Registration No. 2-71469
                 811-3158

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933	    X

Pre-Effective Amendment No.
Post-Effective Amendment No.     35    	   X

REGISTRATION STATEMENT UNDER THE INVESTMENT
	COMPANY ACT OF 1940	    X

Amendment No.     38    	    X

SMITH BARNEY FUNDAMENTAL VALUE FUND INC.
(Exact name of Registrant as Specified in Charter)

7 World Trade Center, New York, New York  10048
(Address of Principal Executive Offices)  (Zip Code)

Registrant's Telephone Number, including Area Code: (212) 720-9218

Christina T. Sydor
Secretary
Smith Barney Fundamental Value Fund Inc.
7 World Trade Center
New York, New York  10048
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: Continuous

It is proposed that this filing will become effective:

	immediately upon filing pursuant to paragraph (b)

XXX	on January 28, 2001 pursuant to paragraph (b) of Rule 485

	60 days after filing pursuant to paragraph (a)(1)

	on (date) pursuant to paragraph (a)(1)

	75 days after filing pursuant to paragraph (a)(2)

	on (date) pursuant to paragraph (a)(2) of Rule 485.

If appropriate, check the following box:

	this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

Title of Securities Being Registered:  Shares of Common Stock.



PART A

<PAGE>

        SB Smith Barney
        MF Mutual Funds

        Your Serious Money. Professionally Managed./SM/


        PROSPECTUS


        Smith Barney
        Fundamental
        Value Fund Inc.

        Class A, B, L and Y Shares
        ---------------------------
        January 28, 2001



        INVESTMENT PRODUCTS: NOT FDIC INSURED . NO BANK GUARANTEE . MAY LOSE
        VALUE

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

Smith Barney
Fundamental Value Fund Inc.

                   Contents

<TABLE>
<S>                                                                          <C>
Investments, risks and performance..........................................   2
More on the fund's investments..............................................   6
Management..................................................................   7
Choosing a class of shares to buy...........................................   8
Comparing the fund's classes................................................  10
Sales charge................................................................  11
More about deferred sales charges...........................................  13
Buying shares...............................................................  14
Exchanging shares...........................................................  15
Redeeming shares............................................................  17
Other things to know about share transactions...............................  19
Distributions, dividends and taxes..........................................  21
Share price.................................................................  22
Financial highlights........................................................  23
</TABLE>

                                                       Smith Barney Mutual Funds

                                                                              1
<PAGE>

 Investments, risks and performance

Investment objective
The fund seeks long-term capital growth. Current income is a secondary consid-
eration.

Principal investment strategies
Key investments The fund invests primarily in common stocks and common stock
equivalents, such as preferred stocks and securities convertible into common
stocks, of companies the manager believes are undervalued in the marketplace.
While the manager selects investments primarily for their capital appreciation
potential, secondary consideration is given to a company's dividend record and
the potential for an improved dividend return. The fund generally invests in
securities of large, well-known companies but may also invest a significant
portion of its assets in securities of small to medium-sized companies when the
manager believes smaller companies offer more attractive value opportunities.

Selection process The manager employs a two-step stock selection process in its
search for undervalued stocks of temporarily out of favor companies. First, the
manager uses proprietary models and fundamental research to try to identify
stocks that are underpriced in the market relative to their fundamental value.
Next, the manager looks for a positive catalyst in the company's near term out-
look which the manager believes will accelerate earnings or improve the value
of the company's assets. The manager also emphasizes companies in those sectors
of the economy which the manager believes are undervalued relative to other
sectors.

When evaluating an individual stock, the manager looks for:
 .Low market valuations measured by the manager's valuation models
 .Positive changes in earnings prospects because of factors such as:
 .New, improved or unique products and services
 .New or rapidly expanding markets for the company's products
 .New management
 .Changes in the economic, financial, regulatory or political environment par-
  ticularly affecting the company
 .Effective research, product development and marketing
 .A business strategy not yet recognized by the marketplace

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

 .Stock prices decline generally
 .The manager's judgment about the attractiveness, value or potential apprecia-
  tion of a particular stock proves to be incorrect

Smith Barney Fundamental Value Fund Inc.

 2
<PAGE>

 .An adverse event, such as negative press reports about a company in which the
  fund invests, depresses the value of the company's stock
 .The markets strongly favor growth stocks over stocks with value characteris-
  tics.
 .Small or medium capitalization companies fall out of favor with investors

Compared to mutual funds that focus only on large capitalization companies, the
fund's share price may be more volatile because the fund also invests a signif-
icant portion of its assets in small and medium capitalization companies.

Compared to large companies, small and medium capitalization companies are more
likely to have:

 .More limited product lines
 .Fewer capital resources
 .More limited management depth

Further, securities of small and medium capitalization companies are more
likely to:

 .Experience sharper swings in market values
 .Be harder to sell at times and at prices the manager believes appropriate
 .Offer greater potential for gains and losses

Who may want to invest
The fund may be an appropriate investment if you:

 .Are seeking to participate in the long-term growth potential of the U.S. stock
  market
 .Are looking for an investment with potentially greater return but higher risk
  than fixed income investments
 .Are willing to accept the risks of the stock market

                                                       Smith Barney Mutual Funds

                                                                              3
<PAGE>

Risk return bar chart
This bar chart indicates the risks of investing in the fund by showing changes
in the fund's performance from year to year. Past performance does not neces-
sarily indicate how the fund will perform in the future.


                        Total Return for Class A Shares

  91      92      93     94      95      96      97      98      99      00
------  ------  ------  -----  ------  ------  ------  ------  ------  ------
31.44%  14.86%  19.75%  1.44%  27.88%  19.69%  15.27%  15.81%  30.87%  16.28%

                       Calendar years ended December 31


The bar chart shows the performance of the fund's Class A shares for each of
the past 10 calendar years. Class B, L and Y shares have different performance
because of different expenses. The performance information in the chart does
not reflect sales charges, which would reduce your return.

Quarterly returns:
Highest: 18.45% in 4th quarter 1998; Lowest: (10.01)% in 3rd quarter 1998

Risk return table
This table indicates the risks of investing in the fund by comparing the aver-
age annual total return of each class for the periods shown with that of the
S&P 500, a broad-based unmanaged index of 500 widely traded large capitaliza-
tion companies, and the Lipper Multi-Cap Value Funds Average (the "Lipper Aver-
age"), an average composed of the fund's peer group of mutual funds. This table
assumes imposition of the maximum sales charge applicable to the class, redemp-
tion of shares at the end of the period, and reinvestment of distributions and
dividends.

                          Average Annual Total Returns
                     Calendar Years Ended December 31, 2000
<TABLE>
<CAPTION>
Class           1 year  5 years 10 years Since inception Inception date
<S>             <C>     <C>     <C>      <C>             <C>
 A              10.48%  18.23%   18.41%      14.88%         11/12/81
 B              10.34%  18.40%      n/a      17.34%          11/6/92
 L              13.17%  18.27%      n/a      16.30%          8/10/93
 Y              16.65%     n/a      n/a      19.49%+        10/13/95
S&P 500 Index   (9.10)% 18.33%   17.44%         n/a            *
Lipper Average   8.84%  13.71%   15.14%         n/a            *
</TABLE>
* Index comparison begins on December 31, 1990.
+ Performance begins on January 31, 1996 since all Class Y shares were redeemed
 during calendar year 1995 and new Class Y shares were not purchased until Jan-
 uary 31, 1996.

Smith Barney Fundamental Value Fund Inc.

 4
<PAGE>

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

                                Shareholder fees
<TABLE>
<CAPTION>
(fees paid directly from your investment)       Class A Class B Class L Class Y
<S>                                             <C>     <C>     <C>     <C>
Maximum sales charge (load) imposed on
purchases (as a % of offering price)             5.00%    None   1.00%    None
Maximum deferred sales charge (load) (as a %
of the lower of net asset value at purchase or
redemption)                                      None*   5.00%   1.00%    None

                         Annual fund operating expenses
<CAPTION>
(expenses deducted from fund assets)            Class A Class B Class L Class Y
<S>                                             <C>     <C>     <C>     <C>
Management fees                                  0.73%   0.73%   0.73%   0.73%
Distribution and service (12b-1) fees            0.25%   1.00%   1.00%    None
Other expenses                                   0.08%   0.11%   0.13%   0.02%
                                                 -----   -----   -----   -----
Total annual fund operating expenses             1.06%   1.84%   1.86%   0.75%
</TABLE>

*You may buy Class A shares in amounts of $1,000,000 or more at net asset value
(without an initial sales charge) but if you redeem those shares within 12
months of their purchase, you will pay a deferred sales charge of 1.00%.

Example
This example helps you compare the costs of investing in the fund with the
costs of investing in other mutual funds. Your actual costs may be higher or
lower. The example assumes:
 .You invest $10,000 in the fund for the period shown
 .Your investment has a 5% return each year
 .You reinvest all distributions and dividends without a sales charge
 .The fund's operating expenses remain the same

                      Number of years you own your shares
<TABLE>
<CAPTION>
                                       1 year 3 years 5 years 10 years
<S>                                    <C>    <C>     <C>     <C>
Class A (with or without redemption)    $603   $820   $1,056   $1,729
Class B (redemption at end of period)   $687   $878   $1,095   $1,952
Class B (no redemption)                 $187   $578   $  995   $1,952
Class L (redemption at end of period)   $387   $679   $1,096   $2,258
Class L (no redemption)                 $287   $679   $1,096   $2,258
Class Y (with or without redemption)    $ 77   $240   $  417   $  930
</TABLE>

                                                       Smith Barney Mutual Funds

                                                                              5
<PAGE>

 More on the fund's investments

Foreign investments The fund may invest up to 25% of its assets in securities
of foreign issuers which may involve greater risk than securities of U.S.
issuers. Many foreign countries the fund may invest in have markets that are
less liquid and more volatile than markets in the U.S. In some foreign coun-
tries, less information is available about foreign issuers and markets because
of less rigorous accounting and regulatory standards than in the U.S. Currency
fluctuations could erase investment gains or add to investment losses. The
risks of investing in foreign securities are greater for securities of emerging
market issuers because political or economic instability, lack of market
liquidity, and negative government actions like currency controls or seizure of
private businesses or property are more likely.

Derivatives and hedging techniques The fund may, but need not, use derivative
contracts, such as futures and options on securities, securities indices or
currencies; options on these futures; forward currency contracts; and interest
rate or currency swaps for any of the following purposes:

 .To hedge against the economic impact of adverse changes in the market value of
  its securities, because of changes in stock market prices, currency exchange
  rates or interest rates.
 .As a substitute for buying or selling securities
 .To enhance return

A derivative contract will obligate or entitle the fund to deliver or receive
an asset or cash payment based on the change in value of one or more securi-
ties, currencies or indices. Even a small investment in derivative contracts
can have a big impact on the fund's stock market, currency and interest rate
exposure. Therefore, using derivatives can disproportionately increase losses
and reduce opportunities for gains when stock prices, currency rates or inter-
est rates are changing. The fund may not fully benefit from or may lose money
on derivatives if changes in their value do not correspond accurately to
changes in the value of the fund's holdings.

The other parties to certain derivative contracts present the same types of
credit risk as issuers of fixed income securities. Derivatives can also make
the fund less liquid and harder to value, especially in declining markets.

Securities of other investment companies The fund may invest up to 10% of its
assets in securities of other investment companies, including shares in a port-
folio of securities that seeks to track the performance of an underlying equity
index or a portion of an equity index.

Smith Barney Fundamental Value Fund Inc.

 6
<PAGE>


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

 Management

Manager The fund's investment adviser and administrator (the manager) is SSB
Citi Fund Management LLC, an affiliate of Salomon Smith Barney Inc. ("Salomon
Smith Barney"). The manager's address is 7 World Trade Center, New York, New
York 10048. The manager selects the fund's investments and oversees its opera-
tions. The manager and Salomon Smith Barney are subsidiaries of Citigroup Inc.
Citigroup businesses produce a broad range of financial services--asset manage-
ment, banking and consumer finance, credit and charge cards, insurance, invest-
ments, investment banking and trading--and use diverse channels to make them
available to consumer and corporate customers around the world.

John G. Goode, Chairman and Chief Investment Officer of Davis Skaggs Investment
Management, a division of SSB Citi Fund Management LLC and managing director of
Salomon Smith Barney, has been responsible for the day-to-day management of the
fund's portfolio since November 1990. Mr. Goode has 17 years of experience with
the manager or its predecessors.

Management fees During the fiscal year ended September 30, 2000, the manager
received a management fee and administrative fee equal to 0.53% and 0.20%,
respectively, of the fund's average daily net assets.

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

In addition, a distributor may make payments for distribution and/or share-
holder servicing activities out of its past profits and other available sourc-
es. A distributor may also make payments for marketing, promotional or related
expenses to dealers. The amount of these payments is determined by the distrib-
utor and may be substantial. The manager or an affiliate may make similar pay-
ments under similar arrangements.

Transfer agent and shareholder servicing agent Citi Fiduciary Trust Company
serves as the fund's transfer agent and shareholder servicing agent

                                                       Smith Barney Mutual Funds

                                                                              7
<PAGE>

(the "transfer agent"). The transfer agent has entered into sub-transfer agency
and services agreements with PFPC Global Fund Services and PFS Shareholder
Services to serve as the fund's sub-transfer agents (the "sub-transfer
agents"). The sub-transfer agents will perform certain shareholder record keep-
ing and accounting services.


 Choosing a class of shares to buy

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

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

You may buy shares from:
 .A broker/dealer, financial intermediary, financial institution or a distribu-
  tor's financial consultants (each called a "Service Agent")
 .The fund, but only if you are investing through certain qualified plans or
  Service Agents

All classes of shares are not available through all Service Agents. You should
contact your Service Agent for further information.

Smith Barney Fundamental Value Fund Inc.

 8
<PAGE>


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

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

*Qualified Retirement Plans are retirement plans qualified under Section
403(b)(7) or Section 401(a) of the Internal Revenue Code, including 401(k)
plans

                                                       Smith Barney Mutual Funds

                                                                              9
<PAGE>


 Comparing the fund's classes

Your Service Agent can help you decide which class meets your goals. The Serv-
ice Agent may receive different compensation depending upon which class you
choose.

<TABLE>
<CAPTION>
                           Class A     Class B     Class L     Class Y
<S>                      <C>         <C>         <C>         <C>
Key features             .Initial    .No initial .Initial    .No initial
                          sales       sales       sales       or
                          charge      charge      charge is   deferred
                          .You may    .Deferred   lower than  sales
                          qualify     sales       Class A     charge
                          for reduc-  charge      .Deferred   .Must
                          tion or     declines    sales       invest
                          waiver of   over time   charge for  at least
                          initial     .Converts   only 1      $15 million
                          sales       to Class A  year        .Lower
                          charge      after 8     .Does not   annual
                          .Lower      years       convert to  expenses
                          annual      .Higher     Class A     than the
                          expenses    annual      .Higher     other
                          than Class  expenses    annual      classes
                          B and       than Class  expenses
                          Class L     A           than Class
                                                  A
-------------------------------------------------------------------------
Initial sales charge     Up to       None        1.00%       None
                         5.00%;
                         reduced for
                         large pur-
                         chases and
                         waived for
                         certain
                         investors.
                         No charge
                         for pur-
                         chases of
                         $1,000,000
                         or more
-------------------------------------------------------------------------
Deferred sales charge    1% on pur-  Up to 5%    1% if you   None
                         chases of   charged     redeem
                         $1,000,000  when you    within 1
                         or more if  redeem      year of
                         you redeem  shares. The purchase
                         within      charge is
                         1 year of   reduced
                         purchase    over time
                                     and there
                                     is no
                                     deferred
                                     sales
                                     charge
                                     after 6
                                     years
-------------------------------------------------------------------------
Annual distribution and  0.25% of    1% of aver- 1% of aver- None
service fees             average     age daily   age daily
                         daily net   net assets  net assets
                         assets
-------------------------------------------------------------------------
Exchange privilege*      Class A     Class B     Class L     Class Y
                         shares of   shares of   shares of   shares of
                         most Smith  most Smith  most Smith  most Smith
                         Barney      Barney      Barney      Barney
                         funds       funds       funds       funds
-------------------------------------------------------------------------
</TABLE>
*Ask your Service Agent for the Smith Barney funds available for exchange.

Smith Barney Fundamental Value Fund Inc.

10
<PAGE>

 Sales charge

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

The table below shows the rate of sales charge you pay, depending on the amount
you purchase.

The table below also shows the amount of broker/dealer compensation that is
paid out of the sales charge. This compensation includes commissions and other
fees Service Agents that sell shares of the fund receive. The distributors keep
up to approximately 10% of the sales charge imposed on Class A shares. Service
Agents also will receive the service fee payable on Class A shares at an annual
rate equal to 0.25% of the average daily net assets represented by the Class A
shares sold by them.

<TABLE>
<CAPTION>
                                   Sales charge as a % of
                                                          Broker/
                                                          Dealer
                                                          Commission
                                   Offering  Net amount   as % of
Amount of purchase                 price (%) invested (%) offering price
<S>                                <C>       <C>          <C>
Less than $25,000                     5.00       5.26             4.50
$25,000 but less than $50,000         4.25       4.44             3.83
$50,000 but less than $100,000        3.75       3.90             3.38
$100,000 but less than $250,000       3.25       3.36             2.93
$250,000 but less than $500,000       2.75       2.83             2.48
$500,000 but less than $1,000,000     2.00       2.04             1.80
$1,000,000 or more                   - 0 -      - 0 -       up to 1.00*
</TABLE>

*A distributor pays up to 1.00% to a Service Agent.

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

                                                       Smith Barney Mutual Funds

                                                                              11
<PAGE>


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

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

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

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

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

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

 .Employees of NASD members.
 .Investors participating in a fee-based program sponsored by certain
  broker/dealers affiliated with Citigroup.
 .Investors who redeemed Class A shares of a Smith Barney fund in the past 60
  days, if the investor's Service Agent is notified.

If you want to learn about additional waivers of Class A initial sales charges,
contact your Service Agent or consult the Statement of Additional Information
("SAI").

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

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

Service Agents selling Class B shares receive a commission of up to 4.50% of
the purchase price of the Class B shares they sell. Service Agents also receive
a service fee at an annual rate equal to 0.25% of the average daily net assets
represented by the Class B shares they are servicing.

Smith Barney Fundamental Value Fund Inc.

12
<PAGE>


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

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

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

Service Agents selling Class L shares receive a commission of up to 2.00% of
the purchase price of the Class L shares they sell. Starting in the thirteenth
month, Service Agents also receive an annual fee of up to 1.00% of the average
daily net assets represented by the Class L shares held by their clients.

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

 More about deferred sales charges

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

                                                       Smith Barney Mutual Funds

                                                                              13
<PAGE>


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

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

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

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

The fund's distributors receive deferred sales charges as partial compensation
for their expenses in selling shares, including the payment of compensation to
your Service Agent.

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

 .On payments made through certain systematic withdrawal plans
 .On certain distributions from a retirement plan
 .For involuntary redemptions of small account balances
 .For 12 months following the death or disability of a shareholder

If you want to learn more about additional waivers of deferred sales charges,
contact your Service Agent or consult the SAI.

 Buying shares

     Through a   You should contact your Service Agent to open a brokerage
 Service Agent   account and make arrangements to buy shares.

                 If you do not provide the following information, your order
                 will be rejected:
                 .Class of shares being bought
                 .Dollar amount or number of shares being bought

                 Your Service Agent may charge an annual account maintenance
                 fee.
--------------------------------------------------------------------------------

Smith Barney Fundamental Value Fund Inc.

14
<PAGE>

   Through the   Qualified retirement plans and certain other investors who
          fund   are clients of certain Service Agents are eligible to buy
                 shares directly from the fund.

                 .Write the fund at the following address:
                      Smith Barney Fundamental Value Fund Inc.
                      (Specify class of shares)
                      c/o PFPC Global Fund Services
                      P.O. Box 9699
                      Providence, RI 02940-9699
                 .Enclose a check to pay for the shares. For initial pur-
                   chases, complete and send an account application
                 .For more information, call the transfer agent at 1-800-451-
                   2010

--------------------------------------------------------------------------------
     Through a   You may authorize a Service Agent or a sub-transfer agent to
    systematic   transfer funds automatically from (i) a regular bank account
    investment   (ii) cash held in a brokerage account opened with a Service
          plan   Agent or (iii) certain money market funds, in order to buy
                 shares on a regular basis.

                 .Amounts transferred should be at least: $25 monthly or $50
                   quarterly
                 .If you do not have sufficient funds in your account on a
                   transfer date, your Service Agent or the applicable sub-
                   transfer agent may charge you a fee

                 For more information, contact your Service Agent or the
                 transfer agent or consult the SAI.

 Exchanging shares

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


                                                       Smith Barney Mutual Funds

                                                                              15
<PAGE>

                 .You must meet the minimum investment amount for each fund
                   (except for systematic investment plan exchanges).
                 .If you hold share certificates, the applicable sub-transfer
                   agent must receive the certificates endorsed for transfer
                   or with signed stock powers (documents transferring owner-
                   ship of certificates) before the exchange is effective.
                 .The fund may suspend or terminate your exchange privilege if
                   you engage in an excessive pattern of exchanges.
--------------------------------------------------------------------------------
     Waiver of   Your shares will not be subject to an initial sales charge at
    additional   the time of the exchange.
 sales charges

                 Your deferred sales charge (if any) will continue to be mea-
                 sured from the date of your original purchase. If the fund
                 you exchange into has a higher deferred sales charge, you
                 will be subject to that charge. If you exchange at any time
                 into a fund with a lower charge, the sales charge will not be
                 reduced.
--------------------------------------------------------------------------------
  By telephone   If you do not have a brokerage account with a Service Agent,
                 you may be eligible to exchange shares through the fund. You
                 must complete an authorization form to authorize telephone
                 transfers. If eligible, you may make telephone exchanges on
                 any day the New York Stock Exchange is open. For clients of a
                 PFS Investments Registered Representative, call PFS Share-
                 holder Services at 1-800-544-5445 between 8:00 a.m. and
                 8:00 p.m. (Eastern time). All other shareholders should call
                 the transfer agent at 1-800-451-2010 between 9:00 a.m. and
                 4:00 p.m (Eastern time). Requests received after the close of
                 regular trading on the Exchange are priced at the net asset
                 value next determined.

                 You can make telephone exchanges only between accounts that
                 have identical registrations.
--------------------------------------------------------------------------------
       By mail   If you do not have a brokerage account, contact your Service
                 Agent or write to a sub-transfer agent at the address on the
                 following page.

Smith Barney Fundamental Value Fund Inc.

16
<PAGE>


 Redeeming shares

     Generally   Contact your Service Agent to redeem shares of the fund.

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

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

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

                 If you have a brokerage account with a Service Agent, your
                 redemption proceeds will be placed in your account and not
                 reinvested without your specific instruction. In other cases,
                 unless you direct otherwise, your redemption proceeds will be
                 paid by check mailed to your address of record.
--------------------------------------------------------------------------------
       By mail   For accounts held directly at the fund, send written requests
                 to the fund at one of the following addresses:

                 For clients of a PFS Investments Registered Representative,
                 write PFS Shareholder Services at the following address:
                      PFS Shareholder Services
                      P.O. Box 105033
                      Atlanta, GA 30348-5033

                 For all other investors, send your request to PFPC Global
                 Fund Services at the following address:
                      Smith Barney Fundamental Value Fund Inc.
                      (Specify class of shares)
                      c/o PFPC Global Fund Services
                      P.O. Box 9699
                      Providence, RI 02940-9699

                                                       Smith Barney Mutual Funds

                                                                              17
<PAGE>


                 Your written request must provide the following:

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

  By telephone   If you do not have a brokerage account with a Service Agent,
                 you may be eligible to redeem shares (except those held in
                 retirement plans) in amounts up to $50,000 per day through
                 the fund. You must complete an authorization form to autho-
                 rize telephone redemptions. If eligible, you may request
                 redemptions by telephone on any day the New York Stock
                 Exchange is open. For clients of a PFS Investments Registered
                 Representative, call PFS Shareholder Services at 1-800-544-
                 5445 between 8:00 a.m. and 8:00 p.m. (Eastern time). All
                 other shareholders should call the transfer agent at 1-800-
                 451-2010 between 9:00 a.m. and 4:00 p.m. (Eastern time).
                 Requests received after the close of regular trading on the
                 Exchange are priced at the net asset value next determined.

                 Your redemption proceeds can be sent by check to your address
                 of record or by wire or electronic transfer (ACH) to a bank
                 account designated on your authorization form. You must sub-
                 mit a new authorization form to change the bank account des-
                 ignated to receive wire or electronic transfers and you may
                 be asked to provide certain other documents. A sub-transfer
                 agent may charge a fee on an electronic transfer (ACH).
--------------------------------------------------------------------------------
     Automatic   You can arrange for the automatic redemption of a portion of
          cash   your shares on a monthly or quarterly basis. To qualify you
    withdrawal   must own shares of the fund with a value of at least $10,000
         plans   ($5,000 for retirement plans) and each automatic redemption
                 must be at least $50. If your shares are subject to a
                 deferred sales charge, the sales charge will be waived if
                 your automatic payments do not exceed 1% per month of the
                 value of your shares subject to a deferred sales charge.

                 The following conditions apply:

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

                 For more information, contact your Service Agent or consult
                 the SAI.

Smith Barney Fundamental Value Fund Inc.

18
<PAGE>

 Other things to know about share transactions

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

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

The fund will try to confirm that any telephone exchange or redemption request
is genuine by recording calls, asking the caller to provide certain personal
identification information, sending you a written confirmation or requiring
other confirmation procedures from time to time.

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

 .Are redeeming over $50,000
 .Are sending signed share certificates or stock powers to the sub-transfer
  agent
 .Instruct the sub-transfer agent to mail the check to an address different from
  the one on your account
 .Changed your account registration
 .Want the check paid to someone other than the account owner(s)
 .Are transferring the redemption proceeds to an account with a different regis-
  tration

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

The fund has the right to:

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

                                                       Smith Barney Mutual Funds

                                                                              19
<PAGE>

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

Small account balances If your account falls below $500 ($250 for IRA accounts)
because of a redemption of fund shares, the fund may ask you to bring your
account up to the applicable minimum investment amount. If you choose not to do
so within 60 days, the fund may close your account and send you the redemption
proceeds.

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

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

Smith Barney Fundamental Value Fund Inc.

20
<PAGE>

 Distributions, dividends and taxes

Dividends The fund generally pays dividends and makes capital gain distribu-
tions, if any, once a year, typically in December. The fund may pay additional
distributions and dividends at other times if necessary for the fund to avoid a
federal tax. Capital gain distributions and dividends are reinvested in addi-
tional fund shares of the same class you hold. The fund expects distributions
to be primarily from capital gains. You do not pay a sales charge on reinvested
distributions or dividends. Alternatively, you can instruct your Service Agent,
the transfer agent or a sub-transfer agent to have your distributions and/or
dividends paid in cash. You can change your choice at any time to be effective
as of the next distribution or dividend, except that any change given to your
Service Agent, the transfer agent or a sub-transfer agent less than five days
before the payment date will not be effective until the next distribution or
dividend is paid.

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

<TABLE>
<CAPTION>
Transaction                            Federal tax status
<S>                                    <C>
Redemption or exchange of shares       Usually capital gain or loss;
                                       long-term only if shares owned
                                       more than one year
Long-term capital gain distributions   Long-term capital gain
Short-term capital gain distributions  Ordinary income
Dividends                              Ordinary income
</TABLE>

Long-term capital gain distributions are taxable to you as long-term capital
gain regardless of how long you have owned your shares. You may want to avoid
buying shares when the fund is about to declare a long-term capital gain dis-
tribution or a dividend, because it will be taxable to you even though it may
actually be a return of a portion of your investment.

After the end of each year, the fund will provide you with information about
the distributions and dividends you received and any redemptions of shares dur-
ing the previous year. If you do not provide the fund with your correct tax-
payer identification number and any required certifications, you may be subject
to back-up withholding of 31% of your distributions, dividends, and redemption
proceeds. Because each shareholder's circumstances are different and special
tax rules may apply, you should consult your tax adviser about your investment
in the fund.

                                                       Smith Barney Mutual Funds

                                                                              21
<PAGE>

 Share price

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

The fund generally values its fund securities based on market prices or quota-
tions. The fund's currency conversions are done when the London stock exchange
closes. When reliable market prices or quotations are not readily available, or
when the value of a security has been materially affected by events occurring
after a foreign exchange closes, the fund may price those securities at fair
value. Fair value is determined in accordance with procedures approved by the
fund's board. A fund that uses fair value to price securities may value those
securities higher or lower than another fund using market quotations to price
the same securities.

International markets may be open on days when U.S. markets are closed and the
value of foreign securities owned by the fund could change on days when you
cannot buy or redeem shares.

In order to buy, redeem or exchange shares at that day's price, you must place
your order with your Service Agent or one of the fund's sub-transfer agents
before the New York Stock Exchange closes. If the New York Stock Exchange
closes early, you must place your order prior to the actual closing time. Oth-
erwise, you will receive the next business day's price.

Service Agents must transmit all orders to buy, exchange or redeem shares to
one of the fund's sub-transfer agents before a sub-transfer agent's close of
business.

Smith Barney Fundamental Value Fund Inc.

22
<PAGE>

 Financial highlights

The financial highlights tables are intended to help you understand the perfor-
mance of each class for the past 5 years (or since inception if less than 5
years). Certain information reflects financial results for a single share.
Total return represents the rate that a shareholder would have earned (or lost)
on a fund share assuming reinvestment of all dividends and distributions. The
information in the following tables was audited by Deloitte & Touche LLP, inde-
pendent auditors, whose report, along with the fund's financial statements, are
included in the annual report (available upon request).

 For a Class A share of capital stock outstanding throughout each year ended
 September 30:
<TABLE>
<CAPTION>
                                 2000(/1/) 1999(/1/) 1998(/1/)    1997   1996
------------------------------------------------------------------------------
 <S>                             <C>       <C>       <C>        <C>     <C>
 Net asset value, beginning of
 year                             $12.90    $10.07    $11.37    $ 9.31  $8.66
------------------------------------------------------------------------------
 Income (loss) from Operations:
 Net investment income              0.04      0.04      0.09      0.11   0.20
 Net realized and unrealized
 gain (loss)                        3.86      3.53     (0.76)     2.52   1.01
------------------------------------------------------------------------------
 Total income (loss) from
 operations                         3.90      3.57     (0.67)     2.63   1.21
------------------------------------------------------------------------------
 Less distributions from:
 Net investment income               --      (0.02)    (0.11)    (0.13) (0.19)
 Net realized gains                (0.83)    (0.72)    (0.52)    (0.44) (0.37)
------------------------------------------------------------------------------
 Total distributions               (0.83)    (0.74)    (0.63)    (0.57) (0.56)
------------------------------------------------------------------------------
 Net asset value, end of year     $15.97    $12.90    $10.07    $11.37  $9.31
------------------------------------------------------------------------------
 Total return                      31.55%    37.17%    (6.04)%   29.53% 14.73%
------------------------------------------------------------------------------
 Net assets, end of year
 (millions)                       $1,085    $  681      $521      $606   $458
------------------------------------------------------------------------------
 Ratios to average net assets:
 Expenses                           1.06%     1.17%     1.15%     1.14%  1.22%
 Net investment income              0.29      0.35      0.81      1.14   2.32
------------------------------------------------------------------------------
 Portfolio turnover rate              38%       43%       41%       46%    57%
------------------------------------------------------------------------------
</TABLE>
(/1/) Per share amounts have been calculated using the monthly average shares
      method,

                                                       Smith Barney Mutual Funds

                                                                              23
<PAGE>

 For a Class B share of capital stock outstanding throughout each year ended
 September 30:
<TABLE>
<CAPTION>
                                 2000(/1/) 1999(/1/) 1998(/1/)    1997   1996
------------------------------------------------------------------------------
 <S>                             <C>       <C>       <C>        <C>     <C>
 Net asset value, beginning of
 year                             $12.73    $10.01    $11.31    $ 9.26  $8.62
------------------------------------------------------------------------------
 Income (loss) from operations:
 Net investment income (loss)      (0.07)    (0.05)     0.00*     0.03   0.13
 Net realized and unrealized
 gain (loss)                        3.80      3.49     (0.75)     2.52   1.01
------------------------------------------------------------------------------
 Total income (loss) from
 operations                         3.73      3.44     (0.75)     2.55   1.14
------------------------------------------------------------------------------
 Less distribution from:
 Net investment income               --        --      (0.03)    (0.06) (0.13)
 Net realized gains                (0.83)    (0.72)    (0.52)    (0.44) (0.37)
------------------------------------------------------------------------------
 Total distributions               (0.83)    (0.72)    (0.55)    (0.50) (0.50)
------------------------------------------------------------------------------
 Net asset value, end of year     $15.63    $12.73    $10.01    $11.31  $9.26
------------------------------------------------------------------------------
 Total return                      30.59%    36.00%    (6.79)%   28.62% 13.82%
------------------------------------------------------------------------------
 Net assets, end of year
 (millions)                       $1,323    $  884      $716      $930   $704
------------------------------------------------------------------------------
 Ratios to average net assets:
 Expenses                           1.84%     1.94%     1.92%     1.90%  1.97%
 Net investment income (loss)      (0.50)    (0.42)     0.04      0.38   1.56
------------------------------------------------------------------------------
 Portfolio turnover rate              38%       43%       41%       46%    57%
------------------------------------------------------------------------------
</TABLE>
(/1/) Per share amounts have been calculated using the monthly average shares
      method.
 *  Amount represents less than $0.01 per share.

Smith Barney Fundamental Value Fund Inc.

24
<PAGE>

 For a Class L share of capital stock outstanding throughout each year ended
 September 30:(/1/)
<TABLE>
<CAPTION>
                               2000(/2/) 1999(/2/) 1998(/1/)(/2/)   1997   1996
--------------------------------------------------------------------------------
 <S>                           <C>       <C>       <C>            <C>     <C>
 Net asset value, beginning
 of year                        $12.73    $10.01       $11.30     $ 9.26  $8.62
--------------------------------------------------------------------------------
 Income (loss) from
 operations:
 Net investment income
 (loss)                          (0.07)    (0.05)        0.00*      0.03   0.14
 Net realized and unrealized
 gain (loss)                      3.79      3.49        (0.74)      2.51   1.00
--------------------------------------------------------------------------------
 Total income (loss) from
 operations                       3.72      3.44        (0.74)      2.54   1.14
--------------------------------------------------------------------------------
 Less distributions from:
 Net investment income              --        --        (0.03)     (0.06) (0.13)
 Net realized gains              (0.83)    (0.72)       (0.52)     (0.44) (0.37)
--------------------------------------------------------------------------------
 Total distributions             (0.83)    (0.72)       (0.55)     (0.50) (0.50)
--------------------------------------------------------------------------------
 Net asset value, end of
 year                           $15.62    $12.73       $10.01     $11.30  $9.26
--------------------------------------------------------------------------------
 Total return                    30.51%    36.00%       (6.70)%    28.52% 13.82%
--------------------------------------------------------------------------------
 Net assets, end of year
 (millions)                       $266       $84          $57        $72    $45
--------------------------------------------------------------------------------
 Ratios to average net
 assets:
 Expenses                         1.86%     1.95%        1.93%      1.92%  1.96%
 Net investment income
 (loss)                          (0.47)    (0.43)        0.03       0.36   1.52
--------------------------------------------------------------------------------
 Portfolio turnover rate            38%       43%          41%        46%    57%
--------------------------------------------------------------------------------
</TABLE>
(/1/) On June 12, 1998 Class C shares were renamed Class L shares.
(/2/) Per share amounts have been calculated using the monthly average shares
      method.
 *  Amount represents less than $0.01 per share.

                                                       Smith Barney Mutual Funds

                                                                              25
<PAGE>

 For a Class Y share of capital stock outstanding throughout each year ended
 September 30:
<TABLE>
<CAPTION>
                               2000(/1/) 1999(/1/) 1998(/1/)    1997  1996(/2/)
--------------------------------------------------------------------------------
 <S>                           <C>       <C>       <C>        <C>     <C>
 Net asset value, beginning
 of year                        $12.93    $10.10    $11.40    $ 9.32    $8.54
--------------------------------------------------------------------------------
 Income from operations:
 Net investment income            0.08      0.09      0.12      0.14     0.23
 Net realized and unrealized
 gain                             3.89      3.52     (0.74)     2.54     0.55
--------------------------------------------------------------------------------
 Total income (loss) from
 operations                       3.97      3.61     (0.62)     2.68     0.78
--------------------------------------------------------------------------------
 Less distribution from:
 Net investment income              --     (0.06)    (0.16)    (0.16)      --
 Net realized gains              (0.83)    (0.72)    (0.52)    (0.44)      --
--------------------------------------------------------------------------------
 Total distributions             (0.83)    (0.78)    (0.68)    (0.60)      --
--------------------------------------------------------------------------------
 Net asset value, end of
 year                           $16.07    $12.93    $10.10    $11.40    $9.32
--------------------------------------------------------------------------------
 Total return                    32.04%    37.57%    (6.78)%   30.06%    9.13%*+
--------------------------------------------------------------------------------
 Net assets, end of year
 (millions)                        $81       $81       $63      $109      $45
--------------------------------------------------------------------------------
 Ratios to average net
 assets:
 Expenses                         0.75%     0.82%     0.79%     0.78%    0.75%++
 Net investment income            0.56      0.71      1.15      1.48     2.58++
--------------------------------------------------------------------------------
 Portfolio turnover rate            38%       43%       41%       46%      57%
--------------------------------------------------------------------------------
</TABLE>
(/1/) Per share amounts have been calculated using the monthly average shares
      method.
(/2/) For the period from October 13, 1995 (inception date) to September 30,
      1996.
* During November 1995 Class Y shares were fully redeemed, therefore perfor-
  mance for Class Y shares represents performance for the period beginning Jan-
  uary 31, 1996, which represents the date new share purchases were made into
  this Class.
+ Total return is not annualized, as it may not be representative of the total
  return for the year.
++Annualized.

Smith Barney Fundamental Value Fund Inc.

26
<PAGE>

                    (This page is intentionally left blank.)
<PAGE>

                                                       Smith Barney Mutual Funds
                                                    ----------------------------
                                Your Serious Money Professionally Managed [LOGO]

Smith Barney Fundamental Value Fund Inc.

Shareholder reports Annual and semiannual reports to shareholders provide addi-
tional information about the fund's investments. These reports discuss the mar-
ket conditions and investment strategies that significantly affected the fund's
performance during its last fiscal year or period.

The fund sends only one report to a household if more than one account has the
same address. Contact your Service Agent or the transfer agent if you do not
want this policy to apply to you.

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

You can make inquiries about the fund or obtain shareholder reports or the
statement of additional information (without charge) by contacting your Service
Agent, by calling one of the fund's sub-transfer agents (PFS Shareholder Serv-
ices at 1-800-544-5445 or PFPC Global Fund Services at 1-800-451-2010), or by
writing to the fund at Smith Barney Mutual Funds, 7 World Trade Center, 39th
Floor, New York, New York 10048.

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

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

Your Serious Money. Professionally Managed. is a service mark of Salomon Smith
Barney Inc.

(Investment Company Act
file no. 811-3158)
FD0206 1/01


PART B



SMITH BARNEY FUNDAMENTAL VALUE FUND INC.
7 World Trade Center
New York, New York 10048
800-451-2010

Statement of Additional Information

January 28,
2001




This Statement of Additional Information (the "SAI")
expands upon and supplements the information contained in the
current prospectus of Smith Barney Fundamental Value Fund Inc.
(the "fund"), dated January 28, 2001, and should be read in
conjunction with the fund's prospectus. The fund's prospectus
may be obtained from any Salomon Smith Barney Financial
Consultant, a PFS Investment Registered Representative, a
broker/dealer, financial intermediary, financial institution
(each called a "Service Agent") or by writing or calling the
fund at the address or phone number listed above. This SAI,
although not in itself a prospectus, is incorporated by
reference into the prospectus in its entirety.

TABLE OF CONTENTS

INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES	2
DIRECTORS AND EXECUTIVE OFFICERS	15
COMPENSATION TABLE	16
DISTRIBUTION	21
PURCHASE OF SHARES	25
REDEMPTION OF SHARES	35
VALUATION OF SHARES	40
EXCHANGE PRIVILEGE	40
PERFORMANCE DATA	41
TAXES	43
ADDITIONAL INFORMATION	47
FINANCIAL STATEMENTS	48
OTHER INFORMATION	48



INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES

The prospectus discusses the fund's investment objective
and policies.  The following discussion supplements the
description of the fund's investment policies in the
prospectus. SSB Citi Fund Management LLC ("SSB Citi" or "the
manager") serves as investment manager and administrator of
the fund.

The fund's primary investment objective is long-term
capital growth. Current income is a secondary objective. The
fund seeks to achieve its objective through investment in
common stocks and common stock equivalents, including
preferred stocks and other securities convertible into common
stocks. The fund also invests to a lesser extent in bonds and
other debt instruments. There is no guarantee that the fund
will achieve its investment objective.

	When SSB Citi believes that a defensive investment
posture is warranted or when opportunities for capital growth
to do not appear attractive, the fund may temporarily invest
all or a portion of its assets in short-term money market
instruments, including repurchase agreements with respect to
those instruments.  The fund is authorized to borrow money in
an amount up to 10% of its total assets for temporary or
emergency purposes.

Foreign Securities and American Depository Receipts
  The fund has the authority to invest up to 25% of its assets
in foreign securities (including European Depository Receipts
("EDRs") and Global Depository Receipts ("GDRs")) and American
Depository Receipts ("ADRs") or other securities representing
underlying shares of foreign companies.  EDRs are receipts
issued in Europe which evidence ownership of underlying
securities issued by a foreign corporation.  ADRs are receipts
typically issued by an American bank or trust company which
evidence a similar ownership arrangement.  Generally, ADRs,
which are issued in registered form, are designed for use in
the United States securities markets, and EDRs, which are
issued in bearer form, are designed for use in European
securities markets.  GDRs are tradeable both in the U.S. and
Europe and are designed for use throughout the world.

Investing in the securities of foreign companies
involves special risks and considerations not typically
associated with investing in U.S. companies. These include
differences in accounting, auditing and financial reporting
standards, generally higher commission rates on foreign
portfolio transactions, the possibility of expropriation or
confiscatory taxation, adverse changes in investment or
exchange control regulations, political instability which
could affect U.S. investments in foreign countries, and
potential restrictions on the flow of international capital.
Additionally, foreign securities often trade with less
frequency and volume than domestic securities and therefore
may exhibit greater price volatility. Many of the foreign
securities held by the fund will not be registered with, nor
will the issuers thereof be subject to the reporting
requirements of the SEC. Accordingly, there may be less
publicly available information about the securities and about
the foreign company issuing them than is available about a
domestic company and its securities. Moreover, individual
foreign economies may differ favorably or unfavorably from the
U.S. economy in such respects as growth of gross domestic
product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payment positions. The fund
may invest in securities of foreign governments (or agencies
or subdivisions thereof), and therefore many, if not all, of
the foregoing considerations apply to such investments as
well.

Securities of Other Investment Companies.  The fund may
invest in securities of other investment companies to the
extent permitted under the Investment Company Act of 1940, as
amended (the "1940 Act").  Presently, under the 1940 Act, the
fund may hold securities of another investment company in
amounts which (i) do not exceed 3% of the total outstanding
voting stock of such company, (ii) do not exceed 5% of the
value of the fund's total assets and (iii) when added to all
other investment company securities held by the fund, do not
exceed 10% of the value of the fund's total assets.
To the extent the fund invests in securities of other
investment companies, fund shareholders would indirectly pay
a portion of the operating costs of such companies in addition
to the expenses of its own operation.  These costs include
management, brokerage, shareholder servicing and other
operational expenses.  Indirectly, then, shareholders of the
fund that invests in Equity Equivalents may pay higher
operational costs than if they owned the underlying investment
companies directly.  Additionally, the fund's investments in
such investment companies are subject to limitations under the
1940 Act and market availability.

Index-Related Securities ("Equity Equivalents") The fund
may invest in certain types of securities that enable
investors to purchase or sell shares in a portfolio of
securities that seeks to track the performance of an
underlying index or a portion of an Index.  Such Equity
Equivalents include among others DIAMONDS (interests in a
portfolio of securities that seeks to track the performance of
the Dow Jones Industrial Average), SPDRs or Standard & Poor's
Depositary Receipts (interests in a portfolio of securities
that seeks to track the performance of the S&P 500 Index),
WEBS or World Equity Benchmark Shares (interests in a
portfolio of securities that seeks to track the performance of
a benchmark index of a particular foreign country's stocks),
and the Nasdaq-100 Trust (interests in a portfolio of
securities of the largest and most actively traded non-
financial companies listed on the Nasdaq Stock Market).  Such
securities are similar to index mutual funds, but they are
traded on various stock exchanges or secondary markets.  The
value of these securities is dependent upon the performance of
the underlying index on which they are based.  Thus, these
securities are subject to the same risks as their underlying
indexes as well as the securities that make up those indexes.
For example, if the securities comprising an index that an
index-related security seeks to track perform poorly, the
index-related security will lose value.

Equity Equivalents may be used for several purposes,
including, to simulate full investment in the underlying index
while retaining a cash balance for fund management purposes,
to facilitate trading, to reduce transaction costs or to seek
higher investment returns where an Equity Equivalent is priced
more attractively than securities in the underlying index.
Because the expense associated with an investment in Equity
Equivalents may be substantially lower than the expense of
small investments directly in the securities comprising the
indices they seek to track, investments in Equity Equivalents
may provide a cost-effective means of diversifying the fund's
assets across a broad range of equity securities.

The prices of Equity Equivalents are derived and based
upon the securities held by the particular investment company.
 Accordingly, the level of risk involved in the purchase or
sale of an Equity Equivalent is similar to the risk involved
in the purchase or sale of traditional common stock, with the
exception that the pricing mechanism for such instruments is
based on a basket of stocks.  The market prices of Equity
Equivalents are expected to fluctuate in accordance with both
changes in the net asset values of their underlying indices
and the supply and demand for the instruments on the exchanges
on which they are traded.  Substantial market or other
disruptions affecting an Equity Equivalent could adversely
affect the liquidity and value of the shares of the fund
investing in such instruments.

	Repurchase Agreements  The fund may enter into
repurchase agreements with certain member banks of the Federal
Reserve System and certain dealers on the Federal Reserve Bank
of New York's list of reporting dealers.  Under the terms of
a typical repurchase agreement, the fund would acquire
securities for a relatively short period (usually not more
than one week) subject to an obligation of the seller to
repurchase, and the fund to resell, the securities at an
agreed-upon price and time, thereby determining the yield
during the fund's holding period.  This arrangement results in
a fixed rate of return that is not subject to market
fluctuations during the fund's holding period.  Repurchase
agreements could involve certain risks in the event of default
or insolvency of the other party, including possible delays or
restrictions upon the fund's ability to dispose of the
underlying securities, the risk of a possible decline in the
value of the underlying securities during the period in which
the fund seeks to assert its rights to them, the risk of
incurring expenses associated with asserting those rights and
the risk of losing all or part of the income from the
agreement.  SSB Citi, acting under the supervision of the
Board of Directors, reviews on an ongoing basis the value of
the collateral and the creditworthiness of those dealers and
banks with which the fund enters into repurchase agreements to
evaluate potential risks.

Lending of Portfolio Securities   The fund has the
ability to lend securities from its portfolio to brokers,
dealers and other financial organizations. Such loans, if and
when made, will be consistent with applicable regulatory
requirements.  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 SEC.
Loans of portfolio securities by the fund will be
collateralized by cash, letters of credit or securities issued
or guaranteed by the U.S. government, its agencies or
instrumentalities ("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. Loans will be made to firms
deemed by the manager to be of good standing and will not be
made unless, in the judgment of the manager, the consideration
to be earned from such loans would justify the risk.

Money Market Instruments     As stated in the
prospectus, the fund may invest for temporary defensive
purposes or when opportunities for capital growth do not
appear attractive, in short-term corporate and government
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.

Certificates of Deposit ("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 amounts 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 generally required to, among other things, 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 government 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, SSB Citi will
carefully evaluate such investments on a case-by-case basis.

Savings and loan 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 U.S. government. As a result, such
savings and loan associations are subject to regulation and
examination.

	Fixed Income Securities The fund may invest in
investment grade bonds, at the time of purchase, in the four
highest ratings categories by a nationally recognized
securities rating organization ("NRSRO"), such as those rated
Aaa, Aa, A and Baa by Moody's or AAA, AA, A and BBB by S&P.
 Obligations rated in the lowest of the top four rating
categories (such as Baa by Moody's or BBB by S&P) may have
speculative characteristics and changes in economic conditions
or other circumstances are more likely to lead to a weakened
capacity to make principal and interest payments, including a
greater possibility of default or bankruptcy of the issuer,
than is the case with higher grade bonds.  Subsequent to its
purchase by the fund, an issue of securities may cease to be
rated or its rating may be reduced below the minimum required
for purchase by the portfolio.  In addition, it is possible
that Moody's, S&P and other NRSROs might not timely change
their ratings of a particular issue to reflect subsequent
events.  None of these events will require the sale of the
securities by the fund, although the manager will consider
these events in determining whether the fund should continue
to hold the securities.

	Illiquid Securities  Up to 15% of the assets of the
fund may be invested in illiquid securities, including (a)
repurchase agreements with maturities greater than seven
days, (b) futures contracts and options thereon for which a
liquid secondary market does not exist, (c) time deposits
maturing in more than seven calendar days and (d) securities
of new and early stage companies whose securities are not
publicly traded.

	Options, Futures and Currency Strategies      The fund
may use forward currency contracts and certain options and
futures strategies to attempt to hedge its portfolio, i.e.,
reduce the overall level of investment risk normally
associated with the fund.  There can be no assurance that such
efforts will succeed.

In order to assure that the fund will not be deemed to
be a "commodity pool" 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 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 do
not exceed 5% of the liquidation value of the fund's assets.
 To attempt to hedge against adverse movements in exchange
rates between currencies, the fund may enter into forward
currency contracts for the purchase or sale of a specified
currency at a specified future date.  Such contracts may
involve the purchase or sale of a foreign currency against the
U.S. dollar or may involve two foreign currencies. The fund
may enter into forward currency contracts either with respect
to specific transactions or with respect to its portfolio
positions.  For example, when the investment manager
anticipates making a purchase or sale of a security, it may
enter into a forward currency contract in order to set the
rate (either relative to the U.S. dollar or another currency)
at which the currency exchange transaction related to the
purchase or sale will be made ("transaction hedging").
Further, when the investment manager believes that a
particular currency may decline compared to the U.S. dollar or
another currency, the fund may enter into a forward contract
to sell the currency the investment manager expects to decline
in an amount approximating the value of some or all of the
fund's securities denominated in that currency, or when the
investment manager believes that one currency may decline
against a currency in which some or all of the portfolio
securities held by the fund are denominated, it may enter into
a forward contract to buy the currency expected to decline for
a fixed amount ("position hedging").  In this situation, the
fund may, in the alternative, enter into a forward contract to
sell a different currency for a fixed amount of the currency
expected to decline where the investment manager believes that
the value of the currency to be sold pursuant to the forward
contract will fall whenever there is a decline in the value of
the currency in which portfolio securities of the fund are
denominated ("cross hedging").  The fund will segregate (i)
cash, (ii) U.S. Government securities or (iii) equity
securities or debt securities (of any grade) in certain
currencies provided such assets are liquid, unencumbered and
marked to market daily, or other high-quality debt securities
denominated in certain currencies with a value equal to the
aggregate amount of the fund's commitments under forward
contracts entered into with respect to position hedges and
cross-hedges.  If the value of the segregated securities
declines, additional cash or securities are segregated on a
daily basis so that the value of the amount will equal the
amount of the fund's commitments with respect to such
contracts.

For hedging purposes, the fund may write covered call
options and purchase put and call options on currencies to
hedge against movements in exchange rates and on debt
securities to hedge against the risk of fluctuations in the
prices of securities held by the fund or which the investment
manager intends to include in its portfolio.  The fund also
may use interest rates futures contracts and options thereon
to hedge against changes in the general level in interest
rates.

The fund may write call options on securities and
currencies only if they are covered, and such options must
remain covered so long as the fund is obligated as a writer.
 A call option written by the fund is "covered" if the fund
owns the securities or currency underlying the option or has
an absolute and immediate right to acquire that security or
currency without additional cash consideration (or for
additional cash consideration which has been segregated by the
fund) upon conversion or exchange of other securities or
currencies held in its portfolio.  A call option is also
covered if the fund holds on a share-for-share basis a call on
the same security or holds a call on the same currency as the
call written where the exercise price of the call held is
equal to less than the exercise price of the call written or
greater than the exercise price of the call written if the
difference is maintained by the fund in cash, Treasury bills
or other high-grade, short-term obligations in a segregated
account with its custodian.

Although the portfolio might not employ the use of
forward currency contracts, options and futures, the use of
any of these strategies would involve certain investment risks
and transaction costs to which it might not otherwise be
subject.  These risks include: dependence on the investment
manager's ability to predict movements in the prices of
individual debt securities, fluctuations in the general fixed-
income markets and movements in interest rates and currency
markets, imperfect correlation between movements in the price
of currency, options, futures contracts or options thereon and
movements in the price of the currency or security hedged or
used for cover; the fact that skills and techniques needed to
trade options, futures contracts and options thereon or to use
forward currency contracts are different from those needed to
select the securities in which the fund invests; lack of
assurance that a liquid market will exist for any particular
option, futures contract or options thereon at any particular
time and possible need to defer or accelerate closing out
certain options, futures contracts and options thereon in
order to continue to qualify for the beneficial tax treatment
afforded "regulated investment companies" under the Internal
Revenue Code of 1986, as amended (the "Code").  See
"Dividends, Distributions and Taxes."


	Options on Securities   As discussed more
generally above, the fund may engage in the writing of covered
call options. The fund may also purchase put options and enter
into closing transactions.

The principal reason for writing covered call options on
securities is to attempt to realize, through the receipt of
premiums, a greater return than would be realized on the
securities alone. In return for a premium, the writer of a
covered call option forfeits the right to any appreciation in
the value of the underlying security above the strike price
for the life of the option (or until a closing purchase
transaction can be effected). Nevertheless, the call writer
retains the risk of a decline in the price of the underlying
security. Similarly, the principal reason for writing covered
put options is to realize income in the form of premiums. The
writer of a covered put option accepts the risk of a decline
in the price of the underlying security. The size of the
premiums the fund may receive may be adversely affected as new
or existing institutions, including other investment
companies, engage in or increase their option-writing
activities.

Options written by the fund will normally have
expiration dates between  one and six months from the date
written. The exercise price of the options may be below, equal
to, or above the current market values of the underlying
securities at the times the options are written. In the case
of call options, these exercise prices are referred to as "in-
the-money," "at-the-money" and "out-of-the-money,"
respectively.

The fund may write (a) in-the-money call options when
the manager expects the price of the underlying security to
remain flat or decline moderately during the option period,
(b) at-the-money call options when the manager expects the
price of the underlying security to remain flat or advance
moderately during the option period and (c) out-of-the-money
call options when the manager expects that the price of the
security may increase but not above a price equal to the sum
of the exercise price plus the premiums received from writing
the call option. In any of the preceding situations, if the
market price of the underlying security declines and the
security is sold at this lower price, the amount of any
realized loss will be offset wholly or in part by the premium
received. Out-of-the-money, at-the-money and in-the-money put
options (the reverse of call options as to the relation of
exercise price to market price) may be utilized in the same
market environments as such call options are used in
equivalent transactions.

So long as the obligation of the fund as the writer of
an option continues, the fund may be assigned an exercise
notice by the broker-dealer through which the option was sold,
requiring it to deliver, in the case of a call, or take
delivery of, in the case of a put, the underlying security
against payment of the exercise price. This obligation
terminates when the option expires or the fund effects a
closing purchase transaction. The fund can no longer effect a
closing purchase transaction with respect to an option once it
has been assigned an exercise notice. To secure its obligation
to deliver the underlying security when it writes a call
option, or to pay for the underlying security when it writes
a put option, the fund will be required to deposit in escrow
the underlying security or other assets in accordance with the
rules of the Options Clearing Corporation ("Clearing
Corporation") or similar clearing corporation and the
securities exchange on which the option is written.

An option position may be closed out only where there
exists a secondary market for an option of the same series on
a recognized securities exchange or in the over-the-counter
market. The fund expects to write options only on national
securities exchanges or in the over-the-counter market. The
fund may purchase put options issued by the Clearing
Corporation or in the over-the-counter market.

The fund may realize a profit or loss upon entering into
a closing transaction. In cases in which the fund has written
an option, it will realize a profit if the cost of the closing
purchase transaction is less than the premium received upon
writing the original option and will incur a loss if the cost
of the closing purchase transaction exceeds the premium
received upon writing the original option. Similarly, when the
fund has purchased an option and engages in a closing sale
transaction, whether it recognizes a profit or loss will
depend upon whether the amount received in the closing sale
transaction is more or less than the premium the fund
initially paid for the original option plus the related
transaction costs.

Although the fund generally will purchase or write only
those options for which the manager believes there is an
active secondary market so as to facilitate closing
transactions, there is no assurance that sufficient trading
interest to create a liquid secondary market on a securities
exchange will exist for any particular option or at any
particular time, and for some options no such secondary market
may exist. A liquid secondary market in an option may cease to
exist for a variety of reasons. In the past, for example,
higher than anticipated trading activity or order flow, or
other unforeseen events, have at times rendered certain of the
facilities of the Clearing Corporation and national securities
exchanges inadequate and resulted in the institution of
special procedures, such as trading rotations, restrictions on
certain types of orders or trading halts or suspensions in one
or more options. There can be no assurance that similar
events, or events that may otherwise interfere with the timely
execution of customers' orders, will not recur. In such event,
it might not be possible to effect closing transactions in
particular options. If, as a covered call option writer, the
fund is unable to effect a closing purchase transaction in a
secondary market, it will not be able to sell the underlying
security until the option expires or it delivers the
underlying security upon exercise.

Securities exchanges generally have established
limitations governing the maximum number of calls and puts of
each class which may be held or written, or exercised within
certain periods, by an investor or group of investors acting
in concert (regardless of whether the options are written on
the same or different securities exchanges or are held,
written or exercised in one or more accounts or through one or
more brokers). It is possible that the fund and other clients
of SSB Citi and certain of their affiliates may be considered
to be such a group. A securities exchange may order the
liquidation of positions found to be in violation of these
limits, and it may impose certain other sanctions.

In the case of options written by the fund that are
deemed covered by virtue of the fund's holding convertible or
exchangeable preferred stock or debt securities, the time
required to convert or exchange and obtain physical delivery
of the underlying common stocks with respect to which the fund
has written options may exceed the time within which the fund
must make delivery in accordance with an exercise notice. In
these instances, the fund may purchase or temporarily borrow
the underlying securities for purposes of physical delivery.
By so doing, the fund will not bear any market risk because
the fund will have the absolute right to receive from the
issuer of the underlying security an equal number of shares to
replace the borrowed stock, but the fund may incur additional
transaction costs or interest expenses in connection with any
such purchase or borrowing.

Although the manager will attempt to take appropriate
measures to minimize the risks relating to the fund's writing
of call options and purchasing of put and call options, there
can be no assurance that the fund will succeed in its option-
writing program.

	Stock Index Options     As described generally above,
the fund may purchase put and call options and write call
options on domestic stock indexes listed on domestic exchanges
in order to realize its investment objective of capital
appreciation or for the purpose of hedging its portfolio. A
stock index fluctuates with changes in the market values of
the stocks included in the index. Some stock index options are
based on a broad market index such as the New York Stock
Exchange Composite Index or the Canadian Market Portfolio
Index, or a narrower market index such as the Standard &
Poor's 100. Indexes also are based on an industry or market
segment such as the American Stock Exchange Oil and Gas Index
or the Computer and Business Equipment Index.

Options on stock indexes are generally similar to
options on stock except that the delivery requirements are
different. Instead of giving the right to take or make
delivery of stock at a specified price, an option on a stock
index gives the holder the right to receive a cash "exercise
settlement amount" equal to (a) the amount, if any, by which
the fixed exercise price of the option exceeds (in the case of
a put) or is less than (in the case of a call) the closing
value of the underlying index on the date of exercise,
multiplied by (b) a fixed "index multiplier." Receipt of this
cash amount will depend upon the closing level of the stock
index upon which the option is based being greater than, in
the case of a call, or less than, in the case of a put, the
exercise price of the option. The amount of cash received will
be equal to such difference between the closing price of the
index and the exercise price of the option expressed in
dollars or a foreign currency, as the case may be, times a
specified multiple. The writer of the option is obligated, in
return for the premium received, to make delivery of this
amount. The writer may offset its position in stock index
options prior to expiration by entering into a closing
transaction on an exchange or it may let the option expire
unexercised.

The effectiveness of purchasing or writing stock index
options as a hedging technique will depend upon the extent to
which price movements in the portion of the securities
portfolio of the fund correlate with price movements of the
stock index selected. Because the value of an index option
depends upon movements in the level of the index rather than
the price of a particular stock, whether the fund will realize
a gain or loss from the purchase or writing of options on an
index depends upon movements in the level of stock prices in
the stock market generally or, in the case of certain indexes,
in an industry or market segment, rather than movements in the
price of a particular stock. Accordingly, successful use by
the fund of options on stock indexes will be subject to the
manager's ability to predict correctly movements in the
direction of the stock market generally or of a particular
industry. This requires different skills and techniques than
predicting changes in the price of individual stocks.

Futures Contracts and Options on Futures Contracts   As
described generally above, the fund may invest in stock index
futures contracts and options on futures contracts that are
traded on a domestic exchange or board of trade.

The purpose of entering into a futures contract by the
fund is to protect the fund from fluctuations in the value of
securities without actually buying or selling the securities.
For example, in the case of stock index futures contracts, if
the fund anticipates an increase in the price of stocks it
intends to purchase at a later time, the fund could enter into
contracts to purchase the stock index (known as taking a
"long" position) as a temporary substitute for the purchase of
stocks. If an increase in the market occurs that influences
the stock index as anticipated, the value of the futures
contracts increases and thereby serves as a hedge against the
fund's not participating in a market advance. The fund then
may close out the futures contracts by entering into
offsetting futures contracts to sell the stock index (known as
taking a "short" position) as it purchases individual stocks.
The fund can accomplish similar results by buying securities
with long maturities and selling securities with short
maturities. But by using futures contracts as an investment
tool to reduce risk, given the greater liquidity in the
futures market, it may be possible to accomplish the same
result more easily and more quickly.

No consideration will be paid or received by the fund
upon the purchase or sale of a futures contract. Initially,
the fund will be required to deposit with the broker an amount
of cash or cash equivalents equal to approximately 1% to 10%
of the contract amount (this amount is subject to change by
the exchange or board of trade on which the contract is traded
and brokers or members of such board of trade may charge a
higher amount). This amount is known as "initial margin" and
is in the nature of a performance bond or good faith deposit
on the contract which is returned to the fund, upon
termination of the futures contract, assuming all contractual
obligations have been satisfied. Subsequent payments, known as
"variation margin," to and from the broker, will be made daily
as the price of the index or securities underlying the futures
contract fluctuates, making the long and short positions in
the futures contract more or less valuable, a process known as
"marking-to-market." In addition, when the fund enters into a
long position in a futures contract or an option on a futures
contract, it must deposit into a segregated account with the
fund's custodian an amount of cash or cash equivalents equal
to the total market value of the underlying futures contract,
less amounts held in the fund's commodity brokerage account at
its broker. At any time prior to the expiration of a futures
contract, the fund may elect to close the position by taking
an opposite position, which will operate to terminate the
fund's existing position in the contract.

There are several risks in connection with the use of
futures contracts as a hedging device. Successful use of
futures contracts by the fund is subject to the ability of the
manager to predict correctly movements in the stock market or
in the direction of interest rates. These predictions involve
skills and techniques that may be different from those
involved in the management of investments in securities. In
addition, there can be no assurance that there will be a
perfect correlation between movements in the price of the
securities underlying the futures contract and movements in
the price of the securities that are the subject of the hedge.
A decision of whether, when and how to hedge involves the
exercise of skill and judgment, and even a well-conceived
hedge may be unsuccessful to some degree because of market
behavior or unexpected trends in market behavior or interest
rates.

Positions in futures contracts may be closed out only on
the exchange on which they were entered into (or through a
linked exchange) and no secondary market exists for those
contracts. In addition, although the fund intends to enter
into futures contracts only if there is an active market for
the contracts, there is no assurance that an active market
will exist for the contracts at any particular time. Most
futures exchanges and boards of trade limit the amount of
fluctuation permitted in futures contract prices during a
single trading day. Once the daily limit has been reached in
a particular contract, no trades may be made that day at a
price beyond that limit. It is possible that futures contract
prices could move to the daily limit for several consecutive
trading days with little or no trading, thereby preventing
prompt liquidation of futures positions and subjecting some
futures traders to substantial losses. In such event, and in
the event of adverse price movements, the fund would be
required to make daily cash payments of variation margin; in
such circumstances, an increase in the value of the portion of
the portfolio being hedged, if any, may partially or
completely offset losses on the futures contract. As described
above, however, no assurance can be given that the price of
the securities being hedged will correlate with the price
movements in a futures contract and thus provide an offset to
losses on the futures contract.

Portfolio Turnover

While the fund does not intend to trade in securities
for short-term profits, securities may be sold without
regard to the amount of time they have been held by the fund
when warranted by the circumstances. The fund's portfolio
turnover rate is calculated by dividing the lesser of
purchases or sales of portfolio securities for a year by the
monthly average value of portfolio securities for the year.
Securities with remaining maturities of one year or less at
the date of acquisition are excluded from the calculation. A
portfolio turnover rate of 100% would occur, for example, if
all the securities in the fund's portfolio 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 2000 and 1999
fiscal years, the fund's portfolio turnover rates were 38%
and 43%, respectively.

Investment Restrictions

The fund has adopted the following investment
restrictions for the protection of shareholders. Restrictions
1 through 7 cannot be changed without approval by the holders
of a majority of the outstanding shares of the fund, defined
as the lesser of (a) 67% or more of the fund's shares present
at a meeting, if the holders of more than 50% of the
outstanding shares are present in person or by proxy, or (b)
more than 50% of the fund's outstanding shares. Investment
restrictions 8 through 17 may be changed by a majority by the
fund's Board of Directors at any time. The fund may not:


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

2.	Issue senior securities as defined in the 1940 Act,
and any rules and orders thereunder, except insofar
as the fund may be deemed to have issued senior
securities by reason of: (a) borrowing money or
purchasing securities on a when-issued or delayed-
delivery basis; (b) purchasing or selling futures
contracts and options on future contracts and other
similar instruments; and (c) issuing separate classes
of shares.

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

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

5.	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.

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

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

8.	Invest more than 5.00% of the value of the fund's
total assets in the securities of any issuer which
has been in continuous operation for less than three
years. This restriction does not apply to U.S.
government securities.

9.	Invest in securities of other investment companies,
except to the extent permitted under the 1940 Act.

10.	Invest in interests in oil, gas or other mineral
exploration or development programs (except that the
fund may invest in the securities of issuers which
operate, invest in or sponsor such programs).

11.	Purchase or retain the securities of any issuer
if, to the knowledge of the fund, any officer or
Director of the fund or of SSB Citi owns beneficially
more than 1/2 of 1.00% of the outstanding securities
of such issuer and the persons so owning more than
1/2 of 1.00% of such securities together own
beneficially more than 5.00% of such securities.

12.	Purchase warrants if, thereafter, more than 2.00%
of the value of the fund's net assets would consist
of such warrants, but warrants attached to other
securities or acquired in units by the fund are not
subject to this restriction.

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

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

15.	Purchase or sell real estate limited partnership
interests.

16.	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.

17.	Write, purchase or sell puts, calls, straddles,
spreads or combinations thereof or engage in
transactions involving futures contracts and related
options, except as permitted under the fund's
investment goals and policies, as set forth in the
current prospectus and the Statement of Additional
Information.

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 SAI and any
future change in those 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 the restriction.

DIRECTORS AND EXECUTIVE OFFICERS

	Set forth below is a list of each Director and executive
officers of the fund, including a description of principal
occupation in the last five years, ages and addresses of each
such person.

	Robert M. Frayn, Jr., (Age 66), Director. President and
Director of Book Publishing Company. His address is 201
Westlake Avenue North, Seattle, Washington 98109.

	Leon P. Gardner, (Age 72), Director. Private investor;
Former Chairman of Fargo's Pizza Company. His address is 2310
N.E. Blue Ridge Drive, Seattle, Washington 98177.

	Howard J. Johnson, (Age 62), Director. Private investor;
Formerly, Vice Chairman, Benefit and Investment Solutions, of
Merrill Lynch & Company; Formerly, President and Chairman of
Howard Johnson & Co., an actuary and pension consultant; His
address is 30 Sutton Place, New York, New York 10022.

	David E. Maryatt, (Age 64), Director. Director of ALS
Co., a real estate management and development firm; Private
Investor. His address is 1326 Fifth Avenue, Seattle,
Washington 98101.

	*Heath B. McLendon, (Age 67), Managing Director of
Salomon Smith Barney Inc. ("Salomon Smith Barney"); President
and Director of SSB Citi and Travelers Investment Advisers,
Inc. ("TIA"); Director of 77 investment companies associated
with Citigroup Inc. ("Citigroup").  His address is 7 World
Trade Center, New York, New York 10048.

	Frederick O. Paulsell, (Age 61), Director. Principal of
Olympic Capital Partners. His address is 1325 Fourth Avenue
Suite 1900, Seattle, Washington 98101.

	Jerry A. Viscione, (Age 56), Director. Executive Vice
President of Marquette University; Former Dean of Albers
School of Business and Economics, Seattle University. His
address is 615 North 11 Street, Milwaukee, WI 53233.

	Julie W. Weston, (Age 57), Director. Attorney;  Her
address is 416 34th Avenue, Seattle, Washington 98122.

	Lewis E. Daidone, (Age 43), Senior Vice President and
Treasurer. Managing Director of Salomon Smith Barney; Director
and Senior Vice President of SSB Citi and TIA.  Mr. Daidone
serves as Senior Vice President or Executive Vice President
and Treasurer of 83 investment companies associated with
Citigroup.  His address is 125 Broad Street, New York, New
York 10004.

	John G. Goode, (Age 56), Vice President and Investment
Officer. Managing Director of Salomon Smith Barney.  Chairman
and Chief Investment Officer of Davis Skaggs Investment
Management ("Davis Skaggs"), a division of SSB Citi.
Investment Officer of three other Smith Barney Mutual Funds.
His address is One Sansome Street, 36th Floor, San Francisco,
California 94104.

	Peter Hable, (Age 42), Investment Officer. Managing
Director of Salomon Smith Barney and President of Davis
Skaggs. . Investment Officer of one other Smith Barney Mutual
Funds. His address is One Sansome Street, 36th Floor, San
Francisco, California 94104.

	Christina T. Sydor, (Age 49), Secretary. Managing
Director of Salomon Smith Barney; General Counsel and
Secretary of SSB Citi and TIA.  Ms. Sydor serves as Secretary
of 60 investment companies associated with Citigroup.  Her
address is 7 World Trade Center, New York, New York 10048.

	*Designates a Director that is an "interested person"
as defined in the 1940Act.  Such persons are compensated by
Salomon Smith Barney and are not separately compensated by
the fund for serving as a fund officer or Director.

	The following table shows the compensation paid by the
fund to each person who was a Director during the fund's
last fiscal year.  None of the officers of the fund received
any compensation from the fund for such period.  Officers
and interested Directors of the fund are compensated by
Salomon Smith Barney.

COMPENSATION TABLE







Director




Aggregate
Compensation
From the Fund

Pension or
Retirement
Benefits
Accrued as
Expenses
of the
Fund

Total
Compensation
from Smith
Barney
Mutual Funds
Complex


Total
Number
of Funds
Served
in
Complex

Lloyd J. Andrews#

$9,200

     $0

$9,200

1

Robert M. Frayn,
Jr.+

  9,300

       0

  9,300

1

Leon P. Gardner

  9,400

       0

  9,400

1
Howard J.
Johnson**

         0

       0

         0

1
David E. Maryatt+
  9,400

       0

  9,400

1

Heath B. McLendon*

         0


       0

         0

77

Frederick O.
Paulsell+

  9,200

       0

  9,200

1

Jerry A. Viscione

  9,300

       0

  9,300

1

Julie W. Weston

  9,200

       0

  9,200

1
__________________
*Designates a Director who is an "interested person".
 ** Mr. Johnson was elected to the Board of Directors on
September 26, 2000.
+ Pursuant to a deferred compensation plan, the indicated
Directors have elected to defer payment of the following
amounts of their compensation from the fund: Robert M.
Frayn, Jr. - $9,300, David E. Maryatt- $9,400 and Frederick
O. Paulsell - $9,200.
# Mr. Andrews became a Director Emeritus on December 1,
2000. Upon attainment of age 80 Directors are required to
change to emeritus status.  Directors Emeritus are entitled
to serve in emeritus status for a maximum of 10 years during
which time they are paid 50% of the annual retainer fee and
meeting fees otherwise applicable to the fund Directors
together with reasonable out-of-pocket expenses for each
meeting attended.



	No officer, director or employee of Salomon Smith Barney
or of its parent or any 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 or
employee of Salomon Smith Barney or any of its affiliates a
fee of $6,000 per annum plus $1,000 for each in-person meeting
and $100 per telephonic meeting. All Directors are reimbursed
for travel and out-of-pocket expenses. During the calendar
year ended December 31, 2000, such expenses totaled $14,777.

	As of January 12, 2001, the Directors and Officers of
the fund as a group, owned less than 1.00% of the outstanding
common stock of the fund.

	As of January 12, 2001, the following shareholders
beneficially owned 5% or more of a class of shares of a fund:

Class Y

Smith Barney Allocation Series, Inc.
Balanced Portfolio
PNC Bank, NA
Attn: Sheila Heacock
8800 Tinicum Blvd., 3rd Floor, Ste 200
owned 3,134,071.434 (42.90%) shares*

Northern Trust Co. Trustee
FBO Kohler Co. and Subsidiaries
Master Ret TR 22-05993
PO Box 92956
Chicago, IL 60675
Owned 2,113,537.140 (28.93%) shares

Class Y (continued)

Smith Barney Allocation Series, Inc.
Select Balanced Portfolio
PNC Bank, NA
Attn: Sheila Heacock
8800 Tinicum Blvd., 3rd Floor, Ste 200
owned 1,499,369..767 (20.52%) shares*

Smith Barney Allocation Series, Inc.
Conservative Portfolio
PNC Bank, NA
Attn: Sheila Heacock
8800 Tinicum Blvd., 3rd Floor, Ste 200
owned 383,836.338 (5.25%) shares*

* The fund believes that these entities are not the
beneficial owners of shares held of record by them.

Investment Manager and Administrator

SSB Citi serves as investment manager to the fund
pursuant to an investment advisory agreement dated July 30,
1993 (the "Advisory Agreement"), which was first approved by
the fund's Board of Directors, including a majority of the
Directors who are not "interested persons" of the fund or
SSB Citi ("Independent Directors"), on April 7, 1993 and by
shareholders on June 22, 1993 and was most recently approved
by the Board, including a majority of the Independent
Directors, on June 27, 2000. The services provided by SSB
Citi under the Advisory Agreement are described in the
prospectus under "Management."  SSB Citi bears all expenses
in connection with the performance of its services and pays
the salary of any officer or employee who is employed by
both it and the fund. SSB Citi is a wholly owned subsidiary
of Salomon Smith Barney Holdings Inc. ("Holdings"), which is
in turn a wholly owned subsidiary of Citigroup.  On
September 21, 1999, the Board of Directors approved a
management fee reduction.  Consequently, the fund pays SSB
Citi a fee, computed daily and paid monthly on the average
daily net assets, according to the following table:

	First $1.5 Billion		0.55%
Next $0.5 Billion		0.50
	Next $0.5 Billion		0.49
	Next $1.0 Billion		0.46
				Over $3.5 Billion		0.38

SSB Citi bears all of its expenses in connection with
the performance of its services. For the fiscal years ended
September 30, 2000, 1999 and 1998, the fund incurred
$11,720,952, $8,940,574 and $8,577,966, respectively, in
investment advisory fees.

	SSB Citi also serves as administrator to the fund
pursuant to a written agreement dated June 28, 1994 (the
"Administration Agreement"), which was first approved by the
fund's Board, including a majority of the Independent
Directors on June 28, 1994 and was most recently approved by
the Board, including a majority of the Independent
Directors, on June 27, 2000.  SSB Citi 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
administrative services rendered to the fund, SSB Citi
receives a fee, computed daily and paid monthly on the
average daily net assets, at the following rates:

	First $2.0 Billion		0.20%
	Next $0.5 Billion		0.16
	Next $1.0 Billion		0.14
				Over $3.5 Billion		0.12

 For the fiscal years ended September 30, 2000, 1999 and
1998, the fund incurred  $4,297,104, $3,278,909 and
$3,134,642, respectively, in administration fees.

	Certain services provided to the fund by SSB Citi
pursuant to the Administration Agreement are described in the
prospectus under "Management." In addition to those services,
SSB Citi pays the salaries of all officers and employees who
are employed by both it and the fund, maintains office
facilities for the fund, furnishes the fund with statistical
and research data, clerical help and accounting, data
processing, bookkeeping, internal auditing and legal services
and certain other services required by the fund, prepares
reports to the fund's shareholders and prepares tax returns,
reports to and filings with the Securities and Exchange
Commission (the "SEC") and state Blue Sky authorities. SSB
Citi bears all expenses in connection with the performance of
its services. SSB Citi renders investment advice to investment
companies that had aggregate assets under management as of
December 31, 2000 in excess of $140 billion.

The fund bears expenses incurred in its operation,
including taxes, interest, brokerage fees and commissions, if
any; fees of Directors who are not officers, directors,
shareholders or employees of Salomon Smith Barney or SSB Citi;
SEC fees and state Blue Sky qualification fees; charges of
custodians; transfer and dividend disbursing agent's fees;
certain insurance premiums; outside auditing and legal
expenses; costs of maintenance of corporate existence;
investor services (including allocated telephone and personnel
expenses); costs of preparation and printing of prospectuses
and statements of additional information for regulatory
purposes and for distribution to existing shareholders and
costs of shareholders' reports and corporate meetings.

Portfolio Transactions

Decisions to buy and sell securities for the fund are
made by the manager, 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 SSB Citi.

Transactions on stock exchanges involve the payment of
negotiated brokerage commissions. There generally is 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. 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. 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 fiscal
years ended September 30, 2000, 1999 and 1998, the fund paid
total brokerage commissions of $3,819,990, $3,075,905 and
$2,284,354, respectively.

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 the manager provides that, in assessing the best
overall terms available for any transaction, the manager
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 the manager, 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 the manager or an
affiliate exercises investment discretion.  For the fiscal
year ended September 30, 2000, the fund directed brokerage
transactions totaling $77,798,018 to brokers because of
research services provided.  The amount of brokerage
commissions paid on such transactions totaled approximately
$148,452.

The fund's Board of Directors periodically will 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 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. SSB
Citi's fee under the Advisory Agreement is not reduced by
reason of SSB Citi's receiving such brokerage and research
services. Further, Salomon Smith Barney 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.

The fund's Board of Directors has determined that any
portfolio transaction for the fund may be executed through
Salomon Smith Barney if, in SSB Citi's judgment, the use of
Salomon Smith Barney is likely to result in price and
execution at least as favorable as those of other qualified
brokers, and if in the transaction, Salomon Smith Barney
charges the fund a commission rate consistent with those
charged by Salomon Smith Barney to comparable unaffiliated
customers in similar transactions.  In addition, Salomon
Smith Barney may directly execute such transactions for the
fund on the floor of any national securities exchange,
provided: (i) the Board of Directors has expressly
authorized Salomon Smith Barney to effect such transactions;
and (ii) Salomon Smith Barney annually advises the fund of
the aggregate compensation it earned on such transactions.
For the fiscal years ended September 30, 2000, 1999 and
1998, the fund paid $175,872, $140,412 and $161,040,
respectively, in brokerage commissions to Salomon Smith
Barney.  The percentage of registrant's aggregate brokerage
commissions paid to Salomon Smith Barney for the fiscal year
ended September 30, 2000 was 4.60% and the percentage of
registrant's aggregate dollar amount of transactions
involving the payment of commissions to Salomon Smith Barney
for the fiscal year ended September 30, 2000 was 5.84%.

While investment decisions for the fund are made
independently from those of the other accounts managed by SSB
Citi, or certain affiliates of SSB Citi, investments of the
type the fund may make also may be made by such other
accounts. In such instances, available investments or
opportunities for sales will be allocated in a manner believed
by SSB Citi to be equitable to each. In some cases, this
procedure may adversely affect the price paid or received by
the fund or the size of the position obtained for or disposed
of by the fund.

Code of Ethics

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

A copy of the fund's code of ethics is on file with the
Securities and Exchange Commission.


DISTRIBUTION

	Distributors. Effective June 5, 2000, the fund has
entered into an agreement with Salomon Smith Barney located at
388 Greenwich Street, New York, New York 10013 and PFS
Distributors, Inc. ("PFS Distributors"), located at 3120
Breckinridge Blvd., Duluth, Georgia 30099 to distribute the
fund's shares on a best efforts basis pursuant to distribution
agreements. Prior to June 5, 2000, CFBDS, Inc. served as the
fund's distributor.

Commissions on Class A Shares.  For the 1998, 1999 and 2000
fiscal years, the aggregate dollar amount of commissions on
Class A shares was as follows:

     Fiscal
Year
Ended 9/30/98*
Fiscal Year
Ended 9/30/99**
Fiscal Year
Ended 9/30/00***
$466,000
$448,000
$4,601,000

*  The entire amount was paid to Salomon Smith
Barney.
**   $403,200 was paid to Salomon Smith Barney
***  $4,140,900 was paid to Salomon Smith
Barney.

Commissions on Class L Shares.  For the 1998, 1999 and 2000
fiscal years, the aggregate dollar amount of commissions on
Class L shares was as follows:

Fiscal Year
 Ended
9/30/98*
Fiscal Year
Ended
9/30/99**
Fiscal Year
Ended
9/30/00***
$10,000
$126,000
$1,348,000

*  The entire amount was paid to Salomon Smith
Barney
**  $113,400 was paid to Salomon Smith Barney
***$1,213,200 was paid to Salomon Smith Barney.

	For the fiscal years ended September 30, 2000, 1999
and 1998, Salomon Smith Barney received $4,000, $0 and
$14,000, respectively, representing contingent deferred
sales charges ("deferred sales charge") on redemptions of
the fund's Class A shares. For the fiscal years ended
September 30, 2000, 1999 and 1998, Salomon Smith Barney
received $594,000, $770,000, $1,177,000, respectively,
representing deferred sales charge on redemptions of the
fund's Class B shares. For the fiscal years ended September
30, 2000, 1999 and 1998, Salomon Smith Barney received
$32,000, $5,000 and $11,000, respectively, representing
deferred sales charge on redemptions of the fund's Class L
shares.

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

Services and Distribution Plan

To compensate Salomon Smith Barney or PFS Investments
Inc. ("PFSI), as the case may be, for the services it provides
and for the expenses it bears, the fund has adopted a services
and distribution plan (the "Plan") pursuant to Rule 12b-1
under the 1940 Act. Under the Plan, the fund pays Salomon
Smith Barney  and with respect to Class A and Class B shares.
PFSI, 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 the Class B
and Class L shares, primarily intended to compensate Salomon
Smith Barney, and with respect to the Class B shares, PFSI for
its initial expense of paying Financial Consultants and PFS
Investments Registered Representatives a commission upon sales
of those shares. The Class B and Class L distribution fees are
 calculated at the annual rate of 0.75% of the value of the
fund's average daily net assets attributable to the shares.

For the fiscal year ended September 30, 2000, Salomon
Smith Barney incurred distribution expenses for the following:
advertising, printing and mailing prospectuses, support
services and overhead expenses to Salomon Smith Barney
Financial Consultants and accruals for interest on the excess
of Salomon Smith Barney expenses incurred in the distribution
of the fund's shares over the sum of the distribution fees and
deferred sales charge received by Salomon Smith Barney are
expressed in the following table:

Financial
Consultant
Compensation



Branch
Expenses



Advertisin
g
Expenses


Printing
Expenses
s



Interes
t
Expenses
s




$7,267,427
$1,945,121
$287,029
$22,066
551,321


Fees are paid to PFS Distributors, which in turn, pays
PFSI to pay its PFS Investment Registered Representatives for
servicing shareholder accounts and, in the case of Class B
shares, to cover expenses primarily intended to result in the
sale of those shares.  These expenses include: advertising
expenses; the cost of printing and mailing prospectuses to
potential investors; payments to and expenses of PFS
Investments Registered Representatives and other persons who
provide support services in connection with the distribution
of shares; interest and/or carrying charges; and indirect and
overhead costs of PFSI associated with the sale of fund
shares, including lease, utility, communications and sales
promotion expenses.

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


	The following shows the total distribution fees paid by
each Class for the fiscal year ended September 30, 2000:



9/30/00




Class A
$2,183,651


Class B
10,939,484


Class L
Total
1,486,449
$14,609,58
4



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

Custodian

	PFPC Trust Company is located at 8800 Tinicum Blvd.,
Philadelphia, Pennsylvania 19153, and serves as the custodian
for the fund. Under the custodian agreement, the custodian is
authorized to establish separate accounts for foreign
securities owned by the appropriate fund to be held with
foreign branches of other U.S. banks as well as with certain
foreign banks and securities depositories. For its custody
services to the fund, the custodian receives monthly fees
based upon the month-end aggregate net asset value of the
fund, plus certain charges for securities transactions
including out-of-pocket expenses, and costs of any foreign and
domestic sub-custodians. The assets of the fund are held under
bank custodianship in compliance with the 1940 Act.

Auditors

	Deloitte & Touche LLP, 2 World Financial Center, New
York, New York 10281, has been selected as independent
auditors to examine and report on the fund's financial
statements for the fiscal year ending September 30, 2001.





PURCHASE,  REDEMPTION AND EXCHANGE OF SHARES

General.   The fund offers four Classes of shares:
Classes A, B, L, and Y.  Class A, and Class L and 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 deferred sales charge payable upon certain
redemptions. Class L shares are also subject to a deferred
sales charge payable upon certain redemptions.  Class Y shares
are sold without an initial sales charge or a deferred sales
charge 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 which Class of shares to purchase

Investors in Class A, Class B, and Class L  shares may
open an account by making an initial investment in the fund of
at least $1,000 for each account, or $250 for an IRA or a
Self-Employed Retirement Plan. 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
Internal Revenue Code of 1986, as amended (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, unit holders who invest distributions from a Unit
Investment Trust ("UIT") sponsored by Salomon Smith Barney,
directors or trustees of any of the Smith Barney Mutual Funds,
and their spouses and children. The funds reserve the right to
waive or change minimums, to decline any order to purchase
their shares and to suspend the offering of shares from time
to time. Shares purchased will be held in the shareholder's
account by PFPC Global Fund Services ("PFPC"), a sub-transfer
agent or PFS Shareholder Services ("PFS Shareholder
Services"), a sub-transfer agent.  Share certificates are
issued only upon a shareholder's written request to PFPC or
PFS Shareholder Services.

Salomon Smith Barney Accounts.  Purchases of shares of
the funds 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 funds through the transfer agent. When purchasing
shares of a 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 PFPC are not subject
to a maintenance fee.

	PFS Accounts. The fund offers two Classes of shares to
investors purchasing through PFS Investments: Class A shares
and Class B shares.


Initial purchases of shares of the fund must be made
through a PFS Investments Registered Representative by
completing the appropriate application found in this
Prospectus. The completed application should be forwarded to
PFS Shareholder Services, P.O. Box 105033, Atlanta, Georgia
30348. Checks drawn on foreign banks must be payable in U.S.
dollars and have the routing number of the U.S. bank encoded
on the check. Subsequent investments may be sent directly to
PFS Shareholder Services.  In processing applications and
investments, the PFS Shareholder Services acts as agent for
the investor and for PFS Investments and also as agent for
the Distributor, in accordance with the terms of the
Prospectus.  If Citi Fiduciary Trust Company  (the "Transfer
Agent") ceases to act as such, a successor company named by
the fund will act in the same capacity so long as the
account remains open.

Shares purchased will be held in the shareholder's
account by PFS Shareholder Services. Share certificates are
issued only upon a shareholder's written request to PFS
Shareholder Services. A shareholder who has insufficient
funds to complete any purchase, will be charged a fee of $30
per returned purchase by PFS Shareholder Services.

Investors in Class A and Class B shares may open an
account by making an initial investment of at least $1,000
for each account in each Class (except for Systematic
Investment Plan accounts), or $250 for an IRA or a Self-
Employed Retirement Plan in the fund. Subsequent investments
of at least $50 may be made for each Class. For participants
in retirement plans qualified under Section 403(b)(7) or
Section 401(a) of the Code, the minimum initial investment
requirement for Class A and Class B shares and the
subsequent investment requirement for each Class in the fund
is $25. There are no minimum investment requirements in
Class A shares for employees of Citigroup and its
subsidiaries, including Salomon Smith Barney, Directors or
Trustees of any of the Smith Barney Mutual Funds, and their
spouses and children. The fund reserves the right to waive
or change minimums, to decline any order to purchase its
shares and to suspend the offering of shares from time to
time.  Purchase orders received by the Transfer Agent or PFS
Shareholder Services 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.

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

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

PFS may pay its Registered Representatives an amount
equal to 0.40% of the amount invested if the purchase
represents redemption proceeds from an investment company
distributed by an entity other than PFS Investments. 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.

In addition, Class A shares of the fund may be
purchased at net asset value by the PFS Primerica
Corporation Savings and Retirement Plan (the ''Primerica
Plan'') for its participants, subject to the provisions of
the Employee Retirement Income Security Act of 1974, as
amended (''ERISA''). Class A shares so purchased are
purchased for investment purposes and may not be resold
except by redemption or repurchase by or on behalf of the
Primerica Plan. Class A shares are also offered at net asset
value to accounts opened for shareholders by PFS Investments
Registered Representatives where the amounts invested
represent the redemption proceeds from investment companies
distributed by an entity other than PFS, if such redemption
has occurred no more than 60 days prior to the purchase of
shares of the Trust, and the shareholder paid an initial
sales charge and was not subject to a deferred sales charge
on the redeemed account. Class A shares are offered at net
asset value to such persons because of anticipated economies
in sales efforts and sales related expenses. The fund may
terminate, or amend the terms of, offering shares of the
fund at net asset value to such persons at any time. PFS may
pay PFS Investments Registered Representatives through whom
purchases are made at net asset value an amount equal to
0.40% of the amount invested if the purchase represents
redemption proceeds from an investment company distributed
by an entity other than PFS. Contact PFS Shareholder
Services at (800) 544-5445 for further information and
appropriate forms.

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

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



a.  Additional General Information

Systematic Investment Plan.  Shareholders may make
additions to their accounts at any time by purchasing shares
through a service known as the Systematic Investment Plan.
Under the Systematic Investment Plan, shareholders can invest
at least $25 on a monthly basis or at least $50 on a quarterly
basis( not available to PFS accounts)  to charge the 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 PFS Investments.
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 Service Agent.

Sales Charge Alternatives

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

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




Amount of
Investment

% of Offering
Price

% of Amount
Invested
Dealers'
Reallowance as %
of Offering Price
Less than $25,000
5.00%
5.26%
4.50%
$  25,000 - 49,999
4.25
4.44
3.83
    50,000 -
99,999
3.75
3.90
3.38
    100,000 -
249,999
3.25
3.36
2.93
    250,000 -
499,999
2.75
2.83
2.48
    500,000 -
999,000

 1,000,000 or more
2.00

0
2.04

0
1.80

up to 1.00*
*	A distributor pays up to 1.00% to a Service Agent.

	Purchases of Class A shares of $1,000,000 or more will
be made at net asset value without any initial sales charge,
but will be subject to a deferred sales charge of 1.00% on
redemptions made within 12 months of purchase.  The deferred
sales charge on Class A shares is payable to Salomon Smith
Barney, which compensates Salomon Smith Barney Financial
Consultants and other dealers whose clients make purchases
of $1,000,000 or more.  The deferred sales charge is waived
in the same circumstances in which the deferred sales charge
applicable to Class B and Class L shares is waived.  See
"Deferred Sales Charge Alternatives" and "Waivers of
Deferred Sales Charge."

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

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

Class L Shares.  Class L shares are sold with an
initial sales charge of 1.00% (which is equal to 1.01% of
the amount invested) and are subject to a deferred sales
charge payable upon certain redemptions.  See "Deferred
Sales Charge Provisions" below.  Until June 22, 2001
purchases of Class L shares by investors who were holders of
Class C shares of the fund and/or other Smith Barney Mutual
Funds on June 12, 1998 will not be subject to the 1% initial
sales charge.

Class Y Shares.  Class Y shares are sold without an
initial sales charge or deferred sales charge and are
available only to investors investing a minimum of
$15,000,000 (except for purchases of Class Y shares (i) of
the International All Cap Growth Portfolio, for which the
minimum initial investment is $5,000,000 and (ii) by Smith
Barney Allocation Series Inc., for which there is no minimum
purchase amount).

Sales Charge Waivers and Reductions

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

Letter of Intent - Class A Shares.  A Letter of Intent
for an amount of $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
(i) all Class A shares of the fund and other Smith Barney
Mutual Funds offered with a sales charge acquired during the
term of the letter plus (ii) the value of all Class A shares
previously purchased and still owned.  Each investment made
during the period receives the reduced sales charge
applicable to the total amount of the investment goal.  If
the goal is not achieved within the period, the investor
must pay the difference between the sales charges applicable
to the purchases made and the charges previously paid, or an
appropriate number of escrowed shares will be redeemed.  The
term of the Letter will commence upon the date the Letter is
signed, or at the option of the investor, up to 90 days
before such date.  Please contact a Service Agent or the
Transfer Agent to obtain a Letter of Intent application.

Letter of Intent - Class Y Shares.  A Letter of Intent
may also be used as a way for investors to meet the minimum
investment requirement for Class Y shares (except purchases
of Class Y shares by Smith Barney Allocation Series Inc.,
for which there is no minimum purchase amount).  Investors
must make an initial minimum purchase of $5,000,000 in Class
Y shares of the fund and agree to purchase a total of
$15,000,000 of Class Y shares of the fund within 13 months
from the date of the Letter. If a total investment of
$15,000,000 is not made within the 13-month period, all
Class Y shares purchased to date will be transferred to
Class A shares, where they will be subject to all fees
(including a service fee of 0.25%) and expenses applicable
to the fund's Class A shares, which may include a deferred
sales charge of 1.00%. Please contact a Salomon Smith Barney
Financial Consultant or the Transfer Agent for further
information.

Deferred Sales Charge Provisions

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

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

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


Year Since Purchase
Payment Was Made


Deferred Sales Charge

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 (Class B shares
that were acquired through the reinvestment of dividends and
distributions) 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 deferred sales
charge, 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 deferred sales charge 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 deferred sales charge
will reduce the gain or increase the loss, as the case may
be, on the amount realized on redemption. The amount of any
deferred sales charge will be paid to Salomon Smith Barney.

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

Waivers of Deferred Sales Charge

The deferred sales charge will be waived on: (a)
exchanges (see ''Exchange Privilege''); (b) automatic cash
withdrawals in amounts equal to or less than 1.00% per month
of the value of the shareholder's shares at the time the
withdrawal plan commences (see ''Automatic Cash Withdrawal
Plan'') (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 12 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
591/2; (e) involuntary redemptions; and (f) redemptions of
shares to effect a combination of the fund with any
investment company by merger, acquisition of assets or
otherwise. In addition, a shareholder who has redeemed
shares from other Smith Barney Mutual Funds may, under
certain circumstances, reinvest all or part of the
redemption proceeds within 60 days and receive pro rata
credit for any deferred sales charge imposed on the prior
redemption.

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



Smith Barney Retirement Programs

You may be eligible to participate in a retirement program
sponsored by Salomon Smith Barney or one of its affiliates.
The fund offers Class A and Class L shares at net asset value
to participating plans under the programs. You can meet
minimum investment and exchange amounts, if any by combining
the plan's investments in any of the Smith Barney mutual
funds.

There are no sales charges when you buy or sell shares and the
class of shares you may purchase depends on the amount of your
initial investment and/or the date your account is opened.
Once a class of shares is chosen, all additional purchases
must by of the same class.

For plans opened on or after March 1, 2000 that are not plans
for which Paychex Inc. or an affiliate provides administrative
services (a "Paychex Plan") offering, Class A shares may be
purchased regardless of the amount invested.

For plans opened prior to March 1, 2000 and for Paychex plans,
the class of shares you may purchase depends on the amount of
your initial investment:

Class A Shares.  Class A shares may be purchased by plans
investing at least $1million.

Class L Shares. Class L shares may be purchased by plans
investing less than $1 million.  Class L shares are eligible
to exchange into Class A shares not later than 8 years after
the plan joined the program.  They are eligible for exchange
in the following circumstances:

If the plan was opened on or after June 21, 1996 and a total
of $1 million is invested in Smith Barney Funds Class L shares
(other than money market funds), all Class L shares are
eligible for exchange after the plan is in the program for 5
years.

If the plan was opened before June 21, 1996 and a total of
$500,000 is invested in Smith Barney Funds Class L shares
(other than money market funds) on December 31 in any year,
all Class L shares are eligible for exchange on or about March
31 of the following year.

For more information, call your Service Agent or the Transfer
Agent.

Retirement Programs 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 the
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.

Retirement Programs Opened Prior to June 21, 1996.  In any
year after the date a participating plan enrolled in the Smith
Barney 401(k) Program, if a participating plan's 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 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 the
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 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) Program 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.

Retirement Programs Investing in Class B Shares:  Class B
shares of a 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 deferred sales charge 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 same 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 ofa 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 deferred sales charge 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
shareholders Class B shares above the purchase payments made
during the preceding eight years.  Whether or not the deferred
sales charge 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 deferred sales charge 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 deferred sales charge 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 or an employee
in the participating plan; (d) the attainment of age 59 1/2 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.

Determination of Public Offering Price

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


 REDEMPTION OF SHARES

The right of redemption may be suspended or the date of
payment postponed (a) for any period during which the NYSE is
closed (other than for customary weekend or holiday closings),
(b) when trading in markets the fund normally utilizes is
restricted, or an emergency, as determined by the SEC, exists
so that disposal of the fund's investments or determination of
net asset value is not reasonably practicable or (c) for such
other periods as the SEC by order may permit for protection of
the fund's shareholders.

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 a sub-transfer agent together with the redemption request.
 Any signature appearing on a share certificate, stock power
or written redemption request in excess of $50,000 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 $50,000 or less do not require a signature
guarantee unless more than one such redemption request is made
in any 10-day period or the redemption proceeds are to be sent
to an address other than the address of record. Unless
otherwise directed, 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.

	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.

Distributions in Kind

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

a. Salomon Smith Barney Accounts.

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

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

A written redemption request must (a) state the class
and number or dollar amount of shares to be redeemed, (b)
identify the shareholder's account number and (c) be signed by
each registered owner exactly as the shares are registered. If
the shares to be redeemed were issued in certificate form, the
certificates must be endorsed for transfer (or be accompanied
by an endorsed stock power) and must be submitted to PFPC
together with the redemption request. Any signature appearing
on a share certificate, stock power or written redemption
request in excess of $50,000 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 $50,000 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.

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 $50,000 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 4:00
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 4:00 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 funds reserve
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.

b.	PFS Accounts

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

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

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

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

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

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


Automatic Cash Withdrawal Plan

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

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

VALUATION OF SHARES

The prospectus states that the net asset value of the
fund's classes of shares will be determined on any date that
the New York Stock Exchange ("NYSE") is open.  The NYSE is
closed on the following holidays: New Year's Day, Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving and Christmas.

Securities listed on a national securities exchange will
be valued on the basis of the last sale on the date on which
the valuation is made or, in the absence of sales, at the mean
between the closing bid and asked prices. Over-the-counter
securities will be valued on the basis of the bid price at the
close of business on each day, or, if market quotations for
those securities are not readily available, at fair value, as
determined in good faith by the fund's Board of Directors.
Short-term obligations with maturities of 60 days or less are
valued at amortized cost, which constitutes fair value as
determined by the fund's Board of Directors. Amortized cost
involves valuing an instrument at its original cost to the
fund and thereafter assuming a constant amortization to
maturity of any discount or premium, regardless of the effect
of fluctuating interest rates on the market value of the
instrument. All other securities and other assets of the fund
will be valued at fair value as determined in good faith by
the fund's Board of Directors.

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 deferred sales charge than that
imposed by the fund, the exchanged Class B shares will be
subject to the higher applicable deferred sales charge. Upon
an exchange, the new Class B shares will be deemed to have
been purchased on the same date as the Class B shares of the
fund that have been exchanged.

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

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

		Additional Information Regarding the Exchange Privilege.
 Although the exchange privilege is an important benefit,
excessive exchange transactions can be detrimental to either
fund's performance and its shareholders.  The manager may
determine that a pattern of frequent exchanges is excessive
and contrary to the best interests of the fund's other
shareholders.  In this event, each fund may, at its
discretion, decide to limit additional purchases and/or
exchanges by a 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.

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

Shareholders who establish telephone transaction authorization
on their account may request an exchange by telephone.  If a
shareholder does not wish to allow telephone exchanges by any
person in his account, he should decline the telephone
transaction option on the account application. Redemption
procedures discussed above are also applicable for exchanging
shares, and exchanges will be made upon receipt of all
supporting documents in proper form.  Exchanges between funds
involving exact registrations do not require a signature
guarantee.

PERFORMANCE DATA

From time to time, the fund may quote total return of a
Class in advertisements or in reports and other communications
to shareholders. The fund may include comparative performance
information in advertising or marketing the fund's shares.
Such performance information may 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 any Class 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 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.

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

Average Annual Total Return




Class of Shares
1-Year
5-Year
10-Year
Life of
fund
Inception
date
Class A1
24.96%
19.06%
19.09%
15.10%
11/12/81
Class B2
25.59%
19.27%
N/A
17.99%
11/6/92
Class L3
28.19%
19.11%
N/A
16.97%
08/10/93
Class Y4
32.04%
N/A
N/A
20.65%
10/13/95
1	The average annual total return figure assumes that the
maximum 5.00% sales charge has been deducted from the
investment at the time of purchase.  If the sales charge
had been deducted, the average annual total return for
Class A shares for the same periods would have been 31.55%,
20.30%, 19.71% and 15.41%, respectively.

2	The average annual total return figure assumes that the
maximum applicable deferred sales charge has been deducted
from the investment at the time of redemption.  If the
deferred sales charge had been deducted, the average annual
total return for Class B shares for the same periods would
have been 30.59%, 19.37% and 17.99%, respectively.

3	The average annual total return figure assumes that the
maximum applicable deferred sales charge has been deducted
from the investment at the time of redemption.  If the
deferred sales charge had been deducted, the average annual
total return for Class L shares for the same period would
have been 30.51%, 19.36% and 17.13%, respectively.

4	Class Y shares do not incur sales charges nor deferred
sales charge.  During November 1995, Class Y shares were
fully redeemed; therefore, performance for Class Y shares
represents performance for the period beginning January 31,
1996, which represents the date new share purchases were
made of Class Y shares.


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.  Each Class' net
investment income changes in response to fluctuations in
interest rates and expenses of the fund.

TAXES

The following is a summary of selected federal income
tax considerations that may affect the fund and its
shareholders. The summary is not intended as a substitute for
individual tax advice and investors are urged to consult their
own tax advisors as to the tax consequences of an investment
in the fund.

The fund has qualified and intends to continue to
qualify each year as a regulated investment company under the
Code. Provided the fund (a) is a regulated investment company
and (b) distributes at least 90% of its net investment income
(including, for this purpose, net realized short-term capital
gains), the fund will not be liable for federal income taxes
to the extent its net investment income and its net realized
long- and short-term capital gains, if any, are distributed to
its shareholders. Although the fund expects to be relieved of
all or substantially all federal, state, and local income or
franchise taxes, depending upon the extent of its activities
in states and localities in which its offices are maintained,
in which its agents or independent contractors are located, or
in which it is otherwise deemed to be conducting business,
that portion of the fund's income which is treated as earned
in any such state or locality could be subject to state and
local tax. Any such taxes paid by the fund would reduce the
amount of income and gain available for distribution to
shareholders. All of a shareholder's dividends and
distributions payable by the fund will be reinvested
automatically in additional shares of the same Class of the
fund at net asset value, unless the shareholder elects to
receive dividends and distributions in cash.

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-term and short-term capital gains) and its net realized
long- and short-term capital gains, if any, that it
distributes to its shareholders, provided an amount equal to
at least 90% 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 to its shareholders in compliance with the Code's
timing and other requirements, but will be subject to tax at
regular corporate rates on any taxable income or gains it does
not distribute.

The Code imposes a 4% nondeductible excise tax on the
fund to the extent it does not distribute by the end of any
calendar year at least 98% of its ordinary income for that
year and at least 98% of its net of its capital gains (both
long-term and short-term) for the one-year period ending, as
a general rule, on October 31 of that year.  For this purpose,
however, any ordinary income or net capital gains 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 excise
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.  Moreover, 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, the fund may be required to
recognize any net built-in gains with respect to certain of
its assets (i.e. the excess of the aggregate gains, including
items of income, over aggregate losses that would have been
realized with respect to such assets if the fund had been
liquidated) in order to qualify as a regulated investment
company in a subsequent year.

On September 30, 2000, the unused capital loss
carryforwards were approximately $6,781,000. For federal
income tax purposes, this amount is available to be applied
against future capital gains of the fund, if it has
carryforwards, that are realized prior to the expiration of
the applicable carryforward.  The carryforwards expire on
September 30, 2007.

Gain or losses on the sale of a security by the fund
generally will be long-term capital gain or loss if the fund
has held the securities for more than one year. Gain or loss
on the sale of securities held for not more than one year will
be short-term. If the fund acquires a debt security at a
substantial discount, a portion of any gain upon the sale or
redemption will be taxed as ordinary income, rather than
capital gain to the extent it reflects accrued market
discount.

Dividends of net investment income and distributions of
net realized short-term capital gains will be taxable to
shareholders as ordinary income for Federal income tax
purposes, whether received in cash or reinvested in additional
shares. Dividends received by corporate shareholders will
qualify for the dividends-received deduction only to the
extent that the fund designates the amount distributed as a
dividend and the amount so designated does not exceed the
aggregate amount of dividends received by the fund from
domestic corporations for the taxable year. The Federal
dividends-received deduction for corporate shareholders may be
further reduced or disallowed if the shares with respect to
which dividends are received are treated as debt-financed or
are deemed to have been held for less than 46 days.

Foreign countries may impose withholding and other taxes
on dividends and interest paid to the fund with respect to
investments in foreign securities. However, certain foreign
countries have entered into tax conventions with the United
States to reduce or eliminate such taxes.  Distributions of
long-term capital gains will be taxable to shareholders as
such, whether paid in cash or reinvested in additional shares
and regardless of the length of time that the shareholder has
held his or her interest in the fund. If a shareholder
receives a distribution taxable as long-term capital gain with
respect to his or her investment in the fund and redeems or
exchanges the shares before he or she has held them for more
than six months, any loss on the redemption or exchange that
is less than or equal to the amount of the distribution will
be treated as a long-term capital loss.

If a shareholder (a) incurs a sales charge in acquiring
or redeeming shares of the fund, and (b) disposes of those
shares and acquires within 90 days after the original
acquisition shares in a mutual fund for which the otherwise
applicable sales charge is reduced by reason of a reinvestment
right (i.e., an exchange privilege), the original sales charge
increases the shareholder's tax basis in the original shares
only to the extent the otherwise applicable sales charge for
the second acquisition is not reduced. The portion of the
original sales charge that does not increase the shareholder's
tax basis in the original shares would be treated as incurred
with respect to the second acquisition and, as a general rule,
would increase the shareholder's 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.

Investors considering buying shares of the fund just
prior to a record date for a taxable dividend or capital gain
distribution should be aware that, regardless of whether the
price of the fund shares to be purchased reflects the amount
of the forthcoming dividend or distribution payment, any such
payment will be a taxable dividend or distribution payment.

If a shareholder fails to furnish a correct taxpayer
identification number, fails to report his or her dividend or
interest income in full, or fails to certify that he or she
has provided a correct taxpayer identification number, and
that he or she is not subject to such withholding, the
shareholder may be subject to a 31% "backup withholding" tax
with respect to (a) any taxable dividends and distributions
and (b) any proceeds of any redemption of fund shares. An
individual's taxpayer identification number is his or her
social security number. The 31% backup withholding tax is not
an additional  tax and may be credited against a shareholder's
regular Federal income tax liability.

Options Transactions.  The tax consequences of options
transactions entered into by the fund will vary depending on
the nature of the underlying security and whether the
"straddle" rules, discussed separately below, apply to the
transaction. When the fund writes a call or put option on an
equity or debt security, it will receive a premium that will,
subject to the "section 1256 contract" and straddle rules
discussed below, be treated as follows for tax purposes. If
the option expires unexercised, or if the fund enters into a
closing purchase transaction, the fund will realize a gain (or
loss if the cost of the closing purchase transaction exceeds
the amount of the premium) without regard to any unrealized
gain or loss on the underlying security. Any such gain or loss
will be short-term capital gain or loss, except that any loss
on a "qualified" covered call option not treated as part of a
straddle may be treated as long-term capital loss. If a call
option written by the fund is exercised, the fund will
recognize a capital gain or loss from the sale of the
underlying security, and will treat the premium as additional
sales proceeds. Whether the gain or loss will be long-term or
short-term will depend on the holding period of the underlying
security. If a put option written by the fund is exercised,
the amount of the premium will reduce the tax basis of the
security the fund then purchases.

The Code imposes a special "mark-to-market" system for
taxing section 1256 contracts which include options on
nonconvertible debt securities (including U.S. government
securities). In general, gain or loss with respect to section
1256 contracts will be taken into account for tax purposes
when actually realized (by a closing transaction, by exercise,
by taking delivery or by other termination). In addition, any
section 1256 contracts held at the end of a taxable year will
be treated as sold at their year-end fair market value (that
is, marked-to-market), and the resulting gain or loss will be
recognized for tax purposes. Provided section 1256 contracts
are held as capital assets and are not part of a straddle,
both the realized and unrealized year-end gain or loss from
these investment positions (including premiums on options that
expire unexercised) will be treated as 60% long-term and 40%
short-term capital gain or loss, regardless of the period of
time particular positions are actually held by the fund.

Straddles.  The Code contains rules applicable to
"straddles," that is, "offsetting positions in actively traded
personal property." Such personal property includes section
1256 contracts or other investment contracts. Where
applicable, the straddle rules generally override the other
provisions of the Code. In general, investment positions will
be offsetting if there is a substantial diminution in the risk
of loss from holding one position by reason of holding one or
more other positions (although certain covered call options
would not be treated as part of a straddle). The fund is
authorized to enter into covered call and covered put
positions. Depending on what other investments are held by the
fund, at the time it enters into one of the above
transactions, the fund may create a straddle for purposes of
the Code.

If two (or more) positions constitute a straddle,
recognition of a realized loss from one position (including a
marked-to-market loss) must be deferred to the extent of
unrecognized gain in an offsetting position. Also, long-term
capital gain may be recharacterized as short-term capital
gain, or short-term capital loss as long-term capital loss.
Furthermore, interest and other carrying charges allocable to
personal property that is part of a straddle must be
capitalized.

If the fund chooses to identify a particular offsetting
position as being one component of a straddle, a realized loss
on any component of the straddle will be recognized no earlier
than upon the liquidation of all of the components of the
straddle. Special rules apply to "mixed" straddles (that is,
straddles consisting of a section 1256 contract and an
offsetting position that is not a section 1256 contract). If
the fund makes certain elections, the section 1256 contract
components of such mixed straddles will not be subject to the
60%/40% mark-to-market rules. If any such election is made,
the amount, the nature (as long- or short-term) and the timing
of the recognition of the fund's gains or losses from the
affected straddle positions will be determined under rules
that will vary according to the type of election made.

Wash Sales.  "Wash sale" rules will apply to prevent the
recognition of loss with respect to a position where an
identical or substantially identical position is or has been
acquired within a prescribed period.

The foregoing is only a summary of certain federal tax
considerations generally affecting the fund and its
shareholders and is not intended as a substitute for careful
tax planning. Shareholders are urged to consult their tax
advisors with specific reference to their own tax situations,
including their state and local tax liabilities.

ADDITIONAL INFORMATION

The fund was originally incorporated under the laws of
the State of Washington on March  17, 1981, under the name
Foster & Marshall Growth Fund, Inc. On May 22, 1984, December
18, 1987, November 21, 1989, August 12, 1992, August 17, 1993
and October 14, 1994, the fund changed its name to Shearson
Fundamental Value Fund Inc., Shearson Lehman Fundamental Value
Fund Inc., SLH Fundamental Value Fund Inc., Shearson Lehman
Brothers Fundamental Value Fund Inc., Smith Barney Shearson
Fundamental Value Fund Inc., and Smith Barney Fundamental
Value fund Inc. Without changing its name, the fund was
reincorporated as a Maryland corporation on May 24, 1995.

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

	The fund is not required to hold annual meetings,
however the Directors will call a meeting for any purpose
upon written request of shareholders holding at least 10% of
the fund's outstanding shares and the fund will assist
shareholders in calling such a meeting as required by the
1940 Act.  When matters are submitted for shareholder vote,
shareholders of each Class will have one vote for each full
share owned and proportionate, fractional votes for
fractional shares held.

	The fund sends its shareholders a semi-annual report
and an audited annual report, which include listings of
investment securities held by the fund at the end of the
reporting period.  In an effort to reduce the fund's
printing and mailing costs, the fund plans to consolidate
the mailing of its semi-annual and annual reports by
household.  This consolidation means that a household having
multiple accounts with the identical address of record will
receive a single copy of each report.  Any shareholder who
does not want this consolidation to apply to his or her
account should contact his or her Salomon Smith Barney
Financial Consultant or the Transfer Agent.

             Citi Fiduciary Trust Company, located at 125
Broad Street, New York, NY 10004 serves as the Transfer
Agent and shareholder services agent of the fund.  PFPC
Global Fund Services, located at P.O. Box 9699, Providence,
RI 02940-9699, serves as a sub-transfer agent to render
certain shareholder record keeping and accounting services
functions. In addition, PFS Shareholder Services, located at
3100 Breckinridge Blvd, Bldg. 200, Duluth, Georgia 30099-
0062, also serves as a sub-transfer agent to render certain
shareholder record keeping and accounting services
functions.

FINANCIAL STATEMENTS

The fund's Annual Report for the fiscal year ended September
30, 2000 is incorporated herein by reference in its entirety.
The Annual Report was filed on December 7, 2000, Accession
Number 950130-00-6523.

OTHER  INFORMATION

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


Smith Barney mutual funds offers more than 60 mutual funds.
 We understand that many investors prefer an active role in
allocating the mix of funds in their portfolio, while others
want the asset allocation decisions to be made by experienced
managers.
That's why we offer four "styles" of fund management that can
be tailored to suit each investor's unique financial goals.

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

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

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

Research Series - driven by exhaustive fundamental
securities analysis
Built on a foundation of substantial buy-side research
under the direction of our Citibank Global Asset
Management (CGAM) colleagues, our Research funds focus
on well-defined industries, sectors and trends.
Style Pure Series - our solution to funds that stray
Our Style Pure Series funds are the building blocks of
asset allocation.  The funds stay fully invested within
their asset class and investment style, enabling you to
make asset allocation decisions in conjunction with your
financial professional.





PART C

Item 23.	Exhibits

All references are to the Registrant's registration statement
 on Form N-1A as filed with the Securities and Exchange Commission
("SEC"), File Nos. 2-71469 and 811-3158 (the "Registration Statement").

(a)(1)	Registrant's Articles of Incorporation dated May 13, 1994 are
incorporated by reference to post-effective amendment no. 27 to the
Registration Statement as filed with the SEC on May 26, 1995
("Post-Effective Amendment No. 27").

(a)(2)	Registrant's Articles of Amendment dated May 24, 1995 are
incorporated by reference to post-effective amendment no. 28 to the
Registration Statement as filed with the SEC on February 1, 1996
("Post-Effective Amendment No. 28").

(a)(3)	Registrant's Articles of Amendment dated June 11, 1998 are
incorporated by reference to post-effective amendment no. 31 to the
Registration Statement as filed with the SEC on November 24, 1998
("Post-Effective Amendment No. 31").


(b)	Registrant's By-Laws are incorporated by reference
to Post-Effective Amendment No. 27.

(c)(1)	Registrant's form of stock certificate relating to Class A
shares are incorporated by reference to Post-Effective Amendment No. 27.

(c)(2)	Registrant's form of stock certificate relating to Class B shares
are incorporated by reference to Post-Effective Amendment No. 27.

(c)(3)	Registrant's form of stock certificate relating to Class C shares
are incorporated by reference to Post-Effective Amendment No. 27.

(c)(4)	Registrant's form of stock certificate relating to Class Y shares
are incorporated by reference to Post-Effective Amendment No. 27.

(d)		Form of Investment Advisory Agreement with Smith Barney
Mutual Funds Management Inc. (currently, SSB Citi Fund Management LLC)
is incorporated by reference to Post-Effective Amendment No. 27.

(e)(1)	Form of Distribution Agreement between the Registrant
and Smith Barney Inc. is incorporated by reference to Post-Effective
Amendment No. 27.

(e)(2)	Distribution Agreement between the Registrant and
CFBDS, Inc. is incorporated by reference to Post-Effective
Amendment No. 31.

(e)(3)	Form of Distribution Agreement between the Registrant
and Salomon Smith Barney Inc. is filed herein.

(e)(4)	Form of Distribution Agreement between the Registrant
and PFS Distributors is filed herein.

(f)	Inapplicable.

(g)	Custodian Agreement with PNC Bank, National
Association to is incorporated by reference to Post-Effective Amendment
No. 27.

(h)(1)	Form of Transfer Agency Agreement between the Registrant and The
Transfer Agent is incorporated by reference to Post-Effective Amendment No.
28.

(h)(2)	Form of Consent to Assignment between the Registrant
and The Shareholder Services Group, Inc. is incorporated by reference
to Post-Effective Amendment No. 27.

(h)(3)	Form of Administration Agreement between the Fund and
Smith Barney Mutual Funds Management Inc. is incorporated by
reference to Post-Effective Amendment No. 27.

(h)(4)	Form of Transfer Agency Agreement between the Registrant and
Citi Fiduciary Trust Company is filed herein.

(h)(5)	Form of Sub-Transfer Agency Agreement between the Registrant and
PFPC Global Fund Services is filed herein.

(h)(6)	Form of Sub-Transfer Agency Agreement between the Registrant and
PFS Shareholder Services is filed herein.

(i)	Opinion of  Maryland Counsel is incorporated by reference to Post-
Effective  Amendment No. 27.

(j)	Consent of Independent Accountants is filed herein.

(k)	Inapplicable.

(l)	Inapplicable.

(m)(1)	Services and Distribution Plan between the Registrant and
Smith Barney Inc. is incorporated by reference to Post-Effective
Amendment No. 27.

(m)(2)	Amended and Restated Shareholder Services and Distribution Plan
pursuant to Rule 12b-1 is incorporated by reference to Post-Effective
Amendment No. 31.

(m)(3)	Form of Amended and Restated Shareholder Services and Distribution
Plan pursuant to Rule 12b-1 with Salomon Smith Barney and PFS Distributors Inc.
is filed herein.

(n)	Financial Data Schedule is filed herein.

(o)(1)	Form of Rule 18f-3(d) Multiple Class Plan of the Registrant is
incorporated by reference to Post Effective Amendment No. 28.

(o)(2)	Amended Rule 18f-3(d) Multiple Class Plan of the Registrant is
incorporated by reference to Post-Effective
Amendment No. 31.

(p) Code of Ethics is filed herein.

Item 24.	Persons Controlled by or Under Common Control
		with Registrant

	Not applicable.

Item 25.	Indemnification

The response to this item is incorporated by reference to Post-Effective
Amendment No. 5 to the Registration Statement as filed with the SEC.

Item 26(a).	Business and Other Connections of Investment Adviser


Investment Adviser - SSB Citi Fund Management LLC ("SSB Citi")
was incorporated in December 1968 under the laws of the State of Delaware.
On September 21, 1999, SSB Citi was converted into a Delaware Limited
Liability Company.  SSB Citi is a wholly owned subsidiary of Salomon Smith
Barney Holdings Inc. ("Holdings"), which in turn is a wholly owned
subsidiary of Citigroup Inc. (formerly known as Travelers Group Inc.).
SSB Citi is registered as an investment
adviser under the Investment Advisers Act of 1940 (the "Advisers Act")
and has, through its predecessors, been in the investment counseling
business since 1968.  The list required by this Item 26 of officers and
directors of SSB Citi together with information as to any other business,
profession, vocation or employment of a substantial nature engaged in by such
officers and directors during the past two fiscal years, is incorporated by
reference to Schedules A and D of FORM ADV filed by SSB Citi pursuant to the
Advisers Act (SEC File No. 801-8314).


Item 27.	Principal Underwriters

(a)  Salomon Smith Barney, Inc., ("Salomon Smith Barney"),
a Distributor of the Registrant, is also a distributor for the
following Smith Barney funds:

Smith Barney Investment Series, Consulting Group Capital
Markets Funds, Greenwich Street Series Fund, Smith Barney
Adjustable Rate Government Income Fund, Smith Barney
Aggressive Growth Fund Inc., Smith Barney Appreciation Fund
Inc., Smith Barney Arizona Municipals Fund Inc., Smith
Barney California Municipals Fund Inc., Smith Barney
Allocation Series Inc., Smith Barney Equity Funds, Smith
Smith Barney Funds, Inc., Smith Barney Income Funds,
Smith Barney Institutional Cash Management Fund, Inc.,
Smith Barney Investment Funds Inc.,
Smith Barney Investment Trust, Smith Barney Managed
Governments Fund Inc., Smith Barney Managed Municipals Fund Inc.,
Smith Barney Massachusetts Municipals Fund,
Smith Barney Money Funds, Inc., Smith Barney Muni Funds, Smith
Barney Municipal Money Market Fund, Inc., Smith Barney New
Jersey Municipals Fund Inc., Smith Barney Oregon Municipals
Fund Inc., Smith Barney Principal Return Fund,
Smith Barney Sector Series Inc., Smith Barney
Small Cap Core Fund, Inc., Smith Barney Telecommunications
Trust, Smith Barney Variable Account Funds, Smith Barney
World Funds, Inc., Travelers Series Fund Inc., and various
series of unit investment trusts.

In addition, Salomon Smith Barney is also the distributor for the
Centurion Funds, Inc.

PFS Distributors, Inc., ("PFS Distributors"),
a Distributor of the Registrant, is also a distributor for the
following Smith Barney funds:

Smith Barney Investment Series,
Smith Barney Aggressive Growth Fund Inc.,
Smith Barney Appreciation Fund Inc.,
Smith Barney Allocation Series Inc.,
Smith Barney Equity Funds,
Smith Barney Income Funds,
Smith Barney Investment Funds Inc.,
Smith Barney Investment Trust,
Smith Barney Managed Municipals Fund Inc.,
Smith Barney Money Funds, Inc.

(b) The information required by this Item 27 with respect
to each director, officer and partner of Salomon Smith Barney
is incorporated by reference to Schedule A of Form BD
filed by Salomon Smith Barney  pursuant to the Securities
Exchange Act of 1934 (SEC File No. 812-8510).

The information required by this Item 27 with respect
to each director, officer and partner of PFS Distributors
is incorporated by reference to Schedule A of Form BD
filed by PFS Distributors  pursuant to the Securities
Exchange Act of 1934 (SEC File No. 8-37352).


(c)	Not applicable.

Item 28.	Location of Accounts and Records

	(1)	With respect to the Registrant,
		Investment Adviser and Administrator:
		c/o Salomon Smith Barney Inc.
		7 World Trade Center
		New York, New York 10048
		and
		125 Broad Street
		New York, New York 10004


	(2)	With respect to the Registrant's Custodian:
		PFPC Trust Co.
		8800 Tinicum Blvd.
		Philadelphia, PA, 19153


	(3)	With respect to the Registrant's Transfer Agent:
		Citi Fiduciary Trust Company
		125 Broad Street
		New York, New York 10004

	(4)	With respect to the Registrant's Sub-Transfer Agents:
		PFPC Global Fund Services
		P.O. Box 9699
		Providence RI 02940-9699

		and

		PFS Shareholder Services
		3100 Breckinridge Blvd.
		Building 20
		Duluth, GA 30099-0062


Item 29.	Management Services

Not applicable.

Item 30.	Undertakings

Not applicable.



SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, as amended, the Registrant certifies that it meets all
the requirements for effectiveness of this Registration Statement
pursuant to Rule 485(b) under the 1933 Act and the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, this Post-Effective Amendment, and where applicable,
the true and lawful attorney-in-fact,
thereto duly authorized, in the City of New York
and State of New York, on the 25th day of January 2001.

SMITH BARNEY FUNDAMENTAL VALUE FUND INC.
Registrant

By: /s/ Heath B. McLendon
Name:   Heath B. McLendon
Title:  Chairman of the Board




Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment to the Registration Statement has been signed below by the
following persons in the capacities and on the date indicated.

Signature:			Title:				Date:


/s/Heath B. McLendon	Chairman of the Board			1/25/01
   Heath B. McLendon 	(Chief Executive Officer)

/s/Lewis E. Daidone	Senior Vice President			1/25/01
   Lewis E. Daidone	and Treasurer
			(Chief Financial and
			Accounting Officer)

/s/Robert M. Frayn*	Director				1/25/01
   Robert M. Frayn

/s/Leon P. Gardner*	Director				1/25/01
   Leon P. Gardner

/s/				Director
   Howard J. Johnson


/s/David E. Maryatt*	Director				1/25/01
   David E. Maryatt

/s/ Frederick O. Paulsell*  Director			1/25/01
   Frederick O. Paulsell

/s/Jerry A. Viscione*	Director				1/25/01
   Jerry A. Viscione

/s/Julie W. Weston*	Director				1/25/01
   Julie W. Weston



* Signed pursuant to power of attorney filed May 26, 1995, as an exhibit
to Post-Effective Amendment No. 27.

/s/ Heath B. McLendon
Heath B. McLendon



EXHIBIT INDEX

Exhibit No.		Exhibit

(e)(3)		Form of Distribution Agreement with Salomon Smith Barney Inc.

(e)(4)		Form of Distribution Agreement with PFS Distributors Inc.

(h)(4)		Transfer Agency Agreement with Citi Fiduciary Trust Company

(h)(5)		Sub-Transfer Agency Agreement with PFPC Global Fund Services

(h)(6)		Sub-Transfer Agency Agreement with PFS Shareholder Services

(j)			Auditor's Consent

(m)(3) 		Form of Amended and Restated Shareholder Services and
Distribution Plan pursuant to Rule 12b-1 with Salomon Smith Barney and
PFS Distributors Inc.

(n) 			Financial Data Schedules

(p)			Code of Ethics