<PAGE>
[Graphic omitted]
STEIN ROE ADVISOR
YOUNG INVESTOR(SM)
FUND
ANNUAL REPORT - SEPTEMBER 30, 1998
THE INVESTMENT THAT'S ALSO AN EDUCATION
<PAGE>
FUND HIGHLIGHTS
From inception through September 30, 1998, the Fund's Class A shares posted a
total return of 22.12 percent.1 The Fund also earned a place on Money magazine's
1998 list of the Top 100 mutual funds. And our Dollar Digest newsletter recently
earned the Mutual Fund Education Alliance's top award -- the Star Award for
outstanding shareholder newsletter. Just as important, we believe the Fund is
fulfilling its mission of helping to educate investors -- especially younger
investors -- about personal finance and investing.
TABLE OF CONTENTS
To Our Shareholders .......................... 1
Portfolio Manager Commentary ............... 2-4
Portfolio of Investments.................... 5-8
Financial Statements ...................... 8-11
Notes to Financial Statements ............ 11-13
Financial Highlights ..................... 13-14
Report of Independent Public Accountants .... 14
Activity Pages
ages three to five .................... 15-16
ages six to eight ..................... 17-18
ages nine to 12 ....................... 19-20
Dollar Digest ................ see end of report
Young Investor Essay Contest ..... see next page
(1) The historical performance of Class A shares for the period prior to
1/26/98, is based on the performance of SR&F Growth Investor Portfolio,
restated to reflect the sales charges, 12b-1 fees and other expenses
applicable to that class as set forth in the prospectus under "Fee Table,"
without giving effect to any fee waivers described therein and assuming
reinvestment of dividends and capital gains. Inception date for performance
purposes is 4/29/94. Stein Roe Advisor Young Investor Fund is not ranked by
Lipper Analytical Services. The Adviser currently limits expenses on Class
A shares to 1.65% of average net assets. Absent this limit, total return
would have been lower.
---------------------------
Not FDIC May Lose Value
Insured No Bank Guarantee
---------------------------
<PAGE>
TO OUR SHAREHOLDERS
[Photo of Thomas W. Butch]
DEAR INVESTOR,
The Stein Roe Advisor Young Investor Fund was created in April 1994 based on the
belief that a competitive long-term investment could be used to help individuals
learn more about investing. Four and a half years later, this belief has become
an industry success story. From inception through September 30, 1998, the Fund's
Class A shares posted a total return of 22.12 percent, based on net asset value.
The Fund also earned a place on Money magazine's 1998 list of the Top 100 mutual
funds. And our Dollar Digest newsletter recently earned the Mutual Fund
Education Alliance's top award -- the Star Award for outstanding shareholder
newsletter. Just as important, we believe the Fund is fulfilling its mission of
helping to educate investors -- especially younger investors -- about personal
finance and investing.
On the following pages you will find your Fund's annual report. This report
covers the 12 months ended September 30, 1998 -- a year of significant change.
For the first 10 months, stock market activity was positive and was supported by
low inflation and a stable, growing U.S. economy. Through its high point on July
17 the equity market was up 25.54 percent for the year-to-date as measured by
the S&P 500 Index. By the end of August, however, troubles in other countries
created an uncertain environment in the United States, which caused equity
markets to lose all of their gains. In fact, at the end of September, the equity
markets were at about the same point they were twelve months before.
While market declines are unpleasant (and at the time of this writing in late
October, the markets have rallied a good bit), they are normal. The stock market
does not always go up over short periods of time. But it has historically gone
up over the long term. According to Ibbotson Associates,+ growth investors have
not lost money in any 15-year period of the stock market's existence, as
represented by the S&P 500 Index.* That's why we believe it's so important to
keep a long-term perspective and to remain invested during the market's ups and
downs.
We hope this report helps you to better understand Young Investor Fund's
performance. Please call us at 1-800-426-3750 with any comments or suggestions.
Sincerely,
/s/ Thomas W. Butch
Thomas W. Butch
President
October 27, 1998
+ Used with permission. (c)1997 Ibbotson Associates, Inc. All rights reserved.
[Certain portions of this work were derived from copyrighted works of Roger
G. Ibbotson and Rex Sinquefield].
* The S&P 500 Index is an unmanaged group of stocks that is not associated with
any Stein Roe Fund. It is not available for direct investment.
Because market conditions change frequently, there can be no assurances that
the trends described in this report will continue.
<PAGE>
PORTFOLIO MANAGER COMMENTARY
Q. HOW DID THE FUND PERFORM?
A. For the year ended September 30, 1998, Stein Roe Advisor Young Investor Fund
had a negative total return of 0.88 percent for Class A shares. The Lipper
growth fund peer group average had a negative return of 1.44 percent.
Q. WHAT AFFECTED THE FUND'S PERFORMANCE?
A. We invest a portion of the portfolio's assets in what we believe are strong
small- and mid-sized companies, while holding a core position in
large-capitalization, high-quality growth stocks. This has been an effective
long-term strategy for the Fund since its inception. However, at certain
points during this past fiscal year, our holdings of small- and mid-cap
stocks hurt performance because investors favored large company stocks. For
example, in the most recent quarter ended September 30, 1998, the S&P 500
Index, which represents the performance of large companies, lost 9.92
percent, while the small-cap index, the S&P 600, lost over twice that --
20.90 percent. A mid-cap index, the S&P 400, lost 14.25 percent.
Nonetheless, we continue to believe that small- and mid-sized growth
companies have strong growth potential over the long term.
Q. DID THE ECONOMY IMPACT THE FUND'S PERFORMANCE?
A. Yes. Some areas were negatively affected. Investments in the energy sector
hurt performance as oil and gas prices dropped due to slowing global
economic activity. Investments in the financial services sector doing
business with countries affected by the global turmoil also underperformed.
Q. WHAT STOCKS PERFORMED WELL?
A. Two holdings that returned solid performance were Intel, the leading
manufacturer of computer microprocessors, and Clear Channel Communications,
a rapidly growing media company (each represented 1.8 percent of total net
assets). These companies are benefiting from consistent growth based on
continued strong demand for their products.
THE MARKET CAPITALIZATION OF A CORPORATION IS DETERMINED BY MULTIPLYING THE
MARKET PRICE OF ITS STOCK BY THE NUMBER OF SHARES OUTSTANDING. BASED ON THIS
VALUE, COMPANIES QUALIFY FOR DIFFERENT LEVELS OF CAPITALIZATION AND CAN FIT
INTO THREE DIFFERENT CATEGORIES: SMALL CAP, MID CAP OR LARGE CAP. LARGE-CAP
COMPANIES OFTEN ARE CONSIDERED TO HAVE THE GREATEST ELEMENT OF SAFETY.
SMALL-CAP COMPANIES MAY BE LOCAL, OR EXTREMELY SPECIALIZED, AND THEREFORE
MAY BE CONSIDERED RISKIER.
The Top Ten Equity Holdings
(as a % of total net assets)
-------------------------------------------------------
1. Cisco Systems 2.7%
-------------------------------------------------------
2. Microsoft 2.2
-------------------------------------------------------
3. Outdoor Systems 2.2
-------------------------------------------------------
4. MCI WorldCom 2.1
-------------------------------------------------------
5. Freddie Mac 2.1
-------------------------------------------------------
6. American Tower 2.0
-------------------------------------------------------
7. Fannie Mae 2.0
-------------------------------------------------------
8. Paychex 2.0
-------------------------------------------------------
9. Johnson & Johnson 1.9
-------------------------------------------------------
10. Household International 1.9
-------------------------------------------------------
Holdings are as of September 30, 1998, and are disclosed as a percentage of
SR&F Growth Investor Portfolio's total net assets. Because the Portfolio is
actively managed, portfolio composition will change as market conditions
change.
ECONOMIC SECTOR BREAKDOWN OF THE FUND
Basic Materials 3%
Energy 1%
Industrial 5%
Technology 24%
Utilities 8%
Financial 18%
Consumer Cyclical 20%
Consumer Noncyclical 21%
Sectors were calculated as a percentage of total equity holdings of SR&F
Growth Investor Portfolio. Because the Portfolio is actively managed, there
can be no guarantee the Portfolio will continue to invest in these sectors
in the future. Industry sectors are based on Stein Roe & Farnham's defined
criteria used in the investment process.
THE OVERALL MARKET CAN BE BROKEN DOWN INTO SECTORS; GROUPINGS WITH SIMILAR
CHARACTERISTICS. BY KNOWING WHAT SECTORS A FUND IS INVESTED IN, YOU CAN
JUDGE ITS PERFORMANCE BASED UPON WHAT YOU KNOW ABOUT THESE SECTORS. IT ALSO
HELPS YOU AVOID OWNING TWO FUNDS THAT INVEST IN THE SAME WAY.
Q. DO YOU EVER SELL STOCKS WHEN MARKET CONDITIONS DETERIORATE?
A. Not necessarily. Generally speaking, sales are made when business
fundamentals disappoint us. For example, we sold Analog Devices when the
analog business started to slow down. We also sold Tupperware because sales
in their international divisions were suffering due to global recession.
Q. WHAT ARE SOME NEW PURCHASES?
A. We bought American Home Products (1.8 percent of total net assets), which
makes products for the health care industry, and the stock has already
delivered good performance. Another new purchase was WorldCom, a leading
telecommunications company with good growth characteristics. This company
performed well based on its growth prospects from a merger with MCI
Communications, a provider of long distance services. The company is now
called MCI WorldCom (2.1 percent of total net assets).
Q. WHAT DO YOU EXPECT GOING FORWARD?
A. We believe the stock market will continue to be volatile until there is
confirmation that the economic problems in emerging markets have reached a
bottom. We do not foresee a repeat of the 30 percent annual returns achieved
by the U.S. equity markets between 1995 and 1997, but we do believe stocks
will continue to outperform cash and fixed income investments over the long
term. We have been finding attractive purchases in small- and mid-sized
companies. Stocks of companies in these categories have underperformed
larger-company stocks over the past two years and are at price levels that
could support strong performance going forward.
AVERAGE ANNUAL
TOTAL RETURNS
(AS OF 9/30/98 CLASS A SHARES)
1 Life of the
Year Fund (4/29/94)
- ------------------------------------------------------------------------
Stein Roe Advisor
Young Investor Fund at NAV (0.88)% 22.12%
- ------------------------------------------------------------------------
with CDSC (2.88)% 22.12%
- ------------------------------------------------------------------------
Lipper Growth Fund
Peer Group Average (1.44)% 16.52%
- ------------------------------------------------------------------------
The Fund commenced operations on 2/14/97, but until 1/26/98 offered only the
shares that are now designated Class K shares. The Adviser currently limits
expenses on Class A and Class K shares to 1.65% and 1.50% of average net assets,
respectively. Absent these limits, total returns would be less. The historical
performance of Class K shares for the period prior to 2/14/97 and the historical
performance of Class A shares for the period prior to 1/26/98 are based on the
performance of SR&F Growth Investor Portfolio, restated to reflect the sales
charges, 12b-1 fees and other expenses applicable to each class as set forth in
the "Fee Table," without giving effect to any fee waivers described therein and
assuming reinvestment of dividends and capital gains. Inception date for
performance purposes is 4/29/94.
CREATED BY THE STANDARD & POOR'S CORPORATION IN 1923, THE S&P 500 INDEX IS MADE
UP OF 500 STOCKS IN DIFFERENT ECONOMIC CATEGORIES, INCLUDING INDUSTRIAL,
FINANCIAL, UTILITY AND TRANSPORTATION. AS THE ECONOMY CHANGES OVER TIME, THE
NUMBER OF STOCKS IN EACH CATEGORY ALSO CHANGES.
GROWTH OF $10,000 SINCE INCEPTION
ON 4/29/94
CLASS A SHARES S&P 500 INDEX
- ----------------------------------------------------------------
4/29/94 $10,000.00 $10,000
5/31/94 10,037.40 10,163
6/30/94 9,695.06 9,915
7/29/94 9,852.63 10,240
8/30/94 10,289.50 10,659
9/30/94 10,227.00 10,399
10/31/94 10,643.80 10,632
11/30/94 10,431.50 10,245
12/30/94 10,717.10 10,397
1/31/95 10,754.50 10,666
2/28/95 11,003.20 11,081
3/31/95 11,382.20 11,408
4/28/95 11,510.10 11,744
5/31/95 11,697.80 12,212
6/30/95 12,678.70 12,495
7/31/95 13,438.20 12,910
8/31/95 13,605.30 12,942
9/29/95 14,334.40 13,488
10/31/95 14,039.80 13,440
11/30/95 14,838.40 14,029
12/29/95 14,936.30 14,299
1/31/96 15,515.40 14,785
2/29/96 15,719.90 14,923
3/29/96 16,371.90 15,066
4/30/96 17,470.50 15,288
5/31/96 18,308.70 15,682
6/28/96 18,658.10 15,742
7/31/96 17,415.70 15,047
8/30/96 18,191.00 15,364
9/30/96 19,371.10 16,228
10/31/96 19,636.30 16,676
11/29/96 20,400.30 17,935
12/31/96 20,117.60 17,580
1/31/97 21,047.70 18,678
2/28/97 20,494.70 18,824
3/31/97 19,125.10 18,052
4/30/97 19,979.70 19,129
5/30/97 21,521.40 20,299
6/30/97 22,546.60 21,201
7/31/97 24,108.00 22,887
8/31/97 23,275.70 21,606
9/30/97 24,407.20 22,789
10/31/97 23,693.20 22,029
11/30/97 24,277.10 23,048
12/31/97 25,330.00 23,443
1/30/98 25,598.80 23,702
2/27/98 27,282.70 25,411
3/31/98 28,114.00 26,711
4/30/98 28,348.40 26,984
5/31/98 27,389.30 26,521
6/30/98 28,923.90 27,598
7/31/98 27,964.80 27,306
8/31/98 22,870.60 23,361
9/30/98 24,192.10 24,859
Illustration is based on a hypothetical $10,000 investment in the Fund. A
$10,000 investment in Class K shares made on 4/29/94 (inception), at net asset
value, would have grown to $24,192 on 9/30/98. All results shown assume
reinvestment of dividends and capital gains. Past performance is no guarantee of
future results. Investment returns and principal value will fluctuate, resulting
in a gain or loss on sale. The S&P 500 Index is an unmanaged group of stocks
that differs from the composition of Growth Investor Portfolio. It is not
possible to invest directly in an index. Lipper Analytical Services, Inc. Lipper
rankings are based on the Lipper Growth Fund Category. The Fund's Class K-share
ranking is in the third quartile for the one-year period (ranked 504th out of
934 funds). Rankings do not include any sales charges. Performance for different
share classes will vary with fees associated with each class.
<PAGE>
SR&F GROWTH INVESTOR PORTFOLIO*
Portfolio of Investments at September 30, 1998
(Dollar amounts in thousands)
Number Market
EQUITY SECURITIES (90.6%) of Shares Value
- -----------------------------------------------------------------------------
AUTOMOBILES/VEHICLES (1.1%)
Volvo ADRs
(Manufactures cars, trucks,
buses, marine engines and
aerospace equipment) 320,000 $ 7,720
BANKS (1.1%)
Texas Regional Bancshares, class A
(Commercial bank operating in
the Rio Grande Valley of Texas) 350,000 7,919
COMMERCIAL SERVICES (2.0%)
Paychex
(Provides computerized payroll
accounting services to businesses) 280,000 14,438
COMPUTER SOFTWARE AND SERVICES (8.2%)
Cambridge Technology
Partners (a)
(Designs, develops, and
deploys client/server and
Internet applications) 225,000 5,020
Cisco Systems (a)
(Produces, markets and supports
multiprotocol internetworking
systems) 316,500 19,563
Comdisco
(Provides technology solutions
that help organizations reduce
technology cost and risk) 590,000 8,039
Microsoft (a)
(Manufactures software products) 145,000 15,959
Transaction Systems Architects (a)
(Develops, markets and supports a
broad line of software products
and services) 300,000 10,650
---------
59,231
*Stein Roe Advisor Young Investor Fund invests all of its assets in the SR&F
Growth Investor Portfolio.
CONSUMER PRODUCTS (2.3%)
Gillette
(Manufacturers and markets shaving
and personal-care products) 200,000 7,650
Procter & Gamble
(Produces personal-care products,
pharmaceuticals, food and beverages) 125,000 8,867
---------
16,517
DIAMONDS/PRECIOUS STONES (0.7%)
De Beers Consolidated Mines
(Holding company for exploration,
trade and production of diamonds) 400,000 5,025
DISTRIBUTION - RETAIL (4.5%)
Hasbro
(Manufactures and sells children's toys) 320,000 9,440
Mattel
(Designs, manufactures and
markets children's toys) 350,000 9,800
Walgreen Co.
(Large retail drugstore chain) 300,000 13,219
---------
32,459
ELECTRICAL EQUIPMENT (5.5%)
General Electric
(Appliances, broadcasting,
communications and transportation) 130,000 10,343
Intel
(Produces and sells microcomputer
components and related products) 150,000 12,862
Maxim Integrated Products (a)
(Develops, manufactures and markets
integrated circuits) 300,000 8,363
Motorola
(Producer of electronic and
telecommunications equipment) 200,000 8,538
---------
40,106
ELECTRICAL GENERATION (1.7%)
AES
(Provider of electricity to U.S.
and international customers) 325,000 12,045
ENTERTAINMENT (3.4%)
Cedar Fair L.P.
(Owns and operates amusement
theme parks) 315,000 7,718
News Corporation Limited ADRs
(Production and distribution of
motion pictures) 350,000 7,831
Walt Disney
(Operates theme parks and resorts,
and produces motion pictures) 370,000 9,366
---------
24,915
FINANCIAL INSTITUTIONS (6.0%)
Fannie Mae
(Purchases mortgages and issues
guaranteed mortgage-backed
securities) 225,000 14,456
Freddie Mac
(Purchases mortgages from lenders
and resells in pools or packages) 300,000 14,831
Household International
(Provides financial and
banking services) 375,000 14,063
---------
43,350
FINANCIAL SERVICES (5.3%)
Alliance Capital Management L.P.
(Provides investment services to
pension funds, endowments,
insurance companies, banks and
individual investors) 350,000 8,072
American Express
(Provides a variety of diversified
travel and financial services) 125,000 9,703
Heller Financial (a)
(Provides financial products
and services) 450,000 10,800
Travelers Group
(Provides investment, consumer
finance and insurance services) 250,000 9,375
---------
37,950
FOOD AND BEVERAGE (7.5%)
Coca-Cola
(Producer and distributor
of soft drink products) 175,000 10,084
Groupe Danone ADRs
(Produces packaged foods
and beverages) 240,000 12,555
Kellogg
(Producer of cereal and
specialty foods) 250,000 8,234
Quaker Oats
(Markets foods & beverages
internationally) 175,000 10,325
Wm. Wrigley Jr.
(Manufacturers of chewing gum) 175,000 13,289
---------
54,487
HEALTH CARE (4.3%)
American Home Products
(Discovers, develops, manufactures,
distributes and sells health
care products) 250,000 13,094
Johnson & Johnson
(Manufactures and markets a
broad range of health care
and other products) 180,000 14,085
Orthodontic Centers of America (a)
(Provides management and
consulting services to
orthodontic practices) 250,000 4,172
---------
31,351
INSURANCE (2.7%)
CMAC Investment Corp.
(Provides private mortgage
insurance coverage) 150,000 6,525
HCC Insurance Holdings
(Underwrites property and
casualty insurance) 400,000 7,750
MGIC Investment Corp.
(Provides private mortgage
insurance coverage) 150,000 5,531
---------
19,806
LEISURE PRODUCTS (0.5%)
Callaway Golf
(Produces and markets golf clubs) 350,000 3,784
MACHINERY (1.5%)
McDermott International
(Manufacturer of steam generating
and environmental machinery) 400,000 10,775
MEDICAL - PHARMACEUTICAL (4.9%)
Eli Lilly & Company
(Creates and delivers pharmaceutical-
based health care solutions) 150,000 11,747
Pfizer
(Researches and provides global
health care products) 125,000 13,242
Watson Pharmaceuticals (a)
(Develops, produces, markets and
distributes pharmaceutical products) 200,000 10,150
---------
35,139
MEDICAL - INSTRUMENTS (1.7%)
Medtronic
(Manufactures various cardiovascular
medical instruments) 210,000 12,154
OIL - EXPLORATION AND PRODUCTION (1.0%)
R & B Falcon (a)
(Operates marine drilling rigs for the
international oil and gas industry) 600,000 7,200
PUBLISHING, BROADCASTING AND MEDIA (7.1%)
Clear Channel Communications (a)
(Owns, operates and manages
radio and television stations) 280,000 13,300
Heftel Broadcasting, class A (a)
(Spanish language radio
broadcasting company) 300,000 11,325
Outdoor Systems (a)
(Provides outdoor advertising
mediums) 800,000 15,600
Petersen Companies (a)
(Publishes special-interest
magazines and provides
television programming) 400,000 11,400
---------
51,625
RESTAURANT/HOTEL (1.7%)
McDonald's
(Develops, licenses, leases and
services a worldwide system
of restaurants) 205,000 12,236
SPECIALTY CHEMICALS (1.7%)
Minerals Technologies
(Develops, produces and markets
specialty minerals, mineral-based
and synthetic mineral products) 270,000 11,897
TELECOMMUNICATIONS (13.2%)
ADC Telecommunications (a)
(Designs, manufactures and markets
a variety of transmission and
networking systems) 350,000 7,394
American Tower, class A (a)
(Operator of wireless
telecommunication sites) 570,000 14,535
Frontier
(Offers integrated communications
services for business and
residential customers) 400,000 10,950
Intermedia Communications (a)
(Provides telecommunications
solutions for business and
government customers) 250,000 6,141
Loral Space & Communications (a)
(High technology company
concentrated on satellite
manufacturing and satellite-based
communication services) 400,000 5,900
Lucent Technologies
(Produces public and private networks,
communication systems and software) 180,000 12,431
MCI WorldCom (a)
(Provides facilities-based and fully
integrated local, long distance,
international and Internet services) 305,000 14,907
Qwest Communications International (a)
(Provides communication services to
interexchange carriers, businesses
and consumers) 291,525 9,128
Tellabs (a)
(Designs, assembles, markets and
services voice and data
networking products) 250,000 9,953
Uniphase (a)
(Designs, develops and markets
fiber optic communications equipment) 100,000 4,100
---------
95,439
TRAVEL SERVICES (1.0%)
Sabre Group Holdings (a)
(Provider of a travel reservation system) 250,000 7,500
---------
TOTAL EQUITY SECURITIES
(Cost $582,424) 655,068
---------
SHORT-TERM Principal
OBLIGATIONS (10.1%) Amount
- ------------------------------------------------------------------------------
COMMERCIAL PAPER (10.1%)
Associates Corp. of
North America 5.75% 10/1/98 $ 35,775 35,775
Asset Securitization
Cooperative 5.55% 10/1/98 27,000 27,000
Enron 5.88% 10/1/98 10,000 10,000
---------
TOTAL SHORT-TERM OBLIGATIONS
(Cost $72,775) 72,775
---------
TOTAL INVESTMENTS (100.7%)
(Cost $655,199) (b) 727,843
OTHER ASSETS, LESS LIABILITIES (-0.7%) (5,173)
---------
Total Net Assets (100.0%) $ 722,670
=========
Notes to Portfolio of Investments
- -----------------------------------------------------------------------------
(a) Non-income producing security.
(b) At September 30, 1998, the cost of investments for federal income tax
purposes was $655,197. Net unrealized appreciation was $72,646, consisting
of gross unrealized appreciation of $137,622 and gross unrealized
depreciation of $64,976.
See accompanying Notes to Financial Statements.
<PAGE>
STEIN ROE ADVISOR YOUNG INVESTOR FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1998
(ALL AMOUNTS IN THOUSANDS, EXCEPT PER-SHARE DATA)
ASSETS
Investment in SR&F Growth Investor
Portfolio, at value $ 36,603
Receivable for fund shares sold 654
Cash 22
Other assets 5
---------
Total assets 37,284
---------
LIABILITIES
Payable to investment adviser 40
Payable for fund shares redeemed 9
Payable to transfer agent 7
Payable to distributor 7
Other liabilities 47
---------
Total liabilities 110
---------
Net assets $ 37,174
=========
ANALYSIS OF NET ASSETS
Paid-in capital $ 42,285
Net unrealized appreciation on investments 427
Undistributed net investment income --
Accumulated net realized loss on investments (5,538)
---------
Net assets $ 37,174
=========
CLASS A
Net asset value per share
(based on net assets of $36,843 and
3,245 shares issued and outstanding) $ 11.35
=========
CLASS K
Net asset value per share
(based on net assets of $331 and
29 shares issued and outstanding) $ 11.41
=========
See accompanying Notes to Financial Statements.
<PAGE>
STEIN ROE ADVISOR YOUNG INVESTOR FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 1998
(ALL AMOUNTS IN THOUSANDS)
INVESTMENT INCOME
Dividend income allocated
from SR&F Growth Investor Portfolio $ 96
Interest income allocated from
SR&F Growth Investor Portfolio 54
---------
Total interest income 150
---------
EXPENSES
Expenses allocated from
SR&F Growth Investor Portfolio 81
12b-1 distribution and service fees 40
SEC and state registration fees 33
Transfer agent fees 31
Administrative fees 26
Accounting fees 25
Amortization of organization expenses 15
Printing and postage 12
Legal and audit fees 11
Trustees' fees 7
Other 25
---------
Total expenses 306
Reimbursement of expenses by investment adviser (87)
---------
Net expenses 219
---------
Net investment loss (69)
---------
REALIZED AND UNREALIZED GAINS (LOSSES)
ON INVESTMENTS
Net realized losses on investments (5,529)
Net change in unrealized appreciation
or depreciation on investments 403
---------
Net losses on investments (5,126)
---------
Net decrease in net assets
resulting from operations $ (5,195)
=========
See accompanying Notes to Financial Statements.
<PAGE>
STEIN ROE ADVISOR YOUNG INVESTOR FUND
STATEMENTS OF CHANGES IN NET ASSETS
(ALL AMOUNTS IN THOUSANDS)
YEAR ENDED PERIOD ENDED
SEPTEMBER 30, SEPTEMBER 30,
1998 1997 (a)
- ---------------------------------------------------------------------------
OPERATIONS
Net investment loss $ (69) $ --
Net realized losses on investments (5,529) (9)
Net change in unrealized
appreciation or depreciation
on investments 403 24
-------- --------
Net increase (decrease) in
net assets resulting
from operations (5,195) 15
-------- --------
SHARE TRANSACTIONS
Subscriptions to fund shares - Class A 44,021 --
Redemptions of fund shares - Class A (2,011) --
-------- --------
42,010 --
-------- --------
Subscriptions to fund shares - Class K 291 101
Redemptions of fund shares - Class K (48) --
-------- --------
243 101
-------- --------
Net increase from share transactions 42,253 101
-------- --------
Net increase in net assets 37,058 116
TOTAL NET ASSETS
Beginning of period 116 --
-------- --------
End of period $ 37,174 $ 116
======== ========
UNDISTRIBUTED NET INVESTMENT
INCOME AT END OF PERIOD $ -- $ --
======== ========
(a) From commencement of operations on February 14, 1997.
See accompanying Notes to Financial Statements.
<PAGE>
SR&F GROWTH INVESTOR PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1998
(ALL AMOUNTS IN THOUSANDS)
ASSETS
Investments, at market value
(cost $655,199) $ 727,843
Dividends receivable 743
Cash 3
---------
Total assets 728,589
---------
LIABILITIES
Payable for investments purchased 5,510
Payable to investment adviser 351
Other liabilities 58
---------
Total liabilities 5,919
---------
Net assets applicable to investors'
beneficial interest $ 722,670
=========
See accompanying Notes to Financial Statements.
SR&F GROWTH INVESTOR PORTFOLIO
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 1998
(ALL AMOUNTS IN THOUSANDS)
INVESTMENT INCOME
Dividends $ 4,335
Interest 2,259
---------
Total investment income 6,594
---------
EXPENSES
Management fees 3,758
Accounting fees 40
Trustees' fees 22
Audit and legal fees 22
Custodian fees 11
Other 82
---------
Total expenses 3,935
---------
Net investment income 2,659
---------
REALIZED AND UNREALIZED GAINS (LOSSES)
ON INVESTMENTS
Net realized gains on investments 12,629
Net change in unrealized appreciation
or depreciation on investments (30,644)
---------
Net losses on investments (18,015)
---------
Net decrease in net assets resulting
from operations $ (15,356)
=========
See accompanying Notes to Financial Statements.
<PAGE>
SR&F GROWTH INVESTOR PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
(ALL AMOUNTS IN THOUSANDS)
YEAR ENDED PERIOD ENDED
SEPTEMBER 30, SEPTEMBER 30,
1998 1997 (a)
-------- --------
OPERATIONS
Net investment income $ 2,659 $ 1,418
Net realized gains on investments 12,629 5,460
Net change in unrealized
appreciation or depreciation
on investments (30,644) 61,915
-------- --------
Net increase (decrease) in
net assets resulting from
operations (15,356) 68,793
-------- --------
TRANSACTIONS IN INVESTORS'
BENEFICIAL INTEREST
Contributions 389,527 452,937
Withdrawals (127,041) (46,190)
-------- --------
Net increase from transactions
in investors' beneficial interest 262,486 406,747
-------- --------
Net increase in net assets 247,130 475,540
TOTAL NET ASSETS
Beginning of period 475,540 --
-------- --------
End of period $722,670 $475,540
======== ========
(a) From commencement of operations on February 3, 1997.
See accompanying Notes to Financial Statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(ALL AMOUNTS, EXCEPT PER-SHARE AMOUNTS, IN THOUSANDS)
NOTE 1. ORGANIZATION
Stein Roe Advisor Young Investor Fund (the "Fund") is a multi-class series of
Stein Roe Advisor Trust (the "Trust"), an open-end management investment company
organized as a Massachusetts business trust. The Fund invests substantially all
of its assets in SR&F Growth Investor Portfolio (the "Portfolio"), which seeks
to achieve long-term capital appreciation by investing primarily in common
stocks and other equity-type securities that are believed to have long-term
appreciation potential. The Fund also has an educational objective to teach
investors, especially young people, about basic economic principles and personal
finance through a variety of educational materials prepared and paid for by the
Fund. The Fund currently offers two classes of shares at net asset value: Class
A and Class K. Class A shares are subject to a maximum contingent deferred sales
charge of 2.00 percent on redemptions made within three years of purchase. The
Fund commenced offering Class A shares on January 26, 1998.
The Portfolio is a series of SR&F Base Trust, a Massachusetts common law trust
organized under an Agreement and Declaration of Trust dated August 23, 1993. The
Portfolio commenced operations February 3, 1997. At commencement, Stein Roe
Young Investor Fund contributed $292,104 in securities and other assets in
exchange for beneficial ownership of the Portfolio. At February 14, 1997, Stein
Roe Advisor Young Investor Fund contributed cash of $100. The Portfolio
allocates income, expenses, realized and unrealized gains and losses to each
investor on a daily basis, based on their respective percentage of ownership. At
September 30, 1998, Stein Roe Young Investor Fund and Stein Roe Advisor Young
Investor Fund owned 94.9 percent and 5.1 percent, respectively, of the
Portfolio.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following summarizes the significant accounting policies of the Fund and
Portfolio. The 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.
SECURITY VALUATIONS
All securities are valued as of September 30, 1998, the last business day of the
period. Securities traded on national securities exchanges are valued at the
last reported sales price or, if there are no sales, at the latest bid
quotation. Each over-the-counter security for which the last sale price is
available from NASDAQ is valued at that price. All other over-the-counter
securities for which reliable quotations are available are valued at the latest
bid quotation. 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.
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.
MULTI-CLASS ALLOCATIONS
All income, expenses (other than transfer agent fees and 12b-1 distribution and
services fees), realized and unrealized gains and losses are allocated to each
class proportionately based on their net assets on a daily basis for purposes of
determining the per-share net asset value of each class.
FEDERAL INCOME TAXES
No provision is made for federal income taxes since (a) the Fund elects to be
taxed as a "regulated investment company" and make distributions to its
shareholders to be relieved of all federal income taxes under provisions of
current federal tax law; and (b) the Portfolio is treated as a partnership for
federal income tax purposes and all of its income is allocated to its owners
based on their respective percentages of ownership.
The Fund intends to utilize provisions of the federal income tax law, which
allow the fund 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. At September 30, 1998, the Fund had a capital loss carryforward
of $5,538, which expires in 2005 and 2006.
DISTRIBUTION TO SHAREHOLDERS
The Fund declares and pays dividends of any net investment income and net
realized capital gains annually, which 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 Portfolio pays a monthly management fee and the Fund pays a monthly
administrative fee to Stein Roe & Farnham Incorporated (the "Adviser"), an
indirect, wholly-owned subsidiary of Liberty Financial Companies, Inc.
("Liberty"), for its services as investment adviser and manager.
The management fee for the 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 fee for
the Fund is computed at an annual rate of .20 of 1 percent of average daily net
assets up to $500 million, .15 of 1 percent of the next $500 million, and .125
of 1 percent thereafter.
The Adviser also provides fund accounting services. For the year ended September
30, 1998, the Fund and Portfolio incurred charges of $25 and $40, respectively.
The Adviser has agreed to reimburse the fund to the extent that its annual
expenses exceed 1.65 percent of average daily net assets for Class A shares and
1.50 percent of average daily net assets for Class K shares through January 31,
2000, subject to earlier termination by the Adviser on 30 days notice.
Shares of the Fund are distributed by Liberty Funds Distributor, Inc. (the
"Distributor"), an indirect, wholly-owned subsidiary of Liberty. 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 the personal service and/or maintenance of shareholder
accounts, the Distributor receives from the Fund a service fee at an annual rate
not to exceed 0.25 percent of average daily net assets attributed to Class A
shares. The Plan also provides that, as compensation for expenses related to the
promotion and distribution of Fund shares, the Distributor receives a
distribution fee at an annual rate not to exceed 0.10 percent of average daily
net assets for Class A shares. The Plan further provides that, as compensation
for services and/or distribution, the Distributor receives a fee at an annual
rate not to exceed 0.25 percent of average daily net assets for Class K shares.
The Distributor currently limits the Class A annual distribution fee to 0.05
percent of average daily net assets, subject to termination at any time without
shareholder approval. For the period ended September 30, 1998, the Fund incurred
12b-1 distribution and service charges of $39 and $1 for Class A and Class K
shares, respectively.
Transfer agent fees are paid to Liberty Funds Services, Inc. ("LFS"), an
indirect, wholly-owned subsidiary of Liberty. Prior to October 15, 1997,
transfer agent fees were paid to SteinRoe Services Inc., a direct, wholly-owned
subsidiary of Liberty. Transfer agent fees for Class A shares are computed at an
annual rate of 0.236 percent of average daily net assets. Transfer agent fees
for Class K shares are computed at an annual rate of 0.30 percent of average
daily net assets. For the period ended September 30, 1998, the Fund incurred
transfer agent charges of $30 and $1 for Class A and Class K shares,
respectively.
Certain officers and trustees of the Trust are also officers of the Adviser. The
compensation of trustees not affiliated with the Adviser for the Fund and the
Portfolio for the period ended September 30, 1998, was $7 and $22, respectively.
No remuneration was paid to any other trustee or officer of the Trust.
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 year ended September 30,
1998.
NOTE 5. INVESTMENT TRANSACTIONS
The Portfolio's aggregate cost of purchases and proceeds from sales other than
short-term obligations for the year ended September 30, 1998, were $483,340 and
$263,465, respectively.
NOTE 6. CAPITAL SHARE TRANSACTIONS
The following table summarizes Fund share activity during the reporting period:
PERIOD ENDED
SEPTEMBER 30,
CLASS A SHARES 1998 (a)
- ----------------------------------------------------------
Subscriptions to fund shares 3,406
Redemptions of fund shares (161)
--------
Net increase in fund shares 3,245
========
YEAR ENDED PERIOD ENDED
SEPTEMBER 30, SEPTEMBER 30,
CLASS K SHARES 1998 1997 (b)
- --------------------------------------------------------------------------
Subscriptions to fund shares 23 10
Redemptions of fund shares (4) --
-------- --------
Net increase in fund shares 19 10
======== ========
(a) From commencement of multi-class offering on January 26, 1998.
(b) From commencement of operations on February 14, 1997.
FINANCIAL HIGHLIGHTS
STEIN ROE ADVISOR YOUNG INVESTOR FUND
Selected per-share data (for a share outstanding throughout the period), ratios
and supplemental data.
PERIOD ENDED
SEPTEMBER 30,
CLASS A 1998 (a)
- ----------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.67
---------
Income From Investment Operations
Net investment loss (0.02)
Net realized and unrealized losses on investments (0.30)
---------
Total from investment operations (0.32)
---------
Net Asset Value, End of Period $ 11.35
=========
Ratio of net expenses to average net assets (b) 1.65%(d)
Ratio of net investment loss to
average net assets (c) (0.52%)(d)
Total return (c) (2.74%)
Net assets, end of period (000's) $ 36,843
(a) From commencement of multi-class offering on January 26, 1998.
(b) If the Fund had paid all of its expenses and there had been no reimbursement
by the investment adviser, this ratio would have been 2.02 percent for the
period ended September 30, 1998. (c) Computed giving effect to the
investment adviser's expense limitation undertaking.
(d) Annualized.
<PAGE>
FINANCIAL HIGHLIGHTS
STEIN ROE ADVISOR YOUNG INVESTOR FUND
Selected per-share data (for a share outstanding throughout each period), ratios
and supplemental data.
YEAR ENDED PERIOD ENDED
SEPTEMBER 30, SEPTEMBER 30,
1998 1997 (a)
------------- -------------
CLASS K
NET ASSET VALUE,
BEGINNING OF PERIOD $ 11.49 $ 10.00
-------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (0.03) (0.02)
Net realized and unrealized
gains (losses) on investments (0.04) 1.51
-------- --------
Total from investment operations (0.07) 1.49
-------- --------
DISTRIBUTIONS
Net investment income (0.01) --
-------- --------
NET ASSET VALUE, END OF PERIOD $ 11.41 $ 11.49
======== ========
Ratio of net expenses to average
net assets (b) 1.50%(d) 1.50%(d)
Ratio of net investment income to
average net assets (c) (0.48%)(d) (0.24%)(d)
Total return (c) (0.62%) 14.90%
Net assets, end of period (000's) $ 331 $ 116
(a) From commencement of operations on February 14, 1997.
(b) If the Fund had paid all of its expenses and there had been no reimbursement
by the investment adviser, this ratio would have been 20.42 percent for the
year ended September 30, 1998, and 89.45 percent for the period ended
September 30, 1997.
(c) Computed giving effect to the investment adviser's expense limitation
undertaking.
(d) Annualized
FINANCIAL HIGHLIGHTS
SR&F GROWTH INVESTOR PORTFOLIO
YEAR ENDED PERIOD ENDED
SEPTEMBER 30, SEPTEMBER 30,
1998 1997(a)
------------- -------------
Ratio of net expenses to
average net assets 0.62% 0.63%(b)
Ratio of net investment income
to average net assets 0.42% 0.54%(b)
Portfolio turnover rate 45% 38%
(a) From commencement of operations on February 3, 1997.
(b) Annualized
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Trustees and Shareholders of:
Stein Roe Advisor Young Investor Fund
SR&F Growth Investor Portfolio
We have audited the accompanying statement of assets and liabilities of Stein
Roe Advisor Young Investor Fund and the accompanying statement of assets and
liabilities, including the portfolio of investments, of SR&F Growth Investor
Portfolio as of September 30, 1998, and the related statements of operations,
changes in net assets and the financial highlights for the periods indicated
thereon. These financial statements and financial highlights are the
responsibility of the Fund's and Portfolio's management. Our responsibility is
to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures for the SR&F Growth Investor Portfolio included
confirmation of securities owned as of September 30, 1998, by correspondence
with the custodian and brokers. As to securities purchased but not received, we
requested confirmation from brokers and, when replies were not received, we
carried out alternative auditing procedures. An audit also includes assessing
the estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly the
financial position of the Stein Roe Advisor Young Investor Fund and SR&F Growth
Investor Portfolio at September 30, 1998, the results of their operations, the
changes in their net assets and their financial highlights for the periods
indicated thereon, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Chicago, Illinois
November 6, 1998
ACTIVITY PAGES
PUZZLES AND GAMES
(AGES THREE TO FIVE)
KEEP MONEY IN A SAFE PLACE AT HOME
Connect the dots and see a good place to keep your money.
[graphic omitted]
color me
WHAT DOESN'T BELONG?
Put an "X" on the thing that's not like the others in each picture.
1. [graphic omitted]
2. [graphic omitted]
3. [graphic omitted]
BONUS: How much money
does this add up to? ________
Answers: 1. Pumpkin. 2. Leaf. 3. Car. All the other objects are different types
of money. Bonus: $1.60
color me
PUZZLES AND GAMES
(AGES SIX TO EIGHT)
REBUS PUZZLES
A rebus puzzle uses pictures and words to make another word or
phrase. Can you figure out these famous sayings about money?
[graphic omitted]
1. (your answer)
[graphic omitted]
2. (your answer)
[graphic omitted]
3. (your answer)
Answers: 1. A fool and his money are soon parted. 2. Money doesn't grow on
trees. 3. A penny saved is a penny earned.
color me
INVESTMENTS ARE A-MAZE-ING
Saving for things can take a little time, or a long time. Can you find your way
to a new bike? Can you find your way to college?
[graphic omitted]
color me
PUZZLES AND GAMES
(AGES NINE TO 12)
NAME THE EXCHANGE
The world has many stock markets. In most countries they are called exchanges,
because that's where brokers (the people whose job it is to buy and sell stocks
for their customers) exchange stocks. How much do you know about them? Try to
match the descriptions on the left to the answers on the right.
[graphic omitted]
1. The world's oldest stock exchange A. New York Stock Exchange (NYSE)
2. The biggest U.S. stock exchange B. Over-the-counter (OTC) market
3. The other exchange in New York C. Nikkei
4. Japan's largest exchange D. American Stock Exchange (Amex)
5. Where most U.S. stocks are traded E. London Stock Exchange
Answers: 1. E. 2. A. 3. D. 4. C. 5. B. Most U.S. stocks are traded on the
over-the-counter (OTC) market, an organized network in which brokers use
computers to track stock prices and trade stocks with other brokers by
telephone, instead of in person on an exchange floor. The Nasdaq stock market is
an example of an over-the-counter market.
BRAINTEASER
In each blank below, write the letter representing the person pictured on that
bill. (If you need help, check the web site for the U.S. Treasury Department at
www.ustreas.gov.)
[graphic omitted]
BILL AMOUNT PERSON FEATURED
$1 _____ a) Grover Cleveland
$2 _____ b) Thomas Jefferson
$5 _____ c) Abraham Lincoln
$10 _____ d) Benjamin Franklin
$20 _____ e) Ulysses Grant
$50 _____ f) William McKinley
$100 _____ g) George Washington
$500 _____ h) Andrew Jackson
$1,000 _____ i) Alexander Hamilton
Answers: $1 (g). $2 (b). $5 (c). $10 (i). $20 (h). $50 (e). $100 (d). $500
(f). $1,000 (a).
V R N I N W V S A F L B H J X O T P K
P N O I T A C I F I S R E V I D N I W
R A E B D M U T U A L F U N D R Z O A
O U S W Y R S S T H A N T O E B U L L
S U T N T N T E K S E B U G J O B U L
P R D M I N O R N M O K A Y K N Z R S
E S H M R V D M L E H N Q A I D E D T
C N N I U D I B C V A O P R W S N S R
T D T W C D A C V M C C E J A N G T E
U N K E E N N M O M V V N J E D O O E
S O C R S R B I J S O N X G L O F T T
T L J O D M L O P L I M J D N C W A S
O O E Q E O I C A H O R B E A S P L D
C A C A F J S T S I D M R I S K T R L
K D T T E K I M L T J S Q N D O P E W
S N R J F L A O R O C Q R P A T B T S
K O V S I S F X E I W U Y O Q V C U K
P D E T E U L A V T E S S A T E N R F
G P Y O U N G I N V E S T O R F U N D
INVESTING INSIGHT
How's your investing knowledge? Words hidden in the puzzle can go
forward, backward, up, down or diagonally. If you still need help
after reading them, ask an adult to help, or give us a call at
1-800-426-3750.
BEAR WALL STREET MUTUAL FUND
STOCKS BOND PORTFOLIO MANAGER
TOTAL RETURN SECURITY PROSPECTUS
MINOR NET ASSET VALUE RISK
NO LOAD NASDAQ VOLATILITY
CUSTODIAN BULL YOUNG INVESTOR FUND
<PAGE>
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
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Stein Roe Advisor Young Investor Fund is:
Liberty Funds Services, Inc.
P.O. Box 1722
Boston, MA 02105-1722
1-800-345-6611
The Fund mails one shareholder report to each shareholder address.
If you would like more than one report, please call 1-800-426-3750
and additional reports will be sent to you.
This report has been prepared for shareholders of Stein Roe Advisor Young
Investor Fund. This report may also be used as sales literature when preceded or
accompanied by the current prospectus which provides details of sales charges,
investment objectives and operating policies of the Fund and the most recent
copy of Liberty Funds Distributor's Performance Update.
<PAGE>
[graphic omitted]
OUR "FAMILY" OF MUTUAL FUNDS
Stein Roe Advisor Young Investor Fund is part of a family of funds
distributed by Liberty Funds Distributor, Inc. Liberty offers a
wide spectrum of funds, from conservative tax-free bonds to more
aggressive international funds. Each fund within the Liberty
family follows a consistent investment style and adheres to its
stated investment objective. For more information on
Liberty-distributed funds, including Colonial, Crabbe Huson,
Newport and Stein Roe Advisor funds please consult your investment
advisor or call 1-800-426-3750.
STEIN ROE ADVISOR YOUNG INVESTOR(SM) FUND ANNUAL REPORT - SEPTEMBER 30, 1998
[logo] L I B E R T Y
COLONIAL o CRABBE HUSON o NEWPORT o STEIN ROE ADVISOR -------------
BULK RATE
Liberty Funds Distributor, Inc. (C)1998 U.S. POSTAGE
One Financial Center, Boston, MA 02111-2621, 1-800-426-3750 PAID
Visit us at www.libertyfunds.com Holliston, MA
PERMIT NO. 20
-------------
YI-02/092G-1098 (11/98) 98/1251
