sub-Administrator, a fee in an amount equal to an annual 
rate of 0.10% of each TIA Portfolio's average daily net assets.

	The Alliance Growth Portfolio is advised by Alliance Capital 
Management L.P. ("Alliance Capital").  Alliance Capital is a 
Delaware limited partnership with principal offices at 1345 Avenue 
of the Americas, New York, New York 10105.  For the services 
provided by Alliance Capital, the Manager pays Alliance Capital an 
annual fee calculated at a rate of 0.375% of the Portfolio's 
average daily net assets,
paid monthly.


	The Alliance Capital is a leading international investment 
manager supervising client accounts with assets as of December 31, 
1997 of more than $218.7 billion (of which more than $80 billion 
represented the assets of investment companies).  The Adviser's 
clients are primarily major corporate employee benefit funds, 
public employee retirement systems, investment companies, 
foundations and endowment funds and included employee benefit 
plans, as of December 31, 1997, 31 of the Fortune 100 Companies.  
As of that date, Alliance Capital and its subsidiaries employed 
more than 1, 450 employees who operated out of domestic offices 
and the overseas offices of subsidiaries in Boston, Chennai, 
Istanbul, London, Mumbai, Sydney, Tokyo, Toronto, Bahrain, 
Luxembourg and Singapore as well as affiliate offices in Vienna, 
Warsaw, Hong Kong, Sao Paulo, Seoul and Moscow.  The 58 registered 
investment companies comprising more than 70 separate investment 
portfolios managed by Alliance Capital currently having over more 
than three million shareholders.  

	Alliance Capital Management Corporation ("ACMC"), sole 
general partner of, and the owner of a 1% general partnership 
interest in, the Adviser, is an indirect wholly owned subsidiary 
of The Equitable Life Assurance Society of the United States 
("Equitable"), one of the largest life insurance companies in the 
United States and a wholly owned subsidiary of The Equitable 
Companies Incorporated ("ECI"), a holding company controlled by 
AXA, a French insurance holding company which at September 30, 
1997, beneficially owned approximately 59% of the outstanding 
voting shares of ECI.  As of June 30, 1997, ACMC and Equitable 
Capital Management Corporation, each a wholly owned direct or 
indirect subsidiary of Equitable, together with Equitable, owned 
in the aggregate approximately 57% of the issued and outstanding 
units representing assignments of beneficial ownership of limited 
partnership interests in the Adviser ("Units").

	AXA-UAP is a holding company for an international group of 
insurance and related financial services companies.  AXA-UAP's 
insurance operations include activities in life insurance, 
property and casualty insurance and reinsurance.  The insurance 
operations are diverse geographically, with activities principally 
in Western Europe, North America and the Asia/Pacific area.  AXA-
UAP is also engaged in asset management, investment banking, 
securities trading, brokerage, real estate and other financial 
services activities principally in the United States, as well as 
Western Europe and the Asia/Pacific area.

	Based on information provided by AXA-UAP, as of September 
30, 1997 more than 25% of the voting power of AXA-UAP was 
controlled directly and indirectly by FINAXA, a French holding 
company. As of September 30, 1997 more than 25% of the voting 
power of FINAXA was controlled directly and indirectly by four 
French Mutual insurance companies (the "Mutuelles AXA"), one of 
which, AXA Assurances I.A.R.D. Mutuelle, itself controlled 
directly and indirectly more than 25% of the voting power of 
FINAXA.  Acting as a group, Mutuelles AXA control AXA-UAP and 
FINAXA. 

	The AIM Capital Appreciation Portfolio is advised by A I M 
Capital Management, Inc. ("AIM Capital").  AIM Capital is located 
at 11 Greenway Plaza, Suite 100, Houston, Texas  77046 and is a 
wholly owned subsidiary of A I M Advisors, Inc., which is a wholly 
owned subsidiary of A I M Management Group Inc.  A I M Management 
Group Inc. is a holding company engaged in the financial serviced 
business and is an indirect wholly owned subsidiary of AMVESCAP 
PLC.  For services provided by AIM Capital, the Manager pays to 
AIM Capital an annual fee calculated at the rate of 0.375% of the 
Portfolio's average daily net assets, paid monthly. 

	The Van Kampen American Capital Enterprise Portfolio is 
advised by Van Kampen American Capital Asset Management, Inc. 
("VKAC"). VKAC is located at One Parkview Plaza, Oakbrook Terrace, 
IL 60181 and is a wholly owned subsidiary of Van Kampen American 
Capital, Inc., which is a wholly owned subsidiary of VK/AC 
Holding, Inc.  VC/AC Holding, Inc., is a wholly owned subsidiary 
of MSAM Holdings II, Inc. which in turn, is a wholly owned 
subsidiary of Morgan Stanley, Dean Witter Discover & Co.  For the 
services provided by VKAC, the Manager pays to VKAC an annual fee 
calculated at the rate of 0.325% of the Portfolio's average daily 
net assets, paid monthly.

	The TBC Managed Income Portfolio is advised by The Boston 
Company Asset Management, Inc. ("TBCAM").  TBCAM is located at One 
Boston Place, Boston, Massachusetts 02108, and is a wholly owned 
subsidiary  of The Boston Company, Inc., which is an indirect 
wholly owned subsidiary of Mellon Bank Corporation.  For the 
services provided by TBCAM, the Manager pays to TBCAM an annual 
fee calculated at the rate of 0.30% of the Portfolio's average 
daily net assets, paid monthly.


	The Putnam Diversified Income Portfolio is advised by Putnam 
Investment Management, Inc. ("Putnam Management").  Putnam 
Management is located at One Post Office Square, Boston, 
Massachusetts  02109.  Putnam Management is a subsidiary of Putnam 
Investments, Inc., which, other than shares held by employees, is 
a wholly owned subsidiary of Marsh & McLennan Companies, Inc.  For 
the services provided by Putnam Management, the Manager pays 
Putnam Management an annual fee calculated at the rate of 0.35% of 
the Portfolio's average daily net assets, paid monthly.  

	The GT Global Strategic Income Portfolio is advised by 
Chancellor LGT Asset Management, Inc. ("Chancellor LGT").  The 
U.S. offices of Chancellor LGT are located at 50 California 
Street, San Francisco, California 94111 and 1166 Avenue of the 
Americas, New York, New York 11036.  Chancellor LGT is a member of 
Liechtenstein Global Trust, formerly BIL GT Group.  Other 
worldwide affiliates of Liechtenstein Global Trust include LGT 
Bank in Liechtenstein formerly Bank in Liechtenstein, an 
international financial services institution founded in 1920.  LGT 
Bank in Liechtenstein has principal offices in Vaduz, 
Liechtenstein.  Its subsidiaries currently include LGT Bank in 
Liechtenstein (Deutschland) GmbH, formerly Bank in Liechtenstein 
(Frankfurt) GmbH, and LGT Asset Management AG, formerly Bilfinanz 
and Verwaltung AG, located in Zurich, Switzerland. 

	Worldwide asset management affiliates also currently include 
Chancellor LGT Trust Company, Chancellor LGT Senior Secured 
Management, Inc., Chancellor LGT Venture Partners, Inc., LGT Asset 
Management PLC, formerly G.T. Management PLC in London, England; 
LGT Asset Management Ltd., formerly G.T. Management (Asia) Ltd. in 
Hong Kong; LGT Investment Trust Management Ltd., formerly G.T. 
Management (Japan) in Tokyo; LGT Asset Management Pte. Ltd., 
formerly G.T. Management (Singapore) PTE Ltd. located in 
Singapore; LGT Asset Management Ltd., formerly G.T. Management 
(Australia) Ltd., located in Sydney; and LGT Asset Management 
GmbH, formerly BIL Asset Management GmbH, located in Frankfurt, 
Germany. 

	For the services provided by Chancellor LGT, the Manager 
pays to Chancellor LGT an annual fee calculated at the rate of 
0.375% of the Portfolio's average daily net assets, paid monthly.


	The MFS Total Return Portfolio is advised by Massachusetts 
Financial Services Company ("MFS").  MFS is located at 500 
Boylston Street, Boston, Massachusetts 02116 and is a subsidiary 
of Sun Life of Canada (U.S.) Financial Services Holdings, Inc., 
which is an indirect wholly owned subsidiary of Sun Life Assurance 
Company of Canada. For services provided by MFS, the Manager pays 
MFS an annual fee calculated a rate equal to 0.375% of the 
Portfolio's average daily net assets, paid monthly.


Portfolio Transactions and Distribution

	Smith Barney distributes shares of the Fund as principal 
underwriter.  In addition, the Fund's Board of Directors has 
determined that transactions for the Fund may be executed through 
Smith Barney or any broker-dealer affiliate of Smith Barney (each, 
an "Affiliated Broker") if, in the judgment of management, the use 
of an Affiliated Broker is likely to result in price and execution 
at least as favorable to the Fund as those obtainable through 
other qualified broker-dealers, and if, in the transaction, the 
Affiliated Broker charges the Fund a fair and reasonable rate 
consistent with that charged to comparable unaffiliated customers 
in similar transactions.  The Fund will not deal with Smith Barney 
in any transactions in which Smith Barney acts as principal.  In 
addition, the Alliance Growth Portfolio will not deal with 
Donaldson, Lufkin & Jenrette ("DLJ") (an affiliate of Alliance 
Capital) in any transactions in which DLJ acts as principal.  In 
addition, the Van Kampen American Capital Enterprise Portfolio may 
not deal with Morgan Stanley & Co., Inc. ("Morgan Stanley") (an 
affiliate of VK/AC Holding, Inc.) in any transaction in which 
Morgan Stanley acts as principal.

	Shown below are the total brokerage fees paid by the Fund 
for the fiscal years ended October 31, 1995, October 31, 1996 and 
October 31, 1997 on behalf of the Portfolios, the portion paid to 
Smith Barney and the portion paid to other brokers for the 
execution of orders allocated in consideration of research and 
statistical services or solely for their ability to execute the 
order.  During the fiscal year ended October 31, 1995 the total 
amount of commissionable transactions was $340,500,090; 
$21,792,006 (6.4%) of which was directed to Smith Barney and 
executed by unaffiliated brokers and $318,708,084 (93.6%) of which 
was directed to other brokers. During the fiscal year ended 
October 31, 1996 the total amount of commissionable transactions 
was $948,677,922, $86,585,294 (9.13%) of which was directed to 
Smith Barney and executed by unaffiliated brokers and $862,093,228 
(90.87%) of which was directed to other brokers. During the fiscal 
year ended October 31, 1997 the total amount of commissionable 
transactions was $1,618,030,296, $115,051,655 (7.11%) of which was 
directed to Smith Barney and executed by unaffiliated brokers and 
$1,502,978,641 (92.89%) of which was directed to other brokers.  


Commissions:


<TABLE>
<CAPTION>
Fiscal					To Smith	To Others (for
Year Ended		Total		Barney		execution only)
<S>			<C>		<C>		<C>
October 31, 1995	$  684,356	$43,728 (6.4%)	$640,628 
(93.6%)
October 31, 1996	1,862,443	142,038 (7.63%)	1,720,405 
(92.37%)
October 31, 1997	2,325,295	163,142 (7.02%)	2,162,153 
(92.98%)
</TABLE>


	The Fund attempts to obtain the most favorable execution of 
each portfolio transaction that is, the best combination of net 
price and prompt reliable execution.  In making its decision as to 
which broker or brokers are most likely to provide the most 
favorable execution, the management of the Fund takes into account 
the relevant circumstances.  These include, in varying degrees, 
the size of the order, the importance of prompt execution, the 
breadth and trends of the market in the particular security, 
anticipated commission rates, the broker's familiarity with such 
security including its contacts with possible buyers and sellers 
and its level of activity in the security, the possibility of a 
block transaction and the general record of the broker for prompt, 
competent and reliable service in all aspects of order processing, 
execution and settlement.

	Commissions are negotiated and take into account the 
difficulty involved in execution of a transaction, the time it 
took to conclude, the extent of the broker's commitment of its own 
capital, if any, and the price received.  Anticipated commission 
rates are an important consideration in all trades and are weighed 
along with the other relevant factors affecting order execution 
set forth above.  In allocating brokerage among those brokers who 
are believed to be capable of providing equally favorable 
execution, the Fund takes into consideration the fact that a 
particular broker may, in addition to execution capability, 
provide other services to the Fund such as research and 
statistical information.  It is not possible to place a dollar 
value on such services nor does their availability reduce the 
Manager's expenses in a determinable amount.  These various 
services may, however, be useful to the Manager or Smith Barney in 
connection with its services rendered to other advisory clients 
and not all such services may be used in connection with the Fund. 

	The Board of Directors of the Fund has adopted certain 
policies and procedures incorporating the standard of Rule l7e-l 
issued by the Securities and Exchange Commission under the 1940 
Act which requires that the commissions paid to any Affiliated 
Broker must be "reasonable and fair compared to the commission, 
fee or other remuneration received or to be received by other 
brokers in connection with comparable transactions involving 
similar securities during a comparable period of time." The Rule 
and the policy and procedures also contain review requirements and 
require management to furnish reports to the Board of Directors 
and to maintain records in connection with such reviews. 

VOTING RIGHTS

	The Directors themselves have the power to alter the number 
and the terms of office of the directors, and they may at any time 
lengthen their own terms or make their terms of unlimited duration 
(subject to certain removal procedures) and appoint their own 
successors, provided that in accordance with the 1940 Act always 
at least a majority, but in most instances, at least two-thirds of 
the Directors have been elected by the shareowners of the Fund.  
Shares do not have cumulative voting rights and therefore the 
owners of more than 50% of the outstanding shares of the Fund may 
elect all of the Directors irrespective of the votes of other 
shareowners.  

	The Fund offers its shares only for purchase by insurance 
company separate accounts.  With respect to any Fund shareholder 
meeting, the insurance company will solicit and accept timely 
voting instructions from its contract owners who own units in a 
separate account investment division which corresponds to shares 
in the Fund in accordance with the procedures set forth in the 
section entitled "Voting Rights" in the accompanying prospectus 
for the applicable contract and to the extent required by law.  
Shares of the Fund attributable to contract owner interests for 
which no voting instructions are received will be voted by the 
insurance company in proportion to the shares for which voting 
instructions are received.  

	Shares of the Fund entitle their owners to one vote per 
share; however, on any matter submitted to a vote of the 
shareowners, all shares then entitled to vote will be voted by 
individual Portfolio unless otherwise required by the 1940 Act (in 
which case all shares will be voted in the aggregate).  For 
example, a change in investment policy for a Portfolio would be 
voted upon only by shareowners of the Portfolio involved.  
Additionally, approval of an amendment to a Portfolio's advisory 
or subadvisory agreement is a matter to be determined separately 
by that Portfolio.  Approval of a proposal by the shareowners of 
one Portfolio is effective as to that Portfolio whether or not 
enough votes are received from the shareowners of the other 
Portfolios to approve the proposal as to that Portfolio. 

FINANCIAL STATEMENTS

	The financial information contained under the following 
headings is hereby incorporated by reference to the Fund's 1997 
Annual Reports to Shareholders:  


<TABLE>
<CAPTION>
Annual Report of:					Pages(s)in:
<S>							<C>	
Smith Barney Large Cap Value Portfolio	
Alliance Growth Portfolio	
Van Kampen American Capital Enterprise Portfolio	
Schedule of Investments 		11-24
Statements of Assets and Liabilities		25
Statements of Operations		26
Statements of Changes in Net Assets		27-29
Notes to Financial Statements		30-35
Financial Highlights (for a share of capital stock of each series
outstanding through each year)		
36-38
Independent Auditors' Report		39
	
MFS Total Return Portfolio	
TBC Managed Income Portfolio	
Smith Barney Money Market Portfolio	
Schedule of Investments		9-28
Statements of Assets and Liabilities		30
Statements of Operations		31
Statements of Changes in Net Assets		32-34
Notes to Financial Statements		35-40
Financial Highlights (for a share of capital stock of each series
outstanding through each year)		
41-43
Independent Auditors' Report		44

Smith Barney High Income Portfolio	
Putnam Diversified Income Portfolio	
Schedule of Investments		10-39
Statements of Assets and Liabilities		41
Statements of Operations		42
Statements of Changes in Net Assets		43-44
Notes to Financial Statements		45-53
Financial Highlights (for a share of capital stock of each series
outstanding through each year)		
54-55
Independent Auditors' Report		56

Smith Barney International Equity Portfolio	
Smith Barney Pacific Basin Portfolio	
GT Global Strategic Income Portfolio	
Schedule of Investments		12-22
Statements of Assets and Liabilities		23
Statements of Operations		24
Statements of Changes in Net Assets		25-27
Notes to Financial Statements		28-36
Financial Highlights (for a share of capital stock of each series
outstanding through each year)		
37-39
Independent Auditors' Report		40

AIM Capital Appreciation Portfolio	
Schedule of Investments		7-17
Statements of Assets and Liabilities		18
Statements of Operations		19
Statements of Changes in Net Assets		20
Notes to Financial Statements		21-25
Financial Highlights (for a share of capital stock of each series
outstanding through each year)		
26
Independent Auditors' Report		27
</TABLE>