<PAGE>
[Graphic omitted]
STEIN ROE ADVISOR
YOUNG INVESTOR(SM) FUND
SEMIANNUAL REPORT - MARCH 31, 1999
THE INVESTMENT THAT'S ALSO AN EDUCATION
<PAGE>
FUND HIGHLIGHTS
Stein Roe Advisor Young Investor Fund Class A shares returned 31.01% at net
asset value for the six-month period ended 3/31/99, outperforming the S&P 500
Index total return of 27.32% for the same period.(1)
The Fund's investments in technology stocks performed well, benefiting from a
strong economy throughout the period.
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
Activity Pages
ages three to five .................... 15-16
ages six to eight ..................... 17-18
ages nine to 12 ....................... 19-20
(1)All information is for Class A shares unless otherwise noted. Performance,
including sales charge, reflects the 2% contingent deferred sales charge
(CDSC) which would be applied if shares are redeemed within three years.
Stein Roe Advisor Young Investor Fund invests all investable assets in SR&F
Growth Investor Portfolio, which has the same investment objective and
substantially the same investment policies as the Fund. Past performance is
not a guarantee of future results. Share price and investment returns will
vary, resulting in a gain or loss when you sell shares. The S&P 500 Index is
an unmanaged index of 500 U. S. companies. Unlike mutual funds, indexes are
not investments, do not incur fees or expenses and are not professionally
managed.
----------------------------
Not FDIC May Lose Value
Insured No Bank Guarantee
----------------------------
<PAGE>
TO OUR SHAREHOLDERS
[Photo of Thomas W. Butch]
DEAR INVESTOR,
We are pleased to present the semiannual report for Stein Roe Advisor Young
Investor Fund. This report covers the six months ended March 31, 1999.
THE BEST OF TIMES
Back on March 31, 1981 - 18 years ago - the Dow Jones Industrial Average (DJIA)
stood at just 1,003 points. It was a tough time to start a family. 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%. The newborns of that period
are reaching adulthood today in an era that many consider the best of times. In
March 1999, the DJIA closed above the 10,000-point level for the first time.
Today, the jobless rate and inflation - a combination once known as the misery
index - stands at less than 6%, a third of its former level in the early 1980s.
Mortgage rates are half of what they were a generation ago.
A TOOL FOR GROWTH
We are pleased to have helped thousands of young Americans capitalize on the
growth prospects of the dynamic economy of the 1990s. Helping children pursue
their dreams is what the Fund is all about. We take our commitment to
shareholders seriously. We believe the more today's young people know about
investing and the economy, the better citizens they'll make as financially
secure adults.
Through our sponsorship of the Young Investor Essay Contest, we've learned to
appreciate just how creative, perceptive and entrepreneurial America's young
people can be.
POSITIONED FOR THE FUTURE
In my opinion, Stein Roe Advisor Young Investor Fund remains well positioned to
take advantage of the trends in technology and business that we think are likely
to foster further growth in the new millennium. On the pages that follow, your
Fund's portfolio managers detail the investment strategies that have helped
generate favorable results over the period. We attribute the Fund's returns to a
strong positioning in technology, and to our dedication to seeking consistent
earnings growth. 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 conditions change frequently, there can be no assurances that the
trends described in this report will continue.
SPECIAL NOTE: Effective May 3, 1999, share prices for Stein Roe Advisor Young
Investor Fund are listed under the Liberty prefix in the newspaper.
<PAGE>
PORTFOLIO MANAGER COMMENTARY
[Photos of Erik Gustafson and David Brady]
Erik Gustafson (left) and David Brady, senior vice presidents of the Advisor,
have co-managed the Fund since its inception in 1997.
Q. HOW DID THE FUND PERFORM DURING THE PERIOD?
A. The Fund participated in the U.S. stock market's recovery last fall and
continued to provide above-average returns this past winter. The Fund's
Class A shares returned 31.01% for the six-month period ended March 31,
1999, outperforming the S&P 500 Index return of 27.32%.
Q. WHAT CONTRIBUTED TO THE FUND'S PERFORMANCE?
A. We held an above-average weighting in technology and telecommunications
stocks, and these sectors provided strong double-digit returns. Over the
past six months, investors have focused primarily on large-company stocks
with proven growth characteristics - the type of stocks that make up a
majority of the portfolio. For example, we held large-company stocks such
as America Online and MCI WorldCom (4.5% and 3.1% of net assets,
respectively), which were among the top performers in the S&P 500 Index for
the period.
Last fall, we repositioned the portfolio to take advantage of the growth
potential of the Internet. We made America Online, the largest Internet
service provider, one of our top ten holdings. We think the company is well
positioned to benefit from the growing use of the Internet.
Q. WHAT CAUSED THE STOCK MARKET TO MOVE UP SO MUCH AFTER ITS BIG DECLINE LAST
SUMMER?
A. Investors became more confident in corporate earnings prospects after the
Federal Reserve Board reduced short-term interest rates three times last
fall; consumer prices remained low; and international financial markets
began to stabilize. Also, U.S. economic growth has been much better than
expected. GDP (gross domestic product, or the amount of goods and services
produced in the U.S.) rose a strong 6% in the fourth quarter of 1998, and
many economists believe the U.S. will continue to grow without much
inflation in 1999. This type of environment has historically been positive
for growth stocks.
AVERAGE ANNUAL TOTAL RETURNS
(CLASS A SHARES AS OF 3/31/99)
Excluding Including
sales sales
charge charge
(NAV) (w/CDSC)
-------------------------------------------------------------------
Six months (cumulative) 31.01% 29.01%
-------------------------------------------------------------------
One year 12.74% 10.74%
-------------------------------------------------------------------
Three years 24.67% 24.24%
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Since inception (4/29/94) 26.44% 26.44%
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All information is for Class A shares unless otherwise noted.
Performance, including sales charge, reflects the 2% contingent
deferred sales charge (CDSC) which would be applied if shares are
redeemed within three years. Stein Roe Advisor Young Investor Fund
invests all investable assets in SR&F Growth Investor 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 1/26/98, offered only shares now designated as
Class K shares. The historical performance for Class A and Class K
shares is based on the performance of SR&F Growth Investor
Portfolio, restated to reflect the sales charge, 12b-1 fees and
other expenses applicable to each class as detailed in the
prospectus under "Fee Table," without giving effect any fee
waivers described therein and assuming reinvestment of dividends
and capital gains.
Past performance is not a guarantee of future results. Share price and
investment returns will vary, resulting in a gain or loss when you sell
shares.
Q. HOW DID SMALL- AND MID-CAP STOCKS PERFORM DURING THE FIRST HALF OF 1999?
A. In general, small- and mid-cap stocks did not perform as well as
large-company stocks, except in the technology sector. We have increased
the average size of companies (median market capitalization) in the
portfolio to position the Fund to benefit from the current demand for
high-quality growth stocks. More than 80% of the Fund's net assets were
invested in companies with a market capitalization of more than $5 billion
as of March 31, 1999.
ECONOMIC SECTOR BREAKDOWN OF THE FUND
Technology 27%
Healthcare/Pharmaceuticals/Media* 20%
Retailers/Restaurants/Entertainment** 21%
Financial 14%
Utilities 10%
Autos/Machinery(+) 6%
Mining & Chemicals(++) 2%
*Consumer Non-Cyclicals. **Consumer Cyclicals. (+)Industrial Cyclicals.
(++)Basic Materials.
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.
We've become extremely selective in buying small-company stocks because
they have been so out of favor. We focus exclusively on those companies we
think can consistently meet or exceed analysts' earnings expectations.
During the first three months of 1999, we increased our position in smaller
technology stocks that we think will benefit from Internet growth. These
include Inktomi Corp., a company that makes search-engine software (0.9% of
net assets), and Entrust Technologies, which develops security products
that assure privacy when transacting business on the Web (0.9% of net
assets).
We hold a broad mix of stocks in an attempt to reduce risk, especially
given that many large-company stocks currently sell at overvalued prices.
Having companies of all sizes in the portfolio served us well a few years
ago and it remains an important part of our long-term strategy.
Q. WERE THERE ANY DISAPPOINTMENTS IN THE FUND'S PORTFOLIO DURING THE PERIOD?
A. Mattel, the toy manufacturer, (2.3% of net assets) remained weak. However,
we retained our position because we believe the company's brand is well
established and inventory reduction by retailers is slowing. Last year,
many stores cut back on the amount of toys they keep in stock, which hurt
Mattel's profits. We sold Kellogg Corp. and Quaker Oats, since increased
competition in the breakfast foods section of supermarkets appears to have
limited both companies' growth prospects.
The health care and pharmaceutical sectors provided mixed results. Stocks
in this area, such as Johnson & Johnson (1.9% of net assets), were weak in
the fourth quarter, but rebounded this past winter.
Q. WHAT'S YOUR OUTLOOK FOR THE U.S. ECONOMY?
A. Generally, we think the current U.S. environment of low inflation, moderate
interest rates and healthy consumer demand should continue. Unless market
conditions change, we believe this environment will bode well for growth
stocks and we will remain fully invested.
The Top Ten Equity Holdings*
(as a % of total net assets)
-------------------------------------------------------
1. AMERICA ONLINE 4.5%
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2. CISCO SYSTENS 3.5
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3. MCI WORLDCOM 3.1
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4. MICROSOFT 2.7
-------------------------------------------------------
5. TELLABS 2.5
-------------------------------------------------------
6. OUTDOOR SYSTEMS 2.4
-------------------------------------------------------
7. MCDONALD's CORP. 2.4
-------------------------------------------------------
8. MATTEL 2.3
-------------------------------------------------------
9. HOUSEHOLD INTERNATIONAL 2.3
-------------------------------------------------------
10. GENERAL ELECTRIC 2.3
-------------------------------------------------------
*Holdings are as of March 31, 1999, 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 economic and market conditions
change. Investments in smaller companies may experience
greater volatility.
THE STOCKS WE OWN
If you could travel back in time, you'd see that the fastest-growing
companies in America in the 19th century were a lot different than today's.
Railroads were a new technology and brought our country together. You may
have read about the joining of the Union Pacific and Southern Pacific
railroads in 1869 in Utah. Investors back then bought railroad stocks to
participate in America's growth potential. In fact, 9 of the 11 stocks in
the first U.S. stock index, the Dow Jones Transportation Average, were
railroads.
Today, the Internet is bringing the world together, creating opportunities
that we believe are as vast as the American West must have seemed to a
traveler in a Pullman railcar. Some 150 years after gold was discovered in
California, many companies in that state and elsewhere now aim to profit
from Internet-related technology that helps people communicate and transact
business.
In managing the Fund, we seek stocks of proven companies in technology,
consumer and other sectors that we think offer long-term potential for
investors. Mindful of the lessons of history, we carefully analyze the
potential risks and rewards of investing in rapidly growing companies.
As of March 31, 1999, the top five holdings were technology companies (see
chart on left). One of the portfolio's most successful holdings since our
last report to you has been America Online (4.5% of net assets). The
company is a leader in Internet communications and has proven itself by
reporting several quarters of consistent earnings growth. We believe
America Online is on track to show further earnings growth and capital
appreciation potential.
<PAGE>
SR&F GROWTH INVESTOR PORTFOLIO
Portfolio of Investments at March 31, 1999
(Dollar amounts in thousands)
(Unaudited))
Number Market
COMMON STOCKS (96.6%) of Shares Value
- ---------------------------------------------------------------------------
ADVERTISING (2.0%)
Interpublic Group
(Owns and operates advertising agencies) 250,000 $ 19,469
--------
BANKS (1.0%)
Texas Regional Bancshares, Class A
(Commercial bank operating
in the Rio Grande Valley of Texas) 350,000 9,450
--------
COMMERCIAL SERVICES (1.4%)
Paychex
(Provides computerized payroll
accounting services to businesses) 300,000 14,231
--------
COMPUTER SOFTWARE AND SERVICES (15.4%)
America Online
(Internet service provider) 300,000 43,800
Cisco Systems (a)
(Worldwide leader in networking
equipment for the Internet) 316,500 34,677
EMC
(Leading supplier of intelligent
enterprise storage and retrieval technology) 50,000 6,388
Entrust Technologies
(Develops security products
to ensure privacy of transactions
across the Internet) 250,000 8,438
Inktomi
(Develops and markets scalable
applications) 100,000 8,575
Microsoft (a)
(Manufactures computer and
software products and operating systems) 290,000 25,991
Sun Microsystems
(Supplies network computing products) 75,000 9,370
Computer Software and Services (continued)
Transaction Systems Architects (a)
(Develops software to facilitate
electronic payments and e-commerce) 375,000 13,500
--------
150,739
--------
CONSUMER PRODUCTS (2.6%)
Gillette
(Manufactures and markets
shaving and personal care products) 225,000 13,373
Procter & Gamble
(Produces personal-care products,
pharmaceuticals, food and beverages) 125,000 12,242
--------
25,615
--------
DISTRIBUTION - RETAIL (6.0%)
Hasbro
(Manufactures and sells children's toys) 600,000 17,363
Mattel
(Designs, manufactures and markets
children's toys) 925,000 23,009
Walgreen Co.
(Large retail drugstore chain) 652,400 18,430
--------
58,802
--------
ELECTRICAL EQUIPMENT (2.3%)
General Electric
(Appliances, broadcasting, communications
and transportation) 200,000 22,125
--------
ELECTRICAL GENERATION (1.2%)
AES
(Provider of electricity to U.S.
and international customers) 325,000 12,106
--------
ENTERTAINMENT (4.2%)
Cedar Fair L.P.
(Owns and operates amusement theme parks) 315,000 7,914
Time Warner
(Media and entertainment company) 250,000 17,766
Walt Disney
(Operates theme parks and resorts, and
produces motion pictures) 500,000 15,563
--------
41,243
--------
FINANCIAL SERVICES (11.9%)
Alliance Capital Management L.P.
(Provides investment services to pension
funds, endowments, insurance companies,
banks and individual investors) 350,000 8,859
American International Group
(Provides financial services
and insurance to U.S. and International
companies) 150,000 18,094
Citigroup
(Provider of financial services to consumers
and corporations) 300,000 19,163
Fannie Mae
(Buys and holds mortgages, and issues
and sells mortgage-backed securities) 250,000 17,312
Freddie Mac
(Purchases mortgages from lenders and
resells in pools or packages) 300,000 17,138
Household International
(Provides financial and banking services) 500,000 22,813
Providian Financial
(Provides lending and deposit products
to consumers) 125,000 13,750
--------
117,129
--------
FOOD AND BEVERAGE (5.2%)
Coca-Cola
(Producer and distributor
of soft drink products) 350,000 21,481
Groupe Danone ADRs
(Produces packaged foods
and beverages) 270,000 13,466
Wm. Wrigley Jr
(Manufactures chewing gum) 175,000 15,827
--------
50,774
--------
HEALTH CARE (4.2%)
American Home Products
(Discovers, develops, manufactures,
distributes and sells health care products) 270,000 17,618
Johnson & Johnson
(Manufactures and markets
a broad range of health care and other products) 200,000 18,737
Orthodontic Centers of America (a)
(Provides management and
consulting services to orthodontic practices) 325,000 5,119
--------
41,474
--------
MACHINERY (1.0%)
McDermott International
(Manufacturer of steam generating and
environmental machinery) 400,000 10,125
--------
MEDICAL - INSTRUMENTS (3.0%)
Becton Dickinson
(Manufactures and sells a variety of medical
supplies and devices) 400,000 15,325
Medtronic
(Manufactures various cardiovascular
medical instruments) 200,000 14,350
--------
29,675
--------
MEDICAL - PHARMACEUTICAL (5.7%)
Eli Lilly & Company
(Creates and delivers pharmaceutical-based
health care solutions) 150,000 12,731
Pfizer
(Researches and provides
global health care products) 150,000 20,812
Watson Pharmaceuticals (a)
(Develops, produces, markets and distributes
pharmaceutical products) 500,000 22,062
--------
55,605
--------
PUBLISHING, BROADCASTING AND MEDIA (6.9%)
AT&T Liberty Media A
(Holds interests in globally
branded entertainment networks) 200,000 10,525
Clear Channel Communications (a)
(Owns, operates and manages
radio and television stations) 300,000 20,119
Heftel Broadcasting, class A (a)
(Spanish language radio broadcasting company) 300,000 13,013
Outdoor Systems (a)
(Provides outdoor advertising mediums) 800,000 24,000
--------
67,657
--------
RESTAURANT (2.4%)
McDonald's
(Develops, licenses, leases and services
a worldwide system of restaurants) 525,000 23,789
--------
SEMICONDUCTORS (3.3%)
Intel
(Produces and sells
microcomputer components
and related products) 135,000 16,048
Maxim Integrated Products (a)
(Develops, manufactures
and markets integrated circuits) 300,000 16,237
--------
32,285
--------
SPECIALTY CHEMICALS (1.5%)
Minerals Technologies
(Develops, produces and markets
specialty minerals, mineral-based
and synthetic mineral products) 300,000 14,400
--------
TELECOMMUNICATIONS (9.1%)
American Tower, class A (a)
(Operator of wireless
telecommunication towers) 500,000 12,250
Equant
(Provider of international
data network systems) 157,500 11,852
Frontier
(Offers integrated
communications services for
business and residential customers) 50,000 2,594
Global Telesystems
(Provider of broadband, internet,
international and domestic
long distance services) 200,000 11,187
MCI WorldCom (a)
(Provides facilities-based and
fully integrated local, long
distance, international and
Internet services) 345,000 30,554
Qwest Communications International (a)
(Provides communication
services to interexchange carriers,
businesses and consumers) 291,525 21,017
--------
89,454
--------
TELECOMMUNICATIONS EQUIPMENT (5.1%)
Loral Space & Communications (a)
(High-technology company
concentrated on satellite
manufacturing and satellite-based
communication services) 400,000 5,775
Lucent Technologies
(Produces public and private
networks, communication systems and software) 180,000 19,394
Tellabs (a)
(Designs, assembles, markets
and services voice and data networking products) 250,000 24,438
--------
49,607
--------
TRAVEL SERVICES (1.2%)
Sabre Group Holdings (a)
(Provider of a travel reservation system) 250,000 11,344
--------
TOTAL COMMON STOCKS
(Cost $641,335) 947,098
--------
Principal
SHORT-TERM OBLIGATIONS (4.5%) Amount
- ----------------------------------------------------------------------------
Commercial Paper (4.5%)
Associates Corp. of North America 5.00% 4/1/99 $43,685 43,685
--------
TOTAL SHORT-TERM OBLIGATIONS
(Cost $43,685) 43,685
--------
TOTAL INVESTMENTS (101.1%)
(Cost $685,019) (b) 990,783
Other Assets, Less Liabilities (-1.1%) (10,653)
--------
TOTAL NET ASSETS (100%) $980,130
========
NOTES TO PORTFOLIO OF INVESTMENTS
(a) Non-income producing security.
(b) At March 31, 1999, the cost of investments for federal income tax purposes
was $685,027. Net unrealized appreciation of $305,756, consisting of gross
unrealized appreciation of $323,673 and gross unrealized depreciation of
$17,917.
See accompanying Notes to Financial Statements.
<PAGE>
STEIN ROE ADVISOR YOUNG INVESTOR FUND
Statement of Assets and Liabilities
March 31, 1999
(All amounts in thousands, except per-share data)
(Unaudited)
ASSETS
Investment in SR&F Growth Investor Portfolio, at value $ 73,066
Receivable for fund shares sold 596
Cash 5
--------
Total assets 73,667
--------
LIABILITIES
Payable for fund shares redeemed 145
Payable to advisor and transfer agent 51
Other liabilities 70
--------
Total liabilities 266
--------
Net assets $ 73,401
--------
ANALYSIS OF NET ASSETS
Paid-in capital $ 64,208
Net unrealized appreciation on investments 15,941
Accumulated undistributed net investment loss (221)
Accumulated net realized loss on investments (6,527)
--------
Net assets $ 73,401
========
CLASS A
Net asset value per share
(based on net assets of $72,964 and
4,905 shares issued and outstanding) $ 14.87
========
CLASS K
Net asset value per share
(based on net assets of $437 and
29 shares issued and outstanding) $ 14.98
========
See accompanying Notes to Financial Statements.
<PAGE>
STEIN ROE ADVISOR YOUNG INVESTOR FUND
Statement of Operations
For the six months ended March 31, 1999
(All amounts in thousands)
(Unaudited)
INVESTMENT INCOME
Dividend income allocated
from SR&F Growth Investor Portfolio $ 174
Interest income allocated from
SR&F Growth Investor Portfolio 55
--------
Total interest income 229
--------
EXPENSES
Expenses allocated from
SR&F Growth Investor Portfolio 161
12b-1 distribution and service fees 81
Transfer agent fees 64
Administrative fees 54
Accounting fees 13
Legal and audit fees 6
SEC and state registration fees 45
Printing and postage 8
Trustees' fees 3
Other 50
--------
Total expenses 485
Reimbursement of expenses by investment advisor (35)
--------
Net expenses 450
--------
Net investment loss (221)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on investments (989)
Net change in unrealized appreciation
or depreciation on investments 15,514
--------
Net gain on investments 14,525
--------
Net increase in net assets
resulting from operations $ 14,304
========
See accompanying Notes to Financial Statements.
<PAGE>
STEIN ROE ADVISOR YOUNG INVESTOR FUND
Statements of Changes in Net Assets
(All amounts in thousands)
(Unaudited)
Six Months Year
Ended Ended
March 31, September 30,
1999 1998
- -------------------------------------------------------------------------------
OPERATIONS
Net investment loss $ (221) $ (69)
Net realized loss on investments (989) (5,529)
Net change in unrealized
appreciation or depreciation
of investments 15,514 403
------- --------
Net increase (decrease) in net assets
resulting from operations 14,304 (5,195)
Share Transactions
Subscriptions to fund shares - Class A 26,446 44,021
Redemptions of fund shares - Class A (4,518) (2,011)
------- --------
21,928 42,010
Subscriptions to fund shares - Class K 89 291
Redemptions of fund shares - Class K (94) (48)
------- --------
(5) 243
Net increase from share transactions 21,923 42,253
Net increase in net assets 36,227 37,058
TOTAL NET ASSETS
Beginning of period 37,174 116
------- --------
End of period $73,401 $ 37,174
======= ========
UNDISTRIBUTED NET INVESTMENT
INCOME (LOSS) AT
END OF PERIOD $ (221) $ --
======= ========
See accompanying Notes to Financial Statements.
<PAGE>
SR&F GROWTH INVESTOR PORTFOLIO
Statement of Assets and Liabilities
March 31, 1999
(All amounts in thousands)
(Unaudited)
ASSETS
Investments, at market value
(cost $685,019) $990,783
Cash 1,858
Dividends receivable 309
--------
Total assets 992,950
--------
LIABILITIES
Payable for investments purchased 12,290
Payable to investment advisor 482
Other liabilities 48
--------
Total liabilities 12,820
--------
Net assets applicable to investor's
beneficial interest $980,130
========
See accompanying Notes to Financial Statements.
<PAGE>
SR&F GROWTH INVESTOR PORTFOLIO
Statement of Operations
For the six months ended March 31, 1999
(All amounts in thousands)
(Unaudited)
INVESTMENT INCOME
Dividends $ 2,746
Interest 911
--------
Total investment income 3,657
--------
EXPENSES
Management fees 2,484
Accounting fees 22
Custodian fees 17
Trustee's fees 9
Audit and legal fees 8
--------
Total expenses 2,540
--------
Net investment income 1,117
--------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on investments (2,534)
Net change in unrealized appreciation
or depreciation on investments 233,951
--------
Net gain on investments 231,417
--------
Net increase in net assets
resulting from operations $232,534
========
See accompanying Notes to Financial Statements.
<PAGE>
SR&F GROWTH INVESTOR PORTFOLIO
Statements of Changes in Net Assets
(All amounts in thousands)
(Unaudited)
Six Months Year
Ended Ended
March 31, September 30,
1999 1998
- -------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 1,117 $ 2,659
Net realized gain (loss) on investments (2,534) 12,629
Net change in unrealized
appreciation or depreciation of investments 233,951 (30,644)
--------- ---------
Net increase (decrease) in
net assets resulting from operations 232,534 (15,356)
--------- ---------
TRANSACTIONS IN INVESTORS'
BENEFICIAL INTEREST
Contributions 65,949 389,527
Withdrawals (41,023 ) (127,041)
--------- ---------
Net increase from transactions
in investors' beneficial interest 24,926 262,486
Net increase in net assets 257,460 247,130
TOTAL NET ASSETS
Beginning of period 722,670 475,540
--------- ---------
End of period $ 980,130 $ 722,670
========= =========
See accompanying Notes to Financial Statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(All amounts in thousands)
(Unaudited)
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 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 Young Investor Fund owned 7.5
percent 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.
SECURITY VALUATIONS
All securities are valued as of March 31, 1999, 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.
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 "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 .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 Advisor also provides fund accounting services. For the six months ended
March 31, 1999, the Fund and Portfolio incurred charges of $13 and 22,
respectively. The Advisor 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 Advisor 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.
For the six months ended March 31, 1999, the Fund incurred 12b-1 distribution
and service charges of $80 and $1 for Class A and Class K shares, respectively.
Transfer agent fees are paid to Liberty Funds Services, Inc. ("LFSI"), an
indirect, 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 six months ended March 31,
1999, the Fund incurred transfer agent charges of $63 and $1 for Class A 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 $3 and $9, 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 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 $278,134
and $217,521, respectively.
NOTE 6. CAPITAL SHARE TRANSACTIONS
The following table summarizes Fund share activity during the reporting period:
Six Months Period
Ended Ended
March 31, September 30,
1999 1998(a)
---------- -------------
CLASS A SHARES
Subscriptions to fund shares 1,997 3,406
Redemptions of fund shares (337) (161)
------ ------
Net increase in fund shares 1,660 3,245
====== ======
Six Months Year
Ended Ended
March 31, September 30,
Class K Shares 1999 1998
---------- -------------
Subscriptions to fund shares 7 23
Redemptions of fund shares (7) (4)
------ ------
Net increase in fund shares -- 19
====== ======
(a) From commencement of multi-class offering on January 26, 1998.
<PAGE>
Finacial Highlights
STEIN ROE ADVISOR YOUNG INVESTOR FUND
Selected per-share data (for a share outstanding throughout the period), ratios
and supplemental data.
(Unaudited)
Six Months Period
Ended Ended
March 31, September 30,
CLASS A 1999 1998(a)
---------- -------------
Net Asset Value, Beginning of Period $11.35 $11.67
------ ------
Income From Investment Operations
Net investment loss (0.05) (0.02)
Net realized and unrealized
gain (loss) on investments 3.57 (0.30)
------ ------
Total from investment operations 3.52 (0.32)
------ ------
NET ASSET VALUE, END OF PERIOD $14.87 $11.35
====== ======
Ratio of net expenses
to average net assets (b) 1.65%(d) 1.65%(d)
Ratio of net investment
loss to average net assets (c) (0.82%)(d) (0.52%)(d)
Total return (c) 31.01% (2.74%)
Net assets, end of period (000's) $72,964 $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 advisor, this ratio would have been 1.78
percent for the six months ended March 31, 1999 and 2.02 percent for the
period ended September 30, 1998.
(c) Computed giving effect to the investment advisor's expense limitation
undertaking.
(d) Annualized.
<PAGE>
FINACIAL HIGHLIGHTS
STEIN ROE ADVISOR YOUNG INVESTOR FUND
<TABLE>
<CAPTION>
Selected per-share data (for a share outstanding throughout each period), ratios and supplemental data.
(Unaudited)
Six Months Year Period
Ended Ended Ended
March 31, September 30, September 30,
Class K 1999 1998 1997 (a)
----------- ------------- -------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 11.41 $ 11.49 $ 10.00
-------- -------- --------
Income From Investment Operations
Net investment loss (0.05) (0.03) (0.02)
Net realized and unrealized gain (loss) on investments 3.62 (0.04) 1.51
-------- -------- --------
Total from investment operations 3.57 (0.07) 1.49
-------- -------- --------
Distributions Net investment income -- (0.01) --
-------- -------- --------
Net Asset Value, End of Period $ 14.98 $ 11.41 $ 11.49
-------- -------- --------
Ratio of net expenses to average net assets (b) 1.50%(d) 1.50% 1.50%(d)
Ratio of net investment loss to average net assets (c) (0.67%)(d) (0.48%) (0.24%)(d)
Total return (c) 31.29% (0.62%) 14.90%
Net assets, end of period (000's) $ 437 $ 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 advisor,
this ratio would have been 1.67 percent for the six months ended March 31, 1999, 20.40 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 advisor's expense limitation undertaking.
(d) Annualized.
</TABLE>
<PAGE>
FINACIAL HIGHLIGHTS
SR&F GROWTH INVESTOR PORTFOLIO
<TABLE>
<CAPTION>
(Unaudited)
Six Months Year Period
Ended Ended Ended
March 31, September 30, September 30,
1999 1998 1997 (a)
----------- ------------- -------------
<S> <C> <C> <C>
Ratio of net expenses to average net assets 0.59%(b) 0.62% 0.63%(b)
Ratio of net investment income to average net assets 0.26%(b) 0.42% 0.54%(b)
Portfolio turnover rate 26% 45% 38%
(a) From commencement of operations on February 3, 1997.
(b) Annualized.
</TABLE>
<PAGE>
ACTIVITY PAGES
PUZZLES AND GAMES DOT-TO-DOT
{AGES THREE TO FIVE) Connect the dots and discover an
unlikely item once used as money.
[Graphic omitted]
- --------------------------------------------------------------------------------
MAZE Help the computer chip finds its way safely through the
bugs back to the clean room.
[Graphic omitted]
[graphic omitted] COLOR ME
<PAGE>
[Graphics omitted]
HAMBURGER SNEAKER TEDDY BEAR CRAYONS BALL
[Graphic omitted]
ONE WAY TO HELP YOUR MONEY GROW IS TO OWN PART OF A COMPANY
Stein Roe Advisor Young Investor Fund invests in the stocks of many companies
that make things you know. Match the picture with its name.
[Graphic omitted] COLOR ME
<PAGE>
PUZZLES AND GAMES
(AGES SIX TO EIGHT)
MONEY CROSSWORD
ACROSS
1. A copper coin
5. You may put money in a ________ account
6. What you use to pay for things
7. You can find 13 of these on the back of the $1 bill
8. You may get this for doing chores each week
9. His picture appears on #1 across
DOWN
1. Usually a child's first place to save money
2. A mutual fund gives shareholders an annual report each _______
3. His picture appears on the $1 bill
4. The "grooviest" coin around
6. Stein Roe Advisor Young Investor Fund is a _______ fund
[Graphic omitted]
Answers:
Across 1. Penny. 5. Savings. 6. Money. 7. Star. 8. Allowance. 9. Lincoln.
Down 1. Piggy bank. 2. Year. 3. Washington. 4. Quarter. Of the four coins we use
- - penny, nickel, dime and quarter - only the dime and quarter have grooves
around the edges. The quarter has 119, one more than the dime. 6. Mutual.
<PAGE>
MONEY AND INVESTING WORD GAME
Learn more about the world of money and investing. Words hidden in the puzzle
can go forward, backward, up, down or on an angle. If you don't know what a word
means, see the definitions below. A parent or other adult can help explain them
to you.
INVEST - To put money to a use intended to make it grow.
JOB - Work you do for money.
LEND - To give someone something with the understanding they will give it back
at some time.
MINOR - A child who is not old enough to enter into legal contracts or own
securities. Investments made for the benefit of a minor are managed by a
custodian.
MUTUAL FUND - An investment that pools money from many different shareholders
who have a common investment goal. Professional money managers invest the money
in different securities, such as stocks or bonds.
OWE - An obligation to give or pay something to someone else.
PENNY - A one-cent coin in the United States.
SAVE - To keep or put aside. One way to save money is to put it in a bank.
SHARE - Part ownership of a company usually bought as an investment. See STOCKS.
STOCKS - Units of ownership of a business, often called shares. Your shares give
you certain privileges and rights to participate in the running of the business.
TRADE - In investing, the act of buying or selling stocks, bonds or other
securities.
YEN - Money used in Japan.
Y A L L T S R B E A R
O E R O E T W U S I L
BANK D R N A D O L L A R S MINOR
BEAR S A E D O C M G H D T MUTUAL
BONDS T G B O N D S P K O O FUND
BULL O O U P I S N T E U C STOCKS
DOLLAR D R L K B A H B A N K YEN
INTEREST I O L H A S P K C O S
A N C G H B E I R E W
N I N T E R E S T F A
V M U T U A L F U N D
<PAGE>
PUZZLES AND GAMES
(AGES NINE TO 12)
BRAINTEASER Money has taken many forms over time - from cattle to credit
cards. See if you can match each type of money with the era when
it was first used.
1. Barter _______________ a. 1000 BC
2. Paper money __________ b. 100 BC
3. Mollusk shells _______ c. 1200 BC
4. Leather money ________ d. 800 AD
5. Metal coins __________ [Graphic omitted] e. The start of
6. Cattle _______________ "WILL THAT BE COW'S OR humankind
7. Wampum _______________ CREDIT CARD? f. 1535 AD
(strings of beads made g. 9000 BC
from clam shells)
Answers: 1. e. 2. d. 3. c. 4. b. 5. a. 6. g. 7. f.
- --------------------------------------------------------------------------------
A WORLD OF MONEY
[Graphic omitted] 1. United States A. Yen Most people in the
world don't make
[Graphic omitted] 2. Israel B. Dollar purchases with the
same dollars we use
[Graphic omitted] 3. France C. Shekel in the United
States. They use
[Graphic omitted] 4. Mexico D. Doodad different kinds of
coins and bills, or
[Graphic omitted] 5. Italy E. Lira currency. No two
countries have
[Graphic omitted] 6. Japan F. Franc currency that looks
exactly the same,
[Graphic omitted] 7. Canada G. Peso either - people in
Canada, for example,
[Graphic omitted] 8. Turkey H. Thingamajig use colorful money
that shows a picture
[Graphic omitted] 9. Brazil I. Rand of the Queen of
England. See if you
[Graphic omitted] 10. South Africa J. Real can match each
country with the
name of its
currency.
NOTE: Different countries sometimes use the same name for their money.
Answers: 1. B. 2. C. 3. F. 4. G. 5. E. 6. A. 7. B. 8. E. 9. J. 10. I. Did we
fool you? "Doodad" and "thingamajig" are made-up words.
<PAGE>
WHAT DOES STEIN ROE ADVISOR YOUNG INVESTOR(SM) FUND INVEST IN?
There are many different types of investments, but Stein Roe Advisor Young
Investor(SM) Fund limits its choices to just a few. Which of the items below
does the Fund invest in?
[Graphic omitted]
Answer: The Fund invests only in the equity, debt and money market securities
(stocks, bonds and short-term IOUs) of U.S. or foreign issuers. You won't find
things like art, gold bars, real estate (buildings), oil wells or livestock in
the Fund's investment portfolio. To learn more about how Stein Roe Advisor Young
Investor(SM) Fund invests, go to pages seven through 11 of the prospectus.
That's where you'll find the Fund's investment policies, strategies and
restrictions.
- --------------------------------------------------------------------------------
REBUS PUZZLE
A rebus puzzle uses pictures and words to make another word or phrase. Can you
figure out these famous sayings about money?
1. [Graphic omitted] ---------------------------------------
(your answer)
2. [Graphic omitted] ---------------------------------------
(your answer)
Answer: 1. Time is money. 2. Save for a rainy day.
<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 the
Liberty Funds Distributor, Inc. 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
financial advisor or call 1-800-426-3750.
Stein Roe Advisor Young Investor(SM) 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
YI-03/937G-0399 (5/99) 99/529
