As filed with the Securities and Exchange Commission on September 
12, 1997
	Securities Act Registration
	No. 33-47116
	Investment Company Act Registration
	No. 811-6629
	
	SECURITIES AND EXCHANGE COMMISSION
	Washington, D.C.  20549
	
	FORM N-2
	REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
	Pre-Effective Amendment No.___
	Post-Effective Amendment No. 8	x
   		
	and/or	
	REGISTRATION STATEMENT UNDER
	THE INVESTMENT COMPANY ACT OF 1940
	AMENDMENT NO. 9	x
	__________________
	Managed Municipals Portfolio Inc.
	(a Maryland Corporation)
	(Exact Name of Registrant as Specified in Charter)
	388 Greenwich Street 
	New York, New York  10013
	(Address of Principal Executive Offices)
	(212) 723-9218
	(Registrant's Telephone Number, including Area Code)
	Christina T. Sydor, Secretary
	Managed Municipals Portfolio Inc.
	388 Greenwich Street
	New York, New York  10013
	(Name and Address of Agent for Service)
	_____________________
	Copies to:
	Burton M.Leibert, Esq.
	Willkie Farr & Gallagher
	One Citicorp Center
153 East 53rd Street
	New York, New York  10022
	_______________
	Approximate Date of Proposed Public Offering:  As soon as 
practicable after
	the effective date of this Registration Statement.

	If any securities being registered on this form will be 
offered on a delayed or continuous basis in reliance on Rule 415 
under the Securities Act of 1933, other than securities offered in 
connection with a dividend reinvestment plan, check the following 
box.  x_______________
	This Registration Statement relates to the registration of 
an indeterminate number of shares solely for market-making 
transactions.  Pursuant to Rule 429, this Registration Statement 
relates to shares previously registered on Form N-2. (Registration 
No. 33-47116).

	It is proposed that this fiing will become effective: x when 
declared effective pursuant to section 8(c).

	Registrant amends this Registration Statement under the 
Securities Act of 1933, as amended, on such date as may be 
necessary to delay its effective date until Registrant files a 
further amendment that specifically states that this Registration 
Statement will thereafter become effective in accordance with the 
provisions of Section 8(a) of the Securities Act of 1933, as 
amended, or until the Registration Statement becomes effective on 
such date as the Securities and Exchange Commission, acting 
pursuant to Section 8(a), may determine.





	MANAGED MUNICIPALS PORTFOLIO INC.

	Form N-2
	Cross Reference Sheet

Part A
Item No.	Caption	Prospectus Caption

1.	Outside Front Cover		Outside Front 
Cover of Prospectus
2.	Inside Front and Outside Back Cover Page		Inside Front and 
Outside Back Cover Page
		of Prospectus
3.	Fee Table and Synopsis		Prospectus 
Summary; Portfolio Expenses
4.	Financial Highlights		Financial 
Highlights
5.	Plan of Distribution		Prospectus 
Summary; The Offering;
		Certain Provisions 
of the Articles of 		
	Incorporation and Market Discount.
6.	Selling Shareholders		Not Applicable
7.	Use of Proceeds	Use of Proceeds; 
8.	General Description of the 
Registrant.........................................	Prospectus 
Summary;  The Portfolio; 		
	Investment Objectives and Policies;  		
	Description of Common Stock; Net Asset 			Value; 
Share PriceData; Certain Provisions 			of of 
the Articles of Incorporation; 			
	Appendix.
9.	Management		Management of the 
Portfolio; Description of 
		Common Stock; 
Custodian and Transfer 			Agent
10.	Capital Stock, Long-Term Debt, and Other
	Securities 		Taxation; Dividend 
Reinvestment Plan;
		Dividends and 
Distributions; Description of 		Common 
Stock; Share Price Data
11.	Defaults and Arrears on Senior Securities		Not 
Applicable
12.	Legal Proceedings		Not Applicable
13.	Table of Contents of the Statement of
	Additional Information		Further 
Information

Part B		Statement of 
Additional
Item No.		Information 
Caption     

14.	Cover Page		Cover Page
15.	Table of Contents		Cover Page
16.	General 
Information and 
History................................................	The 
Portfolio; Description of Common 			Stock 
(see Prospectus) 
17.	Investment Objective and Policies		Investment 
Objective and Policies; Invest-
		ment Restrictions
18.
	Management.....................................................
 ..........................	Management of the 
Portfolio; Directors and 		Executive 
Officers of the Portfolio
19.	Control Persons and Principal Holders of
	 Securities		Not Applicable
20.	Investment Advisory and Other Services		Management of the 
Portfolio
21.	Brokerage Allocation and Other Practices		Portfolio 
Transactions
22.	Tax Status		Taxes; Taxation 
(see Prospectus)
23.	Financial Statements		Financial 
Statements

PART A. PROSPECTUS
--------------------------------------------------------------------------------
   
Prospectus                                                    September 26, 1997
    
--------------------------------------------------------------------------------

Managed Municipals Portfolio Inc.
388 Greenwich Street
New York, New York 10013
(800) 451-2010



   
     Managed Municipals Portfolio Inc. (the "Portfolio") is a non-diversified,
closed-end management investment company that seeks as high a level of current
income exempt from federal income tax as is consistent with the preservation of
principal. Under normal conditions, the Portfolio will, in seeking its
investment objective, invest substantially all of its assets in long-term,
investment grade obligations issued by state and local governments, political
subdivisions, agencies and public authorities ("Municipal Obligations"). For a
discussion of the risks associated with certain of the Portfolio's investments,
see "Investment Objective and Policies."
    

   
     This Prospectus sets forth concisely the information about the Portfolio
that a prospective investor ought to know before investing and should be
retained for future reference. A Statement of Additional Information (the "SAI")
dated September 26, 1997 containing additional information about the Portfolio
has been filed with the Securities and Exchange Commission (the "SEC") and is
hereby incorporated by reference in its entirety into this Prospectus. A copy of
the SAI may be obtained without charge by calling or writing to the Portfolio at
the telephone number or address set forth above or by contacting a Smith Barney
Financial Consultant.
    



                                                           (Continued on page 2)

   
SMITH BARNEY INC.
Distributor

SMITH BARNEY MUTUAL FUND MANAGEMENT INC.
Investment Manager and Administrator


THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
    


                                                                               1
<PAGE>

--------------------------------------------------------------------------------
Prospectus (continued)                                        September 26, 1997
--------------------------------------------------------------------------------

     Smith Barney intends to make a market in the Common Stock, although it is
not obligated to conduct market-making activities and any such activities may be
discontinued at any time without notice, at the sole discretion of Smith Barney.
The shares of Common Stock that may be offered from time to time pursuant to
this Prospectus were issued and sold by the Portfolio in a public offering which
commenced June 18, 1992, at a price of $12.00 per share. No assurance can be
given as to the liquidity of, or the trading market for, the Common Stock as a
result of any market-making activities undertaken by Smith Barney. The Portfolio
will not receive any proceeds from the sale of any Common Stock offered pursuant
to this Prospectus.

   
     All dealers effecting transactions in the registered securities, whether or
not participating in this distribution, may be required to deliver a Prospectus.
    


2
<PAGE>

--------------------------------------------------------------------------------
Table of Contents
--------------------------------------------------------------------------------

Prospectus Summary                                                          4
--------------------------------------------------------------------------------
Portfolio Expenses                                                          7
--------------------------------------------------------------------------------
Financial Highlights                                                        8
--------------------------------------------------------------------------------
The Portfolio                                                               9
--------------------------------------------------------------------------------
The Offering                                                                9
--------------------------------------------------------------------------------
Use of Proceeds                                                             9
--------------------------------------------------------------------------------
Investment Objective and Policies                                           9
--------------------------------------------------------------------------------
Net Asset Value                                                            17
--------------------------------------------------------------------------------
Share Price Data                                                           17
--------------------------------------------------------------------------------
Taxation                                                                   18
--------------------------------------------------------------------------------
Management of the Portfolio                                                19
--------------------------------------------------------------------------------
Dividends and Distributions; Dividend Reinvestment Plan                    21
--------------------------------------------------------------------------------
Certain Provisions of the Articles of Incorporation and
  Market Discount                                                          23
--------------------------------------------------------------------------------
Description of Common Stock                                                24
--------------------------------------------------------------------------------
Custodian and Transfer Agent                                               25
--------------------------------------------------------------------------------
Experts                                                                    25
--------------------------------------------------------------------------------
Further Information                                                        26
--------------------------------------------------------------------------------
Appendix A                                                                A-1
--------------------------------------------------------------------------------
Appendix B                                                                B-1
--------------------------------------------------------------------------------


--------------------------------------------------------------------------------
      No person has been authorized to give any information or to make any
representations in connection with this offering other than those contained in
this Prospectus and, if given or made, such other information or representations
must not be relied upon as having been authorized by the Fund or the
distributor. This Prospectus does not constitute an offer by the Fund or the
distributor to sell or a solicitation of an offer to buy any of the securities
offered hereby in any jurisdiction to any person to whom it is unlawful to make
such an offer or solicitation in such jurisdiction.
--------------------------------------------------------------------------------


                                                                               3
<PAGE>

--------------------------------------------------------------------------------
Prospectus Summary
--------------------------------------------------------------------------------

   The following summary is qualified in its entirety by the more detailed
information appearing elsewhere in this Prospectus and in the SAI.

THE PORTFOLIO The Portfolio is a non-diversified, closed-end management
investment company. See "The Portfolio."

INVESTMENT OBJECTIVE The Portfolio seeks as high a level of current income
exempt from federal income tax as is consistent with the preservation of
principal. See "Investment Objective and Policies."

TAX-EXEMPT INCOME The Portfolio is intended to operate in such a manner that
dividends paid by the Portfolio may be excluded by the Portfolio's shareholders
from their gross incomes for federal income tax purposes. See "Investment
Objective and Policies" and "Taxation."

INVESTMENTS The Portfolio will invest substantially all of its assets in
long-term investment grade Municipal Obligations. At least 80% of the
Portfolio's total assets will be invested in securities rated investment grade
by Moody's Investors Service, L.P. ("Moody's"), Standard & Poor's Ratings Group
("S&P"), Fitch Investors Service, Inc. ("Fitch") or another
nationally-recognized rating agency (that is, rated no lower than Baa, MIG 3 or
Prime-1 by Moody's, BBB, SP-2 or A-1 by S&P or BBB or F-1 by Fitch). Up to 20%
of the Portfolio's total assets may be invested in unrated securities that are
deemed by the Portfolio's investment adviser to be of a quality comparable to
investment grade. See "Investment Objective and Policies."

THE OFFERING The Common Stock is listed for trading on the New York Stock
Exchange, Inc. ("NYSE"). In addition, Smith Barney intends to make a market in
the Common Stock. Smith Barney, however, is not obligated to conduct
market-making activities and any such activities may be discontinued at any time
without notice, at the sole discretion of Smith Barney.

LISTING NYSE

SYMBOL MMU

INVESTMENT MANAGER Greenwich Street Advisors, a division of Smith Barney Mutual
Funds Management Inc. ("SBMFM"), serves as the Portfolio's investment manager
(the "Investment Manager"). The Investment Manager provides investment advisory
and management services to investment companies affiliated with Smith Barney.
Smith Barney is a wholly owned subsidiary of Smith Barney Holdings Inc.
("Holdings"), which is in turn a wholly owned subsidiary of Travelers Group Inc.
("Travelers"). Subject to the supervision and direction of the Portfolio's Board
of Directors, the Investment Manager manages the securities held by the
Portfolio in accordance with the Portfolio's stated investment objective and
policies, makes investment decisions for the Portfolio, places orders to
purchase and sell securities on behalf of the Portfolio and employs professional
portfolio managers. SBMFM acts


4
<PAGE>

--------------------------------------------------------------------------------
Prospectus Summary (continued)
--------------------------------------------------------------------------------

as administrator of the Portfolio and in that capacity provides certain
administrative services, including overseeing the Portfolio's non-investment
operations and its relations with other service providers and providing
executive and other officers to the Portfolio. The Portfolio pays the Investment
Manager a fee ("Management Fee") for services provided to the Fund that is
computed daily and paid monthly at the annual rate of 0.90% of the value of the
Portfolio's average daily net assets. The Portfolio will bear other expenses and
costs in connection with its operation in addition to the costs of investment
management services. See "Management of the Portfolio -- Investment Manager."

CUSTODIAN PNC Bank, National Association ("PNC Bank") serves as the Portfolio's
custodian. See "Custodian and Transfer Agent."

TRANSFER AGENT First Data Investor Services Group, Inc. ("First Data"), serves
as the Portfolio's transfer agent, dividend-paying agent and registrar. See
"Custodian and Transfer Agent."

DIVIDENDS AND DISTRIBUTIONS The Portfolio expects to pay monthly dividends of
net investment income (income other than net realized capital gains) and to
distribute net realized capital gains, if any, annually. All dividends or
distributions with respect to shares of Common Stock are reinvested
automatically in additional shares through participation in the Portfolio's
Dividend Reinvestment Plan, unless a shareholder elects to receive cash. See
"Dividends and Distributions; Dividend Reinvestment Plan."

INVESTMENT OBJECTIVE AND POLICIES The Portfolio will not purchase securities
that are rated lower than Baa by Moody's, BBB by S&P or BBB by Fitch at the time
of purchase. Although obligations rated Baa by Moody's, BBB by S&P or BBB by
Fitch are considered to be investment grade, they may be subject to greater
risks than other higher rated investment grade securities. See "Investment
Objective and Policies."

     The Portfolio may invest up to 20% of its total assets in unrated
securities that the Investment Manager determines to be of comparable quality to
the securities rated investment grade in which the Portfolio may invest. Dealers
may not maintain daily markets in unrated securities and retail secondary
markets for many of them may not exist; this lack of markets may affect the
Portfolio's ability to sell these securities when the Investment Manager deems
it appropriate. The Portfolio has the right to invest without limitation in
state and local obligations that are "private activity bonds," the income from
which may be taxable as a specific preference item for purposes of the federal
alternative minimum tax. Thus, the Portfolio may not be a suitable investment
for investors who are subject to the alternative minimum tax. See "Investment
Objective and Policies" and "Taxation."


                                                                               5
<PAGE>

--------------------------------------------------------------------------------
Prospectus Summary (continued)
--------------------------------------------------------------------------------

RISK FACTORS AND SPECIAL CONSIDERATIONS Certain of the instruments held by the
Portfolio, and certain of the investment techniques that the Portfolio may
employ, might expose the Portfolio to special risks. The instruments presenting
the Portfolio with risks are municipal leases, zero coupon securities, custodial
receipts, municipal obligation components, floating and variable rate demand
notes and bonds, and participation interests. Entering into securities
transactions on a when-issued or delayed delivery basis, entering into
repurchase agreements, lending portfolio securities, and engaging in financial
futures and options transactions, are investment techniques involving risks to
the Portfolio. As a non-diversified fund within the meaning of the Investment
Company Act of 1940, as amended (the "1940 Act"), the Portfolio may invest a
greater proportion of its assets in the obligations of a smaller number of
issuers and, as a result, may be subject to greater risk than a diversified fund
with respect to its holdings of securities. See "Investment Objective and
Policies" and "Risk Factors and Special Considerations."

MANAGEMENT OF THE PORTFOLIO The combined annual rate of fees paid by the
Portfolio for advisory and administrative services, 0.90% of the value of the
Portfolio's average daily net assets, is higher than the rates for similar
services paid by other publicly offered, closed-end, management investment
companies that have investment objectives and policies similar to those of the
Portfolio. The Portfolio will bear, in addition to the costs of advisory and
administrative services, other expenses and costs in connection with its
operation. See "Management of the Portfolio."

     The Portfolio's Articles of Incorporation include provisions that could
have the effect of limiting the ability of other entities or persons to acquire
control of the Portfolio and of depriving shareholders of an opportunity to sell
their shares of Common Stock at a premium over prevailing market prices. See
"Certain Provisions of the Articles of Incorporation and Market Discount."


6
<PAGE>

--------------------------------------------------------------------------------
Portfolio Expenses
--------------------------------------------------------------------------------

     The following tables are intended to assist investors in understanding the
various costs and expenses associated with investing in the Portfolio.

--------------------------------------------------------------------------------
   Annual Expenses
         (as a percentage of net assets attributable to Common Stock)
         Management Fees                                                    .90%
         Other Expenses*                                                    .10
--------------------------------------------------------------------------------
   TOTAL ANNUAL PORTFOLIO OPERATING EXPENSES                               1.00%
================================================================================

*"Other Expenses," as shown above are based upon amounts for the fiscal year
ending May 31, 1997.

     EXAMPLE

     An investor would directly or indirectly pay the following expenses on a
$1,000 investment in the Portfolio, assuming a 5% annual return:

   One Year              Three Years             Five Years            Ten Years
--------------------------------------------------------------------------------
     $10                     $32                    $55                  $122
--------------------------------------------------------------------------------


   
     While the example assumes a 5% annual return, the Portfolio's performance
will vary and may result in a return greater or less than 5%. In addition, while
the example assumes reinvestment of all dividends and distributions at net asset
value, participants in the Portfolio's Dividend Reinvestment Plan may receive
shares purchased or issued at a price or value different from net asset value.
See "Dividend Reinvestment Plan." This example should not be considered a
representation of future expenses of the Portfolio and actual expenses may be
greater or less than those shown.
    


                                                                               7
<PAGE>

--------------------------------------------------------------------------------
Financial Highlights
--------------------------------------------------------------------------------

   
     The following information for the two years ended May 31, 1997 has been
audited by KPMG Peat Marwick LLP, independent auditors whose report thereon
appears in the Portfolio's annual report dated May 31, 1997. The following
information for the fiscal years ended May 31, 1993 through May 31, 1995 has
been audited by other independent auditors. This information should be read in
conjunction with the financial statements and related notes that also appear in
the Portfolio's Annual Report, which is incorporated by reference into this
Prospectus.

<TABLE>
<CAPTION>
For a share of capital stock outstanding
throughout each year                                   1997             1996            1995            1994            1993*
------------------------------------------------------------------------------------------------------------------------------
<S>                                               <C>              <C>             <C>             <C>             <C>      
Net asset value, beginning of year                $   12.11        $   12.55       $   12.26       $   13.00       $   12.00
------------------------------------------------------------------------------------------------------------------------------
Income from operations:
  Net investment income                                0.67             0.67            0.72            0.67            0.63
  Net realized and unrealized gain (loss)              0.08            (0.35)           0.49           (0.23)           0.97
------------------------------------------------------------------------------------------------------------------------------
  Total Income from operations                         0.75             0.32            1.21            0.44            1.60
------------------------------------------------------------------------------------------------------------------------------
Offering Cost Charged to Paid-In Capital                 --               --              --              --           (0.02)
------------------------------------------------------------------------------------------------------------------------------
Distributions:
  Dividends from net investment income                (0.66)           (0.75)          (0.67)          (0.67)          (0.55)
  Distributions from net realized capital gains       (0.30)           (0.01)          (0.25)          (0.51)          (0.03)
------------------------------------------------------------------------------------------------------------------------------
Total distributions                                   (0.96)           (0.76)          (0.92)          (1.18)          (0.58)
------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year                      $   11.90        $   12.11       $   12.55       $   12.26       $   13.00
------------------------------------------------------------------------------------------------------------------------------
Total Return Based on Market Value                     7.89%            8.26%           8.40%           2.98%           7.02%++
------------------------------------------------------------------------------------------------------------------------------
Total Return, Based on Net Asset Value**               6.59%            2.79%          10.96%           3.45%          13.58%++
------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Year (in 000's)                $ 411,286        $ 417,924       $ 432,920       $ 422,792       $ 443,938
------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
  Ratio of operating expenses to average
  net assets                                           1.00%            1.00%           1.02%           1.00%           0.98%+
  Ratio of net investment income to average
  net assets                                           5.56             5.35            5.97            5.15            5.48+
------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                 113%              45%             93%             72%            169%
------------------------------------------------------------------------------------------------------------------------------
Market value, end of year                            11.625            11.69           11.50           11.50           12.25
==============================================================================================================================
</TABLE>
    

*    For the period from June 26, 1992 (commencement of operations) to May 31,
     1993.
**   The total return assumes the purchase and redemption of shares using the
     Portfolio's net asset value rather than market value. Dividends are
     reinvested in accordance with the Portfolio's Dividend Reinvestment Plan.
+    Annualized.
++   Total return is not annualized, as it may not be representative of the
     total return for the year.


8
<PAGE>

--------------------------------------------------------------------------------
The Portfolio
--------------------------------------------------------------------------------

     The Portfolio is a non-diversified, closed-end management investment
company that seeks as high a level of current income exempt from federal income
tax as is consistent with the preservation of principal. The Portfolio, which
was incorporated under the laws of the State of Maryland on April 9, 1992, is
registered under the 1940 Act, and has its principal office at 388 Greenwich
Street, New York, New York 10013. The Portfolio's telephone number is (800)
451-2010.

--------------------------------------------------------------------------------
The Offering
--------------------------------------------------------------------------------

     Smith Barney intends to make a market in the Common Stock, although it is
not obligated to conduct market-making activities and any such activities may be
discontinued at any time without notice at the sole discretion of Smith Barney.
No assurance can be given as to the liquidity of, or the trading market for, the
Common Stock as a result of any market-making activities undertaken by Smith
Barney. This Prospectus is to be used by Smith Barney in connection with offers
and sales of the Common Stock in market-making transactions in the
over-the-counter market at negotiated prices related to prevailing market prices
at the time of the sale.

--------------------------------------------------------------------------------
Use of Proceeds
--------------------------------------------------------------------------------

     The Portfolio will not receive any proceeds from the sale of any Common
Stock offered pursuant to this Prospectus. Proceeds received by Smith Barney as
a result of its market-making in the Common Stock will be utilized by Smith
Barney in connection with its secondary market operations and for general
corporate purposes.

--------------------------------------------------------------------------------
Investment Objective and Policies
--------------------------------------------------------------------------------

   
     The Portfolio's investment objective is to seek as high a level of current
income exempt from federal income taxes as is consistent with the preservation
of principal. The Portfolio's investment objective may not be changed without
the affirmative vote of the holders of a "majority of the Portfolio's
outstanding voting securities" (as defined in the 1940 Act). In seeking its
objective, the Portfolio will invest in long-term Municipal Obligations. The
Portfolio will operate subject to a fundamental investment policy providing
that, under normal conditions, the Portfolio will invest at least 80% of its
total assets in investment grade Municipal Obligations. No assurance can be
given that the Portfolio's investment objective will be achieved.
    


                                                                               9
<PAGE>

--------------------------------------------------------------------------------
Investment Objective and Policies (continued)
--------------------------------------------------------------------------------

     The Portfolio will invest at least 80% of its total assets in Municipal
Obligations rated investment grade, that is, rated no lower than Baa, MIG 3 or
Prime-1 by Moody's, BBB, SP-2 or A-1 by S&P or BBB or F-1 by Fitch. Up to 20% of
the Portfolio's total assets may be invested in unrated securities that are
deemed by the Investment Manager to be of a quality comparable to investment
grade. The Portfolio will not invest in Municipal Obligations that are rated
lower than Baa by Moody's, BBB by S&P or BBB by Fitch, at the time of purchase.
A description of relevant Moody's, S&P and Fitch ratings is set forth in the
Appendix to the SAI. Although Municipal Obligations rated Baa by Moody's, BBB by
S&P or BBB by Fitch are considered to be investment grade, they may be subject
to greater risks than other higher rated investment grade securities. Municipal
Obligations rated Baa by Moody's, for example, are considered medium grade
obligations that lack outstanding investment characteristics and have
speculative characteristics as well. Municipal Obligations rated BBB by S&P are
regarded as having an adequate capacity to pay principal and interest. Municipal
Obligations rated BBB by Fitch are deemed to be subject to a higher likelihood
that their rating will fall below investment grade than higher rated bonds.

     The Portfolio is classified as a non-diversified fund under the 1940 Act,
which means that the Portfolio is not limited by the 1940 Act in the proportion
of its assets that it may invest in the obligations of a single issuer. The
Portfolio intends to conduct its operations, however, so as to qualify as a
"regulated investment company" for purposes of the Internal Revenue Code of
1986, as amended (the "Code"), which will relieve the Portfolio of any liability
for federal income tax to the extent that its earnings are distributed to
shareholders. To qualify as a regulated investment company, the Portfolio will,
among other things, limit its investments so that, at the close of each quarter
of its taxable year (1) not more than 25% of the market value of the Portfolio's
total assets will be invested in the securities of a single issuer and (2) with
respect to 50% of the market value of its total assets, not more than 5% of the
market value of its total assets will be invested in the securities of a single
issuer. See "Taxation."

     The Portfolio generally will not invest more than 25% of its total assets
in any industry. Governmental issuers of Municipal Obligations are not
considered part of any "industry." Municipal Obligations backed only by the
assets and revenues of non-governmental users may be deemed to be issued by the
non-governmental users, and would be subject to the Portfolio's 25% industry
limitation. The Portfolio may invest more than 25% of its total assets in a
broad segment of the Municipal Obligations market, if the Investment Manager
determines that the yields available from obligations in a particular segment of
the market justify the additional risks associated with a large investment in
the segment. The Portfolio reserves the right to invest more than 25% of its
assets in industrial development bonds or in issuers located in the same state,
although it has no current intention of investing more than


10
<PAGE>

--------------------------------------------------------------------------------
Investment Objective and Policies (continued)
--------------------------------------------------------------------------------

25% of its assets in issuers located in the same state. If the Portfolio were to
invest more than 25% of its total in issuers located in the same state, it would
be more susceptible to adverse economic, business or regulatory conditions in
that state.

     Municipal Obligations are classified as general obligation bonds, revenue
bonds and notes. General obligation bonds are secured by the issuer's pledge of
its full faith, credit and taxing power for the payment of principal and
interest. Revenue bonds are payable from the revenue derived from a particular
facility or class of facilities or, in some cases, from the proceeds of a
special excise tax or other specific revenue source, but not from the general
taxing power. Notes are short-term obligations of issuing municipalities or
agencies and are sold in anticipation of a bond sale, collection of taxes or
receipt of other revenues. Municipal Obligations bear fixed, floating and
variable rates of interest, and variations exist in the security of Municipal
Obligations, both within a particular classification and between
classifications. The types of Municipal Obligations in which the Portfolio may
invest are described in Appendix A to this Prospectus.

     The yields on, and values of, Municipal Obligations are dependent on a
variety of factors, including general economic and monetary conditions, money
market factors, conditions in the Municipal Obligations markets, size of a
particular offering, maturity of the obligation and rating of the issue.
Consequently, Municipal Obligations with the same maturity, coupon and rating
may have different yields or values, whereas obligations of the same maturity
and coupon with different ratings may have the same yield or value.

     Opinions relating to the validity of Municipal Obligations and to the
exemption of interest on them from federal income taxes are rendered by bond
counsel to the respective issuers at the time of issuance. Neither the Portfolio
nor the Investment Manager will review the procedures relating to the issuance
of Municipal Obligations or the basis for opinions of counsel. Issuers of
Municipal Obligations may be subject to the provisions of bankruptcy, insolvency
and other laws, such as the Federal Bankruptcy Reform Act of 1978, affecting the
rights and remedies of creditors. In addition, the obligations of those issuers
may become subject to laws enacted in the future by Congress, state legislatures
or referenda extending the time payment of principal and/or interest, or
imposing other constraints upon enforcement of the 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 issuer to
pay, when due, the principal of, and interest on, its obligations may be
materially affected.

     Under normal conditions, the Portfolio may hold up to 20% of its total
assets in cash or money market instruments, including taxable money market
instruments (collectively, "Taxable Investments"). In addition, the Portfolio
may take a temporary defensive posture and invest without limitation in
short-term Municipal


                                                                              11
<PAGE>

--------------------------------------------------------------------------------
Investment Objective and Policies (continued)
--------------------------------------------------------------------------------

Obligations and Taxable Investments, upon a determination by the Investment
Manager that market conditions warrant such a posture. To the extent the
Portfolio holds Taxable Investments, the Portfolio may not be fully achieving
its investment objective.

     INVESTMENT TECHNIQUES

     The Portfolio may employ, among others, the investment techniques described
below, which may give rise to taxable income:

     When-Issued and Delayed Delivery Securities. The Portfolio may purchase
securities on a when-issued basis, or may purchase or sell securities for
delayed delivery. In when-issued or delayed delivery transactions, delivery of
the securities occurs beyond normal settlement periods, but no payment or
delivery will be made by the Portfolio prior to the actual delivery or payment
by the other party to the transaction. The Portfolio will not accrue income with
respect to a when-issued or delayed delivery security prior to its stated
delivery date. The Portfolio will establish with PNC Bank a segregated account
consisting of cash, debt securities of any grade or equity securities, having a
value equal to or greater than the Portfolio's purchase commitments, provided
such securities have been determined by SBMFM to be liquid and unencumbered, and
are marked to market daily, pursuant to guidelines established by the Directors.
Placing securities rather than cash in the segregated account may have a
leveraging effect on the Portfolio's net asset value per share; that is, to the
extent that the Portfolio remains substantially fully invested in securities at
the same time that it has committed to purchase securities on a when-issued or
delayed delivery basis, greater fluctuations in its net asset value per share
may occur than if it had set aside cash to satisfy its purchase commitments.

     Stand-By Commitments. The Portfolio may acquire "stand-by commitments" with
respect to Municipal Obligations it holds. Under a stand-by commitment, which
resembles a put option, a broker, dealer or bank is obligated to repurchase at
the Portfolio's option specified securities at a specified price. Each exercise
of a stand-by commitment, therefore, is subject to the ability of the seller to
make payment on demand. The Portfolio will acquire stand-by commitments solely
to facilitate liquidity and does not intend to exercise the rights afforded by
the commitments for trading purposes.

     Financial Futures and Options Transactions. To hedge against a decline in
the value of Municipal Obligations it owns or an increase in the price of
Municipal Obligations it proposes to purchase, the Portfolio may enter into
financial futures contracts and invest in options on financial futures contracts
that are traded on a U.S. exchange or board of trade. The futures contracts or
options on futures contracts that may be entered into by the Portfolio will be
restricted to those that are either based on an index of Municipal Obligations
or relate to debt securities the


12
<PAGE>

--------------------------------------------------------------------------------
Investment Objective and Policies (continued)
--------------------------------------------------------------------------------

prices of which are anticipated by the Investment Manager to correlate with the
prices of the Municipal Obligations owned or to be purchased by the Portfolio.
Regulations of the Commodity Futures Trading Commission ("CFTC") applicable to
the Portfolio require that its transactions in futures and options be engaged in
for "bona fide hedging" purposes or other permitted purposes, provided that
aggregate initial margin deposits and premiums required to establish positions
other than those considered by the CFTC to be "bona fide hedging" will not
exceed 5% of the Portfolio's net asset value, after taking into account
unrealized profits and unrealized losses on such contracts.

     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 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 on 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 Portfolio.

     Lending Securities. The Portfolio is authorized to lend securities it holds
to brokers, dealers and other financial organizations, but it will not lend
securities to any affiliate of the Investment Manager unless the Portfolio
applies for and receives specific authority to do so from the SEC. Loans of the
Portfolio's securities, if and when made, may not exceed 331 1/43 % of the value
of the Portfolio's total assets. The Portfolio's loans of securities will be
collateralized by cash, letters of credit or U.S. government securities that
will be maintained at all times in a segregated account with PNC Bank in an
amount equal to the current market value of the loaned securities.

     Repurchase Agreements. The Portfolio may enter into repurchase agreement
transactions with banks which are the issuers of instruments acceptable for
purchase by the Fund and with certain dealers on the Federal Reserve Bank of New
York's list of reporting dealers. A repurchase agreement is a contract under
which the buyer of a security simultaneously commits to resell the security to
the seller at an agreed-upon price on an agreed-upon date. Under the terms of a
typical repurchase agreement, the Portfolio would acquire an underlying debt
obligation for a relatively short period subject to an obligation of the seller
to repurchase, and the Port-


                                                                              13
<PAGE>

--------------------------------------------------------------------------------
Investment Objective and Policies (continued)
--------------------------------------------------------------------------------

folio to resell, the obligation at an agreed-upon price and time, thereby
determining the yield during the Portfolio's holding period. This arrangement
results in a fixed rate of return that is not subject to market fluctuations
during the Portfolio's holding period. Under each repurchase agreement, the
selling institution will be required to maintain the value of the securities
subject to the repurchase agreement at not less than their repurchase price.

     RISK FACTORS AND SPECIAL CONSIDERATIONS

     Investment in the Portfolio involves risk factors and special
considerations, such as those described below:

     Municipal Obligations. Market rates of interest available with respect to
Municipal Obligations generally may be lower than those available with respect
to taxable securities, although the differences may be wholly or partially
offset by the effects of federal income tax on income derived from taxable
securities. The amount of available information about the financial condition of
issuers of Municipal Obligations may be less extensive than that for corporate
issuers with publicly traded securities, and the market for Municipal
Obligations may be less liquid than the market for corporate debt obligations.
Although the Portfolio's policy will generally be to hold Municipal Obligations
until their maturity, the relative illiquidity of some of the Portfolio's
securities may adversely affect the ability of the Portfolio to dispose of the
securities in a timely manner and at a fair price. The market for less liquid
securities tends to be more volatile than the market for more liquid securities
and market values of relatively illiquid securities may be more susceptible to
change as a result of adverse publicity and investor perceptions than are the
market values of more liquid securities. Although the issuer of certain
Municipal Obligations may be obligated to redeem the obligations at face value,
redemption could result in capital losses to the Portfolio to the extent that
the Municipal Obligations were purchased by the Portfolio at a premium to face
value.

     Although the municipal obligations in which the Portfolio may invest will
be, at the time of investment, rated investment grade, municipal securities,
like other debt obligations, are subject to the risk of non-payment by their
issuers. The ability of issuers of Municipal Obligations to make timely payments
of interest and principal may be adversely affected in general economic
downturns and as relative governmental cost burdens are allocated and
reallocated among federal, state and local governmental units. Non-payment by an
issuer would result in a reduction of income to the Portfolio, and could result
in a reduction in the value of the Municipal Obligations experiencing
non-payment and a potential decrease in the net asset value of the Portfolio.

     Unrated Securities. The Portfolio may invest in unrated securities that the
Investment Manager determines to be of comparable quality to the rated
securities 


14
<PAGE>

--------------------------------------------------------------------------------
Investment Objective and Policies (continued)
--------------------------------------------------------------------------------

in which the Portfolio may invest. Dealers may not maintain daily markets in
unrated securities and retail secondary markets for many of them may not exist.
As a result, the Portfolio's ability to sell these securities when the
Investment Manager deems it appropriate may be diminished.

     Municipal Leases. Municipal leases in which the Portfolio may invest have
special risks not normally associated with Municipal Obligations. These
obligations frequently contain non-appropriation clauses that provide that the
governmental issuer of the obligation need not make future payments under the
lease or contract unless money is appropriated for that purpose by a legislative
body annually or on another periodic basis. Moreover, although a municipal lease
typically will be secured by financed equipment or facilities, the disposition
of the equipment or facilities in the event of foreclosure might prove
difficult.

     Non-Publicly Traded Securities. As suggested above, the Portfolio may, from
time to time, invest a portion of its assets in non-publicly traded Municipal
Obligations. Non-publicly traded securities may be less liquid than publicly
traded securities. Although non-publicly traded securities may be resold in
privately negotiated transactions, the prices realized from these sales could be
less than those originally paid by the Portfolio.

     When-Issued and Delayed Delivery Transactions. Securities purchased on a
when-issued or delayed delivery basis may expose the Portfolio to risk because
the securities may experience fluctuations in value prior to their delivery.
Purchasing securities on a when-issued or delayed delivery basis can involve the
additional risk that the yield available in the market when the delivery takes
place may be higher than that obtained in the transaction itself.

     Lending Securities. The risks associated with lending Portfolio securities,
as with other extensions of credit, consist of possible loss of rights in the
collateral should the borrower fail financially.

     Financial Futures and Options. Although the Portfolio intends to enter into
financial futures contracts and options on financial futures contracts that are
traded on a U.S. 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 Portfolio would be required to
make daily cash payments of variation margin. In those circumstances, an
increase in the value of the portion of the Portfolio'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 Portfolio that are the subject of a hedging


                                                                              15
<PAGE>

--------------------------------------------------------------------------------
Investment Objective and Policies (continued)
--------------------------------------------------------------------------------

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 Portfolio 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
Portfolio that were the subject of the hedge. If the Portfolio has hedged
against the possibility of an increase in interest rates adversely affecting the
value of securities it holds and rates decrease instead, the Portfolio 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.

     Non-Diversified Classification. Investment in the Portfolio, which is
classified as a non-diversified fund under the 1940 Act, may present greater
risks to investors than an investment in a diversified fund. The investment
return on a non-diversified fund typically is dependent upon the performance of
a smaller number of securities relative to the number of securities held in a
diversified fund. The Portfolio's assumption of large positions in the
obligations of a small number of issuers will affect the value of the securities
it holds to a greater extent than that of a diversified fund in the event of
changes in the financial condition, or in the market's assessment, of the
issuers.

     INVESTMENT RESTRICTIONS

     The Portfolio has adopted certain fundamental investment restrictions that
may not be changed without the prior approval of the holders of a majority of
the Portfolio's outstanding voting securities. A "majority of the Portfolio's
outstanding voting securities" for this purpose means the lesser of (1) 67% or
more of the shares of the Portfolio's Common Stock present at a meeting of
shareholders, if the holders of 50% of the outstanding shares are present or
represented by proxy at the meeting or (2) more than 50% of the outstanding
shares. Among the investment restrictions applicable to the Portfolio is that
the Portfolio is prohibited from borrowing money, except for temporary or
emergency purposes, or for clearance of transactions, in amounts not exceeding
15% of its total assets (not including the amount borrowed) and as otherwise
described in this Prospectus -- when the Portfolio's borrowings exceed 5% of the
value of its total assets, the Portfolio will not make any additional
investments. In addition, the Portfolio will not invest more than 25% of its
total assets in the securities of issuers in any single industry, except that
this limitation will not be applicable to the purchase of U.S. government
securities. Also, the Portfolio may not purchase securities other than Municipal
Obligations and Taxable Investments. For a complete listing of the investment
restrictions applicable to the Portfolio, see "Investment Restrictions" in the
SAI. All percentage limitations included in the investment restrictions apply
immediately after a purchase or initial investment, and any subsequent change in
any applicable percentage resulting from market fluctuations will not require
the Portfolio to dispose of any security that it holds.


16
<PAGE>

--------------------------------------------------------------------------------
Net Asset Value
--------------------------------------------------------------------------------

     The Portfolio's net asset value will be calculated as of the close of
regular trading on the NYSE, currently 4:00 p.m., New York time, on the last day
on which the NYSE is open for trading of each week and month. Net asset value is
calculated by dividing the value of the Portfolio's net assets (the value of its
assets less its liabilities, exclusive of capital stock and surplus) by the
total number of shares of Common Stock outstanding. Investments in U.S.
Government securities having a maturity of 60 days or less are valued at
amortized cost. All other securities and assets are taken at fair value as
determined in good faith by or under the direction of the Board of Directors.

     The valuation of the Portfolio's assets is made by the Investment Manager
after consultation with an independent pricing service (the "Service") approved
by the Board of Directors. When, in the judgment of the 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 prices and asked prices. Investments for which, in the judgment of the
Service, no readily obtainable market quotation is available (which may
constitute a majority of the Portfolio's portfolio securities), are carried at
fair value as determined by the Service. The Service may use electronic data
processing techniques and/or a matrix system to determine valuations. The
procedures of the Service are reviewed periodically by the officers of the
Portfolio under the general supervision and responsibility of the Board of
Directors, which may replace the Service at any time if it determines it to be
in the best interests of the Portfolio to do so.

--------------------------------------------------------------------------------
Share Price Data
--------------------------------------------------------------------------------

     The Common Stock is listed on the NYSE under the symbol "MMU." Smith Barney
intends to make a market in the Portfolio's Common Stock.

     The following table sets forth the high and low sales prices for the Common
Stock, the net asset value per share and the discount or premium to net asset
value represented by the quotation for each quarterly period since the
Portfolio's commencement of operations.



                                                                              17
<PAGE>

--------------------------------------------------------------------------------
Share Price Data (continued)
--------------------------------------------------------------------------------

                 Quarterly High Price               Quarterly Low Price
                 --------------------               -------------------
           Net Asset    NYSE       Discount   Net Asset    NYSE       Discount
             Value      Price       to NAV      Value      Price       to NAV
================================================================================
5/31/95     $ 12.41    $11.250      (9.35)%    $ 12.32    $10.630     (13.72)%
8/31/95       12.42     12.250      (1.37)       12.49     11.500      (7.93)
11/30/95      12.67     12.625      (0.36)       12.30     11.625      (5.49)
2/28/96       12.83     12.625      (1.60)       12.62     11.875      (5.90)
5/31/96       12.68     12.250      (3.39)       12.11     11.125      (8.13)
8/31/96       12.28     12.000      (2.28)       11.97     11.375      (4.97)
11/30/96     12.510     11.875      (5.08)      12.030     11.500      (4.41)
2/28/97      12.370     12.000      (2.99)      11.880     11.125      (6.36)
5/31/97      11.930     11.875      (0.46)      11.570     11.250      (2.77)
8/31/97      12.430     12.188      (1.95)      12.020     11.625      (3.29)
================================================================================

   
     As of September 5, 1997, the price of Common Stock as quoted on the NYSE
was $11.750, representing a 3.85% discount from the Common Stock's net asset
value calculated on that day.
    

--------------------------------------------------------------------------------
Taxation
--------------------------------------------------------------------------------

     The following is a summary of the material federal tax considerations
affecting the Portfolio and Portfolio shareholders, please refer to the SAI for
further discussion. In addition to the considerations described below and in the
SAI, there may be other federal, state, local, or foreign tax applications to
consider. Because taxes are a complex matter, prospective shareholders are urged
to consult their tax advisors for more detailed information with respect to the
consequences of any investment.

     The Portfolio has qualified and intends to qualify, as it has in prior
years, under Subchapter M of the Code for tax treatment as a regulated
investment company. In each taxable year that the Portfolio qualifies, so long
as such qualification is in the best interests of its shareholders, the
Portfolio will pay no federal income tax on its net investment income and
long-term capital gain that is distributed to shareholders. The Portfolio also
intends to satisfy conditions that will enable it to pay "exempt-interest
dividends" to shareholders. Exempt-interest dividends are generally not subject
to regular federal income taxes, but, may be considered taxable for state
and local income (or intangible) tax purposes.

     Exempt-interest dividends attributable to interest received by the
Portfolio on certain "private-activity" bonds will be treated as a specific tax
preference item to be included in a shareholder's alternative minimum tax
computation. In addition to the alternative minimum tax, corporate share holders
must include 75%  of the interest as an adjustment
 (the "current earnings adjustment")
 in computing corporate minimum taxable income.
Exempt-interest dividends derived


18
<PAGE>

--------------------------------------------------------------------------------
Taxation (continued)
--------------------------------------------------------------------------------

from the interest earned on private activity bonds will not be exempt from
federal income tax for those shareholders who are "substantial users" (or
persons related to "substantial users") of the facilities financed by these
bonds.

     Shareholders who receive social security or equivalent railroad retirement
benefits should note that exempt-interest dividends are one of the items taken
into consideration in determining the amount of these benefits that may be
subject to federal income tax.

     The interest expense incurred by a shareholder on borrowings made to
purchase, or carry Portfolio shares, are not deductible for federal income tax
purposes to the extent related to the exempt-interest dividends received on such
shares.

     Dividends paid by the Portfolio from interest income on taxable
investments, net realized short-term securities gains, and, all, or a portion
of, any gains realized from the sale or other disposition of certain market
discount bonds are subject to federal income tax as ordinary income.

   
     Distributions, if any, from net realized long-term securities gains are
taxable as long-term capital gains, regardless of the length of time a
shareholder has owned Portfolio shares. The recently enacted Taxpayer Relief Act
of 1997 provides that net capital gain, for taxpayers other than
corporations, generally will not be subject to federal income taxes at a rate in
excess of  28% for assets held for more than one year but not more than
18 months, with a reduced maximum rate of 20% for assets held more 
than 18 months..
    

     Shareholders are required to pay tax on all taxable distributions even if
those distributions are automatically reinvested in additional Portfolio shares.
None of the dividends paid by the Portfolio will qualify for the corporate
dividends received deduction. The Portfolio will inform shareholders of the
source and tax status of all distributions, including their eligiblity for
the reduced maximum 20% capital gains tax rate, promptly after the close
of each calendar year.

     The Portfolio is required to withhold ("backup withholding") 31% of all
taxable dividends, capital gain distributions, and the proceeds of any
redemption, regardless of whether gain or loss is realized upon the redemption,
for shareholders who do not provide the Portfolio with a correct taxpayer
identification number (social security or employer identification number).
Withholding from taxable dividends and capital gain distributions also is
required for shareholders who otherwise are subject to backup withholding. Any
tax withheld as a result of backup withholding does not constitute an additional
tax, and may be claimed as a credit on the shareholders' federal income tax
return.

--------------------------------------------------------------------------------
Management of the Portfolio
--------------------------------------------------------------------------------

     BOARD OF DIRECTORS

     Overall responsibility for management and supervision of the Portfolio
rests with the Portfolio's Board of Directors. The Directors approve all
significant 


                                                                              19
<PAGE>

--------------------------------------------------------------------------------
Management of the Portfolio (continued)
--------------------------------------------------------------------------------

agreements with the Portfolio's investment manager, administrator,
custodian and transfer agent. The day-to-day operations of the Fund are
delegated to the Portfolio's Investment Manager. The SAI contains background
information regarding each Director and executive officer of the Portfolio.

     INVESTMENT MANAGER AND ADMINISTRATOR

     SBMFM, through its Greenwich Street Advisors division, located at 388
Greenwich Street, New York, New York 10013, serves as the Portfolio's investment
manager. The Investment Manager, through its predecessors, has been in the
investment counseling business since 1934 and renders investment advice to a
wide variety of individual, institutional and investment company clients with
aggregate assets under management in excess of $81 billion. The Investment
Manager is wholly-owned by Smith Barney Holdings Inc. ("Holdings"), the parent
company of Smith Barney. Holdings is a wholly-owned subsidiary of Travelers
Group Inc. ("Travelers"), a financial service holdings company engaged through
its subsidiaries, principally in four business segments: Investment Services,
Consumer Finance Services, Life Insurance Services and Property & Casualty
Insurance Services. SBMFM, Smith Barney Holdings Inc. and Smith Barney are
located at 388 Greenwich Street, New York, New York 10013.

     Subject to the supervision and direction of the Portfolio's Board of
Directors, the Investment Manager manages the securities held by the Portfolio
in accordance with the Portfolio's stated investment objective and policies,
makes investment decisions for the Portfolio, places orders to purchase and sell
securities on behalf of the Portfolio and employs managers and securities
analysts who provide research services to the Portfolio. The Portfolio pays the
Investment Manager a fee for services provided to the Portfolio that is computed
daily and paid monthly at the annual rate of 0.70% of the value of the
Portfolio's average daily net assets. In addition, SBMFM serves as administrator
and is paid a fee by the Portfolio that is computed daily and paid monthly at a
rate of 0.20% of the value of the Portfolio's average daily net assets.

     Transactions on behalf of the Portfolio are allocated to various dealers by
the Investment Manager in its best judgment. The primary consideration is prompt
and effective execution of orders at the most favorable price. Subject to that
primary consideration, dealers may be selected for their research, statistical
or other services to enable the Investment Manager to supplement its own
research and analysis with the views and information of other securities firms.
The Portfolio may use Smith Barney or a Smith Barney-affiliated broker in
connection with the purchase or sale of securities when the Investment Manager
believes that the broker's charge for the transaction does not exceed usual and
customary levels. The same standard applies to the use of Smith Barney as a
broker in connection with entering into options and futures contracts. The
Portfolio paid no brokerage commissions in the last fiscal year.


20
<PAGE>

--------------------------------------------------------------------------------
Management of the Portfolio (continued)
--------------------------------------------------------------------------------

     PORTFOLIO MANAGEMENT

     Joseph P. Deane, Vice President and Investment Officer of the Portfolio, is
primarily responsible for the management of the Portfolio's assets. Mr. Deane
has served in this capacity since the Portfolio commenced operations in 1992 and
manages the day-to-day operations of the Portfolio, including making all
investment decisions. Mr. Deane is an Investment Officer of SBMFM and is the
senior asset manager for a number of investment companies and other accounts
investing in tax-exempt securities.

--------------------------------------------------------------------------------
Dividends and Distributions; Dividend Reinvestment Plan
--------------------------------------------------------------------------------

     The Portfolio expects to pay monthly dividends of substantially all net
investment income (that is, income (including its tax-exempt income and its
accrued original issue discount income) other than net realized capital gains)
to the holders of Common Stock. Under the Portfolio's current policy, which may
be changed at any time by its Board of Directors, the Portfolio's monthly
dividends will be made at a level that reflects the past and projected
performance of the Portfolio, which policy over time will result in the
distribution of all net investment income of the Portfolio. Net income of the
Portfolio consists of all interest income accrued on the Portfolio's assets less
all expenses of the Portfolio. Expenses of the Portfolio are accrued each day.
Net realized capital gains, if any, will be distributed to the shareholders at
least once a year. Net income available for distribution will also be reduced by
dividends on any preferred stock.

     Under the Portfolio's Dividend Reinvestment Plan (the "Plan"), a
shareholder whose shares of Common Stock are registered in his or her own name
will have all distributions from the Portfolio reinvested automatically by First
Data as agent under the Plan, unless the shareholder elects to receive cash.
Distributions with respect to shares registered in the name of a broker-dealer
or other nominee (that is, in "Street Name") will be reinvested by the broker or
nominee in additional shares under the Plan, unless the service is not provided
by the broker or nominee or the shareholder elects to receive distributions in
cash. Investors who own Common Stock registered in Street Name should consult
their broker-dealers for details regarding reinvestment. All distributions to
Portfolio shareholders who do not participate in the Plan will be paid by check
mailed directly to the record holder by or under the direction of First Data as
dividend-paying agent.

     The number of shares of Common Stock distributed to participants in the
Plan in lieu of a cash dividend is determined in the following manner. Whenever
the market price of the Common Stock is equal to or exceeds the net asset value
per share at the time shares are valued for purposes of determining the number
of shares equivalent to the cash dividend or capital gains distribution, Plan
participants 


                                                                              21
<PAGE>

--------------------------------------------------------------------------------
Dividends and Distributions; Dividend Reinvestment Plan (continued)
--------------------------------------------------------------------------------

will be issued shares of Common Stock valued at the greater of (1) the net asset
value per share most recently determined as described under "Net Asset Value" or
(2) 95% of the then current market value. To the extent the Portfolio issues
shares to participants in the Plan at a discount to net asset value, the
remaining shareholders' interests in the Portfolio's net assets will be
proportionately diluted.

   
     If the net asset value per share of Common Stock at the time of valuation
exceeds the market price of the Common Stock or if the Portfolio declares a
dividend or capital gains distribution payable only in cash, First Data will buy
Common Stock in the open market, on the NYSE or elsewhere, for the participants'
accounts. If, following the commencement of the purchases and before First Data
has completed its purchases, the market price exceeds the net asset value of the
Common Stock, First Data will attempt to terminate purchases in the open market
and cause the Portfolio to issue the remaining dividend or distribution in
shares at a price equal to the greater of (a) net asset value or (b) 95% of the
then-current market price. In this case, the number of shares of Common Stock
received by a Plan participant will be based on the weighted average of prices
paid for shares purchased in the open market and the price at which the
Portfolio issues the remaining shares. To the extent First Data is unable to
stop open market purchases and cause the Portfolio to issue the remaining
shares, the average per share purchase price paid by First Data may exceed the
net asset value of the Common Stock, resulting in the acquisition of fewer
shares than if the dividend or capital gains distribution had been paid in
Common Stock issued by the Portfolio at net asset value. First Data will begin
to purchase Common Stock on the open market as soon as practicable after the
record date of the dividend or capital gains distribution, but in no event later
than 30 days after the payment date therefor, except when necessary to comply
with applicable provisions of the federal securities laws.
    

     First Data maintains all shareholder accounts in the Plan and furnishes
written confirmations of all transactions in each account, including information
needed by a shareholder for personal and tax records. The automatic reinvestment
of dividends and capital gains distributions will not relieve Plan participants
of any income tax that may be payable on the dividends or capital gains
distributions. Common Stock in the account of each Plan participant will be held
by First Data in uncertificated form in the name of each Plan participant, and
each shareholder's proxy will include those shares purchased pursuant to the
Plan.

     Plan participants are subject to no charge for reinvesting dividends and
capital gains distributions. First Data's fees for handling the reinvestment of
dividends and capital gains distributions will be paid by the Portfolio. No
brokerage charges apply with respect to shares of Common Stock issued directly
by the Portfolio as a result of dividends or capital gains distributions payable
either in Common Stock or in cash. Each Plan participant will, however, bear a
proportionate share of brokerage commissions incurred with respect to open
market purchases made in connection with the reinvestment of dividends or
capital gains distributions.


22
<PAGE>

--------------------------------------------------------------------------------
Dividends and Distributions; Dividend Reinvestment Plan (continued)
--------------------------------------------------------------------------------

     Experience under the Plan may indicate that changes to it are desirable.
The Portfolio reserves the right to amend or terminate the Plan as applied to
any dividend or capital gains distribution paid subsequent to written notice of
the change sent to participants at least 30 days before the record date for the
dividend or capital gains distribution. The Plan also may be amended or
terminated by First Data, with the Portfolio's prior written consent, on at
least 30 days' written notice to Plan participants. All correspondence
concerning the Plan should be directed by mail to First Data Investor Services
Group, P.O. Box 5128, Westborough, Massachusetts 01581-5128 or by telephone at
(617) 573-9300.

--------------------------------------------------------------------------------
Certain Provisions of the Articles of Incorporation
and Market Discount
--------------------------------------------------------------------------------

     ANTI-TAKEOVER PROVISIONS

     The Portfolio presently has provisions in its Articles of Incorporation and
Bylaws (commonly referred to as "anti-takeover" provisions) which may have the
effect of limiting the ability of other entities or persons to acquire control
of the Portfolio, to cause it to engage in certain transactions or to modify its
structure.

     The Board of Directors is classified into three classes, each with a term
of three years with only one class of directors standing for election in any
year. Such classification may prevent replacement of a majority of the directors
for up to a two-year period. Directors may be removed from office only for cause
by vote of at least 75% of the shares entitled to be voted on the matter. In
addition, unless 70% of the Board of Directors approves the transaction, the
affirmative vote of the holders of at least 75% of the shares will be required
to authorize the Portfolio's conversion from a closed-end to an open-end
investment company, or generally to authorize any of the following transactions:
(i) merger, consolidation or share exchange of the Portfolio with or into any
other corporation; (ii) dissolution or liquidation of the Portfolio; (iii) sale,
lease, exchange or other disposition of all or substantially all of the assets
of the Portfolio; (iv) change in the nature of the business of the Portfolio so
that it would cease to be an investment company registered under the 1940 Act;
or (v) sale, lease or exchange to the Portfolio, in exchange for securities of
the Portfolio, of any assets of any entity or person (except assets having an
aggregate fair market value of less than $1,000,000). The affirmative vote of at
least 75% of the shares will be required to amend the Articles of Incorporation
or Bylaws to change any of the foregoing provisions.

     The percentage votes required under these provisions, which are greater
than the minimum requirements under Maryland law or the 1940 Act, will make more
difficult a change in the Portfolio's business or management and may have the


                                                                              23
<PAGE>

--------------------------------------------------------------------------------
Certain Provisions of the Articles of Incorporation
and Market Discount (continued)
--------------------------------------------------------------------------------


effect of depriving shareholders of an opportunity to sell shares at a premium
over prevailing market prices by discouraging a third party from seeking to
obtain control of the Portfolio in a tender offer or similar transaction. The
Portfolio's Board of Directors, however, has considered these anti-takeover
provisions and believes they are in the best interests of shareholders.

     MARKET DISCOUNT

     Shares of common stock of closed-end investment companies frequently trade
at a discount from net asset value, or in some cases trade at a premium. Shares
of closed-end investment companies investing primarily in fixed-income
securities tend to trade on the basis of income yield on the market price of the
shares and the market price may also be affected by trading volume, general
market conditions and economic conditions and other factors beyond the control
of the Portfolio. As a result, the market price of the Portfolio's shares may be
greater or less than the net asset value. Since the commencement of the
Portfolio's operations, the Portfolio's shares have traded in the market at
prices that were at times equal to, but generally were below, net asset value.

     Some closed-end investment companies have taken certain actions, including
the repurchase of common stock in the market at market prices and the making of
one or more tender offers for common stock at net asset value, in an effort to
reduce or mitigate the discount, and others have converted to an open-end
investment company, the shares of which are redeemable at net asset value.

     The Portfolio's Board of Directors has seen no reason to adopt any of the
steps, which some other closed-end Portfolios have used to address the discount.
In addition, the experience of many closed-end funds suggests that the effect of
many of these steps (other than open-ending) on the discount may be temporary or
insignificant. Accordingly, there can be no assurance that any of these actions
will be taken or, if undertaken, will cause the Portfolio's shares to trade at a
price equal to their net asset value.

--------------------------------------------------------------------------------
Description of Common Stock
--------------------------------------------------------------------------------

   
                                                            Amount Outstanding
                                                            Exclusive of Shares
                                           Amount Held     Held by Portfolio for
                                        by Portfolio for   its Own Account as of
  Title of Class    Amount Authorized    its Own Account     September 5, 1997
================================================================================
   Common Stock    500,000,000 Shares          --               34,564,283
    

     No shares, other than those currently outstanding, are offered for sale
pursuant to this Prospectus. All shares of Common Stock have equal
non-cumulative voting


24
<PAGE>

--------------------------------------------------------------------------------
Description of Common Stock (continued)
--------------------------------------------------------------------------------

rights and equal rights with respect to dividends, assets and liquidations.
Shares of Common Stock will be fully paid and non-assessable when issued and
have no preemptive, conversion or exchange rights. A majority of the votes cast
at any meeting of shareholders is sufficient to take or authorize action, except
for election of Directors or as otherwise provided in the Portfolio's Articles
of Incorporation as described under "Certain Provisions of the Articles of
Incorporation and Market Discount."

     Under the rules of the NYSE applicable to listed companies, the Portfolio
will be required to hold an annual meeting of shareholders in each year. If the
Portfolio's shares are no longer listed on the NYSE (or any other national
securities exchange the rules of which require annual meetings of shareholders),
the Portfolio may decide not to hold annual meetings of shareholders.

     The Portfolio has no current intention of offering additional shares,
except that additional shares may be issued under the Plan. See "Dividends and
Distributions; Dividend Reinvestment Plan." Other offerings of shares, if made,
will require approval of the Portfolio's Board of Directors and will be subject
to the requirement of the 1940 Act that shares may not be sold at a price below
the then current net asset value (exclusive of underwriting discounts and
commissions) except in connection with an offering to existing shareholders or
with the consent of a majority of the Portfolio's outstanding shares.

--------------------------------------------------------------------------------
Custodian and Transfer Agent
--------------------------------------------------------------------------------

     PNC Bank, located at 17th and Chestnut Streets, Philadelphia, Pennsylvania
19103, acts as custodian of the Portfolio's
investments. First Data, located at One Exchange Place, Boston, Massachusetts
02109, serves as agent in connection with the Plan and serves as the Portfolio's
transfer agent, dividend-paying agent and registrar.

--------------------------------------------------------------------------------
Experts
--------------------------------------------------------------------------------

     The audited financial statements have been incorporated by reference in the
SAI in reliance upon the report of KPMG Peat Marwick LLP, independent auditors,
and upon the authority of said firm as experts in accounting and auditing.


                                                                              25
<PAGE>

--------------------------------------------------------------------------------
Further Information
--------------------------------------------------------------------------------

     This Prospectus does not contain all of the information set forth in the
Registration Statement filed with the SEC. The complete Registration Statement
may be obtained from the SEC upon payment of the fee prescribed by its Rules and
Regulations.

     No person has been authorized to give any information or make any
representations not contained in this Prospectus and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Portfolio, the Portfolio's Investment Manager or Smith Barney. This
Prospectus does not constitute an offer to sell or a solicitation of any offer
to buy any security other than the shares of Common Stock offered by this
Prospectus, nor does it constitute an offer to sell or a solicitation of any
offer to buy the shares of Common Stock by anyone in any jurisdiction in which
the offer or solicitation would be unlawful. Neither the delivery of this
Prospectus nor any sale made hereunder will, under any circumstances, create any
implication that there has been no change in the affairs of the Portfolio since
the date of this Prospectus. If any material change occurs while this Prospectus
is required by law to be delivered, however, this Prospectus will be
supplemented or amended accordingly.


26
<PAGE>

                      [This page intentionally left blank]




                                                                              27
<PAGE>

--------------------------------------------------------------------------------
Appendix A
--------------------------------------------------------------------------------

                         TYPES OF MUNICIPAL OBLIGATIONS

     The Portfolio may invest in the following types of Municipal Obligations
and in such other types of Municipal Obligations.

     MUNICIPAL BONDS

     Municipal bonds are debt obligations issued to obtain funds for various
public purposes. The two principal classifications of municipal bonds are
"general obligation" and "revenue" bonds. General obligation bonds are secured
by the issuer's pledge of its full faith, credit and taxing power for the
payment of principal and interest. Revenue bonds are payable only from the
revenues derived from a particular facility or class of facilities or, in some
cases, from the proceeds of a special excise tax or from another specific
source, such as the user of the facility being financed. Certain municipal bonds
are "moral obligation" issues, which normally are issued by special purpose
public authorities. In the case of such issues, an express or implied "moral
obligation" of a stated government unit is pledged to the payment of the debt
service but is usually subject to annual budget appropriations.

     INDUSTRIAL DEVELOPMENT BONDS AND PRIVATE ACTIVITY BONDS

     Industrial development bonds ("IDBs") and private activity bonds ("PABs")
are municipal bonds issued by or on behalf of public authorities to finance
various privately operated facilities, such as airports or pollution control
facilities. IDBs and PABs generally do not carry the pledge of the credit of the
issuing municipality, but are guaranteed by the corporate entity on whose behalf
they are issued. IDBs and PABs are generally revenue bonds and thus are not
payable from the unrestricted revenue of the issuer. The credit quality of IDBs
and PABs is usually directly related to the credit standing of the user of the
facilities being financed.

     MUNICIPAL LEASE OBLIGATIONS

     Municipal lease obligations are Municipal Obligations that may take the
form of leases, installment purchase contracts or conditional sales contracts,
or certificates of participation with respect to such contracts or leases.
Municipal lease obligations are issued by state and local governments and
authorities to purchase land or various types of equipment and facilities.
Although municipal lease obligations do not constitute general obligations of
the municipality for which the municipality's taxing authority is pledged, they
ordinarily are backed by the municipality's covenant to budget for, appropriate
and make the payments due under the lease obligation. The leases underlying
certain Municipal Obligations, however, provide that lease payments are subject
to partial or full abatement if, because of material damage or destruction of
the leased property, there is substantial interference with the lessee's use or
occupancy of such property. This "abatement risk" may be reduced by the
existence of insurance covering the leased property, the maintenance


                                                                             A-1
<PAGE>

--------------------------------------------------------------------------------
Appendix A (continued)
--------------------------------------------------------------------------------

by the lessee of reserve funds or the provision of credit enhancements such as
letters of credit.

     The liquidity of municipal lease obligations varies. Municipal leases held
by the Portfolio will be considered illiquid securities unless the Portfolio's
Board of Directors determines on an on-going basis that the leases are readily
marketable. Certain municipal 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 the case of a "non-appropriation" lease, the
Portfolio's ability to recover under the lease in the event of non-appropriation
or default will be limited solely to the repossession of the leased property,
without recourse to the general credit of the lessee, and disposition of the
property in the event of foreclosure might be difficult. The Portfolio will not
invest more than 5% of its assets in such "non-appropriation" municipal lease
obligations.

     ZERO COUPON OBLIGATIONS

     The Portfolio may invest in zero coupon Municipal Obligations. Such
obligations include "pure zero" obligations, which pay no interest for their
entire life (either because they bear no stated rate of interest or because
their stated rate of interest is not payable until maturity), and "zero/fixed"
obligations, which pay no interest for an initial period and thereafter pay
interest currently. Zero coupon obligations also include securities representing
the principal-only components of Municipal Obligations from which the interest
components have been stripped and sold separately by the holders of the
underlying Municipal Obligations. Zero coupon securities usually trade at a deep
discount from their face or par value and will be subject to greater
fluctuations in market value in response to changing rates than obligations of
comparable maturity that make current distributions of interest. While zero
coupon Municipal Obligations will not contribute to the cash available to the
Portfolio, SBMFM believes that limited investments in such securities may
facilitate the Portfolio's ability to preserve capital while generating
tax-exempt income through the accrual of original interest discount. Zero coupon
Municipal Obligations generally are liquid, although such liquidity may be
reduced from time to time due to interest rate volatility and other factors.

     FLOATING RATE OBLIGATIONS

     The Portfolio may purchase floating and variable rate municipal notes and
bonds, which frequently permit the holder to demand payment of principal at any
time, or at specified intervals, and permit the issuer to prepay principal, plus
accrued interest, at its discretion after a specified notice period. The
issuer's obligations under the demand feature of such notes and bonds generally
are secured by bank letters of credit or other credit support arrangements.
There frequently will be 


A-2
<PAGE>

--------------------------------------------------------------------------------
Appendix A (continued)
--------------------------------------------------------------------------------

no secondary market for variable and floating rate obligations held by the
Portfolio, although the Portfolio may be able to obtain payment of principal at
face value by exercising the demand feature of the obligation.


     PARTICIPATION INTERESTS

     The Portfolio may invest up to 5% of its total assets in participation
interests in municipal bonds, including IDBs, PABs and floating and variable
rate securities. A participation interest gives the Portfolio an undivided
interest in a municipal bond owned by a bank. The Portfolio has the right to
sell the instrument back to the bank. If the participation interest is unrated,
it will be backed by an irrevocable letter of credit or guarantee of a bank that
the Portfolio's Board of Directors has determined meets certain credit quality
standards or the payment obligation will otherwise be collateralized by U.S.
government securities. The Portfolio will have the right, with respect to
certain participation interests, to draw on the letter of credit on demand,
after specified notice for all or any part of the principal amount of the
Portfolio's participation interest, plus accrued interest. Generally, the
Portfolio intends to exercise the demand under the letters of credit or other
guarantees only upon a default under the terms of the underlying bond, or to
maintain the Portfolio's assets in accordance with its investment objective and
policies. The ability of a bank to fulfill its obligations under a letter of
credit or guarantee might be affected by possible financial difficulties of its
borrowers, adverse interest rate or economic conditions, regulatory limitations
or other factors. SBMFM will monitor the pricing, quality and liquidity of the
participation interests held by the Portfolio and the credit standing of the
banks issuing letters of credit or guarantees supporting such participation
interests on the basis of published financial information reports of rating
services and bank analytical services.

     CUSTODIAL RECEIPTS

     The Portfolio may acquire custodial receipts or certificates underwritten
by securities dealers or banks that evidence ownership of future interest
payments, principal payments or both on certain Municipal Obligations. The
underwriter of these certificates or receipts typically purchases Municipal
Obligations and deposits the obligations in an irrevocable trust or custodial
account with a custodian bank, which then issues receipts or certificates that
evidence ownership of the periodic unmatured coupon payments and the final
principal payment on the obligations. Custodial receipts evidencing specific
coupon or principal payments have the same economic attributes as zero coupon
Municipal Obligations described above. Although under the terms of the custodial
receipt the Portfolio would be typically authorized to assert its rights
directly against the issuer of the underlying obligation, the Portfolio could be
required to assert through the custodian bank those rights that may exist
against the underlying issuer. Thus, in the event the underlying issuer 


                                                                             A-3
<PAGE>

--------------------------------------------------------------------------------
Appendix A (continued)
--------------------------------------------------------------------------------

fails to pay principal or interest when due, the Portfolio may be subject to
delays, expenses and risks that are greater than those that would have been
involved if the Portfolio had purchased a direct obligation of the issuer. In
addition, in the event that the trust or custodial account in which the
underlying security has been deposited is determined to be an association
taxable as a corporation, instead of a non-taxable entity, the yield on the
underlying security would be reduced in recognition of any taxes paid.

     MUNICIPAL OBLIGATION COMPONENTS

     The Portfolio may invest in Municipal Obligations, the interest rate on
which has been divided by the issuer into two different and variable components,
which together result in a fixed interest rate. Typically, the first of the
components (the "Auction Component") pays an interest rate that is reset
periodically through an auction process, whereas the second of the components
(the "Residual Component") pays a residual interest rate based on the difference
between the total interest paid by the issuer on the Municipal Obligation and
the auction rate paid on the Auction Component. The Portfolio may purchase both
Auction and Residual Components.

     Because the interest rate paid to holders of Residual Components is
generally determined by subtracting the interest rate paid to the holders of
Auction Components from a fixed amount, the interest rate paid to Residual
component holders will decrease as the Auction Component's rate increases and
increase as the Auction Component's rate decreases. Moreover, the extent of the
increases and decreases in market value of Residual Components may be larger
than comparable changes in the market value of an equal principal amount of a
fixed rate Municipal Obligation having similar credit quality, redemption
provisions and maturity.


A-4
<PAGE>

--------------------------------------------------------------------------------
Appendix B
--------------------------------------------------------------------------------

     Tax-Exempt Income Compared to Taxable Income

     The tables below show individual taxpayers how to translate the tax savings
from investments such as the Portfolio into an equivalent return from a taxable
investment. The yields used below are for illustration only and are not intended
to represent current or future yields for the Portfolio, which may be higher or
lower than those shown.

<TABLE>
<CAPTION>
                                        Federal
                                        Marginal               Tax-Exempt Rate
              Taxable Income              Rate*   2.0%   3.0%    4.0%   5.0%   6.0%    7.0%
============================================================================================
                                                     Equivalent Taxable Yield
      Single              Joint                      -------------------------      
<S>                 <C>                   <C>     <C>    <C>    <C>    <C>     <C>     <C>  
$     0 - 24,0000   $     0 - 40,1000     15.0%   2.35%  3.53%  4.71%  5.88%   7.06%   8.24%
 24,001 - 58,150     40,101 - 96,9000     28.0    2.78   4.17   5.56   6.94    8.33    9.72
 58,151 - 121,300    96,901 - 147,700     31.0    2.90   4.35   5.80   7.25    8.70   10.14
121,301 - 263,750   147,701 - 263,750     36.0    3.13   4.69   6.25   7.81    9.38   10.94
     over 263,750        over 263,750     39.6    3.31   4.97   6.62   8.28    9.93   11.59
============================================================================================
</TABLE>

   
*    The Federal tax rates shown are those currently in effect for 1997. The
     calculations assume that no income will be subject to the federal
     alternative minimum tax.
    


                                                                             B-1
<PAGE>

                                                                    Smith Barney
                                                                    ------------
                                                A Member of TravelersGroup[Logo]



                                           
                                        Managed 
                                        Municipals 
                                        Portfolio Inc.
                                            

                                        Common Stock

                                        388 Greenwich Street
                                        New York, New York 10013

                                        FD01205   9/97

PART B. STATEMENT OF ADDITIONAL INFORMATION

Managed Municipals Portfolio Inc.

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

Statement of Additional Information

September 26, 1997

	Managed Municipals Portfolio Inc. (the "Portfolio") is a 
non-diversified, closed-end management investment company that 
seeks as high a level of current income exempt from federal income 
tax as is consistent with the preservation of principal.  Under 
normal conditions, the Portfolio will, in seeking its investment 
objective, invest substantially all of its assets in long-term, 
investment grade obligations issued by state and local governments 
political subdivisions, agencies and public authorities 
("Municipal Obligations").  No assurance can be given that the 
Portfolio will be able to achieve its investment objective.

	This Statement of Additional Information ("SAI") expands 
upon and supplements the information contained in the current 
Prospectus of the Portfolio, dated September 26, 1997, as amended 
or supplemented from time to time (the "Prospectus"), and should 
be read in conjunction with the Prospectus.  The Prospectus may be 
obtained from any Smith Barney Financial Consultant or by writing 
or calling the Portfolio at the address or telephone number set 
forth above.  This SAI, although not itself a prospectus, is 
incorporated by reference into the Prospectus in its entirety.

	No person has been authorized to give any information or to 
make any representations not contained in the Prospectus or this 
SAI and, if given or made, such information must not be relied 
upon as having been authorized by the Portfolio or the Portfolio's 
investment adviser.  The Prospectus and this SAI do not constitute 
an offer to sell or a solicitation of any offer to buy any 
security other than the shares of Common Stock.  The Prospectus 
and this SAI do not constitute an offer to sell or a solicitation 
of an offer to buy the shares of Common Stock by anyone in any 
jurisdiction in which such offer or solicitation would be 
unlawful.  Neither the delivery of the Prospectus nor any sale 
made hereunder shall, under any circumstances, create any 
implication that there has been no change in the affairs of the 
Portfolio since the date hereof.  If any material change occurs 
while the Prospectus is required by law to be delivered however, 
the Prospectus or this SAI will be supplemented or amended 
accordingly.




TABLE OF CONTENTS					PAGE

Investment Objective and Policies (see in the Prospectus 
"Investment Objective and Policies" and "Appendix A")	2
	
Management of the Portfolio (see in the  Prospectus "Management of 
the Portfolio")	13
	
Taxes (see in Prospectus "Taxation")	18
	
Stock Purchases and Tenders (see in the  Prospectus "Description 
of Common Stock")	22
	
Certian Provisions of the Articles of Incorporation (see in the 
Prospectus "Certian Provisions of the Articles of Incorporation 
and Market Discount")	23
	
Additional Information (see in the Prospectus "Custodian and 
Transfer Agent")	24
	
Financial Statements	25
	
Appendix-- Description of Moody's Investors Service, 
Inc.("Moody's"), Standard & Poors Ratings Group ("S&P") and Fitch 
Investors Service, L.P. ("Fitch") Ratings	26


INVESTMENT OBJECTIVE AND POLICIES

	The Prospectus discusses the Portfolio's investment 
objective and the policies it employs to achieve that objective.  
The following discussion supplements the description of the 
Portfolio's investment policies in the Prospectus.  The 
Portfolio's investment objective is high tax-exempt current income 
by investing substantially all of its assets in a variety of 
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 and instrumentalities or 
multistate agencies or authorities ("Municipal Obligations").  The 
Portfolio's investment objective may not be changed without the 
affirmative vote of the holders of a majority (as defined in the 
Investment Company Act of 1940, as amended (the "1940 Act")) of 
the Portfolio's outstanding voting shares.  No assurance can be 
given that the Portfolio's investment objective will be achieved.



Use of Ratings as Investment Criteria

	In general, the ratings of Moody's, S&P and Fitch represent 
the opinions of those agencies as to the quality of the Municipal 
Obligations and long-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 as initial criteria for the selection of securities, but the 
Portfolio also will rely upon the independent advice of its 
investment adviser, Greenwich Street Advisors a division of Smith 
Barney Mutual Funds Management Inc. (the "Investment Manager").  
Among the factors that will also be considered by the Investment 
Manager in evaluating potential Municipal Obligations to be held 
by the Portfolio are the price, coupon and yield to maturity of 
the obligations, the Investment Manager's assessment of the credit 
quality of the issuer of the obligations, the issuer's available 
cash flow and the related coverage ratios, the property, if any, 
securing the obligations, and the terms of the obligations, 
including subordination, default, sinking fund and early 
redemption provisions.  To the extent the Portfolio invests in 
lower-rated and comparable unrated securities, the Portfolio's 
achievement of its investment objective may be more dependent on 
the Investment Manager's credit analysis of such securities than 
would be the case for a portfolio consisting entirely of higher-
rated securities.  The Appendix to this SAI contains information 
concerning the ratings of Moody's, S&P and Fitch and their 
significance.

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

	The Portfolio will seek to invest substantially all of its 
assets in Municipal Obligations, and under normal conditions at 
least 80% of the Portfolio's total assets will be invested in 
investment grade Municipal Obligations.

	The Portfolio may invest in Municipal Obligations rated as 
low as Baa by Moody's, BBB by S&P or BBB by Fitch or in unrated 
Municipal Obligations deemed to be of comparable quality.  
Although such securities are considered investment grade, they may 
be subject to greater risks than other higher-rated investment 
grade securities.

	While the market for Municipal Obligations is considered to 
be generally adequate, the existence of limited markets for 
particular lower-rated and comparable unrated securities may 
diminish the Portfolio's ability to (1) obtain accurate market 
quotations for purposes of valuing such securities and calculating 
its net asset value and (2) sell the securities at fair value to 
respond to changes in the economy or in the financial markets.  
The market for certain lower-rated and comparable unrated 
securities is relatively new and has not fully weathered a major 
economic recession.  Any such economic downturn could adversely 
affect the ability of the issuers of such securities to repay 
principal and pay interest thereon.
Taxable Investments

	Under normal conditions the Portfolio may hold up to 20% of 
its assets in cash or money market instruments including taxable 
money market instruments (collectively, "Taxable Investments").

	Money market instruments in which the Portfolio may invest 
include: U.S. government securities; tax-exempt notes of municipal 
issuers rated, at the time of purchase no lower than MIGI by 
Moody's, SP-1 by S&P or F-1 by Fitch or, if not rated by issuers 
having outstanding unsecured debt then rated within the three 
highest rating categories; bank obligations (including 
certificates of deposit, time deposits and bankers' acceptances of 
domestic banks, domestic savings and loan associations and similar 
institutions); commercial paper rated no lower than P-1 by 
Moody's, A-1 by S&P or F-l by Fitch or the equivalent from another 
nationally recognized rating service or, if unrated, of an issuer 
having an outstanding, unsecured debt issue then rated within the 
three highest rating categories; and repurchase agreements.  At no 
time will the Portfolio's investments in bank obligations, 
including time deposits, exceed 25% of the value of its assets.

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

Lending Securities

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

Repurchase Agreements

	The Portfolio may enter into repurchase agreements with 
certain member banks of the Federal Reserve System and certain 
dealers on the Federal Reserve Bank of New York's list of 
reporting dealers.  Under the terms of a typical repurchase 
agreement, the Portfolio would acquire an underlying debt 
obligation for a relatively short period (usually not more than 
one week) subject to an obligation of the seller to repurchase and 
the Portfolio to resell the obligation at an agreed-upon price and 
timer thereby determining the yield during the Portfolio's holding 
period.  Under each repurchase agreement, the selling institution 
will be required to maintain the value of the securities subject 
to the repurchase agreement at not less than their repurchase 
price.  The Investment Manager acting under the supervision of the 
Portfolio's Board of Directors, reviews on an ongoing basis the 
value of the collateral and the creditworthiness of those banks 
and dealers with which the Portfolio enters into repurchase 
agreements to evaluate potential risks.  In entering into a 
repurchase agreement) the Portfolio will bear a risk of loss in 
the event that the other party to the transaction defaults on its 
obligations and the Portfolio is delayed or prevented from 
exercising its rights to dispose of the underlying securities, 
including the risk of a possible decline in the value of the 
underlying securities during the period in which the Portfolio 
seeks to assert its rights to them, the risk of incurring expenses 
associated with asserting those rights and the risk of losing all 
or a part of the income from the agreement.

Investments in Municipal Obligation Index and Interest Rate 
Futures Contracts and Options on Interest Rate Futures Contracts

	The Portfolio may invest in Municipal Obligation index and 
interest rate futures contracts and options on interest rate 
futures contracts that are traded on a domestic exchange or board 
of trade.  Such investments may be made by the Portfolio solely 
for the purpose of hedging against changes in the value of its 
portfolio securities due to anticipated changes in interest rates 
and market conditions, and not for purposes of speculation.  
Further, such investments will be made only in unusual 
circumstances such as when the Investment Manager anticipates an 
extreme change in interest rates or market conditions.

	Municipal Obligation Index and Interest Rate Futures 
Contracts.  A Municipal Obligation index futures contract is an 
agreement to take or make delivery of an amount of cash equal to a 
specific dollar amount times the difference between the value of 
the index at the close of the last trading day of the contract and 
the price at which the index contract is originally written.  No 
physical delivery of the underlying Municipal Obligations in the 
index is made.  Interest rate futures contracts are contracts for 
the future purchase or sale of specified interest rate sensitive 
debt securities of the U.S. Treasury, such as U.S. Treasury bills, 
bonds and notes, obligations of the Government National Mortgage 
Association and bank certificates of deposit.  Although most 
interest rate futures contracts require the delivery of the 
underlying securities, some settle in cash.  Each contract 
designates the price date, time and place of delivery.

	The purpose of the Portfolio's entering into a Municipal 
Obligation index or interest rate futures contract, as the holder 
of long-term Municipal Obligations, is to protect the Portfolio 
from fluctuation in interest rates on tax-exempt securities 
without actually buying or selling Municipal Obligations.  The 
Portflio will, with respect to its purchases of financial futures 
contracts establish a segregated account consisting of cash, U.S. 
government securities, equity securites or debt securities of any 
grade equal  in an amount equal to or greater than the total 
market value of the futures contracts less the amount of initial 
margin on deposit for the contracts.

	Unlike the purchase or sale of a Municipal Obligation, no 
consideration is paid or received by the Portfolio upon the 
purchase or sale of a futures contract.  Initially, the Portfolio 
will be required to deposit with the futures commission merchant 
an amount of cash or cash equivalents equal to approximately 5% of 
the contract amount (this amount is subject to change by the board 
of trade on which the contract is traded and members of such board 
of trade may charge a higher amount).  This amount is known as 
"initial margin" and is in the nature of a performance bond or 
good faith deposit on the contract which is returned to the 
Portfolio upon termination of the futures contract, assuming that 
all contractual obligations have been satisfied. Subsequent 
payments known as "variation margin", to and from the futures 
commission merchant, will be made on a daily basis as the price of 
the index or securities fluctuates making the long and short 
positions in the futures contract more or less valuable, a process 
known as marking-to-market.  At any time prior to the expiration 
of the contract, the Portfolio may elect to close the position by 
taking an opposite position, which will operate to terminate the 
Portfolio's existing position in the futures contract.

	There are several risks in connection with the use of 
Municipal Obligation index and interest rate futures contracts as 
a hedging device.  Successful use of these futures contracts by 
the Portfolio is subject to the Investment Manager's ability to 
predict correctly movements in the direction of interest rates.  
Such predictions involve skills and techniques which may be 
different from those involved in the management of a long-term 
Municipal Obligation portfolio.  In addition, there can be no 
assurance that a correlation would exist between movements in the 
price of the Municipal Obligation index or the debt security 
underlying the futures contract and movement in the price of the 
Municipal Obligations which are the subject of the hedge.  The 
degree of imperfection of correlation depends upon various 
circumstances, such as variations in speculative market demand for 
futures contracts and Municipal Obligations and technical 
influences on futures trading.  The Portfolio's Municipal 
Obligations and the Municipal Obligations in the index may also 
differ in such respects as interest rate levels, maturities and 
creditworthiness of issuers. A decision of whether, when and how 
to hedge involves the exercise of skill and judgment and even a 
well-conceived hedge may be unsuccessful to some degree because of 
market behavior or unexpected trends in interest rates.

	Although the Portfolio intends to enter into futures 
contracts only if an active market exists for such contracts, 
there can be no assurance that an active market will exist for a 
contract at any particular time, most domestic futures exchanges 
and boards of trade limit the amount of fluctuation permitted in 
futures contract prices during a single trading day.  The daily 
limit establishes the maximum amount the price of a futures 
contract may vary either up or down from the previous day's 
settlement price at the end of a trading session.  Once the daily 
limit has been reached in a particular contract, no trades may be 
made that day at a price beyond that limit.  The daily limit 
governs only price movement during a particular trading day and 
therefore does not limit potential losses because the limit may 
prevent the liquidation of unfavorable positions.  It is possible 
that futures contract prices could move to the daily limit for 
several consecutive trading days with little or no trading, 
thereby preventing prompt liquidation of futures positions and 
subjecting some futures traders to substantial losses.  In such 
event it will not be possible to close a futures position and in 
the event of adverse price movements, the Portfolio would be 
required to make daily cash payments of variation margin.  In such 
circumstances, an increase in the value of the portion of the 
portfolio being hedged, if any, may partially or completely offset 
losses on the futures contract.  As described above, however, 
there is no guarantee the price of Municipal Obligations will, in 
fact, correlate with the price movements in a futures contract and 
thus provide an offset to losses on a futures contract.  

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

	Options on Interest Rate Futures Contracts.  The Portfolio 
may purchase put and call options on interest rate futures 
contracts which are traded on a domestic exchange or board of 
trade as a hedge against changes in interest rates, and may enter 
into closing transactions with respect to such options to 
terminate existing positions.  The Portfolio will sell put and 
call options on interest rate futures contracts only as part of 
closing sale transactions to terminate its options positions.  
There is no guarantee such closing transactions can be effected.

	Options on interest rate futures contracts, as contrasted 
with the direct investment in such contracts, give the purchaser 
the right, in return for the premium paid, to assume a position in 
interest rate futures contracts at a specified exercise price at 
any time prior to the expiration date of the options.  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 on the futures contract.  The potential loss related to 
the purchase of an option on interest rate futures contracts is 
limited to the premium paid for the option (plus transaction 
costs).  Because the value of the option is fixed at the point of 
sale, there are no daily cash payments to reflect changes in the 
value of the underlying contract; however, the value of the option 
does change daily and that change would be reflected in the net 
asset value of the Portfolio.

	There are several risks relating to options on interest rate 
futures contracts.  The ability to establish and close out 
positions on such options will be subject to the existence of a 
liquid market.  In addition, the Portfolio's purchase of put or 
call options will be based upon predictions as to anticipated 
interest rate trends by the Investment Manager which could prove 
to be inaccurate.  Even if the Investment Manager's expectations 
are correct, there may be an imperfect correlation between the 
change in the value of the options and of the Portfolio's 
securities.

Municipal Obligations

	General Information.  Municipal Obligations generally are 
understood to include debt obligations issued to obtain funds for 
various public purposes, including the 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 that 
are issued by or on behalf of public authorities to obtain funds 
to provide privately operated facilities are included within the 
term Municipal Obligations if the interest paid thereon qualifies 
as excludable 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 yields on Municipal Obligations are dependent upon a 
variety of factors, including general economic and monetary 
conditions, general money market conditions, general conditions of 
the Municipal Obligations market, the financial condition of the 
issuer, the size of a particular offering, the maturity of the 
obligation offered and the rating of the issue.  Municipal 
Obligations are also 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, 
that 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 the obligations or 
upon the ability of municipalities to levy taxes.   There is also 
the possibility that as a result of litigation or other conditions 
the power or ability of any one or more issuer to pay, when due, 
principal of and interest on its, or their, Municipal Obligations 
may be materially affected.  

	The net asset value of the Common Stock will change with 
changes in the value of the Portfolio's securities.  Because the 
Portfolio will invest primarily in fixed-income securities, the 
net asset value of the Common Stock can be expected to change as 
levels of interest rates fluctuate; generally, when prevailing 
interest rates increase, the value of fixed-income securities held 
by the Portfolio can be expected to decrease and when prevailing 
interest rates decrease, the value of the fixed-income securities 
held by the Portfolio can be expected to increase.  The value of 
the fixed-income securities held by the Portfolio and thus the 
Portfolio's net asset value, may also be affected by other 
economic, market and credit factors.

	From time to time, the Portfolio's investments may include 
securities as to which the Portfolio, by itself or together with 
other funds or accounts managed by the Investment Manager holds a 
major portion or all of an issue of Municipal Obligations.  
Because relatively few potential purchasers may be available for 
these investments and, in some cases, contractual restrictions may 
apply on resales, the Portfolio may find it more difficult  to 
sell these securities at a time when the Investment Manager 
believes it is advisable to do so.

	When-Issued Securities.  The Portfolio may purchase 
Municipal Obligations 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 Obligations purchased on a when-issued basis are 
each fixed at the time the buyer enters into the commitment.  
Although the Portfolio will purchase Municipal Obligations on a 
when-issued basis only with the intention of actually acquiring 
the securities, the Portfolio may sell these securities before the 
settlement date if it is deemed advisable as a matter of 
investment strategy. 

	Municipal Obligations 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 Obligations tend to appreciate when 
interest rates decline and depreciate when interest rates rise.  
Purchasing Municipal Obligations on a when-issued basis, 
therefore, can involve the risk that the yields available in the 
market when the delivery takes place actually may be higher than 
those obtained in the transaction itself.  To account for this 
risk, a separate account of the Portfolio consisting of cash, U.S. 
government securities, equity securities or debt securities of any 
grade equal to or greater than the amount of the when-issued 
commitments, provided such securities have been determined by the 
Investment Manager to be liquid and unencumbered, and are marked 
to market daily pursuant to guidelines established by the 
Portfolio's Directors, will be established at the Portfolio's 
custodian bank.  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 that the value of the 
account will equal the amount of such commitments by the 
Portfolio.  Placing securities rather than cash in the segregated 
account may have a leveraging effect on the Portfolio's net 
assets.  That is, to the extent the Portfolio 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 commitment.  Upon the 
settlement date of the when-issued securities, the Portfolio will 
meet its obligation from then-available cash flow, sale of 
securities held in the segregated account, sale of other 
securities or, although it would not normally expect to do so, 
from the sale of the when-issued securities themselves (which may 
have a value greater or less than the Portfolio's payment 
obligations).  Sales of securities to meet such obligations may 
involve the realization of capital gains, which are not exempt 
from federal income taxes.

	When the Portfolio 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 Portfolio's incurring a loss or 
missing an opportunity to obtain a price considered to be 
advantageous.

	Municipal Leases.  Municipal leases may take the form of a 
lease or an installment purchase contract issued by state and 
local government authorities to obtain funds to acquire a wide 
variety of equipment and facilities such as fire and sanitation 
vehicles computer equipment and other capital assets.  These 
obligations have evolved to make it possible for state and local 
government authorities to acquire property and equipment without 
meeting constitutional and statutory requirements for the issuance 
of debt.  Thus, municipal leases have special risks not normally 
associated with Municipal Obligations.  These obligations 
frequently contain "non-appropriation" clauses providing that the 
governmental issuer of the obligation has no obligation to make 
future payments under the lease or contract unless money is 
appropriated for such purposes by the legislative body on a yearly 
or other periodic basis.  In addition to the "non-appropriation" 
risk, municipal leases represent a type of financing that has not 
yet developed the depth of marketability associated with Municipal 
Obligations, moreover, although the obligations will be secured by 
the leased equipment, the disposition of the equipment in the 
event of foreclosure might prove difficult.

	To limit the risks associated with municipal leases, the 
Portfolio will invest no more than 5% of its total assets in lease 
obligations that contain non-appropriation clauses and will only 
purchase a non-appropriation lease obligation with respect to 
which (1) the nature of the leased equipment or other property is 
such that its ownership or use is reasonably essential to a 
governmental function of the issuing municipality (2) the lease 
payments will begin to amortize the principal balance due at an 
early date, resulting in an average life of five years or less for 
the lease obligation, (3) appropriate covenants will be obtained 
from the municipal obligor prohibiting the substitution or 
purchase of similar equipment or other property if lease payments 
are not appropriated, (4) the lease obligor has maintained good 
market acceptability in the past, (5) the investment is of a size 
that will be attractive to institutional investors and (6) the 
underlying leased equipment or other property has elements of 
portability and/or use that enhance its marketability in the event 
that foreclosure on the underlying equipment or other property 
were ever required.

	Municipal leases that the Portfolio may acquire will be both 
rated and unrated.  Rated leases that may be held by the Portfolio 
include those rated investment grade at the time of investment 
(that is, rated no lower than Baa by Moody's, BBB by S&P or BBB by 
Fitch).  The Portfolio may acquire unrated issues that the 
Investment Manager deems to be comparable in quality to rated 
issues in which the Portfolio is authorized to invest.  A 
determination by the Investment Manager that an unrated lease 
obligation is comparable in quality to a rated lease obligation 
will be made on the basis of, among other things a consideration 
of whether the nature of the leased equipment or other property is 
such that its ownership or use is reasonably essential to a 
governmental function of the issuing municipality.  In addition, 
all such determinations made by the Investment Manager will be 
subject to oversight and approval by the Portfolio's Board of 
Directors.

	Municipal leases held by the Portfolio will be considered 
illiquid securities unless the Portfolio's Board of Directors 
determines on an ongoing basis that the leases are readily 
marketable an unrated municipal lease with a non-appropriation 
risk that is backed by an irrevocable bank letter of credit or an 
insurance policy issued by a bank or insurer deemed by the 
Investment Manager to be of high quality and minimal credit risk 
is not deemed to be illiquid solely because the underlying 
municipal lease is unrated if the Investment Manager determines 
that the lease is readily marketable because it is backed by the 
letter of credit or insurance policy.


Investment Restrictions

	The Portfolio has adopted certain fundamental investment 
restrictions that may not be changed without the prior approval of 
the holders of a majority of the Portfolio's outstanding voting 
securities.  A "majority of the Portfolio's outstanding voting 
securities" for this purpose means the lesser of (1) 67% or more 
of the shares of the Portfolio's Common Stock present at a meeting 
of shareholders, if the holders of 50% of the outstanding shares 
are present or represented by proxy at the meeting or (2) more 
than 50% of the outstanding shares.  For purposes of the 
restrictions listed below all percentage limitations apply 
immediately after a purchase or initial investment, and any 
subsequent change in applicable percentage resulting from market 
fluctuations will not require elimination of any security from the 
Portfolio.  Under its fundamental restrictions, the Portfolio may 
not:

1. Purchase securities other than Municipal Obligations and 
Taxable Investments as those terms are described in the 
Prospectus and this SAI. 
2. Borrow money, except for temporary or emergency purposes, or 
for clearance of transactions, and then only in amounts not 
exceeding 15% of its total assets (not including the amount 
borrowed) and as otherwise described in the Prospectus and 
this SAI.  When the Portfolio's borrowings exceed 5% of the 
value of its total assets, the Portfolio will not make any 
additional investments.
3. Sell securities short or purchase securities on margin, 
except for such short-term credits as are necessary for the 
clearance of transactions, but the Portfolio may make margin 
deposits in connection with transactions in options futures 
and options on futures.
4. Underwrite any issue of securities, except to the extent that 
the purchase of Municipal Obligations may be deemed to be an 
underwriting.
5. Purchase, hold or deal in real estate or oil and gas 
interests except that the Portfolio may invest in Municipal 
Obligations secured by real estate or interests in real 
estate.
6. Invest in commodities, except that the Portfolio may enter 
into futures contracts, including those relating to indexes 
and options on futures contracts or indexes described in the 
Prospectus and this SAI.
7. Lend any funds or other assets except through purchasing 
Municipal Obligations or Taxable Investments, lending 
portfolio securities and entering into repurchase agreements 
consistent with the Portfolio's investment objective.
8. Issue senior securities. 
9. Invest more than 25% of its total assets in the securities of 
issuers in any single industry, except that this limitation 
will not be applicable to the purchase of Municipal 
Obligations and U.S. government securities.
10. Make any investments for the purpose of exercising control or 
management of any company.


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 the best price or execution will be obtained; 
those dealers may be acting as either agents or principals.  The 
purchase price paid by the Portfolio 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.  The Portfolio has paid no brokerage commissions since its 
commencement of operations.

	Allocation of transactions, including their frequency, to 
various dealers is determined by the Investment 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 Investment 
Manager may receive orders for portfolio transactions by the 
Portfolio.  Information so received is in addition to, and not in 
lieu of, services required to be performed by the Investment 
Manager and the fees of the Investment Manager are not reduced as 
a consequence of their receipt of such supplemental information.  
Such information may be useful to the Investment Manager in 
serving both the Portfolio and other clients and conversely, 
supplemental information obtained by the placement of business of 
other clients may be useful to the Investment Manager in carrying 
out its obligations to the Portfolio.

	The Portfolio will not purchase Municipal Obligations during 
the existence of any underwriting or selling group relating 
thereto of which Smith Barney Inc. ("Smith Barney") or its 
affiliates are members except to the extent permitted by the 
Securities and Exchange Commission (the "SEC").  Under certain 
circumstances, the Portfolio 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.

	While investment decisions for the Portfolio are made 
independently from those of the other accounts managed by the 
Investment Manager investments of the type the Portfolio may make 
also may be made by those other accounts.  When the Portfolio and 
one or more other accounts managed by the Investment 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 Investment Manager to be equitable to 
each.  In some cases, this procedure may adversely affect the 
price paid or received by the Portfolio or the size of the 
position obtained or disposed of by the Portfolio.

	The Portfolio's Board of Directors will review periodically 
the commissions paid by the Portfolio to determine if the 
commissions paid over representative periods of time were 
reasonable in relation to the benefits inuring to the Portfolio.


Portfolio Turnover

	The Portfolio's portfolio turnover rate (the lesser of 
purchases or sales of portfolio securities during the last fiscal 
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 Portfolio 
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 Portfolio 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 often-exempt 
securities.  For the fiscal years ended May 31, 1995, 1996 and 
1997, the Portfolio's portfolio turnover rate was 93%, 45% and 
113%, respectively.

MANAGEMENT OF THE PORTFOLIO

	The executive officers of the Portfolio are employees of 
certain of the organizations that provide services to the 
Portfolio. These organizations are as follows:

Name	Service

Smith Barney Mutual Funds Management Inc. 	Investment Manager 
and ("SBMFM")	Administrator

Smith Barney	Distributor 
(Sponsor)

PNC Bank, National Association.	Custodian
("PNC Bank")	

First Data Investor Services Group, Inc.	Transfer Agent
("First Data")

	These organizations and the functions they perform for the 
Portfolio are discussed in the Prospectus and this SAI.  

Directors and Executive Officers of the Portfolio

	The overall management of the business and affairs of the 
Portfolio is vested with its Board of Directors. The Board of 
Directors approves all significant agreements between the 
Portfolio and persons or companies furnishing services to it, 
including the Portfolio's agreements with its investment adviser, 
administrator, custodian and transfer agent, dividend paying 
agent, registrar and plan agent. The day-to day operations of the 
Portfolio are delegated to its officers and to the Investment 
Manager and SBMFM, subject always to the investment objective and 
policies of the Portfolio and to general supervision by the 
Portfolio's Board of Directors. 

	The Directors and executive officers of the Portfolio, their 
addresses together with information as to their principal business 
occupations during the past five years, are shown below:


Name and Address(Age)
Positions Held 
With the Fund
Principal Occupations 
During Past 5 Years



*+Heath B. McLendon (64)
	388 Greenwich Street
	New York, NY 10013

Chairman of the Board, 
Chief Executive Officer 

Managing Director of Smith Barney; President and Director of 
SBMFM; President and Director of Travelers Investment Advisers, 
Inc. ("TIA"); Chairman of Smith Barney Strategy Advisers Inc. 
Prior to July 1993, Senior Executive Vice President of Shearson 
Lehman Brothers; Vice Chairman of Shearson Asset Management.

 +Martin Brody (76)
	c\o HMK Associates
	30 Columbia Turnpike
	Florham Park, NJ 07932

Director
Consultant, HMK Associates; Retired Vice Chairman of the Board of 
Restaurant Associates Corp.; Director of Jaclyn, Inc.

 +Allan J. Bloostein (68)
	717 Fifth Avenue
	21st Floor
	New York, NY 10022

Director
President; Allan J. Bloostein Associates, Consultant and retired 
Vice Chairman of the Board of May Department Stores Company; 
Director of Taubman Centers, Inc. and CVS Corporation.

 +Dwight B. Crane (59) 
	Harvard Business School 
	Soldiers Field Road
	Boston, MA 02163

Director
Professor, Harvard Business School.




 +Robert A. Frankel (70)
	102 Grand Street
	Croton-on-Hudson
	New York, NY 10520

Director
Consultant Robert A. Frankel Management Consultants; formerly 
Corporate Vice President of The Reader's Digest Association, Inc.


 +William R. Hutchinson (54)
	Amoco Corp.
	200 East Randolph Drive
	Chicago, IL  60601



Director
Vice President-Financial Operations Amoco Corp.; Director of 
Associated Banks and Associated Bank Corp.



Name and Address(Age)
Positions Held 
With the Fund
Principal Occupations 
During Past 5 Years



  Joseph P. Deane (49)
	388 Greenwich Street
	New York. NY 10013


Vice President and 
Investment Officer
Managing Director of Smith Barney; Investment Officer of SBMFM. 
Prior to July 1993, Senior Vice President and Managing Director of 
Shearson Lehman Advisors.

  David Fare (34)
	388 Greenwich Street
	New York, NY 10013

Investment Officer
Vice President of Smith Barney. Prior to July 1993, Vice President 
of Shearson Lehman Advisors.

  Lewis E. Daidone (40)
	388 Greenwich Street
	New York, NY 10013


Senior Vice President
and Treasurer
Managing Director of Smith Barney; Director and Senior Vice 
President of SBMFM and TIA.

  Christina T. Sydor (46)
	388 Greenwich Street
	New York, NY 10013

Secretary
Managing Director of Smith Barney; General Counsel and Secretary 
of SBMFM and TIA.


________________________________
*	Directors who are "interested persons" of the Portfolio (as 
defined in the 1940 Act).
+ Director and/or trustee of other registered investment companies 
with which Smith Barney is affiliated.

	The Fund pays each of its Directors who is not a director, 
officer or employee of SBMFM, or any of its affiliates, an annual 
fee of $5,000 plus $500 for each in-person Board meeting and $100 
for each telephonic Board meeting attended.  In addition, the Fund 
will reimburse these Directors for travel and out-of-pocket 
expenses incurred in connection with Board of Directors meetings.  
For the fiscal year ended May 31, 1997, such fees totaled $48,866.








Director	




			
	Total
			
	Number
		Pension or	
	of Funds
		Retirement	Total
	for which
		Benefits	Compen
	Director
		Accrued	sation
	Serves
	Aggregate	as part	from Fund
	Within
	Compensation	of Fund	and Fund
	Fund
Director	from Fund	Expenses	Complex
	Complex

Charles Barber*$	$7,000	$0	$38,700	6
Martin Brody	6,500	0	124,286
	19
Dwight Crane	7,200	0	141,375
	22
Allan Bloostein	7,000	0	83,150	8
Robert Frankel	7,000	0	66,100	8
William R. Hutchinson	7,000	0
	38,600	6
Heath B. McLendon	-----	0	-----
	41
					
*	Pursuant to the Fund's deferred compensation plan, Mr. Barber 
elected, effective January 2, 1996, to defer the payment of some 
or all of the compensation due to him from the Fund.
$	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, during which time 
they are paid 50% of the annual retainer fee and meeting fees 
otherwise applicable to Fund Directors, together with reasonable 
out-of-pocket expenses for each meeting attended.  Effective 
February 26, 1997, Mr. Barber became a Director Emeritus.

Principal Stockholders

	There are no persons known to the Portfolio to be control 
persons of the Portfolio, as such term is defined in Section 
2(a)(9) of the 1940 Act. There is no person known to the Portfolio 
to hold beneficially more than 5% of the outstanding shares of 
Common Stock. The following person is the only person holding more 
than 5% of the Portfolio's outstanding shares of Common Stock as 
of July 16, 1997;

	
	Percent of
Name and Address	Amount of
	Common
of Record Owner	Record
	Stock
	Ownership
	Outstanding

Cede & Co., as Nominee for The Depository Trust Company
	33,523,695.00
0	96.98%
P.O. Box 20
Bowling Green Station
New York, New York 10004

Of the shares held of record by Cede & Co., 27,245,208 shares, 
representing 78.82% of the outstanding shares of Common Stock, 
were held by The Depository Trust Company as nominee for Smith 
Barney, representing accounts for which Smith Barney has 
discretionary and non-discretionary authority.

	As of July 16, 1997, the Directors and officers of the 
Portfolio, as a group, beneficially owned less than 1% of the 
Portfolio's outstanding shares of Common Stock.

Investment Manager and Administrator

	 The Investment Manager serves as investment adviser to the 
Portfolio pursuant to a written agreement dated July 30, 1993 (the 
"Advisory Agreement"), a form of which was most recently approved 
by the Board of Directors, including a majority of those Directors 
who are not "interested persons" of the Portfolio or the 
Investment Manager ("Non-Interested Directors") on August 20, 
1997.  Unless terminated sooner, the Advisory Agreement will 
continue for successive annual periods provided that such 
continuance is specifically approved at least annually: (1) by a 
majority vote of the Non-Interested Directors cast in person at a 
meeting called for the purpose of voting on such approval; and (2) 
by the Board of Directors or by a vote of a majority of the 
outstanding shares of Common Stock.  The Investment Manager is a 
wholly owned subsidiary of Smith Barney Holdings Inc. 
("Holdings"), which is in turn a wholly owned subsidiary of 
Travelers Group.  The Investment Manager pays the salary of any 
officer or employee who is employed by both it and the Portfolio.  
The Investment Manager bears all expenses in connection with the 
performance of its services as investment adviser. 

	For services rendered to the Portfolio, the Investment 
Manager receives from the Portfolio a fee, computed and paid 
monthly at the annual rate 0.70% of the value of the Portfolio's 
average daily net assets.  For the fiscal years ended May 31, 
1995, 1996 and 1997, such fees amounted to $2,896,951, $3,021,241 
and $2,913,886, respectively.

	Under the Advisory Agreement, the Investment Manager will 
not be liable for any error of judgment or mistake of law or for 
any loss suffered by the Portfolio in connection with the Advisory 
Agreement, except a loss resulting from willful misfeasance, bad 
faith or gross negligence on the part of the Investment Manager in 
the performance of its duties or from reckless disregard of its 
duties and obligations under the Advisory Agreement.  The Advisory 
Agreement is terminable by vote of the Board of Directors or by 
the holders of a majority of Common Stock, at any time without 
penalty on 60 days written notice to the Investment Manager.  The 
Advisory Agreement may also be terminated by the Investment 
Manager on 90 days' written notice to the Portfolio.  The Advisory 
Agreement terminates automatically upon its assignment.

	SBMFM serves as administrator to the Portfolio pursuant to a 
written agreement dated June 1, 1994 (the "Administration 
Agreement"), a form of which was most recently approved by the 
Board of Directors, including a majority of Non-Interested 
Directors, on August 20, 1997.  The services provided by SBMFM 
under the Administration Agreement are described in the Prospectus 
under "Management of the Portfolio."

	For services rendered to the Portfolio, SBMFM received from 
the Portfolio a fee computed and paid monthly at the annual rate 
0.20% of the value of the Portfolio's average daily assets.  For 
the fiscal years ended May 31, 1995, 1996 and 1997 SBMFM or its 
predecessor received $827,700, $863,212 and $832,539 respectively, 
in administration fees.

	Pursuant to the Administration Agreement, SBMFM will 
exercise its best judgment in rendering its services to the 
Portfolio.  SBMFM will not be liable for any error of judgment or 
mistake of law or for any loss suffered by the Portfolio in 
connection with the matters to which the Administration Agreement 
relates, except by reason of SBMFM's reckless disregard of its 
obligations and duties under the Administration Agreement.

	The Administration Agreement will continue automatically for 
successive annual periods provided that such continuance is 
approved at least annually by the Board of Directors of the 
Portfolio including a majority of the Non-Interested Directors by 
vote cast in person at a meeting called for the purpose of voting 
such approval. The Administration Agreement is terminable, without 
penalty, upon 60 days written notice, by the Board of Directors of 
the Portfolio or by vote of holders of a majority of the 
Portfolio's shares of Common Stock, or upon 90 days' written 
notice, by the SBMFM.

	The Portfolio bears expenses incurred in its operation 
including: fees of the investment, adviser and administrator; 
taxes, interest brokerage fees and commissions, if any; fees of 
Directors who are not officers, directors shareholders or 
employees of Smith Barney; SEC fees and state blue sky 
qualification fees; charges of the custodian; transfer and 
dividend disbursing agent's fees; certain insurance premiums; 
outside auditing and legal expenses; costs of any independent 
pricing service; costs of maintaining corporate existence; costs 
attributable to investor services (including allocated telephone 
and personnel expenses); costs of preparation and printing of 
prospectuses and statements of additional information for 
regulatory purposes and for distribution to shareholders; 
shareholders' reports and corporate meetings of the officers, 
Board of Directors and shareholders of the Portfolio.

TAXES

	As described above and in the Prospectus, the Portfolio is 
designed to provide investors with current income which is 
excluded from gross income for federal income tax purposes. The 
Portfolio 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 Portfolio 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 following is a summary of selected federal income tax 
considerations that may affect the Portfolio and its shareholders. 
The summary is not intended as a substitute for individual tax 
advice and investors are urged to consult their own tax advisors 
as to the tax consequences of an investment in the Portfolio.

Taxation of the Portfolio and its Investments

	The Portfolio has qualified and intends to qualify as a 
"regulated investment company" under Subchapter M of the Internal 
Revenue Code of 1986 as amended (the "Code"). In addition, the 
Portfolio intends to satisfy conditions contained in the Code that 
will enable interest from Municipal Obligations, excluded from 
gross income for federal income tax purposes with respect to the 
Portfolio, to retain that tax-exempt status when distributed to 
the shareholders of the Portfolio (that is, to be classified as 
"exempt interest" dividends of the Portfolio).

	If it qualifies as a regulated investment company the 
Portfolio will pay no federal income taxes on its taxable net 
investment income (that is, taxable income other than net realized 
capital gains) and its net realized capital gains that are 
distributed to shareholders. To qualify under Subchapter M of the 
Code, the Portfolio must among other things: (1) distribute to its 
shareholders at least 90% of its taxable net investment income 
(for this purpose consisting of taxable net investment income and 
net realized short-term capital gains) and 90% of its tax-exempt 
net investment income (reduced by certain expenses); (2) derive at 
least 90% of its gross income from dividends, interest, payments 
with respect to loans of securities, gains from the sale or other 
disposition of securities, or other income (including, but not 
limited to, gains from options, futures, and forward contracts) 
derived with respect to the Portfolio's business of investing in 
securities; (3) derive less than 30% of its annual gross income 
from the sale or other disposition of securities, options, futures 
or forward contracts held for less than three months(the "short-
short rule"); and (4) diversify its holdings so that at the end of 
each fiscal quarter of the Portfolio (a) at least 50% of the 
market value of the Portfolio's assets is represented by cash, 
U.S. government securities and other securities) with those other 
securities limited with respect to any one issuer, to an amount no 
greater than 5% of the Portfolio's assets and (b) not more than 
25% of the market value of the Portfolio's assets is invested in 
the securities of any one issuer (other than U.S. government 
securities or securities of other regulated investment companies) 
or of two or more issuers that the Portfolio controls and that are 
determined to be in the same or similar trades or businesses or 
related trades or businesses. In meeting these requirements, the 
Portfolio may be restricted by the short-short rule in the selling 
of securities held by the Portfolio for less than three months and 
in the utilization of certain of the investment techniques 
described above under "Investment Objective and Policies."  
However, the Taxpayer Relief Act of 1997 repeals the short-short 
rule effective for the Portfolio's taxable year begining June 1, 
1998.  As a regulated investment company, the Portfolio will be 
subject to a 4% non-deductible excise tax measured with respect to 
certain undistributed amounts of ordinary income and capital gain. 
The Portfolio expects to pay dividends and distributions necessary 
to avoid the application of this excise tax.

	As described above in this SAI and in the Prospectus, the 
Portfolio may invest in financial futures contracts and options on 
financial futures contracts that are traded on a U.S. exchange or 
board of trade. The Portfolio anticipates that these investment 
activities will not prevent the Portfolio from qualifying as a 
regulated investment company. As a general rule, these investment 
activities will increase or decrease the amount of long-term and 
short-term capital gains or losses realized by the Portfolio and 
thus will affect the amount of capital gains distributed to the 
Portfolio shareholders.

	For federal income tax purposes, gain or loss on the futures 
and options described above (collectively referred to as "Section 
1256 Contracts") would, as a general rule, be taxed pursuant to a 
special "mark-to-market system." Under the mark-to-market system, 
the Portfolio may be treated as realizing a greater or lesser 
amount of gains or losses than actually realized. As a general 
rule gain or loss on Section 1256 Contracts is treated as 60% long 
term capital gain or loss and 40% short-term capital gain or loss, 
and as a result, the mark-to-market system will generally affect 
the amount of capital gains or losses taxable to the Portfolio and 
the amount of distributions taxable to a shareholder.  The portion 
of gain on Section 1256 Contracts treated as long-term capital 
gains may not qualify for the 20% reduced maximum rate on long-
term capital gainsmand may instead be taxable at a maximum rate of 
28%.

	If Portfolio invests in both Section 1256 Contracts and 
offsetting positions in those contracts, then the Portfolio might 
not be able to receive the benefit of certain realized losses for 
an indeterminate period of time. The Portfolio expects that its 
activities with respect to Section 1256 Contracts and offsetting 
positions in those Contracts (1) will not cause it or its 
shareholders to be treated as receiving a materially greater 
amount of capital gains or distributions than actually realized or 
received and (2) will permit the Fund to use substantially all of 
its losses for the fiscal years in which the losses actually 
occur.

Taxation of the Portfolio's Shareholders

	The Portfolio anticipates that all dividends it pays, other 
than dividends from Taxable Investments and from income or gain 
derived from securities transactions and from the use of certain 
of the investment techniques described under "Investment Objective 
and Policies" will be derived from interest on Municipal 
Obligations and thus will be exempt-interest dividends that may be 
excluded by shareholders from their gross income for federal 
income tax purposes if the Portfolio satisfies certain asset 
percentage requirements. Dividends paid from the Portfolio's net 
investment income and distributions of the Portfolio's net 
realized short-term capital gains are taxable to shareholders of 
the Portfolio as ordinary income, regardless of the length of time 
shareholders have held shares of Common Stock and whether the 
dividends or distributions are received in cash or reinvested in 
additional shares. As a general rule, a shareholder's gain or loss 
on a sale of his or her shares of Common Stock will be a long-term 
gain or loss if he or she has held his or her shares for more than 
one year and will be a short-term capital gain or loss if he or 
she has held his or her shares for one year or less.  Gain on 
shares held for more than 18 months will be eligible for the 
reduced 20% maximum capital gains tax rate.  Dividends and 
distributions paid by the Portfolio will not qualify for the 
federal dividends-received deduction for corporations.

Exempt-Interest Dividends

	Interest on indebtedness incurred by a shareholder to 
purchase or carry shares of Common Stock is not deductible for 
federal income tax purposes. If a shareholder receives exempt-
interest dividends with respect to any share of Common Stock and 
if the share is held by the shareholder for six months or less, 
then any loss on the sale of the share may, to the extent of the 
exempt-interest dividends, be disallowed. The Code may also 
require a shareholder if he or she receives exempt-interest 
dividends to treat as taxable income a portion of certain 
otherwise non-taxable social security and railroad retirement 
benefit payments. In addition, the portion of any exempt-interest 
dividend paid by the Portfolio that represents income derived from 
private activity bonds held by the Portfolio may not retain its 
tax-exempt status in the hands of a shareholder who is a 
"substantial user" of a facility financed by the bonds, or a 
"related person" of the substantial user. Although the Portfolio's 
exempt-interest dividends may be excluded by shareholders from 
their gross income for federal income tax purposes (1) some or all 
of the Portfolio's exempt-interest 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 and (2) the receipt of dividends and distributions 
from the Portfolio may affect a corporate shareholder's federal 
"environmental" tax liability. The receipt of dividends and 
distributions from the Portfolio may affect a foreign corporate 
shareholder's federal "branch profits" tax liability and a 
corporate shareholder's federal "excess net passive income" tax 
liability. Shareholders should consult their own tax advisors to 
determine whether they are (1) "substantial users" with respect to 
a facility or "related" to those users within the meaning of the 
Code or (2) subject to a federal alternative minimum tax the 
federal "environmental" tax, the federal "branch profits" tax, or 
the federal "excess net passive income" tax.

Dividend Reinvestment Plan

	A shareholder of the Portfolio receiving dividends or 
distributions in additional shares pursuant to the Plan should be 
treated for federal income tax purposes as receiving a 
distribution in an amount equal to the amount of money that a 
shareholder receiving cash dividends or distributions receives and 
should have a cost basis in the shares received equal to that 
amount.

Statements and Notices

	Statements as to the tax status of the dividends and 
distributions received by shareholders of the Portfolio are mailed 
annually. These statements show the dollar amount of income 
excluded from federal income taxes and the dollar amount, if any, 
subject to federal income taxes. The statements will also 
designate the amount of exempt interest dividends that are a 
specific preference item for purposes of the federal individual 
and corporate alternative minimum taxes and will indicate the 
shareholder's share of the investment expenses of the Portfolio. 
The Portfolio will notify shareholders annually as to the interest 
excluded from federal income taxes earned by the Portfolio with 
respect to those states and possessions in which the Portfolio has 
or had investments. The dollar amount of dividends paid by the 
Portfolio that is excluded from federal income taxation and the 
dollar amount of dividends paid by the Portfolio that is subject 
to federal income taxation, if any, will vary for each shareholder 
depending upon the size and duration of the shareholder's 
investment in the Portfolio. To the extent that the Portfolio 
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. Therefore, the percentage of 
each day's dividend designated as taxable, if any, may vary from 
day to day.

Backup Withholding

	If a shareholder fails to furnish a correct taxpayer 
identification number fails to report filly dividend or interest 
income or fails to certify that he has provided a correct taxpayer 
identification number and that he is not subject to "backup 
withholding," the shareholder may be subject to a 31% "backup 
withholding" tax with respect to (1) taxable dividends and 
distributions and (2) the proceeds of any sales or repurchases of 
shares of Common Stock. An individual's taxpayer identification 
number is his social security number. The 31% backup withholding 
tax is not an additional tax and may be credited against a 
taxpayer's federal income tax liability

STOCK PURCHASES AND TENDERS

	The Portfolio may repurchase shares of its Common Stock in 
the open market or in privately negotiated transactions when the 
Portfolio can do so at prices below their then current net asset 
value per share on terms that the Portfolio's Board of Directors 
believes represent a favorable investment opportunity. In 
addition, the Board of Directors currently intends to consider, at 
least once a year, making an offer to each shareholder of record 
to purchase at net asset value shares of Common Stock owned by the 
shareholder

	No assurance can be given that repurchases and/or tenders 
will result in the Portfolio's shares trading at a price that is 
equal to their net asset value. The market prices of the Portfolio 
shares will among other things, be determined by the relative 
demand for and supply of the shares in the market, the Portfolio's 
investment performance, the Portfolio's dividends and yield and 
investor perception of the Portfolio's overall attractiveness as 
an investment as compared with other investment alternatives. The 
Portfolio's acquisition of Common Stock will decrease the total 
assets of the Portfolio and therefore have the effect of 
increasing the Portfolio's expense ratio. The Portfolio may borrow 
money to finance the repurchase of shares subject to the 
limitations described in the Prospectus. Any interest on the 
borrowings will reduce the Portfolio's net income. Because of the 
nature of the Portfolio's investment objective, policies and 
securities holdings, the Investment Manager does not anticipate 
that repurchases and tenders will have an adverse effect on the 
Portfolio's investment performance and does not anticipate any 
material difficulty in disposing of securities to consummate 
Common Stock repurchases and tenders.

	When a tender offer is authorized to be made by the 
Portfolio's Board of Directors, it will be an offer to purchase at 
a price equal to the net asset value of all (but not less than 
all) of the shares owned by the shareholder (or attributed to him 
for federal income tax purposes under Section 38 of the Code). A 
shareholder who tenders all shares owned or considered owned by 
him or her, as required, will realize a taxable gain or loss 
depending upon his or her basis in his or her shares.

	If the Portfolio liquidates securities in order to 
repurchase shares of Common Stock, the Portfolio may realize gains 
and losses. These gains, if any, may be realized on securities 
held for less than three months. Because the Portfolio must derive 
less than 30% of its gross income for any taxable year from the 
sale or disposition of stock and securities held less than three 
months (in order to retain the Portfolio's regulated investment 
company status under the Code), gains realized by the Portfolio 
due to a liquidation of securities held for less than three months 
would reduce the amount of gain on sale of other securities held 
for less than three months that the Portfolio could realize in the 
ordinary course of its portfolio management, which may adversely 
affect the Portfolio's performance. The portfolio turnover rate of 
the Portfolio may or may not be affected by the Portfolio's 
repurchases of shares of Common Stock pursuant to a tender offer.

CERTAIN PROVISIONS OF THE ARTICLES OF INCORPORATION

	The Portfolio's Articles of Incorporation include provisions 
that could have the effect of limiting the ability of other 
entities or persons to acquire control of the Portfolio or to 
change the composition of its Board of Directors and could have 
the effective of depriving shareholders of an opportunity to sell 
their shares of Common Stock at a premium over the prevailing 
market prices by discouraging a third party from seeking to obtain 
control of the Portfolio.  Commencing with the first annual 
meeting of shareholders, the Board of Directors will be divided 
into three classes.  At the annual meeting of shareholders in each 
year thereafter, the term of one class will expire and each 
Director elected to the class will hold office for a term of three 
years.  The classification of the Board of Directors in this 
manner could delay for up to two years the replacement of majority 
of the Board.  The Articles of Incorporation provide that the 
maximum number of Directors that may constitute the Portfolio's 
entire board is 12.  A director may be removed from office, or the 
maximum number of Directors increased, only by vote of the holders 
of at least 75% of shares of Common Stock entitled to be voted on 
the matter.

	The Portfolio's Articles of Incorporation require the 
favorable vote of the holders of at least two-thirds of the shares 
of Common Stock then entitled to be voted to authorized the 
conversion of the Portfolio from a closed-end to an open-end 
investment company's defined in the 1940 Act, unless two-thirds of 
the Continuing Directors (as defined below) approve such a 
conversion.  In the latter case, the affirmative vote of a 
majority of the shares outstanding will be required to approve the 
amendment to the Portfolio's Articles of Incorporation providing 
for the conversion of the Portfolio.

	The affirmative votes of a least 75% of the Directors and 
the holder of at least 75% of the shares of the Portfolio are 
required to authorize any of the following transactions (referred 
to individually as a "Business Combination"): (1) a merger, 
consolidation or share exchange of the Portfolio with or into any 
other person (referred to individually as a "Reorganization 
Transaction"); (2) the issuance or transfer by the Portfolio (in 
one or a series of transactions in any 12-month period) of any 
securities of the Portfolio to any other person or entity for 
cash, securities of other property (or combinations thereof) 
having an aggregate fair market value of $1,000,000 or more, 
excluding sales of securities of the Portfolio in connection with 
a public offering, issuance of securities of the Portfolio 
pursuant to a dividend reinvestment plan adopted by the Portfolio 
and issuance's of securities of the Portfolio upon the exercise 
for any stock subscriptions rights distributed by the Portfolio; 
or (3) a sale, lease, exchange, mortgage, pledge, transfer or 
other disposition by the Portfolio (in one or a series of 
transactions in any 12-month period) to or with any person of any 
assets of the Portfolio having aggregate fair market value of 
$1,000,000 or more, except for transactions in securities effected 
by the Portfolio in the ordinary course of its business (each such 
sale, lease, exchange, mortgage, pledge, transfer or other 
disposition being referred to individually as a "Transfer 
Transaction").  The same affirmative votes are required with 
respect to: any proposal as to the voluntary liquidation or 
dissolution of the Portfolio or any amendment to the Portfolio's 
Articles of Incorporation to terminate its existence (referred to 
individually as "Termination Transaction"); and any shareholder 
proposal as to specific investment decisions made or to be made 
with respect to the Portfolio's assets.

	A 75% shareholder vote will not be required with respect to 
a Business Combination if the transaction is approved by a vote of 
a least 75% of the Continuing Directors (as defined below) or it 
certain conditions regarding the consideration paid by the person 
entering into, or proposing to enter into, a Business Combination 
with the Portfolio and various other requirements are satisfied.  
In such case, a majority of the votes entitled to be cast by 
shareholders of the Portfolio will be required to approve the 
transaction if it is a Reorganization Transaction or a Transfer 
Transaction that involves substantially all of the Portfolio's 
assets and no shareholder vote will be required to approve the 
transaction if it is any other Business Combination.  In addition, 
a 75% shareholder vote will not be required with respect to a 
Termination Transaction if it is approved by a vote of at least 
75% of the Continuing Directors, in which case a majority of the 
votes entitled to be cast by shareholders of the Portfolio will be 
required to approve the transaction.

	The voting provisions described above could have the effect 
of depriving shareholders of the Portfolio of an opportunity to 
sell their Common Stock at a premium over prevailing market prices 
by discouraging a third party from seeking to obtain control of 
the Portfolio in a tender offer or similar transaction.  In the 
view of the Portfolio's Board of Directors, however, these 
provisions offer several possible advantages including: (1) 
requiring persons seeking control of the Portfolio to negotiate 
with its management regarding the price to be paid for the amount 
of Common Stock required to obtain control; (2) promoting 
continuity and stability; and (3) enhancing the Portfolio's 
ability to pursue long-term strategies that are consistent with 
its investment objective and management policies.  The Board of 
Directors has determined that the voting requirements under 
Maryland law and the 1940 Act are in the best interests of 
shareholders generally.

	A "Continuing Director" as used in the discussion above, is 
any member of the Portfolio's Board of Directors (1) who is not 
person or affiliate of a person who enters or proposes to enter 
into a Business Combination with the Portfolio (such person or 
affiliate being referred to individually as an "Interested party") 
and (2) who has been a member of the Board of Directors for a 
period of least 12 months (or since the commencement of the 
Portfolio's operations, if less than 12 months), or is a successor 
of a Continuing Director who is unaffiliated with an Interested 
party and is recommended to succeed a Continuing Director by a 
majority of the Continuing Directors.

ADDITIONAL INFORMATION

Legal Matters

	Willkie Farr & Gallagher serves as legal counsel to the 
Portfolio. The Directors who are not "interested persons" of the 
Portfolio have selected Stroock & Stroock & Lavan LLP as their 
counsel.


Independent Auditors

	For the fiscal year ending May 31, 1998, KPMG Peat Marwick 
LLP, 345 Park Avenue, New York, New York 10154, will serve as 
auditors of the Portfolio and render an opinion on the Portfolio's 
financial statements.

Custodian and Transfer Agent

	PNC Bank, is located at 17th and Chestnut Streets, 
Philadelphia, Pennsylvania 19103 and serves as the Fund's 
custodian pursuant to a custody agreement. Under the custody 
agreement, PNC Bank holds Fund's securities and keeps all 
necessary accounts and records.  The assets of the Fund are held 
under bank custodianship in compliance with the 1940 Act.  First 
Data is located at One Exchange Place Boston, Massachusetts 02109, 
and serves as the Portfolio's transfer agent pursuant to a 
transfer agency agreement.  Under the transfer agency agreement, 
First Data maintains the shareholder account records for the 
Portfolio, handles certain communications between shareholders and 
the Portfolio, and distributes dividends and distributions payable 
by the Portfolio.

Financial Statements

	The Portfolio sends unaudited semi-annual and audited annual 
financial statements of the Portfolio to shareholders, including a 
list of the investments held by the Portfolio.

	The Portfolio's Annual Report for the fiscal year ended May 
31, 1997 and its semi-annual report for the six month period ended 
November 30, 1996 are incorporated into this SAI by reference in 
their entirety. A copy of these Reports may be obtained from any 
Smith Barney Financial Consultant or by calling or writing to the 
Portfolio at the telephone number or address set forth on the 
cover page of this SAI.



APPENDIX

DESCRIPTION OF MOODY'S, S&P AND FITCH RATINGS

Description of Moody's Municipal Bond Ratings:

Aaa - Bonds that are rated Aaa are judged to be of the best 
quality, carry the smallest degree of investment risk and are 
generally referred to as "gilt edge. " Interest payments with 
respect to these bonds are protected by a large or by an 
exceptionally stable margin, and principal is secure. Although the 
various protective elements applicable to these bonds are likely 
to change, those changes are most unlikely to impair the 
fundamentally strong position of these bonds.

Aa - Bonds that are rated Aa are judged to be of high quality by 
all standards and together with the Aaa group 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 other elements may be present that 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 
with respect to these bonds are considered adequate, but elements 
may be present that suggest a susceptibility to impairment 
sometime in the fixture.

Baa - Bonds rated Baa are considered to be medium grade 
obligations, that is they are neither highly protected nor poorly 
secured. Interest payment 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. These bonds lack outstanding investment characteristics and 
may have speculative characteristics as well.

	Moody's applies the numerical modifiers 1, 2 and 3 in each 
generic rating classification from Aa through B. The modifier 1 
indicates that the security ranks in the higher end of its generic 
rating category; the modifier 2 indicates a mid-range ranking; and 
the modifier 3 indicates that the issue ranks in the lower end of 
its generic rating category.

Description of Moody's Municipal Note Ratings:

	Moody's ratings for state and municipal notes and other 
short-term loans are designated Moody's Investment Grade (MIG) and 
for variable demand obligations are designated Variable Moody's 
Investment Grade (VMIG). This distinction recognizes the 
differences between short- and long-term credit risk. Loans 
bearing the designation MIG1/VMIG 1 are of the best quality, 
enjoying strong protection from established cash flows of funds 
for their servicing or from established and broad-based access to 
the market for refinancing, or both. Loans bearing the designation 
MIG 2/VMIG 2 are of high quality, with margins of protection 
ample, although not as large as the preceding group. Loans bearing 
the designation MIG3/VMIG 3 are of favorable quality, with all 
security elements accounted for but lacking the undeniable 
strength of the preceding grades. Market access for refinancing, 
in particular, is likely to be less well established.

Description of Moody's Commercial Paper Ratings:

	The rating Prime-1 is the highest commercial paper rating 
assigned by Moody's. Issuers rated Prime- I (or related supporting 
institutions) are considered to have a superior capacity for 
repayment of short-term promissory obligations. Issuers rated 
Prime-2 (or related supporting institutions) are considered to 
have a strong capacity for repayment of short-term promissory 
obligations, normally evidenced by many of the characteristics of 
issuers rated Prime-1 but to a lesser degree. Earnings trends and 
coverage ratios, while sound, will be more subject to variation. 
Capitalization characteristics, while still appropriate, may be 
more affected by external conditions. Ample alternative liquidity 
is maintained.


Description of S&P Municipal Bond Ratings:

AAA - These bonds are the obligations of the highest quality and 
have the strongest capacity for timely payment of debt service.

General Obligation Bonds Rated AAA - In a period of economic 
stress the issuers of these bonds 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 Rated AAA - Debt service coverage with respect to 
these bonds 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, debt 
service reserve requirements) are rigorous. There is evidence of 
superior management

AA - The investment characteristics of 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 - Principal and interest payments on bonds in this category are 
regarded as safe although the bonds are somewhat more susceptible 
to the adverse effects of changes in circumstances and economic 
conditions than bonds in high rated categories. This rating 
describes the third strongest capacity for payment of debt 
service.

General Obligation Bonds Rated A - 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 fixture 
date.

Revenue Bonds Rated A - 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 - The bonds in this group are regarded as having an adequate 
capacity to pay interest and repay principal. Whereas bonds in 
this group normally exhibit adequate protection parameters, 
adverse economic conditions or changing circumstances are more 
likely to lead to a weakened capacity to pay interest and repay 
principal for debt in this category than in higher rated 
categories. Bonds rated BBB have the fourth strongest capacity for 
payment of debt service.

	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 category.

Description of S&P Municipal Note Ratings:

	Municipal notes with maturities of three years or less are 
usually given note ratings (designated SP-1 -2 or -3) 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.

Description of S&P Commercial Paper Ratings:

	Commercial paper rated A- l by S&P indicates that the degree 
of safety regarding timely payment is either overwhelming or very 
strong. Those issues determined to possess overwhelming safety 
characteristics are denoted A-1+. Capacity for timely payment of 
commercial paper rated A-2 is stronger but the relative degree of 
safety is not as high as issues designated A-1.

Description of Fitch Municipal Bond Ratings:

AAA - Bonds rated AAA by Fitch are considered to be investment 
grade and of the highest credit quality. The obligor has an 
exceptionally strong ability to pay interest and repay principal, 
which is unlikely to be affected by reasonably foreseeable events.

AA - Bonds rated AA by Fitch are considered to be investment grade 
and of high quality. The obligor's ability to pay interest and 
repay principal, while very strong, is somewhat less than for AAA 
rated securities or more subject to possible change over the term 
of the issue.

A - Bonds rated A by Fitch are considered to be investment grade 
and of high credit quality. The obligor's ability to pay interest 
and repay principal is considered to be strong, but may be more 
vulnerable to adverse changes in economic conditions and 
circumstances than bonds with higher ratings

BBB - Bonds rated BBB by Fitch are considered to be investment 
grade and of satisfactory credit quality. The obligor's ability to 
pay interest and repay principal is considered to be adequate. 
Adverse changes in economic conditions and circumstances, however, 
are more likely to have adverse consequences on these bonds, and 
therefore impair timely payment. The likelihood that the ratings 
of these bonds will fall below investment grade is higher than for 
bonds with higher ratings.

	Plus and minus signs are used by Fitch to indicate the 
relative position of a credit within a rating category. Plus and 
minus signs, however, are not used in the AAA category.

Description of Fitch Short-Term Ratings

	Fitch's short-term ratings apply to debt obligations that 
are payable on demand or have original maturities of generally up 
to three years, including commercial paper certificates of 
deposit, medium-term notes, and municipal and investment notes.

	The short-term rating places greater emphasis than a long-
term rating on the existence of liquidity necessary to meet the 
issuer's obligations in a timely manner.

Fitch's short-term ratings are as follows:

F-1 + - Issues assigned this rating are regarded as having the 
strongest degree of assurance for timely payment.

F-1 - Issues assigned this rating reflect an assurance of timely 
payment only slightly less in degree than issues rated F-1+.

F-2 - Issues assigned this rating have a satisfactory degree of 
assurance for timely payment but the margin of safety is not as 
great as for issues assigned F- 1+ and F-1 ratings.

F-3 - Issues assigned this rating have characteristics suggesting 
that the degree of assurance for timely payment is adequate, 
although near-term adverse changes could cause these securities to 
be rated below investment grade.

LOC- The symbol LOC indicates that the rating is based on a letter 
of credit issued by a commercial bank.






	32

u:\legal\funds\#mmu\1997\secdocs\sai97






PART C - OTHER INFORMATION

Item 24. Financial Statements and Exhibits


	(1)	Financial Statements:

		- Included in Part A:

			*     Financial Highlights

		- Included in Part B:

			*        The Registrant's Annual Report for the 
				fiscal year ended May 31, 1997 and 
				Report of Independent Accountants 
				dated July 14, 1997 are incorporated by 
				reference to the Definitive 30(b)2-1 filed 
				on July 29, 1997, 
				Accession # 0000091155-97-000338    

	(2)	Exhibits:

(a)	(i)	Articles of Incorporation*

	(ii)	Articles of Amendment to Articles of Incorporation are 
incorporated by reference to Pre-Effective Amendment No. 1.*

(b)	(i)	Bylaws of Registrant are incorporated by reference to 
Pre-Effective Amendment No. 1.*

	(ii)	Amended Bylaws of Registrant are incorporated by 
reference to Pre-Effective Amendment No. 1.*

		(c)	Not Applicable

(d)	Specimen Certificate of Common Stock, par value $.01 per 
share is incorporated by reference to Pre-Effective Amendment No. 
1.*

(e)	Dividend Reinvestment Plan #

		(f)	Not Applicable

   		(g)(i)	Form of Investment Advisory Agreement
			between Registrant and Shearson Lehman 
			Advisors*
		
		    (ii)	Form of Investment Advisory Agreement  
			between Registrant and Greenwich Street 
			Advisers.**** 
		

    
   		(h)	Form of Underwriting Agreement between 
			Registrant and Shearson Lehman Brothers Inc.**

		(i)	Not Applicable


    
   		(j)	Form of Custody Agreement between Registrant 
			and PNC Bank, National Association ##

		(k)	(i)	Transfer Agency and Registrar Agreement 
				between Registrant and TSSG***


    
   			(ii)	Administration Agreement between 
				Registrant and Smith Barney Mutual Funds
				Management Inc. (filed herewith)    
   
		 (l)	 Not Applicable

		(m)	Not Applicable


    
   		(n)	Consent of KPMG Peat Marwick LLP, independent
			auditors for the Fund. (filed herewith).
    
		(o)	Not Applicable

		(p)	Purchase Agreement between Registrant and 
Shearson 
			Lehman Brothers Inc.*

		(q)	Not Applicable

		(r)	Not Applicable

________________________________________
*	Incorporated by reference to the Registrant's Pre-Effective 
Amendment No. 1 
to its initial Registration Statement on Form N-2, Registration 
No. 33-47116, 
filed with the SEC on May 14, 1992.

**	Incorporated by reference to the Registrant's Pre-Effective 
Amendment No. 3 
to its Registration Statement on Form N-2, Registration No. 33-
47116, filed with
the SEC on June 18, 1992.

***	Incorporated by reference to the Registrant's Post-Effective 
Amendment No. 
4 to its Registration Statement on Form N-2, Registration No. 33-
47116,
 filed with the SEC on August 4, 1993.

   ****	Incorporated by reference to the Registrant's Post-
Effective 
Amendment No. 5 to its Registration Statement on Form N-2, 
Registration No. 33-
47116, filed with the SEC on October 14, 1993.    

#		Incorporated by reference to Post-Effective Amendment 
No. 6. to its initial Registration Statement on Form N-2, 
Registration No. 33-47116, filed with the SEC on September 28, 
1994 ("Post-Effective Amendment No. 6").

##		Incorporated by reference to the Registrant's Post-
Effective Amendement No.8 to its initial registration statement on 
form N-2, Registration No. 33-47116, filed with the SEC on 
September 23, 1996.

Item 25.	Marketing Arrangements

	None

Item 26.	Other Expenses of Issuance and Distribution

	The following table sets forth the expenses to be incurred 
in 
connection with the offering described in this Registration 
Statement:

Securities and Exchange Commission Fees		         0
Printing and Engraving Expenses	  $5000
Legal Fees		0
Accounting Expenses		0
Miscellaneous Expenses		0    
		                

Item 27.	Persons Controlled by or Under Common Control

			None

Item 28.	Number of Holders of Securities

   Title of Class		Number of 
				Record
				Stockholders
				as of September 5, 1997    

Shares of Common Stock, 	   682    
par value $0.01 per share

Item 29.	Indemnification

	Under Article VII of Registrant's Articles of Incorporation, 
any past 
or present director or officer of Registrant is indemnified to the 
fullest 
extent permitted by law against liability and all expenses 
reasonably 
incurred by him in connection with any action, suit or proceeding 
to which 
he may be a party or otherwise involved by reason or his being or 
having 
been a director or officer of Registrant.  This provision does not 
authorize indemnification when it is determined that the director 
or 
officer would otherwise be liable to Registrant or its 
shareholders by 
reason of willful misfeasance, bad faith, gross negligence or 
reckless 
disregard of his duties.  Expenses may be paid by Registrant in 
advance of 
the final disposition of any action, suit or proceeding upon 
receipt of an 
undertaking by a director or officer to repay those expenses to 
Registrant 
in the event that it is ultimately determined that indemnification 
of the 
expenses is not authorized under Registrant's Articles of 
Incorporation.

	Insofar as indemnification for liability arising under the 
Securities 
Act of 1933, as amended (the "Securities Act"), may be permitted 
to 
directors, officers and controlling persons of Registrant pursuant 
to the 
foregoing provisions, or otherwise, Registrant has been advised 
that in the 
opinion of the Securities and Exchange Commission, such 
indemnification is 
against policy as expressed in the Securities Act and is, 
therefore, 
unenforceable.  In the event that a claim for indemnification 
against such 
liabilities (other than the payment by Registrant of expenses 
incurred or 
paid by a director, officer or controlling person of Registrant in 
the 
successful defense of any action, suit or proceeding) is asserted 
by such 
director, officer or controlling person in connection with the 
securities 
being registered, Registrant will, unless in the opinion of its 
counsel the 
matter has been settled by controlling precedent, submit to a 
court of 
appropriate jurisdiction the question whether such indemnification 
by it is 
against public policy as expressed in the Securities Act and will 
be 
governed by the final adjudication of such issue.

Item 30.	Business and Other Connections of Investment Adviser

	See "Management of the Portfolio" in the Prospectus.
   
	Smith Barney Mutual Funds Management Inc., ("Funds
Management") a New York corporation, is a registered investment 
adviser and is wholly owned by Smith Barney Holdings Inc., which 
in 
turn is wholly owned by The Travelers Group Inc.  Funds Management 
is 
primarily engaged in the investment advisory business.  
Information as to 
executive officers and directors of Funds Management  is included 
in its 
Form ADV filed with the Securities and Exchange Commission
(Registration number 801-8314) and is incorporated herein by 
reference.    

Item 31.	Location of Accounts and Records

	   Smith Barney Mutual Funds Management Inc.
	388 Greenwich Street
	New York, New York 10013

	
    
    First Data Investor Services Group, Inc.
	One Exchange Place
	Boston, Massachusetts 02109

	PNC Bank, N.A.
	17th & Chestnut Streets
	Philadelphia, Pennsylvania 19103    

Item 32.	Management Services

		None

Item	33.	Undertakings

	1.	Not Applicable

	2.	Not Applicable

	3.	Not Applicable

4.	The registrant hereby undertakes:

(a)	To file, during any period in which offers or sales are 
being made, a 
post-effective amendment to this Registration Statement:

(1)	to include any prospectus required by Section 10(a)(3) of 
the 
Securities Act of 1933 (the "Act");

(2)	to reflect in the Prospectus any facts or events arising 
after the 
effective date of the Registration Statement (or the most recent 
post-
effective amendment thereof) which, individually or in the 
aggregate, 
represent a fundamental change in the information set forth in the 
Registration Statement; and

(3)	to include any material information with respect to the plan 
of 
distribution not previously disclosed in the Registration 
Statement or any 
material change to such information in the Registration Statement.

(4)(b)	For the purpose of determining any liability under the 
Act, each 
post-effective amendment shall be deemed to be a new Registration 
Statement 
relating to the securities offered therein, and the offering of 
such 
securities at that time shall be deemed to be the initial bona 
fide 
offering thereof.

(4)(c)	Not Applicable

5.	   Not Applicable    

6.	The registrant undertakes to send by first class mail or 
other means 
designed to ensure equally prompt delivery, within two business 
days of 
receipt of a written or oral request, any Statement of Additional 
Information.



SIGNATURES


  Pursuant to the requirements of the Securities Act of 1933, as 
amended, and the Investment Company Act of 1940, as amended, the 
Registrant, MANAGED MUNICIPALS PORTFOLIO INC., has duly caused 
this Amendment to the Registration Statement on Form N-2 to be 
signed on its behalf by the undersigned, thereunto duly 
authorized, all in the City of New York, State of New York on the 
12th day of September, 1997.

MANAGED MUNICIPALS PORTFOLIO INC.


By:/s/Health B. McLendon
Heath B. McLendon
Chief Executive Officer 



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

Signature				Title					Date


/s/Health B. McLendon
Heath B. McLendon			 Chairman of the Board		
	9/12/97
					 Chief Executive Officer



/s/Lewis E. Daidone
Lewis E. Daidone				Treasurer (Chief Financial 
	9/12/97
						and Accounting Officer)



/s/ Allan J. Bloostein*
Allan J. Bloostein				Director		
	9/12/97



/s/ Martin Brody*
Martin Brody					Director		
	9/12/97




Signature					Title				Date



/s/ Dwight B. Crane*
Dwight B. Crane				Director		
	9/12/97



/s/ Robert A. Frankel*
Robert A. Frankel				Director		
	9/12/97



/s/ William R. Hutchinson*
William Hutchinson				Director		
	9/12/97



* By: /s/Health B. McLendon
         Heath B. McLendon 
         Attorney-in-Fact