[LOGO] Smith Barney
       Mutual Funds




P R O S P E C T U S



Massachusetts
Municipal Fund

Class A, B, L and Y Shares
--------------------------
March 29, 2000





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

<PAGE>

Massachusetts Municipals Fund

Contents

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

More on the fund's investments..............................................   6

Management..................................................................   7

Choosing a class of shares to buy...........................................   8

Comparing the fund's classes................................................   9

Sales charges...............................................................  10

More about deferred sales charges...........................................  12

Buying shares...............................................................  13

Exchanging shares...........................................................  14

Redeeming shares............................................................  16

Other things to know about share transactions...............................  18

Dividends, distributions and taxes..........................................  20

Share price.................................................................  21

Financial highlights........................................................  22
</TABLE>
You should know: An investment in the fund is not a bank deposit and is not
insured or guaranteed by the FDIC or any other government agency.

                                                       Smith Barney Mutual Funds

                                                                               1
<PAGE>


 Investments, risks and performance

Investment objective
The fund seeks to provide Massachusetts investors with as high a level of divi-
dend income exempt from federal and Massachusetts personal income taxes as is
consistent with prudent investment management and the preservation of capital.

Principal investment strategies

Key investments The fund invests at least 80% of its net assets in Massachu-
setts municipal securities. Massachusetts municipal securities include securi-
ties issued by the Commonwealth of Massachusetts and certain other municipal
issuers, political subdivisions, agencies and public authorities that pay
interest which is exempt from Massachusetts personal income taxes. The fund
focuses primarily on intermediate-term and long-term municipal securities which
have remaining maturities at the time of purchase from three to more than
twenty years. The fund can invest up to 25% of its assets in below investment
grade bonds. Investment grade bonds are those rated by a national ratings
organization in any of the four highest long-term rating categories, or if
unrated, of comparable quality.

Selection process The manager selects individual securities it believes are
undervalued or will benefit from changes in market conditions. The manager
spreads the fund's investments among various sectors, focusing more heavily on
sectors it believes are relatively undervalued. In selecting individual securi-
ties, the manager:

 . Uses fundamental credit analysis to estimate the relative value and attrac-
  tiveness of various securities and sectors and to exploit opportunities in
  the municipal bond market
 . May trade between general obligation and revenue bonds, and among various
  revenue bond sectors, such as hospital, industrial development and housing,
  based on their apparent relative values
 . Considers the yields available for securities with different maturities and a
  security's maturity in light of the outlook for the issuer, its sector and
  for interest rates
 . Identifies individual securities with the most potential for added value,
  such as those involving unusual situations, new issuers, the potential for
  credit upgrades, unique structural characteristics or innovative features

Massachusetts Municipals Fund

2
<PAGE>


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

 . Interest rates rise, causing the value of the fund's portfolio to decline
 . The issuer of a security owned by the fund defaults on its obligation to pay
  principal and/or interest or the security's credit rating is downgraded. This
  risk is higher for below investment grade bonds, which are considered specu-
  lative because they have a higher risk of issuer default, are subject to
  greater price volatility and may be illiquid
 . Massachusetts municipal securities fall out of favor with investors
 . Unfavorable legislation affects the tax-exempt status of municipal bonds
 . The manager's judgment about the attractiveness, value or income potential of
  a particular security proves to be incorrect

It is possible that some of the fund's income distributions may be, and distri-
butions of the fund's gains generally will be, subject to federal and Massachu-
setts state taxation. The fund may realize taxable gains on the sale of its
securities or on transactions in derivative contracts. Some of the fund's
income may be subject to the federal alternative minimum tax. In addition, dis-
tributions of the fund's income and gains will be subject to taxation to
investors in states other than Massachusetts.

The fund is classified as "non-diversified," which means it may invest a larger
percentage of its assets in one issuer than a diversified fund. To the extent
the fund concentrates its assets in fewer issuers, the fund will be more sus-
ceptible to negative events affecting those issuers.

Who may want to invest The fund may be an appropriate investment if you are a
Massachusetts taxpayer:

 . In a high federal tax bracket, seeking income that is exempt from Massachu-
  setts and federal taxation
 . Currently have exposure to other asset classes and are seeking to broaden
  your investment portfolio
 . Are willing to accept the risks of municipal securities, including the risks
  of concentrating in a single state

                                                       Smith Barney Mutual Funds

                                                                               3
<PAGE>


Risk return bar chart

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

                        Total Return for Class A Shares





                                  [BAR CHART]

     90      91     92     93     94     95     96     97     98      99
   -----   ------  ----  ------ ------ ------ -----  ------  -----  ------
   4.98%   13.29%  9.09  12.73% -8.22% 18.53% 3.88%  10.16%  5.96%  -6.24%

                       Calendar years ended December 31



Quarterly returns:

Highest: 7.79% in 1st quarter 1995; Lowest: (7.14)% in 1st quarter 1994

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

                          Average Annual Total Returns

                  Calendar Years Ended December 31, 1999
<TABLE>
<CAPTION>
Class                  1 year  5 years 10 years Since inception Inception date
<S>                   <C>      <C>     <C>      <C>             <C>
 A                     (9.98)%  5.27%   5.67%        6.54%         12/21/87
 B                    (10.78)%  5.44%    n/a         4.58%         11/30/92
 L                     (8.51)%  5.35%    n/a         5.91%         11/10/94
 Y**                    n/a      n/a     n/a          n/a            n/a
Lehman Index           (2.06)%  6.91%   6.89%        7.48%            *
Lipper Funds Average   (4.57)%  5.72%   6.27%        6.83%            *
</TABLE>

*   Index comparison begins on December 31, 1987.

** There are no Class Y shares outstanding for the calendar year ended December
 31, 1999.

Massachusetts Municipals Fund

4
<PAGE>


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

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

                         Annual fund operating expenses
<CAPTION>
(expenses deducted from fund assets)          Class A Class B Class L Class Y**
<S>                                           <C>     <C>     <C>     <C>
Management fee                                 0.50%   0.50%   0.50%    0.50%
Distribution and service (12b-1) fees          0.15%   0.65%   0.70%     None
Other expenses                                 0.20%   0.21%   0.19%    0.20%
                                               -----   -----   -----    -----
Total annual fund operating expenses           0.85%   1.36%   1.39%    0.70%
</TABLE>
*You may buy Class A shares in amounts of $500,000 or more at net asset value
(without an initial sales charge) but if you redeem those shares within 12
months of their purchase, you will pay a deferred sales charge of 1.00%.

**For Class Y shares, "Other Expenses" have been estimated based on expenses
incurred by Class A shares because as of November 30, 1999, no Class Y shares
had been sold.

Example
This example helps you compare the costs of investing in the fund with the
costs of investing in other mutual funds. Your actual costs may be higher or
lower. The example assumes:
 . You invest $10,000 in the fund for the period shown

 . Your investment has a 5% return each year
 . You reinvest all distributions and dividends without a sales charge
 . The fund's operating expenses remain the same
                      Number of years you own your shares
<TABLE>


<CAPTION>
                                       1 year 3 years 5 years 10 years
<S>                                    <C>    <C>     <C>     <C>
Class A (with or without redemption)    $483   $660    $852    $1,407
Class B (redemption at end of period)   $638   $731    $845    $1,495
Class B (no redemption)                 $138   $431    $745    $1,495
Class L (redemption at end of period)   $340   $536    $853    $1,752
Class L (no redemption)                 $240   $536    $853    $1,752
Class Y (with or without redemption)    $ 72   $224    $390    $  871
</TABLE>

                                                       Smith Barney Mutual Funds

                                                                               5
<PAGE>

 More on the fund's investments

Massachusetts municipal securities Massachusetts municipal securities include
debt obligations issued by certain non-Massachusetts governmental issuers such
as Puerto Rico, the Virgin Islands and Guam. The interest on Massachusetts
municipal securities is exempt from federal income tax and Massachusetts per-
sonal income tax. As a result, the interest rate on these bonds normally is
lower than it would be if the bonds were subject to taxation. The Massachusetts
municipal securities in which the fund invests include general obligation
bonds, revenue bonds and municipal leases.

Derivatives and hedging techniques The fund may, but need not, use derivative
contracts, such as futures and options on securities and securities indices,
and options on futures, to hedge against adverse changes in the market value of
its securities or interest rates.

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

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

Massachusetts Municipals Fund

6
<PAGE>

 Management

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

Peter Coffey, an investment officer of SSB Citi and a managing director of Sal-
omon Smith Barney, assumed responsibility for the day-to-day management of the
fund's portfolio on February 2, 1999. Mr. Coffey has over 30 years of securi-
ties business experience.

Management fees During the fiscal year ended November 30, 1999, the manager
received an advisory fee and an administration fee equal to 0.30% and 0.20%,
respectively, of the fund's average daily net assets.

Distributor The fund has entered into an agreement with CFBDS, Inc. to distrib-
ute the fund's shares. A selling group consisting of Salomon Smith Barney and
other broker-dealers sells fund shares to the public.

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

Transfer agent and shareholder servicing agent Smith Barney Private Trust Com-
pany serves as the fund's transfer agent and shareholder servicing agent (the
"transfer agent"). Pursuant to a sub-transfer agency and services agreement
with the transfer agent, PFPC Global Fund Services serves as the fund's sub-
transfer agent (the "sub-transfer agent") to render certain shareholder record
keeping and accounting services and functions.

                                                       Smith Barney Mutual Funds

                                                                               7
<PAGE>

 Choosing a class of shares to buy

You can choose among four classes of shares: Classes A, B, L and Y. Each class
has different sales charges and expenses, allowing you to choose the class that
best meets your needs. Which class is more beneficial to an investor depends on
the amount and intended length of the investment.

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

You may buy shares from:
 . A Salomon Smith Barney Financial Consultant
 . An investment dealer in the selling group or a broker that clears through
  Salomon Smith Barney--a dealer representative

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

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

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

Massachusetts Municipals Fund

8
<PAGE>

 Comparing the fund's classes

Your Salomon Smith Barney Financial Consultant or dealer representative can
help you decide which class meets your goals. They may receive different com-
pensation depending upon which class you choose.

<TABLE>
<CAPTION>
                           Class A     Class B     Class L     Class Y
<S>                      <C>         <C>         <C>         <C>
Key features             .Initial    .No initial .Initial    .No initial
                          sales       sales       sales       or
                          charge      charge      charge is   deferred
                          .You may    .Deferred   lower than  sales
                          qualify     sales       Class A     charge
                          for reduc-  charge      .Deferred   .Must
                          tion or     declines    sales       invest at
                          waiver of   over time   charge for  least $15
                          initial     .Converts   only 1      million
                          sales       to Class A  year        .Lower
                          charge      after 8     .Does not   annual
                          .Lower      years       convert to  expenses
                          annual      .Higher     Class A     than the
                          expenses    annual      .Higher     other
                          than Class  expenses    annual      classes
                          B and       than Class  expenses
                          Class L     A           than Class
                                                  A
------------------------------------------------------------------------
Initial sales charge     Up to       None        1.00%       None
                         4.00%;
                         reduced for
                         large pur-
                         chases and
                         waived for
                         certain
                         investors.
                         No charge
                         for pur-
                         chases of
                         $500,000 or
                         more
------------------------------------------------------------------------
Deferred sales charge    1.00% on    Up to 4.50% 1.00% if    None
                         purchases   charged     you redeem
                         of $500,000 when you    within 1
                         or more if  redeem      year of
                         you redeem  shares. The purchase
                         within 1    charge is
                         year of     reduced
                         purchase    over time
                                     and there
                                     is no
                                     deferred
                                     sales
                                     charge
                                     after 6
                                     years
------------------------------------------------------------------------
Annual distribution and  0.15% of    0.65% of    0.70% of    None
service fees             average     average     average
                         daily net   daily net   daily net
                         assets      assets      assets
------------------------------------------------------------------------
Exchange privilege*      Class A     Class B     Class L     Class Y
                         shares      shares      shares      shares
                         of most     of most     of most     of most
                         Smith       Smith       Smith       Smith
                         Barney      Barney      Barney      Barney
                         funds       funds       funds       funds
------------------------------------------------------------------------
</TABLE>
*Ask your Salomon Smith Barney Financial Consultant or dealer representative or
visit the web site for the Smith Barney funds available for exchange.

                                                       Smith Barney Mutual Funds

                                                                               9
<PAGE>


 Sales charges

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

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

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

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

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

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

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

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

Massachusetts Municipals Fund

10
<PAGE>


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

 . Employees of members of the NASD
 . Clients of newly employed Salomon Smith Barney Financial Consultants, if cer-
  tain conditions are met
 . Investors who redeemed Class A shares of a Smith Barney fund in the past 60
  days, if the investor's Salomon Smith Barney Financial Consultant or dealer
  representative is notified

If you want to learn about additional waivers of Class A initial sales charges,
contact your Salomon Smith Barney Financial Consultant or dealer representative
or consult the Statement of Additional Information ("SAI").

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

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

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

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

                                                       Smith Barney Mutual Funds

                                                                              11
<PAGE>


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

Class Y shares

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

 More about deferred sales charges

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

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

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

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

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

Salomon Smith Barney receives deferred sales charges as partial compensation
for its expenses in selling shares, including the payment of compensation to
your Salomon Smith Barney Financial Consultant or dealer representative.

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

 . On payments made through certain systematic withdrawal plans

Massachusetts Municipals Fund

12
<PAGE>

 . For involuntary redemptions of small account balances
 . For 12 months following the death or disability of a shareholder

If you want to learn more about additional waivers of deferred sales charges,
contact your Salomon Smith Barney Financial Consultant or dealer representative
or consult the SAI.

 Buying shares

     Through a   You should contact your Salomon Smith Barney Financial Con-
 Salomon Smith   sultant or dealer representative to open a brokerage account
        Barney   and make arrangements to buy shares.
     Financial
 Consultant or   If you do not provide the following information, your order
        dealer   will be rejected
representative
                 . Class of shares being bought
                 . Dollar amount or number of shares being bought

                 You should pay for your shares through your brokerage account
                 no later than the third business day after you place your
                 order. Salomon Smith Barney or your dealer representative may
                 charge an annual account maintenance fee.
--------------------------------------------------------------------------------

                 Certain other investors who are clients of the selling group
   Through the   are eligible to buy shares directly from the fund.
   fund's sub-
      transfer
    agent

                 . Write the sub-transfer agent at the following address:
                      Smith Barney Massachusetts Municipals Fund
                      (Specify class of shares)

                      c/o PFPC Global Fund Services

                      P.O. Box 9699

                      Providence, RI 02940-9699

                 . Enclose a check made payable to the fund to pay for the
                   shares. For initial purchases, complete and send an account
                   application.
                 . For more information, call the transfer agent at 1-800-451-
                   2010.


                                                       Smith Barney Mutual Funds

                                                                              13
<PAGE>

     Through a
    systematic   You may authorize Salomon Smith Barney, your dealer represen-
    investment   tative or the sub-transfer agent to transfer funds automati-
          plan   cally from a regular bank account, cash held in a Salomon
                 Smith Barney brokerage account or Smith Barney money market
                 fund to buy shares on a regular basis.

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

                 . If you do not have sufficient funds in your account on a
                   transfer date, Salomon Smith Barney, your dealer represen-
                   tative or the sub-transfer agent may charge you a fee

                 For more information, contact your Salomon Smith Barney
                 Financial Consultant, dealer representative or the transfer
                 agent or consult the SAI.

 Exchanging shares

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

                 . You must meet the minimum investment amount for each fund

                 . If you hold share certificates, the sub-transfer agent must
                   receive the certificates endorsed for transfer or with
                   signed stock powers (documents transferring ownership of
                   certificates) before the exchange is effective
                 . The fund may suspend or terminate your exchange privilege
                   if you engage in an excessive pattern of exchanges


Massachusetts Municipals Fund

14
<PAGE>

     Waiver of   Your shares will not be subject to an initial sales charge at
    additional   the time of the exchange.
 sales charges

                 Your deferred sales charge (if any) will continue to be mea-
                 sured from the date of your original purchase. If the fund
                 you exchange into has a higher deferred sales charge, you
                 will be subject to that charge. If you exchange at any time
                 into a fund with a lower charge, the sales charge will not be
                 reduced.
--------------------------------------------------------------------------------

  By telephone
                 If you do not have a brokerage account, you may be eligible
                 to exchange shares through the transfer agent. You must com-
                 plete an authorization form to authorize telephone transfers.
                 If eligible, you may make telephone exchanges on any day the
                 New York Stock Exchange is open. Call the transfer agent at
                 1-800-451-2010 between 9:00 a.m. and 4:00 p.m. (Eastern
                 time).

                 You can make telephone exchanges only between accounts that
                 have identical registrations.
--------------------------------------------------------------------------------

       By mail
                 If you do not have a Salomon Smith Barney brokerage account,
                 contact your dealer representative or write to the sub-trans-
                 fer agent at the address on the following page.

                                                       Smith Barney Mutual Funds

                                                                              15
<PAGE>

 Redeeming shares

     Generally   Contact your Salomon Smith Barney Financial Consultant or
                 dealer representative to redeem shares of the fund.

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

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

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

                 If you have a Salomon Smith Barney brokerage account, your
                 redemption proceeds will be placed in your account and not
                 reinvested without your specific instruction. In other cases,
                 unless you direct otherwise, your redemption proceeds will be
                 paid by check mailed to your address of record.
--------------------------------------------------------------------------------

       By mail
                 For accounts held directly at the fund, send written requests
                 to the sub-transfer agent at the following address:
                      Smith Barney Massachusetts Municipals Fund
                      (Specify class of shares)

                      c/o PFPC Global Fund Services

                      P.O. Box 9699

                      Providence, RI 02940-9699

                 Your written request must provide the following:

                 . Your account number
                 . The class of shares and the dollar amount or number of
                   shares to be redeemed
                 . Signatures of each owner exactly as the account is regis-
                   tered

Massachusetts Municipals Fund

16
<PAGE>


  By telephone
                 If you do not have a brokerage account, you may be eligible
                 to redeem shares in amounts up to $10,000 per day through the
                 transfer agent. You must complete an authorization form to
                 authorize telephone redemptions. If eligible, you may request
                 redemptions by telephone on any day the New York Stock
                 Exchange is open. Call the transfer agent at 1-800-451-2010
                 between 9:00 a.m. and 4:00 p.m. (Eastern time).

                 Your redemption proceeds can be sent by check to your address
                 of record or by wire transfer to a bank account designated on
                 your authorization form. You must submit a new authorization
                 form to change the bank account designated to receive wire
                 transfers and you may be asked to provide certain other docu-
                 ments.
--------------------------------------------------------------------------------

     Automatic   You can arrange for the automatic redemption of a portion of
          cash   your shares on a monthly or quarterly basis. To qualify you
    withdrawal   must own shares of the fund with a value of at least $10,000
         plans   and each automatic redemption must be at least $50. If your
                 shares are subject to a deferred sales charge, the sales
                 charge will be waived if your automatic payments do not
                 exceed 1% per month of the value of your shares subject to a
                 deferred sales charge.

                 The following conditions apply:

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

                 For more information, contact your Salomon Smith Barney
                 Financial Consultant or dealer representative or consult the
                 SAI.

                                                       Smith Barney Mutual Funds

                                                                              17
<PAGE>

 Other things to know about share transactions

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

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

The transfer agent will try to confirm that any telephone exchange or redemp-
tion request is genuine by recording calls, asking the caller to provide a per-
sonal identification number for the account, sending you a written confirmation
or requiring other confirmation procedures from time to time.

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

 . Are redeeming over $10,000 of shares

 . Are sending signed share certificates or stock powers to the sub-transfer
  agent

 . Instruct the sub-transfer agent to mail the check to an address different
  from the one on your account
 . Changed your account registration
 . Want the check paid to someone other than the account owner(s)
 . Are transferring the redemption proceeds to an account with a different reg-
  istration

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

The fund has the right to:

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

Massachusetts Municipals Fund

18
<PAGE>

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

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

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

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

                                                       Smith Barney Mutual Funds

                                                                              19
<PAGE>

 Dividends, distributions and taxes

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

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

<TABLE>
<CAPTION>
Transaction              Federal tax status           Massachusetts tax status
<S>                      <C>                          <C>
Redemption or exchange   Usually capital              Usually capital gain
of shares                gain or loss; long-term only or loss
                         if shares owned
                         more than one year

Long-term capital gain   Taxable gain                 Taxable gain
distributions

Short-term capital gain  Ordinary income              Ordinary income
distributions
Dividends                Exempt if from               Exempt if from
                         interest on tax-exempt       interest on Massachusetts
                         securities, otherwise        municipal securities,
                         ordinary income              otherwise ordinary
                                                      income
</TABLE>

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

After the end of each year, the fund will provide you with information about
the distributions and dividends you received and any redemptions of

Massachusetts Municipals Fund

20
<PAGE>

shares during the previous year. If you do not provide the fund with your cor-
rect taxpayer identification number and any required certifications, you may be
subject to back-up withholding of 31% of your distributions, dividends, and
redemption proceeds. Because each shareholder's circumstances are different and
special tax rules may apply, you should consult your tax adviser about your
investment in the fund.

 Share price

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

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

In order to buy, redeem or exchange shares at that day's price, you must place
your order with your Salomon Smith Barney Financial Consultant or dealer repre-
sentative before the New York Stock Exchange closes. If the New York Stock
Exchange closes early, you must place your order prior to the actual closing
time. Otherwise, you will receive the next business day's price.

Salomon Smith Barney or members of the selling group must transmit all orders
to buy, exchange or redeem shares to the fund's agent before the agent's close
of business.

                                                       Smith Barney Mutual Funds

                                                                              21
<PAGE>

 Financial highlights

The financial highlights tables are intended to help you understand the perfor-
mance of each class for the past 5 years. Certain information reflects finan-
cial results for a single share. Total return represents the rate that a
shareholder would have earned (or lost) on a fund share assuming reinvestment
of all dividends and distributions. The information in the following tables was
audited by KPMG LLP, independent auditors, whose report, along with the fund's
financial statements, is included in the annual report (available upon
request). No information is present for Class Y shares because no shares were
outstanding during these fiscal years.

 For a Class A share of beneficial interest outstanding throughout each year
 ended November 30:
<TABLE>
<CAPTION>
                                           1999(/3/)     1998     1997     1996     1995
-----------------------------------------------------------------------------------------
 <S>                                       <C>        <C>      <C>      <C>      <C>
 Net asset value, beginning of year          $13.32    $13.18   $12.99   $12.96   $11.35
-----------------------------------------------------------------------------------------
 Income (loss) from operations:
 Net investment income(/1/)                    0.62      0.65     0.66     0.68     0.69
 Net realized and unrealized gain (loss)      (1.23)     0.34     0.32     0.02     1.61
-----------------------------------------------------------------------------------------
 Total income (loss) from operations          (0.61)     0.99     0.98     0.70     2.30
-----------------------------------------------------------------------------------------
 Less distributions from:
 Net investment income                        (0.62)    (0.64)   (0.67)   (0.67)   (0.69)
 In excess of net investment income              --     (0.01)      --       --       --
 Net realized gains                              --     (0.20)   (0.12)      --       --
-----------------------------------------------------------------------------------------
 Total distributions                          (0.62)    (0.85)   (0.79)   (0.67)   (0.69)
-----------------------------------------------------------------------------------------
 Net asset value, end of year                $12.09    $13.32   $13.18   $12.99   $12.96
-----------------------------------------------------------------------------------------
 Total return(/2/)                            (4.73)%    7.66%    7.85%    5.65%   20.73%
-----------------------------------------------------------------------------------------
 Net assets, end of year (000)'s            $35,386   $37,451  $32,736  $30,109  $29,159
-----------------------------------------------------------------------------------------
 Ratios to average net assets:
 Expenses(/1/)                                 0.85%     0.76%    0.80%    0.80%    0.83%
 Net investment income                         4.84      4.84     5.07     5.32     5.42
-----------------------------------------------------------------------------------------
 Portfolio turnover rate                         66%       51%      58%      23%      10%
-----------------------------------------------------------------------------------------
</TABLE>

(/1/) The adviser waived all or part of its fees for the three years ended
      November 30, 1997. If such fees had not been waived, the per share
      decrease in net investment income and the expense ratios would have been
      as follows:

<TABLE>
<CAPTION>
            Per Share Decreases        Expense Ratios
          In Net Investment Income  Without Fee Waivers
             1997     1996     1995   1997    1996    1995
-----------------------------------------------------------
<S>      <C>      <C>      <C>      <C>     <C>     <C>
Class A     $0.01    $0.01    $0.03   0.88%   0.91%   1.07%
-----------------------------------------------------------
</TABLE>
(/2/) Total return does not reflect any applicable sales load or deferred sales
      charge.

(/3/) Per share amounts have been calculated using the monthly average shares
      method.

Massachusetts Municipals Fund

22
<PAGE>


 For a Class B share of beneficial interest outstanding throughout each year
 ended November 30:
<TABLE>
<CAPTION>
                                 1999(/3/)     1998     1997     1996     1995
-------------------------------------------------------------------------------
 <S>                             <C>        <C>      <C>      <C>      <C>
 Net asset value, beginning of
 year                             $ 13.30    $13.17   $12.99   $12.96   $11.35
-------------------------------------------------------------------------------
 Income (loss) from operations:
 Net investment income(/1/)          0.56      0.58     0.60     0.61     0.63
 Net realized and unrealized
 gain (loss)                        (1.23)     0.33     0.31     0.03     1.61
-------------------------------------------------------------------------------
 Total income (loss) from
 operations                         (0.67)     0.91     0.91     0.64     2.24
-------------------------------------------------------------------------------
 Less distributions from:
 Net investment income              (0.55)    (0.57)   (0.61)   (0.61)   (0.63)
 In excess of net investment
 income                                --     (0.01)      --       --       --
 Net realized gains                    --     (0.20)   (0.12)      --       --
-------------------------------------------------------------------------------
 Total distributions                (0.55)    (0.78)   (0.73)   (0.16)   (0.63)
-------------------------------------------------------------------------------
 Net asset value, end of year     $ 12.08    $13.30   $13.17   $12.99   $12.96
-------------------------------------------------------------------------------
 Total return(/2/)                  (5.18)%    7.05%    7.25%    5.14%   20.15%
-------------------------------------------------------------------------------
 Net assets, end of year
 (000)'s                          $27,332   $30,285  $27,589  $28,874  $28,726
-------------------------------------------------------------------------------
 Ratios to average net assets:
 Expenses(/1/)                       1.36%     1.28%    1.31%    1.31%    1.35%
 Net investment income               4.33      4.32     4.57     4.81     4.94
-------------------------------------------------------------------------------
 Portfolio turnover rate               66%       51%      58%      23%      10%
-------------------------------------------------------------------------------
</TABLE>

(/1/) The adviser has waived all or part of its fees for the three years ended
      November 30, 1997. If such fees had not been waived, the per share
      decrease in net investment income and the expense ratios would have been
      as follows:

<TABLE>
<CAPTION>
         Per Share Decreases     Expense Ratios
          In Net Investment   Without Fee Waivers
                Income
           1997   1996   1995   1997    1996    1995
-----------------------------------------------------
<S>      <C>    <C>    <C>    <C>     <C>     <C>
Class B   $0.01  $0.01  $0.04   1.39%   1.42%   1.59%
-----------------------------------------------------
</TABLE>
(/2/) Total return does not reflect any applicable sales load or deferred sales
      charge.

(/3/)  Per share amounts have been calculated using the monthly average shares
 method.

                                                       Smith Barney Mutual Funds

                                                                              23
<PAGE>

 For a Class L share of beneficial interest outstanding throughout each year
 ended November 30:
<TABLE>
<CAPTION>
                                    1999(/3/)  1998(/4/)   1997    1996    1995
--------------------------------------------------------------------------------
 <S>                                <C>        <C>       <C>     <C>     <C>
 Net asset value, beginning of
 year                                $13.30     $13.16   $12.98  $12.95  $11.35
--------------------------------------------------------------------------------
 Income (or loss) from
 operations:
 Net investment income(/1/)            0.56       0.58     0.59    0.60    0.63
 Net realized and unrealized gain
 (or loss)                            (1.24)      0.34     0.31    0.03    1.60
--------------------------------------------------------------------------------
 Total income (or loss) from
 operations                           (0.68)      0.92     0.90    0.63    2.23
--------------------------------------------------------------------------------
 Less distributions from:
 Net investment income                (0.55)     (0.57)   (0.60)  (0.60)  (0.63)
 In excess of net investment
 income                                  --      (0.01)      --      --      --
 Net realized gains                      --      (0.20)   (0.12)     --      --
--------------------------------------------------------------------------------
 Total distributions                  (0.55)     (0.78)   (0.72)  (0.60)  (0.63)
--------------------------------------------------------------------------------
 Net asset value, end of year        $12.07     $13.30   $13.16  $12.98  $12.95
--------------------------------------------------------------------------------
 Total return(/2/)                    (5.28)%     7.11%    7.21%   5.09%  20.04%
--------------------------------------------------------------------------------
 Net assets, end of year (000)'s     $2,867     $1,895     $428    $179    $146
--------------------------------------------------------------------------------
 Ratios to average net assets:
 Expenses(/1/)                         1.39%      1.31%    1.34%   1.34%   1.35%
 Net investment income                 4.32       4.25     4.51    4.77    4.65
--------------------------------------------------------------------------------
 Portfolio turnover rate                 66%        51%      58%     23%     10%
--------------------------------------------------------------------------------
</TABLE>

(/1/) The investment adviser waived all or part of its fees for the three years
      ended November 30, 1997. If such fees had not been waived, the per share
      decrease in net investment income and the ratios of expenses would have
      been as follows:
<TABLE>
<CAPTION>
         Per Share Decreases     Expense Ratios
          In Net Investment   Without Fee Waivers
                Income
           1997   1996   1995   1997    1996    1995
-----------------------------------------------------
<S>      <C>    <C>    <C>    <C>     <C>     <C>
Class L   $0.01  $0.01  $0.04   1.42%   1.44%   1.58%
-----------------------------------------------------
</TABLE>

(/2/) Total return does not reflect any applicable sales load or deferred sales
      charge.

(/3/)  Per share amounts have been calculated using the monthly average shares
 method.

(/4/)  On June 12, 1998, Class C shares were renamed Class L shares.

Massachusetts Municipals Fund

24
<PAGE>

                                                              SalomonSmithBarney
                                                    ----------------------------
                                                    A member of citigroup [LOGO]

Massachusetts
Municipals Fund

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

The fund sends only one report to a household if more than one account has the
same address. Contact your Salomon Smith Barney Financial Consultant, dealer
representative or the transfer agent if you do not want this policy to apply to
you.

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

You can make inquiries about the fund or obtain shareholder reports or the
statement of additional information (without charge) by contacting your Salomon
Smith Barney Financial Consultant or dealer representative, by calling the fund
at 1-800-451-2010, or by writing to the fund at Smith Barney Mutual Funds, 388
Greenwich Street, MF2, New York, New York 10013.

Visit our web site. Our web site is located at www.smithbarney.com

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

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

SMSalomon Smith Barney is a service mark of Salomon Smith Barney Inc.

(Investment Company Act file
no. 811-04994)

FD0226 3/00