<PAGE>
INVEST FOR THE LONG TERM IN A FUND
MANAGED WITH AN UNCOMPROMISING
APPROACH TO INVESTING IN RECOGNIZED
CORPORATE LEADERS.
[graphic omitted]
STEIN ROE ADVISOR GROWTH STOCK FUND SEMIANNUAL REPORT
MARCH 31, 1999
---------------------------
NOT FDIC MAY LOSE VALUE
INSURED. NO BANK GUARANTEE
---------------------------
<PAGE>
- --------------------------------------------------------------------------------
STEIN ROE ADVISOR GROWTH STOCK FUND
- --------------------------------------------------------------------------------
[Photo of Thomas W. Butch]
PRESIDENT'S MESSAGE TO SHAREHOLDERS:
We are pleased to present the semiannual report for Stein Roe Advisor Growth
Stock Fund. This report covers the six months ended March 31, 1999.
A CLEAR OPPORTUNITY
Back on March 31, 1981, the Dow Jones Industrial Average (DJIA) stood at just
1,003 points. Consumer prices were spiraling upward at a 10.6% rate. The U.S.
unemployment rate was 7.4% and climbing. Home mortgage rates exceeded 15%.
Today, we live in an era that could be considered the best of times. In March
1999, the DJIA reached the 10,000 level. Today, the jobless and inflation rates
- -- a combination once known as the misery index -- stand at less than 6%, a
third of the level in the early 1980s. Mortgage rates are half of what they were
a generation ago.
When measured by such traditional indicators as price/earnings ratios and book
value, U.S. stock prices are at historically high levels. Still, when one looks
at the positive changes that have occurred since 1981, including a
more-globalized economy and significant developments in technology and
healthcare, the new millennium offers exciting growth potential.
For the six months ended March 31, 1999, a select group of large-company growth
stocks performed exceptionally well. Stein Roe Advisor Growth Stock Fund
benefited from this market phenomenon, which emphasized rapidly growing
technology and consumer stocks.
On the pages that follow, your Fund's portfolio manager details the investment
strategies that helped generate favorable results over the period.
As always, thank you for the opportunity to serve your investment needs.
Sincerely,
/s/ Thomas W. Butch
Thomas W. Butch
President
May 14, 1999
Because market and economic conditions change frequently, there can be no
assurance that the trends described above or on the following pages will
continue.
TABLE OF CONTENTS
1 HIGHLIGHTS
2 PORTFOLIO MANAGER REPORT
3 PERFORMANCE
4 PORTFOLIO OF INVESTMENTS
5 FINANCIAL STATEMENTS
8 NOTES TO FINANCIAL STATEMENTS
10 FINANCIAL HIGHLIGHTS
<PAGE>
- --------------------------------------------------------------------------------
HIGHLIGHTS
- --------------------------------------------------------------------------------
o FAVORABLE CONDITIONS FOR GROWTH STOCKS.
During the period, a growing U.S. economy, low interest rates and negligible
inflation created a favorable environment for large-cap stocks --
particularly rapidly growing technology stocks.
o STRONG DEMAND FOR GROWTH STOCKS RESULTED IN HIGH VALUATIONS.
Following last summer's correction, investors sought large-cap growth stocks
for their strong earnings growth rate, perceived safety and high level of
liquidity, pushing their prices to historically high levels relative to the
overall market.
o A HANDFUL OF LARGE-CAP GROWTH STOCKS DOMINATE THE MARKET.
During the period, a small number of large-cap stocks -- many of which were
technology-related -- produced strong returns and boosted the Fund's
performance. For the six-month period, the Fund outperformed the S&P 500
Index.
STEIN ROE ADVISOR GROWTH STOCK FUND OUTPERFORMS S&P 500 INDEX AND AVERAGE
GROWTH FUND(1)
Stein Roe Advisor Growth Stock Fund 39.00%
S&P 500 Index 27.32%
Average Growth Fund 28.23%
- ---------------------------------------------------
9/30/98 -- 3/31/99
(1) Source: Lipper, Inc. Lipper rankings are based on the Lipper Growth Funds
Category (a proxy for "Average Growth Funds"). The Fund (Class A shares)
ranked in the first quartile (142 out of 1,111 funds) for the six-month
period and in the first quartile (214 out of 1,022 funds) for the one-year
period ended March 31, 1999. For the period starting 10/31/97, the Fund
ranked in the first quartile (211 out of 898 funds). Lipper, Inc. did not
rank the Fund for the five- and ten-year periods.
The Standard & Poor's 500 Index is an unmanaged index that tracks the
performance of 500 large-capitalization U.S. stocks. Unlike mutual funds,
indexes are not investments and do not incur fees or expenses. It is not
possible to invest directly in an index.
SIX-MONTH TOTAL RETURNS FOR THE PERIOD ENDED 3/31/99
With sales
NAV charge*
--- -------
Class A 39.00% 31.01%
- ------------------------------------------
Class B 38.67% 33.67%
- ------------------------------------------
Class C 38.65% 37.65%
- ------------------------------------------
Class K 38.87% N/A
- ------------------------------------------
NET ASSET VALUE PER SHARE ON 3/31/99
Class A $16.43
- ------------------------------------------
Class B $16.28
- ------------------------------------------
Class C $16.25
- ------------------------------------------
Class K $16.47
- ------------------------------------------
* Public offering price performance reflects the maximum initial sales charge
of 5.75% applicable to Class A shares. The applicable contingent deferred
sales charge (CDSC) for the six-month period for Class B shares is 5% and 1%
for Class C shares.
<PAGE>
SEMIANNUAL REPORT: STEIN ROE ADVISOR GROWTH STOCK FUND
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER'S REPORT
- --------------------------------------------------------------------------------
FUND OUTPERFORMS FOR THE PERIOD
The Fund's Class A shares returned 39.00% at net asset value for the past six
months. This outperformed the Fund's Lipper peer group average of 28.23% and the
S&P 500 Index, which rose 27.32% during the period.
TECHNOLOGY, FINANCIAL AND HEALTHCARE STOCKS WERE STRONG
The Fund maintained a heavier weighting in a diverse mix of technology stocks
(31% of total net assets) relative to the S&P 500 Index (22%) during the first
half of fiscal year 1999, which helped its performance. We emphasized companies
that build data networks, transmission systems, and retrieval and storage
systems because we forsee strong demand on these areas going forward. These
include Cisco Systems, MCI WorldCom, EMC Corp. and Microsoft (5.3%, 5.1%, 4.0%
and 4.0% of net assets, respectively). All four stocks were exceptional
performers during the period.
Another area of focus was financial services. Coming off a difficult 1998 marked
by global financial crises, financial stocks have done well so far in 1999. We
aggressively added to the portfolio's holdings late last year, focusing on
premier global franchises such as American International Group (AIG) and
Citigroup (4.3% and 4.0% of net assets, respectively). These stocks also
bolstered the Fund's six-month return.
The Fund was overweighted in healthcare relative to the S&P 500. As aging baby
boomers continue to demand more and better pharmaceuticals and healthcare
services, demographics should help drive future growth in this sector. Strong
performing stocks in the portfolio included Pfizer, Eli Lilly & Co., Cardinal
Health and Merck & Co. (3.7%, 3.0%, 3.1% and 2.1% of net assets, respectively).
MULTINATIONAL COMPANIES IMPACTED BY RECESSION ABROAD
Many consumer non-durable stocks held by the portfolio, such as Gillette,
Procter & Gamble and Coca-Cola (2.6%, 2.2% and 1.6% of net assets, respectively)
maintain international operations. As a result, their exposure to economic
downturns in Asia and emerging markets hurt them during the period. However,
these companies continue to invest with long-term vision in those emerging
economies. Should these foreign economies recover, we believe these stocks are
well positioned to resume their historical growth rates.
POSITIVE OUTLOOK FOR HIGH-QUALITY, LARGE-CAP STOCKS
Despite the recent fears of rising inflation and interest rates, our long-term
outlook remains positive for large-cap growth stocks. We believe the Federal
Reserve Board may raise interest rates in the short term to prevent inflation.
However, we feel the economy will continue to grow, but at a potentially slower
pace than in 1998. Therefore, we will continue to focus on companies that
deliver consistent earnings and that will benefit the Fund in the future.
/s/ Erik Gustafson /s/ David Brady
ERIK GUSTAFSON is a senior vice president of the Advisor and has managed the
Growth Stock Portfolio since its inception. DAVID BRADY, senior vice president
of the Advisor, serves as the Fund's associate portfolio manager.
SECTOR BREAKDOWN AS OF 3/31/99
(AS A PERCENTAGE OF TOTAL NET ASSETS)*
Stein Roe Advisor S&P
Growth Stock Fund 500 Index
----------------- ---------
TECHNOLOGY 31% 22%
CONSUMER NON-CYCLICAL 25% 21%
CONSUMER CYCLICAL 16% 14%
FINANCIAL 13% 16%
INDUSTRIAL 9% 8%
UTILITIES 5% 10%
ENERGY 1% 7%
BASIC MATERIALS 0% 2%
* Sectors are calculated as a percentage of the total holdings of the SR&F
Growth Stock Portfolio. Because the Portfolio is actively managed, there can
be no guarantee the Portfolio will continue to maintain this sector
allocation. The sector classifications are based upon the Advisor's defined
criteria as used in the investment process.
BOUGHT
- -------------------------------------------------------------------------------
MORGAN STANLEY DEAN WITTER
We added Morgan Stanley Dean Witter (1.3% of net assets), which maintains a very
powerful financial services franchise.
TYCO INTERNATIONAL
We also added shares of Tyco International (2.5% of net assets), an industrial
conglomerate. In our opinion, the company is likely to expand earnings and
benefit from its recent acquisition of AMP, an electronic components
manufacturer.
- --------------------------------------------------------------------------------
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 3/31/99
Share Clas (A) (B) (C) (K)
Inception 10/15/97 10/15/97 10/15/97 2/14/97
- -------------------------------------------------------------------------------
NAV POP NAV w/CDSC NAV w/CDSC NAV
- -------------------------------------------------------------------------------
1 year 25.32% 18.12% 24.46% 19.46% 24.90% 23.90% 24.96%
- -------------------------------------------------------------------------------
5 years 25.23 23.76 24.37 24.20 24.32 24.32 25.16
- -------------------------------------------------------------------------------
10 years 19.42 18.71 18.60 18.60 18.58 18.58 19.42
- -------------------------------------------------------------------------------
Past performance is not a guarantee of future results. Investment returns and
principal value will fluctuate, resulting in a gain or loss on sale. Stein Roe
Advisor Growth Stock Fund invests all of its investable assets in SR&F Growth
Stock Portfolio, which has the same investment objective and substantially the
same investment policies as the Fund. The Fund commenced operations on 2/14/97,
but until 10/15/97 only offered the shares that are now designated as Class K
shares. The historical performance of the Fund's remaining share classes for all
periods, is based on the performance of SR&F Growth Stock Portfolio, restated to
reflect sales charges, 12b-1 fees and other expenses applicable to that 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. The Advisor
currently limits expenses on Class A shares to 1.40% of average annual net
assets. Absent this limit, total returns would have been less. Historical
performance as restated should not be interpreted as indicative of Stein Roe
Advisor Growth Stock Fund's future performance. The Fund offers other share
classes, which are subject to different fees and expenses, which will affect
their performance.
TOP HOLDINGS AS OF 3/31/99
(AS A PERCENTAGE OF TOTAL NET ASSETS)*
1. Cisco Systems 5.3%
- --------------------------------------------
2. MCI WorldCom 5.1%
- --------------------------------------------
3. American International Group 4.3%
- --------------------------------------------
4. Microsoft 4.0%
- --------------------------------------------
5. Citigroup 4.0%
- --------------------------------------------
6. EMC Corp. 4.0%
- --------------------------------------------
7. Time Warner 3.8%
- --------------------------------------------
8. Pfizer 3.7%
- --------------------------------------------
9. Home Depot 3.6%
- --------------------------------------------
10. General Electric 3.4%
- --------------------------------------------
* Holdings are calculated as a percentage of the total net assets of the SR&F
Growth Stock Portfolio. Because the Portfolio is actively managed, there can
be no guarantee the Portfolio will continue to hold these securities in the
future.
SOLD
- -------------------------------------------------------------------------------
AMERICAN EXPRESS
AMERICAN HOME PRODUCTS
We sold shares of AMEX and American Home Products as both of these established
growth stocks reached our price targets and we found more attractive
alternatives.
<PAGE>
INVESTMENT PORTFOLIO
March 31, 1999 (Unaudited)
(Dollar amount in thousands)
<TABLE>
<CAPTION>
SR&F GROWTH STOCK PORTFOLIO
- -------------------------------------------------------------------------------------------------
NUMBERS MARKET
COMMON STOCKS (97.6%) OF SHARES VALUE
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
BUSINESS SERVICES (5.3%)
America Online 200,000 $ 29,200
Paychex 650,000 30,834
----------
60,034
----------
CAPITAL EQUIPMENT (1.6%)
Applied Materials 300,000 18,506
----------
COMPUTER AND COMPUTER SOFTWARE (13.3%)
Cisco Systems (a) 550,000 60,259
EMC Corp. 350,000 44,712
Microsoft (a) 500,000 44,813
----------
149,784
----------
CONSUMER-RELATED (4.8%)
Gillette 500,000 29,719
Procter & Gamble 250,000 24,484
----------
54,203
----------
DISTRIBUTION - RETAIL (8.5%)
Home Depot 650,000 40,462
Kohl's (a) 500,000 35,438
Walgreen Co. 700,000 19,775
----------
95,675
----------
ELECTRICAL EQUIPMENT (3.4%)
General Electric 350,000 38,719
----------
FINANCIAL SERVICES (8.4%)
Citigroup 700,000 44,712
Fannie Mae 500,000 34,625
Morgan Stanley Dean Witter 150,000 14,991
----------
94,328
----------
FOOD, BEVERAGE AND TOBACCO (1.6%)
Coca-Cola 300,000 18,413
----------
HEALTH CARE (3.1%)
Johnson & Johnson 250,000 23,422
Monsanto 250,000 11,484
----------
34,906
----------
INSURANCE (4.3%)
American International Group 400,000 48,250
----------
LEISURE AND ENTERTAINMENT (5.6%)
Walt Disney 650,000 20,231
Time Warner 600,000 42,638
----------
62,869
----------
MANUFACTURING (2.6%)
Tyco International 400,000 28,700
----------
MEDICAL SUPPLIES (6.3%)
Cardinal Health 525,000 34,650
Medtronic 500,000 35,875
----------
70,525
----------
OIL AND GAS (1.6%)
Schlumberger Limited 300,000 18,056
----------
PHARMACEUTICAL (11.5%)
Eli Lilly & Co. 400,000 33,950
Merck & Co. 300,000 24,056
Pfizer 300,000 41,625
Warner-Lambert 450,000 29,784
----------
129,415
----------
SEMI-CONDUCTOR MANUFACTURER (2.1%)
Intel 200,000 23,775
----------
TELECOMMUNICATIONS (12.3%)
Lucent Technologies 300,000 32,325
MCI WorldCom (a) 650,000 57,566
Motorola 200,000 14,650
Tellabs (a) 350,000 34,213
----------
138,754
----------
TOYS (1.3%)
Mattel 600,000 14,925
----------
TOTAL COMMON STOCKS
(Cost $539,923) 1,099,837
----------
SHORT-TERM OBLIGATIONS (2.9%) PAR
- ------------------------------------------------------------------------------------------------
COMMERCIAL PAPER (2.9%)
Associates Corp. of North America 5.000% 4/1/99 (Cost $32,645) $32,645 32,645
----------
TOTAL INVESTMENTS (100.5%)
(Cost $572,568) 1,132,482
----------
OTHER ASSETS, LESS LIABILITIES (-0.5%) (5,571)
----------
TOTAL NET ASSETS (100.0%) $1,126,911
==========
NOTES TO PORTFOLIO OF INVESTMENTS
(a) Non-income producing security.
(b) At March 31, 1999, the cost of investments for financial reporting and federal income tax
purposes was identical. Net unrealized appreciation was $559,914, consisting of gross
unrealized appreciation of $566,783 and gross unrealized depreciation of $6,869.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1999 (Unaudited)
(All amounts in thousands, except per-share data)
<CAPTION>
STEIN ROE ADVISOR GROWTH STOCK FUND
- ----------------------------------------------------------------------------------------
<S> <C>
ASSETS
Investment in SR&F Growth Stock Portfolio,
at value $258,344
Receivable for fund shares sold 3,906
Receivable from investment advisor 149
--------
Total assets 262,399
--------
LIABILITIES
Payable for fund shares redeemed 1,039
Payable to distributor 240
Payable to transfer agent 114
Payable to investment advisor 48
Other liabilities 18
--------
Total liabilities 1,459
--------
Net assets $260,940
========
ANALYSIS OF NET ASSETS
Paid-in capital $211,655
Net unrealized appreciation on investments 60,273
Accumulated net investment loss (888)
Accumulated net realized loss on investments (10,100)
--------
Net assets $260,940
========
CLASS A
Net asset value per share (based on net assets of $65,809 and 4,004 shares
issued and outstanding) $ 16.43
--------
Maximum offering price per share (includes 5.75% initial sales charge) $ 17.43
--------
CLASS B
Net asset value per share (based on net assets of $173,585 and 10,662 shares
issued and outstanding) $ 16.28
--------
CLASS C
Net asset value per share (based on net assets of $18,038 and 1,110 shares
issued and outstanding) $ 16.25
--------
CLASS K
Net asset value per share (based on net assets of $3,508 and 213 shares
issued and outstanding) $ 16.47
--------
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
For the Six Months Ended March 31, 1999 (Unaudited)
(All amounts in thousands)
<CAPTION>
STEIN ROE ADVISOR GROWTH STOCK FUND
- ----------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
Dividends allocated from SR&F Growth Stock Portfolio $ 482
Interest allocated from SR&F Growth Stock Portfolio 270
-------
Total income 752
-------
EXPENSES
12b-1 distribution and service fees 682
Expenses allocated from SR&F Growth Stock Portfolio 513
Transfer agent fees 207
Administrative fees 131
SEC and state registration fees 25
Accounting fees 14
Legal and audit fees 7
Printing and postage 3
Trustees' fees 1
Other 57
-------
Total expenses 1,640
-------
Reimbursement of expenses by investment advisor --
-------
Net expenses 1,640
-------
Net investment loss (888)
-------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on investments (3,171)
Net change in unrealized appreciation on investments 57,899
-------
Net gain on investments 54,728
-------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $53,840
-------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
(All amounts in thousands)
<CAPTION>
STEIN ROE ADVISOR GROWTH STOCK FUND
- ----------------------------------------------------------------------------------------------------------------------------------
(UNAUDITED)
SIX MONTHS ENDED YEAR ENDED
MARCH 31, SEPTEMBER 30,
1999 1998
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
Net investment loss $ (888) $ (647)
Net realized loss on investments (3,171) (6,921)
Net change in unrealized appreciation of investments 57,899 2,340
-------- --------
Net increase (decrease) in net assets resulting from
operations 53,840 (5,228)
-------- --------
SHARE TRANSACTIONS
Subscriptions to fund shares -- Class A 19,899 46,829
Redemptions of fund shares -- Class A (9,353) (6,434)
-------- --------
10,546 40,395
-------- --------
Subscriptions to fund shares -- Class B 87,338 71,665
Redemptions of fund shares -- Class B (10,597) (3,980)
--------- --------
76,741 67,685
--------- --------
Subscriptions to fund shares -- Class C 4,808 12,370
Redemptions of fund shares -- Class C (1,461) (1,334)
--------- --------
3,347 11,036
-------- --------
Subscriptions to fund shares -- Class K 727 3,500
Redemptions of fund shares -- Class K (1,170) (730)
--------- --------
(443) 2,770
--------- --------
Net increase from share transactions 90,191 121,886
---------- --------
Net increase in net assets 144,031 116,658
TOTAL NET ASSETS
Beginning of period 116,909 251
-------- --------
End of period $260,940 $116,909
======== ========
ACCUMULATED NET INVESTMENT LOSS AT END OF PERIOD $ (888) $ --
--------- --------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
- ----------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- ----------------------------------------------------------------------
March 31, 1999 (Unaudited)
(All amounts in thousands
SR&F GROWTH STOCK PORTFOLIO
- ----------------------------------------------------------------------
ASSETS
Investments, at market value (cost $572,568) $1,132,482
Receivable for investments sold 6,239
Dividends receivable 346
Cash 4
----------
Total assets 1,139,071
----------
LIABILITIES
Payable to investments purchased 11,525
Payable to investment advisor 530
Other liabilities 105
----------
Total liabilities 12,160
----------
Net assets applicable to investors' beneficial
interest $1,126,911
==========
- ----------------------------------------------------------------------
STATEMENT OF OPERATIONS
- ----------------------------------------------------------------------
For the Six Months Ended March 31, 1999 (Unaudited)
(All amounts in thousands)
SR&F GROWTH STOCK PORTFOLIO
- ----------------------------------------------------------------------
INVESTMENT INCOME
Dividends $ 2,608
Interest 1,478
----------
Total investment income 4,086
----------
EXPENSES
Management fees 2,639
Accounting fees 25
Trustees' fees 12
Audit and legal fees 8
Custodian fees 7
Other 30
----------
Total expenses 2,721
----------
Net investment income 1,365
----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments 36,831
Net change in unrealized appreciation on investments 261,875
----------
Net gain on investments 298,706
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 300,071
----------
- ----------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- ----------------------------------------------------------------------
(All amounts in thousands)
<TABLE>
<CAPTION>
SR&F GROWTH STOCK PORTFOLIO
- --------------------------------------------------------------------------------------------------------
(UNAUDITED)
SIX MONTHS ENDED YEAR ENDED
MARCH 31, SEPTEMBER 30,
1999 1998
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
Net investment income $ 1,365 $ 2,268
Net realized gain (loss) on investments 36,831 (7,814)
Net change in unrealized appreciation of investments 261,875 32,197
---------- --------
Net increase in net assets resulting from operations 300,071 26,651
---------- --------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTEREST
Contributions 236,362 151,248
Withdrawals (141,065) (54,727)
---------- --------
Net increase from transactions in investors' beneficial
interest 95,297 96,521
---------- --------
Net increase in net assets 395,368 123,172
TOTAL NET ASSETS
Beginning of period 731,543 608,371
---------- --------
End of period $1,126,911 $731,543
========== ========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
March 31, 1999 (Unaudited)
NOTE 1. ORGANIZATION
Stein Roe Advisor Growth Stock 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 Stock 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 currently offers four classes of shares: Class
A, Class B, Class C and Class K. Class A shares are offered at net asset value
plus a sales charge imposed at the time of purchase; Class B shares are offered
at net asset value and are subject to a declining contingent deferred sales
charge on redemptions made within six years after purchase; Class C shares are
offered at net asset value and are subject to a contingent deferred sales charge
on redemptions made within one years after purchase; and Class K shares are
offered at net asset value only through certain intermediaries as disclosed in
the prospectus. Class B shares automatically convert to Class A shares after
approximately eight years. Class C and Class K shares do not convert. The Fund
commenced offering Class A, Class B and Class C shares on October 15, 1997.
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 Growth Stock Fund contributed $474,861 in securities and other assets in
exchange for beneficial ownership of the Portfolio. At February 14, 1997,
Stein Roe Advisor Growth Stock Fund contributed cash of $100 to the Portfolio.
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 March 31, 1999, Stein Roe Advisor Growth Stock Fund owned
22.92 percent of the Portfolio.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following summarizes the significant accounting policies of the Fund and the
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.
SECURITY VALUATIONS
All securities are valued as of March 31, 1999. 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 on a daily basis for purposes of determining the 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 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
$6,929, 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 "Advisor"), an
indirect, wholly-owned subsidiary of Liberty Financial Companies, Inc.
("Liberty"), for its services as investment advisor and administrator.
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 .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 Advisor also provides fund accounting services. For the six months ended
March 31, 1999, the Fund and the Portfolio incurred charges of $14 and $25,
respectively.
The Advisor has agreed to reimburse the Fund to the extent that its annual
expenses exceed 1.40 percent of average daily net assets for Class A shares,
2.10 percent of average daily net assets for Class B and Class C shares, and
1.35 percent of average daily net assets for Class K shares through January
31, 2000, subject to earlier termination by the Advisor on 30 days notice. For
the six months ended March 31, 1999, the Fund's total expenses were operating
at the expense limit. Therefore, there was no expense reimbursement accrued on
the Fund.
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 each class
of shares other than Class K 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 attributed to Class A shares,
and 0.75 percent of the average daily net assets attributed to each of its Class
B and Class C 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 the average daily net assets attributable to 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 six months ended March 31, 1999, the Fund
incurred 12b-1 distribution and service charges of $75, $536, $67 and $4 for
Class A, Class B, Class C and Class K shares, respectively.
Transfer agent fees are paid to Liberty Funds Services, Inc., an indirect,
wholly-owned subsidiary of Liberty. Transfer agent fees for Class A, Class B
and Class C shares are computed an annual rate of 0.236 percent of average
daily net assets. Transfer agent fees for Class K shares are computed an
annual rate of 0.30 percent of average daily net assets. For the six months
ended March 31, 1999, the Fund incurred transfer agent charges of $59, $127,
$16 and $5 for Class A, Class B, Class C and Class K shares, respectively.
Certain officers and trustees of the Trust are also officers of the Advisor.
The compensation of trustees not affiliated with the Advisor for the Fund and
the Portfolio for the six months ended March 31, 1999, was $1 and $12,
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 the Portfolio maintain borrowing
arrangements under which they can borrow against portfolio securities. Neither
the Fund nor the Portfolio had borrowings during the six months ended March 31,
1999.
NOTE 5. INVESTMENT TRANSACTIONS
The Portfolio's aggregate cost of purchases and proceeds from sales other than
short-term obligations for the six months ended March 31, 1999, were $386,840
and $249,663, respectively.
NOTE 6. CAPITAL SHARE TRANSACTIONS
The following table summarizes fund share activity during the reporting
period:
(UNAUDITED)
SIX MONTHS
ENDED PERIOD ENDED
MARCH 31, SEPTEMBER 30,
CLASS A SHARES 1999 1998(a)
--------------- -----------------
Subscriptions to fund shares 1,342 3,848
Redemptions of fund shares (683) (503)
--------------- ---------------
Net increase in fund shares 659 3,345
=============== ===============
(UNAUDITED)
SIX MONTHS
ENDED PERIOD ENDED
MARCH 31, SEPTEMBER 30,
CLASS B SHARES 1999 1998(a)
--------------- -----------------
Subscriptions to fund shares 5,929 5,778
Redemptions of fund shares (730) (315)
--------------- -----------------
Net increase in fund shares 5,199 5,463
=============== =================
(UNAUDITED)
SIX MONTHS
ENDED PERIOD ENDED
MARCH 31, SEPTEMBER 30,
CLASS C SHARES 1999 1998(a)
--------------- -----------------
Subscriptions to fund shares 321 998
Redemptions of fund shares (105) (104)
--------------- -----------------
Net increase in fund shares 216 894
=============== =================
(UNAUDITED)
SIX MONTHS
ENDED YEAR ENDED
MARCH 31, SEPTEMBER 30,
CLASS K SHARES 1999 1998
--------------- -----------------
Subscriptions to fund shares 55 268
Redemptions of fund shares (75) (57)
--------------- -----------------
Net increase (decrease) in fund
shares (20) 211
=============== =================
(a) From commencement of multi-class offering on October 15, 1997.
<PAGE>
FINANCIAL HIGHLIGHTS
Selected per-share data (for a share outstanding throughout
each period), ratios and supplemental data.
STEIN ROE ADVISOR GROWTH STOCK FUND
- --------------------------------------------------------------------------------
(UNAUDITED)
SIX MONTHS
ENDED PERIOD ENDED
MARCH 31, SEPTEMBER 30,
CLASS A 1999 1998 (a)
- --------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.82 $ 11.59
-------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (0.04) (0.04)
Net realized and unrealized gain on
investments 4.65 0.27
-------- --------
Total from Investment Operations 4.61 0.23
-------- --------
NET ASSET VALUE, END OF PERIOD $ 16.43 $ 11.82
-------- --------
Ratio of net expenses to average
net assets (b) 1.40%(c) 1.40%(d)
Ratio of net investment loss to
average net assets (b) (0.54)%(c) (0.50)%(e)
Total return 39.00% 1.98%(e)
Net assets, end of period (000's) $65,809 $39,521
(a) From commencement of multi-class offering on October 15, 1997.
(b) Annualized.
(c) As of March 31, 1999, the Fund's total expenses were operating at the
expense limit.
(d) If the Fund had paid all of its expenses and there had been no reimbursement
by the investment advisor, this ratio would have been 1.63 percent for the
period ended September 30, 1998.
(e) Computed giving effect to the investment advisor's expense limitation
undertaking.
- --------------------------------------------------------------------------------
(UNAUDITED)
SIX MONTHS
ENDED PERIOD ENDED
MARCH 31, SEPTEMBER 30,
CLASS B 1999 1998 (a)
- --------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD
$ 11.74 $ 11.59
-------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (0.09) (0.08)
Net realized and unrealized gain on
investments 4.63 0.23
-------- --------
Total from Investment Operations 4.54 0.15
-------- --------
NET ASSET VALUE, END OF PERIOD $ 16.28 $ 11.74
-------- --------
Ratio of net expenses to average
net assets (b) 2.10%(c) 2.10%(d)
Ratio of net investment loss to
average net assets (b) (1.24)%(c) (1.20)%(e)
Total return 38.67% 1.29%(e)
Net assets, end of period (000's) $173,585 $64,148
(a) From commencement of multi-class offering on October 15, 1997.
(b) Annualized.
(c) As of March 31, 1999, the Fund's total expenses were operating at the
expense limit.
(d) If the Fund had paid all of its expenses and there had been no reimbursement
by the investment advisor, this ratio would have been 2.31 percent for the
period ended September 30, 1998.
(e) Computed giving effect to the investment advisor's expense limitation
undertaking.
- --------------------------------------------------------------------------------
(UNAUDITED)
SIX MONTHS
ENDED PERIOD ENDED
MARCH 31, SEPTEMBER 30,
CLASS C 1999 1998 (a)
- --------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.72 $ 11.59
-------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (0.09) (0.08)
Net realized and unrealized gain on
investments 4.62 0.21
-------- --------
Total from Investment Operations 4.53 0.13
-------- --------
NET ASSET VALUE, END OF PERIOD $ 16.25 $ 11.72
-------- --------
Ratio of net expenses to average
net assets (b) 2.10%(c) 2.10%(d)
Ratio of net investment loss to
average net assets (b) (1.24)%(c) (1.21)%(e)
Total return 38.65% 1.12%(e)
Net assets, end of period (000's) $18,038 $10,472
(a) From commencement of multi-class offering on October 15, 1997.
(b) Annualized.
(c) As of March 31, 1999, the Fund's total expenses were operating at the
expense limit.
(d) If the Fund had paid all of its expenses and there had been no reimbursement
by the investment advisor, this ratio would have been 2.30 percent for the
period ended September 30, 1998.
(e) Computed giving effect to the investment advisor's expense limitation
undertaking.
<PAGE>
FINANCIAL HIGHLIGHTS
Selected per-share data (for a share outstanding throughout
each period), ratios and supplemental data.
<TABLE>
<CAPTION>
STEIN ROE ADVISOR GROWTH STOCK FUND
- -----------------------------------------------------------------------------------------------------------------------------------
(UNAUDITED)
SIX MONTHS
ENDED YEAR ENDED PERIOD ENDED
MARCH 31, SEPTEMBER 30, SEPTEMBER 30,
CLASS K 1999 1998 1997 (a)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.86 $ 11.26 $ 10.00
-------- -------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (0.04) (0.03) (0.01)
Net realized and unrealized gain on investments 4.65 0.63 1.27
-------- -------- --------
Total from Investment Operations 4.61 0.60 1.26
-------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 16.47 $ 11.86 $ 11.26
-------- -------- --------
Ratio of net expenses to average net assets 1.35%(b)(c) 1.35%(d) 1.35%(c)(d)
Ratio of net investment loss to average net assets (0.49)%(b)(c) (0.47)%(e) (0.22)%(c)(e)
Total return 38.87% 5.33%(e) 12.60%(e)
Net assets, end of period (000's) $ 3,508 $ 2,768 $ 251
(a) From commencement of operations on February 14, 1997.
(b) As of March 31, 1999, the Fund's total expenses were operating at the expense limit.
(c) Annualized.
(d) If the Fund had paid all of its expenses and there had been no reimbursement by the investment advisor, this ratio would have
been 2.07 percent for the year ended September 30, 1998 and 56.10 percent for the period ended September 30, 1997.
(e) Computed giving effect to the investment advisor's expense limitation undertaking.
<CAPTION>
SR&F GROWTH STOCK PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------
(UNAUDITED)
SIX MONTHS
ENDED YEAR ENDED PERIOD ENDED
MARCH 31, SEPTEMBER 30, SEPTEMBER 30,
1999 1998 1997 (a)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Ratio of net expenses to average net assets 0.57%(b) 0.61% 0.63%(b)
Ratio of net investment income to average net assets 0.28%(b) 0.31% 0.52%(b)
Portfolio turnover rate 29% 39% 22%
(a) From commencement of operations on February 3, 1997.
(b) Annualized.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
SEMIANNUAL REPORT: STEIN ROE ADVISOR GROWTH STOCK FUND
TRUSTEES & TRANSFER AGENT
- --------------------------------------------------------------------------------
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 Growth Stock 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 Growth Stock
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 with the most
recent copy of the Liberty Funds Distributor, Inc. Performance Update.
<PAGE>
- --------------------------------------------------------------------------------
CHOOSE LIBERTY
- --------------------------------------------------------------------------------
BECAUSE NO SINGLE INVESTMENT MANAGER CAN BE ALL THINGS TO ALL INVESTORS.(SM)
At Liberty Funds Distributor, Inc. (Liberty), we believe that -- try as they may
- -- no single investment manager can do all things well. That's why we make
available the individual talents of investment managers that have excelled in a
particular investment discipline. These managers not only specialize in a
distinct investment style, they hold a passion for the style along with a
demonstrated track record.
BOSTON, MA Colonial has long PORTLAND, OR Crabbe Huson's
been a recognized leader in contrarian investment style
fixed-income investing. In seeks long-term performance by
addition, Colonial has investing in stocks from
distinguished itself with both high-quality, out-of-favor
a traditional value and a more companies. This risk-averse
contemporary approach to strategy capitalizes on the
equity investing. potential of these companies
to regain market popularity.
[logo] COLONIAL
Management [logo]
Associates, Inc. CRABBE HUSON
[grpahic omitted]
LIBERTY
[logo] NEWPORT [logo]
FUND STEIN
MANAGEMENT ROE &
FARNHAM
SAN FRANCISCO, CA A leader in ---------------------
Asian investing(TM), Newport INVESTMENT MANAGEMENT
has an unparalleled knowledge
of Asian economies, business CHICAGO, IL Stein Roe's growth
and culture. management style emphasizes
companies with the ability to
create, maintain and grow
earnings in different market
environments.
Each of these managers is a member of the Liberty Financial Companies (NYSE: L),
a diversified asset accumulation and management organization with approximately
$61 billion in assets under management for more than 1.7 million investors.
- --------------------------------------------------------------------------------
STEIN ROE ADVISOR GROWTH STOCK FUND SEMIANNUAL REPORT, MARCH 31, 1999
- --------------------------------------------------------------------------------
[logo] L I B E R T Y
COLONIAL o CRABBE HUSON o NEWPORT o STEIN ROE ADVISOR
Liberty Funds Distributor, Inc. (C)1999
One Financial Center, Boston, MA 02111-2621, 1-800-426-3750
Visit us a www.libertyfunds.com
-------------
BULK RATE
U.S. POSTAGE
PAID
HOLLISTON, MA
PERMIT NO. 20
-------------
SG-03/933G-0399 (6/99) 99/559
