<PAGE> 1
--------------------------------------------------------------------------------
STEIN ROE ADVISOR SELECT GROWTH & INCOME FUND SEMIANNUAL REPORT
--------------------------------------------------------------------------------
MARCH 31, 2000
<PAGE> 2
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
The six-month period proved to be a positive but challenging one for Stein Roe
Advisor Select Growth & Income Fund, which posted gains, but not as quickly as
the U.S. equity markets in general. The Fund's Class A shares returned 8.16%,
without a sales charge, for the six months ended March 31, 2000. This is
compared to the S&P 500 Index's return of 17.50% for the same period.
The U.S. economy expanded rapidly during the past six months, and the continued
strength stirred up fears of higher inflation. In response, the Federal Reserve
raised short-term interest rates three times between September 30 and March 31.
In the equity markets, the worries about rapid economic growth, inflation, and
changing interest rates kept investors wondering and, for many stocks, put a
damper on price appreciation. Despite robust gains in earnings, overall stock
prices rose only moderately, with the exception of the technology sector.
Throughout the period, the market could clearly be divided into the "haves" --
most anything related to technology and telecommunications -- and the "have
nots" -- most everything else. In general, portfolios with large allocations to
technology shares sprinted ahead, while other portfolios lagged. In spite of a
sell off during the last three weeks of the period, technology and growth
investing were the undisputed victors for the six-month period.
Due to its objectives and investment strategies, the Fund could not participate
fully in the technology "boom." Yet it provided a total return for the six
months that exceeds the long-term historical average for the broad equity
market, as represented by the S&P 500 Index. I attribute this to the
disciplined, research-intensive investment strategy practiced by the Fund's
portfolio manager.
In the following report, you will find detailed information about this strategy.
I encourage you to review the report carefully. For more information, call your
financial advisor or visit us on the Internet at www.libertyfunds.com for
updates on the Fund's progress. As always, we thank you for choosing a Stein Roe
Advisor fund and for the opportunity to serve your investment needs.
Sincerely,
/s/ Stephen E. Gibson
Stephen E. Gibson
President
May 15, 2000
--------------------------- Because market and economic conditions
NOT FDIC MAY LOSE VALUE change frequently, there can be no assurance
INSURED ------------------ that the trends described above or on the
NO BANK GUARANTEE following pages will continue or come to pass.
---------------------------
<PAGE> 3
--------------------------------------------------------------------------------
HIGHLIGHTS
--------------------------------------------------------------------------------
* INVESTOR SENTIMENT SHIFTED TOWARD VALUE STOCKS AT END OF PERIOD.
Investors favored technology and growth stocks throughout most of the
period and prices rose quickly for these groups. At the same time,
investors shunned stocks in many sectors of the economy where prices were
more attractive. Toward the end of the half-year, investors shifted their
focus toward value stocks, or those that could be bought at more reasonable
prices.
* TECHNOLOGY AND HEALTH CARE STOCKS DROVE FUND'S PERFORMANCE.
The Fund's best-performing investments were technology and health care
stocks; and the worst-performing, industrial and consumer issues.
* BROAD-BASED INDEX OUTPERFORMED FUND.
Like most large-capitalization value funds, Stein Roe Advisor Select Growth
& Income Fund posted positive results for the six months ended March 31,
2000, but due to its value bias, did not keep pace with the broad stock
market.
STEIN ROE ADVISOR SELECT GROWTH & Income Fund Performance vs. S&P 500 Index
10/1/99 - 3/31/00
[BAR CHART]
Stein Roe Advisor Select Growth & Income Fund, Class A
shares, without a sales charge 8.16%
S&P 500 Index 17.50%
The Standard & Poor's 500 Index is an unmanaged index that tracks the
performance of 500 widely held, 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 in an index.
NET ASSET VALUE PER SHARE AS OF 3/31/00
---------------------------------------------
Class A $27.02
---------------------------------------------
Class B $26.97
---------------------------------------------
Class C $26.96
---------------------------------------------
Class Z $27.02
---------------------------------------------
DISTRIBUTIONS DECLARED PER SHARE FROM 12/1/99 - 3/31/00
Class A $0.009
---------------------------------------------
Class B $0.000
---------------------------------------------
Class C $0.000
---------------------------------------------
Class Z $0.032
---------------------------------------------
1
<PAGE> 4
--------------------------------------------------------------------------------
PORTFOLIO MANAGER'S REPORT
--------------------------------------------------------------------------------
MIXED ENVIRONMENT FOR VALUE STOCKS
Stein Roe Advisor Select Growth & Income Fund pursues both capital appreciation
and current income by investing in large-capitalization value stocks. And, like
most large-cap value funds, it underperformed the broad market during the six
months ended March 31, 2000. The Fund's Class A shares generated a total return
of 8.16%, without a sales charge, compared to 17.50% for the Standard & Poor's
500 Index.
DOMINANCE OF GROWTH-ORIENTED TECHNOLOGY STOCKS OVERSHADOWED PORTFOLIO'S
PERFORMANCE
Much of the underperformance can be attributed to an intense rotation in the
market toward technology stocks, most of which are also growth stocks. Since
these make up a large portion of the S&P 500, the index advanced. The Portfolio
focuses heavily on stocks with more attractive valuations, and we stayed true to
our discipline. So, while technology took off and valuations in that sector
rose, especially after the first of the year, the Portfolio did not participate
fully in the advance. When technology retreated in March, the Fund gained over
12% in a single month.
PORTFOLIO BENEFITED FROM TECHNOLOGY AND HEALTH CARE STOCKS
As you might expect, our few technology holdings performed well. During the
six-month period, the prices of our Applied Materials and Intel stocks (2.3% and
1.6% of net assets, respectively) rose significantly.
Outside technology, the strongest performers were health care companies.
Warner-Lambert (4.4% of net assets) rose roughly 50%, primarily because it was a
takeover target. Monsanto, a life sciences company, also posted gains. We owned
shares of Monsanto when it merged with Pharmacia & Upjohn at the end of the
period, and we believe the combined company, now referred to as Pharmacia (2.4%
of net assets), is poised to bring innovative drugs to market, bolster its
research and development effort and create numerous cost efficiencies.
The list of poorly performing stocks is littered with industrial and consumer
companies, such as Burlington Northern Santa Fe and Procter & Gamble (1.3% and
1.4% of net assets, respectively), Goodyear, which we sold during the period,
and retailers like Federated (1.0% of net assets) and Kmart, which we also sold.
Despite good fundamental characteristics and earnings, these stocks lagged the
market by a wide margin. In our opinion, industry groups, rather than individual
company merit,
SECTOR BREAKDOWN AS OF 3/31/00
[BAR CHART]
Fund S&P 500 Index
Basic Materials 6% 2%
Consumer Cyclical 15% 12%
Consumer Non-Cyclical 18% 15%
Energy 8% 6%
Financials 17% 13%
Industrials 15% 7%
Technology 16% 35%
Utilities 5% 10%
Sector breakdowns are calculated as a percentage of the total holdings in SR&F
Growth & Income Portfolio. Because the Portfolio is actively managed, there can
be no guarantee the Portfolio will continue to maintain this breakdown in the
future.
Industry sectors in the following financial statements are based upon the
standard industrial classifications (SIC) as published by the U.S. Office of
Management and Budget. The sector classifications used on this page are based
upon the Advisor's defined criteria as used in the investment process.
BOUGHT
We acquired shares of Pharmacia (2.4% of net assets) when Monsanto, an existing
holding in the Portfolio, merged with Pharmacia & Upjohn, another holding in the
Portfolio. We believe Pharmacia is well-positioned for new product innovation
and research and development initiatives.
2
<PAGE> 5
--------------------------------------------------------------------------------
PORTFOLIO MANAGER'S REPORT (CONTINUED)
--------------------------------------------------------------------------------
drove their performance throughout most of the period. However, the Fund gained
more than 12% in March, once investors decided they might be paying too much for
"new economy" issues and came looking for stocks with more attractive
valuations.
POSITIONING THE FUND TO BENEFIT IN VOLATILE MARKET CONDITIONS
As the market rotated away from technology and toward other sectors, we saw it
as an opportunity. We trimmed back or eliminated a number of holdings that, on a
relative basis, did not look as attractive and concentrated on those that, in
our view, had the greatest potential. While the market may remain volatile in
the future, we will keep the Fund diversified among the best opportunities we
can find -- stocks we believe are most likely to appreciate -- to reduce the
effects of market volatility.
/s/ Daniel Cantor
Daniel Cantor is a senior vice president and principal of the Advisor. Mr.
Cantor has managed the Fund since February 1995.
An investment in the Fund offers significant long-term growth potential, but
also involves certain risks. The Fund may be affected by stock market
fluctuations that occur in response to economic and business developments.
PERFORMANCE INFORMATION -- AVERAGE ANNUAL TOTAL RETURNS AS OF 3/31/00
<TABLE>
<CAPTION>
Share Class A B C Z
Inception Date 11/22/99 11/22/99 11/22/99 11/22/99
------------------------------------------------------------------------------------------------------------------
w/o sales with sales w/o sales with sales w/o sales with sales w/o sales
charge charge charge charge charge charge charge
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Six months
(cumulative) 8.16% 1.96% 7.92% 2.92% 7.88% 6.88% 8.25%
------------------------------------------------------------------------------------------------------------------
One year 7.36 1.19 7.12 2.12 7.08 6.08 7.46
------------------------------------------------------------------------------------------------------------------
Five years 20.05 18.63 19.99 19.80 19.98 19.98 20.07
------------------------------------------------------------------------------------------------------------------
10 years 15.80 15.11 15.77 15.77 15.77 15.77 15.81
------------------------------------------------------------------------------------------------------------------
</TABLE>
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 Select Growth & Income Fund invests all of its investable assets in SR&F
Growth & Income Portfolio, which has the same investment objective and
substantially the same investment policies as the Fund. Performance results
reflect any voluntary waivers or reimbursements of Fund expenses by the Advisor
or its affiliates. Absent these waivers or reimbursement arrangements,
performance results would have been lower. The historical performance of the
Fund's share classes for all periods is based on the performance of Class S
shares of SR&F Growth & Income Fund restated to reflect sales charges, 12b-1
fees and other expenses applicable to that class as set forth in the prospectus
"Fee Table" without giving effect to any fee waivers described therein and
assuming reinvestment of dividends and capital gains. Historical performance as
restated should not be interpreted as indicative of the Fund's future
performance.
TOP 10 HOLDINGS AS OF 3/31/00
1. Warner-Lambert Co. 4.4%
-------------------------------------------------------
2. Citigroup, Inc. 4.4%
-------------------------------------------------------
3. General Electric Co. 4.1%
-------------------------------------------------------
4. Kansas City Southern Industries, Inc. 3.9%
-------------------------------------------------------
5. BP Amoco PLC ADR 3.9%
-------------------------------------------------------
6. International Business Machines Corp. 3.7%
-------------------------------------------------------
7. American Express Co. 3.6%
-------------------------------------------------------
8. Bell Atlantic Corp. 3.5%
-------------------------------------------------------
9. Chase Manhattan Corp. 3.4%
-------------------------------------------------------
10.Wal-Mart Stores, Inc. 3.2%
-------------------------------------------------------
Holdings are calculated as a percentage of net assets in SR&F Growth & Income
Portfolio. Because the Portfolio is actively managed, there can be no guarantee
the Portfolio will continue to maintain these holdings in the future.
3
<PAGE> 6
--------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
--------------------------------------------------------------------------------
March 31, 2000
(Unaudited, in thousands)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
SR&F GROWTH & INCOME PORTFOLIO
--------------------------------------------------------------------------------
COMMON STOCKS - 98.8% SHARES VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
FINANCE, INSURANCE & Real Estate - 17.0%
Depository Institutions - 6.4%
BankAmerica Corp. 68 $ 3,560
Chase Manhattan Corp. 129 11,230
Wells Fargo & Co. 157 6,413
--------
21,203
--------
INSURANCE CARRIERS - 4.3%
Citigroup, Inc. 245 14,520
--------
NONDEPOSITORY CREDIT INSTITUTIONS - 6.3%
American Express Co. 80 11,915
Fannie Mae 161 9,086
--------
21,001
--------
MANUFACTURING - 54.9%
CHEMICALS & ALLIED PRODUCTS - 17.4%
Avon Products, Inc. 40 1,163
Bristol-Myers Squibb Co. 170 9,818
E.I. DuPont De Nemours & Co. 29 1,543
Ecolab, Inc. 260 9,538
Millennium Chemicals, Inc. 104 2,082
Monsanto Co. 100 5,150
Pharmacia & Upjohn, Inc. 50 2,963
Procter & Gamble Co. 81 4,556
Union Carbide Corp. 111 6,479
Warner-Lambert Co. 150 14,625
--------
57,917
--------
COMMUNICATIONS EQUIPMENT - 0.8%
Motorola, Inc. 10 1,424
Sabre Group Holdings, Inc. 36 1,335
--------
2,759
--------
ELECTRICAL INDUSTRIAL EQUIPMENT - 6.3%
Emerson Electric Co. 100 5,288
General Electric Co. 88 13,657
Hubbell, Inc., Class B 70 1,927
--------
20,872
--------
ELECTRONIC COMPONENTS - 1.6%
Intel Corp 40 5,278
--------
FABRICATED METAL - 1.5%
Gillette Co. 134 5,065
--------
FOOD & KINDRED PRODUCTS - 2.0%
Philip Morris Companies, Inc. 203 $ 4,288
Sara Lee Corp. 144 2,592
--------
6,880
--------
LUMBER & WOOD PRODUCTS - 2.6%
Georgia Pacific Corp. 170 6,726
Georgia-Pacific Corp. Timber Group 75 1,922
--------
8,648
--------
MACHINERY & COMPUTER EQUIPMENT - 9.6%
Applied Materials 80 7,540
Cisco Systems, Inc. 90 6,958
Compaq Computer Corp. 195 5,191
International Business Machines Corp. 105 12,390
--------
32,079
--------
MEASURING & ANALYZING INSTRUMENTS - 5.7%
Biomet, Inc. 127 4,620
Baxter International, Inc. 100 6,268
Honeywell International, Inc. 158 8,298
--------
19,186
--------
PETROLEUM REFINING - 3.9%
Bp Amoco PLC ADR 243 12,884
--------
PRINTING & PUBLISHING - 1.1%
Tribune Co. 100 3,656
--------
TRANSPORTATION EQUIPMENT - 2.4%
Boeing Co. 100 3,779
Lear Corp. 150 4,219
--------
7,998
--------
--------------------------------------------------------------------------------
MINING & ENERGY - 4.1%
CRUDE PETROLEUM & NATURAL GAS - 0.5%
Conoco, Inc. Class B 61 1,574
--------
OIL & GAS FIELD SERVICES - 3.6%
Conoco, Inc. Class A 105 2,581
Enron Corp. 125 9,359
--------
11,940
--------
--------------------------------------------------------------------------------
RETAIL - 8.2%
APPAREL & ACCESSORY STORES - 1.9%
TJX Companies, Inc. 283 6,275
--------
</TABLE>
See notes to investment portfolio.
4
<PAGE> 7
--------------------------------------------------------------------------------
INVESTMENT PORTFOLIO (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SR&F GROWTH & INCOME PORTFOLIO
--------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) SHARES VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
GENERAL MERCHANDISE STORES - 4.2%
Federated Department Stores, Inc. 80 $ 3,340
Wal-Mart Stores, Inc. 190 10,545
---------
13,885
---------
MISCELLANEOUS RETAIL - 2.1%
Walgreen Co. 280 7,210
---------
--------------------------------------------------------------------------------
SERVICES - 2.3%
AUTO REPAIR, RENTAL & PARKING - 0.6%
Hertz Corp. Class A 60 2,044
---------
BUSINESS SERVICES - 1.7%
Interpublic Group of Cos., Inc. 121 5,727
---------
--------------------------------------------------------------------------------
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES - 12.3%
AIR TRANSPORTATION - 2.4%
AMR Corp. 50 1,593
Continental Airlines, Inc. Class B 160 6,540
8,133
---------
RAILROAD - 5.3%
Burlington Northern Santa Fe Corp. 200 4,425
Kansas City Southern Industries, Inc. 152 13,054
---------
17,479
---------
TELECOMMUNICATION - 4.6%
At&T Corp. 65 3,675
Bell Atlantic Corp. 190 11,633
---------
15,308
---------
TOTAL COMMON STOCKS
(Cost of $160,720)(b) 329,521
---------
SHORT-TERM OBLIGATIONS PAR VALUE
--------------------------------------------------------------------------------
COMMERCIAL PAPER - 0.7%
Associates First Capital,
4.17%(c) 4/3/00 $2,315 $ 2,314
---------
OTHER ASSETS & LIABILITIES - 0.5% 1,694
---------
Net Assets - 100.0% $333,529
---------
</TABLE>
NOTES TO INVESTMENT PORTFOLIO:
(a) non-income producing security.
(b) cost for federal income tax purposes is the same.
(c) Rate represents yield at time of purchase.
ACRONYM NAME
------- ----
ADR American Depositary Receipt
See notes to financial statements.
5
<PAGE> 8
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
--------------------------------------------------------------------------------
March 31, 2000 (Unaudited)
(In thousands)
<TABLE>
<CAPTION>
SR&F GROWTH & INCOME PORTFOLIO
--------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments, at market value (cost of $160,720) $329,521
Short-term obligations 2,314
331,835
Receivable for:
Investments sold $4,085
Dividends 316
Foreign tax reclaims 4
Other 4 4,409
------ --------
Total Assets 336,244
LIABILITIES
Payable due to custodian bank 131
Payable for:
Investments purchased 2,340
Accrued:
Management fee 160
Transfer agent fee 1
Bookkeeping fee 3
Other 80
------
Total Liabilities 2,715
--------
Net assets $333,529
========
</TABLE>
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
--------------------------------------------------------------------------------
For the Six Months Ended March 31, 2000 (Unaudited)
(In thousands)
<TABLE>
<CAPTION>
SR&F GROWTH & INCOME PORTFOLIO
--------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
Interest $ 460
Dividends 2,294
-------
2,754
Foreign taxes withheld (12)
-------
Total Investment Income 2,742
-------
EXPENSES
Management fee $1,094
Transfer agent fee 3
Bookkeeping fee 17
Trustees fee 9
Custodian fee 8
Audit & legal fees 8
Other 9
------
Total expenses 1,148
-------
Net Investment Income 1,594
-------
NET REALIZED & UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain (loss) on:
Investments 19,462
Closed futures contracts 252
Foreign currency transactions (1)
-------
Net realized gain 19,713
Net change in unrealized
appreciation/depreciation 7,039
-------
Net Gain 26,752
-------
Increase In Net Assets From Operations $28,346
=======
</TABLE>
See notes to financial statements.
6
<PAGE> 9
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
(In thousands)
<TABLE>
<CAPTION>
SR&F GROWTH & INCOME PORTFOLIO
---------------------------------------------------------------------------------------------------------
UNAUDITED
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 2000 SEPTEMBER 30, 1999
---------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
Net investment income $ 1,594 $ 5,114
Net realized gain 19,713 18,373
Net change in unrealized appreciation/depreciation 7,039 49,677
--------- ---------
Net Increase from Operations 28,346 73,164
--------- ---------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTEREST
Contributions 1,143 22,804
Withdrawals (72,695) (72,426)
--------- ---------
Net decrease from transactions in investors' beneficial interest (71,552) (49,622)
--------- ---------
Total Increase (Decrease) (43,206) 23,542
NET ASSETS
Beginning of period 376,735 353,193
--------- ---------
End of period $ 333,529 $ 376,735
========= =========
</TABLE>
See notes to financial statements.
7
<PAGE> 10
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
--------------------------------------------------------------------------------
March 31, 2000 (Unaudited)
(In thousands except for per share amounts)
<TABLE>
<CAPTION>
ADVISOR SELECT GROWTH & INCOME FUND
--------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investment in Portfolio, at value $333,351
Receivable for fund shares sold $ 251
Other 103 354
------ --------
Total Assets 333,705
--------
LIABILITIES
Payable for fund shares repurchased 1,949
Accrued:
Administrative fee 40
Transfer agent fee 60
Bookkeeping fee 3
Other 1
------
Total Liabilities 2,053
--------
NET ASSETS $331,652
--------
Net asset value and redemption price
per share -- Class A ($148/5) $ 27.02(a)
--------
Maximum offering price
per share -- Class A ($27.02/0.9425) $ 28.67(b)
--------
Net asset value and offering price
per share -- Class B ($434/16) $ 26.97(a)
--------
Net asset value and offering price
per share -- Class C ($7/(c)) $ 26.96(a)
--------
Net asset value, redemption and offering price
per share -- Class S ($331,062/12,250) $ 27.02
--------
Net asset value, redemption and offering price
per share -- Class Z ($1/(c)) $ 27.02
--------
COMPOSITION OF NET ASSETS
Paid-in capital $145,049
Undistributed net investment income 95
Accumulated net realized
gain allocated from Portfolio 17,839
Net unrealized appreciation
allocated from Portfolio 168,669
--------
$331,652
========
</TABLE>
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
(b) On sales of $50,000 or more the offering price is reduced.
(c) Rounds to less than one.
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
--------------------------------------------------------------------------------
For the Six Months Ended March 31, 2000 (Unaudited)
(In thousands)
<TABLE>
<CAPTION>
ADVISOR SELECT GROWTH & INCOME FUND
--------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
Interest income allocated from Portfolio $ 460
Dividend income allocated from Portfolio 2,292
-------
2,752
Foreign taxes withheld allocated from Portfolio (12)
-------
Total investment income 2,740
-------
EXPENSES
Expenses allocated from Portfolio 1,128
Administrative fee 273
Transfer agent fee 435
Bookkeeping fee 16
Service fees (a)
Distribution fee -- Class A (a)
Distribution fee -- Class B (a)
Distribution fee -- Class C (a)
Trustees' fee 4
Legal fee 2
Custodian fee 1
Audit fee 8
Registration fee 18
Report to shareholders 4
Other 23
-------
Total expenses 1,912
Fees waived by the Distributor -- Class A (a)
-------
Net Expenses 1,912
-------
Net Investment Income 828
-------
NET REALIZED & UNREALIZED GAIN
ALLOCATED FROM PORTFOLIO
Net realized gain on:
Investments 19,397
Closed futures contacts 197
Foreign currency transactions 22
-------
Net realized gain 19,616
-------
Net change in unrealized appreciation/depreciation
during the period 7,073
-------
Net Gain 26,689
-------
Increase In Net Assets from Operations $27,517
=======
</TABLE>
(a) Rounds to less than one.
See notes to financial statements.
8
<PAGE> 11
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
(In thousands)
ADVISOR SELECT GROWTH & INCOME FUND
--------------------------------------------------------------------------------
(UNAUDITED)
SIX MONTHS YEAR
ENDED ENDED
MARCH 31, SEPTEMBER 30,
----------- -------------
2000 (b) 1999
--------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 828 $ 3,410
Net realized gain allocated from
Portfolio 19,616 18,333
Net change in unrealized
appreciation/depreciation
allocated from Portfolio 7,073 49,228
--------- ---------
Net Increase from Operations 27,517 70,971
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income - Class A (a) --
From net investment income - Class S (1,139) (3,859)
From net realized capital
gains - Class S (16,297) (5,981)
--------- ---------
From net investment income - Class Z (a) --
(17,436) (9,840)
--------- ---------
FUND SHARE TRANSACTIONS
Receipts for shares sold - Class A 172 --
Value of distributions
reinvested - Class A (a) --
Cost of shares repurchased - Class A (26) --
--------- ---------
146 --
--------- ---------
Receipts for shares sold - Class B 416 --
Cost of shares repurchased - Class B (2) --
--------- ---------
414 --
--------- ---------
Receipts for shares sold - Class C 11 --
Cost of shares repurchased - Class C (4) --
--------- ---------
7 --
--------- ---------
Receipts for shares sold - Class S 13,896 91,029
Value of distributions
reinvested - Class S 16,279 9,089
Cost of shares repurchased - Class S (84,961) (136,512)
--------- ---------
(54,786) (36,394)
--------- ---------
Receipts for shares sold - Class Z 1 --
Cost of shares repurchased - Class Z (a) --
--------- ---------
1 --
--------- ---------
Net Decrease from Fund Share
Transactions (54,218) (36,394)
--------- ---------
Total Increase (Decrease) (44,137) 24,737
--------------------------------------------------------------------------------
(UNAUDITED)
SIX MONTHS YEAR
ENDED ENDED
MARCH 31, SEPTEMBER 30,
----------- -------------
2000 (b) 1999
--------------------------------------------------------------------------------
NET ASSETS
Beginning of period $ 375,789 $ 351,052
--------- ---------
End of period (including undistributed
net investment income of $95 and
$406, respectively) $ 331,652 $ 375,789
--------- ---------
ANALYSIS OF CHANGES IN SHARES OF
BENEFICIAL INTEREST SOLD
Sold - Class A 6 --
Issued for distributions
reinvested - Class A (a) --
Repurchased - Class A (1) --
--------- ---------
5 --
--------- ---------
Sold - Class B 16 --
Repurchased - Class B (a) --
--------- ---------
16 --
--------- ---------
Sold - Class C (a) --
Repurchased - Class C (a) --
--------- ---------
(a) --
--------- ---------
Sold - Class S 529 3,502
Issued for distributions
reinvested - Class S 616 367
Repurchased - Class S (3,274) (5,124)
--------- ---------
(2,129) (1,255)
--------- ---------
Sold - Class Z (a) --
Issued for distributions
reinvested - Class Z (a) --
--------- ---------
(a) --
--------- ---------
Net Decrease in Fund Shares (2,108) (1,255)
Shares outstanding at beginning
of period 14,379 15,634
--------- ---------
Shares outstanding at end of period 12,271 14,379
--------- ---------
(a) Rounds to less than one
(b) Class A, Class B, Class C and Class Z shares were initially offered on
December 1, 1999.
See notes to financial statements.
9
<PAGE> 12
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
March 31, 2000 (Unaudited, all amounts in thousands)
NOTE 1. INTERIM FINANCIAL STATEMENTS
In the opinion of management of Stein Roe Advisor Select Growth & Income Fund
(SRSG&IF) (formerly Stein Roe Advisor Growth & Income Fund) (the "Fund"), a
series of Liberty-Stein Roe Funds Investment Trust (the "Trust"), the
accompanying financial statements contain all normal and recurring adjustments
necessary for the fair presentation of the financial position of the Fund at
March 31, 2000, and the results of its operations, the changes in its net assets
and the financial highlights for the six months then ended.
NOTE 2. ORGANIZATION
The Fund is an open-end management investment company organized as a
Massachusetts business trust. The Fund invests substantially all of its assets
in SR&F Growth & Income Portfolio (the "Portfolio"), respectively. The Fund may
issue an unlimited number of shares. The Fund offers five classes of shares:
Class A, Class B, Class C, Class S and Class Z. Class A shares are sold with a
front-end sales charge. A 1.00% contingent deferred sales charge is assessed on
redemptions made within eighteen months on an original purchase of $1 million to
$5 million. Class B shares are subject to an annual distribution fee and a
contingent deferred sales charge. Effective February 1, 2000, Class B shares
will convert to Class A shares as follows:
ORIGINAL PURCHASE CONVERTS TO CLASS A SHARES
----------------- --------------------------
Less than $250,000 8 years
$250,000 to less than $500,000 4 years
$500,000 to less than $1,000,000 3 years
Class C shares are subject to a contingent deferred sales charge on redemptions
made within one year after purchase and an annual distribution fee. Class Z
shares are offered continuously at net asset value. There are certain
restrictions on the purchase of Class Z shares, as described in the Fund's
prospectus. Effective October 31, 1999, Class S was closed to new investors, as
described in the Fund's prospectus.
The Portfolio is a series of the SR&F Base Trust, a Massachusetts common law
trust organized under an Agreement and Declaration of Trust dated August 23,
1993. The Portfolio commenced operations on February 3, 1997. At commencement,
Advisor Select Growth & Income Fund contributed $239,175 in securities and other
assets to SR&F Growth & Income Portfolio in exchange for beneficial ownership of
the Portfolio. The Portfolio allocates income, expenses, realized and unrealized
gains and losses to each investor on a daily basis, based on methods approved by
the Internal Revenue Service. At March 31, 2000, the Fund owned 99.9% of the
SR&F Growth & Income Portfolio.
NOTE 3. SIGNIFICANT ACCOUNTING POLICIES
The following summarizes the significant accounting policies of the Fund and
Portfolio. These policies are in conformity with generally accepted accounting
principles, which require management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME
Investment transactions are accounted for on trade date. Dividend income is
recorded on the ex-dividend date, and interest income is recorded on the accrual
basis. Interest income includes discount accretion on fixed income securities.
Realized gains and losses from investment transactions are reported on an
identified cost basis.
SECURITY VALUATIONS
Securities are valued at, depending on the security involved, the last reported
sales price, last bid or asked price, or the mean between last bid and asked
price as of the close of the appropriate exchange or other designated time. A
security that is listed or traded on more than one exchange is valued at the
quotation on the exchange determined to be the primary exchange for such
security. Securities and other assets for which market quotations are not
readily available are valued at fair value as determ ined in good faith by or
under the direction of the Board of Trustees.
FUTURES CONTRACTS
During the six months ended March 31, 2000, the Portfolio entered into stock
index futures contracts to invest cash pending direct investments in stocks and
to enhance its return. Risks of entering into futures contracts include the
possibility that there may be an illiquid market at the time the Portfolio seeks
to close out a contract, and changes in the value of the futures contract may
not correlate with changes in the value of the portfolio securities being
hedged. Upon entering into a futures contract, the Portfolio deposits with its
custodian cash or securities in an amount sufficient to meet the initial margin
requirements. Subsequent payments are made or received by the Portfolio equal to
the daily change in the contract value and are recorded as unrealized gains or
losses. The Portfolio recognizes a realized gain or loss when the contract is
closed or expires.
DETERMINATION OF CLASS NET ASSET VALUE AND FINANCIAL HIGHLIGHTS:
All income, expenses (other than class specific transfer agent fees and Class A,
Class B and Class C service and distribution fees), and realized and unrealized
gains (losses) are allocated to each class proportionately on a daily basis for
purposes of determining the net asset value of each class.
Per share data is calculated using average share outstanding during the period.
In addition, Class A, Class B and Class C net investment income per share data
reflects the service fee applicable to Class A, Class B and Class C shares and
the distribution fee applicable to Class A, Class B and Class C shares only.
Class A, Class B and Class C ratios are calculated by adjusting the expense and
net investment income ratios for the Fund for the entire period by the service
fee applicable to Class A, Class B and Class C shares and the distribution fee
applicable to Class B and Class C shares only.
10
<PAGE> 13
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONT.)
--------------------------------------------------------------------------------
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 makes 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 methods approved by the Internal Revenue Service.
DISTRIBUTIONS TO SHAREHOLDERS
The Fund declares and pays dividends of any net investment income at least
quarterly, and any net realized capital gains annually. Shareholder
distributions are recorded on the ex-dividend date. Dividends are determined in
accordance with income tax principles, which may treat certain transactions
differently from generally accepted accounting principles. Distributions in
excess of tax basis earnings are reported in the financial statements as a
return of capital. Permanent differences in the recognition or classification of
income between the financial statements and tax earnings are reclassified to
paid-in capital.
NOTE 4. TRUSTEES' FEES AND TRANSACTIONS WITH AFFILIATES
MANAGEMENT AND ADMINISTRATION FEES
The Fund and Portfolio pays monthly management and administrative fees 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 0.60% of average daily net assets up to $500 million, 0.55% of
the next $500 million, and 0.50% thereafter. The administrative fees for the
Fund is computed at an annual rate of 0.15% of average daily net assets up to
$500 million, 0.125% of the next $500 million, and 0.10% thereafter.
BOOKKEEPING FEE
The Advisor provides bookkeeping and pricing services for a monthly fee equal to
$25 annually plus 0.0025% annually of the Fund's average daily net assets over
$50 million.
TRANSFER AGENT FEE
Liberty Funds Services, Inc. (the Transfer Agent), an affiliate of Liberty,
provides shareholder services for a monthly fee equal to 0.236% annually of
SRSG&IF's average daily net assets attributable to Class A, Class B, Class C and
Class Z shares and receives reimbursement for certain out of pocket expenses.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES
Liberty Funds Distributor, Inc. (the Distributor), a subsidiary of Liberty, is
the Fund's principal underwriter. For the period ended March 31, 2000, the Fund
has been advised that the Distributor retained no net underwriting discounts on
sales of the Fund's Class A shares and received contingent deferred sales
charges (CDSC) of none, $21 and none on Class A, Class B and Class C share
redemptions, respectively.
The Fund has adopted a 12b-1 plan which requires it to pay the Distributor a
service fee equal to 0.25% annually on Class A, Class B and Class C net assets
as of the 20th of each month. The plan also requires the payment of a
distribution fee to the Distributor equal to 0.10% of the average daily net
assets attributable to Class A shares and 0.75% of the average daily net assets
attributable to Class B and Class C shares only. The Distributor has voluntarily
agreed to waive a portion of the Class A distribution fee so that it does not
exceed 0.05% annually.
The CDSC and the fees received from the 12b-1 plan are used principally as
repayment to the Distributor for amounts paid by the Distributor to dealers who
sold such shares.
OTHER
Certain officers and trustees of the Trust are also officers of the Advisor. No
remuneration was paid to any other trustee or officer of the Trust who is
affiliated with the Advisor.
NOTE 5. SHORT-TERM DEBT
To facilitate portfolio liquidity, the Fund and Portfolio maintains 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,
2000.
NOTE 6. INVESTMENT TRANSACTIONS
The aggregate cost of purchases and proceeds of sales, other than short-term
obligations for the six months ended March 31, 2000 was $16,960 and $56,845,
respectively.
Unrealized appreciation (depreciation) at March 31, 2000, based on cost of
investments for both financial statement and federal income tax purposes was
approximately:
Gross unrealized appreciation $176,023
Gross unrealized depreciation 7,222
--------
Net unrealized appreciation $168,801
--------
11
<PAGE> 14
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
Selected data for a share outstanding throughout the period are as follows:
ADVISOR SELECT GROWTH & INCOME FUND
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
(UNAUDITED)
PERIOD ENDED MARCH 31, 2000 (a)
CLASS A CLASS B CLASS C CLASS Z
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 26.80 $ 26.80 $ 26.80 $ 26.80
-------- -------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (b) 0.06(c) -- -- 0.08
Net realized and unrealized gain on investments 0.17 0.17 0.16 0.17
-------- -------- ------- -------
Total from investment operations 0.23 0.17 0.16 0.25
-------- -------- ------- -------
DISTRIBUTIONS
Net investment income (0.01) -- -- (0.03)
-------- -------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 27.02 $ 26.97 $ 26.96 $ 27.02
-------- -------- ------- -------
Ratio of net expenses to average net assets (d) 1.33%(c) 2.03% 2.03% 1.03%
Ratio of net investment income to average net assets (d) 0.03%(c) (0.67)% (0.67)% 0.33%
Total return (e) 8.16%(f) 7.92% 7.88% 8.25%
Net assets, end of period (000's) $ 148 $ 434 $ 7 $ 1
</TABLE>
(a) Class A, Class B, Class C and Class Z shares were initially offered on
December 1, 1999. Per share data reflects activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Net of fees waived by the Distributor which amounted to $0.004 per share
and 0.05% (annualized).
(d) Annualized.
(e) Not annualized.
(f) If the Distributor had not waived a portion of its fee, total return would
have been reduced.
SR&F GROWTH & INCOME PORTFOLIO
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
(UNAUDITED)
SIX MONTHS ENDED YEARS ENDED PERIOD ENDED
MARCH 31, SEPTEMBER 30, SEPTEMBER 30,
2000 1999 1998 1997(a)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ratio of net expenses to average net assets 0.62%(b) 0.63%(c) 0.65% 0.65%(b)
Ratio of net investment income to average net assets 0.89%(b) 1.22%(c) 1.44% 2.04%(b)
Portfolio turnover rate 5% 7% 11% 7%
</TABLE>
(a) From commencement of operations on February 3, 1997
(b) Annualized.
(c) During the year ended September 30, 1999, the Portfolio experienced a
one-time reduction in its expenses of two basis points as a result of
expenses accrued in a prior period. The Portfolio's ratios disclosed above
reflects the actual rate at which expenses were incurred throughout the
current fiscal year without the reduction.
12
<PAGE> 15
TRUSTEES & TRANSFER AGENT
--------------------------------------------------------------------------------
TRUSTEES
JOHN A. BACON, JR.
Private Investor
WILLIAM W. BOYD
Chairman and Director, Sterling Plumbing Group, Inc.
LINSDAY COOK
Executive Vice President, Liberty Financial Companies, Inc.
DOUGLAS A. HACKER
Executive Vice President and Chief Financial Officer, United Airlines
JANET LANGFORD KELLY
Executive Vice Present - Corporate Development, Secretary and General Counsel,
Kellogg Co.
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 Select Growth & Income Fund is:
Liberty Funds Services, Inc.
P.O. Box 1722
Boston, MA 02105-1722
800-345-6611
The Fund mails one shareholder report to each shareholder address. If you would
like more than one report, please call 800-426-3750 and additional reports will
be sent to you.
This report has been prepared for shareholders of Stein Roe Advisor Select
Growth & Income 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> 16
'
Liberty offers the independent thinking and collective strength of six financial
specialists. Our distinguished product line helps financial advisors and their
clients build diversified investment portfolios for long-term financial goals.
LIBERTY
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FUNDS
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ADVISOR
KEYPORT A leading provider of innovative annuity products
Liberty's mutual funds are offered by prospectus through Liberty Funds
Distributor, Inc.
BEFORE YOU INVEST, CONSULT YOUR FINANCIAL ADVISOR.
Your financial advisor can help you develop a long-term plan for reaching
financial goals.
--------------------------------------------------------------------------------
STEIN ROE ADVISOR SELECT GROWTH & INCOME FUND SEMIANNUAL REPORT
--------------------------------------------------------------------------------
<TABLE>
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</TABLE>
