Stein Roe Advisor Funds
Semiannual Report
March 31, 1998
Photo of: small plant
Stein Roe Advisor Funds
Growth and Income Funds
Stein Roe Advisor Balanced Fund
Stein Roe Advisor Growth & Income Fund
Stein Roe Mutual Funds
Sensible Risks. Intelligent Investments. (sm)
<PAGE>
Contents
Performance.............................................................. 1
How the Stein Roe Advisor growth and
income funds have done over time
Q&A
Interviews with the portfolio managers and
a summaries of investment activity
Stein Roe Advisor Balanced Fund.......................................... 2
Stein Roe Advisor Growth & Income Fund................................... 4
Investments.............................................................. 6
A complete list of investments with market values
Financial Statements..................................................... 14
Balance sheets, statements of operations and changes in net assets
Notes to Financial Statements............................................ 20
Financial Highlights..................................................... 23
Selected per-share data
General Information...................................................... 27
Must be accompanied or preceded by a prospectus.
<PAGE>
Fund Performance
There are several ways to evaluate a fund's historical performance. You can look
at the total percentage change in value, the average annual percentage change or
the growth of a hypothetical $10,000 investment. Each performance figure
includes changes in a fund's share price, plus reinvestment of any dividends
(net investment income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value).
<TABLE>
<CAPTION>
Average Annual Total Returns
Periods ended March 31, 1998
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Past 1 Past 3 Past 5 Past 10
Year Years Years Years
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Stein Roe Advisor Balanced Fund 24.06% 18.93% 12.52% 12.45%
Stein Roe Advisor Growth & Income Fund 38.71 28.52 19.19 17.38
S&P 500 47.96 32.79 22.38 18.92
</TABLE>
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Investment Comparison
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Comparison of change in value of a $10,000 investment.
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LINE CHART:
Advisor Balanced S&P 500 Advisor Growth & Income
9/30/87 10000 10000 10000
9/30/88 9388 8761 8588
9/30/89 11309 11648 11191
9/30/90 10507 10571 10577
9/30/91 13590 13858 13095
9/30/92 15066 15389 14892
9/30/93 17217 17384 17525
9/30/94 17235 18024 18186
9/30/95 19685 23378 21972
9/30/96 22546 28129 26885
9/30/97 27785 39500 35098
3/31/98 29562 46298 40157
Past performance is no guarantee of future results. Share price and
investment return will vary, so you may have a gain or loss when you sell
shares. These graphs compare the performance of the Stein Roe funds to the S&P
500 Index, an unmanaged group of stocks that differs from the composition of any
Stein Roe fund; it is not available for direct investment. The Adviser currently
limits expenses to 1.35% and 1.40% of averageannualnetassets, respectively, of
the Stein Roe Advisor Balanced and Growth & Income Funds. Historical performance
for Class K shares for the period prior to Feb. 14, 1997 is based on the
performance of the SR&F Growth & Income and Balanced Portfolios, restated to
reflect the 12b-1 fees and any other expenses applicable to that class, without
giving effect to any fee waivers and assuming reinvestment of dividends and
capital gains. Total return performance includes changes in share price and
reinvestment of income and capital gains distributions.
<PAGE>
Q&A
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An Interview with Harvey Hirschhorn,
Portfolio Manager of Stein Roe Advisor Balanced Fund
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Fund Data
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Investment Objective:
Seeks long-term growth of capital and current income, consistent with
reasonable investment risk by investing primarily in a diversified portfolio
of equities, debt securities and cash.
Q: How did the Fund perform?
A: The Fund's total return was 6.40 percent for the six months ended March 31,
1998, compared to the Lipper flexible fund peer group median return of 8.96
percent and the benchmark S&P 500 Index return of 17.21 percent. The Fund and
its peer group underperformed the benchmark because balanced funds have a fixed
income and a cash portion while the S&P 500 is strictly equities. Equities,
including those owned by the portfolio, had much higher total returns than fixed
income investments over the period.
Q: What worked well in your domestic equity holdings?
A: The portfolio's holdings in drug, finance, retail and telephone services
companies performed well during the six-month period. We think each of these
sectors has the potential for continued growth, so we have increased the
portfolio's exposure to these sectors. Specifically, drug companies stand to
have better profitability in a slower economy than other companies whose
earnings are tied to economic cycles. These companies also fit our thesis that
aging baby boomers -- the largest market segment -- will consume drugs and
health care services at a growing rate. We also maintain a positive outlook for
financial services stocks. We anticipate that these companies will continue to
benefit from low inflation and low interest rates.
Q: What sectors did not perform as well as you had expected?
A: The real estate investment trust (REIT) sector did not perform as well as we
had hoped over the past six months. Nonetheless, we maintain a positive outlook
for REITs over the long term. We believe REIT earnings will continue to grow and
acquisitions will improve their efficiencies and productivity. We also were
disappointed by the performance of our holdings in the energy sector. We reduced
our exposure to this sector early in the first quarter of 1998 as oil prices
began to deteriorate.
Q: Did you make any new purchases in the past six months?
A: We added several names to the portfolio to increase diversification. They
include WorldCom and TCI Pacific Communications in telecommunications and
Travelers Group in financial services (1.1 percent, 1.0 percent, and 1.0 percent
of total net assets, respectively).
Q: During this volatile period for international equities, your holdings seemed
to fare better comparatively. Despite that, did you restructure your
international holdings?
A: As Latin American equity markets reacted to the financial crisis in Asia,
prices fell substantially. We used this opportunity to add to our positions in
Latin American companies such as Telebras and Banco Rio de La Plata (0.9 percent
and 0.7 percent of total net assets, respectively). We are currently considering
adjusting some of our international holdings, and we remain cautious toward
countries that may continue to be affected by the Asian currency crisis.
Q: How did the portfolio's fixed income portion perform as a whole?
A: Our longer-duration strategy in fixed income holdings benefited the Fund's
performance as interest rates were modestly lower during the first quarter. We
expect the Federal Reserve Board to maintain the current interest rate
environment for the foreseeable future. Therefore, we continue to hold a full,
high-quality position in fixed income. We are now in the environment of a
federal budget surplus and anticipate that the government will use some of the
budget surplus this year to pay down debt. This event would provide support for
the fixed income market. Also, in anticipation of slowing growth in the economy,
we anticipate that the yields on long-term bonds will ease further.
<PAGE>
Q: Do you believe the portfolio's asset allocation strategy is suitable for most
investors?
A: The Fund is structured to be an appropriate core holding for most investors.
We invest in what we believe is a good balance of fixed income, domestic and
foreign equity securities. Our Investment Committee, of which I am a member,
sets the asset allocation guidelines, based on our outlook for the coming
quarters. We take into consideration economic, political and geopolitical
issues. We also take into account the objectives of the portfolio. The Committee
maintains a policy of being modestly underweight in domestic equities and
modestly overweight in international equities, which has been implemented in the
portfolio. Our overweighting in international equities hurt performance in the
fourth quarter of 1997, but helped it in the first quarter of 1998 when
international stocks, as represented by the MSCI EAFE Index, returned 14.71
percent, outperforming the S&P 500 return of 13.94 percent for the same period.
Q: What's your outlook for the Fund?
A: We are somewhat cautious about the stock market's ability to maintain its
current strength in coming months because we think valuations are high. We are
also concerned that some corporate earnings may be adversely affected by several
factors including the Asian crisis, slowing economic growth, continued wage
pressures with slower productivity gains, a lack of pricing power and costs
associated with preparing computer systems for the year 2000. We have a
favorable outlook for retail stocks because there are a few indications that the
consumer is in excellent shape. First, real wage gains have been more positive
than we've seen in the past 25 years. Second, low oil prices may help retailers
because consumers will be able to spend more of their hard-earned dollars on
non-energy goods and services. Last, cheaper imports from Asia should reduce the
cost-basis for a lot of retailers, so they should be able to maintain low
prices. Fixed income markets should continue to provide positive returns as
inflation remains low and the federal government's budget surplus rises.
Past performance is no guarantee of future results. Share price and investment
returns will vary, so you may have a gain or loss when you sell shares.
Holdings are disclosed as a percentage of the SR&F Balanced Portfolio's total
net assets. Portfolio holdings are as of March 31, 1998, and are subject to
change. The Adviser currently limits expenses to 1.35% of average annual net
assets. Historical performance for Class K shares for the period prior to
Feb. 14, 1997, is based on the performance of the SR&F Balanced Portfolio,
restated to reflect the 12b-1 fees and any other expenses applicable to that
class, without giving effect to any fee waivers and assuming reinvestment of
dividends and capital gains. Total return performance includes changes in
share price and reinvestment of income and capital gains distributions. The
S&P 500 and the MSCI EAFE are unmanaged groups of stocks that differ from the
composition of SR&F Balanced Portfolio; they are not available for direct
investment. According to Lipper Analytical Services, Inc., an independent
monitor of mutual fund performance, the median returns for the Fund's
flexible portfolio fund peer group for the one-, five- and 10-year periods
ended March 31, 1998, were 28.58 percent, 13.51 percent and 12.77 percent,
respectively.
Foreign investments involve market, political and currency risks not generally
associated with U.S. investments.
<PAGE>
Q&A
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An Interview with Dan Cantor,
Portfolio Manager of Stein Roe Advisor Growth & Income Fund
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Fund Data
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Investment Objective:
Seeks capital growth by investing primarily in a diversified portfolio of
common stocks, convertible securities and other equity-type investments
issued by well-established companies. In an effort to limit volatility, the
portfolio will normally emphasize investments in the equity securities of
companies with market capitalizations greater than $1 billion. The Fund is
designed to provide more dividend income than a portfolio focused exclusively
on growth.
Q: How did the Fund perform?
A: The Fund posted a total return of 14.41 percent for the six months ended
March 31, 1998, exceeding the Lipper peer group median return of 12.66 percent
and placing the Fund in the top third of its Lipper peer group for the period.
Q: What factors contributed to the Fund's performance?
A: The Fund's performance can be attributed to select holdings in companies such
as Kansas City Southern Industries, Continental Airlines and Warner-Lambert (2.7
percent, 2.5 percent and 3.1 percent of total net assets, respectively). The
Fund's technology holdings did not fare as well -- the Fund's positions in IBM
and Compaq underperformed (1.8 percent and 1.1 percent of total
net assets, respectively).
Q: What were some purchases you made during the period?
A: Our best purchase during the period was TJX (1.9 percent of total net
assets), an off-price retailer that operates Marshall's, TJ Maxx and other
chains. We initiated this position in the last few days of 1997. Soon after
purchase, the stock rapidly appreciated due to a favorable holiday selling
season and an improved earnings outlook. We also purchased Avon (0.8 percent of
total net assets) because its growth prospects appeared good despite its
temporarily depressed stock price. We believe Avon's new management team can
effectively enhance its considerable global consumer base.
Q: As a category, growth and income funds have seen the most mutual fund
subscriptions over the past few months. Why is that?
A: A growth and income fund is often a core holding in a mutual fund investor's
portfolio because growth and income funds invest in growing companies that
provide capital appreciation and income, in the form of dividends, to
shareholders. These companies are potentially less affected by market
fluctuations because they are large and well-established. Our strategy for the
Stein Roe Advisor Growth & Income Fund is designed to allow investors to
participate in an equity market upcycle through non-aggressive growth holdings.
In recent months, the Asian currency crisis and general concerns about the
height of the stock market caused investors to fear aggressive growth
investments, making more conservative growth and income funds attractive
options.
Q: You've been known to refer to your style as investing for "growth at a
reasonable price." Can you explain what this means?
A: We define "growth at a reasonable price" as seeking out reasonably-valued
companies that tend to be key players in their respective industries. Many of
these companies offer superior risk-adjusted long-term growth potential. We look
for companies with improving fundamentals, solid earnings, healthy cash flows,
sound balance sheets and proven management capabilities. This strategy has paid
off in good returns for the Fund over the long term. For the 10-year period
ended March 31, 1998, the Fund returned an average annual total return of 17.38
percent versus the Lipper peer group return of 16.32 percent for the same
period.
<PAGE>
Q: What is your outlook for the portfolio?
A: The market throughout the past year has had exceptional, although sometimes
unexplainable, momentum. We are constantly striving to ensure that the
valuations of the stocks we own are attractive. We manage SR&F Growth & Income
Portfolio to be an "all-weather" fund, with the goal of performing well relative
to our peer group in bull and bear markets alike. We believe the portfolio's
price-sensitive orientation and its income component may help buffer it in
difficult environments and help make its return less volatile than mutual funds
that invest exclusively for capital appreciation.
Past performance is no guarantee of future results. Share price and investment
returns will vary, so you may have a gain or loss when you sell shares. Holdings
are disclosed as a percentage of the SR&F Growth & Income Portfolio's total net
assets. Portfolio holdings are as of March 31, 1998, and are subject to change.
The Adviser currently limits expenses to 1.40% of average annual net assets.
Historical performance for Class K shares for the period prior to Feb. 14, 1997,
is based on the performance of the SR&F Growth & Income Portfolio, restated to
reflect the 12b-1 fees and any other expenses applicable to that class, without
giving any effect to fee waivers and assuming reinvestment of dividends and
capital gains. Total return performance includes changes in share price and
reinvestment of income and capital gains distributions. The S&P 500 is an
unmanaged group of stocks that differs from the composition of SR&F Growth &
Income Portfolio; it is not available for direct investment. According to Lipper
Analytical Services, Inc., an independent monitor of mutual fund performance,
the median returns for the Fund's growth and income fund peer group for the
one-, five-and 10-year periods ended March 31, 1998, were 40.63 percent, 19.48
percent and 16.32 percent, respectively.
<PAGE>
<TABLE>
<CAPTION>
SR&F Balanced Portfolio
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Portfolio of Investments at March 31, 1998
(Dollar Amounts in thousands)
(Unaudited)
Number Market
Equity Securities (60.0%) of Shares Value
<S> <C> <C>
Automotive (0.8%)
Honda Motor ADRs................................................................................. 33,000 $ 2,343
Banks (10.5%)
Banc One......................................................................................... 70,536 4,461
Banco Rio de La Plata ADRs....................................................................... 160,300 2,004
BankAmerica...................................................................................... 106,000 8,759
Citicorp......................................................................................... 53,000 7,526
Royal Bank of Scotland Group..................................................................... 175,000 2,720
Wells Fargo & Company............................................................................ 7,000 2,319
Westpac Banking.................................................................................. 300,000 2,013
WBK STRYPES Trust................................................................................ 15,000 511
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30,313
Building Products (0.3%)
Royal Group Technologies Limited (a)............................................................. 25,000 819
Chemicals (1.8%)
E. I. du Pont de Nemours......................................................................... 40,000 2,720
Praxair.......................................................................................... 50,000 2,572
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5,292
Commercial Services (1.7%)
Cendant (a)...................................................................................... 121,802 4,826
Computers (0.8%)
International Business Machines.................................................................. 23,000 2,389
Conglomerates (0.8%)
Harris........................................................................................... 44,000 2,294
Drugs and Health Products (8.3%)
American Home Products........................................................................... 35,000 3,338
Bristol-Myers Squibb............................................................................. 41,000 4,277
Elan ADRs (a).................................................................................... 60,000 3,877
Eli Lilly & Company.............................................................................. 68,500 4,084
Novartis ADRs.................................................................................... 25,000 2,212
Pfizer........................................................................................... 39,000 3,889
SmithKline Beecham ADRs.......................................................................... 40,000 2,503
----------
24,180
Electrical Equipment (6.8%)
Emerson Electric................................................................................. 97,000 6,323
General Electric................................................................................. 117,000 10,084
Hubbell, class B................................................................................. 65,000 3,274
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19,681
Electronics (3.7%)
Analog Devices (a)............................................................................... 55,000 1,829
Intel............................................................................................ 43,000 3,357
Motorola......................................................................................... 50,000 3,031
Sony ADRs........................................................................................ 31,000 2,638
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10,855
Energy Services (0.7%)
Cooper Cameron (a)............................................................................... 35,000 2,113
<PAGE>
<CAPTION>
<S> <C> <C>
Financial Services (1.0%)
Travelers Group.................................................................................. 50,000 $ 3,000
Food, Beverage and Tobacco (2.3%)
General Mills.................................................................................... 26,000 1,976
PepsiCo.......................................................................................... 45,000 1,921
Philip Morris.................................................................................... 65,000 2,710
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6,607
Funeral Services (0.9%)
Service Corporation International................................................................ 60,000 2,546
Media (0.5%)
CBS.............................................................................................. 45,000 1,527
Oil and Natural Gas (3.7%)
British Petroleum ADRs........................................................................... 58,000 4,992
El Paso National Gas............................................................................. 32,000 2,258
Enron............................................................................................ 25,000 1,160
Ocean Energy (a)................................................................................. 71,500 1,685
Tosco............................................................................................ 19,000 670
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10,765
Paper and Forest Products (0.9%)
Plum Creek Timber Company, L.P................................................................... 80,000 2,640
Real Estate (3.8%)
Crescent Real Estate Equities.................................................................... 50,000 1,800
Kimco Realty..................................................................................... 66,000 2,336
Patriot American Hospitality..................................................................... 60,000 1,620
Reckson Associates............................................................................... 96,200 2,537
Security Capital Group, class B (a).............................................................. 85,500 2,629
Security Capital Group, class B warrants (a)..................................................... 4,111 13
-----------
10,935
Retail (2.6%)
Home Depot....................................................................................... 38,500 2,596
Wal-Mart Stores.................................................................................. 94,000 4,776
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7,372
Telecommunications (5.4%)
AirTouch Communications (a)...................................................................... 75,000 3,670
GTE.............................................................................................. 58,000 3,473
Telebras ADRs.................................................................................... 21,000 2,726
Telefonica de Argentina ADRs..................................................................... 64,000 2,436
WorldCom (a)..................................................................................... 75,000 3,229
-----------
15,534
Transportation (1.8%)
Canadian National Railway........................................................................ 45,000 2,880
FDX (a).......................................................................................... 33,000 2,347
-----------
5,227
Utilities - Electric (0.9%)
Endesa ADRs...................................................................................... 108,000 2,619
-----------
Total Equity Securities
(Cost $94,437)................................................................................... 173,877
-----------
<PAGE>
<CAPTION>
<S> <C> <C>
Convertible Securities (7.7%)
Convertible Preferred Securities (3.0%)
Building Products (0.5%)
RYG DECS Trust II 6.875% 11/15/00................................................................ 50,000 $ 1,550
Oil and Natural Gas (0.4%)
Tosco Financing Trust 5.750% 12/15/26 (b)....................................................... 17,000 1,039
Telecommunications (2.1%)
LM Ericsson Telecommunications 4.250% 6/30/00................................................... 500 3,312
TCI Pacific Communications 5.000% 7/31/06........................................................ 16,000 2,848
-----------
6,160
-----------
Total Convertible Preferred Securities
(Cost $5,795).................................................................................... 8,749
-----------
<CAPTION>
PRINCIPAL
Convertible Debt Securities (4.7%) AMOUNT
--------
<S> <C> <C>
Electronics (0.5%)
Analog Devices 3.500% 12/01/00................................................................... $ 900 1,435
Energy (1.2%)
SFP Pipeline Holdings 11.160% 8/15/10........................................................... 2,000 3,520
Health Care (0.8%)
Nationwide Health Properties 6.250% 1/01/99...................................................... 2,040 2,341
Insurance (1.0%)
Fremont General Zero Coupon (Effective Yield 9.270%) 10/12/13.................................... 2,500 2,838
Producer Goods (0.7%)
U.S. Filter 6.000% 9/15/05....................................................................... 1,100 2,161
Retail (0.5%)
Home Depot 3.250% 10/01/01...................................................................... 950 1,434
-----------
Total Convertible Debt Securities
(Cost $8,537).................................................................................... 13,729
-----------
Total Convertible Securities
(Cost $14,332)................................................................................... 22,478
<CAPTION>
Bonds and Notes (37.9%)
<S> <C> <C>
U.S. Government Obligation (19.7%)
U.S. Treasury Bonds
8.125% 8/15/19................................................................................ 7,350 9,182
7.250% 8/15/22................................................................................ 7,200 8,309
U.S. Treasury Notes
5.875% 3/31/99................................................................................ 1,650 1,656
6.375% 5/15/00................................................................................ 9,200 9,339
7.875% 8/15/01................................................................................ 6,850 7,308
5.750% 8/15/03................................................................................ 6,500 6,520
7.250% 8/15/04................................................................................ 6,700 7,245
6.500% 5/15/05................................................................................ 1,750 1,826
6.250% 2/15/07................................................................................ 5,550 5,734
-----------
57,119
<PAGE>
<CAPTION>
<S> <C> <C>
U.S. Government Agency Mortgage-Backed Securities (5.5%)
Federal Home Loan Mortgage Corporation Gold
6.500% 2/01/11................................................................................ $1,574 $ 1,581
6.500% 4/01/11 ............................................................................... 834 838
6.500% 10/01/11 .............................................................................. 1,676 1,683
6.500% 4/01/26 ............................................................................... 910 904
6.500% 6/01/26................................................................................ 933 927
Federal Home Loan Mortgage Corporation
6.500% 4/01/11................................................................................ 1,466 1,472
6.500% 4/01/26................................................................................ 949 941
6.500% 2/01/27................................................................................ 2,926 2,901
6.500% 3/01/27................................................................................ 2,688 2,665
Government National Mortgage Association.........................................................
8.000% 7/15/25................................................................................ 1,134 1,177
8.000% 3/15/26................................................................................ 819 849
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15,938
Air Transportation (1.9%)
Federal Express 1994 Pass-Through Certificates
Series A310-A1 7.530% 9/23/06................................................................. 1,575 1,647
Lockheed Martin 6.550% 5/15/99................................................................... 2,500 2,518
United Airlines 1991 Pass-Through Certificates
Series A1 9.200% 3/22/08...................................................................... 1,293 1,467
-----------
5,632
Chemicals (0.9%)
BOC Group 5.875% 1/29/01........................................................................ 2,500 2,485
Commercial Bank (1.6%)
Den Danske Bank 6.550% 9/15/03................................................................... 2,250 2,257
Deutsche Ausgleichsbank 7.000% 9/24/01........................................................... 2,250 2,329
-----------
4,586
Construction and Housing (0.8%)
Hanson Overseas 6.750% 9/15/05.................................................................. 2,250 2,280
Financial (3.7%)
ALPS Series 1994-1 Class C2 9.350% 9/15/04....................................................... 2,487 2,561
Lehman Brothers Holdings 8.375% 2/15/99......................................................... 2,500 2,547
MDC Mortgage Funding Series Q Class 5 8.850% 3/20/18............................................. 308 321
Ford Motor Credit 6.375% 9/15/99................................................................. 2,750 2,768
USX 6.850% 3/1/08................................................................................ 2,500 2,506
-----------
10,703
Foreign Government Regional Bonds (2.3%)
Corporacion Andina de Fomento 6.625% 10/14/98 (b)................................................ 1,500 1,499
Republic of Slovenia 7.000% 8/06/01 (b).......................................................... 2,750 2,810
Province of Quebec 6.500% 1/17/06................................................................ 2,400 2,405
-----------
6,714
Mortgage-Backed Securities (0.8%)
American Mortgage Trust Series 1993-3 Class 3B 8.190% 9/27/22.................................... 2,272 2,247
Utilities - Electric (0.7%)
National Power 7.125% 7/11/01.................................................................... 2,000 2,055
-----------
Total Bonds and Notes
(Cost $106,080).................................................................................. 109,759
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<PAGE>
<CAPTION>
<S> <C> <C>
Short-Term Obligations (0.5%)
Commercial Paper (0.5%)
Associates Corp. of North America 6.050% 4/01/98
(Cost $1,305).................................................................................... $1,305 $ 1,305
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Total Investments (106.1%)
(Cost $216,154).................................................................................. 307,419
Other Assets, Less Liabilities (-6.1%)........................................................... (17,778)
-----------
Total Net Assets (100.0%)........................................................................ $289,641
===========
<CAPTION>
Securities Sold Short at March 31, 1998, were as follows:
Market
Shares Value
<S> <C> <C>
BankAmerica...................................................................................... 60,000 $ 4,957
British Petroleum ADRs........................................................................... 37,000 3,184
Citicorp......................................................................................... 30,000 4,260
Eli Lilly & Company.............................................................................. 20,000 1,193
Emerson Electric................................................................................. 20,000 1,304
General Electric................................................................................. 70,000 6,033
Intel............................................................................................ 8,000 625
-----------
Total Value of Securities Sold Short (Proceeds $15,372).......................................... $ 21,556
===========
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Notes to Portfolio of Investments
(a) Non-income producing security.
(b) Security is subject to contractual or legal restrictions on its resale. At
March 31, 1998, the value of all such securities represented 1.8 percent of
total net assets.
(c) At March 31, 1998, the cost of investments for federal income tax purposes
was $216,093. Net unrealized appreciation was $91,326, consisting of gross
unrealized appreciation of $92,608 and gross unrealized depreciation of
$1,282.
See accompanying Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SR&F Growth & Income Portfolio
- --------------------------------------------------------------------------------
Portfolio of Investments at March 31, 1998
(Dollar amounts in thousands)
(Unaudited)
Number Market
Common Stocks (85.9%) of Shares Value
<S> <C> <C>
Aerospace (1.6%)
Boeing........................................................................................... 119,600 $ 6,234
Auto/Truck Parts & Equipment (2.2%)
Lear (a)......................................................................................... 145,000 8,174
Banks (8.5%)
Bankers Trust.................................................................................... 60,000 7,219
Chase Manhattan.................................................................................. 64,400 8,686
Citicorp......................................................................................... 65,616 9,317
Republic New York................................................................................ 25,000 3,334
Wells Fargo & Company............................................................................ 11,666 3,864
----------
32,421
Broadcasting & Communications (1.9%)
Interpublic Group of Companies................................................................... 60,600 3,765
Tribune.......................................................................................... 50,000 3,525
----------
7,290
Computers and Computer-Related (3.5%)
Cisco Systems (a)................................................................................ 15,000 1,026
Compaq Computer.................................................................................. 165,000 4,269
Intel............................................................................................ 15,000 1,171
International Business Machines.................................................................. 65,000 6,752
----------
13,218
Consumer-Related (6.6%)
Avon Products.................................................................................... 40,000 3,120
Cendant (a)...................................................................................... 154,186 6,110
Gillette......................................................................................... 72,200 8,569
Procter & Gamble................................................................................. 86,000 7,256
----------
25,055
Distribution (6.2%)
TJX.............................................................................................. 161,400 7,303
Wal-Mart Stores.................................................................................. 180,000 9,146
Walgreen......................................................................................... 200,000 7,038
----------
23,487
Electrical Equipment (3.6%)
Emerson Electric................................................................................. 104,000 6,780
Hubbell, class B................................................................................. 135,400 6,821
----------
13,600
Energy (3.3%)
Amoco............................................................................................ 36,500 3,153
British Petroleum ADRs........................................................................... 73,104 6,292
Enron............................................................................................ 62,500 2,898
----------
12,343
Entertainment (0.6%)
Walt Disney...................................................................................... 22,035 2,352
Financial Services (9.4%)
American Express................................................................................. 104,000 9,549
Fannie Mae....................................................................................... 161,000 10,183
Kansas City Southern Industries.................................................................. 236,900 10,424
Nationwide Financial Services, class A........................................................... 37,000 1,605
Washington Mutual................................................................................ 52,000 3,729
----------
35,490
<PAGE>
<CAPTION>
<S> <C> <C>
Food, Beverage & Tobacco (5.1%)
PepsiCo.......................................................................................... 160,000 $ 6,830
Phillip Morris................................................................................... 198,000 8,254
Sara Lee......................................................................................... 72,000 4,437
------------
19,521
Health Care (9.7%)
Abbott Laboratories.............................................................................. 58,500 4,406
Baxter International............................................................................. 125,000 6,891
Bristol-Myers Squibb............................................................................. 85,000 8,867
Roche Holdings Limited........................................................................... 200 2,165
SmithKline Beecham ADRs.......................................................................... 40,000 2,503
Warner-Lambert................................................................................... 70,000 11,922
------------
36,752
Hotels (0.2%)
Circus Circus Enterprises (a).................................................................... 40,000 840
Multi-Industry (7.4%)
General Electric................................................................................. 88,000 7,585
Honeywell........................................................................................ 104,000 8,600
Minnesota Mining & Manufacturing................................................................. 20,000 1,824
Monsanto......................................................................................... 195,000 10,140
------------
28,148
Paper and Forest Products (2.1%)
Champion International........................................................................... 20,000 1,086
Georgia-Pacific.................................................................................. 75,000 4,856
Georgia-Pacific Timber Group..................................................................... 75,000 1,927
------------
7,869
Rubber, Plastics, and Related Products (0.9%)
Goodyear Tire & Rubber........................................................................... 45,000 3,409
Scientific Instruments (0.2%)
Millipore........................................................................................ 25,000 869
Specialty Chemicals (4.5%)
Ecolab........................................................................................... 330,000 9,570
Solutia.......................................................................................... 42,000 1,250
Union Carbide.................................................................................... 126,100 6,321
------------
17,140
Telecommunications (3.4%)
AT&T............................................................................................. 30,222 1,983
Bell Atlantic.................................................................................... 95,160 9,754
Lucent Technologies.............................................................................. 9,794 1,252
------------
12,990
Transportation (5.0%)
Burlington Northern Santa Fe..................................................................... 92,000 9,568
Continental Airlines, class B (a)................................................................ 160,000 9,410
------------
18,978
------------
Total Common Stocks
(Cost $175,582).................................................................................. 326,179
- ---------------------------------------------------------------------------------------------------------------------------------
<PAGE>
<CAPTION>
Principal Market
Long-Term Notes (0.8%) Amount Value
<S> <C> <C>
U.S. Government Obligation (0.8%)
U.S. Treasury Note 7.125% 9/30/99
(Cost $2,964).................................................................................... $3,000 $ 3,067
Short-Term Obligations (13.2%)
- ---------------------------------------------------------------------------------------------------------------------------------
Commercial Paper (12.9%)
Associates Corp. of North America 6.050% 04/01/98................................................ 16,160 16,160
CSX 5.750% 04/02/98.............................................................................. 18,000 17,997
Marriott International 5.090% 04/07/98........................................................... 15,000 14,985
------------
49,142
U.S. Government Obligation (0.3%)
US Treasury Bill 5.230% 04/30/98 (b)............................................................. 1,000 996
------------
Total Short-Term Obligations
(Cost $50,138).................................................................................. 50,138
Total-Investments-(99.9%)--------------------------------------------------------------------------------------------------------
(Cost $228,684) (c).............................................................................. 379,384
Other Assets, Less Liabilities (0.1%)............................................................ 297
------------
Total Net Assets (100.0%)........................................................................ $379,681
============
Notes to Portfolio of Investments
(a) Non-income producing security.
(b)Security was pledged to cover margin requirements for open futures
contracts. The following contracts were open at March 31, 1998:
<CAPTION>
Number of Contract Unrealized
Type Position Contracts Value Expiration Gain
<S> <C> <C> <C> <C> <C>
S&P 500 Index Long 80 $22,210 June, 1998 $619
(c)At March 31, 1998, the cost of investments for federal income tax purposes
was $228,849. Net unrealized appreciation was $150,535, consisting of gross
unrealized appreciation of $151,833 and gross unrealized depreciation of
$1,298.
See accompanying Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of Assets and Liabilities
March 31, 1998
(All amounts in thousands, except per-share data)
(Unaudited)
Advisor
Advisor Growth
Balanced & Income
Fund Fund
<S> <C> <C>
Assets
Investment in Portfolio, at value............................................... $ 120 $ 476
Cash............................................................................ 33 39
Receivable for fund shares sold................................................. -- 1
Other assets.................................................................... 11 11
-------- --------
Total assets................................................................. 164 527
-------- --------
Liabilities
Payable to investment adviser................................................... 33 32
Other liabilities............................................................... 12 14
-------- --------
Total liabilities............................................................ 45 46
-------- --------
Net assets................................................................... $ 119 $ 481
========= =========
Analysis of Net Assets
Paid-in capital................................................................. $ 102 $ 439
Net unrealized appreciation on investments...................................... 20 47
Accumulated overdistributed net investment income............................... (1) --
Accumulated net realized losses on investments.................................. (2) (5)
-------- --------
Net assets................................................................... $ 119 $ 481
======== ========
Shares outstanding (unlimited number authorized)................................ 10 38
======== ========
Net asset value per share....................................................... $11.67 $12.84
======== ========
See accompanying Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
Statements of Operations
For the six months ended march 31, 1998
(All amounts in thousands)
(Unaudited)
<CAPTION>
Advisor
Advisor Growth &
Balanced Income
Fund Fund
<S> <C> <C>
Investment Income
Dividends and interest allocated from Portfolio................................. $ 2 $ 2
-------- --------
Expenses
Amortization of organization costs.............................................. 15 15
Accounting fees................................................................. 12 12
SEC and state registration fees................................................. 10 10
Printing and postage............................................................ 3 3
Audit and legal fees............................................................ 4 3
Trustees' fees.................................................................. 3 3
Expenses allocated from Portfolio............................................... -- 1
Other........................................................................... 1 1
-------- --------
Total expenses............................................................... 48 48
Reimbursement of expenses by investment adviser................................. (47) (47)
-------- --------
Net expenses................................................................. 1 1
-------- --------
Net investment income........................................................ 1 1
-------- --------
Realized and Unrealized Gains on Investments
Net realized gain on investments, futures and foreign currency
transactions allocated from Portfolio........................................ 2 1
Net change in unrealized appreciation or depreciation on
investments, futures and foreign currency translations....................... 4 27
-------- --------
Net gain on investments...................................................... 6 28
-------- --------
Net Increase in Net Assets Resulting from Operations............................ $ 7 $ 29
======== ========
See accompanying Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
For the six months ended March 31, 1998 and the year ended September 30, 1997
(All amounts in thousands)
(Unaudited)
Advisor Growth
Advisor Balanced Fund & Income Fund
1998 1997 (a) 1998 1997 (a)
<S> <C> <C> <C> <C>
Operations
Net investment income..................................................... $ 1 $-- $ 1 $--
Net realized gain (loss) on investments................................... 2 (4) 1 (6)
Net change in unrealized appreciation or depreciation on investments...... 4 16 27 20
-------- -------- -------- --------
Net increase in net assets resulting from operations................... 7 12 29 14
-------- -------- -------- --------
Distributions to Shareholders
Distributions from net investment income.................................. (2) -- (1) --
-------- -------- -------- --------
Share Transactions
Subscriptions to fund shares.............................................. -- 100 340 100
Value of distributions reinvested......................................... 2 -- 1 --
Redemptions of fund shares................................................ -- -- (2) --
-------- -------- -------- --------
Net increase from share transactions................................... 2 100 339 100
-------- -------- -------- --------
Net increase in net assets............................................. 7 112 367 114
Total Net Assets
Beginning of period....................................................... 112 -- 114 --
-------- -------- -------- --------
End of period............................................................. $ 119 $ 112 $ 481 $ 114
======== ======== ======== ========
Accumulated Overdistributed Net Investment Income......................... $ (1) $ -- $ -- $ --
======== ======== ======== ========
Analysis of Changes in Shares of Beneficial Interest
Subscriptions to fund shares.............................................. -- 10 28 10
Issued in reinvestment of distributions................................... -- -- 1
Redemptions of fund shares................................................ -- -- (1) --
-------- -------- -------- --------
Net increase in fund shares............................................ -- 10 28 100
Shares outstanding at beginning of period................................. 10 -- 10 --
-------- -------- -------- --------
Shares outstanding at end of period....................................... 10 10 38 10
======== ======== ======== ========
(a) From commencement of operations on February 14, 1997.
See accompanying Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
Statements of Assets and Liabilities
<CAPTION>
March 31, 1998
(All amounts in thousands)
(Unaudited)
SR&F
SR&F Growth &
Balanced Income
Portfolio Portfolio
<S> <C> <C>
Assets
Investments, at market value (cost of $216,154 and
$228,684, respectively).......................................................... $307,419 $379,384
Cash................................................................................ -- 4
Deposit with broker for securities sold short....................................... 17,831 --
Dividends and interest receivable................................................... 2,369 427
Receivable for investments sold..................................................... 799 --
Variation margin receivable......................................................... -- 96
----------- -----------
Total assets..................................................................... 328,418 379,911
----------- -----------
Liabilities
Securities sold short, at market value (cost of $15,372)............................ 21,556 --
Loan payable to broker.............................................................. 16,000 --
Interest payable.................................................................... 637 --
Payable for dividends on securities sold short...................................... 398 --
Payable to investment adviser....................................................... 142 184
Other liabilities................................................................... 44 46
----------- -----------
Total liabilities................................................................ 38,777 230
----------- -----------
Net assets applicable to investors' beneficial interest.......................... $289,641 $379,681
=========== ===========
See accompanying Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
Statements of Operations
For the six months ended March 31, 1998
(All amounts in thousands)
(Unaudited)
<CAPTION>
SR&F
SR&F Growth &
Balanced Income
Portfolio Portfolio
<S> <C> <C>
Investment Income
Dividends....................................................................... $ 1,237 $ 2,206
Interest........................................................................ 4,704 1,607
--------- ---------
5,941 3,813
Foreign taxes withheld.......................................................... (18) --
--------- ---------
Total investment income...................................................... 5,923 3,813
--------- ---------
Expenses
Management fees................................................................. 776 1,040
Accounting fees................................................................. 15 16
Trustees' fees.................................................................. 11 10
Audit and legal fees............................................................ 9 9
Other........................................................................... 50 52
--------- ---------
Total expenses............................................................... 861 1,127
--------- ---------
Net investment income........................................................ 5,062 2,686
--------- ---------
Realized and Unrealized Gains (Losses) on Investments
Net realized gains on investments............................................... 12,743 5,741
Net realized gains on futures transactions...................................... -- 3,019
Net realized losses on foreign currency transactions............................ (81) --
Net change in unrealized appreciation or depreciation on
investments, futures and foreign currency translations....................... 884 38,703
--------- ---------
Net gains on investments, futures and foreign
currency transactions..................................................... 13,546 47,463
--------- ---------
Net Increase in Net Assets Resulting from Operations............................ $18,608 $50,149
========= =========
See accompanying Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
Statements of Changes in Net Assets
For the six months ended March 31, 1998 and the period ended September 30, 1997
(All amounts in thousands)
(Unaudited)
<CAPTION>
SR&F Growth &
SR&F Balanced Portfolio Income Portfolio
1998 1997 (a) 1998 1997 (a)
<S> <C> <C> <C> <C>
Operations
Net investment income .......................................... $ 5,062 $ 6,241 $ 2,686 $ 4,048
Net realized gains on investments .............................. 12,662 6,019 8,760 9,775
Net change in unrealized appreciation or depreciation
on investments .............................................. 884 21,679 38,703 38,203
--------- --------- --------- ---------
Net increase in net assets resulting from operations ........ 18,608 33,939 50,149 52,026
--------- --------- --------- ---------
Transactions in Investors' Beneficial Interest
Contributions .................................................. 3,693 272,915 11,700 306,674
Withdrawals .................................................... (17,601) (21,913) (19,913) (20,955)
--------- --------- --------- ---------
Net increase (decrease) from transactions in investors'
beneficial interest ...................................... (13,908) 251,002 (8,213) 285,719
--------- --------- --------- ---------
Net increase in net assets .................................. 4,700 284,941 41,936 337,745
Total Net Assets
Beginning of period ............................................ 284,941 -- 337,745 --
--------- --------- --------- ---------
End of period .................................................. $ 289,641 $ 284,941 $ 379,681 $ 337,745
========= ========= ========= =========
(a)From commencement of operations on February 3, 1997.
See accompanying Notes to Financial Statements.
</TABLE>
<PAGE>
Notes to Financial Statements
(All amounts, except per-share amounts, in thousands)
Note 1. Organization
The Stein Roe Advisor Balanced Fund and the Stein Roe Advisor Growth & Income
Fund (the "Funds") are series of the Stein Roe Advisor Trust (the "Trust"), an
open-end management investment company organized as a Massachusetts business
trust. Advisor Balanced Fund and Advisor Growth & Income Fund invest
substantially all of their assets in SR&F Balanced Portfolio and SR&F Growth &
Income Portfolio (the "Portfolios"), respectively. SR&F Balanced Portfolio seeks
long-term growth of capital and current income, consistent with reasonable
investment risk. SR&F Growth & Income Portfolio seeks long-term growth of
capital and current income by investing primarily in equity and equity-like
securities issued by well-established companies.
The Portfolios are series of SR&F Base Trust, a Massachusetts common law
trust organized under an Agreement and Declaration of Trust dated August 23,
1993. The Portfolios commenced operations on February 3, 1997. At commencement,
Stein Roe Balanced Fund and Stein Roe Growth & Income Fund contributed $260,013
and $239,175 in securities and other assets to SR&F Balanced Portfolio and SR&F
Growth & Income Portfolio, respectively, in exchange for beneficial ownership of
those Portfolios. At February 14, 1997, Advisor Balanced Fund and Advisor Growth
& Income Fund each contributed cash of $100 to their respective Portfolios. The
Portfolios allocate net asset value, income and expenses to each investor on a
daily basis, based on their respective percentage of ownership. At March 31,
1998, Balanced Fund and Advisor Balanced Fund owned 99.96 percent and .04
percent, respectively, of SR&F Balanced Portfolio; and Growth & Income Fund and
Advisor Growth & Income Fund owned 99.87 percent and .13 percent, respectively,
of SR&F Growth & Income Portfolio.
Note 2. Significant Accounting Policies
The following summarizes the significant accounting policies of the Funds and
Portfolios. These policies are in conformity with generally accepted accounting
principles, which require management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
Certain prior-year amounts have been reclassified to conform to current-year
presentation.
Investment Transactions and Investment Income
Investment transactions are accounted for on trade date. Dividend income is
recorded on the ex-dividend date, and interest income is recorded on the accrual
basis. Interest income includes discount accretion on fixed income securities.
Realized gains and losses from investment transactions are reported on an
identified cost basis.
Security Valuations
All securities are valued as of March 31, 1998. Securities are valued at,
depending on the security involved, the last reported sales price, last bid or
asked price, or the mean between last bid and asked prices as of the close of
the appropriate exchange or other designated time. A security that 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. Securities and other
assets for which market quotations are not readily available are valued at fair
value as determined in good faith by or under the direction of the Board of
Trustees.
Currency Translations
For purposes of valuation, assets and liabilities are translated into U.S.
dollars using currency exchange rates that represent the midpoint between the
bid and asked rates as of 4 p.m., London time. Purchases and sales of securities
are translated into U.S. dollars using the prevailing exchange rate 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.
Futures Contracts
During the period ended March 31, 1998, SR&F Growth & Income Portfolio
entered into stock index futures contracts to either hedge against expected
declines of its portfolio securities or as a temporary substitute for the
purchase of individual stocks. Risks of entering into futures contracts include
the possibility that there may be an illiquid market at the time the Portfolio
seeks to close out a contract, and changes in the value of the futures contract
may not correlate with changes in the value of the portfolio securities being
hedged. Upon entering into a futures contract, the Portfolio deposits with its
custodian cash or securities in an amount sufficient to meet the initial margin
requirements. Subsequent payments are made or received by the Portfolio equal to
the daily change in the contract value and are recorded as unrealized gains or
losses. The Portfolio recognizes a realized gain or loss when the contract is
closed or expires.
<PAGE>
Securities Sold Short
During the period ended March 31, 1998, SR&F Balanced Portfolio engaged in
selling securities short, which obligates the Portfolio to replace a security
borrowed by purchasing the same security at the current market value. The
Portfolio may incur a gain or a loss between the date of the short sale and the
date on which the Portfolio replaces the borrowed security. The Portfolio has
established a margin account with the broker lending the security sold short.
While the short sale is outstanding, the broker retains the proceeds of the
short sale in a margin account. The Portfolio may take a loan against said
proceeds not exceeding 95 percent of the total proceeds. The Portfolio also must
maintain in a separate account with the custodian an equivalent amount of the
securities sold short or convertible or exchangeable into said securities.
Federal Income Taxes
No provision is made for federal income taxes since (a) the Funds elect to
be taxed as "regulated investment companies" and make distributions to their
shareholders to be relieved of all federal income taxes under provisions of
current federal tax law; and (b) the Portfolios are treated as partnerships for
federal income tax purposes and all of their income is allocated to their owners
based on respective percentages of ownership.
Distributions to Shareholders
Each Fund declares and pays dividends of any net investment income at least
quarterly, and any net realized capital gains annually. Shareholder
distributions are recorded on the ex-dividend date. Dividends are determined in
accordance with income tax principles, which may treat certain transactions
differently from generally accepted accounting principles. Distributions in
excess of tax basis earnings are reported in the financial statements as a
return of capital. Permanent differences in the recognition or classification of
income between the financial statements and tax earnings are reclassified to
paid-in capital.
Note 3. Trustees' Fees and Transactions with Affiliates
The Funds and Portfolios pay monthly management and administrative fees 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 Balanced Portfolio is computed at an
annual rate of .55 of 1 percent of average daily net assets up to $500 million,
.50 of 1 percent of the next $500 million, and .45 of 1 percent thereafter. The
management fee for Growth & Income Portfolio is computed at an annual rate of
.60 of 1 percent of average daily net assets up to $500 million, .55 of 1
percent of the next $500 million, and .50 of 1 percent thereafter. The
administrative fees for the Funds are computed at an annual rate of .15 of 1
percent of average daily net assets up to $500 million, .125 of 1 percent of the
next $500 million, and .10 of 1 percent thereafter.
The Adviser also provides certain fund accounting services. For the period
ended March 31, 1998, Advisor Balanced Fund, Advisor Growth & Income Fund, SR&F
Balanced Portfolio and SR&F Growth & Income Portfolio incurred charges of $12,
$12, $15, and $16, respectively.
The administrative agreement provides that the Adviser will reimburse each
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 Advisor Balanced Fund
and Advisor Growth & Income Fund to the extent that expenses exceed 1.35 percent
and 1.40 percent of average annual net assets, respectively. These expense
limitations expire on January 31, 1999, subject to earlier termination by the
Adviser on 30 days notice.
Shares of the Funds are distributed by Liberty Financial Investments, Inc.
(the "Distributor"), an indirect, majority-owned subsidiary of Liberty Mutual
Insurance Company. The trustees of the Trust have adopted a plan of distribution
and service pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the
"Plan"). The Plan provides that, as compensation for services and/or
distribution, the Distributor receives from each Fund a fee at an annual rate
not to exceed 0.25 percent of average daily net assets.
Transfer agent fees are paid to Colonial Investors Service Center, Inc.
("CISC"), an indirect, majority-owned subsidiary of Liberty Mutual Insurance
Company. Prior to October 15, 1997, transfer agent fees were paid to Stein Roe
Services Inc., also an indirect, majority-owned subsidiary of Liberty Mutual
Insurance Company.
Certain officers and trustees of the Trust are also officers of the Adviser.
The compensation of trustees not affiliated with the Adviser for Advisor
Balanced Fund, Advisor Growth & Income Fund, SR&F Balanced Portfolio and SR&F
Growth & Income Portfolio for the period ended March 31, 1998, was $3, $3, $11,
and $10, respectively. No remuneration was paid to any other trustee or officer
of the Trust.
<PAGE>
Note 4. Short-Term Debt
To facilitate portfolio liquidity, the Funds and Portfolios maintain borrowing
arrangements under which they can borrow against portfolio securities. Neither
the Funds nor the Portfolios had borrowings during the period ended March 31,
1998.
Note 5. Investment Transactions
The aggregate cost of purchases and proceeds from sales other than short-term
obligations for the period ended March 31, 1998, were:
Purchases Sales
-------- ------
SR&F Balanced Portfolio $81,983 $78,473
SR&F Growth & Income Portfolio 21,409 20,980
<PAGE>
<TABLE>
Financial Highlights
<CAPTION>
Advisor Balanced Fund
Selected per-share data (for a share outstanding throughout each period), ratios
and supplemental data.
Six Months
Ended Period
March 31, Ended
1998 September 30,
(Unaudited) 1997 (d)
<S> <C> <C>
Net Asset Value, Beginning of Period................................... $ 11.17 $ 10.00
--------- ---------
Income From Investment Operations
Net investment income............................................... 0.16 0.04
Net realized and unrealized gains on investments.................... 0.54 1.13
--------- ---------
Total from investment operations....................................... 0.70 1.17
--------- ---------
Distributions
Net investment income............................................... (0.20) --
--------- ---------
Net Asset Value, End of Period......................................... $ 11.67 $ 11.17
========= =========
Ratio of net expenses to average net assets (b)........................ 1.35%(a) 1.35%(a)
Ratio of net investment income to average net assets (c)............... 2.83%(a) 0.70%(a)
Total return (c)....................................................... 6.40% 11.70%
Net assets, end of period (000's)...................................... $ 119 $ 112
(a)Annualized
(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 58.07
percent for the six months ended March 31, 1998, and 88.76 percent for the
period ended September 30, 1997.
(c)Computed giving effect to the investment adviser's expense limitation
undertaking.
(d)From commencement of operations on February 14, 1997.
</TABLE>
<PAGE>
<TABLE>
Financial Highlights CONTINUED
<CAPTION>
Advisor Growth & Income Fund
Selected per-share data (for a share outstanding throughout each period), ratios
and supplemental data.
Six Months
Ended Period
March 31, Ended
1998 September 30,
(Unaudited) 1997 (d)
<S> <C> <C>
Net Asset Value, Beginning of Period...................................... $ 11.36 $ 10.00
--------- ---------
Income From Investment Operations
Net investment income.................................................. 0.09 0.03
Net realized and unrealized gains on investments....................... 1.53 1.33
--------- ---------
Total from investment operations..................................... 1.62 1.36
--------- ---------
Distributions
Net investment income.................................................. (0.14) --
--------- ---------
Net Asset Value, End of Period............................................ $ 12.84 $ 11.36
========== ==========
Ratio of net expenses to average net assets (b)........................... 1.40%(a) 1.40%(a)
Ratio of net investment income to average net assets (c).................. 0.79%(a) 0.54%(a)
Total return (c).......................................................... 14.41% 13.60%
Net assets, end of period (000's)......................................... $ 481 $ 114
(a)Annualized
(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 58.07
percent for the six months ended March 31, 1998, and 88.76 percent for the
period ended September 30, 1997.
(c)Computed giving effect to the investment adviser's expense limitation
undertaking.
(d)From commencement of operations on February 14, 1997.
</TABLE>
<PAGE>
<TABLE>
Financial Highlights CONTINUED
<CAPTION>
SR&F Balanced Portfolio
Selected per-share data (for a share outstanding throughout each period), ratios
and supplemental data.
Six Months
Ended Period
March 31, Ended
1998 September 30,
(Unaudited) 1997 (b)
<S> <C> <C>
Ratios to Average Net Assets
Ratio of net expenses to average net assets............................ 0.61%(a) 0.60%(a)
Ratio of net investment income to average net assets................... 3.59%(a) 3.52%(a)
Portfolio turnover rate................................................ 28% 21%
Average commissions per share.......................................... $0.0535 $0.0534
(a)Annualized
(b)From commencement of operations on February 3, 1997.
</TABLE>
<PAGE>
<TABLE>
Financial Highlights CONTINUED
<CAPTION>
SR&F Growth & Income Portfolio
Selected per-share data (for a share outstanding throughout each period), ratios
and supplemental data.
Six Months
Ended Period
March 31, Ended
1998 September 30,
(Unaudited) 1997 (b)
<S> <C> <C>
Ratios to Average Net Assets
Ratio of net expenses to average net assets............................. 0.65%(a) 0.65%(a)
Ratio of net investment income to average net assets.................... 1.55%(a) 2.04%(a)
Portfolio turnover rate................................................. 7% 7%
Average commissions per share........................................... $0.0669 $0.0644
(a)Annualized
(b)From commencement of operations on February 3, 1997.
</TABLE>
<PAGE>
Stein Roe Advisor Trust
Trustees
Thomas W. Butch
President, Mutual Fund Division and Director,
Stein Roe & Farnham Incorporated
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
Charles R. Nelson
Van Voorhis Professor of Political Economy,
University of Washington
Thomas C. Theobald
Managing Partner, William Blair Capital Partners
Officers
Thomas W. Butch, President
William D. Andrews, Executive Vice President
Loren A. Hansen, Executive Vice President
Hans P. Ziegler, Executive Vice President
Gary A. Anetsberger, Senior Vice President, Chief Financial Officer
David P. Brady, Vice President
Kevin M. Carome, Vice President, Assistant Secretary
Daniel K. Cantor, Vice President
Erik P. Gustafson, Vice President
David P. Harris, Vice President
Harvey B. Hirschhorn, Vice President
Michael T. Kennedy, Vice President
Stephen F. Lockman, Vice President
Eric S. Maddix, Vice President
Lynn C. Maddox, Vice President
Anne E. Marcel, Vice President
M. Jane McCart, Vice President
John S. McLandsborough, Vice President
Arthur J. McQueen, Vice President
Nicolette D. Parrish, Vice President, Assistant Secretary
Richard B. Peterson, Vice President
M. Gerard Sandel, Vice President
Gloria J. Santella, Vice President
Heidi J. Walter, Vice President, Secretary
Sharon R. Robertson, Controller
Scott E. Volk, 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
Colonial Investors Service Center, Inc.
Transfer Agent
Bell, Boyd & Lloyd
Legal Counsel to the Trust
Arthur Andersen LLP
Independent Public Accountants
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Stein Roe & Farnham
One South Wacker Drive
Chicago, IL 60606-1130
www.steinroe.com
Liberty Financial Investments, Inc. Distributor
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