Smith Barney
SMALL CAP BLEND FUND, INC.

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



Statement of Additional 
Information

April 30, 1999, 
amended as of  May 12, 1999


This Statement of Additional Information (the "SAI") expands upon and 
supplements the information contained in the current Prospectus of Smith 
Barney Small Cap Blend Fund, Inc. (formerly Smith Barney Disciplined Small 
Cap Fund, Inc.) (the "fund"), dated April 30, 1999, as amended or 
supplemented from time to time, and should be read in conjunction with the 
fund's Prospectus.  The Fund's Prospectus may be obtained from any Smith 
Barney Financial Consultant, or by writing or calling the fund at the 
address or telephone number set forth above.  This SAI, although not in 
itself a prospectus, is incorporated by reference into the Prospectus in 
its entirety.

Table of Contents

For ease of reference, the same section headings are used in both the 
Prospectus and this SAI except where shown below:

Management of the fund							2
Investment Objective and Management Policies				5
Purchase, Exchange and Redemption of Shares				17
Distribution								27
Determination of Net Asset Value					29
IRA and Other Prototype Retirement Plans				30
Performance Data							31
Additional Information Concerning Taxes				34
Additional Information							39
Financial Statements							40



MANAGEMENT OF THE FUND

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

Name								Service
CFBDS, Inc.
  ("CFBDS'')							Distributor
Travelers Investment Management Company
  ("TIMCO")							Investment Adviser
SSBC Fund Management Inc. (formerly
  Mutual Management Corp.) ("SSBC") 				Administrator
PNC Bank, National Association ("PNC")			Custodian
First Data Investor Services Group, Inc. ("First Data")		Transfer 
Agent

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

Directors and Executive Officers of the fund

The Directors and executive officers of the fund, together with 
information as to their principal business occupations during the past 
five years, are shown below. Each Director who is an "interested person" 
of the fund, as defined in the Investment Company Act of 1940, as amended 
(the "1940 Act"), is indicated by an asterisk.  The address of each 
Director who is an "interested person" and each executive officer is 388 
Greenwich Street, New York, NY 10013.

JANE DASHER, Director
Investment Officer, Korsant Partners, 283 Greenwich Avenue, Greenwich, 
Connecticut 06830; Director of seven investment companies associated with 
Citigroup Inc. ("Citigroup"); Prior to 1997 Independent Financial 
Consultant; from 1975 to 1987 held various positions with Philip Morris 
Companies, Inc. including Director of Financial Services, Treasurers 
Department; 49.

DONALD R. FOLEY, Director 
Retired; 3668 Freshwater Drive, Jupiter, Florida 33477.  Director of 
twelve investment companies associated with Citigroup.  Formerly Vice 
President of Edwin Bird Wilson, Incorporated (advertising); 76. 
 
PAUL HARDIN, Director 
Professor of Law at University of North Carolina at Chapel Hill, 12083 
Morehead, Chapel Hill, North Carolina 27514, Director of 14 investment 
companies associated with Citigroup; Director of The Summit 
Bancorporation; Formerly, Chancellor of the University of North Carolina 
at Chapel Hill, University of North Carolina; 67. 
  
*HEATH B. McLENDON, Chairman of the Board, President and Chief Executive 
Officer 
Managing Director of Smith Barney; Director of 64 investment companies 
associated with Citigroup; Director and President of SSBC and Travelers 
Investment Adviser, Inc. ("TIA"); Director of Chairman of the Board of 
Smith Barney Strategy Advisors Inc.; Prior to July 1993, Senior Executive 
Vice President of Shearson Lehman Brothers Inc.; Vice Chairman of Shearson 
Asset Management; 65.  
 


RODERICK C. RASMUSSEN, Director 
Investment Counselor; 9 Cadence Court, Morristown, New Jersey 07960.  
Director of twelve investment companies associated with Citigroup.  
Formerly Vice President of Dresdner and Company Inc. (investment 
counselors); 72. 

JOHN P. TOOLAN, Director 
Retired; 13 Chadwell Place, Morristown, New Jersey 07960.  Director of 
twelve investment companies associated with Citigroup.  Formerly, Director 
and Chairman of Smith Barney Trust Company, Director of Salomon Smith 
Barney Holdings Inc. ("Holdings") and SSBC and Senior Executive Vice 
President, Director and Member of the Executive Committee of Smith Barney; 
68. 

SANDIP BHAGAT, Vice President
President of TIMCO, Vice President of certain other investment companies 
affiliated with Citigroup, 39.

LEWIS E. DAIDONE, Senior Vice President and Treasurer 
Managing Director of Salomon Smith Barney; Senior Vice President and 
Treasurer of 59 investment companies associated with Citigroup; Director 
and Senior Vice President of SSBC and TIA; 41.

PAUL BROOK, Controller
Director of Salomon Smith Barney and Controller or Assistant Treasurer of 
43 investment companies associated with Citigroup since 1998; Managing 
Director of AMT Capital Services Inc. from 1997-1998; Partner with Ernst 
& Young LLP prior to 1997; 45.

CHRISTINA T. SYDOR, Secretary
Managing Director of Salomon Smith Barney; Secretary of 59 investment 
companies associated with Citigroup; Secretary and General Counsel of SSBC 
and TIA; 48.



As of April 21, 1999, the Directors and Officers of the fund owned in the 
aggregate less than 1% of the outstanding shares of the fund.  No officer, 
director or employee of Smith Barney or any parent or subsidiary receives 
any compensation from the fund for serving as an officer or Director of 
the fund. The Fund pays each Director who is not an officer, director or 
employee of Smith Barney or any of its affiliates a fee of $42,000 per 
annum plus $100 per meeting attended and reimburses them for travel and 
out-of-pocket expenses. For the fund's fiscal year ended December 31, 
1998, such fees and expenses totaled $13,732.

For the fiscal year ended December 31, 1998, the Directors of the fund 
were paid the following compensation: 

COMPENSATION TABLE


Name of Person

Aggregate 
Compensation 
from the fund

Pension or 
Retirement 
Benefits 
Accrued as 
Part of Fund's 
Expenses

Total 
Compensation 
from Fund 
Complex

Total Number 
of Funds for 
Which Person 
Served within 
Fund Complex

Joseph H. Fleiss+
$333.26
$0.00
$32,943.00
10
Donald R. Foley**
$847.10
$0.00
$57,100.00
10
Paul Hardin
$647.09
$0.00
$71,400.00
12





Heath B. 
McLendon*
--
--
--
64
Bruce Sargent*#
--
--
--
3
Roderick C.     
Rasmussen
$847.09
$0.00
$57,100.00
10
John P. Toolan**
$747.09
$0.00
$54,700.00
10

________________________________________
*  Designates a director who is an "interested person" of the fund. 

#Effective October 8, 1998, Mr. Sargent resigned from the fund's 
Board of Directors.

** Pursuant to a deferred compensation plan, the indicated persons 
elected to defer the following amounts of their compensation from 
the fund: Donald R. Foley: $73.55 and John P. Toolan: $747.09, and 
the following amounts of their total compensation from the fund 
Complex: Donald R. Foley: $21,000.00 and John P. Toolan: 
$54,700.00.  During the fund's most recent fiscal year ended 
December 31, 1998, the estate of a deceased director was paid his 
previously deferred compensation, which totaled $2,058.45 from the 
fund and $171,147.72 from the fund Complex.

+  Effective January 1, 1998, Mr. Fleiss became a Director 
Emeritus. Upon attainment of age 72 the fund's current Directors 
may elect to change to emeritus status.  Any directors elected or 
appointed to the Board of Directors in the future will be required 
to change to emeritus status upon attainment of age 80.  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 the fund's directors, 
together with reasonable out-of-pocket expenses for each meeting 
attended.  During the fund's last fiscal year aggregate 
compensation from the fund to Emeritus Directors (other than Mr. 
Fleiss who is covered in the above table) totaled $106.44. 

Investment Adviser -TIMCO

TIMCO serves as investment adviser to the fund pursuant to a 
written agreement (the "Advisory Agreement").  The services 
provided by TIMCO under the Advisory Agreement are described in the 
Prospectus under "Management."  TIMCO bears all of the expenses of 
its employees and overhead in connection with its duties under the 
Advisory Agreement.  TIMCO is a wholly owned subsidiary of 
Holdings, which is in turn a wholly owned subsidiary of Citigroup 
Inc. ("Citigroup").

As compensation for investment advisory services, the fund pays 
TIMCO a fee computed daily and paid monthly at the annual rate of 
0.65% of the value of the fund's average daily net assets. For the 
1998, 1997 and 1996 fiscal years, the fund paid $1,321,762, 
$439,687 and $416,000, respectively, in investment advisory fees.

The Investment Advisory Agreement provides that except for the 
expenses specifically assumed by TIMCO, the fund bears expenses 
incurred in its operation, including: fees of the Directors not 
affiliated with the Adviser or its affiliates and board meeting 
expenses; fees of the Adviser and of SSBC (or any successor) as the 
Administrator; interest charges; taxes; charges and expenses of the 
fund's legal counsel and independent accountants, and of the 
transfer agent, registrar and dividend disbursing agent of the 
fund; expenses of issue, repurchase or redemption of Shares; 
expenses of printing and mailing stockholder reports, notices, 
proxy statements and reports to governmental offices; brokerage and 
other expenses connected with the execution, recording and 
settlement of portfolio security transactions; expenses connected 
with negotiating, effecting purchases or sales or registering 
privately issued portfolio securities; fees and expenses of the 
fund's custodians for all services to the fund, including 
safekeeping of funds and securities and maintaining required books 
and accounts; expenses of fidelity bonding and other insurance 
premiums; expenses of stockholder's meetings; filing fees and 
expenses related to the registration and qualification of the 
fund's shares and the fund under federal and state securities laws 
and maintaining such registrations and qualifications (including 
the printing of the funds registration statements and 
prospectuses); and its other business and operating expenses.

Administrator

SSBC serves as administrator to the fund pursuant to a written 
agreement (the "Administration Agreement").  The services provided 
by SSBC under the Administration Agreement are described in the 
Prospectus under "Management." SSBC pays the salary of any officer 
and employee who is employed by both it and the fund and bears all 
expenses in connection with the performance of its services.  As 
compensation for administration services rendered to the fund, SSBC 
receives a fee at the annual rate of 0.10% of the value of the 
fund's average daily net assets. For the 1998, 1997 and 1996 fiscal 
years, the fund paid SSBC $203,348, $102,195 and $138,000, 
respectively, in administration fees.

SSBC, formerly Mutual Management Corp., 388 Greenwich Street, New 
York, NY 10013 was incorporated on March 12, 1968 and renders 
investment management advice to investment companies with aggregate 
assets under management in excess of $114 billion as of March 31, 
1999. SSBC is an affiliate of Salomon Smith Barney.  SSBC and 
Salomon Smith Barney are subsidiaries of Citigroup Inc., a 
financial services company that uses diverse channels to offer a 
broad range of financial services to consumer and corporate 
customers around the world.  Among these businesses are Citibank, 
Commercial Credit, Primerica Financial Services, Salomon Smith 
Barney, SSB Citi Asset Management, Travelers Life & Annuity, and 
Travelers Property Casualty.

Auditors

KPMG LLP, 345 Park Avenue, New York, New York 10154, has been 
selected as the fund's independent auditor to examine and report on 
the fund's financial statements and highlights for the fiscal year 
ending December 31, 1999. 

INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES

The Prospectus discusses the fund's investment objective and the 
policies it employs to achieve its objective. The following 
discussion supplements the description of the fund's investment 
objective and management policies in the Prospectus.

Small Capitalization Companies.  The fund may invest in securities 
of companies with market capitalization or estimated revenues of 
less than $500 million at the time of initial investment.  Small 
companies may (i) be subject to more volatile market movements than 
securities of larger, more established companies; (ii) have limited 
product lines, markets or financial resources; and (iii) depend 
upon a limited or less experienced management group.  The 
securities of small companies may be traded only on the over-the-
counter market or on a regional securities exchange and may not be 
traded daily or in the volume typical of trading on a national 
securities exchange.  Disposition by the fund of small company 
securities in order to meet redemptions may require the fund to 
sell these securities at a discount from market prices, over a 
longer period of time or during periods when disposition is not 
desirable.

Preferred Stocks and Convertible Securities.  The fund may invest 
in convertible debt and preferred stocks.  Convertible debt 
securities and preferred stock entitle the holder to acquire the 
issuer's stock by exchange or purchase for a predetermined rate. 
 Convertible securities are subject both to the credit and interest 
rate risks associated with fixed income securities and to the stock 
market risk associated with equity securities.

Warrants.  Warrants acquired by the fund entitle it to buy common 
stock from the issuer at a specified price and time.  Warrants are 
subject to the same market risks as stocks, but may be more 
volatile in price.  The fund's investment in warrants will not 
entitle it to receive dividends or exercise voting rights and will 
become worthless if the warrants cannot be profitably exercised 
before the expiration dates.


REITs.  The fund may invest in shares of real estate investment 
trusts (REITs), which are pooled investment vehicles that invest in 
real estate or real estate loans or interests.  Investing in REITs 
involves risks similar to those associated with investing in equity 
securities of small capitalization companies.  REITs are dependent 
upon management skills, are not diversified, and are subject to 
risks of project financing, default by borrowers, self-liquidation, 
and the possibility of failing to qualify for the exemption from 
taxation on distributed amounts under the Internal Revenue Code of 
1986, as amended (the "Code").

Illiquid and Restricted Securities.  The fund may invest up to 15% 
of its assets in securities (excluding those subject to Rule 144A 
under the Securities Act of 1933, as amended (the ''1933 Act'')), 
with contractual or other restrictions on resale and other 
instruments that are not readily marketable, including (a) 
repurchase agreements with maturities greater than seven days, (b) 
time deposits maturing from two business days through seven 
calendar days, (c) to the extent that a liquid secondary market 
does not exist for the instruments, futures contracts and options 
on those contracts and (d) other securities that are subject to 
restrictions on resale that the investment adviser has determined 
are not liquid under guidelines established by the fund's Board of 
Directors. 

ADRs.  The fund may purchase ADRs or other securities representing 
underlying shares of foreign companies.  ADRs are publicly traded 
on exchanges or over-the-counter in the United States and are 
issued through "sponsored" or "unsponsored" arrangements.  In a 
sponsored ADR arrangement, the foreign issuer assumes the 
obligation to pay some or all of the depository's transaction fees, 
whereas under an unsponsored arrangement, the foreign issuer 
assumes no obligation and the depository's transaction fees are 
paid by the ADR holders.  In addition, less information is 
available in the United States about an unsponsored ADR than about 
a sponsored ADR, and the financial information about a company may 
not be as reliable for an unsponsored ADR as it is for a sponsored 
ADR.  The fund may invest in ADRs through both sponsored and 
unsponsored arrangements.

Repurchase Agreements.  The fund may enter into repurchase 
agreements.  A repurchase agreement is a contract under which the 
fund acquires a security for a relatively short period (usually not 
more than one week) subject to the obligation of the seller to 
repurchase and the fund to resell such security at a fixed time and 
price (representing the fund's cost plus interest).  It is the 
fund's present intention to enter into repurchase agreements only 
upon receipt of fully adequate collateral and only with commercial 
banks (whether U.S. or foreign) and registered broker-dealers.  
Repurchase agreements may also be viewed as loans made by the fund 
which are collateralized primarily by the securities subject to 
repurchase.  The fund bears a risk of loss in the event that the 
other party to a repurchase agreement defaults on its obligations 
and the fund is delayed in or prevented from exercising its rights 
to dispose of the collateral securities.  Pursuant to policies 
established by the fund's Board of Trustees, the investment adviser 
monitors the creditworthiness of all issuers with which the fund 
enters into repurchase agreements. 


Reverse Repurchase Agreements.  The fund may enter into reverse 
repurchase agreements with broker/dealers and other financial 
institutions.  Such agreements involve the sale of fund securities 
with an agreement to repurchase the securities at an agreed-upon 
price, date and interest payment, are considered to be borrowings 
by the fund and are subject to the borrowing limitations set forth 
under "Investment Restrictions."  Since the proceeds of reverse 
repurchase agreements are invested, this would introduce the 
speculative factor known as "leverage."  The securities purchased 
with the funds obtained from the agreement and securities 
collateralizing the agreement will have maturity dates no later 
than the repayment date.  Generally the effect of such a 
transaction is that the fund can recover all or most of the cash 
invested in the portfolio securities involved during the term of 
the reverse repurchase agreement, while in many cases it will be 
able to keep some of the interest income associated with those 
securities.  Such transactions are only advantageous if the fund 
has an opportunity to earn a greater rate of interest on the cash 
derived from the transaction than the interest cost of obtaining 
that cash.   Opportunities to realize earnings from the use of the 
proceeds equal to or greater than the interest required to be paid 
may not always be available, and the fund intends to use the 
reverse repurchase technique only when the investment adviser 
believes it will be advantageous to the fund.   The use of reverse 
repurchase agreements may exaggerate any interim increase or 
decrease in the value of the fund's assets.  The fund or its 
custodian bank will maintain a separate account for the fund with 
securities having a value equal to or greater than such 
commitments. 

Lending of Portfolio Securities.  As stated in the Prospectus, the 
fund has the ability to lend securities from its portfolio to 
brokers, dealers and other financial organizations.  The Fund may 
not lend its portfolio securities to Salomon Smith Barney or its 
affiliates unless it has applied for and received specific 
authority from the Securities and Exchange Commission ("SEC"). 
Loans of portfolio securities by the fund will be collateralized by 
cash, letters of credit or securities issued or guaranteed by the 
United States government, its agencies or instrumentality's ("U.S. 
government securities") which will be maintained at all times in an 
amount equal to at least 100% of the current market value of the 
loaned securities. From time to time, the fund may return a part of 
the interest earned from the investment of collateral received for 
securities loaned to the borrower and/or a third party, which is 
unaffiliated with the fund or with Salomon Smith Barney, and which 
is acting as a "finder."

In lending its portfolio securities, the fund can increase its 
income by continuing to receive interest on the loaned securities 
as well as by either investing the cash collateral in short-term 
instruments or obtaining yield in the form of interest paid by the 
borrower when government securities are used as collateral. 
Requirements of the SEC, which may be subject to future 
modifications, currently provide that the following conditions must 
be met whenever portfolio securities are loaned: (a) the fund must 
receive at least 100% cash collateral or equivalent securities from 
the borrower; (b) the borrower must increase such collateral 
whenever the market value of the securities rises above the level 
of such collateral; (c) the fund must be able to terminate the loan 
at any time; (d) the fund must receive reasonable interest on the 
loan, as well as an amount equal to any dividends, interest or 
other distributions on the loaned securities, and any increase in 
market value; (e) the fund may pay only reasonable custodian fees 
in connection with the loan; and (f) voting rights on the loaned 
securities may pass to the borrower; however, if a material event 
adversely affecting the investment occurs, the fund's Board of 
Directors must terminate the loan and regain the right to vote the 
securities. The risks in lending portfolio securities, as with 
other extensions of secured credit, consist of possible delay in 
receiving additional collateral or in the recovery of the 
securities or possible loss of rights in the collateral should the 
borrower fail financially.


Short Term Instruments.  As stated in the Prospectus, the fund may 
invest in short term and money market instruments.  Money market 
instruments in which the fund may invest include: U.S. government 
securities; certificates of deposit, time deposits and bankers' 
acceptances issued by domestic banks (including their branches 
located outside the United States and subsidiaries located in 
Canada), domestic branches of foreign banks, savings and loan 
associations and similar institutions; high grade commercial paper; 
and repurchase agreements with respect to the foregoing types of 
instruments. The following is a more detailed description of such 
money market instruments.

Bank Obligations. Certificates of deposits ("CDs") are short-term, 
negotiable obligations of commercial banks. Time deposits ("TDs") 
are non-negotiable deposits maintained in banking institutions for 
specified periods of time at stated interest rates. Bankers' 
acceptances are time drafts drawn on commercial banks by borrowers, 
usually in connection with international transactions.
Domestic commercial banks organized under Federal law are 
supervised and examined by the Comptroller of the Currency and are 
required to be members of the Federal Reserve System and to be 
insured by the Federal Deposit Insurance Corporation (the "FDIC"). 
Domestic banks organized under state law are supervised and 
examined by state banking authorities but are members of the 
Federal Reserve System only if they elect to join. Most state banks 
are insured by the FDIC (although such insurance may not be of 
material benefit to the fund, depending upon the principal amount 
of CDs of each bank held by the fund) and are subject to Federal 
examination and to a substantial body of Federal law and 
regulation. As a result of governmental regulations, domestic 
branches of domestic banks are, among other things, generally 
required to maintain specified levels of reserves, and are subject 
to other supervision and regulation designed to promote financial 
soundness.

Obligations of foreign branches of domestic banks, such as CDs and 
TDs, may be general obligations of the parent bank in addition to 
the issuing branch, or may be limited by the terms of a specific 
obligation and governmental regulation. Such obligations are 
subject to different risks than are those of domestic banks or 
domestic branches of foreign banks. These risks include foreign 
economic and political developments, foreign governmental 
restrictions that may adversely affect payment of principal and 
interest on the obligations, foreign exchange controls and foreign 
withholding and other taxes on interest income. Foreign branches of 
domestic banks are not necessarily subject to the same or similar 
regulatory requirements that apply to domestic banks, such as 
mandatory reserve requirements, loan limitations, and accounting, 
auditing and financial recordkeeping requirements. In addition, 
less information may be publicly available about a foreign branch 
of a domestic bank than about a domestic bank. CDs issued by wholly 
owned Canadian subsidiaries of domestic banks are guaranteed as to 
repayment of principal and interest (but not as to sovereign risk) 
by the domestic parent bank.


Obligations of domestic branches of foreign banks may be general 
obligations of the parent bank in addition to the issuing branch, 
or may be limited by the terms of a specific obligation and by 
governmental regulation as well as governmental action in the 
country in which the foreign bank has its head office. A domestic 
branch of a foreign bank with assets in excess of $1 billion may or 
may not be subject to reserve requirements imposed by the Federal 
Reserve System or by the state in which the branch is located if 
the branch is licensed in that state. In addition, branches 
licensed by the Comptroller of the Currency and branches licensed 
by certain states ("State Branches") may or may not be required to: 
(a) pledge to the regulator by depositing assets with a designated 
bank within the state, an amount of its assets equal to 5% of its 
total liabilities; and (b) maintain assets within the state in an 
amount equal to a specified percentage of the aggregate amount of 
liabilities of the foreign bank payable at or through all of its 
agencies or branches within the state. The deposits of State 
Branches may not necessarily be insured by the FDIC. In addition, 
there may be less publicly available information about a domestic 
branch of a foreign bank than about a domestic bank.

In view of the foregoing factors associated with the purchase of 
CDs and TDs issued by foreign branches of domestic banks or by 
domestic branches of foreign banks, TIMCO will carefully evaluate 
such investments on a case-by-case basis.

Savings and loans associations whose CDs may be purchased by the 
fund are supervised by the Office of Thrift Supervision and are 
insured by the Savings Association Insurance Fund which is 
administered by the FDIC and is backed by the full faith and credit 
of the United States government. As a result, such savings and loan 
associations are subject to regulation and examination.

Derivative Contracts

Writing Covered Call Options.  The fund may write (sell) covered 
call options for hedging purposes.  Covered call options will 
generally be written on securities and currencies which, in the 
opinion of the investment adviser, are not expected to make any 
major price moves in the near future but which, over the long term, 
are deemed to be attractive investments for the fund. 

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

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


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

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

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

The exercise price of the options may be below, equal to or above 
the current market values of the underlying securities or 
currencies at the time the options are written.  From time to time, 
the fund may purchase an underlying security or currency for 
delivery in accordance with the exercise of an option, rather than 
delivering such security or currency from its portfolio.  In such 
cases, additional costs will be incurred. 

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

Purchasing Put Options.  The fund may purchase put options.  As the 
holder of a put option, the fund has the right to sell the 
underlying security or currency at the exercise price at any time 
during the option period.  The fund may enter into closing sale 
transactions with respect to such options, exercise them or permit 
them to expire. 


The fund may purchase a put option on an underlying security or 
currency (a "protective put") owned by the fund as a hedging 
technique in order to protect against an anticipated decline in the 
value of the security or currency.  Such hedge protection is 
provided only during the life of the put option when the fund, as 
the holder of the put option, is able to sell the underlying 
security or currency at the put exercise price regardless of any 
decline in the underlying security's market price or currency's 
exchange value.  For example, a put option may be purchased in 
order to protect unrealized appreciation of a security or currency 
when the investment adviser deems it desirable to continue to hold 
the security or currency because of tax considerations.  The 
premium paid for the put option and any transaction costs may 
reduce any capital gain or, in the case of currency, ordinary 
income otherwise available for distribution when the security or 
currency is eventually sold.
  
The fund may also purchase put options at a time when the fund does 
not own the underlying security or currency.  By purchasing put 
options on a security or currency it does not own, the fund seeks 
to benefit from a decline in the market price of the underlying 
security or currency.  If the put option is not sold when it has 
remaining value, and if the market price of the underlying security 
or currency remains equal to or greater than the exercise price 
during the life of the put option, the fund will lose its entire 
investment in the put option.  In order for the purchase of a put 
option to be profitable, the market price of the underlying 
security or currency must decline sufficiently below the exercise 
price to cover the premium and transaction costs, unless the put 
option is sold in a closing sale transaction. 

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

Purchasing Call Options.  The fund may purchase call options.  As 
the holder of a call option, the fund has the right to purchase the 
underlying security or currency at the exercise price at any time 
during the option period.  The fund may enter into closing sale 
transactions with respect to such options, exercise them or permit 
them to expire.  Call options may be purchased by the fund for the 
purpose of acquiring the underlying security or currency for its 
portfolio.  Utilized in this fashion, the purchase of call options 
enables the fund to acquire the security or currency at the 
exercise price of the call option plus the premium paid.  At times 
the net cost of acquiring the security or currency in this manner 
may be less than the cost of acquiring the security or currency 
directly.  This technique may also be useful to the fund in 
purchasing a large block of securities that would be more difficult 
to acquire by direct market purchases.  So long as it holds such a 
call option rather than the underlying security or currency itself, 
the fund is partially protected from any unexpected decline in the 
market price of the underlying security or currency and in such 
event could allow the call option to expire, incurring a loss only 
to the extent of the premium paid for the option. 


The fund may also purchase call options on underlying securities or 
currencies it owns in order to protect unrealized gains on call 
options previously written by it.  A call option would be purchased 
for this purpose where tax considerations make it inadvisable to 
realize such gains through a closing purchase transaction.  Call 
options may also be purchased at times to avoid realizing losses 
that would result in a reduction of the fund's current return. 

Index Futures Contracts.   The fund may enter into futures 
contracts based on financial indices including any index of U.S. 
Government securities, foreign government securities or corporate 
debt securities.

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

Futures contracts are usually closed out before the delivery date. 
 Closing out an open futures contract sale or purchase is effected 
by entering into an offsetting futures contract purchase or sale, 
respectively, for the same aggregate amount of the identical 
financial instrument and the same delivery date.  If the offsetting 
purchase price is less than the original sale price, the fund 
realizes a gain; if it is more, the fund realizes a loss.  
Conversely, if the offsetting sale price is more than the original 
purchase price, the fund realizes a gain; if it is less, the fund 
realizes a loss.  The transaction costs must also be included in 
these calculations.  There can be no assurance, however, that the 
fund will be able to enter into an offsetting transaction with 
respect to a particular futures contract at a particular time.  If 
the fund is not able to enter into an offsetting transaction, the 
fund will continue to be required to maintain the margin deposits 
of the underlying financial instrument or currency on the relevant 
delivery date.  The Fund intends to enter into futures transactions 
only on exchanges or boards of trade where there appears to be a 
liquid secondary market.  However, there can be no assurance that 
such a market will exist for a particular contract at a particular 
time. 

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

The fund's futures transactions will be entered into for 
traditional hedging purposes; that is, futures contracts will be 
sold to protect against a decline in the price of securities that 
the fund owns, or futures contracts will be purchased to protect 
the fund against an increase in the price of securities it has 
committed to purchase or expects to purchase. 


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

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

Options on Futures Contracts.  Options on futures contracts are 
similar to options on securities or currencies except that options 
on futures contracts give the purchaser the right, in return for 
the premium paid, to assume a position in a futures contract (a 
long position if the option is a call and a short position if the 
option is a put), rather than to purchase or sell the futures 
contract, at a specified exercise price at any time during the 
period of the option.  Upon exercise of the option, the delivery of 
the Futures position by the writer of the option to the holder of 
the option will be accompanied by delivery of the accumulated 
balance in the writer's Futures margin account which represents the 
amount by which the market price of the futures contract, at 
exercise, exceeds (in the case of a call) or is less than (in the 
case of a put) the exercise price of the option on the futures 
contract.  If an option is exercised on the last trading day prior 
to the expiration date of the option, the settlement will be made 
entirely in cash equal to the difference between the exercise price 
of the option and the closing level of the securities or currencies 
upon which the futures contracts are based on the expiration date. 
 Purchasers of options who fail to exercise their options prior to 
the exercise date suffer a loss of the premium paid. 

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

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


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

New options and futures contracts and various combinations thereof 
continue to be developed and the fund may invest in any such 
options and contracts as may be developed to the extent consistent 
with their investment objectives and regulatory requirements 
applicable to investment companies. 

Investment Restrictions

The Fund is subject to certain restrictions and policies that are 
"fundamental," which may not be changed without a "vote of a 
majority of the outstanding voting securities" of the fund, as 
defined under the Investment Company Act of 1940, as amended (the 
"1940 Act") and Rule 18f-2 thereunder.  The Fund is subject to 
other restrictions and policies that are "non-fundamental" and 
which may be changed by the fund's Board of Directors without 
shareholder approval, subject to any applicable disclosure 
requirements.  

Fundamental Policies.  Without the approval of a majority of its 
outstanding voting securities, the fund may not: 
 
1.	invest in a manner that would cause it to fail to be a 
"diversified company" under the 1940 Act and the rules, 
regulations and orders thereunder; 

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

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

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

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


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

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

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

2.	purchase or otherwise acquire any security if, as a result, 
more than 15% of its net assets would invested in securities 
that are illiquid; and

3.	invest in any company for the purpose of exercising control 
of management. 

The Fund has adopted a non-fundamental investment policy 
prohibiting it from investing in other registered open-end 
management investment companies and registered unit investment 
trusts in reliance upon the provisions of subparagraphs (G) or (F) 
of Section 12(d)(1) of the 1940 Act.  The foregoing investment 
policy does not restrict the fund from (i) acquiring securities of 
other registered investment companies in connection with a merger, 
consolidation, reorganization, or acquisition of assets, or (ii) 
purchasing the securities of registered closed-end investment 
companies, to the extent permissible under Section 12(d) (1) (G) of 
the 1940 Act.

Certain restrictions listed above permit the fund without 
shareholder approval to engage in investment practices that the 
fund does not currently pursue. The Fund has no present intention 
of altering its current investment practices as otherwise described 
in the Prospectus and this Statement of Additional Information and 
any future change in these practices would require Board approval. 
If any percentage restriction described above is complied with at 
the time of an investment, a later increase or decrease in 
percentage resulting from a change in values or assets will not 
constitute a violation of such restriction. 

Portfolio Turnover


The Fund's investment policies may result in its experiencing a 
greater portfolio turnover rate than those of investment companies 
that seek to produce income or to maintain a balanced investment 
position. The Fund's portfolio turnover rate cannot be predicted 
and will vary from year to year, yet TIMCO expects that the fund's 
annual portfolio turnover rate may exceed 100%.  A 100% portfolio 
turnover rate would occur, for instance, if all securities were 
replaced once during a period of one year. A high rate of portfolio 
turnover in any year will increase brokerage commissions paid and 
could result in high amounts of realized investment gain subject to 
the payment of taxes by shareholders. Any realized short-term 
investment gain will be taxed to shareholders as ordinary income. 
For the 1998, 1997 and 1996 fiscal years, the fund's portfolio 
turnover rates were 129%, 140% and 151%, respectively.

Portfolio Transactions and Brokerage

Decisions to buy and sell securities for the fund are made by 
TIMCO, subject to the overall supervision and review of the fund's 
Board of Directors. Portfolio securities transactions for the fund 
are effected by or under the supervision of TIMCO.

Transactions on stock exchanges involve the payment of negotiated 
brokerage commissions. There is generally no stated commission in 
the case of securities traded in the over-the-counter markets, but 
the price of those securities includes an undisclosed commission or 
mark-up. The cost of securities purchased from underwriters 
includes an underwriting commission or concession, and the prices 
at which securities are purchased from and sold to dealers include 
a dealer's mark-up or mark-down. For the 1998, 1997 and 1996 fiscal 
years, the fund paid $778,402, $358,528 and $176,000, respectively, 
in brokerage commissions.

In executing portfolio transactions and selecting brokers or 
dealers, it is the fund's policy to seek the best overall terms 
available. The Advisory Agreement between the fund and TIMCO 
provides that, in assessing the best overall terms available for 
any transaction, TIMCO shall consider the factors it deems 
relevant, including the breadth of the market in the security, the 
price of the security, the financial condition and execution 
capability of the broker or dealer, and the reasonableness of the 
commission, if any, for the specific transaction and on a 
continuing basis. In addition, the Advisory Agreement authorizes 
TIMCO, in selecting brokers or dealers to execute a particular 
transaction and in evaluating the best overall terms available, to 
consider the brokerage and research services (as those terms are 
defined in Section 28(e) of the Securities Exchange Act of 1934) 
provided to the fund and/or other accounts over which TIMCO or an 
affiliate exercises investment discretion.

The Fund's Board of Directors will periodically review the 
commissions paid by the fund to determine if the commissions paid 
over representative periods of time were reasonable in relation to 
the benefits inuring to the fund. It is possible that certain of 
the services received will primarily benefit one or more other 
accounts for which investment discretion is exercised. Conversely, 
the fund may be the primary beneficiary of services received as a 
result of portfolio transactions effected for other accounts. 
TIMCO's fee under the Advisory Agreement is not reduced by reason 
of TIMCO's receiving such brokerage and research services.


The Fund's Board of Directors has determined that any portfolio 
transaction for the fund may be executed through Salomon Smith 
Barney and other affiliated broker-dealers if, in TIMCO's judgment, 
the use of an affiliated broker-dealer is likely to result in price 
and execution at least as favorable as those of other qualified 
brokers, and if, in the transaction, the affiliated broker-dealer 
charges the fund a commission rate consistent with that charged by 
it to comparable unaffiliated customers in similar transactions. In 
addition, under SEC rules, the affiliated broker-dealer may 
directly execute such transactions for the fund on the floor of any 
national securities exchange, provided (a) the Board of Directors 
has expressly authorized the affiliated broker-dealer to effect 
such transactions and (b) the affiliated broker-dealer annually 
advises the fund of the aggregate compensation it earned on such 
transactions. An affiliated broker-dealer will not participate in 
commissions from brokerage given by the fund to other brokers or 
dealers and will not receive any reciprocal brokerage business 
resulting therefrom. Over-the-counter purchases and sales are 
transacted directly with principal market makers except in those 
cases in which better prices and executions may be obtained 
elsewhere. For the 1998, 1997 and 1996 fiscal years, the fund paid 
$51,249, $9,374 and $7,375, respectively, in brokerage commissions 
to Salomon Smith Barney. For the 1998 fiscal year, Salomon Smith 
Barney received 7.2% of the brokerage commissions paid by the fund 
and effected 6.5% of the total dollar amount of transactions for 
the fund involving the payment of brokerage commissions.

Even though investment decisions for the fund are made 
independently from those of the other accounts managed by TIMCO, 
investments of the kind made by the fund also may be made by those 
other accounts. When the fund and one or more accounts managed by 
TIMCO 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 TIMCO to be equitable. In some 
cases, this procedure may adversely affect the price paid or 
received by the fund or the size of the position obtained for or 
disposed of by the fund.

PURCHASE, EXCHANGE AND REDEMPTION OF SHARES

Purchase of Shares

General.  The fund offers four Classes of shares. Class A and Class 
L shares are sold to investors with an initial sales charge.  Class 
B shares are sold without an initial sales charge but are subject 
to a contingent deferred sales charge ("CDSC") payable upon certain 
redemptions. Class L shares are also subject to a CDSC payable upon 
certain redemptions.  Class Y shares are sold without an initial 
sales charge or CDSC and are available only to investors investing 
a minimum of $15,000,000. See the Prospectus for a discussion of 
factors to consider in selecting a class of shares to purchase. 

Purchases of shares of the fund must be made through a brokerage 
account maintained with Salomon Smith Barney, an Introducing Broker 
or an investment dealer in the selling group. In addition, certain 
investors, including qualified retirement plans and certain other 
institutional investors, may purchase shares directly from the fund 
through the transfer agent. When purchasing shares of the fund, 
investors must specify whether the purchase is for Class A, Class 
B, Class L or Class Y shares. Salomon Smith Barney and other 
broker/dealers may charge their customers an annual account 
maintenance fee in connection with a brokerage account through 
which an investor purchases or holds shares. Accounts held directly 
at the transfer agent are not subject to a maintenance fee. 

Investors in Class A, Class B and Class L shares may open an 
account by making an initial investment of at least $1,000 for each 
account, or $250 for an IRA or a Self-Employed Retirement Plan, in 
the fund. Investors in Class Y shares may open an account by making 
an initial investment of $15,000,000.  Subsequent investments of at 
least $50 may be made for all Classes. For participants in 
retirement plans qualified under Section 403(b)(7) or Section 
401(a) of the Code, the minimum initial and subsequent investment 
requirement for Class A, Class B and Class L shares and the 
subsequent investment requirement for all Classes in the fund is 
$25.  For shareholders purchasing shares of the fund through the 
Systematic Investment Plan on a monthly basis, the minimum initial 
investment requirement for Class A, Class B and Class L shares and 
the subsequent investment requirement for all Classes is $25.  For 
shareholders purchasing shares of the fund through the Systematic 
Investment Plan on a quarterly basis, the minimum initial 
investment requirement for Class A, Class B and Class L shares and 
the subsequent investment requirement for all Classes is $50.  
There are no minimum investment requirements in Class A shares for 
employees of Citigroup and its subsidiaries, including Salomon 
Smith Barney, unitholders who invest distributions form a UIT 
sponsored by Salomon Smith Barney, Directors or Trustees of any of 
the Smith Barney Mutual Funds, and their spouses and children. The 
Fund reserves the right to waive or change minimums, to decline any 
order to purchase its shares and to suspend the offering of shares 
from time to time. Shares purchased will be held in the 
shareholder's account by the transfer agent. Share certificates are 
issued only upon a shareholder's written request to the transfer 
agent. 

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

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

Initial Sales Charge Alternative - Class A Shares.  The sales 
charges applicable to purchases of Class A shares of the fund are 
as follows: 



Amount of 
Investment

Sales Charge 
as % of 
Offering 
Price

Sales Charge as
% of Amount Invested

Less than $25,000

5.00%

5.26%

$ 25,000 - 49,999

4.00   

4.17   

50,000 - 99,999

3.50   

3.63   

100,000 - 249,999

3.00   

3.09   

250,000 - 499,999

2.00   

2.04   

500,000 and over

-0-

-0-   

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

Members of the selling group may receive up to 90% of the sales 
charge and may be deemed to be underwriters of the fund as defined 
in the 1933 Act. 

The reduced sales charges shown above apply to the aggregate of 
purchases of Class A shares of the fund made at one time by ''any 
person,'' which includes an individual and his or her immediate 
family, or a trustee or other fiduciary of a single trust estate or 
single fiduciary account. 

Initial Sales Charge Alternative - Class L Shares.  For purchases 
of Class L shares, there is a sales charge of 1% of the offering 
price (1.01% of the net amount invested).


Initial Sales Charge Waivers for Class A Shares.  Purchases of 
Class A shares may be made at net asset value without a sales 
charge in the following circumstances: (a) sales to (i) Board 
Members and employees of Citigroup and its subsidiaries and any of 
the Smith Barney Mutual Funds (including retired Board Members and 
employees); the immediate families of such persons (including the 
surviving spouse of a deceased Board Member or employee); and to a 
pension, profit-sharing or other benefit plan for such persons and 
(ii) employees of members of the National Association of Securities 
Dealers, Inc., provided such sales are made upon the assurance of 
the purchaser that the purchase is made for investment purposes and 
that the securities will not be resold except through redemption or 
repurchase; (b) offers of Class A shares to any other investment 
company to effect the combination of such company with the fund by 
merger, acquisition of assets or otherwise; (c) purchases of Class 
A shares by any client of a newly employed Salomon Smith Barney 
Financial Consultant (for a period up to 90 days from the 
commencement of the Financial Consultant's employment with Salomon 
Smith Barney), on the condition the purchase of Class A shares is 
made with the proceeds of the redemption of shares of a mutual fund 
which (i) was sponsored by the Financial Consultant's prior 
employer, (ii) was sold to the client by the Financial Consultant 
and (iii) was subject to a sales charge; (d) purchases by 
shareholders who have redeemed Class A shares in the fund (or Class 
A shares of another fund of the Smith Barney Mutual Funds that are 
offered with a sales charge) and who wish to reinvest their 
redemption proceeds in the same fund, provided the reinvestment is 
made within 60 calendar days of the redemption; (e) purchases by 
accounts managed by registered investment advisory subsidiaries of 
Citigroup; (f) direct rollovers by plan participants of 
distributions from a 401(k) plan offered to employees of Citigroup 
or its subsidiaries or a 401(k) plan enrolled in the Salomon Smith 
Barney 401(k) Program (Note: subsequent investments will be subject 
to the applicable sales charge); (g) purchases by separate accounts 
used to fund certain unregistered variable annuity contracts; (h) 
investments of distributions from or proceeds from a sale of a UIT 
sponsored by Salomon Smith Barney; (i) purchases by investors 
participating in a Salomon Smith Barney fee-based arrangement; and 
(j) purchases of Class A shares by Section 403(b) or Section 401(a) 
or (k) accounts associated with Copeland Retirement Programs.  In 
order to obtain such discounts, the purchaser must provide 
sufficient information at the time of purchase to permit 
verification that the purchase would qualify for the elimination of 
the sales charge. 

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

Letter of Intent.  A Letter of Intent for amounts of $50,000 or 
more provides an opportunity for an investor to obtain a reduced 
sales charge by aggregating investments over a 13 month period, 
provided that the investor refers to such Letter when placing 
orders.  For purposes of a Letter of Intent, the ''Amount of 
Investment'' as referred to in the preceding sales charge table 
includes purchases of all Class A shares of the fund and other 
funds of the Smith Barney Mutual Funds offered with a sales charge 
over the 13 month period based on the total amount of intended 
purchases plus the value of all Class A shares previously purchased 
and still owned. An alternative is to compute the 13 month period 
starting up to 90 days before the date of execution of a Letter of 
Intent.  Each investment made during the period receives the 
reduced sales charge applicable to the total amount of the 
investment goal.  If the goal is not achieved within the period, 
the investor must pay the difference between the sales charges 
applicable to the purchases made and the charges previously paid, 
or an appropriate number of escrowed shares will be redeemed.  
Please contact a Salomon Smith Barney Financial Consultant or the 
transfer agent to obtain a Letter of Intent application. 

A Letter of Intent may also be used as a way for investors to meet 
the minimum investment requirement for Class Y shares.  The 
investor must make an initial minimum purchase of $5,000,000 in 
Class Y shares of the fund and agree to purchase a total of 
$15,000,000 of Class Y shares of the same fund within 13 months 
from the date of the Letter. If a total investment of $15,000,000 
is not made within the 13-month period, all Class Y shares 
purchased to date will be transferred to Class A shares, where they 
will be subject to all fees (including a service fee of 0.25%) and 
expenses applicable to the fund's Class A shares, which may include 
a CDSC of 1.00%. Please contact a Salomon Smith Barney Financial 
Consultant or the transfer agent for further information. 

Deferred Sales Charge Alternatives.  CDSC Shares are sold at net 
asset value next determined without an initial sales charge so that 
the full amount of an investor's purchase payment may be 
immediately invested in the fund. A CDSC, however, may be imposed 
on certain redemptions of these shares. ''CDSC Shares'' are: (a) 
Class B shares; (b) Class L shares; and (c) Class A shares that 
were purchased without an initial sales charge but subject to a 
CDSC. 


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

Class L shares and Class A shares that are CDSC Shares are subject 
to a 1.00% CDSC if redeemed within 12 months of purchase. In 
circumstances in which the CDSC is imposed on Class B shares, the 
amount of the charge will depend on the number of years since the 
shareholder made the purchase payment from which the amount is 
being redeemed.  Solely for purposes of determining the number of 
years since a purchase payment, all purchase payments made during 
a month will be aggregated and deemed to have been made on the last 
day of the preceding Salomon Smith Barney statement month. The 
following table sets forth the rates of the charge for redemptions 
of Class B shares by shareholders, except in the case of Class B 
shares held under the Salomon Smith Barney 401(k) Program, as 
described below. See ''Purchase of Shares-Smith Barney 401(k) and 
ExecChoiceTM Programs.'' 


Year Since Purchase 
Payment Was Made


CDSC

First

5.00%

Second

4.00   

Third

3.00   

Fourth

2.00   

Fifth

1.00   

Sixth and thereafter

0.00   

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

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


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

Waivers of CDSC.  The CDSC will be waived on: (a) exchanges (see 
''Exchange Privilege''); (b) automatic cash withdrawals in amounts 
equal to or less than 1.00% per month of the value of the 
shareholder's shares at the time the withdrawal plan commences (see 
''Automatic Cash Withdrawal Plan'') (provided, however, that 
automatic cash withdrawals in amounts equal to or less than 2.00% 
per month of the value of the shareholder's shares will be 
permitted for withdrawal plans that were established prior to 
November 7, 1994); (c) redemptions of shares within twelve months 
following the death or disability of the shareholder; (d) 
redemptions of shares made in connection with qualified 
distributions from retirement plans or IRAs upon the attainment of 
age 59; (e) involuntary redemptions; and (f) redemptions of shares 
to effect the combination of the fund with any other investment 
company by merger, acquisition of assets or otherwise. In addition, 
a shareholder who has redeemed shares from other funds of the Smith 
Barney Mutual Funds may, under certain circumstances, reinvest all 
or part of the redemption proceeds within 60 days and receive pro 
rata credit for any CDSC imposed on the prior redemption. 

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

Smith Barney 401(k) and ExecChoiceTM Programs.  Investors may be 
eligible to participate in the Smith Barney 401(k) Program or the 
Smith Barney ExecChoiceTM Program. To the extent applicable, the 
same terms and conditions, which are outlined below, are offered to 
all plans participating (''Participating Plans'') in these 
programs. 

The fund offers to Participating Plans Class A and Class L shares 
as investment alternatives under the Smith Barney 401(k) and 
ExecChoiceTM Programs. Class A and Class L shares acquired through 
the Participating Plans are subject to the same service and/or 
distribution fees as the Class A and Class L shares acquired by 
other investors; however, they are not subject to any initial sales 
charge or CDSC. Once a Participating Plan has made an initial 
investment in the fund, all of its subsequent investments in the 
fund must be in the same Class of shares, except as otherwise 
described below. 

Class A Shares.   Class A shares of the fund are offered without 
any sales charge or CDSC to any Participating Plan that purchases 
$1,000,000 or more of Class A shares of one or more funds of the 
Smith Barney Mutual Funds. 

Class L Shares.   Class L shares of the fund are offered without 
any sales charge or CDSC to any Participating Plan that purchases 
less than $1,000,000 of Class L shares of one or more funds of the 
Smith Barney Mutual Funds. 


401(k) and ExecChoiceTM Plans Opened On or After June 21, 1996.   
If, at the end of the fifth year after the date the Participating 
Plan enrolled in the Smith Barney 401(k) Program or ExecChoiceTM 
Program, a Participating Plan's total Class L holdings in all non-
money market Smith Barney Mutual Funds equal at least $1,000,000, 
the Participating Plan will be offered the opportunity to exchange 
all of its Class L shares for Class A shares of the fund. (For 
Participating Plans that were originally established through a 
Salomon Smith Barney retail brokerage account, the five-year period 
will be calculated from the date the retail brokerage account was 
opened.) Such Participating Plans will be notified of the pending 
exchange in writing within 30 days after the fifth anniversary of 
the enrollment date and, unless the exchange offer has been 
rejected in writing, the exchange will occur on or about the 90th 
day after the fifth anniversary date. If the Participating Plan 
does not qualify for the five-year exchange to Class A shares, a 
review of the Participating Plan's holdings will be performed each 
quarter until either the Participating Plan qualifies or the end of 
the eighth year. 

401(k) Plans Opened Prior to June 21, 1996.   In any year after the 
date a Participating Plan enrolled in the Smith Barney 401(k) 
Program, if its total Class L holdings in all non-money market 
Smith Barney Mutual Funds equal at least $500,000 as of the 
calendar year-end, the Participating Plan will be offered the 
opportunity to exchange all of its Class L shares for Class A 
shares of the same fund. Such Plans will be notified in writing 
within 30 days after the last business day of the calendar year 
and, unless the exchange offer has been rejected in writing, the 
exchange will occur on or about the last business day of the 
following March. 

Any Participating Plan in the Smith Barney 401(k) or ExecChoiceTM 
Program, whether opened before or after June 21, 1996, that has not 
previously qualified for an exchange into Class A shares will be 
offered the opportunity to exchange all of its Class L shares for 
Class A shares of the same fund regardless of asset size, at the 
end of the eighth year after the date the Participating Plan 
enrolled in the Smith Barney 401(k) or ExecChoiceTM Program. Such 
Plans will be notified of the pending exchange in writing 
approximately 60 days before the eighth anniversary of the 
enrollment date and, unless the exchange has been rejected in 
writing, the exchange will occur on or about the eighth anniversary 
date. Once an exchange has occurred, a Participating Plan will not 
be eligible to acquire additional Class L shares, but instead may 
acquire Class A shares of the same fund. Any Class L shares not 
converted will continue to be subject to the distribution fee. 

Participating Plans wishing to acquire shares of the fund through 
the Smith Barney 401(k) Program or the Smith Barney ExecChoiceTM 
Program must purchase such shares directly from the transfer agent. 
For further information regarding these Programs, investors should 
contact a Salomon Smith Barney Financial Consultant. 

Existing 401(k) Plans Investing in Class B Shares:   Class B shares 
of the fund are not available for purchase by Participating Plans 
opened on or after June 21, 1996, but may continue to be purchased 
by any Participating Plan in the Smith Barney 401(k) Program opened 
prior to such date and originally investing in such Class. Class B 
shares acquired are subject to a CDSC of 3.00% of redemption 
proceeds if the Participating Plan terminates within eight years of 
the date the Participating Plan first enrolled in the Smith Barney 
401(k) Program. 


At the end of the eighth year after the date the Participating Plan 
enrolled in the Smith Barney 401(k) Program, the Participating Plan 
will be offered the opportunity to exchange all of its Class B 
shares for Class A shares of the fund. Such Participating Plan will 
be notified of the pending exchange in writing approximately 60 
days before the eighth anniversary of the enrollment date and, 
unless the exchange has been rejected in writing, the exchange will 
occur on or about the eighth anniversary date. Once the exchange 
has occurred, a Participating Plan will not be eligible to acquire 
additional Class B shares, but instead may acquire Class A shares 
of the same fund. If the Participating Plan elects not to exchange 
all of its Class B shares at that time, each Class B share held by 
the Participating Plan will have the same conversion feature as 
Class B shares held by other investors. See ''Purchase of Shares-
Deferred Sales Charge Alternatives.'' 

No CDSC is imposed on redemptions of Class B shares to the extent 
that the net asset value of the shares redeemed does not exceed the 
current net asset value of the shares purchased through 
reinvestment of dividends or capital gain distributions, plus the 
current net asset value of Class B shares purchased more than eight 
years prior to the redemption, plus increases in the net asset 
value of the shareholder's Class B shares above the purchase 
payments made during the preceding eight years. Whether or not the 
CDSC applies to the redemption by a Participating Plan depends on 
the number of years since the Participating Plan first became 
enrolled in the Smith Barney 401(k) Program, unlike the 
applicability of the CDSC to redemptions by other shareholders, 
which depends on the number of years since those shareholders made 
the purchase payment from which the amount is being redeemed. 

The CDSC will be waived on redemptions of Class B shares in 
connection with lump-sum or other distributions made by a 
Participating Plan as a result of: (a) the retirement of an 
employee in the Participating Plan; (b) the termination of 
employment of an employee in the Participating Plan; (c) the death 
or disability of an employee in the Participating Plan; (d) the 
attainment of age 591/2 by an employee in the Participating Plan; 
(e) hardship of an employee in the Participating Plan to the extent 
permitted under Section 401(k) of the Code; or (f) redemptions of 
shares in connection with a loan made by the Participating Plan to 
an employee.

Exchange Privilege

As your needs change, you may wish to reposition your investments. 
 With Smith Barney Mutual Funds, you have the ability to exchange 
your shares of most Smith Barney mutual funds for those of others 
within the family.

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

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

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


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

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

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

Redemption of Shares

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

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

Shares held by Salomon Smith Barney as custodian must be redeemed 
by submitting a written request to a Salomon Smith Barney Financial 
Consultant. Shares other than those held by Salomon Smith Barney as 
custodian may be redeemed through an investor's Financial 
Consultant, Introducing Broker or dealer in the selling group or by 
submitting a written request for redemption to: 

Smith Barney Small Cap Blend Fund, Inc.
Class A, B, L or Y (please specify) 
c/o First Data Investor Services Group, Inc. 
P.O. Box 5128 
Westborough, Massachusetts 01581-5128

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

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

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


Redemptions.   Redemption requests of up to $10,000 of any class or 
classes of shares of the fund may be made by eligible shareholders 
by calling the transfer agent at 1-800-451-2010. Such requests may 
be made between 9:00 a.m. and 5:00 p.m. (New York City time) on any 
day the NYSE is open.  Redemptions of shares (i) by retirement 
plans or (ii) for which certificates have been issued are not 
permitted under this program. 

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

Exchanges.  Eligible shareholders may make exchanges by telephone 
if the account registration of the shares of the fund being 
acquired is identical to the registration of the shares of the fund 
exchanged.  Such exchange requests may be made by calling the 
transfer agent at 1-800-451-2010 between 9:00 a.m. and 5:00 p.m. 
(New York City time) on any day on which the NYSE is open. 

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

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

DISTRIBUTION


CFBDS, Inc. ("CFBDS") located at 20 Milk Street, Boston, 
Massachusetts 02109-5408 serves as the trust's distributor on a 
best efforts basis pursuant to a distribution agreement dated 
October 8, 1998 (the "Distribution Agreement").  Prior to the 
merger of Travelers Group, Inc. and Citicorp Inc. on October 8, 
1998, Salomon Smith Barney served as the fund's distributor. 

To compensate Salomon Smith Barney for the service it provides and 
for the expense it bears under the Distribution Agreement, the fund 
has adopted a services and distribution plan (the "Plan") pursuant 
to Rule 12b-1 under the 1940 Act.  Under the Plan, the fund pays 
Salomon Smith Barney a service fee, accrued daily and paid monthly, 
calculated at the annual rate of 0.25% of the value of the fund's 
average daily net assets attributable to the Class A, Class B  and 
Class L shares.  In addition, the fund pays Salomon Smith Barney a 
distribution fee with respect to Class B and Class L shares 
calculated at the annual rate of 0.75% of the value of the fund's 
average daily net assets attributable those shares primarily 
intended to compensate Salomon Smith Barney for its initial expense 
of paying Financial Consultants a commission upon sales of those 
shares.  Class B shares that automatically convert to Class A 
shares eight years after the date of original purchase will no 
longer be subject to a distribution fee. 

For the year ended December 31, 1998, the fees which have been 
accrued and/or paid to Salomon Smith Barney pursuant to Rule 12b-1 
for the fund were $107,818 for Class A shares, $193,723 for Class 
B shares and $47,398 for Class L shares. The distribution expenses 
for 1998 included compensation of financial consultants and 
printing costs of prospectuses and marketing materials. 

Commissions on Class A Shares. For the 1996 and 1997 fiscal years, 
the aggregate dollar amounts of commissions on Class A shares, all 
of which were paid to Salomon Smith Barney, were $0 (prior to June 
23, 1997, the fund was a closed-end investment company and thus had 
no sales charges) and $173,000, respectively.  For the period 
January 1, 1998 through October 7, 1998 and for the period October 
8, 1998 through December 31, 1998, the aggregate dollar amounts of 
commissions on Class A shares are as follows:

		01/01/98 through	10/08/98 through
		10/07/98	12/31/98

Class A shares	$136,000*	$35,000**

*The entire amount was paid to Salomon Smith Barney.

**The following amount was paid to Salomon Smith Barney: 
$31,500.00.                   .

Commissions on Class L Shares.  For the period June 12, 1998 
through October 7, 1998 and for the period October 8, 1998 through 
December 31, 1998, the aggregate dollar amounts of commissions on 
Class L shares are as follows:

		06/12/98 through	10/08/98 through
		10/07/98	12/31/98

Class L shares	$12,000*	$7,000**
(On June 12, 1998, Class C
shares were renamed Class L
shares)

*The entire amount was paid to Salomon Smith Barney.

**The following amount was paid to Salomon Smith Barney: $6,300.00. 
                   .

 

A contingent deferred sales charge ("CDSC") may be imposed on 
certain redemptions of Class A, Class B shares and Class L shares. 
For Class B shares, the maximum CDSC is 5.00% of redemption 
proceeds, declining by 1.00% each year after the date of purchase 
to zero.  A CDSC of 1% is imposed on redemptions of Class L shares. 
 A CDSC of 1.00% is also imposed on redemptions of Class A shares 
that were purchased without an initial sales charge but subject to 
a CDSC if such redemptions occur within 12 months from the date 
such investment was made.  Any sales charge imposed on redemptions 
is paid to the distributor of the shares. 

CFBDS will pay for the printing, at printer's overrun cost, of 
prospectuses and periodic reports after they have been prepared, 
set in type and mailed to shareholders, and will also pay the cost 
of distributing such copies used in connection with the offering to 
prospective investors and will also pay for supplementary sales 
literature and other promotional costs.  Such expenses incurred by 
CFBDS are distribution expenses within the meaning of the Plans and 
may be paid from amounts received by CFBDS from the Company under 
the Plans.

DETERMINATION OF NET ASSET VALUE

The net asset value per share of the fund normally is determined as 
of the close of regular trading on the NYSE on each day that the 
NYSE is open, by dividing the value of the fund's net assets 
attributable to each Class by the total number of shares of the 
Class outstanding.  If the NYSE closes early, the fund accelerates 
the calculation of its net asset value to the actual closing time. 
 The NYSE is closed for the following holidays: New Year's Day, 
Martin Luther King Day, President's Day, Good Friday, Memorial Day, 
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. 
 

Securities for which market quotations are readily available are 
valued at current market value or, in their absence, at fair value. 
Securities traded on an exchange are valued at last sales prices on 
the principal exchange on which each such security is traded, or if 
there were no sales on that exchange on the valuation date, the 
last quoted sale, up to the time of valuation, on the other 
exchanges.  If instead there were no sales on the valuation date 
with respect to these securities, such securities are valued at the 
mean of the latest published closing bid and asked prices.  Over-
the-counter securities are valued at last sales price or, if there 
were no sales that day, at the mean between the bid and asked 
prices. Options, futures contracts and options thereon that are 
traded on exchanges are also valued at last sales prices as of the 
close of the principal exchange on which each is listed or if there 
were no such sales on the valuation date, the last quoted sale, up 
to the time of valuation, on the other exchanges. In the absence of 
any sales on the valuation date, valuation shall be the mean of the 
latest closing bid and asked prices. Securities with a remaining 
maturity of 60 days or less are valued at amortized cost where the 
Board of Directors has determined that amortized cost is fair 
value. Premiums received on the sale of call options will be 
included in the fund's net assets, and current market value of such 
options sold by the fund will be subtracted from the fund's net 
assets. Any other investments of the fund, including restricted 
securities and listed securities for which there is a thin market 
or that trade infrequently (i.e., securities for which prices are 
not readily available), are valued at a fair value determined by 
the Board of Directors in good faith. This value generally is 
determined as the amount that the fund could reasonably expect to 
receive from an orderly disposition of these assets over a 
reasonable period of time but in no event more than seven days. The 
value of any security or commodity denominated in a currency other 
than U.S. dollars will be converted into U.S. dollars at the 
prevailing market rate as determined by the investment adviser. 


Foreign securities trading may not take place on all days on which 
the NYSE is open. Further, trading takes place in various foreign 
markets on days on which the NYSE is not open. Accordingly, the 
determination of the net asset value of the fund may not take place 
contemporaneously with the determination of the prices of 
investments held by such fund. Events affecting the values of 
investments that occur between the time their prices are determined 
and 4:00 P.M. on each day that the NYSE is open will not be 
reflected in the fund's net asset value unless the investment 
adviser, under the supervision of the Company's Board of Directors, 
determines that the particular event would materially affect net 
asset value. As a result, the fund's net asset value may be 
significantly affected by such trading on days when a shareholder 
has no access to that fund.

IRA AND OTHER PROTOTYPE RETIREMENT PLANS

Copies of the following plans with custody or trust agreements have 
been approved by the Internal Revenue Service and are available 
from the fund or Salomon Smith Barney; investors should consult 
with their own tax or retirement planning advisors prior to the 
establishment of a plan. 

IRA, Rollover IRA and Simplified Employee Pension - IRA

The Small Business Job Protection Act of 1996 changed the 
eligibility requirements for participants in Individual Retirement 
Accounts ("IRAs").  Under these new provisions, if you or your 
spouse have earned income, each of you may establish an IRA and 
make maximum annual contributions equal to the lesser of earned 
income or $2,000.  As a result of this legislation, married couples 
where one spouse is non-working may now contribute a total of 
$4,000 annually to their IRAs.

The Taxpayer Relief Act of 1997 has changed the requirements for 
determining whether or not you are eligible to make a deductible 
IRA contribution.  Under the new rules effective beginning January 
1, 1998, if you are considered an active participant in an 
employer-sponsored retirement plan, you may still be eligible for 
a full or partial deduction depending upon your combined adjusted 
gross income ("AGI").  For married couples filing jointly for 1998, 
a full deduction is permitted if your combined AGI is $50,000 or 
less ($30,000 for unmarried individuals); a partial deduction will 
be allowed when AGI is between $50,000-$60,000 ($30,000-$40,000 for 
an unmarried individual); and no deduction when AGI is above 
$60,000 ($40,000 for an unmarried individual).  However, if you are 
married and your spouse is covered by a employer-sponsored 
retirement plan, but you are not, you will be eligible for a full 
deduction if your combined AGI is $150,000 or less.  A partial 
deduction is permitted if your combined AGI is between $150,000-
$160,000 and no deduction is permitted after $160,000.  

The rules applicable to so-called "Roth IRAs" differ from those 
described above.

A Rollover IRA is available to defer taxes on lump sum payments and 
other qualifying rollover amounts (no maximum) received from 
another retirement plan. 

An employer who has established a Simplified Employee Pension - IRA 
("SEP-IRA") on behalf of eligible employees may make a maximum 
annual contribution to each participant's account of 15% (up to 
$24,000) of each participant's compensation.  Compensation is 
capped at $160,000 for 1998.

Paired Defined Contribution Prototype


Corporations (including Subchapter S corporations) and non-
corporate entities may purchase shares of the fund through the 
Salomon Smith Barney Prototype Paired Defined Contribution Plan 
(the "Prototype").  The Prototype permits adoption of profit-
sharing provisions, money purchase pension provisions, or both, to 
provide benefits for eligible employees and their beneficiaries. 
 The Prototype provides for a maximum annual tax deductible 
contribution on behalf of each Participant of up to 25% of 
compensation, but not to exceed $30,000 (provided that a money 
purchase pension plan or both a profit-sharing plan and a money 
purchase pension plan are adopted thereunder).

PERFORMANCE DATA

From time to time, the fund may quote total return of the Classes 
in advertisements or in reports and other communications to 
shareholders. The Fund may include comparative performance 
information in advertising or marketing the fund's shares. Such 
performance information may include data from the following 
industry and financial publications:  Barron's, Business Week, CDA 
Investment Technologies, Inc., Changing Times, Forbes, Fortune, 
Institutional Investor, Investors Daily, Money, Morningstar Mutual 
Fund Values, The New York Times, USA Today and The Wall Street 
Journal.  To the extent any advertisement or sales literature of 
the fund describes the expenses or performance of Class A, Class B, 
Class L or Class Y, it will also disclose such information for the 
other Classes.

Average Annual Total Return

"Average annual total return" figures are computed according to a 
formula prescribed by the SEC. The formula can be expressed as 
follows:

P(1 + T)n = ERV

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

Class A's average annual total return was as follows for the 
periods indicated: 

(6.24)%  for the one-year period January 1, 1998 through 
December 31, 1998. 

11.38% for the five-year period January 1, 1994 through 
December 31, 1998.

9.40% for the period from commencement of operations (January 
23, 1990) through December 31, 1998.

Class B's average annual total return was as follows for the period 
indicated: 

(6.91)% for the one-year period January 1, 1998 through 
December 31, 1998.

6.73% for the period from commencement of operations June 25, 
1997 (inception date) through December 1, 1998.

Class L's average annual total return was as follows for the period 
indicated: 

(3.96)% for the one-year period January 1, 1998 through 
December 31, 1998.

9.04% for the period from June 24, 1997 (inception date) 
through December 31, 1998.

Class Y's average annual total return was as follows for the period 
indicated:

(0.80)% for the one-year period January 1, 1998 through 
December 31, 1998.

(1.84)% for the period from October 17, 1997 (inception date) 
through December 31, l998. 

Average annual total return figures calculated in accordance with 
the above formula assume that the maximum 5.00% sales charge or 
maximum applicable CDSC, as the case may be, has been deducted from 
the hypothetical investment. If the maximum 5.00% sales charge had 
not been deducted at the time of purchase, Class A's average annual 
total return for the same periods would have been (1.31)%, 12.53% 
and 10.04%, respectively.  If the maximum CDSC had not been 
deducted at the time of redemption, Class B's average annual total 
return for the same periods would have been (2.07)% and 9.22%, 
respectively.  If the maximum CDSC had not been deducted at the 
time of redemption, Class L's average annual total return for the 
same periods would have been (1.99)% and 9.74%, respectively. 

Aggregate Total Return

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

 				ERV-P
  				   P

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

Class A's aggregate total return was as follows for the period 
indicated: 

135.25% for the period from January 23, 1990 through December 
31, 1998. 

Class B's aggregate total return was as follows for the period 
indicated: 


14.32% for the period from June 25, 1997 through December 31, 
1998.

Class L's aggregate total return was as follows for the period 
indicated:

15.18% for the period from June 24, 1997 through December 31, 
1998.

Class Y's average annual total return was as follows for the period 
indicated:

(2.21)% for the period from October 17, 1997 through December 
31, l998. 

Class A aggregate total return figures assume that the maximum 
5.00% sales charge has not been deducted from the investment at the 
time of purchase. If the maximum 5.00% sales charge had been 
deducted at the time of purchase, Class A's aggregate total return 
for the same period would have been 123.39%.

Class B aggregate total return figures assume that the maximum 
applicable CDSC has not been deducted from the investment at the 
time of redemption. If the maximum 5.00% CDSC had been deducted at 
the time of redemption, Class B's aggregate total return for the 
same period would have been 10.48%.

Class L aggregate total return figures assume that the maximum 
applicable CDSC has not been deducted from the investment at the 
time of redemption. If the maximum 1% CDSC had been deducted at the 
time of redemption, Class L's aggregate total return for the same 
period would have been 14.07%.

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

It is important to note that the total return figures set forth 
above are based on historical earnings and are not intended to 
indicate future performance.

ADDITIONAL INFORMATION CONCERNING TAXES

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

The Fund and Its Investments

The Fund intends to continue to qualify to be treated as a 
regulated investment company each taxable year under the Internal 
Revenue Code of 1986, as amended (the "Code").  To so qualify, the 
fund must, among other things: (a) derive at least 90% of its gross 
income in each taxable year from dividends, interest, payments with 
respect to securities, loans and gains from the sale or other 
disposition of stock or securities or foreign currencies, or other 
income (including, but not limited to, gains from options, futures 
or forward contracts) derived with respect to its business of 
investing in such stock, securities or currencies; and (b) 
diversify its holdings so that, at the end of each quarter of the 
fund's taxable year, (i) at least 50% of the market value of the 
fund's assets is represented by cash, securities of other regulated 
investment companies, United States government securities and other 
securities, with such other securities limited, in respect of any 
one issuer, to an amount not greater than 5% of the fund's assets 
and not greater than 10% of the outstanding voting securities of 
such issuer and (ii) not more than 25% of the value of its assets 
is invested in the securities (other than United States government 
securities or securities of other regulated investment companies) 
of any one issuer or any two or more issuers that the fund controls 
and are determined to be engaged in the same or similar trades or 
businesses or related trades or businesses.  The Fund expects that 
all of its foreign currency gains will be directly related to its 
principal business of investing in stocks and securities.

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

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

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

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

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

Foreign Investments.  Dividends or other income (including, 
in some cases, capital gains) received by the fund from investments 
in foreign securities may be  subject to withholding and other 
taxes imposed by foreign countries.  Tax conventions between 
certain countries and the United States may reduce or eliminate 
such taxes in some cases.  The Fund will not be eligible to elect 
to treat any foreign taxes paid by it as paid by its shareholders, 
who therefore will not be entitled to credits for such taxes on 
their own tax returns.  Foreign taxes paid by the fund will reduce 
the return from the fund's investments.  

Passive Foreign Investment Companies.  If the fund purchases 
shares in certain foreign investment entities, called "passive 
foreign investment companies" (a "PFIC"), it may be subject to 
United States federal income tax on a portion of any "excess 
distribution" or gain from the disposition of such shares even if 
such income is distributed as a taxable dividend by the fund to its 
shareholders.  Additional charges in the nature of interest may be 
imposed on the fund in respect of deferred taxes arising from such 
distributions or gains.  If the fund were to invest in a PFIC and 
elected to treat the PFIC as a "qualified electing fund" under the 
Code, in lieu of the foregoing requirements, the fund might be 
required to include in income each year a portion of the ordinary 
earnings and net capital gains of the qualified electing fund, even 
if not distributed to the fund, and such amounts would be subject 
to the 90% and excise tax distribution requirements described 
above.  In order to make this election, the fund would be required 
to obtain certain annual information from the passive foreign 
investment companies in which it invests, which may be difficult or 
not possible to obtain.

Recently, legislation was enacted that provides a mark-to-
market election for regulated investment companies effective for 
taxable years beginning after December 31, 1997.  This election 
would result in the fund being treated as if it had sold and 
repurchased all of the PFIC stock at the end of each year.  In this 
case, the fund would report gains as ordinary income and would 
deduct losses as ordinary losses to the extent of previously 
recognized gains.  The election, once made, would be effective for 
all subsequent taxable years of the fund, unless revoked with the 
consent of the IRS.  By making the election, the fund could 
potentially ameliorate the adverse tax consequences with respect to 
its ownership of shares in a PFIC, but in any particular year may 
be required to recognize income in excess of the distributions it 
receives from PFICs and its proceeds from dispositions of PFIC 
company stock.  The Fund may have to distribute this "phantom" 
income and gain to satisfy its distribution requirement and to 
avoid imposition of the 4% excise tax.  The Fund will make the 
appropriate tax elections, if possible, and take any additional 
steps that are necessary to mitigate the effect of these rules.

Taxation of United States Shareholders

Dividends and Distributions.  Any dividend declared by the 
fund in October, November or December of any calendar year and 
payable to shareholders of record on a specified date in such a 
month shall be deemed to have been received by each shareholder on 
December 31 of such calendar year and to have been paid by the fund 
not later than such December 31, provided that such dividend is 
actually paid by the fund during January of the following calendar 
year.  The Fund intends to distribute annually to its shareholders 
substantially all of its investment company taxable income, and any 
net realized long-term capital gains in excess of net realized 
short-term capital losses (including any capital loss carryovers). 
 The Fund currently expects to distribute any excess annually to 
its shareholders.  However, if the fund retains for investment an 
amount equal to all or a portion of its net long-term capital gains 
in excess of its net short-term capital losses and capital loss 
carryovers, it will be subject to a corporate tax (currently at a 
rate of 35%) on the amount retained.  In that event, the fund will 
designate such retained amounts as undistributed capital gains in 
a notice to its shareholders who (a) will be required to include in 
income for United Stares federal income tax purposes, as long-term 
capital gains, their proportionate shares of the undistributed 
amount, (b) will be entitled to credit their proportionate shares 
of the 35% tax paid by the fund on the undistributed amount against 
their United States federal income tax liabilities, if any, and to 
claim refunds to the extent their credits exceed their liabilities, 
if any, and (c) will be entitled to increase their tax basis, for 
United States federal income tax purposes, in their shares by an 
amount equal to 65% of the amount of undistributed capital gains 
included in the shareholder's income.  Organizations or persons not 
subject to federal income tax on such capital gains will be 
entitled to a refund of their pro rata share of such taxes paid by 
the fund upon filing appropriate returns or claims for refund with 
the Internal Revenue Service (the "IRS").

Dividends of net investment income and distributions of net 
realized short-term capital gains are taxable to a United States 
shareholder as ordinary income, whether paid in cash or in shares. 
 Distributions of net-long-term capital gains, if any, that the 
fund designates as capital gains dividends are taxable as long-term 
capital gains, whether paid in cash or in shares and regardless of 
how long a shareholder has held shares of the fund.  Dividends and 
distributions paid by the fund attributable to dividends on stock 
of U.S. corporations received by the fund, with respect to which 
the fund meets certain holding period requirements, will be 
eligible for the deduction for dividends received by corporations. 
 Distributions in excess of the fund's current and accumulated 
earnings and profits will, as to each shareholder, be treated as a 
tax-free return of capital to the extent of a shareholder's basis 
in his shares of the fund, and as a capital gain thereafter (if the 
shareholder holds his shares of the fund as capital assets).

Shareholders receiving dividends or distributions in the form 
of additional shares should be treated for United States federal 
income tax purposes as receiving a distribution in the amount equal 
to the amount of money that the shareholders receiving cash 
dividends or distributions will receive, and should have a cost 
basis in the shares received equal to such amount.

Investors considering buying shares just prior to a dividend 
or capital gain distribution should be aware that, although the 
price of shares just purchased at that time may reflect the amount 
of the forthcoming distribution, such dividend or distribution may 
nevertheless be taxable to them.

If the fund is the holder of record of any stock on the 
record date for any dividends payable with respect to such stock, 
such dividends are included in the fund's gross income not as of 
the date received but as of the later of (a) the date such stock 
became ex-dividend with respect to such dividends (i.e., the date 
on which a buyer of the stock would not be entitled to receive the 
declared, but unpaid, dividends) or (b) the date the fund acquired 
such stock.  Accordingly, in order to satisfy its income 
distribution requirements, the fund may be required to pay 
dividends based on anticipated earnings, and shareholders may 
receive dividends in an earlier year than would otherwise be the 
case.

Sales of Shares.  Upon the sale or exchange of his shares, a 
shareholder will realize a taxable gain or loss equal to the 
difference between the amount realized and his basis in his shares. 
 Such gain or loss will be treated as capital gain or loss, if the 
shares are capital assets in the shareholder's hands, and will be 
long-term capital gain or loss if the shares are held for more than 
one year and short-term capital gain or loss if the shares are held 
for one year or less.  Any loss realized on a sale or exchange will 
be disallowed to the extent the shares disposed of are replaced, 
including replacement through the reinvesting of dividends and 
capital gains distributions in the fund, within a 61-day period 
beginning 30 days before and ending 30 days after the disposition 
of the shares.  In such a case, the basis of the shares acquired 
will be increased to reflect the disallowed loss.  Any loss 
realized by a shareholder on the sale of a fund share held by the 
shareholder for six months or less will be treated for United 
States federal income tax purposes as a long-term capital loss to 
the extent of any distributions or deemed distributions of long-
term capital gains received by the shareholder with respect to such 
share.

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

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

Notices.  Shareholders will be notified annually by the fund 
as to the United States federal income tax status of the dividends, 
distributions and deemed distributions attributable to 
undistributed capital gains (discussed above in "Dividends and 
Distributions") made by the fund to its shareholders.  Furthermore, 
shareholders will also receive, if appropriate, various written 
notices after the close of the fund's taxable year regarding the 
United States federal income tax status of certain dividends, 
distributions and deemed distributions that were paid (or that are 
treated as having been paid) by the fund to its shareholders during 
the preceding taxable year.

Other Taxation

Distributions also may be subject to additional state, local 
and foreign taxes depending on each shareholder's particular 
situation.

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

ADDITIONAL INFORMATION

The Fund, an open-end management investment company, was 
incorporated on October 4, 1989 in Maryland under the name The 
Inefficient-Market Fund Inc. as a non-diversified closed-end 
management investment company and converted to open-end diversified 
status on June 23, 1997 pursuant to shareholder approval rendered 
on April 18, 1997 and Securities and Exchange Declaration of 
Effectiveness issued on June 23, 1997.

PNC is located at 17th Chestnut Street, Philadelphia, PA 19103, and 
serves as the custodian of the fund. Under its agreement with the 
fund, PNC holds the fund's portfolio securities and keeps all 
necessary accounts and records. For its services, PNC receives a 
monthly fee based upon the month-end market value of securities 
held in custody and also receives securities transaction charges. 
PNC is authorized to establish separate accounts for foreign 
securities owned by the fund to be held with foreign branches of 
other domestic banks as well as with certain foreign banks and 
securities depositories. The assets of the fund are held under bank 
custodianship in compliance with the 1940 Act.

First Data is located at Exchange Place, Boston, MA 02109, and 
serves as the fund's transfer agent. Under the transfer agency 
agreement, First Data maintains the shareholder account records for 
the fund, handles certain communications between shareholders and 
the fund and distributes dividends and distributions payable by the 
fund. For these services, First Data receives a monthly fee 
computed on the basis of the number of shareholder accounts it 
maintains for the fund during the month and is reimbursed for out-
of-pocket expenses.

As of April 21, 1999, the following table contains a list of 
shareholders who of record  or beneficially own at least 5% of the 
outstanding shares of a particular class of shares of the fund:

Class A
Holder				% of shares
Charles Schwab & Co. Inc.		11.31%
101 Montgomery Street
San Francisco, CA 94104

Class Y
Holder					% of shares
Smith Barney Concert Series, Inc.	65.76%
High Growth Portfolio
PNC Bank
Attn: Beverly Timson
200 Stevens Drive Suite 440
Lester, PA 19113

Smith Barney Concert Series, Inc.	20.91%
Growth Portfolio
PNC Bank
Attn: Beverly Timson
200 Stevens Drive Suite 440
Lester, PA 19113

Smith Barney Concert Series, Inc.	8.45%
Select High Growth Portfolio
PNC Bank
Attn: Beverly Timson
200 Stevens Drive Suite 440
Lester, PA 19113





FINANCIAL STATEMENTS

The fund's Annual Report for the fiscal year ended December 31, 
1998, is incorporated herein by reference in its entirety.  The 
annual report was filed on was filed on March 15, 1999, accession 
number 9115-99-000143.



Smith Barney
Small Cap Blend
Fund, Inc.


Statement of


Additional 
Information























April 30, 1999



Smith Barney
Small Cap Blend Fund, Inc.
388 Greenwich Street
New York, NY  10013
SALOMON SMITH 
BARNEY
A Member of 
Citigroup 

	DRAFT 1/22/99

	

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