N-Q

0000950123-07-004665.txt : 20070329 0000950123-07-004665.hdr.sgml : 20070329 20070329124721 ACCESSION NUMBER: 0000950123-07-004665 CONFORMED SUBMISSION TYPE: N-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20070131 FILED AS OF DATE: 20070329 DATE AS OF CHANGE: 20070329 EFFECTIVENESS DATE: 20070329 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LEGG MASON PARTNERS INVESTMENT FUNDS, INC. CENTRAL INDEX KEY: 0000355747 IRS NUMBER: 133089608 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-Q SEC ACT: 1940 Act SEC FILE NUMBER: 811-03275 FILM NUMBER: 07726651 BUSINESS ADDRESS: STREET 1: 125 BROAD STREET STREET 2: 10TH FLOOR, MF-2 CITY: NEW YORK STATE: NY ZIP: 10004 BUSINESS PHONE: 800-451-2010 MAIL ADDRESS: STREET 1: 125 BROAD STREET STREET 2: 10TH FLOOR, MF-2 CITY: NEW YORK STATE: NY ZIP: 10004 FORMER COMPANY: FORMER CONFORMED NAME: SMITH BARNEY INVESTMENT FUNDS INC DATE OF NAME CHANGE: 20060105 FORMER COMPANY: FORMER CONFORMED NAME: SMITH BARNEY INVESTMENT FUNDS INC /MD/ DATE OF NAME CHANGE: 20010308 FORMER COMPANY: FORMER CONFORMED NAME: SMITH BARNEY SHEARSON INVESTMENT FUNDS INC DATE OF NAME CHANGE: 19931015

0000355747 S000008866 Legg Mason Partners Multiple Discipline Funds - Large Cap Growth and Value Fund

C000024135 Class Y

C000024136 Class A spsax

C000024137 Class B spsbx

C000024138 Class C spslx

N-Q 1 y32200nvq.htm FORM N-Q N-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number 811-3275

Legg Mason Partners Investments Funds, Inc.

(Exact name of registrant as specified in charter)

125 Broad Street, New York, NY 10004
(Address of principal executive offices) (Zip code)

Robert I. Frenkel, Esq.
Legg Mason & Co., LLC
300 First Stamford Place
Stamford, CT 06902
(Name and address of agent for service)

Registrant’s telephone number, including area code: 1-800-451-2010

Date of fiscal year end: April 30,
Date of reporting period: January 31, 2007


ITEM 1.		SCHEDULE OF INVESTMENTS

LEGG MASON PARTNERS INVESTMENT FUNDS, INC.

LEGG MASON PARTNERS MULTIPLE DISCIPLINE FUNDS
LARGE CAP GROWTH AND VALUE

FORM N-Q
JANUARY 31, 2007

LEGG MASON PARTNERS MULTIPLE DISCIPLINE FUNDS LARGE CAP GROWTH AND VALUE



Schedule of Investments (unaudited)		January 31, 2007


Shares		Security(a)	Value

COMMON STOCKS — 29.2%
CONSUMER DISCRETIONARY — 9.2%
Internet & Catalog Retail — 3.4%
	49,000	Amazon.com Inc. *	$	1,845,830
	55,000	Expedia Inc. *		1,179,750
	29,000	IAC/InterActiveCorp. *		1,113,600

		Total Internet & Catalog Retail		4,139,180

Media — 3.0%
	170,300	Time Warner Inc.		3,724,461

Specialty Retail — 2.8%
	86,300	Home Depot Inc.		3,515,862

		TOTAL CONSUMER DISCRETIONARY		11,379,503

FINANCIALS — 7.1%
Consumer Finance — 1.3%
	21,000	Capital One Financial Corp.		1,688,400

Diversified Financial Services — 2.2%
	24,218	Bank of America Corp.		1,273,382
	27,700	JPMorgan Chase & Co.		1,410,761

		Total Diversified Financial Services		2,684,143

Insurance — 3.6%
	51,950	American International Group Inc.		3,555,978
	17,000	St. Paul Travelers Cos. Inc.		864,450

		Total Insurance		4,420,428

		TOTAL FINANCIALS		8,792,971

HEALTH CARE — 4.4%
Biotechnology — 2.5%
	44,200	Amgen Inc. *		3,110,354

Health Care Providers & Services — 1.9%
	20,500	UnitedHealth Group Inc.		1,071,330
	16,000	WellPoint Inc. *		1,254,080

		Total Health Care Providers & Services		2,325,410

		TOTAL HEALTH CARE		5,435,764

INFORMATION TECHNOLOGY — 7.0%
Computers & Peripherals — 2.4%
	74,600	Dell Inc. *		1,809,050
	11,490	International Business Machines Corp.		1,139,234

		Total Computers & Peripherals		2,948,284

Internet Software & Services — 2.1%
	92,500	Yahoo! Inc. *		2,618,675

Semiconductors & Semiconductor Equipment — 2.5%
	98,400	Texas Instruments Inc.		3,069,096

		TOTAL INFORMATION TECHNOLOGY		8,636,055

TELECOMMUNICATION SERVICES — 1.5%
Wireless Telecommunication Services — 1.5%
	103,480	Sprint Nextel Corp.		1,845,048

See Notes to Schedule of Investments.

Page 1

LEGG MASON PARTNERS MULTIPLE DISCIPLINE FUNDS LARGE CAP GROWTH AND VALUE



Schedule of Investments (unaudited) (continued)		January 31, 2007


Face
Amount		Security(a)	Value

		TOTAL INVESTMENTS BEFORE SHORT-TERM INVESTMENT (Cost — $38,519,872)	$	36,089,341

SHORT-TERM INVESTMENT — 2.7%
Repurchase Agreement — 2.7%
$	3,260,000	State Street Bank & Trust Co., dated 1/31/07, 4.770% due 2/1/07; Proceeds at maturity — $3,260,432; (Fully collateralized by U.S. Treasury Notes, 4.875% due 4/30/08; Market value — $3,327,950) (Cost — $3,260,000)		3,260,000

		TOTAL INVESTMENTS — 31.9% (Cost — $41,779,872#)		39,349,341
		Other Assets in Excess of Liabilities — 68.1%		84,092,378

		TOTAL NET ASSETS — 100.0%	$	123,441,719


*		Non-income producing security.

(a)		All securities are segregated as collateral pursuant to futures contracts.

#		Aggregate cost for federal income tax purposes is substantially the same.

See Notes to Schedule of Investments.

Page 2

Notes to Schedule of Investments (unaudited)

1. Organization and Significant Accounting Policies

Legg Mason Partners Multiple Discipline Funds Large Cap Growth and Value (the “Fund”) is a separate non-diversified series of the Legg Mason Partners Investment Funds, Inc. (the “Company”). The Company, a Maryland corporation, is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company.

The following are significant accounting policies consistently followed by the Fund and are in conformity with U.S. generally accepted accounting principles (“GAAP”).

(a) Investment Valuation. Equity securities for which market quotations are available are valued at the last sale price or official closing price on the primary market or exchange on which they trade. Debt securities are valued at the mean between the bid and asked prices provided by an independent pricing service that are based on transactions in debt obligations, quotations from bond dealers, market transactions in comparable securities and various other relationships between securities. When prices are not readily available, or are determined not to reflect fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded, but before the Fund calculates its net asset value, the Fund may value these investments at fair value as determined in accordance with the procedures approved by the Fund’s Board of Directors. Short-term obligations with maturities of 60 days or less are valued at amortized cost, which approximates market value.

(b) Repurchase Agreements. When entering into repurchase agreements, it is the Fund’s policy that its custodian or a third party custodian take possession of the underlying collateral securities, the market value of which at least equals the principal amount of the repurchase transaction, including accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market to ensure the adequacy of the collateral. If the seller defaults, and the market value of the collateral declines or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by the Fund may be delayed or limited.

(c) Financial Futures Contracts. The Fund may enter into financial futures contracts typically to hedge a portion of the portfolio. Upon entering into a financial futures contract, the Fund is required to deposit cash or securities as initial margin. Additional securities are also segregated up to the current market value of the financial futures contracts. Subsequent payments, known as variation margin, are made or received by the Fund each day, depending on the daily fluctuation in the value of the underlying financial instruments. The Fund recognizes an unrealized gain or loss equal to the daily variation margin. When the financial futures contracts are closed, a realized gain or loss is recognized equal to the difference between the proceeds from (or cost of) the closing transactions and the Fund’s basis in the contracts.

The risks associated with entering into financial futures contracts include the possibility that a change in the value of the contract may not correlate with the changes in the value of the underlying instruments. In addition, investing in financial futures contracts involves the risk that the Fund could lose more than the original margin deposit and subsequent payments required for a futures transaction. Risks may also arise upon entering into these contracts from the potential inability of the counterparties to meet the terms of their contracts.

(d) Security Transactions. Security transactions are accounted for on a trade date basis.

2. Investments

At January 31, 2007, the aggregate gross unrealized appreciation and depreciation of investments for federal income tax purposes were substantially as follows:



Gross unrealized appreciation	$	2,349,989
Gross unrealized depreciation		(4,780,520	)

Net unrealized depreciation	$	(2,430,531	)

At January 31, 2007, the Fund had the following open futures contracts:


	Number of		Expiration		Basis		Market		Unrealized
	Contracts		Date		Value		Value		Gain

Contracts to Buy:
S&P Mini 500 Index		384		3/07	$	27,475,424	$	27,705,600	$	230,176
S&P Mini 500 Index		599		3/07		42,858,800		43,217,850		359,050

Net Unrealized Gain on Open Futures Contracts									$	589,226


ITEM 2.		CONTROLS AND PROCEDURES.

	(a)		The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a- 3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the disclosure controls and procedures required by Rule 30a-3(b) under the 1940 Act and 15d-15(b) under the Securities Exchange Act of 1934.

	(b)		There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant’s last fiscal quarter that have materially affected, or are likely to materially affect the registrant’s internal control over financial reporting.


ITEM 3.		EXHIBITS.

Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are attached hereto.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Legg Mason Partners Investment Funds, Inc.

By		/s/ R. Jay Gerken

R. Jay Gerken
Chief Executive Officer

Date: March 29, 2007

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


By		/s/ R. Jay Gerken

R. Jay Gerken
Chief Executive Officer

Date: March 29, 2007

By		/s/ Kaprel Ozsolak

Kaprel Ozsolak
Chief Financial Officer

Date: March 29, 2007

EX-99.CERT 2 y32200exv99wcert.htm EX-99.CERT: CERTIFICATION EX-99.CERT

CERTIFICATIONS

I, R. Jay Gerken, certify that:

1.		I have reviewed this report on Form N-Q of Legg Mason Partners Investment Funds, Inc. — Legg Mason Partners Multiple Discipline Funds Large Cap Growth and Value;

2.		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.		Based on my knowledge, the schedule of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed;

4.		The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

	a)		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)		Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)		Evaluated the effectiveness of the registrant’s disclosure controls and procedures and

			presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

	d)		Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

	a)		All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

	b)		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: March 29, 2007		/s/ R. Jay Gerken

		R. Jay Gerken Chief Executive Officer

I, Kaprel Ozsolak, certify that:

1.		I have reviewed this report on Form N-Q of Legg Mason Partners Investment Funds, Inc. — Legg Mason Partners Multiple Discipline Funds Large Cap Growth and Value;

2.		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.		Based on my knowledge, the schedule of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed;

4.		The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

	a)		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)		Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)		Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

	d)		Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

	a)		All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

	b)		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: March 29, 2007		/s/ Kaprel Ozsolak

		Kaprel Ozsolak
		Chief Financial Officer