June 28, 2001

STATEMENT OF ADDITIONAL INFORMATION

SMITH BARNEY MANAGED MUNICIPALS FUND INC.

7 World Trade Center
New York, New York 10048
(800) 451-2010


This Statement of Additional Information ("SAI") is not a prospectus
and is meant to be read in conjunction with the Prospectus of the
Smith Barney Managed Municipals Fund Inc. (the "fund") dated June
28, 2001, as amended or supplemented from time to time (the
"prospectus"), and is incorporated by reference in its entirety into
the prospectus.  Additional information about the fund's investments
is available in the fund's annual and semi-annual reports to
shareholders that are incorporated herein by reference.  The
prospectus and copies of the reports may be obtained free of charge
by contacting a Salomon Smith Barney Financial Consultant, or a
registered representative of PFS Distributors, Inc., a
broker/dealer, financial intermediary, financial institution (each
called a "Service Agent") or by writing or calling Salomon Smith
Barney Inc. at the address or telephone number above.

TABLE OF CONTENTS

Investment Objective and Management Policies	2
Risk Factors and Special Considerations Relating to Municipal
Securities...................10
Portfolio Transactions.................12
Portfolio Turnover.....................12
Investment Restrictions....................13
Directors and Executive Officers of the Fund	15
Purchase of Shares.....................19
PFS Accounts	...........................25
Determination of Net Asset Value...............27
Valuation of Shares	28
Redemption of Shares	28
Investment Management and Other Services	32
Exchange Privilege	37
Performance Data	39
Dividends, Distributions and Taxes	42
Additional Information	46
Financial Statements.....................47
Other Information..............................47
Appendix A................................49


INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES

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

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

Diversified Classification

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

Use of Ratings as Investment Criteria

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

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

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

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

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

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

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

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

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

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

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

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

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

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


When-Issued Securities.  The fund may purchase Municipal Bonds on a
"when-issued" basis (i.e., for delivery beyond the normal settlement
date at a stated price and yield).  The payment obligation and the
interest rate that will be received on the Municipal Bonds purchased
on a when-issued basis are each fixed at the time the buyer enters
into the commitment. Although the fund will purchase Municipal Bonds
on a when-issued basis only with the intention of actually acquiring
the securities, the fund may sell these securities before the
settlement date if it is deemed advisable as a matter of investment
strategy.

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

When the fund engages in when-issued transactions, it relies on the
seller to consummate the trade. Failure of the seller to do so may
result in the fund's incurring a loss or missing an opportunity to
obtain a price considered advantageous.
Repurchase Agreements.  The fund may agree to purchase securities
from a bank or recognized securities dealer and simultaneously
commit to resell the securities to the bank or dealer at an agreed-
upon date and price reflecting a market rate of interest unrelated
to the coupon rate or maturity of the purchased securities
("repurchase agreements"). The fund would maintain custody of the
underlying securities prior to their repurchase; thus, the
obligation of the bank or dealer to pay the repurchase price on the
date agreed to would be, in effect, secured by such securities.  If
the value of such securities were less than the repurchase price,
plus interest, the other party to the agreement would be required to
provide additional collateral so that at all times the collateral is
at least 102% of the repurchase price plus accrued interest. Default
by or bankruptcy of a seller would expose the fund to possible loss
because of adverse market action, expenses and/or delays in
connection with the disposition of the underlying obligations. The
financial institutions with which the fund may enter into repurchase
agreements will be banks and non-bank dealers of U.S. Government
securities that are on the Federal Reserve Bank of New York's list
of reporting dealers, if such banks and non-bank dealers are deemed
creditworthy by the fund's manager.  The manager will continue to
monitor creditworthiness of the seller under a repurchase agreement,
and will require the seller to maintain during the term of the
agreement the value of the securities subject to the agreement to
equal at least 102% of the repurchase price (including accrued
interest).  In addition, the manager will require that the value of
this collateral, after transaction costs (including loss of
interest) reasonably expected to be incurred on a default, be equal
to 102% or greater than the repurchase price (including accrued
premium) provided in the repurchase agreement or the daily
amortization of the difference between the purchase price and the
repurchase price specified in the repurchase agreement.  The manager
will mark-to-market daily the value of the securities.
Temporary Investments.  Under normal market conditions, the fund may
hold up to 20% of its total assets in cash or money market
instruments, including taxable money market instruments. When the
fund is maintaining a defensive position, the fund may invest in
short-term investments ("Temporary Investments") consisting of: (a)
tax-exempt securities in the form of notes of municipal issuers
having, at the time of purchase, a rating within the three highest
grades of Moody's, S&P or the equivalent rating from an NRSRO or, if
not rated, having an issue of outstanding Municipal Bonds rated
within the three highest grades by Moody's, S&P or the equivalent
rating from an NRSRO; and (b) the following taxable securities:
obligations of the United States government, its agencies or
instrumentalities ("U.S. government securities"), repurchase
agreements, other debt securities rated within the three highest
grades by Moody's, S&P or the equivalent rating from an NRSRO,
commercial paper rated in the highest grade by any of such rating
services, and certificates of deposit of domestic banks with assets
of $1 billion or more. The fund may invest in Temporary Investments
for defensive reasons in anticipation of a market decline. At no
time will more than 20% of the fund's total assets be invested in
Temporary Investments unless the fund has adopted a defensive
investment policy. The fund intends, however, to purchase tax-exempt
Temporary Investments pending the investment of the proceeds of the
sale of portfolio securities or shares of the fund's common stock,
or in order to have highly liquid securities available to meet
anticipated redemptions. For the fiscal year ended February 28,
2001, the fund did not invest in taxable Temporary Investments.

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

In entering into a financial futures contract, the fund will be
required to deposit with the broker through which it undertakes the
transaction an amount of cash or cash equivalents equal to
approximately 5% of the contract amount.  This amount, which is
known as "initial margin," is subject to change by the exchange or
board of trade may charge a higher amount.  Initial margin is in the
nature of a performance bond or good faith deposit on the contract
that is returned to the fund upon termination of the futures
contract, assuming all contractual obligations have been satisfied.
In accordance with a process known as "marking-to-market,"
subsequent payments, known as "variation margin," to and from the
broker will be made daily as the price of the index or securities
underlying the futures contract fluctuates, making the long and
short positions in the futures contract more or less valuable.  At
any time prior to the expiration of a futures contract, the fund may
elect to close the position by taking an opposite position, which
will operate to terminate the fund's existing position in the
contract.

A financial futures contract provides for the future sale by one
party and the purchase by the other party of a certain amount of a
specified property at a specified price, date, time and place.
Unlike the direct investment in a futures contract, an option on a
financial futures contract gives the purchaser the right, in return
for the premium paid, to assume a position in the financial futures
contract at a specified exercise price at any time prior to the
expiration date of the option.  Upon exercise of an option, the
delivery of the futures position by the writer of the option to the
holder of the option will be accompanied by delivery of the
accumulated balance in the writer's futures margin account, which
represents the amount by which the market price of the futures
contract exceeds, in the case of a call, or is less than, in the
case of a put, the exercise price of the option in the futures
contract.  The potential loss related to the purchase of an option
on financial futures contracts is limited to the premium paid for
the option (plus transaction costs).  The value of the option may
change daily and that change would be reflected in the net asset
value of the fund.

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

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

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

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

RISK FACTORS AND SPECIAL CONSIDERATIONS RELATING TO MUNICIPAL
SECURITIES

Alternative Minimum Tax

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

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

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

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

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

Municipal Market Disruption Risk. The value of municipal securities
may be affected by uncertainties in the municipal market related to
legislation or litigation involving the taxation of municipal
securities or the rights of municipal securities holders in the
event of a bankruptcy. Proposals to restrict or eliminate the
federal income tax exemption for interest on municipal securities
are introduced before Congress from time to time. Proposals also may
be introduced before the California legislature that would affect
the state tax treatment of a municipal fund's distributions. If such
proposals were enacted, the availability of municipal securities and
the value of a municipal fund's holdings would be affected and the
Trustees would reevaluate the fund's investment objectives and
policies. Municipal bankruptcies are relatively rare, and certain
provisions of the U.S. Bankruptcy Code governing such bankruptcies
are unclear and remain untested. Further, the application of state
law to municipal issuers could produce varying results among the
states or among municipal securities issuers within a state. These
legal uncertainties could affect the municipal securities market
generally, certain specific segments of the market, or the relative
credit quality of particular securities. Any of these effects could
have a significant impact on the prices of some or all of the
municipal securities held by a fund, making it more difficult for a
money market fund to maintain a stable net asset value per share.

Education. In general, there are two types of education-related
bonds; those issued to finance projects for public and private
colleges and universities, and those representing pooled interests
in student loans. Bonds issued to supply educational institutions
with funds are subject to the risk of unanticipated revenue decline,
primarily the result of decreasing student enrollment or decreasing
state and federal funding. Among the factors that may lead to
declining or insufficient revenues are restrictions on students'
ability to pay tuition, availability of state and federal funding,
and general economic conditions. Student loan revenue bonds are
generally offered by state (or substate) authorities or commissions
and are backed by pools of student loans. Underlying student loans
may be guaranteed by state guarantee agencies and may be subject to
reimbursement by the United States Department of Education through
its guaranteed student loan program. Others may be private,
uninsured loans made to parents or students which are supported by
reserves or other forms of credit enhancement. Recoveries of
principal due to loan defaults may be applied to redemption of bonds
or may be used to re-lend, depending on program latitude and demand
for loans. Cash flows supporting student loan revenue bonds are
impacted by numerous factors, including the rate of student loan
defaults, seasoning of the loan portfolio, and student repayment
deferral periods of forbearance. Other risks associated with student
loan revenue bonds include potential changes in federal legislation
regarding student loan revenue bonds, state guarantee agency
reimbursement and continued federal interest and other program
subsidies currently in effect.

Electric Utilities. The electric utilities industry has been
experiencing, and will continue to experience, increased competitive
pressures. Federal legislation in the last two years will open
transmission access to any electricity supplier, although it is not
presently known to what extent competition will evolve. Other risks
include: (a) the availability and cost of fuel, (b) the availability
and cost of capital, (c) the effects of conservation on energy
demand, (d) the effects of rapidly changing environmental, safety,
and licensing requirements, and other federal, state, and local
regulations, (e) timely and sufficient rate increases, and (f)
opposition to nuclear power.

Health Care. The health care industry is subject to regulatory
action by a number of private and governmental agencies, including
federal, state, and local governmental agencies. A major source of
revenues for the health care industry is payments from the Medicare
and Medicaid programs. As a result, the industry is sensitive to
legislative changes and reductions in governmental spending for such
programs. Numerous other factors may affect the industry, such as
general and local economic conditions; demand for services; expenses
(including malpractice insurance premiums); and competition among
health care providers. In the future, the following elements may
adversely affect health care facility operations: adoption of
legislation proposing a national health insurance program; other
state or local health care reform measures; medical and
technological advances which dramatically alter the need for health
services or the way in which such services are delivered; changes in
medical coverage which alter the traditional fee-for-service revenue
stream; and efforts by employers, insurers, and governmental
agencies to reduce the costs of health insurance and health care
services.

Housing. Housing revenue bonds are generally issued by a state,
county, city, local housing authority, or other public agency. They
generally are secured by the revenues derived from mortgages
purchased with the proceeds of the bond issue. It is extremely
difficult to predict the supply of available mortgages to be
purchased with the proceeds of an issue or the future cash flow from
the underlying mortgages. Consequently, there are risks that
proceeds will exceed supply, resulting in early retirement of bonds,
or that homeowner repayments will create an irregular cash flow.
Many factors may affect the financing of multi-family housing
projects, including acceptable completion of construction, proper
management, occupancy and rent levels, economic conditions, and
changes to current laws and regulations.

Transportation. Transportation debt may be issued to finance the
construction of airports, toll roads, highways, or other transit
facilities. Airport bonds are dependent on the general stability of
the airline industry and on the stability of a specific carrier who
uses the airport as a hub. Air traffic generally follows broader
economic trends and is also affected by the price and availability
of fuel. Toll road bonds are also affected by the cost and
availability of fuel as well as toll levels, the presence of
competing roads and the general economic health of an area. Fuel
costs and availability also affect other transportation-related
securities, as do the presence of alternate forms of transportation,
such as public transportation.

Water and Sewer. Water and sewer revenue bonds are often considered
to have relatively secure credit as a result of their issuer's
importance, monopoly status, and generally unimpeded ability to
raise rates. Despite this, lack of water supply due to insufficient
rain, run-off, or snow pack is a concern that has led to past
defaults. Further, public resistance to rate increases, costly
environmental litigation, and Federal environmental mandates are
challenges faced by issuers of water and sewer bonds.


THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK.

PORTFOLIO TRANSACTIONS

Newly issued securities normally are purchased directly from the
issuer or from an underwriter acting as principal.  Other purchases
and sales usually are placed with those dealers from which it
appears that the best price or execution will be obtained; those
dealers may be acting as either agents or principals.  The purchase
price paid by the fund to underwriters of newly issued securities
usually includes a concession paid by the issuer to the underwriter,
and purchases of after-market securities from dealers normally are
executed at a price between the bid and asked prices. For the 1999,
2000 and 2001 fiscal years, the fund has paid no brokerage
commissions.

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

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

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

PORTFOLIO TURNOVER

The fund's portfolio turnover rate (the lesser of purchases or sales
of portfolio securities during the year, excluding purchases or
sales of short-term securities, divided by the monthly average value
of portfolio securities) generally is not expected to exceed 100%,
but the portfolio turnover rate will not be a limiting factor
whenever the fund deems it desirable to sell or purchase securities.
Securities may be sold in anticipation of a rise in interest rates
(market decline) or purchased in anticipation of a decline in
interest rates (market rise) and later sold.  In addition, a
security may be sold and another security of comparable quality may
be purchased at approximately the same time in order to take
advantage of what the fund believes to be a temporary disparity in
the normal yield relationship between the two securities.  These
yield disparities may occur for reasons not directly related to the
investment quality of particular issues or the general movement of
interest rates, such as changes in the overall demand for or supply
of various types of tax-exempt securities.  For the 1999, 2000 and
2001 fiscal years, the fund's portfolio turnover rates were 45%, 55%
and 56%, respectively.

INVESTMENT RESTRICTIONS

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

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

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

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

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

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

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

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

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

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

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

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

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

	13.	Purchase or sell oil and gas interests.

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

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

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


DIRECTORS AND EXECUTIVE OFFICERS OF THE FUND

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

Herbert Barg (Age 78).  Director
Private Investor.  Director or trustee of 16 investment companies
associated with Citigroup Inc. ("Citigroup") His address is 1460
Drayton Lane, Wynewood, Pennsylvania 19096.

*Alfred J. Bianchetti (Age 78).  Director
Retired; formerly Senior Consultant to Dean Witter Reynolds Inc.
Director or trustee of 11 investment companies associated with
Citigroup. His address is 19 Circle End Drive, Ramsey, New Jersey
07466.

Martin Brody (Age 79).  Director
Consultant, HMK Associates; Retired Vice Chairman of the Board of
Restaurant Associates Corp. Director or trustee of 21 investment
companies associated with Citigroup. His address is c/o HMK
Associates, 30 Columbia Turnpike, Florham Park, New Jersey 07932.

Dwight B. Crane (Age 63).  Director
Professor, Harvard Business School. Director or trustee of 24
investment companies associated with Citigroup. His address is c/o
Harvard Business School, Soldiers Field Road, Boston, Massachusetts
02163.

Burt N. Dorsett (Age 70).  Director
Managing Partner of Dorsett McCabe Management. Inc., an investment
counseling firm; Director of Research Corporation Technologies,
Inc., a nonprofit patent clearing and licensing firm. Director or
trustee of 11 investment companies associated with Citigroup. His
address is 500 5th Avenue, Suite 3120, New York, New York 10110.

Elliot S. Jaffe (Age 75).  Director
Chairman of the Board and President of The Dress Barn, Inc. Director
or trustee of 11 investment companies associated with Citigroup.
His address is 30 Dunnigan Drive, Suffern, New York 10901.

Stephen E. Kaufman (Age 69).  Director
Attorney. Director or trustee of 13 investment companies associated
with Citigroup. His address is 277 Park Avenue, New York, New York
10172.

Joseph J. McCann (Age 70).  Director
Financial Consultant; Retired Financial Executive, Ryan Homes, Inc.
Director or trustee of 11 investment companies associated with
Citigroup. His address is 200 Oak Park Place, Pittsburgh,
Pennsylvania 15243.

*Heath B. McLendon (Age 68).  Chairman of the Board, President and
Chief Executive Officer
Managing Director of Salomon Smith Barney Inc.; President of SBFM
and Travelers Investment Adviser, Inc. ("TIA"); Chairman or Co-
Chairman of the Board and director or trustee of 78 investment
companies associated with Citigroup.

Cornelius C. Rose, Jr. (Age 68).  Director
President, Cornelius C. Rose Associates, Inc., financial
consultants, and Chairman and Director of Performance Learning
Systems, an educational consultant. Director or trustee of 11
investment companies associated with Citigroup.  His address is
Meadowbrook Village, Building 4, Apt 6, West Lebanon, New Hampshire
03784.

Lewis E. Daidone (Age 43).  Senior Vice President and Treasurer
Managing Director of Salomon Smith Barney; Chief Financial Officer
of the Smith Barney Mutual funds; Director and Senior Vice President
of SBFM and TIA. Senior Vice President or Executive Vice President
and Treasurer of 61 investment companies associated with Citigroup.
His address is 125 Broad Street, New York, New York 10004.

Joseph P. Deane (Age 53).  Vice President and Investment Officer
Investment Officer of SBFM;  Managing Director of Salomon Smith
Barney; Investment Officer of 9 Smith Barney Mutual Funds.

Paul Brook (Age 47). Controller
Director of Salomon Smith Barney; from 1997-1998 Managing Director
of AMT Capital Services Inc.; prior to 1997, Partner with Ernst &
Young LLP. Controller or Assistant Treasurer of 43 investment
companies associated with Citigroup. His address is 125 Broad
Street, New York, New York 10004.

Christina T. Sydor (Age 50).  Secretary
Managing Director of Salomon Smith Barney; General Counsel and
Secretary of SBFM and TIA. Secretary of 61 investment companies
associated with Citigroup.

No officer, director or employee of Salomon Smith Barney or any of
its affiliates receives any compensation from the fund for serving
as an officer of the fund or director of the fund.  The fund pays
each director who is not an officer, director or employee of Salomon
Smith Barney or any of its affiliates a fee of $4,000 per annum plus
$500 per in-person meeting and $100 per telephonic meeting.  Each
director emeritus who is not an officer, director or employee of
Salomon Smith Barney or its affiliates receives a fee of $2,000 per
annum plus $250 per in-person meeting and $50 per telephonic
meeting.  All directors are reimbursed for travel and out-of-pocket
expenses incurred to attend such meetings. For the calendar year
ended December 31, 2000, the directors were reimbursed, in the
aggregate, $7,347.54 for travel and out-of-pocket expenses.

For the fiscal year ended February 28, 2001, the directors of the
fund were paid the following compensation:






Name of Person




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


Compensati
on
From Fund
And Fund
Complex
Paid to
Directors+


Number of
Funds for
Which
Directors
Serve Within
Fund Complex

Herbert Barg **
$6,100
$0
$116,075
16
Alfred
Bianchetti *
 6,009
  0
   58,900
11
Martin Brody **
 5,100
  0
 132,950
21
Dwight B. Crane
**
 6,109
  0
 153,175
24
Burt N. Dorsett
**
 6,109
  0
   59,500
11
Elliot S. Jaffe
**
 5,600
  0
   58,700
11
Stephen E.
Kaufman **
 6,109
  0
   114,400
13
Joseph J. McCann
**
 6,109
  0
   59,500
11
Heath B.
McLendon *
0
 0
0
71
Cornelius C.
Rose, Jr. **
 6,109
  0
   59,500
11

+	For the calendar year ended December 31, 2000.
*	Designates an "interested" director.
**	Designates member of Audit Committee.
	Upon attainment of age 80, fund directors are required to
change to emeritus status. Directors emeritus are entitled to
serve in emeritus status for a maximum of 10 years.  A
director emeritus may attend meetings but has no voting
rights. During the fund's last fiscal year, aggregate
compensation paid by the fund to directors achieving emeritus
status totaled $3,000.

As of June 8, 2001, the directors and officers of the fund, as a
group, owned less than 1% of the outstanding shares of beneficial
interest of the fund.

To the best knowledge of the directors, as of June 8, 2001, the
following shareholders or "groups" (as such term is defined in
Section 13(d) of the Securities Exchange Act of 1934, as amended)
owned beneficially or of record more than 5% of the shares of the
following classes:

Shareholder
Class
Shares Held
Mr. David J. Heerensperger
96 Cascade Key
Bellevue, WA  98006-1030


Y
Owned 1,149,995.847
65.2224% of shares
Barry Baker
USA Networks, Inc.
152 W. 57th Street
42nd Floor
New York, NY 10019


Y
Owned 5,059,201.570
18.4761% of shares
Randolph McCormick, Sr.
Broussard Poche, Lewis
And Breaux, CPAs
Attn: Peter Borello
994 E. Prudhomme St.
Opelousas, LA 70570-8239


Y
Owned 2,348,677.530
8.5773% of shares

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


Y
Owned 2,105,860.540
7.6905% of shares



PURCHASE OF SHARES

Sales Charge Alternatives

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

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




Amount of
Investment

Sales Charge as
a %
Of Transaction

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

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

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

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






Size of Investment



As % of
Net Amount
Invested



As % of
Offering
Price


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

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

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

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

Class L Shares.  Class L shares are sold with an initial sales
charge of 1.00% (which is equal to 1.01% of the amount invested) and
are subject to a deferred sales charge payable upon certain
redemptions.  See "Deferred Sales Charge Provisions" below.  Until
June 22, 2002 purchases of Class L shares by investors who were
holders of Class C shares of the fund on June 12, 1998 will not be
subject to the 1% initial sales charge.

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

General

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

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

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

Systematic Investment Plan.  Shareholders may make additions to
their accounts at any time by purchasing shares through a service
known as the Systematic Investment Plan.  Under the Systematic
Investment Plan, Shareholders can invest at least $25 on a monthly
basis or at least $50 on a quarterly basis (not available to PFS
Accounts) to charge the shareholder's account held with a bank or
other financial institution on a monthly or quarterly basis as
indicated by the shareholder, to provide for systematic additions to
the shareholder's fund account. A shareholder who has insufficient
funds to complete the transfer will be charged a fee of up to $25 by
Salomon Smith Barney or the sub-transfer agent.  The Systematic
Investment Plan also authorizes Salomon Smith Barney to apply cash
held in the shareholder's Salomon Smith Barney brokerage account or
redeem the shareholder's shares of a Smith Barney money market fund
to make additions to the account. Additional information is
available from the fund or your Service Agent.

Sales Charge Waivers and Reductions

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

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

Letter of Intent - Class A Shares.  A Letter of Intent for an amount
of $25,000 or more provides an opportunity for an investor to obtain
a reduced sales charge by aggregating investments over a 13 month
period, provided the investor refers to such Letter when placing orders.
  For purposes of a Letter of Intent, the ''Amount of Investment'' as
referred to in the preceding sales charge table includes (i) all
Class A shares of the fund and other Smith Barney mutual funds
offered with a sales charge acquired during the term of the letter
plus (ii) the value of all Class A shares previously purchased and
still owned.  Each investment made during the period receives the
reduced sales charge applicable to the total amount of the
investment goal.  If the goal is not achieved within the period, the
investor must pay the difference between the sales charges
applicable to the purchases made and the charges previously paid, or
an appropriate number of escrowed shares will be redeemed.  The term
of the Letter will commence upon the date the Letter is signed, or
at the option of the investor, up to 90 days before such date.
Please contact a Service Agent or Citi Fiduciary Trust Company (the
"transfer agent") to obtain a Letter of Intent application.

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

Deferred Sales Charge Provisions

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

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

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



Year Since Purchase Payment Was Made

Deferred sales charge

First

4.50%

Second

4.00

Third

3.00

Fourth

2.00

Fifth

1.00

Sixth and thereafter

0.00

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

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

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

Waivers of Deferred Sales Charge

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

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

Volume Discounts

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

PFS ACCOUNTS

Initial purchase of shares of the fund must be made through a PFS
Investments Registered Representative by completing the appropriate
application found in the prospectus. The completed application
should be forwarded to Primerica Shareholder Services, P.O. Box
9662, Providence, RI 02940-5016. Checks drawn on foreign banks must
be payable in U.S. dollars and have the routing number of the U.S.
bank encoded on the check. Subsequent investments may be sent
directly to Primerica Shareholder Services.  In processing
applications and investments, Primerica Shareholder Services acts as
agent for the investor and for PFS Investments Inc. ("PFSI") and
also as agent for the distributor, in accordance with the terms of
the prospectus.  If the transfer agent ceases to act as such, a
successor company named by the fund will act in the same capacity so
long as the account remains open.

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

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

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

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

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

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

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

DETERMINATION OF NET ASSET VALUE

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

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

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

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

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

Determination of Public Offering Price

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

VALUATION OF SHARES

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

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

REDEMPTION OF SHARES

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

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

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

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

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

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

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

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

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

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

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

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

	PFS Investments Accounts

Shareholders may redeem for cash some or all of their shares of the
fund at any time by sending a written request in proper form
directly to a sub-transfer agent, Primerica Shareholder Services, at
P.O. Box 105033, Atlanta, Georgia 30348-5033. If you should have any
questions concerning how to redeem your account after reviewing the
information below, please contact Primerica Shareholder Services at
(800) 544-5445, Spanish-speaking representatives (800) 544-7278 or
TDD Line for the Hearing Impaired (800) 824-1721.

The request for redemption must be signed by all persons in whose
names the shares are registered. Signatures must conform exactly to
the account registration. If the proceeds of the redemption exceed
$50,000, or if the proceeds are not paid to the record owner(s) at
the record address, if the shareholder(s) has had an address change
within 45 days or less of the shareholder's redemption request, or
if the shareholder(s) is a corporation, sole proprietor,
partnership, trust or fiduciary, signature(s) must be guaranteed by
one of the following: a bank or trust company; a broker-dealer; a
credit union; a national securities exchange, registered securities
association or clearing agency; a savings and loan association; or
a federal savings bank.

Generally, a properly completed Redemption Form with any required
signature guarantee is all that is required for a redemption. In
some cases, however, other documents may be necessary. For example,
in the case of shareholders holding certificates, the certificates
for the shares being redeemed must accompany the redemption request.
Additional documentary evidence of authority is also required by
Primerica Shareholder Services in the event redemption is requested
by a corporation, partnership, trust, fiduciary, executor or
administrator. Additionally, if a shareholder requests a redemption
from a Retirement Plan account (IRA or SEP), such request must state
whether or not federal income tax is to be withheld from the
proceeds of the redemption check. Redemption from a 403(b)(7)
account requires completion of a special form.  Please call
Primerica Shareholder Services at (800) 544-5445 between 8:00 a.m.
and 8:00 p.m. eastern standard time to obtain the proper forms.

A shareholder may utilize Primerica Shareholder Services Telephone
Redemption service to redeem his or her account as long as they have
authorized the telephone redemption option.  If a shareholder does
not wish to allow telephone redemptions by any person in his
account, he should decline the telephone transaction option on the
account application.  The telephone redemption option can be used
only if: (a) the redemption proceeds are to be mailed to the address
of record and there has been no change of address of record within
the preceding 45 days; (b) the shares to be redeemed are not in
certificate form; (c); the person requesting the redemption can
provide proper identification information; and (d) the proceeds of
the redemption do not exceed $50,000.  403(b)(7) accounts and
accounts not registered in the name of individual(s) are not
eligible for the telephone redemption option.  Telephone redemption
requests can be made by contacting Primerica Shareholder Services at
(800) 544-5445 between 9:00 a.m. and 6:00 p.m. eastern time any day
that the NYSE is open.  Telephone redemption may not be available if
the shareholder cannot reach Primerica Shareholder Services whether
because all telephone lines are busy or for any other reason; in
such case, a shareholder would have to use the fund's regular
redemption procedure described above.

A shareholder may utilize Primerica Shareholder Services FAX to
redeem the shareholder's account as long as a signature guarantee or
other documentary evidence is not required. Redemption requests
should be properly signed by all owners of the account and faxed to
Primerica Shareholder Services at (800) 554-2374. Facsimile
redemptions may not be available if the shareholder cannot reach
Primerica Shareholder Services by FAX, whether because all telephone
lines are busy or for any other reason; in such case, a shareholder
would have to use the fund's regular redemption procedure described
above. Facsimile redemptions received by Primerica Shareholder
Services  prior to 4:00 p.m. Eastern time on a regular business day
will be processed at the net asset value per share determined that
day.

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

Distributions in Kind

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

Automatic Cash Withdrawal Plan

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

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

INVESTMENT MANAGEMENT AND OTHER SERVICES

Investment Adviser and Administrator - SBFM (Manager)

SBFM serves as investment adviser to the fund pursuant to an
investment advisory agreement (the "Investment Advisory Agreement")
with the fund which was approved by the Board of Directors,
including a majority of directors who are not "interested persons"
of the fund or the manager.  The manager is a wholly owned
subsidiary of Salomon Smith Barney Holdings Inc. ("Holdings"), which
in turn, is a wholly owned subsidiary of Citigroup.  Subject to the
supervision and direction of the fund's Board of Directors, the
manager manages the fund's portfolio in accordance with the fund's
stated investment objective and policies, makes investment decisions
for the fund, places orders to purchase and sell securities, and
employs professional portfolio managers and securities analysts who
provide research services to the fund. The manager pays the salary
of any officer and employee who is employed by both it and the fund.
The manager bears all expenses in connection with the performance of
its services.  SBFM (through its predecessor entities) has been in
the investment counseling business since 1968 and renders investment
advice to a wide variety of individual, institutional and investment
company clients that had aggregate assets under management as of May
31, 2001 of approximately $129 billion.

As compensation for investment advisory services, the fund pays the
manager a fee computed daily and payable monthly at the following
annual rates of the fund's average daily net assets: 0.35% up to
$500 million; 0.32% of the next $1.0 billion and 0.29% in excess of
$1.5 billion.  For the fiscal years ended February 28, 1999,
February 29, 2000 and February 28, 2001, the fund incurred
$11,563,790, $10,576,937 and $9,123,118 respectively, in investment
advisory fees.

The Manager also serves as administrator to the fund pursuant to a
written agreement (the "Administration Agreement").  SBFM pays the
salary of all officers and employees who are employed by both it and
the fund and bears all expenses in connection with the performance
of its services.  As administrator SBFM: (a) assists in supervising
all aspects of the fund's operations; b) supplies the fund with
office facilities (which may be in SBFM's own offices), statistical
and research data, data processing services, clerical, accounting
and bookkeeping services, including, but not limited to, the
calculation of (i) the net asset value of shares of the fund, (ii)
applicable contingent deferred sales charges and similar fees and
charges and (iii) distribution fees, (c) internal auditing and legal
services, internal executive and administrative services, and
stationary and office supplies; and (d) prepares reports to
shareholders of the fund, tax returns and reports to and filings
with the SEC and state blue sky authorities.

As compensation for administrative services rendered to the fund,
the manager receives a fee computed daily and payable monthly at the
following annual rates of average daily net assets: 0.20% up to $500
million; and 0.18% of the next $1.0 billion, and 0.16% in excess of
$1.5 billion.  For the fiscal years ended February 28, 1999,
February 29, 2000 and February 28, 2001, the fund paid the manager
 $6,448,802, $5,904,963 and $5,102,414, respectively, in
administration fees.

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

Counsel

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

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

Auditors

KPMG LLP, independent auditors, 757 Third Avenue, New York, New York
10017 have been selected to serve as auditors of the fund and to
render an opinion on the fund's financial statements for the fiscal
year ended February 28, 2002.

Custodian, Transfer Agent and Sub-Transfer Agents

PFPC Trust Company (successor as assigned by PNC Bank, National
Association) is located at 8800 Tinicum Blvd., Philadelphia,
Pennsylvania 19153, serves as the fund's custodian.  Under the
custody agreement, PFPC holds the fund's portfolio securities and
keeps all necessary accounts and records.  For its services, PFPC
receives a monthly fee based upon the month-end market value of
securities held in custody and also receives securities transaction
charges.  The assets of the fund are held under bank custodianship
in compliance with the 1940 Act.

Citi Fiduciary Trust Company, located at 125 Broad Street, New York,
New York 10004, serves as the fund's transfer and dividend-paying
agent.  Under the transfer agency agreement, the transfer agent
maintains the shareholder account records for the fund, handles
certain communications between shareholders and the fund,
distributes dividends and distributions payable by the fund and
produces statements with respect to account activity for the fund
and its shareholders.  For these services, the transfer agent
receives fees from the fund computed on the basis of the number of
shareholder accounts that the transfer agent maintains for the fund
during the month and is reimbursed for out-of-pocket expenses.

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

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

Code of Ethics

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

Distributor

Salomon Smith Barney, located at 388 Greenwich Street, New York, NY
10048, and PFS Distributors, Inc. serve as the fund's co-
distributors (the "Distributor") pursuant to a written agreement
dated June 5, 2000 (the "Distribution Agreement") which was approved
by the fund's Board of Directors, including a majority of the
independent directors on April 17, 2000 and July 12, 2000.  Prior to
and up to June 5, 2000, CFBDS, Inc., located at 20 Milk Street,
Boston, Massachusetts 02109-5408 served as the fund's distributor.
 For the period February 28, 1998 through October 7, 1998 the
aggregate dollar amount of initial sales charges on Class A shares
was $55,400 all.  For the period October 8, 1998 through February
28, 1999 the aggregate dollar amount of initial sales charges on
Class A shares was $48,000.  For the fiscal year ended February 29,
2000 the aggregate dollar amount of initial sales charges on Class
A shares was $1,597,000.  For the fiscal year ended February 28,
2001 the aggregate dollar amount of initial sales charges on Class
A shares was $1,741,000.

For the period June 12, 1998 through October 7, 1998 the aggregate
dollar amount of initial sales charges on Class L shares was $1,000.
 For the period October 8, 1998 through February 28, 1999 the
aggregate dollar amount of sales charges on Class L shares was
$198,000.  For the fiscal year ended February 29, 2000 the aggregate
dollar amount of initial sales charges on Class L shares was
$197,000.  For the fiscal year ended February 28, 2001 the aggregate
dollar amount of initial sales charges on Class L shares was $153,
000.

For the fiscal year ended February 28, 2001 the aggregate dollar
amount of initial sales charges on Class 1 shares was $103, 000.

For the fiscal years ended February 28, 1999, February 29, 2000 and
February 28, 2001, Salomon Smith Barney or its predecessor received
from shareholders $72,000, $178,000 and $11,000, respectively, in
deferred sales charges on the redemption of Class A shares. For the
fiscal years ended February 28, 1999, February 29, 2000 and February
28, 2001, Salomon Smith Barney or its predecessor received from
shareholders $1,404,000, $2,384,000 and $1,277,000, respectively, in
deferred sales charges on the redemption of Class B shares.  For the
fiscal years ended February 28, 1999, February 29, 2000 and February
28, 2001, Salomon Smith Barney or its predecessor received from
shareholders $32,000 $46,000 and $17,000, respectively, in deferred
sales charges on redemption of Class L shares.

When payment is made by the investor before the settlement date,
unless otherwise noted by the investor, the funds will be held as a
free credit balance in the investor's brokerage account and Salomon
Smith Barney may benefit from the temporary use of the funds.  The
fund's Board of Directors has been advised of the benefits to
Salomon Smith Barney resulting from these settlement procedures and
will take such benefits into consideration when reviewing the
Investment Advisory Agreement for continuance.

The Distributor has entered into a selling agreement with PFS and
PFS has entered into an agreement with PFSI giving PFSI the right to
sell shares of each portfolio of the fund on behalf of the
Distributor.  The Distributor's obligation is an agency or "best
efforts" arrangement under which the Distributor is required to take
and pay only for such shares of each portfolio as may be sold to the
public.  The Distributor is not obligated to sell any stated number
of shares.  The Distribution Agreement is renewable from year to
year if approved (a) by the directors or by a vote of a majority of
the fund's outstanding voting securities, and (b) by the affirmative
vote of a majority of directors who are not parties to the
Distribution Agreement or interested persons of any party by votes
cast in person at a meeting called for such purpose.  The
Distribution Agreement provides that it will terminate if assigned,
and that it may be terminated without penalty by either party on
60 days' written notice.

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

For the fiscal year ended February 28, 2001, Salomon Smith Barney
incurred distribution expenses totaling $7,078,518 consisting of
$404,303 for advertising, $64,086 for printing and mailing of
prospectuses, $ 3,991,502 for support services, $2,631,941 to
Salomon Smith Barney Financial Consultants, and ($13,315) in
accruals for interest on the excess of Salomon Smith Barney expenses
incurred in distributing the fund's shares over the sum of the
distribution fees and deferred sales charge received by Salomon
Smith Barney from the fund.

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

Distribution Plan Fees



Fiscal Year
Ended 2/28/01

Fiscal Year
Ended 2/29/00

Fiscal Year
Ended 2/28/99

Class A

$   2,889,938

$   3,264,176

$   3,651,852

Class B

$   5,318,523

$   6,863,675

$   7,588,761

Class L*

$
997,062

$   1,199,500

$   1,106,096

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

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

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

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

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

EXCHANGE PRIVILEGE

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

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

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

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

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

Certain shareholders may be able to exchange shares by telephone.
See ''Redemption of Shares Telephone Redemptions and Exchange
Program.'' Exchanges will be processed at the net asset value next
determined. Redemption procedures discussed below are also
applicable for exchanging shares, and exchanges will be made upon
receipt of all supporting documents in proper form.  If the account
registration of the shares of the fund being acquired is identical
to the registration of the shares of the fund exchanged, no
signature guarantee is required.  An exchange involves a taxable
redemption of shares, subject to the tax treatment described in
"Dividends, Distributions and Taxes" below, followed by a purchase
of shares of a different fund.  Before exchanging shares, investors
should read the current prospectus describing the shares to be
acquired.  The fund reserves the right to modify or discontinue
exchange privileges upon 60 days' prior notice to shareholders.
The exchange privilege enables shareholders to acquire shares of the
same class in a fund with different investment objectives when they
believe that a shift between funds is an appropriate investment
decision.  This privilege is available to shareholders residing in
any state in which the fund shares being acquired may legally be
sold.  Prior to any exchange, the shareholder should obtain and
review a copy of the current prospectus of each fund into which an
exchange is being considered. Prospectuses may be obtained from a
Service Agent.
Upon receipt of proper instructions and all necessary supporting
documents, shares submitted for exchange are redeemed at the then-
current net asset value and the proceeds are immediately invested at
a price as described above in shares of the portfolio being
acquired.  Salomon Smith Barney and PFS reserve the right to reject
any exchange request.  The exchange privilege may be modified or
terminated at any time after written notice to shareholders.
As stated in the prospectus for shares distributed through PFS, the
exchange privilege is limited.

Additional Information Regarding Telephone Redemption and Exchange
Program

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


PERFORMANCE DATA

From time to time, the Company may advertise the Fund's total return
and average annual total return in advertisements and/or other types
of sales literature.  These figures are computed separately for
Class A, Class B, Class L and Class Y shares of the Fund.  These
figures are based on historical earnings and are not intended to
indicate future performance.  Total return is computed for a
specified period of time assuming deduction of the maximum sales
charge, if any, from the initial amount invested and reinvestment of
all income dividends and capital gain distributions on the
reinvestment dates at prices calculated as stated in the prospectus,
then dividing the value of the investment at the end of the period
so calculated by the initial amount invested and subtracting 100%.
 The standard average annual total return, as prescribed by the SEC
is derived from this total return, which provides the ending
redeemable value.  Such standard total return information may also
be accompanied with nonstandard total return information for
differing periods computed in the same manner but without
annualizing the total return or taking sales charges into account.
The Company may also include comparative performance information in
advertising or marketing the Fund's shares. Such performance
information may include data from Lipper Analytical Services, Inc.
and other financial publications.

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


Yield and Equivalent Taxable Yield

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

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

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

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

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

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

The fund's yield for Class A, Class B, Class L and Class Y shares
for the 30-day period ended February 28, 2001 was:

Class of Shares
Yield
Class A
4.74%
Class B
4.42%
Class L
4.28%
Class Y
5.12%
Class 1
4.87%

The equivalent taxable yield for Class A, Class B, Class L and Class
Y shares for that same period, assuming the payment of Federal
income taxes at a rate of 39.6%, was:

Class of Shares
Taxable
Yield
Class A
7.85%
Class B
7.32%
Class L
7.09%
Class Y
8.48%
Class 1
8.06%

Average Annual Total Return

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

	P (1+T)n = ERV

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

The ERV assumes complete redemption of the hypothetical investment
at the end of the measuring period.  A fund's net investment income
changes in response to fluctuations in interest rates and the
expenses of the fund.


Average Annual Total Return for the
fiscal year ended February 28, 2001



Class of Shares

1-Year

5-Year

10-Year
Since
Inceptio
n1
Class A2
10.71%
4.77%
7.56%
9.79%
Class B3
10.25%
4.94%
n/a
6.95%
Class L4
12.60%
4.83%
n/a
7.48%
Class Y5
15.52%
5.84%
n/a
6.61%
Class 16
n/a
n/a
n/a
0.43%

1 Class A, B, L, Y and 1 shares commenced operations on March
4, 1981, November 6, 1992, November 9, 1994, April 4, 1995
and September 12, 2000, respectively.
2 The average annual total return figure assumes that the
maximum 4.00% sales charge has been deducted from the
investment at the time of purchase.  If the maximum sales
charge had not been deducted, the average annual total
return for Class A shares would have been 15.33%, 5.64%,
8.00% and 10.02% for those same periods.
3 The average annual total return figure assumes that the
maximum applicable deferred sales charge has been deducted
from the investment at the time of redemption.  If the
maximum deferred sales charge had not been deducted, the
average annual total return for Class B shares would have
been 14.75%, 5.09% and 6.95%, for those same periods.
4 The average annual total return figure assumes that the
maximum applicable initial and deferred sales charges have
been deducted from the investment at the time of redemption.
 If the maximum initial and deferred sales charges have not
been deducted, the average annual total return for Class L
shares would have been 14.72%, 5.04% and 7.64%.for those
same periods.
5 Class Y Shares do not incur sales charges or deferred sales
charges.
6 The average annual total return figure assumes that the
maximum applicable initial and deferred sales charges have
been deducted from the investment at the time of redemption.
 If the maximum initial and deferred sales charges have not
been deducted, the average annual total return for Class 1
shares would have been 5.42% for the same period.

Aggregate Total Return

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

	ERV-P
	P

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

The ERV assumes complete redemption of the hypothetical investment
at the end of the measuring period.



Aggregate Annual Total Return for the
fiscal year ended February 28, 2001



Class of Shares
1-Year
5-Year
10-Year
Since
Inceptio
n1
Class A2
10.71%
26.24%
107.25%
546.90%
Class B3
10.25%
27.24%
n/a
74.77%
Class L4
12.60%
26.60%
n/a
57.56%
Class Y5
15.52%
32.84%
n/a
45.91%
Class 16
n/a
n/a
n/a
0.43%

1 Class A, B, L, Y and 1 shares commenced operations on March 4,
1981, November 6, 1992, November 9, 1994, April 4, 1995 and
September 12, 2000, respectively.
2 The average annual total return figure assumes that the
maximum applicable sales charge has been deducted from the
investment at the time of purchase.  If the maximum sales
charge had not been deducted, the average annual total return
for Class A shares would have been 15.33%, 31.54%, 115.83% and
573.98%, for the same periods.
3 The average annual total return figure assumes that the
maximum applicable deferred sales charge has been deducted
from the investment at the time of redemption.  If the maximum
deferred sales charge had not been deducted, the average
annual total return for Class B shares would have been 14.75%,
28.20% and 74.77% for the same periods.
4 The average annual total return figure assumes that the
maximum applicable initial and deferred sales charges have
been deducted from the investment at the time of redemption.
 If the maximum initial and deferred sales charges had not
been deducted, the average annual total return for Class L
shares would have been 14.72%, 27.85% and 59.10% for the
same periods.
5 Class Y Shares do not incur sales charges or deferred sales
charges.
6 The average annual total return figure assumes that the
maximum applicable initial and deferred sales charges have
been deducted from the investment at the time of redemption.
 If the maximum initial and deferred sales charges had not
been deducted, the average annual total return for Class 1
shares would have been 5.42% for the same period.

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

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



DIVIDENDS, DISTRIBUTIONS AND TAXES

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

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

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

The fund and its investments

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

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

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

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

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

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

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

On February 28, 2001, the unused capital loss carryovers of the fund
were approximately $124,328,000. For federal income tax purposes,
these amounts are available to be applied against future realized
capital gains, if any.  The carryovers expire as follows:


February 28,
February 29,
February 28,

2007
2008
2009
Carryforward Amount
$12,059,000
$78,350,000
$33,919,000


Taxation of Shareholders

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

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

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

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

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

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

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


ADDITIONAL INFORMATION

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

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

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

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


FINANCIAL STATEMENTS

The fund's annual report for the fiscal year ended February 28, 2001
is incorporated herein by reference in its entirety.  The annual
report was filed on May 3, 2001, Accession Number 950109-01-501036.


OTHER INFORMATION

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

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

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

	Classic Series  - our portfolio manager driven funds
Our Classic Series lets investors participate in mutual funds
whose investment decisions are determined by experienced
portfolio managers, based on each fund's investment objectives
and guidelines.  Classic Series funds invest across asset
classes and sectors, utilizing a range of strategies in order
to achieve their objectives.

	Index Series   funds that track the market
Our Index funds are designed to provide investment results
that track, as closely as possible, the performance of a stock
or bond market index.  This strategy distinguishes an index
fund from an "actively managed" mutual fund.  Instead of
trying to outperform a market or segment, a portfolio manager
looks to an index to determine which securities the fund
should own.

	Premier Selections Series   our best ideas, concentrated funds
We offer a series of Premier Selections funds managed by
several of our most experienced and proven managers.  This
series of funds is built on a unique strategy of combining
complementary investment management styles to create broader,
multiclass and multicap products that are distinguished by a
highly concentrated focus.

Research Series   driven by exhaustive fundamental securities
analysis
Built on a foundation of substantial buy-side research under
the direction of our Citibank Global Asset Management (CGAM)
colleagues, our Research funds focus on well-defined
industries, sectors and trends.

Style Pure Series   our solution to funds that stray
Our Style Pure Series funds are the building blocks of asset
allocation.  The funds stay fully invested within their asset
class and investment style, enabling you to make asset
allocation decisions in conjunction with your financial
professional.

APPENDIX A

Description of S&P and Moody's ratings:

S&P Ratings for Municipal Bonds

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

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

	AAA

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

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

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

	AA

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


	A

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

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

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

	BBB

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

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

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

	BB, B, CCC and CC

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

	C

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




	D

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

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

S&P Ratings for Municipal Notes

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

Moody's Ratings for Municipal Bonds

	Aaa

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

	Aa

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

	A

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



Baa

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

	Ba

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

	B

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

	Caa

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

	Ca

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

	C

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

Moody's Ratings for Municipal Notes

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

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

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

Description of Moody's Prime-1 Commercial Paper Rating

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

SMITH BARNEY MANAGED MUNICIPALS FUND INC.



Statement of


Additional
Information























June 28, 2001,





Smith Barney Managed Municipals Fund Inc.
7 World Trade Center
New York, NY  10048
									SALOMON SMITH BARNEY
									A Member of
Citigroup [Symbol]


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