February 27, 1998
As Amended August 27, 1998

STATEMENT OF ADDITIONAL INFORMATION

SMITH BARNEY WORLD FUNDS, INC. 
388 Greenwich Street
New York, New York 10013

	Shares of Smith Barney World Funds, Inc. (the "Fund") are 
offered with a choice of six Portfolios:

	The Global Government Bond Portfolio seeks as high a level 
of current income and capital appreciation as is 
consistent with its policy of investing principally in 
high quality bonds of the United States and foreign 
governments.

	The International Equity Portfolio seeks a total return on 
its assets from growth of capital and income.  The 
Portfolio seeks to achieve its objective principally 
through a diversified portfolio of equity securities of 
established non-United States issuers. 

	The Pacific Portfolio seeks long-term capital appreciation 
by investing primarily in a diversified portfolio of 
equity securities of companies in the Asian Pacific 
Countries. 

	The European Portfolio seeks long-term capital 
appreciation by investing primarily in equity securities 
of issuers based in countries of Europe. 

	The International Balanced Portfolio seeks a competitive 
total return on its assets from growth of capital and 
income through a portfolio invested primarily in 
securities of established non-United States issuers. 

	The Emerging Markets Portfolio seeks long-term capital 
appreciation on its assets through a portfolio invested 
primarily in securities of emerging country issuers. 

The Fund offers three classes of shares which may be purchased at the 
next-determined net asset value per share plus a sales charge which, 
at the election of the investor, may be imposed (i) at the time of 
purchase (Class A shares) or (ii) on a deferred basis (Class B and 
Class C shares). A fourth class of shares (the Class Y shares) is sold 
at net asset value and is available only to investors investing a 
minimum of $5,000,000 with respect to the International Equity 
Portfolio and $15,000,000 with respect to each of the other 
Portfolios. A fifth class of shares of the International Equity 
Portfolio (the Class Z shares) are offered only to tax-exempt 
retirement plans of Smith Barney Inc. These alternatives permit an 
investor to choose the method of purchasing shares that is most 
beneficial given the amount of the purchase, the length of time the 
investor expects to hold the shares and other circumstances.


This Statement of Additional Information is not a prospectus.  It is 
intended to provide more detailed information about Smith Barney World 
Funds, Inc. as well as matters already discussed in the Prospectus of 
the applicable Portfolio and therefore should be read in conjunction 
with each Prospectus dated February 27, 1998 for the International 
Equity Portfolio, the Global Government Bond Portfolio, the Pacific 
Portfolio, the European Portfolio, the International Balanced 
Portfolio and the Emerging Markets Portfolio, which may be obtained 
from the Fund or your Smith Barney Financial Consultant. 


TABLE OF CONTENTS

		Page

Directors, Advisory Director and Officers		 3
Investment Policies		5
Investment Restrictions		16
Additional Tax Information		20
IRA and Other Prototype Retirement Plans		22
Performance Information		23
Determination of Net Asset Value		27
Redemption of Shares		27
Investment Management Agreement and Other Services		27
Custodian		31
Independent Auditors		31
Voting		31
Financial Statements		35
Appendix - Ratings of Debt Obligations		A-1


DIRECTORS, ADVISORY DIRECTOR AND OFFICERS
   
VICTOR K. ATKINS, Director
Retired; 120 Montgomery Street, San Francisco, CA. Former President of 
Lips Propellers, Inc., a ship propeller repair company.  Director of 
two investment companies associated with Smith Barney; 76. 

ABRAHAM E. COHEN, Director (Age 61)
Consultant to MeesPierson, Inc., a Dutch investment bank; Consultant 
to and Board Member, Chugai Pharmaceutical Co. Ltd.; Director of 
Agouron Pharmaceuticals, Inc., Akzo Nobel NV, Vasomedical, Inc., Teva 
Pharmaceutical Ind., Ltd., Neurobiological Technologies Inc., Vion 
Pharmaceuticals, Inc., BlueStone Capital Partners, LP. and The 
Population Council, an international public interest organization. 

ROBERT A. FRANKEL, Director
Managing Partner of Robert A. Frankel Managing Consultants, 102 Grand 
Street, Croton-on-Hudson, NY.  Director of seven investment companies 
associated with Smith Barney.  Former Vice President of The Readers 
Digest Association, Inc.; 70. 

RAINER GREEVEN, Director
Partner of the law firm of Greeven & Ercklentz; 630 Fifth Avenue, New 
York, NY.  Director of two investment companies associated with Smith 
Barney; 62. 

SUSAN M. HEILBRON, Director
Attorney; Lacey & Heilbron, 3 East 54th Street, New York, NY.  Prior 
to November 1990, Vice President and General Counsel of MacMillan, 
Inc. and Executive Vice President of The Trump Organization.  Director 
of two investment companies associated with Smith Barney; 53. 

*HEATH B. McLENDON, Chairman of the Board, President and Chief 
Executive Officer 
Managing Director of Smith Barney; Director of forty-two investment 
companies associated with Smith Barney; Director and President of the 
Manager and Travelers Investment Adviser, Inc. ("TIA"); Chairman of 
Smith Barney Strategy Advisers Inc.; prior to July 1993, Senior 
Executive Vice President of  Shearson Lehman Brothers, Inc., Vice 
Chairman of Shearson Asset Management, Director of PanAgora Asset 
Management, Inc. and PanAgora Asset Management Limited; 64 

*MAURITS E. EDERSHEIM, Chairman of the Fund and Advisory Director 
Deputy Chairman of Smith Barney International Incorporated; Director 
and President of Amstel Hudson Management Corp. (offshore investment 
management); Director Esfinco NV (U.S. subsidiary of Spanish 
Construction Company).  Formerly Deputy Chairman and Director of 
Drexel Burnham Lambert Incorporated, The Drexel Burnham Lambert Group 
Inc., and various of their subsidiaries; 79. 
    
*LEWIS E. DAIDONE, Senior Vice President and Treasurer 
Managing Director of Smith Barney, and Senior Vice President and 
Treasurer of forty-two investment companies associated with Smith 
Barney; and Director and Senior Vice President of the Manager and TIA; 
40

*JAMES B. CONHEADY, Vice President and Investment Officer
Managing Director of Smith Barney. Formerly First Vice President of 
Drexel Burnham Lambert Incorporated; 62. 

*JEFFREY RUSSELL, Vice President and Investment Officer
Managing Director of Smith Barney.  Formerly Vice President of Drexel 
Burnham Lambert Incorporated; 40. 

*REIN VAN DER DOES, Vice President and Investment Officer
Managing Director of Smith Barney.  Formerly Managing Director of 
Drexel Burnham Lambert Incorporated; 58. 

*SCOTT KALB, Vice President and Investment Officer
Managing Director of Smith Barney.  Formerly Vice President of Drexel 
Burnham Lambert Incorporated; 41

*VICTOR S. FILATOV, Vice President and Investment Officer
Managing Director of Smith Barney, President and Director of Smith 
Barney Global Capital Management Inc.  Formerly Vice President of J.P. 
Morgan Securities Inc.; 46. 

*SIMON R. HILDRETH, Vice President and Investment Officer
Senior Vice President of Smith Barney, Managing Director of Smith 
Barney Global Capital Management Inc.  Formerly Director of Mercury 
Asset Management Ltd; 43. 

*DENIS P. MANGAN, Vice President and Investment Officer
Vice President of Smith Barney Global Capital Management Inc.  
Formerly Vice President of J.P. Morgan and Citibank; 44. 

*DONALD ELEFSON, Vice President and Investment Officer
Vice President of Smith Barney; Formerly Analyst of emerging markets 
at Merrill Lynch Asset Management; 38.

*DAVID S. ISHIBASHI, Vice President and Investment Officer
Vice President of Smith Barney; Formerly Head of Japanese equities 
desk at SG Warburg; 42

*IRVING DAVID, Controller
Director of Smith Barney. Formerly Assistant Treasurer of First 
Investment Management Company; 37. 

*CHRISTINA T. SYDOR, Secretary
Managing Director of Smith Barney and Secretary of forty-two 
investment companies associated with Smith Barney; Secretary and 
General Counsel of the Manager and TIA; 47. 


                      
*  Designates an "interested person" as defined in the Investment 
Company Act of 1940, as amended (the "1940 Act") whose business 
address is 388 Greenwich Street, New York, New York 10013.  Such 
person is not separately compensated for services as a Fund officer or 
director. 

	On February 6, 1998 the directors and officers owned, in the 
aggregate, less than 1% of the outstanding shares of each of the 
Portfolios.

	The following table shows the compensation paid by the Fund to 
each 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 Smith Barney. 

COMPENSATION TABLE
   





Name of Person



Aggregate 
Compensation 
from the 
Fund
Total 
Pension
or 
Retirement
Benefits 
Accrued as
Part of Fund
Expenses


Compensation 
from Fund 
and Complex 
Paid
to Directors
Number of
Funds for
Which 
Director
Serves 
Within
Fund Complex
Victor Atkins
$11,946
0
$27,400
2
Alger B. 
Chapman1
9,078
0
20,600
2
A. E. Cohen2
0
0
13,700
2
Robert A. 
Frankel
11,946
0
65,900
8
Ranier Greeven
11,346
0
25,600
2
Susan M. 
Heilbron
11,946
0
27,400
2
Heath B. 
McLendon
    0
0
    0
42
Bruce D. 
Sargent3
    0
0
    0
3
James M. Shuart4
11,946
0
 27,400
2
    

INVESTMENT POLICIES

	Except as described under "INVESTMENT RESTRICTIONS," the 
investment policies described in the Prospectuses and in this 
Statement of Additional Information are not fundamental and the Board 
of Directors may change such policies without shareholder approval. 

	The Fund effects transactions with a view towards attaining each 
Portfolio's investment objective, and although it is not limited by a 
predetermined rate of portfolio turnover, it is expected that the 
annual turnover rate for each of the International Equity Portfolio, 
the Global Government Bond Portfolio, the European Portfolio, the 
Pacific Portfolio and the equity portion of each of the International 
Balanced Portfolio and the Emerging Markets Portfolio will not exceed 
100% in normal circumstances and that the annual turnover rate for the 
debt portion of each of the International Balanced Portfolio and the 
Emerging Markets Portfolio will not exceed 200% in normal 
circumstances.  A high portfolio turnover results in correspondingly 
greater transaction costs in the form of brokerage commissions or 
dealer spreads that a Portfolio will bear directly, and may result in 
the realization of net capital gains which are taxable when 
distributed to shareholders.  See "Investment Management Agreement and 
Other Services--Brokerage and Portfolio Transactions" in this 
Statement of Additional Information. 

	Each of the following investment policies is subject to the 
limitations set forth under "Investment Restrictions." 

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

Reverse Repurchase Agreements.  The Fund does not currently intend to 
commit more than 5% of a Portfolio's net assets to reverse repurchase 
agreements.  The Fund may enter into reverse repurchase agreements 
with broker/dealers and other financial institutions.  Such agreements 
involve the sale of Portfolio securities with an agreement to 
repurchase the securities at an agreed-upon price, date and interest 
payment and are considered to be borrowings by a Portfolio and are 
subject to the borrowing limitations set forth under "Investment 
Restrictions."  Since the proceeds of reverse repurchase agreements 
are invested, this would introduce the speculative factor known as 
"leverage."  The securities purchased with the funds obtained from the 
agreement and securities collateralizing the agreement will have 
maturity dates no later than the repayment date.  Generally the effect 
of such a transaction is that the Fund can recover all or most of the 
cash invested in the portfolio securities involved during the term of 
the reverse repurchase agreement, while in many cases it will be able 
to keep some of the interest income associated with those securities. 
 Such transactions are only advantageous if the Portfolio has an 
opportunity to earn a greater rate of interest on the cash derived 
from the transaction than the interest cost of obtaining that cash.  
Opportunities to realize earnings from the use of the proceeds equal 
to or greater than the interest required to be paid may not always be 
available, and the Fund intends to use the reverse repurchase 
technique only when the Manager believes it will be advantageous to 
the Portfolio.  The use of reverse repurchase agreements may 
exaggerate any interim increase or decrease in the value of the 
participating Portfolio's assets.  The Fund's custodian bank will 
maintain a separate account for the Portfolio with securities having a 
value equal to or greater than such commitments. 

Restricted Securities.  Each Portfolio may invest in securities the 
disposition of which is subject to legal or contractual restrictions. 
 The sale of restricted securities often requires more time and 
results in higher brokerage charges or dealer discounts and other 
selling expenses than does the sale of securities eligible for trading 
on a national securities exchange that are not subject to restrictions 
on resale.  Restricted securities often sell at a price lower than 
similar securities that are not subject to restrictions on resale. 

Securities Lending.  Each Portfolio may seek to increase its net 
investment income by lending its securities provided such loans are 
callable at any time and are continuously secured by cash or U.S. 
Government Obligations equal to no less than the market value, 
determined daily, of the securities loaned.  Each Portfolio will 
receive amounts equal to dividends or interest on the securities 
loaned.  It will also earn income for having made the loan because 
cash collateral pursuant to these loans will be invested in short-term 
money market instruments.  In connection with lending of securities 
the Fund may pay reasonable finders, administrative and custodial 
fees.  Management will limit such lending to not more than one-third 
of the value of the total assets of each Portfolio.  Where voting or 
consent rights with respect to loaned securities pass to the borrower, 
management will follow the policy of calling the loan, in whole or in 
part as may be appropriate, to permit the exercise of such voting or 
consent rights if the issues involved have a material effect on the 
Portfolio's investment in the securities loaned.  Apart from lending 
its securities and acquiring debt securities of a type customarily 
purchased by financial institutions, no Portfolio will make loans to 
other persons. 

Commercial Bank Obligations.  For the purposes of each Portfolio's 
investment policies with respect to bank obligations, obligations of 
foreign branches of U.S. banks and of foreign banks may be general 
obligations of the parent bank in addition to the issuing bank, or may 
be limited by the terms of a specific obligation and by government 
regulation.  As with investment in non-U.S. securities in general, 
investments in the obligations of foreign branches of U.S. banks and 
of foreign banks may subject the Portfolio to investment risks that 
are different in some respects from those of investments in 
obligations of domestic issuers.  Although a Portfolio will typically 
acquire obligations issued and supported by the credit of U.S. or 
foreign banks having total assets at the time of purchase in excess of 
U.S. $1 billion (or the equivalent thereof), this U.S. $1 billion 
figure is not a fundamental investment policy or restriction of the 
Portfolio.  For calculation purposes with respect to the U.S. $1 
billion figure, the assets of a bank will be deemed to include the 
assets of its U.S. and non-U.S. branches. 

Commercial Paper.  Commercial paper consists of short-term (usually 
from 1 to 270 days) unsecured promissory notes issued by corporations 
in order to finance their current operations.  A variable amount 
master demand note (which is a type of commercial paper) represents a 
direct borrowing arrangement involving periodically fluctuating rates 
of interest under a letter agreement between a commercial paper issuer 
and an institutional lender, such as one of the Portfolios, pursuant 
to which the lender may determine to invest varying amounts.  Transfer 
of such notes is usually restricted by the issuer, and there is no 
secondary trading market for such notes.  Each Portfolio, therefore, 
may not invest in a master demand note, if as a result more than 15% 
of the value of the Portfolio's total assets would be invested in such 
notes and other illiquid securities. 

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

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

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

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

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

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

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

	Call options written by each Portfolio, other than the 
International Balanced Portfolio, will normally have expiration dates 
of less than nine months from the date written.  Call options written 
by the International Balanced Portfolio will normally have expiration 
dates of less than twelve 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 or currencies at the time 
the options are written.  From time to time, the Portfolio may 
purchase an underlying security or currency for delivery in accordance 
with the exercise of an option, rather than delivering such security 
or currency from its portfolio.  In such cases, additional costs will 
be incurred. 

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

	See "Additional Tax Information" for a discussion of federal 
income tax treatment of covered call options. 

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

	Each Portfolio may purchase a put option on an underlying 
security or currency (a "protective put") owned by the Portfolio as a 
hedging technique in order to protect against an anticipated decline 
in the value of the security or currency.  Such hedge protection is 
provided only during the life of the put option when the Portfolio, as 
the holder of the put option, is able to sell the underlying security 
or currency at the put exercise price regardless of any decline in the 
underlying security's market price or currency's exchange value.  For 
example, a put option may be purchased in order to protect unrealized 
appreciation of a security or currency when the Manager deems it 
desirable to continue to hold the security or currency because of tax 
considerations.  The premium paid for the put option and any 
transaction costs would reduce any capital gain otherwise available 
for distribution when the security or currency is eventually sold. 

	Each Portfolio may also purchase put options at a time when the 
Portfolio does not own the underlying security or currency.  By 
purchasing put options on a security or currency it does not own, the 
Portfolio seeks to benefit from a decline in the market price of the 
underlying security or currency.  If the put option is not sold when 
it has remaining value, and if the market price of the underlying 
security or currency remains equal to or greater than the exercise 
price during the life of the put option, the Portfolio will lose its 
entire investment in the put option.  In order for the purchase of a 
put option to be profitable, the market price of the underlying 
security or currency must decline sufficiently below the exercise 
price to cover the premium and transaction costs, unless the put 
option is sold in a closing sale transaction. 

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

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

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

Interest Rate and Currency Futures Contracts.  Each Portfolio may 
enter into interest rate or currency futures contracts ("Futures" or 
"Futures Contracts") as a hedge against changes in prevailing levels 
of interest rates or currency exchange rates in order to establish 
more definitely the effective return on securities or currencies held 
or committed to be acquired by the Portfolio.  A Portfolio's hedging 
may include holding Futures as an offset against anticipated changes 
in interest or currency exchange rates.  A Portfolio may also enter 
into Futures Contracts based on financial indices including any index 
of U.S. Government securities, foreign government securities or 
corporate debt securities.

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

	Although techniques other than sales and purchases of Futures 
Contracts could be used to reduce the Portfolio's exposure to interest 
rate and currency exchange rate fluctuations, the Portfolio may be 
able to hedge its exposure more effectively and at a lower cost 
through using Futures Contracts. 

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

	As an example of an offsetting transaction, the contractual 
obligations arising from the sale of one Futures Contract of September 
Treasury Bills on an exchange may be fulfilled at any time before 
delivery under the Futures Contract is required (i.e., on a specific 
date in September, the "delivery month") by the purchase of another 
Futures Contract of September Treasury Bills on the same exchange.  In 
such instance the difference between the price at which the Futures 
Contract was sold and the price paid for the offsetting purchase, 
after allowance for transaction costs, represents the profit or loss 
to the Portfolio. 

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

	Each Portfolio's Futures transactions will be entered into for 
traditional hedging purposes; that is, Futures Contracts will be sold 
to protect against a decline in the price of securities or currencies 
that the Portfolio owns, or Futures Contracts will be purchased to 
protect a Portfolio against an increase in the price of securities or 
currencies it has committed to purchase or expects to purchase.  The 
International Equity Portfolio, the Pacific Portfolio, the 
International Balanced Portfolio and the Emerging Market Portfolio may 
each also enter into Futures transactions for non-hedging purposes, 
subject to applicable law. 

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

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

Risks of Using Futures Contracts.  The prices of Futures Contracts are 
volatile and are influenced, among other things, by actual and 
anticipated changes in interest rates, which in turn are affected by 
fiscal and monetary policies and national and international political 
and economic events. 

	At best, the correlation between changes in prices of Futures 
Contracts and of the securities or currencies being hedged can be only 
approximate.  The degree of imperfection of correlation depends upon 
circumstances such as: variations in speculative market demand for 
Futures and for debt securities or currencies, including technical 
influences in Futures trading; and differences between the financial 
instruments being hedged and the instruments underlying the standard 
Futures Contracts available for trading, with respect to interest rate 
levels, maturities, and creditworthiness of issuers.  A decision of 
whether, when, and how to hedge involves skill and judgment, and even 
a well-conceived hedge may be unsuccessful to some degree because of 
unexpected market behavior or interest rate trends. 

	Because of the low margin deposits required, Futures trading 
involves an extremely high degree of leverage.  As a result, a 
relatively small price movement in a Futures Contract may result in 
immediate and substantial loss, as well as gain, to the investor.  For 
example, if at the time of purchase, 10% of the value of the Futures 
Contract is deposited as margin, a subsequent 10% decrease in the 
value of the Futures Contract would result in a total loss of the 
margin deposit, before any deduction for the transaction costs, if the 
account were then closed out.  A 15% decrease would result in a loss 
equal to 150% of the original margin deposit, if the Futures Contract 
were closed out.  Thus, a purchase or sale of a Futures Contract may 
result in losses in excess of the amount invested in the Futures 
Contract.  A Portfolio, however, would presumably have sustained 
comparable losses if, instead of the Futures Contract, it had invested 
in the underlying financial instrument and sold it after the decline. 
 Where a Portfolio enters into Futures transactions for non-hedging 
purposes, it will be subject to greater risks and could sustain losses 
which are not offset by gains on other portfolio assets. 

	Furthermore, in the case of a Futures Contract purchase, in 
order to be certain that each Portfolio has sufficient assets to 
satisfy its obligations under a Futures Contract, the Portfolio 
segregates and commits to back the Futures Contract an amount of cash, 
U.S. Government securities and other liquid, high-grade debt 
securities equal in value to the current value of the underlying 
instrument less the margin deposit. 

	Most U.S. Futures exchanges limit the amount of fluctuation 
permitted in Futures Contract prices during a single trading day.  The 
daily limit establishes the maximum amount that the price of a Futures 
Contract may vary either up or down from the previous day's settlement 
price at the end of a trading session.  Once the daily limit has been 
reached in a particular type of Futures Contract, no trades may be 
made on that day at a price beyond that limit.  The daily limit 
governs only price movement during a particular trading day and 
therefore does not limit potential losses, because the limit may 
prevent the liquidation of unfavorable positions.  Futures Contract 
prices have occasionally moved 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. 

	See "Additional Tax Information" for a discussion of federal tax 
treatment of Futures Contracts. 

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

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

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

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

Forward Currency Contracts and Options on Currency.  A forward 
currency contract is an obligation to purchase or sell a currency 
against another currency at a future date and price as agreed upon by 
the parties.  A Portfolio may either accept or make delivery of the 
currency at the maturity of the forward contract or, prior to 
maturity, enter into a closing transaction involving the purchase or 
sale of an offsetting contract.  Each Portfolio engages in forward 
currency transactions in anticipation of, or to protect itself 
against, fluctuations in exchange rates.  A Portfolio might sell a 
particular foreign currency forward, for example, when it holds bonds 
denominated in that currency but anticipates, and seeks to be 
protected against,  decline in the currency against the U.S. dollar.  
Similarly, a Portfolio might sell the U.S. dollar forward when it 
holds bonds denominated in U.S. dollars but anticipates, and seeks to 
be protected against, a decline in the U.S. dollar relative to other 
currencies.  Further, a Portfolio might purchase a currency forward to 
"lock in" the price of securities denominated in that currency which 
it anticipates purchasing. 

	The matching of the increase in value of a forward contract and 
the decline in the U.S. dollar equivalent value of the foreign 
currency denominated asset that is the subject of the hedge generally 
will not be precise.  In addition, a Portfolio may not always be able 
to enter into foreign currency forward contracts at attractive prices 
and this will limit the Portfolio's ability to use such contract to 
hedge or cross-hedge its assets.  Also, with regard to a Portfolio's 
use of cross-hedges, there can be no assurance that historical 
correlations between the movement of certain foreign currencies 
relative to the U.S. dollar will continue.  Thus, at any time poor 
correlation may exist between movements in the exchange rates of the 
foreign currencies underlying the Portfolio's cross-hedges and the 
movements in the exchange rates of the foreign currencies in which the 
Portfolio's assets that are the subject of such cross-hedges are 
denominated. 

	Forward contracts are traded in an interbank market conducted 
directly between currency traders (usually large commercial banks) and 
their customers.  A forward contract generally has no deposit 
requirement and is consummated without payment of any commission.  
Each Portfolio, however, may enter into forward contracts with deposit 
requirements or commissions. 

	A put option gives a Portfolio, as purchaser, the right (but not 
the obligation) to sell a specified amount of currency at the exercise 
price until the expiration of the option.  A call option gives a 
Portfolio, as purchaser, the right (but not the obligation) to 
purchase a specified amount of currency at the exercise price until 
its expiration.  A Portfolio might purchase a currency put option, for 
example, to protect itself during the contract period against a 
decline in the value of a currency in which it holds or anticipates 
holding securities.  If the currency's value should decline, the loss 
in currency value should be offset, in whole or in part, by an 
increase in the value of the put.  If the value of the currency 
instead should rise, any gain to the Portfolio would be reduced by the 
premium it had paid for the put option.  A currency call option might 
be purchased, for example, in anticipation of, or to protect against, 
a rise in the value of a currency in which the Portfolio anticipates 
purchasing securities. 

	Each Portfolio's ability to establish and close out positions in 
foreign currency options is subject to the existence of a liquid 
market.  There can be no assurance that a liquid market will exist for 
a particular option at any specific time.  In addition, options on 
foreign currencies are affected by all of those factors that influence 
foreign exchange rates and investments generally. 

	A position in an exchange-listed option may be closed out only 
on an exchange that provides a secondary market for identical options. 
 Exchange markets for options on foreign currencies exist but are 
relatively new, and the ability to establish and close out positions 
on the exchanges is subject to maintenance of a liquid secondary 
market.  Closing transactions may be effected with respect to options 
traded in the over-the-counter ("OTC") markets (currently the primary 
markets for options on foreign currencies) only by negotiating 
directly with the other party to the option contract or in a secondary 
market for the option if such market exists.  Although each Portfolio 
intends to purchase only those options for which there appears to be 
an active secondary market, there is no assurance that a liquid 
secondary market will exist for any particular option at any specific 
time.  In such event, it may not be possible to effect closing 
transactions with respect to certain options, with the result that the 
Portfolio would have to exercise those options which it has purchased 
in order to realize any profit.  The staff of the Securities and 
Exchange Commission ("SEC") has taken the position that, in general, 
purchased OTC options and the underlying securities used to cover 
written OTC options are illiquid securities.  However, a Portfolio may 
treat as liquid the underlying securities used to cover written OTC 
options, provided it has arrangements with certain qualified dealers 
who agree that the Portfolio may repurchase any option it writes for a 
maximum price to be calculated by a predetermined formula.  In these 
cases, the OTC option itself would only be considered illiquid to the 
extent that the maximum repurchase price under the formula exceeds the 
intrinsic value of the option. 

Swap Agreements. Among the hedging transactions into which the 
Portfolios may enter are interest rate swaps and the purchase or sale 
of interest rate caps and floors.  Each Portfolio expects to enter 
into these transactions primarily to preserve a return or spread on a 
particular investment or portion of its portfolio or to protect 
against any increase in the price of securities the Portfolio 
anticipates purchasing at a later date.  Each Portfolio intends to use 
these transactions as a hedge and not as a speculative investment.  
Each Portfolio will not sell interest rate caps or floors that it does 
not own.  Interest rate swaps involve the exchange by a Portfolio with 
another party of their respective commitments to pay or receive 
interest, e.g., an exchange of floating rate payments for fixed rate 
payments.  The purchase of an interest rate cap entitles the 
purchaser, to the extent that a specified index exceeds a 
predetermined interest rate, to receive payments of interest on a 
notional principal amount from the party selling such interest rate 
cap.  The purchase of an interest rate floor entitles the purchaser, 
to the extent that a specified index falls below a predetermined 
interest rate, to receive payments of interest on a notional principal 
amount from the party selling such interest rate floor. 

	A Portfolio may enter into interest rate swaps, caps and floors 
on either an asset-based or liability-based basis, depending on 
whether it is hedging its assets or its liabilities, and will usually 
enter into interest rate swaps on a net basis, i.e., the two payment 
streams are netted but, with the Portfolio receiving or paying, as the 
case may be, only the net amount of the two payments.  Inasmuch as 
these hedging transactions are entered into for good faith hedging 
purposes, the investment adviser and the Portfolios believe such 
obligations do not constitute senior securities and, accordingly will 
not treat them as being subject to its borrowing restrictions.  The 
net amount of the excess, if any, of a Portfolio's obligations over 
its entitlement with respect to each interest rate swap will be 
accrued on a daily basis and an amount of cash or liquid securities 
having an aggregate net asset value at least equal to the accrued 
excess will be maintained in a segregated account by a custodian that 
satisfies the requirements of the Investment Company Act of 1940 (the 
"1940 Act").  The Portfolios will not enter into any interest rate 
swap, cap or floor transaction unless the unsecured senior debt or the 
claims-paying ability of the other party thereto is rated in the 
highest rating category of at least one nationally recognized rating 
organization at the time of entering into such transaction.  If there 
is a default by the other party to such a transaction, a Portfolio 
will have contractual remedies pursuant to the agreements related to 
the transaction.  The swap market has grown substantially in recent 
years with a large number of banks and investment banking firms acting 
both as principals and as agents utilizing swap documentation.  As a 
result, the swap market has become relatively liquid.  Caps and floors 
are more recent innovations for which standardized documentation has 
not yet been developed and, accordingly, they are less liquid than 
swaps. 

	New options and Futures Contracts and various combinations 
thereof continue to be developed and the Portfolios may invest in any 
such options and contracts as may be developed to the extent 
consistent with its investment objective and regulatory requirements 
applicable to investment companies. 

	The Articles of Incorporation of the Fund permit the Board of 
Directors to establish additional Portfolios of the Fund from time to 
time.  The investment objectives, policies and restrictions applicable 
to additional Portfolios would be established by the Board of 
Directors at the time such Portfolios were established and may differ 
from those set forth in the Prospectus and this Statement of 
Additional Information. 

INVESTMENT RESTRICTIONS
   
	The Fund has adopted the following restrictions and fundamental 
policies that cannot be changed without approval by a "vote of a 
majority of the outstanding voting securities" of each Portfolio 
affected by the change as defined in the 1940 Act and Rule 18f-2 
thereunder (see "Voting").

	Without the approval of a majority of its outstanding voting 
securities, the Global Government Bond Portfolio may not: 

1. Change its subclassification as an open-end fund.;

2. Change its subclassification as a non-diversified company;

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

4. Purchase or sell real estate, real estate mortgages, 
commodities or commodity contracts,  but this restriction 
shall not prevent the Portfolio 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 Portfolios' investment objective and policies); or 
(d) investing in real estate investment trust securities.

5. Borrow money, except that (a) the Portfolio 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 Portfolio 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 Portfolio 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.

6. Issue senior securities.

7. Make loans.  This restriction does not apply to: (a) the 
purchase of debt obligations in which the Portfolio 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. Engage in the business of underwriting securities issued by 
other persons,  except to the extent that the Portfolio may 
technically be deemed to be an underwriter under the 
Securities Act of 1933,  as amended,  in disposing of 
portfolio securities.
	
9. Enter into a Futures Contract or a commodity option other 
than for bona fide hedging purposes and, if, as a result 
thereof, more than 5% of the Portfolio's total assets (taken 
at market value at the time of entering into the contract or 
commodity option) would be committed to initial margin on 
futures contracts and premiums on commodity options all 
within the meaning of Regulation 4.5 of the CFTC. 

In addition, the following policies have also been adopted by 
the Global Government Bond Portfolio but are not fundamental and 
accordingly may be changed by approval of the Board of Directors.  The 
Portfolio may not:

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

2. Have more than 15% of its total assets at any time invested 
in or subject to puts, calls or combinations thereof.

3. Invest in companies for the purpose of exercising control or 
management.

4. 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.

5. Invest in securities of another investment company except as 
permitted by Section 12(d)(1)(a) of the 1940 Act, or as part 
of a merger, consolidation, or acquisition.

6. Invest in securities of an issuer if the investment would 
cause the Portfolio to own more than 10% of any class of 
securities of any one issuer. 

7. Purchase oil, gas or other mineral leases, rights or royalty 
contracts or exploration or development programs, except that 
the Portfolio may invest in, or sponsor such programs.

8. Invest more than 5% of its total assets in securities of 
companies having, together with their predecessors, a record 
of less than three years of continuous operation. 

	Without the approval of a majority of its outstanding voting 
securities, the International Equity Portfolio, the Pacific Portfolio, 
the European Portfolio, the International Balanced Portfolio and the 
Emerging Markets Portfolio each may not:

1. With respect to each of the European Portfolio, the 
International Equity Portfolio and the Pacific Portfolio, 
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. With respect to each of the Emerging Markets Portfolio and 
the International Balanced Portfolio, deviate from its 
subclassification as a non-diversified company.

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

4. Purchase or sell real estate, real estate mortgages, 
commodities or commodity contracts, but this restriction 
shall not prevent the Portfolio 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 Portfolios' investment objective and policies); or 
(d) investing in real estate investment trust securities.

5. With respect to each of the Emerging Markets Portfolio and 
the European Portfolio, borrow money, except that (a) the 
Portfolio 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 Portfolio 
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 Portfolio 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.

6. With respect to each of the International Balanced Portfolio, 
the International Equity Portfolio and the Pacific Portfolio, 
borrow money, except that (a) the Portfolio may borrow from 
banks under certain circumstances where the Portfolio's 
Manager reasonably believes that (i) the cost of borrowing 
and related expenses will be exceeded by the Portfolio's 
return from investments of the proceeds of the borrowing in 
portfolio securities, or (ii) the meeting of redemption 
requests might otherwise require the untimely disposition of 
securities, in an amount not exceeding 33 1/3% of the value 
of the Portfolio's 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 and (b) the Portfolio may, to the 
extent consistent with its investment policies, enter into 
reverse repurchase agreements,  forward roll transactions and 
similar investment strategies and techniques.

7. Make loans.  This restriction does not apply to: (a) the 
purchase of debt obligations in which the Portfolio 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. Engage in the business of underwriting securities issued by 
other persons, except to the extent that the Portfolio may 
technically be deemed to be an underwriter under the 
Securities Act of 1933, as amended,  n disposing of portfolio 
securities.

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

	In addition, the following policies have also been adopted by 
the Emerging Markets Portfolio, the International Balanced Portfolio, 
the International Equity Portfolio and the Pacific Portfolio, but are 
not fundamental and accordingly may be changed by approval of the 
Board of Directors.  The Portfolios' may not:

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

2. Purchase interests in oil, gas and/or mineral exploration or 
development programs (including mineral leases), except for 
purchases of currencies and futures and options and other 
related contracts as described in the Prospectus from time to 
time and except for the purchase of marketable securities 
issued by companies that have such interests. 

3. Purchase securities of any other registered investment 
company, except in connection with a merger, consolidation, 
reorganization or acquisition of assets; provided, however, 
that each of the Portfolios may also purchase shares of other 
investment companies pursuant to Section 12(d)(1)(A) of the 
1940 Act.

4. Make investments in securities for the purpose of exercising 
control over or managing the issuer.
	
5. Purchase securities of any issuer (including any predecessor) 
which has been in operation for less than three years if 
immediately after such purchase more than 5% of the value of 
the total assets of the Portfolio would be invested in such 
securities.

6. 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.

7. Purchase warrants if as a result the Portfolio would then 
have more than 5% of its net assets (determined at the time 
of investment) invested in warrants.  Warrants will be valued 
at the lower of cost or market and investment in warrants 
which are not listed on the New York Stock Exchange ("NYSE") 
or American Stock Exchange ("AMEX") will be limited to 2% of 
the Portfolio's net assets (determined at the time of 
investment). For the purpose of this limitation, warrants 
acquired in units or attached to securities are deemed to be 
without value.   

    



ADDITIONAL TAX INFORMATION

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

General

	Each Portfolio intends to qualify, as it has in prior years, 
under Subchapter M of the Internal Revenue Code (the "Code") for tax 
treatment as a regulated investment company.  In each taxable year 
that each Portfolio qualifies, so long as such qualification is in the 
best interest of its shareholders, each Portfolio will pay no federal 
income tax on its net investment income and long-term capital gain 
that is distributed to shareholders.

	To so qualify, a Portfolio must, among other things, (i) derive 
at least 90% of its gross income in each taxable year from dividends, 
interest, proceeds from loans of stock and securities, gains from the 
sale or other disposition of stock, securities or foreign currency, or 
certain other income (including but not limited to gains from options, 
Futures and forward contracts) derived from its business of investing 
in stock, securities or currency; and (ii) diversify its holdings so 
that, at the end of each quarter of its taxable year, the following 
two conditions are met: (a) at least 50% of the market value of the 
Portfolio's total assets is represented by cash, U.S. Government 
securities, securities of other regulated investment companies and 
other securities,  with such other securities limited, in respect of 
any one issuer, to an amount not greater than 5% of the Portfolio's 
assets and not more than 10% of the outstanding voting securities of 
such issuer; and (b) not more than 25% of the value of the Portfolio's 
assets is invested in securities of any one issuer (other than U.S. 
Government securities or securities of other regulated investment 
companies).  The diversification requirements described above may 
limit the Portfolio's ability to engage in hedging transactions by 
writing or buying options or by entering into Futures or forward 
contracts. 

	Foreign currency gains that are not directly related to a 
Portfolio's principal business of investing in stock or securities, or 
options or forward contracts thereon, might be excluded by regulations 
from income that counts toward the 90% gross income requirement 
described above. 

	As a regulated investment company, each Portfolio will not be 
subject to U.S. federal income tax on net investment income and net 
long-term capital gains distributed to shareholders if, as is 
intended, the Portfolio distributes at least 90% of its ordinary 
income and net short-term capital gains to the Portfolio's 
shareholders each year. 

	Each Portfolio, however, will generally be subject to a 
nondeductible excise tax of 4% to the extent that it does not meet 
certain minimum distribution requirements as of the end of each 
calendar year.  Each Portfolio intends to make timely distributions of 
its income (including any net capital gains) in compliance with these 
requirements.  As a result, it is anticipated that each Portfolio will 
not be subject to the excise tax. 

	For federal income tax purposes, dividends declared by each 
Portfolio in October, November or December as of a record date in such 
month and which are actually paid in January of the following year 
will be treated as if they were paid on December 31.  These dividends 
will be taxable to shareholders in the year declared, and not in the 
year in which shareholders actually receive the dividend. 

	Gains or losses that a Portfolio recognizes upon the sale or 
other disposition of stock or securities will be treated as long-term 
capital gains or losses if the securities have been held by it for 
more than one year, except in certain cases where the Portfolio sells 
the stock or security short or acquires a put or writes a call 
thereon.  Other gains or losses on the sale of stock or securities 
will be short-term capital gains or losses.  Gains and losses on the 
sale, lapse or other termination of options on stock or securities 
will generally be treated as gains and losses from the sale of stock 
or securities.  If an option written for a Portfolio lapses or is 
terminated through a closing transaction the Portfolio may realize a 
short-term capital gain or loss, depending on whether the premium 
income is greater or less than the amount paid in the closing 
transaction.  If a Portfolio sells stock or securities pursuant to the 
exercise of a call option written by it, the Portfolio will add the 
premium received to the sale price of the stock or securities 
delivered in determining the amount of gain or loss on the sale.  The 
requirement that a Portfolio derive less than 30% of its gross income 
from gains from the sale of stock or securities held for less than 
three months may limit the Portfolio's ability to acquire put options 
or make short sales. 

	Under the Code, gains or losses attributable to foreign currency 
contracts, or to fluctuations in exchange rates between the time a 
Portfolio accrues income or receivables or expenses or other 
liabilities denominated in a foreign currency and the time the 
Portfolio actually collects such income or pays such liabilities, are 
treated as ordinary income or ordinary loss.  Similarly, gains or 
losses on the disposition of debt securities held by the Portfolio 
denominated in foreign currency, to the extent attributable to 
fluctuations in exchange rates between the acquisition and disposition 
dates, are also treated as ordinary income or loss. 

	Forward currency contracts, options and Futures contracts 
entered into by a Portfolio may create "straddles" for federal income 
tax purposes and this may affect the character and timing of gains or 
losses realized by the Portfolio on such contracts or options or on 
the underlying securities.  Under regulations yet to be issued, 
straddles may also result in the loss of the holding period of 
underlying property, and therefore, the Portfolio's ability to enter 
into forward currency contracts, options and Futures contracts may be 
limited by the 30% of gross income test described above. 

	Certain options, Futures and foreign currency contracts held by 
a Portfolio at the end of each fiscal year will be required to be 
"marked to market" for federal income tax purposes; that is, treated 
as having been sold at market value.  Sixty percent of any capital 
gain or loss recognized on these deemed sales and on actual 
dispositions will be treated as long-term capital gain or loss, and 
the remainder will be treated as short-term capital gain or loss 
regardless of how long the Portfolio has held such options or 
contracts. 


	If a Portfolio purchases shares in certain foreign investment 
entities, referred to as "passive foreign investment companies," the 
Portfolio itself may be subject to U.S. federal income tax and an 
additional charge in the nature of interest on a portion of any 
"excess distribution" from such company or gain from the disposition 
of such shares, even if the distribution or gain is distributed by the 
Portfolio to its shareholders in a manner that satisfies the 
requirements described above.  If the Portfolio were able and elected 
to treat a passive foreign investment company as a "qualified electing 
fund," in lieu of the treatment described above, the Portfolio would 
be required each year to include in income, and distribute to 
shareholders in accordance with the distribution requirements 
described above, the Portfolio's pro rata share of the ordinary 
earnings and net capital gains of the company, whether or not actually 
received by the Portfolio. 

Distributions 

	If the net asset value of shares of a Portfolio is reduced below 
a shareholder's cost as a result of distribution by the Portfolio, 
such distribution will be taxable even though it represents a return 
of invested capital. 

Redemption of Shares 

	Any gain or loss realized on the redemption or exchange of 
Portfolio shares by a shareholder who is not a dealer in securities 
will be treated as long-term capital gain or loss if the shares have 
been held for more than one year, and otherwise as short-term capital 
gain or loss. 

	However, any loss realized by a shareholder upon the redemption 
or exchange of Portfolio shares held six months or less will be 
treated as long-term capital loss to the extent of any long-term 
capital gain distributions received by the shareholder with respect to 
such shares.  Additionally, any loss realized on a redemption or 
exchange of Portfolio shares will be disallowed to the extent the 
shares disposed of are replaced within a period of 61 days beginning 
30 days before and ending 30 days after such disposition, such as 
pursuant to reinvestment of dividends in Portfolio shares. 

IRA AND OTHER PROTOTYPE RETIREMENT PLANS

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

IRA, Rollover IRA and Simplified Employee Pension - IRA

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

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

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

	An employer who has established a Simplified Employee Pension - 
IRA ("SEP-IRA") on behalf of eligible employees may make a maximum 
annual contribution to each participant's account of 15% (up to 
$24,000) of each participant's compensation.  Compensation is capped 
at $160,000 for 1997.

Paired Defined Contribution Prototype

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

PERFORMANCE INFORMATION

	From time to time the Fund may advertise a Portfolio's total 
return, average annual total return and yield in advertisements. In 
addition, in other types of sales literature the Fund may include a 
Portfolio's current dividend return. These figures are based on 
historical earnings and are not intended to indicate future 
performance.  The total return shows what an investment in the 
Portfolio would have earned over a specified period of time (one, five 
or ten years) assuming the payment of the maximum sales load when the 
investment was first made, that all distributions and dividends by the 
Portfolio were invested on the reinvestment dates during the period 
less all recurring fees.  The average annual total return is derived 
from this total return, which provides the ending redeemable value.  
The Fund may also quote the Portfolio's total return for present 
shareholders that eliminates the sales charge on the initial 
investment.  The following chart reflects the financial performance of 
the Portfolios through the period ended October 31, 1997 for the one, 
and five year periods and since inception: 



Average Annual Total Returns
SEC Returns




5 Year

Since Inception
Name of Portfolio 
	Clas
s
1 Year
Annualiz
ed
Cumulati
ve
Annualiz
ed
Cumulati
ve
International Equity1
inception: 11-22-91	A
inception: 11-7-94 	B
inception:  1-4-93 	C
inception:  6-16-94 
	Y
inception: 11-7-94     
     Z

	3.85%
	3.42%
	7.43%
	9.68%
  9.69%

 10.55%
	--
	--
	--
  --

	65.08%



  --

	10.95%*
	2.60%
	10.83%
	5.45%
    
4.71%

	237.55%*
	7.97%
	64.21%
	19.64%
  14.73%
Global Government Bond
inception:  7-22-91	A
inception: 11-18-94 
	B
inception:  1-4-93 	C
inception:  2-19-93 
	Y 

	3.35%
	3.22%
	6.75%
	8.61%

	7.47%
	--
	--
	--

	43.34
	--
	--
	--

	8.16%
	8.76%
	8.35%
	8.62%

	63.69%
	28.15%
	47.27%
	47.45%
International Balanced
inception:  8-25-94	A
inception: 11-7-94 	B
inception:  8-25-94 
	C
inception:  2-7-96 	Y 

	(6.62)%
	(7.27)%
	(3.42)%
	(1.28)%

	--
	--
	--
	--

	--
	--
	--
	--

	4.41%
	4.58%
	5.29%
	3.88%

	14.74%
	14.31%
	17.84%
	6.82%
Pacific
inception:  2-7-94	A
inception: 11-7-94 	B
inception:  2-11-94 
	C

	(21.08)%
	(21.70)%
	(18.56)%

	--
	--
	--

	--
	--
	--

	(11.17)%
	(14.21)%
	(10.68)%

	(35.71)%
	(36.69)%
	(34.32)%
European
inception:  2-7-94	A
inception: 11-7-94 	B
inception:  2-14-94 
	C

	7.22%
	7.08%
	11.06%

	--
	--
	--

	--
	--
	--

	11.34%
	14.36%
	12.23%

	49.31%
	49.22%
	53.45%
Emerging Markets
inception:  5-12-95	A
inception:  5-12-95 
	B
inception:  5-12-95 
	C


	(2.12)%
	(2.82)%
	1.26%


	--
	--
	--

	--
	--
	--

	(0.58)%
	(0.51)%
	0.74%


	(1.43)%
	(1.25)%
	1.83%


	The International Equity Portfolio's performance record includes 
the performance of the Fenimore International Fund through November 
22, 1991.  The shareholders of the Fenimore International Fund 
approved a reorganization with the Portfolio at their October 31, 1991 
shareholder's meeting. As a result, all shares of the Fenimore 
International Fund were exchanged at the close of business on November 
22, 1991 for shares of the Portfolio.  Prior to November 22, 1991 the 
Portfolio had not made an offering of its shares.

* These numbers represent the financial performance for the ten-year 
period ended October 31, 1997.

	Note that, prior to November 7, 1994, (i) with respect to each 
Portfolio, Class C shares were designated as Class B shares; and (ii) 
with respect to Global Government Bond Portfolio, Class Y shares were 
designated as Class C shares.  Note further, that effective October 3, 
1994, with respect to the International Equity, International 
Balanced, European and Pacific Portfolios, Class C shares of each such 
Portfolio were reclassified as additional Class A shares. 

	The Global Government Bond Portfolio's yield is computed by 
dividing the net investment income per share earned during a specified 
thirty day period by the maximum offering price per share on the last 
day of such period and analyzing the result.  For purposes of the 
yield calculation, interest income is determined based on a yield to 
maturity percentage for each long-term debt obligation in the 
portfolio; income on short-term obligations is based on current 
payment rate. 

	The Fund calculates current dividend return for each Portfolio 
by dividing the dividends from investment income declared during the 
most recent twelve months by the net asset value or the maximum public 
offering price (including sales charge) on the last day of the period 
for which current dividend return is presented.  From time to time, 
the Fund may include the Portfolio's current dividend return in 
information furnished to present or prospective shareholders and in 
advertisements. 

	Each Portfolio's current dividend return may vary from time to 
time depending on market conditions, the composition of its investment 
portfolio and operating expenses.  These factors and possible 
differences in the methods used in calculating current dividend return 
should be considered when comparing the Portfolio's current dividend 
return to yields published for other investment companies and other 
investment vehicles.  Current dividend return should also be 
considered relative to changes in the value of the Portfolio's shares 
and to the risks associated with the Portfolio's investment objective 
and policies.  For example, in comparing current dividend returns with 
those offered by Certificates of Deposit ("CDs"), it should be noted 
that CDs are insured (up to $100,000) and offer a fixed rate of 
return. 

	Performance information may be useful in evaluating a Portfolio 
and for providing a basis for comparison with other financial 
alternatives.  Since the performance of the Portfolio changes in 
response to fluctuations in market conditions, interest rates and 
Portfolio expenses, no performance quotation should be considered a 
representation as to the Portfolio's performance for any future 
period. 

	A Portfolio may from time to time compare its investment results 
with the following: 

	(1) Various Salomon Smith Barney World Bond Indices and 
J.P. Morgan Global Bond Indices, which measure the total 
return performance of high-quality securities in major 
sectors of the worldwide bond markets. 

	(2) The Shearson Lehman Government/Corporate Bond Index, 
which is a comprehensive measure of all public obligations 
of the U.S. Treasury (excluding flower bonds and foreign 
targeted issues), all publicly issued debt of agencies of 
the U.S. Government (excluding mortgage-backed 
securities), and all public, fixed-rate, non-convertible 
investment grade domestic corporate debt rated at least 
Baa by Moody's Investors Service ("Moody's") or BBB by 
Standard and Poor's Ratings Group ("S&P"), or, in the case 
of nonrated bonds, BBB by Fitch Investors Service 
(excluding Collateralized Mortgage Obligations). 

	(3) Average of Savings Accounts, which is a measure of all 
kinds of savings deposits, including longer-term 
certificates (based on figures supplied by the U.S. League 
of Savings Institutions).  Savings accounts offer a 
guaranteed rate of return on principal, but no opportunity 
for capital growth.  During a portion of the period, the 
maximum rates paid on some savings deposits were fixed by 
law. 

	(4) The Consumer Price Index, which is a measure of the 
average change in prices over time in a fixed market 
basket of goods and services (e.g., food, clothing, 
shelter, fuels, transportation fares, charges for doctors' 
and dentists' services, prescription  medicines, and other 
goods and services that people buy for day-to-day living). 

	(5) Data and mutual fund rankings published or prepared by 
Lipper Analytical Services, Inc., which ranks mutual funds 
by overall performance, investment objectives and assets. 

	(6) Ibbottson Associates International Bond Index, which 
provides a detailed breakdown of local market and currency 
returns since 1960. 

	(7) Standard & Poor's 500 Index ("S&P 500") which is a 
widely recognized index composed of the capitalization-
weighted average of the price of 500 of the largest 
publicly traded stocks in the U.S. 

	(8) Salomon Smith Barney Broad Investment Grade Bond Index 
which is a widely used index composed of U.S. domestic 
government, corporate and mortgage-back fixed income 
securities. 

	(9) Dow Jones Industrial Average which is a price-weighted 
average of 30 actively traded stocks of highly reputable 
companies prepared by Dow Jones & Co.

	(10) Financial News Composite Index. 

	(11) Morgan Stanley Capital International World Indices, 
including, among others, the Morgan Stanley Capital 
International Europe, Australia, Far East Index ("EAFE 
Index").  The EAFE Index is an unmanaged index of more 
than 800 companies of Europe, Australia and the Far East. 

	(12) Data and comparative performance rankings published 
or prepared by CDA Investment Technologies, Inc. 

	(13) Data and comparative performance rankings published 
or prepared by Wiesenberger Investment Company Service. 

	Indices prepared by the research departments of such financial 
organizations as Salomon Smith Barney, Inc., Merrill Lynch, Bear 
Stearns & Co., Inc., Morgan Stanley, and Ibbottson Associates may be 
used, as well as information provided by the Federal Reserve Board.  
In addition, performance rankings and ratings reported periodically in 
national financial publications, including but not limited to Money 
Magazine, Forbes, Business Week, The Wall Street Journal and Barron's 
may also be used. 



DETERMINATION OF NET ASSET VALUE

	The net asset value of each Portfolio's shares will be 
determined on any day that the NYSE is open.  The NYSE is closed for 
the following holidays: New Year's Day, Martin Luther King Day, 
President's Day, Good Friday, Memorial Day, Independence Day, Labor 
Day, Thanksgiving Day and Christmas Day. 

REDEMPTION OF SHARES

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

INVESTMENT MANAGEMENT AGREEMENT AND OTHER SERVICES

Manager

	The Management Agreement for the Global Government Bond 
Portfolio provides for an annual fee calculated at the rate of 0.75% 
of the Portfolio's average daily net assets, paid monthly; each of the 
Management Agreements for the International Equity Portfolio, the 
Pacific Portfolio, the European Portfolio and the International 
Balanced Portfolio provides for an annual fee calculated at the rate 
of 0.85% of the Portfolio's average daily net assets, paid monthly; 
and the Management Agreement for the Emerging Markets Portfolio 
provides for an annual fee calculated at the rate of 1.00% of the 
Portfolio's average daily net assets, paid monthly. 

	For the fiscal years 1995, 1996 and 1997 the management fees for 
each Portfolio were as follows: 

Portfolio

1995
1996
1997
International Equity
	$8,452,273
	$10,047,384
$11,766,569
Global Government 
Bond
	901,693
	1,150,340
    
l,123,627
European
	202,500
	314,805
      
390,268
Pacific
	74,052
	82,839
        
79,628
International 
Balanced
	213,800
	274,278
      
471,084
Emerging Markets
	69,254
	227,869
      
380,979

For the year ended October 31, 1995, the manager waived $8,684, 
$74,052, $87,233 and $64,107 of management fees for European, Pacific, 
International Balanced and Emerging Markets Portfolios, respectively, 
and agreed to reimburse the Pacific Portfolio for expenses in the 
amount of $30,862. 

	Each Management Agreement further provides that all other 
expenses not specifically assumed by the Manager under the Management 
Agreement on behalf of the Portfolio are borne by the Fund.  Expenses 
payable by the Fund include, but are not limited to, all charges of 
custodians (including sums as custodian and sums for keeping books and 
for rendering other services to the Fund) and shareholder servicing 
agents, expenses of preparing, printing and distributing all 
prospectuses, proxy material, reports and notices to shareholders, all 
expenses of shareholders' and directors' meetings, filing fees and 
expenses relating to the registration and qualification of the Fund's 
shares and the Fund under Federal or state securities laws and 
maintaining such registrations and qualifications (including the 
printing of the Fund's registration statements), fees of auditors and 
legal counsel, costs of performing portfolio valuations, out-of-pocket 
expenses of directors and fees of directors who are not "interested 
persons" as defined in the Act, interest, taxes and governmental fees, 
fees and commissions of every kind, expenses of issue, repurchase or 
redemption of shares, insurance expense, association membership dues, 
all other costs incident to the Fund's existence and extraordinary 
expenses such as litigation and indemnification expenses.  Direct 
expenses are charged to each Portfolio; general corporate expenses are 
allocated on the basis of the relative net assets. Mutual Management 
Corp., the investment manager of the Fund, also acts as investment 
adviser to numerous other open-end investment companies. Smith Barney 
also advises profit-sharing and pension accounts.  Smith Barney and 
its affiliates may in the future act as investment advisers for other 
accounts. 

Distributor

	For the year ended October 31, 1997, the table below represents 
the fees which have been accrued and/or paid to Smith Barney under the 
Plans of Distribution pursuant to Rule 12b-1 for the Fund's 
Portfolios. The distribution expenses for 1997 included compensation 
of financial consultants and printing costs of prospectuses and 
marketing materials. 
	
	Pursuant to a Plan of Distribution adopted by the Fund on behalf 
of each Portfolio under Rule 12b-1 under the 1940 Act (the "Plan"), 
Smith Barney incurs the expenses of distributing the Fund's Class A, 
Class B and Class C shares.  See "Management of the Fund--Distributor" 
in the Prospectus. 


Portfolio

Class A
Class B
Class C
Total
International 
Equity
 
$1,282,917
	$2,375,547
	$2,261,441
	$5,919,905
Global Government 
Bond
	249,862
	169,569
	25,078
	444,509
European
	32,501
	302,094
	27,521
	362,116
Pacific
	9,943
	37,798
	16,217
	63,958
International 
Balanced
	34,903
	56,286
	42,281
	133,470
Emerging Markets
	37,470
	189,861
	41,594
	268,925

	During the fiscal years 1995, 1996 and 1997 aggregate sales 
commissions of $1,929,000,  $1,438,000, and $1,613,000, respectively, 
were paid to Smith Barney by the purchasers of Fund shares. A 
contingent deferred sales charge ("CDSC") may be imposed on certain 
redemptions of Class A, Class B shares and Class C shares. The amount 
of the CDSC will depend on the number of years since the shareholder 
made the purchase payment from which the amount is being redeemed. For 
Class B shares, for each of the Fund's Portfolios except the Global 
Government Bond Portfolio, the maximum CDSC is 5.00% of redemption 
proceeds, declining by 1.00% each year after the date of purchase to 
zero. For Class B shares of the Global Government Bond Portfolio the 
maximum CDSC is 4.50% of redemption proceeds, declining by 0.50% the 
first year after purchase and by 1.00% each year thereafter to zero. A 
CDSC of 1.00% is imposed on redemptions of Class A shares that were 
purchased without an initial sales charge but subject to a CDSC if 
such redemptions occur within 12 months from the date such investment 
was made.  Any sales charge imposed on redemptions is paid to the 
distributor of the Fund shares. 

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

Brokerage and Portfolio Transactions

	The Manager is responsible for allocating the Fund's brokerage. 
 Orders may be directed to any broker including, to the extent and in 
the manner permitted by applicable law, Smith Barney .  No Portfolio 
will deal with Smith Barney in any transaction in which Smith Barney 
acts as principal. 

	The Fund attempts to obtain the most favorable execution of each 
portfolio transaction in the International Equity Portfolio, the 
Pacific Portfolio, the European Portfolio, the International Balanced 
Portfolio and the Emerging Markets Portfolio, that is, the best 
combination  of net price and prompt reliable execution.  In the 
opinion of the Manager, however, it is not possible to determine in  
advance that any particular broker will actually be able to effect the 
most favorable execution because, in the context of a constantly 
changing market, order execution involves judgments as to price, 
commission rates, volume, the direction of the market and the 
likelihood of future change.  In making its decision as to which 
broker or brokers are most likely to provide the most favorable 
execution, the management of the Fund takes into account the relevant 
circumstances.  These include, in varying degrees, the size of the 
order, the importance of prompt execution, the breadth and trends of 
the market in the particular security, anticipated commission rates, 
the broker's familiarity with such security including its contacts 
with possible buyers and sellers and its level of activity in the 
security, the possibility of a block transaction and the general 
record of the broker for prompt, competent and reliable service in all 
aspects of order processing, execution and settlement. 

	Commissions are negotiated and take into account the difficulty 
involved in execution of a transaction, the time it took to conclude, 
the extent of the broker's commitment of its own capital, if any, and 
the price received.  Anticipated commission rates are an important 
consideration in all trades and are weighed along with the other 
relevant factors affecting order execution set forth above.  In 
allocating brokerage among those brokers who are believed to be 
capable of providing equally favorable execution, the Fund takes into 
consideration the fact that a particular broker may, in addition to 
execution capability, provide other services to the Fund such as 
research and statistical information.  It is not possible to place a 
dollar value on such services nor does their availability reduce the 
Manager's expenses in a determinable amount.  These various services 
may, however, be useful to the Manager or Smith Barney  in connection 
with its services rendered to other advisory clients and not all such 
services may be used in connection with the Fund. 

	The Board of Directors of the Fund has adopted certain policies 
and procedures incorporating the standard of Rule 17e-1 issued by the 
SEC under the 1940 Act which requires that the commissions paid to 
Smith Barney  must be "reasonable and fair compared to the commission 
fee or other remuneration received or to be received by other brokers 
in connection with comparable transactions involving similar 
securities during a comparable period of time." The Rule and the 
policy and procedures also contain review requirements and require the 
Manager to furnish reports to the Board of Directors and to maintain 
records in connection with such reviews. 

	In placing orders for the Global Government Bond Portfolio's 
transactions, the Manager seeks to obtain the best net results.  The 
Manager has no agreement or commitment to place orders with any 
broker-dealer.  Debt securities are generally traded on a "net" basis 
with a dealer acting as principal for its own account without stated 
commission, although the price of the security usually includes a 
profit to the dealer.  United States and foreign government securities 
and money market instruments are generally traded in the OTC markets. 
 In underwritten offerings, securities are usually purchased at a 
fixed price which includes an amount of compensation to the 
underwriter.  On occasion, securities may be purchased directly from 
an issuer, in which case no commissions or discounts are paid.  
Dealers may receive commissions on Futures, currency and options 
transactions purchased on behalf of the Portfolio.  Commissions or 
discounts in foreign securities exchanges or OTC markets typically are 
fixed and generally are higher than those in U.S. securities exchanges 
or OTC markets. 

	Shown below are the total brokerage fees paid by the Fund on 
behalf of the International Equity Portfolio, European Portfolio, 
Pacific Portfolio, International Balanced Portfolio and the Emerging 
Markets Portfolio during 1995, 1996 and 1997. Also shown is the 
portion paid to Smith Barney and the portion paid to other brokers for 
the execution of orders allocated in consideration of research and 
statistical services or solely for their ability to execute the order. 
 During fiscal year 1997, the total amount of commissionable 
transactions was $1,215,395,099 of which $14,300,215 (1%) was directed 
to Smith Barney and executed by unaffiliated brokers and 
$1,201,094,884 (99%) of which was directed to other brokers. 





Commissions

For Execution Only


 Total 
    To Smith Barney
  To Others
1995........
 .........
	$2,907,454
	$38,786*	(1.33%)
	$2,868,668	(98.67%)
1996........
 .........
	3,971,236
	31,857*	(.80%)
	3,939,379	(99.20%)
1997........
 .........
   
3,310,496
      52,098*     
(1.57%)
  3,258,398    (98.43%)

_________________
* Directed to Smith Barney and executed by unaffiliated brokers. 


CUSTODIAN

	Portfolio securities and cash owned by the Fund are held in the 
custody of The Chase Manhattan Bank, Chase Metrotech Center, Brooklyn, 
New York 11245.

INDEPENDENT AUDITORS

KPMG Peat Marwick LLP, 345 Park Avenue, New York, New York 10154, has 
been selected as the Fund's independent auditors to examine and report 
on the financial statements and financial highlights of the Fund for 
its fiscal year ending October 31, 1998. 

VOTING

As permitted by Maryland law, there will normally be no meetings of 
shareholders for the purpose of electing directors unless and until 
such time as less than a majority of the directors holding office have 
been elected by shareholders.  At that time, the directors then in 
office will call a shareholders' meeting for the election of 
directors.  The directors must call a meeting of shareholders for the 
purpose of voting upon the question of removal of any director when 
requested in writing to do so by the record holders of not less than 
10% of the outstanding shares of the Fund.  At such a meeting, a 
director may be removed after the holders of record of not less than a 
majority of the outstanding shares of the Fund have declared that the 
director be removed either by declaration in writing or by votes cast 
in person or by proxy.  The Fund will assist shareholders in calling 
such a meeting as required by the Act. Except as set forth above, the 
directors shall continue to hold office and may appoint successor 
directors. 

	As used in the Prospectus and this Statement of Additional 
Information, a "vote of a majority of the outstanding voting 
securities" means the affirmative vote of the lesser of (a) more than 
50% of the outstanding shares of the Fund (or the affected Portfolio 
or class) or (b) 67% or more of such shares present at a meeting if 
more than 50% of the outstanding shares of the Fund (or the affected 
Portfolio or class) are represented at the meeting in person or by 
proxy. 

	The following table contains a list of shareholders who of 
record or beneficially owned at least 5% of the outstanding shares of 
a particular class of shares of a Portfolio of the Fund as of 
February 6, 1998.


Global Government Bond Portfolio

Class A

Srs. of Providence Community
Support Trust - Intl Inv
Generalate - Finance Office
Owens Hall
St Mary of the W IN 47876-1096
owned 500,318,344(6.5778%) shares

Class C

Richard J. Horbal & Linda
Horbal TTEES FBO Richard J. Horbal 
MD PC EMP. Retirement 
Plan UAD 12/01/82
4196 Old Pine Trail 
Midland, MI 48642-8892
owned 39,524.368 (15.2563%) shares

Class Y

Smith Barney Concert Series, Inc.
Balanced Portfolio PNC Bank, NA
Attn:  Beverly Timson
200 Stevens Drive
Suite 440
Lester, PA 19113-1522
owned 1,747,519.597 (71.6142%) shares

Smith Barney Concert Series, Inc.
Conservative Portfolio PNC Bank, NA
Attn:  Beverly Timson
200 Stevens Drive
Suite 440
Lester, PA 19113-1522
owned 451,650.086 (18.5088%) shares

Smith Barney Concert Series, Inc
Select Balanced Portfolio PNC Bank 
Attn:  Beverly Timpson 
200 Steven Drive Suite 440
Lester, PA 19113-1522
owned 195,285.214 (8.0028) shares




International Balanced Portfolio 

Class C

NR Ernest H Lorch
200 East End Avenue
New York, NY 10128-7831
owned 14,569.774 (5.9117%) shares

Class Y

Smith Barney Concert Series, Inc.
Balanced Portfolio PNC Bank, NA
Attn:  Beverly Timson
200 Stevens Drive
Suite 440
Lester, PA 19113-1522
owned 3,033,105.860 (78.9382%) shares

Smith Barney Concert Series, Inc.
Conservative Portfolio PNC Bank, NA
Attn:  Beverly Timson 
200 Stevens Drive 
Suite 440
Lester, PA 19113-1522
owned 416,763.846 (10.8465%) shares

Smith Barney Concert Series, Inc.
Select Balanced Portfolio PNC Bank 
Attn:  Beverly Timson
200 Steven Drive 
Suite 440
Lester, PA 19113-1522
owned 351,002.485 (9.1350) shares

International Equity Portfolio 

Class Y

Smith Barney Concert Series, Inc.
High Growth Portfolio PNC Bank, NA
Attn:  Beverly Timson
200 Stevens Drive 
Suite 440
Lester, PA 19133-1522
owned 5,275,866.243 (31.8316) shares



Smith Barney Concert Series, Inc.
Growth Portfolio PNC Bank, NA
Attn:  Beverly Timson 
200 Stevens Drive 
Suite 440
Lester, PA 19113-1522
owned 3,398,089.846 (20.5021) shares

Wachovia Bank of North Carolina, NA
Successor Trustee U/A DRD 7-1-95
 For USAA Savings & Investment Plan
Attn:  Mutual Funds
301 North Main Street- MC: NC-31051
Winston-Salem, NC 27150
owned 2,380,027.838 (14.3597%) shares

Wachovia Bank of North Carolina, NA
USAA Retirement Trust
Smith Barney Internat'l Equity 
Attn:  Mutual Funds Mc: NC-31051
301 North Main Street
Winston-Salem, NC 27150
owned 2,061,044.665 (12.4351) shares

Class Z

Citibank N A TTEE
Travelers Group Master Trust
Smith Barney 401K Savings Plan
111 Wall Street - 20th Floor
Attn:  N. Kronenberg
New York, NY 10043
owned 6,170,398.219 (99.9928) shares

Pacific Portfolio

Class A

Phil D. Pitchford
87 Aspen Way
Rolling Hills EST CA 90274-3429
owned 38,472.812 (12.0999) shares




Clyde Pitchford TTEE
FBO The Miller Survivor's 
Trust U/A/D 9/8/75
595 Market Street Suite 1470
San Francisco, CA 94105-2821
owned 17,359.820 (5.4597) shares

Michael F. Konak 
Holanda 337, D-805
Santiago, Chile
owned 16,920.056 (5.3214) shares




FINANCIAL STATEMENTS

The following financial information is hereby incorporated by 
reference to the indicated pages of the Fund's 1997 Annual Report to 
Shareholders, copies of which are furnished with this Statement of 
Additional Information. 



Page(s) in 
Annual Report
(Global 
Government Bond, 
International 
Balanced and 
International 
Equity 
Portfolios)

Page(s) in
Annual Report 
(Emerging 
Markets, 
European and 
Pacific
Portfolios)



5,11,15
6,12,18


Average Annual Total Return	




Line Graph Showing Growth of 
   $10,000 Investment	

6,12,16

7,13,19


Statements of Assets and 
Liabilities	
31
32


Statements of Operations	
32
33


Statement of Changes in Net Assets	
33-34
34-35


Notes to Financial Statements	
35-43
36-41


Financial Highlights	
44-56
42-50


Independent Auditor's Report	
57
51




APPENDIX - RATINGS OF DEBT OBLIGATIONS


BOND (AND NOTE) RATINGS

Moody's Investors Service, Inc. ("Moody's")

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

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

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

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

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

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

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

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

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

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

Standard & Poor's Ratings Group ("Standard & Poors") 

	AAA - Debt rated "AAA" has the highest rating assigned by 
Standard & Poor's.  Capacity to pay interest and repay principal is 
extremely strong. 

	AA - Debt rated "AA" has a very strong capacity to pay interest 
and repay principal and differs from the highest rated issues only in 
small degree. 

	A - Debt rated "A" has a strong capacity to pay interest and 
repay principal although it is somewhat more susceptible to the 
adverse effects of changes in circumstances and economic conditions 
than debt in higher rated categories. 

	BBB - Debt rated "BBB" is regarded as having an adequate 
capacity to pay interest and repay principal.  Whereas it normally 
exhibits adequate protection parameters, adverse economic conditions 
or changing circumstances are more likely to lead to a weakened 
capacity to pay interest and repay principal for debt in this category 
than in higher rated categories. 

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

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

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

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

COMMERCIAL PAPER RATINGS

Moody's Investors Service, Inc. 

Issuers rated "Prime-1" (or related supporting institutions) have a 
superior capacity for repayment of short-term promissory obligations. 
 Prime-1 repayment capacity will normally be evidenced by the 
following characteristics: leading market positions in well-
established industries; high rates of return on funds employed; 
conservative capitalization structures with moderate reliance on debt 
and ample asset protection; broad margins in earnings coverage of 
fixed financial charges and high internal cash generation; well-
established access to a range of financial markets and assured sources 
of alternate liquidity. 

Issuers rated "Prime-2" (or related supporting institutions) have a 
strong capacity for repayment of short-term promissory obligations.  
This will normally be evidenced by many of the characteristics cited 
above but to a lesser degree.  Earnings trends and coverage ratios, 
while sound, will be more subject to variation.  Capitalization 
characteristics, while still appropriate, may be more affected by 
external conditions.  Ample alternate liquidity is maintained. 

Standard & Poor's Ratings Group

		A-1 - This designation indicates that the degree of safety 
regarding timely payment is either overwhelming or very strong.  Those 
issues determined to possess overwhelming safety characteristics will 
be denoted with a plus (+) sign designation.

     A-2 - Capacity for timely payment on issues with this designation 
is strong.  However, the relative degree of safety is not as high as 
for issues designated A-1.

1 Effective June 20, 1997, Mr. Chapman resigned from the Fund's Board of 
Directors.
2 Effective March 30, 1998, Mr. Cohen became a member of the Fund's Board 
of Directors.
3 Effective August 1, 1998, Mr. Sargent resigned from the Fund's Board 
of Directors.
4 Effective July 28, 1998, Mr. Shuart resigned from the Fund's Board of 
Directors.
 

 
 
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