<PAGE> 1
Stein Roe Mutual Funds
Semiannual Report
March 31, 1997
Stein Roe Advisor International Fund
<PAGE> 2
SR&F International Portfolio
- --------------------------------------------------------------------
Investments as of March 31, 1997
(Dollar Amounts in Thousands)
(Unaudited)
NUMBER MARKET
STOCKS (98.3%) OF SHARES VALUE
ARGENTINA (2.5%)
Telecom Argentina ADRs ........................ 32,600 $ 1,500
YPF Sociedad Anonima ADRs . ................... 76,000 2,014
-----------
3,514
AUSTRALIA (1.3%)
Reinsurance Australia Corp. ................... 559,000 1,879
BELGIUM (1.6%)
Generale de Banque ............................ 5,720 2,239
BRAZIL (2.1%)
Coteminas Pfd. ................................ 200,000 882
*Globex Utilidades S.A. Pfd. .................. 71,000 1,373
Perdigao S.A. Comercio e Industria Pfd. ....364,700,000 757
-----------
3,012
CHINA (0.7%)
Yizheng Chemical Fibre ..................... 4,502,000 964
FINLAND (5.2%)
Enso Gutzeit (Ordinary R Shares) ........... 240,000 2,065
Kemira Oy ................................. 128,000 1,385
Metsa-Serla Oy (B Shares) .................. 303,000 2,202
Neste Oy ................................... 60,600 1,578
-----------
7,230
FRANCE (6.1%)
Alcatel Alsthom ............................ 17,786 2,143
Generale Des Eaux .......................... 17,673 2,402
*Moulinex .................................. 77,400 1,774
Total Petroles Class B ..................... 24,616 2,129
-----------
8,448
GERMANY (6.1%)
Agiv AG .................................... 78,000 1,426
Friedrick Grohe ............................ 6,300 2,009
Henkel KGAA Ordinary Shares ........ 6,500 337
Preferred Shares ................... 42,100 2,317
Mannesmann AG ........................ 6,100 2,331
-----------
8,420
See accompanying notes to financial statements.
<PAGE> 3
SR&F International Portfolio continued
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NUMBER MARKET
OF SHARES VALUE
HONG KONG (3.4%)
Companion Building .................... 7,227,680 597
Hong Kong Ferry ....................... 530,000 947
International Bank of Asia ............ 1,400,000 858
Jardine Matheson Holdings ............. 163,853 950
Tian An China Investment
Ordinary Shares ........................ 5,072,000 530
Warrants ............................... 1,014,400 35
Vitasoy ................................... 999,364 351
World Houseware Holdings .................. 6,293,680 520
-----------
4,788
INDIA (1.0%)
Indian Petrochem GDRs ..................... 92,000 $ 1,035
**Reliance Industries GDSs ................ 29,000 442
---------
1,477
INDONESIA (3.5%)
CP Indonesia .............................. 415,000 467
Ever Shine Tex ............................ 2,019,688 757
Kawasan Industri Jababeka ................. 1,133,333 1,546
Matahari Putra Prima ...................... 1,438,000 2,096
---------
4,866
ISRAEL (0.5%)
Koor Industries ........................... 39,500 711
ITALY (4.8%)
Banca Popolare di Milano .................. 375,800 2,106
*Olivetti ................................. 4,338,000 1,560
Telecom Italia Savings Shares ............. 1,466,000 3,124
---------
6,790
See accompanying notes to financial statements.
<PAGE> 3
SR&F International Portfolio continued
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NUMBER MARKET
OF SHARES VALUE
JAPAN (18.2%)
Canon Inc. ................................ 86,000 1,841
DDI ....................................... 249 1,571
Hitachi ................................... 212,000 1,884
Ito Yokado ................................ 50,000 2,221
*Japan OTC Fund ........................... 840 441
Jusco Co. ................................. 73,000 2,005
Kaneshita Construction .................... 73,000 528
Kokusai Securities ........................ 123,000 964
Matsushita Electric Industrial ............ 138,000 2,151
Mori Seiki ................................ 119,000 1,634
Murata Manufacturing ...................... 50,000 1,793
Promise Co. .............................. 54,000 2,259
Suzuki Motor .............................. 201,000 1,948
Tokyo Style ............................... 105,000 1,162
*World Equity Benchmark Shares ............ 134,000 1,541
Yamazen Corporation ...................... 521,000 1,629
---------
25,572
MALAYSIA (0.5%)
IOI Properties ............................. 230,000 761
MEXICO (0.7%)
Transportation Maritima Mexicana ADRs ........ 176,000 968
NETHERLANDS (3.4%)
Fortis AMEV ................................ 64,057 2,496
KPN ........................................ 43,306 1,605
Sphinx Kon CVA ............................. 56,427 614
---------
4,715
NEW ZEALAND (1.2%)
Brierley Investments ....................... 1,824,883 1,702
NORWAY (4.2%)
Helikopter Service ......................... 129,000 $ 1,897
Norsk Hydro AS ............................. 42,800 2,141
Saga Petroleum A Free ...................... 109,500 1,892
---------
5,930
PANAMA (1.6%)
Bladex ADRs ................................ 46,200 2,183
PERU (0.5%)
Southern Peru Copper ADRs .................. 43,000 731
See accompanying notes to financial statements.
<PAGE> 5
SR&F International Portfolio continued
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NUMBER MARKET
OF SHARES VALUE
PHILIPPINES (1.1%)
Metro Pacific .............................. 5,100,000 1,548
PORTUGAL (1.1%)
Portugal Telecom ADRs ...................... 42,157 1,549
RUSSIA (1.3%)
*Fleming Russia Securities Fund ............ 104,100 1,783
SOUTH KOREA (5.0%)
Korea Exchange Bank ........................ 186,295 1,175
LG Electronics ............................. 58,000 674
LG Securities .............................. 81,000 636
Samchully .................................. 19,983 1,430
Samsung Electronics
GDRs .................................... 15,000 307
Ordinary Shares ......................... 896 72
Preferred Shares ........................ 25,774 1,032
**Yukong GDRs .............................. 92,500 1,653
---------
6,979
SPAIN (1.3%)
Acerinox SA ................................ 12,600 1,773
SWEDEN (5.3%)
Avesta-Sheffield .......................... 221,000 2,391
*Biora ..................................... 32,200 644
SSAB Svenskt Stal AB (B shares) ............ 152,800 2,789
*Diligentia AB ............................. 138,500 1,609
---------
7,433
SWITZERLAND (2.7%)
*Bucher AG ................................ 774 661
Danzas Holding AG .......................... 1,020 999
Novartis AG ................................ 1,700 2,108
---------
3,768
THAILAND (2.2%)
Precious Shipping .......................... 347,100 935
Property Perfect ........................... 690,000 797
*Siam Commercial Bank ...................... 200,000 1,170
Sino Thai Engineering & Construction ....... 151,200 162
---------
3,064
See accompanying notes to financial statements.
<PAGE> 6
SR&F International Portfolio continued
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NUMBER MARKET
OF SHARES VALUE
UNITED KINGDOM (9.2%)
British Gas Plc.............................. 699,000 $ 1,865
*Celsis International Plc.................... 487,905 837
*Centrica International Plc.................. 699,000 729
Inchcape Plc................................. 611,000 2,629
Intrum Justita Plc........................... 305,000 621
Powerscreen International Plc................ 136,200 1,374
SmithKline Beecham Plc Class A............... 131,164 1,945
*Tele-Communications International Plc....... 138,000 1,777
Transtec Plc................................. 595,054 1,158
--------
12,935
--------
Total Stocks (Cost $131,277)................. 137,732
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PRINCIPAL
SHORT-TERM OBLIGATIONS (1.0%) AMOUNT
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UNITED STATES
COMMERCIAL PAPER (1.0%)
UBS Finance 6.750% 4/01/97
(Amortized cost $1,435)................... 1,435 1,435
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TOTAL INVESTMENTS (99.3%)
(Cost Basis $139,163) ...................... 139,167
OTHER ASSETS, LESS LIABILITIES (0.7%)........ 1,000
--------
TOTAL NET ASSETS (100.0%).................... $140,167
========
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* Non-income producing.
** These securities are subject to contractual or legal restrictions on
their resale. At March 31, 1997, the aggregate value of these
securities represented 1.5 percent of net assets.
See accompanying notes to financial statements.
<PAGE> 7
Stein Roe Advisor International Fund
Balance Sheet
March 31, 1997
(All amounts in thousands, except per-share amount)
(Unaudited)
Assets
Investment in SR&F International Portfolio, at value $ 99
Cash and other assets 24
------
Total Assets $ 12
======
Liabilities
Other liabilities $ 23
------
Total Liabilities 23
------
Capital
Paid-in capital 100
Accumulated undistributed realized losses on
foreign currency transactions (2)
Net unrealized appreciation of investments 2
------
Total Capital (Net Assets) 100
------
Total Liabilities and Capital $ 123
======
Shares Outstanding (Unlimited Number Authorized) 10
======
Net Asset Value (Capital) Per Share $ 9.97
======
See accompanying notes to financial statements.
<PAGE> 8
Stein Roe Advisor International Fund
Statement of Operations
For the Period Ended March 31, 1997 (a)
(All amounts in thousands)
(Unaudited)
Expenses
Amortization of organization expenses $ 4
Accounting fees 3
Other 1
-------
10
Reimbursement of expenses by investment adviser (8)
--------
Total Expenses 2
--------
Net Investment Loss (2)
--------
Unrealized Gains on Investments
Net realized losses on foreign currency transactions
allocated from SR&F International Portfolio (2)
Net change in unrealized appreciation or depreciation
of investments 2
--------
Net Gains on Investments --
--------
Net Increase in Net Assets Resulting
from Operations $ --
========
(a) The Fund commenced operations on February 14, 1997
See accompanying notes to financial statements.
<PAGE> 9
Stein Roe Advisor International Fund
Statement of Changes in Net Assets
For the Period Ended March 31, 1997 (a)
(All amounts in thousands)
(Unaudited)
Operations
Net investment income $ --
Net realized losses on foreign currency transactions (2)
Net change in unrealized appreciation
or depreciation of investments 2
-------
Net Increase in Net Assets Resulting from Operations --
-------
Share Transactions
Subscriptions to fund shares 100
-------
Net Increase from Share Transactions 100
-------
Net Increase in Net Assets 100
Total Net Assets
Beginning of Period --
-------
End of Period $ 100
=======
Analysis of Changes in Shares of Beneficial Interest
Subscriptions to fund shares 10
-------
Net increase in fund shares 10
Shares outstanding at beginning of period --
-------
Shares outstanding at end of period 10
=======
(a) The Fund commenced operations on February 14, 1997.
See accompanying notes to financial statements.
<PAGE> 10
SR&F International Portfolio
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Balance Sheet
(All Amounts in Thousands)
(Unaudited)
MARCH 31,
1997
--------
ASSETS
Investments, at market value ............................... $139,164
Cash ....................................................... 848
Dividends receivable ....................................... 279
--------
Total Assets ............................................ 140,291
========
LIABILITIES
Payable to investment adviser .............................. $ 101
Other liabilities .......................................... 27
--------
Total Liabilities ....................................... 128
--------
Net Assets Applicable to Investors' Beneficial Interests.... $140,163
========
See accompanying notes to financial statements.
<PAGE> 11
SR&F International Portfolio
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Statement of Operations
(All Amounts in Thousands)
(Unaudited)
PERIOD
ENDED
MARCH 31,
1997(a)
----------
INVESTMENT INCOME
Dividends ............................................... $ 541
Interest Income ......................................... 46
-------
587
Foreign taxes withheld .................................. (62)
-------
Total Investment Income .............................. 525
EXPENSES
Management fees ......................................... 187
Accounting fees ......................................... 5
Audit and legal fees .................................... 4
-------
Total Expenses ....................................... 196
-------
Net Investment Income ................................... 329
-------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS
Net realized gains on investments ....................... 2,060
Net realized losses on foreign currency transactions .... (36)
Net change in unrealized appreciation or depreciation of
investments and foreign currency transactions ........ 6,450
-------
Net Gains on Investments and
Foreign Currency Transactions ....................... 8,474
-------
Net Increase in Net Assets Resulting from Operations .... $ 8,803
======
(a) The Portfolio commenced operations on February 3, 1997.
See accompanying notes to financial statements.
<PAGE> 12
SR&F International Portfolio
- -----------------------------------------------------------------------
Statement of Changes in Net Assets
(All Amounts in Thousands)
(Unaudited)
PERIOD
ENDED
MARCH 31,
1997(a)
----------
OPERATIONS
Net investment income........................................ $ 329
Net realized gains on investments and foreign
currency transactions..................................... 2,024
Net change in unrealized appreciation or depreciation of
investments.............................................. 6,450
----------
Net Increase in Net Assets Resulting from Operations...... 8,803
----------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTERESTS
Contributions............................................. 139,079
Withdrawals............................................... (7,719)
----------
Net Increase from Transactions in Investors' Beneficial
Interests............................................. 131,360
----------
Net Increase in Net Assets........................... 140,163
TOTAL NET ASSETS
Beginning of Period..................................... --
----------
End of Period............................................ $140,163
==========
(a) The Portfolio commenced operations on February 3, 1997.
See accompanying notes to financial statements.
<PAGE> 13
Notes to Financial Statements
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Note 1. Organization of the SR&F International Portfolio
The SR&F International Portfolio (the "Portfolio") is a separate series
of the SR&F Base Trust, a Massachusetts common law trust organized under
an Agreement and Declaration of Trust dated August 23, 1993. The
Declaration of Trust permits the Trustees to issue non-transferable
interests in the Portfolio. The Portfolio commenced operations on
February 3, 1997. At commencement, the Stein Roe International Fund
contributed $143,615 in securities and other assets. On February 14, 1997
Stein Roe Advisor International Fund contributed cash of $100.
The Portfolio allocates net asset value, income and expenses based on
respective percentage ownership of each investor on a daily basis. At
March 31, 1997, Stein Roe International Fund and Stein Roe Advisor
International Fund owned 99.93 percent and .07 percent, respectively.
Note 2. Significant Accounting Policies
The following are the significant accounting policies of Stein Roe
Advisor International Fund (the "Fund"), a series of the Stein Roe
Investment Trust (a Massachusetts business trust) and the SR&F
International Portfolio (the "Portfolio"), a series of the SR&F Base
Trust (a Massachusetts common law trust). These policies are in
conformity with generally accepted accounting principles. The preparation
of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements
and the reported amounts of increases and decreases in net assets from
operations during the reporting period. Actual results could differ from
those estimates.
Security Valuations
All securities are valued as of March 31, 1997. Securities are valued,
depending on the security involved, at the last reported sales price,
last bid or asked price, or the mean between last bid and asked price as
of the close of the appropriate exchange or other designated time. A
security which is listed or traded on more than one exchange is valued at
the quotation on the exchange determined to be the primary exchange for
such security. Other assets and securities of the Portfolio are valued by
a method that the Board of Trustees believes represents a fair value.
<PAGE> 14
Notes (continued)
Currency Translations
For purposes of valuation, assets and liabilities are translated into
U.S. dollars using currency exchange rates that represent the mid-point
between the bid and asked rates as of 4:00 p.m., London time. Purchases
and sales or securities are translated into U.S. dollars using the
prevailing exchange on the dates of such transactions. The effect of
changes in foreign exchange rates on realized and unrealized security
gains and losses is reflected as a component of such gains and losses.
Forward Currency
Exchange ContractsThe Portfolio may enter into forward currency exchange
contracts under which the Portfolio is obligated to exchange currencies
at specified future dates. Risks arise from the possible inability of
counterparties to meet the terms of their contracts and from movements in
currency values. The Portfolio did not have any open contracts at March
31, 1997.
Federal Income Taxes
No provision is made for federal income taxes since the Fund elects to be
taxed as a "regulated investment company" and make such distributions to
its shareholders as to be relieved of all federal income taxes under
provisions of current federal tax law.
The Fund intends to utilize provisions of the federal income tax laws,
which allow them to carry a realized capital loss forward up to eight
years following the year of the loss, and offset such losses against any
future realized gains.
Distributions to Shareholders
Dividends from net investment income and capital gains, if any, are
distributed annually. Distributions in excess of tax basis earnings are
reported in the financial statements as a return of capital. Differences
in the recognition or classification of income between the financial
statements and tax earnings that result in temporary overdistributions
are classified as distributions in excess of net investment income or net
realized gains, and any permanent differences are reclassified to paid-in
capital.
Other Information
The books and records of the Fund and Portfolio are maintained in U.S.
dollars. Dividend income is recognized on the ex-dividend date and
interest income is recognized on an accrual basis.
Realized gains or losses from sales of securities are determined on the
specific identified cost basis.
All amounts, except per-share amounts, are shown in thousands.
<PAGE> 15
Notes (continued)
Note 3. Trustees' Fees and Transactions with Affiliates
The Fund and Portfolio pay monthly management and administrative fees,
computed and accrued daily, to Stein Roe & Farnham Incorporated (the
"Adviser"), an indirect, majority-owned subsidiary of Liberty Mutual
Insurance Company, for its services as investment adviser and manager.
The management fee for the Portfolio is computed at an annual rate of .85
percent of average daily net assets. The administrative fee for the Fund
is computed at an annual rate of .15 percent of average daily net assets.
The administrative agreement for the Fund provides that the Adviser will
reimburse the Fund to the extent that annual expenses, excluding certain
expenses, exceed the applicable limits prescribed by any state in which
the Fund's shares are offered for sale. In addition, the Adviser has
agreed to reimburse the Fund to the extent that expenses exceed 1.75
percent of average daily net assets. This expense limitation expires on
January 31, 1998, subject to earlier termination by the Adviser on 30
days' notice.
The transfer agent fees are paid to SteinRoe Services Inc. (SSI), an
indirect, majority-owned subsidiary of Liberty Mutual Insurance Company.
SSI has entered into an agreement with Colonial Investors Service Center,
Inc., an indirect, majority-owned subsidiary of Liberty Mutual Insurance
Company, to act as sub-transfer agent for the Fund.
The Adviser also provides certain fund accounting services. For the
period ended March 31, 1997, the Fund and Portfolio incurred charges of
$3, and $2, respectively.
Certain officers and trustees of the Trusts are also officers of the
Adviser. The compensation of trustees not affiliated with the Adviser for
the Portfolio for the period ended March 31, 1997, was $3. No
remuneration was paid to any other trustee or officer of the Trusts.
The Board of Trustees of each Trust has adopted procedures permitting
securities transactions among the Funds and Portfolios, clients of Stein
Roe and other affiliated entities. The aggregate cost of purchases and
proceeds from sales from such securities transactions for the Portfolio
for the period ended March 31, 1997 were $1,109 and $800, respectively.
Note 4. Short-Term Debt
To facilitate portfolio liquidity, the Fund and Portfolio maintain
borrowing arrangements under which they can borrow against portfolio
securities. Neither the Fund nor the Portfolio had borrowings during the
period ended March 31, 1997.
Note 5. Investment Transactions
The aggregate cost of purchases and proceeds from sales for the Portfolio
(other than short-term obligations) for the period ended March 31, 1997,
were $10,272 and $7,334, respectively.
At March 31, 1997, the cost of investments for federal income tax
purposes and for financial reporting were the same. Unrealized
appreciation and depreciation on a tax basis were $21,737 and $15,286,
respectively.
<PAGE> 16
Notes (continued)
Note 6. Distribution and Service Plans
The Fund and its shareholders have adopted a distribution plan pursuant
to Rule 12b-1 under the Investment Company Act of 1940 and a service plan
(collectively the "Plans"). The Plans govern payments for the
distribution of the Fund's shares, ongoing shareholder services and
maintenance of shareholder accounts.
Annual fees under the Plans of up to .25 percent are computed annually as
a percentage of average daily net assets.
<PAGE> 17
Stein Roe Advisor International Fund
Financial Highlights
Selected per-share data (for a share outstanding throughout the
period), ratios and supplemental data.
Period
Ended
March 31,
1997 (a)
---------
Net Asset Value, Beginning of Period $10.00
---------
Income From Investment Operations
Net investment income 0.01
Net realized and unrealized losses on investments (0.04)
---------
Total from investment operations (0.03)
---------
Net Asset Value, End of Period $9.97
=========
Ratio of net expenses to average net assets (b) 1.77%*
Ratio of net investment income to average net assets (c) 0.82%*
Total return -0.30%
Net assets, end of period $ 100
* Annualized
(a) The Fund commenced operations on February 14, 1997.
(b) If the Fund had paid all of its expenses and there had been no
reimbursement of expenses by the investment adviser, this ratio
would have been 65.57 percent for the period ended March 31, 1997.
(c) Computed giving effect to the investment adviser's expense limitation
undertaking.
<PAGE> 18
Financial Highlights
- -----------------------------------------------------------------------
SR&F International Portfolio
(Unaudited)
PERIOD
ENDED
MARCH 31,
1997 (a)
---------
RATIOS TO AVERAGE NET ASSETS
Ratio of net investment income to average net assets............ 1.50%*
Ratio of net expenses to average net assets..................... 0.89%*
Portfolio turnover rate......................................... 5%
Average commissions (per share)................................ $0.0129
*Annualized
(a) The Portfolio commenced operations on February 3, 1997.
<PAGE> 19
Trustees
Timothy K. Armour
President, Mutual Fund Division and Director, Stein Roe & Farnham
Incorporated
Kenneth L. Block
Chairman Emeritus, A.T. Kearney, Inc.
William W. Boyd
Chairman and Director, Sterling Plumbing Group Inc.
Lindsay Cook
Senior Vice President, Liberty Financial Companies, Inc.
Douglas A. Hacker
Senior Vice President and Chief Financial Officer, United Airlines
Janet Langford Kelly
Senior Vice President, Secretary and General Counsel, Sara Lee Corporation
Francis W. Morley
Chairman, Employer Plan Administrators and Consultants Co.
Charles R. Nelson
Van Voorhis Professor of Political Economy, University of Washington
Thomas C. Theobald
Managing Director, William Blair Capital Partners
Officers
Timothy K. Armour, President
Jilaine H. Bauer, Executive Vice President, Secretary
Hans P. Ziegler, Executive Vice President
Gary A. Anetsberger, Senior Vice President, Chief Financial Officer
Bruno Bertocci, Vice President
David P. Brady, Vice President
Thomas W. Butch, Vice President
Daniel K. Cantor, Vice President
Philip J. Crosley, Vice President
E. Bruce Dunn, Vice President
Erik P. Gustafson, Vice President
David P. Harris, Vice President
Harvey B. Hirschhorn, Vice President
Eric S. Maddix, Vice President
Lynn C. Maddox, Vice President
Anne E. Marcel, Vice President
Arthur J. McQueen, Vice President
Nicolette D. Parrish, Vice President, Assistant Secretary
Cynthia A. Prah, Vice President
Richard B. Peterson, Vice President
Gloria J. Santella, Vice President
Thomas P. Sorbo, Vice President
Heidi J. Walter, Vice President
Stacy H. Winick, Vice President
Sharon R. Robertson, Controller
Judith E. Perrie, Treasurer
Margaret O. Zwick, Assistant Treasurer
Janet B. Rysz, Assistant Secretary
Agents and Advisers
Stein Roe & Farnham Incorporated
Investment Adviser
State Street Bank and Trust Company
Custodian
SteinRoe Services Inc.
Transfer Agent
Bell, Boyd & Lloyd
Legal Counsel to the Trust
Arthur Andersen LLP
Independent Public Accountants
