<PAGE>
[Graphic Omitted]
EQUITY FUNDS
THAT SEEK TO
CONTROL TAXES
STEIN ROE ADVISOR
TAX-MANAGED FUNDS
ANNUAL REPORT
OCTOBER 31, 1999
<PAGE>
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PRESIDENT'S MESSAGE
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Dear Shareholder:
[Photo of Stephen E. Gibson]
It has been another strong year for the U.S. economy and a year of economic
rebuilding for both industrialized and developing economies outside the U.S.
Consumer confidence, personal income and employment were high while inflation
has remained in check. Although costs have increased in some segments -- notably
energy -- businesses have managed to offset them with productivity gains, at
least for the time being.
It has also been a strong year for the stock market. However, the impressive
gains of the major indexes mask the market's volatility as well as its
selectivity. A narrow band of large companies, primarily in the technology
sector, led the market. In the spring, it appeared that the trend was broadening
to include smaller as well as more value-oriented stocks. However, that shift
was short lived. After the Federal Reserve Board raised interest rates late in
June, followed with another increase in August, investors sought refuge in the
stocks of large companies with familiar names.
Despite the changes in the market environment during the period, we remained
committed to our disciplined style and to managing for tax efficiency. We hope
that you will think of the year's performance in that perspective and keep your
longer-term goals in mind.
The following report will provide you with more specific information about your
Funds' performance and the strategies the managers used to deliver higher
after-tax returns. Thank you for choosing Stein Roe Advisor Tax-Managed Funds.
We look forward to continuing to serve your investment needs.
Respectfully,
/s/ Stephen E. Gibson
Stephen E. Gibson
President
December 13, 1999
- -------------------------------
Not FDIC May Lose Value
Insured No Bank Guarantee
- -------------------------------
Because economic and market conditions change frequently, there can be no
assurance that the trends described above or on the following pages will
continue.
<PAGE>
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HIGHLIGHTS
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> ANOTHER YEAR OF IMPRESSIVE GAINS FOR LARGE COMPANY GROWTH STOCKS.
Many of the major indexes delivered another year of 20% plus performance.
However, the average stock on the New York Stock Exchange actually fell 20%.
> NARROW MARKET FOR VALUE STOCKS.
Concerns about the possibility of a global recession were replaced by fears
of inflation and economic recovery in Asia, giving value stocks a boost in
the spring. However, as inflationary fears subsided and economic growth
settled to a steady pace, investors sought large company growth stocks. By
the end of the period, value stocks gave back most of their gains and
continued to fall behind.
> FUNDS MAINTAINED 100% TAX-EFFICIENCY.*
Stein Roe Advisor Tax-Managed Growth Fund and Stein Roe Advisor Tax-Managed
Value Fund paid no taxable capital gains or dividend income to shareholders.
PERFORMANCE OF A $10,000 INVESTMENT IN
S&P 500 INDEX AND S&P 500 BARRA/VALUE INDEX
10/31/98 - 10/31/99
S&P 500 Index S&P 500 Barra/Value Index
------------- -------------------------
10/98 $10,000 $10,000
11/98 10,606 10,521
12/98 11,217 10,890
1/99 11,686 11,110
2/99 11,322 10,871
3/99 11,775 11,201
4/99 12,231 12,166
5/99 11,942 11,951
6/99 12,605 12,410
7/99 12,212 12,028
8/99 12,151 11,723
9/99 11,818 11,265
10/99 12,566 11,900
The Standard & Poor's 500 Index is an unmanaged index that tracks the
performance of 500 widely held, large-capitalization U.S. stocks. It is not
possible to invest directly in an index. The Standard & Poor's 500 Barra/Value
Index is an unmanaged index that tracks the performance of stocks with lower
price-to-book ratios that are included in the S&P 500 Index.
* The Funds expect to distribute taxable income and capital gains from time to
time. In addition, market conditions may limit the Funds' ability to generate
tax losses or to avoid dividend income. Excessive shareholder redemptions may
also require the Funds to sell securities and realize gains. The ability to
use certain tax-management techniques may be curtailed or eliminated in the
future by tax legislation, regulations, administrative interpretations or
court decisions.
<PAGE>
ANNUAL REPORT: STEIN ROE ADVISOR TAX-MANAGED GROWTH FUND
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PORTFOLIO MANAGERS' REPORT
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TOP SECTOR BREAKDOWNS
10/31/99 VS. 10/31/98
FUND AS OF FUND AS OF
10/31/99 10/31/98
-------- --------
TECHNOLOGY 23% 11%
CONSUMER CYCLICAL 20% 15%
CONSUMER STAPLES 19% 14%
FINANCIAL 17% 22%
Sector breakdowns are calculated as a percentage of net assets. Because the Fund
is actively managed, there can be no guarantee the Fund will continue to
maintain this breakdown.
BOUGHT
- --------------------------------------------------------------------------------
SPRINT (1.9% OF NET ASSETS)
Shortly after we bought it, Sprint agreed to be acquired in an exchange of stock
by MCI WorldCom (2.3% of net assets). The gain for the portfolio is significant.
Better yet, because the Fund already owns MCI, there is no negative tax impact
on the portfolio.
MICROSOFT (3.7% OF NET ASSETS)
Despite the cloud of litigation and an unfavorable initial court ruling, we
believe that the outlook for the company is unlikely to change significantly. In
fact, even if the company is broken up, we believe that the value of its
individual pieces could be greater than the company today. And if Microsoft
settles its case outside of the courts, that, too, could be the catalyst for a
higher stock price.
POSITIVE RETURNS FOR THE YEAR
Investor enthusiasm for large company growth stocks and a generally favorable
environment for stocks helped Stein Roe Advisor Tax-Managed Growth Fund during
the 12-month period ended October 31, 1999. The Fund's Class A shares rose to
28.38%. That was higher than the Lipper Large-Cap Core Fund Average,(1) which
returned 26.11% for the period. The Fund also outperformed the S&P 500, which
posted 25.66%. The Fund's performance was achieved without the payment of
taxable distributions to shareholders during the year.
(1) Lipper, Inc., a widely respected data provider in the industry, calculates
an average total return for mutual funds using portfolio-based
classifications. The total return calculated for the Lipper Large-Cap Core
Funds was 26.11% for the 12 months ended October 31, 1999. The Fund's Class
A shares were ranked in the second quartile for 1 year (112 out of 364
funds) and in the third quartile for the period 12/31/96-10/31/99 (148 out
of 211 funds). Rankings do not include sales charges. Performance for
different share classes will vary with fees associated with each class. Past
performance cannot predict future results.
EMPHASIS ON GROWTH STOCKS HELPED PERFORMANCE
The Fund's continued emphasis on growth stocks, especially in the technology,
communications and consumer sectors, helped the Fund achieve above-average gains
for the period. Additions to the Fund's technology investments -- Sun
Microsystems, EMC and Microsoft (1.5%, 1.6% and 3.7% of net assets,
respectively) -- were among the Fund's strongest performers. Motorola, Cisco and
Intel (2.4%, 2.2% and 2.6% of net assets, respectively) also enjoyed impressive
gains.
In the communications sector, MCI WorldCom (2.3% of net assets) has been a
long-term winner for the Fund, and continued to perform well during the period.
We also benefited from the company's announcement to purchase Sprint (1.9%), a
newly added position in the portfolio. Since the transaction will be for stock,
we will be able to exchange our Sprint shares for shares of MCI, without
realizing a capital gain.
SELECTED FINANCIAL AND CONSUMER CYCLICAL COMPANIES DELIVERED IN
CHALLENGING ENVIRONMENT
We cut back on our exposure to financial services -- a well-timed move because
many financial services stocks lost ground as rising interest rates clouded
their outlook in the second half of the period. However, our investments in
Citigroup, Chase Manhattan and Wells Fargo (2.6%, 2.3% and 2.8% of net assets,
respectively) bucked the trend and were winners despite the increasingly
unfavorable climate. Their strong performances were the result of recovery in
the world's emerging markets as well as company-specific improvements.
CONSUMER CYCLICAL STOCKS RESPOND TO HIGHER SPENDING
As disposable personal income in the U.S. has continued to grow, consumers have
taken their heftier paychecks to the mall -- or to Wal-Mart, Home Depot and
Dollar General (2.7%, 1.9% and 2.1% of net assets, respectively), three market
leaders that have done very well for the Fund. Wal-Mart is the leader in the
mega-discount store segment; Home Depot has established itself as the leader in
the home improvement category; and Dollar General is the dominant company in the
convenience discount store segment. The Fund's investment in broadcasting and
media stocks such as CBS and Clear Channel Communications (2.3% each of net
assets) also contributed to good performance.
TAX MANAGEMENT EFFORTS REWARDED
When the stock market declined last summer, we reviewed our portfolio with an
eye to finding selective losses to balance capital gains. Some of the proceeds
of our sales were actually switched into similar companies that we felt had
strong rebound potential. In that way, we were able to harvest losses and, at
the same time, invest in companies that had fallen with the general market but
with the potential, we believed, to rebound when the market rallied. Two
companies that we invested in as a result of this strategy were Wells Fargo and
American International Group (2.8% and 2.4% of net assets, respectively), which
had pulled back with the market.
Our confidence was well-founded as both stocks have come back since we purchased
them.
AN OPTIMISTIC OUTLOOK FOR THE STOCK MARKET ENVIRONMENT
The outlook for corporate earnings in the period ahead remains favorable as the
U.S. economy continues to expand. Although there are signs that the domestic
expansion may slow, this would be a healthy development to prevent overheating.
Meanwhile, foreign economies are beginning to strengthen, which should help to
offset slowing domestic earnings growth. Our primary concern is upward pressure
on inflation and interest rates. However, we're hopeful that a moderation in
U.S. economic growth, continued productivity gains and deflationary pressures
from global competition, and the increasing influence of the Internet, will help
to keep both in check.
Keep in mind that we don't try to forecast the market or the economy. Rather, we
use a bottom-up investing approach, which leverages the expertise of our
experienced management team. Our goal is to invest in companies we believe can
continue to deliver above-average earnings growth and to manage the Fund in a
tax-efficient manner.
/s/ William M. Hughes /s/ Stephen Berman
WILLIAM M. (MEL) HUGHES and STEVE BERMAN are senior equity analysts at Stein Roe
& Farnham Incorporated and are members of the nine-person investment management
team for Stein Roe Advisor Tax-Managed Growth Fund.
NET ASSET VALUE AS OF 10/31/99
Class A $17.19
---------------------------------
Class B $16.82
---------------------------------
Class C $16.82
---------------------------------
Class E $17.14
---------------------------------
Class F $16.77
---------------------------------
Class G $17.17
---------------------------------
Class H $16.83
---------------------------------
Class Z $17.23
---------------------------------
TOP 10 HOLDINGS AS OF 10/31/99
Microsoft Corp. 3.7%
---------------------------------
General Electric 3.2%
---------------------------------
Wells Fargo & Co. 2.8%
---------------------------------
Wal-Mart Stores 2.7%
---------------------------------
Citigroup, Inc. 2.6%
---------------------------------
Intel Corp. 2.6%
---------------------------------
American Int'l. Corp 2.4%
---------------------------------
Motorola 2.4%
---------------------------------
AES Corp. 2.4%
---------------------------------
Dover Corp. 2.4%
---------------------------------
Holdings are calculated as a percentage of net assets. Because the Fund is
actively managed, there can be no guarantee the Fund will maintain these
holdings in the future.
HELD
- --------------------------------------------------------------------------------
TYCO INTERNATIONAL, LTD.
(1.7% of net assets) had been a strong performer until the end of the period
when it was hit by charges of accounting irregularities. However, we believe
that the company's business prospects remain strong and that the accounting
issues are overblown. As a result, we continue to own it in the portfolio.
<PAGE>
ANNUAL REPORT: STEIN ROE ADVISOR TAX-MANAGED GROWTH FUND
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PERFORMANCE INFORMATION
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PERFORMANCE OF A $10,000
INVESTMENT IN ALL SHARE CLASSES
FROM 12/31/96 - 10/31/99
WITHOUT SALES WITH SALES
CHARGE CHARGE
Class A $17,122 $16,137
- --------------------------------------------
Class B $16,770 $16,470
- --------------------------------------------
Class C $16,770 $16,770
- --------------------------------------------
Class E $17,072 $16,218
- --------------------------------------------
Class F $16,720 $16,420
- --------------------------------------------
Class G $17,102 $16,332
- --------------------------------------------
Class H $16,780 $16,480
- --------------------------------------------
Class Z $17,161 N/A
- --------------------------------------------
PERFORMANCE OF A $10,000 INVESTMENT IN CLASS A SHARES 12/31/96 - 10/31/99
Without Sales Charge With Sales Charge S&P 500 Index
-------------------- ----------------- -------------
10/96 $10,000 $ 9,425 $10,000
10/97 11,990 11,301 12,529
10/98 13,334 12,568 15,285
10/99 17,122 16,073 19,212
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, it is not possible to invest directly in an index.
<TABLE>
AVERAGE ANNUAL TOTAL RETURNS AS OF 10/31/99
<CAPTION>
Share Class A B C E F G H Z
Without With Without With Without With Without With Without With Without With Without With Without
Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales
Charge Charge Charge Charge Charge Charge Charge Charge Charge Charge Charge Charge Charge Charge Charge
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 Year 28.38% 21.00% 27.42% 22.42% 27.42% 26.42% 28.29% 21.88% 26.95% 21.95% 28.33% 22.55% 27.40% 22.40% 28.68%
- ------------------------------------------------------------------------------------------------------------------------------------
Life of Fund 20.69 18.20 19.77 19.01 19.77 19.77 20.57 18.41 19.64 18.88 20.64 18.70 19.79 19.03 20.79
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS AS OF 9/30/99
Share Class A B C E F G H Z
Without With Without With Without With Without With Without With Without With Without With Without
Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales
Charge Charge Charge Charge Charge Charge Charge Charge Charge Charge Charge Charge Charge Charge Charge
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 Year 29.93% 22.46% 29.05% 24.05% 28.96% 27.96% 29.92% 23.42% 28.54% 23.54% 29.85% 24.01% 28.94% 23.94% 30.17%
- ------------------------------------------------------------------------------------------------------------------------------------
Life of Fund 19.02 16.49 18.14 17.32 18.11 18.11 18.91 16.72 18.00 17.18 18.99 17.02 18.14 17.32 19.10
- ------------------------------------------------------------------------------------------------------------------------------------
Inception for all share classes is 12/30/96 except for Class Z shares, which commenced on 1/11/99. Past performance cannot predict
future investment results. Returns and value of an investment will vary, resulting in a gain or loss on sale. All results shown
assume reinvestment of distributions. The "with sales charge" returns include the maximum 5.75% charge for Class A shares, 5% for
Class E shares and 4.50% for Class G shares. The contingent deferred sales charge (CDSC) returns reflect 5% for one year and 3%
since inception for Class B, F and H shares, and 1% for one year for Class C shares. Performance for different share classes will
vary based on differences in sales charges and fees associated with each class. Performance results reflect any voluntary waivers or
reimbursement of Fund expenses by the Advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance
results would have been lower.
Recently, the Trustees of Stein Roe Advisor Tax-Managed Growth Fund approved the reorganization of Classes E, F, G and H shares. The
two front-end load classes, Class E and Class G, will be merged to create a new "Class E," and the two back-end load classes, Class
F and Class H, will be merged to create a new "Class F".
Class E shares will merge into Class G shares, resulting in new "Class E Shares" with a lower sales charge (4.50%) for all
shareholders and a fixed 12b-1 fee of 0.35%. Class F shares will merge into Class H shares, resulting in a new "Class F Shares" with
the same contingent deferred sales charge and 12b-1 fee. The merger is scheduled to occur on March 1, 2000.
Class Z shares performance information includes returns of the Fund's Class A shares (as its expense structure more closely
resembles that of the newer class) for periods prior to the inception of the newer class shares. These Class A share returns were
not restated to reflect any expense differential (e.g., Rule 12b-1 fees) between Class A shares and Class Z shares. Had the expense
differential been reflected, the returns for the periods prior to the inception of the newer class shares would have been higher.
</TABLE>
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PORTFOLIO MANAGER'S REPORT
- --------------------------------------------------------------------------------
A CHALLENGING YEAR FOR VALUE STOCKS
Investor preference for large company growth stocks created a challenging
environment for Stein Roe Advisor Tax-Managed Value Fund during the period from
inception on June 1, 1999 through October 31, 1999. The Fund's Class A share
return was negative 11.33%. That was significantly lower than the S&P 500 which
gained 5.22% and the S&P 500 Barra/Value Index which lost 0.42% over the same
period. The Fund paid no taxable distributions to shareholders during the year.
OPPORTUNITY AHEAD IN ENERGY, RETAIL AND FINANCIAL SERVICES
Sticking to the Fund's disciplined investment style, we focused on three
segments of the market where we found attractive valuations and comeback
prospects.
o Energy. Weakness in Asia hurt the energy sector last year, throwing the
sector's supply-demand balance out of kilter. However, a more favorable
relationship between supply and demand has been struck this year. OPEC
announced a cutback in production and -- more important -- stuck to their
decision. Plus, demand is up thanks to a rebound in Asia. As a result, the
energy sector offered bargains early in the year, and it remains attractive.
We have overweighted energy stocks in the portfolio, and we believe they have
the potential to contribute to positive performance as the world's economies
get back on track.
o Consumer cyclicals, especially retailers, were driven down by expectations
earlier this year that the U.S. economy would slow. However, consumer spending
has remained strong, and we believe it will continue to be strong despite the
market's reluctance to accord retail stocks a favorable outlook.
o Financial services stocks were strong early in the year, then came down as the
result of pressure from rising interest rates. We have invested in insurance
companies and banks, which we think have attractive potential going forward.
TOP SECTOR BREAKDOWNS
AS OF 10/31/99
FUND S&P 500 INDEX
CONSUMER STAPLES 17.9% 11.9%
FINANCIALS 15.8% 15.5%
CONSUMER CYCLICALS 12.9% 9.0%
ENERGY 12.1% 5.9%
TECHNOLOGY 9.7% 23.5%
Sector breakdowns are calculated as a percentage of total net assets. Because
the Fund is actively managed, there can be no guarantee the Fund will continue
to maintain this sector breakdown.
BOUGHT
- --------------------------------------------------------------------------------
The Boeing Company
We bought shares of Boeing (2.3% of net assets), the world's largest maker of
commercial jets and a leading defense and aerospace company. Boeing's prospects
sagged when Asia, one of its major commercial jet clients, suffered an economic
downturn. Now Asia has started to turn around. And, Boeing has brought in a new
Chief Financial Officer, with the promise of more efficient financial controls
to reduce inventories and free up working capital.
<PAGE>
ANNUAL REPORT: STEIN ROE ADVISOR TAX-MANAGED VALUE FUND
Net asset value as of 10/31/99
Class A $10.64
- -------------------------------------------
Class B $10.61
- -------------------------------------------
Class C $10.61
- -------------------------------------------
Class Z $10.65
- -------------------------------------------
Top 10 holdings as of 10/31/99
Abbott Laboratories 2.7%
- -------------------------------------------
Bestfoods 2.5%
- -------------------------------------------
United Healthcare 2.5%
- -------------------------------------------
Royal Dutch Petr. 2.3%
- -------------------------------------------
Boeing 2.3%
- -------------------------------------------
Manpower, Inc. 2.2%
- -------------------------------------------
Newell Rubbermaid, Inc. 2.1%
- -------------------------------------------
AT&T Corp. 2.0%
- -------------------------------------------
Wells Fargo 2.0%
- -------------------------------------------
Nucor 2.0%
- -------------------------------------------
Holdings are calculated as a percentage of net assets. Because the Fund is
actively managed, there can be no guarantee the Fund will maintain these
holdings in the future.
SOLD
- --------------------------------------------------------------------------------
WASTE MANAGEMENT, INC.
Last year USA Waste acquired Waste Management and renamed itself Waste
Management, Inc. We were attracted to the newly- named company because of its
track record, and because the stock was attractively priced after a quarter of
disappointing earnings earlier in the year. However, since then we have lost
confidence in the firm's ability to integrate its latest acquisition and the
stock was sold.
LOOKING AHEAD
Value stocks' poor showing in the past several years has not discouraged us. In
fact, if anything, it makes today's relative valuations the most attractive
we've seen in years. The reason: history shows that growth and value stocks have
alternated leadership in the market, and over the long-term have produced
similar average annual gains. We are optimistic that opportunities will unfold
in value stocks. There's no way of predicting when that will occur, or what will
ignite the spark. However, we believe the Fund is well positioned to benefit
should a turnaround occur.
/s/ Scott Schermerhorn
SCOTT SCHERMERHORN is a senior vice president of Colonial Management Associates
and portfolio manager of the Fund.
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PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
<TABLE>
AVERAGE ANNUAL TOTAL RETURNS AS OF 10/31/99
<CAPTION>
Share Class A B C Z
Inception 6/1/99 6/1/99 6/1/99 6/1/99
- ------------------------------------------------------------------------------------------------------------------------
Without With Without With Without With Without
Sales Sales Sales Sales Sales Sales Sales
Charge Charge Charge Charge Charge Charge Charge
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Life of Fund (11.33)% (16.43)% (11.58)% (16.00)% (11.58)% (12.47)% (11.25)%
- ------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 9/30/99
<CAPTION>
Share Class A B C Z
Without With Without With Without With Without
Sales Sales Sales Sales Sales Sales Sales
Charge Charge Charge Charge Charge Charge Charge
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Life of Fund (13.58)% (18.55)% (13.75)% (18.06)% (13.75)% (14.61)% (13.58)%
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
Past performance cannot predict future investment results. Returns and value of
an investment will vary, resulting in a gain or loss on sale. All results shown
assume reinvestment of distributions. The "with sales charge" returns include
the maximum 5.75% charge for Class A shares and the contingent deferred sales
charge (CDSC) maximum charge of 5% for the life of the Fund for Class B shares
and 1% for the life of the Fund for Class C shares.
Performance results reflect any voluntary waivers or reimbursement of Fund
expenses by the Advisor or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower.
Performance for different share classes will vary based on differences in sales
charges and fees associated with each class.
<PAGE>
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INVESTMENT PORTFOLIO
- --------------------------------------------------------------------------------
October 31, 1999
(In thousands)
STEIN ROE ADVISOR TAX-MANAGED GROWTH FUND (SRATMGF)
- --------------------------------------------------------------------------------
COMMON STOCKS - 94.8% SHARES VALUE
- --------------------------------------------------------------------------------
FINANCE, INSURANCE & REAL ESTATE - 17.7%
DEPOSITORY INSTITUTIONS - 6.5%
Bank of America Corp. 102 $ 6,566
Chase Manhattan Corp. 124 10,808
Wells Fargo & Co. 270 12,912
--------
30,286
--------
INSURANCE CARRIERS - 4.9%
American International Group, Inc. 109 11,219
Citigroup, Inc. 221 11,975
--------
23,194
--------
INVESTMENT COMPANIES - 2.2%
Standard and Poor's Depositary Receipts 75 10,256
--------
NONDEPOSITORY CREDIT INSTITUTIONS - 4.1%
Associates First Capital Corp. 208 7,607
Fannie Mae 56 3,955
Freddie Mac 136 7,325
--------
18,887
--------
- --------------------------------------------------------------------------------
MANUFACTURING - 41.2%
CHEMICALS & ALLIED PRODUCTS - 9.9%
Bristol-Myers Squibb Co. 127 9,763
Ecolab, Inc. 253 8,561
Merck & Co., Inc. 129 10,256
Pfizer, Inc. 167 6,577
Procter & Gamble Co. 104 10,865
--------
46,022
--------
COMMUNICATIONS EQUIPMENT - 2.4%
Motorola, Inc. 114 11,098
--------
ELECTRICAL INDUSTRIAL EQUIPMENT - 3.3%
General Electric Co. 111 15,111
--------
ELECTRONIC COMPONENTS - 4.5%
Intel Corp. 155 12,003
Molex, Inc., Class A 267 8,824
--------
20,827
--------
FOOD & KINDRED PRODUCTS - 1.8%
Nabisco Holdings Corp. 230 8,581
--------
MACHINERY & COMPUTER EQUIPMENT - 12.7%
Cisco Systems, Inc. (a) 136 10,090
Dover Corp. 258 10,994
EMC Corp. (a) 100 7,300
Hewlett-Packard Co. 94 6,962
International Business Machines Corp. 89 8,706
Sun Microsystems, Inc.(a) 67 7,058
Tyco International Ltd. 204 8,147
--------
59,257
--------
MEASURING & ANALYZING INSTRUMENTS - 3.6%
Guidant Corp. 185 9,135
Medtronic, Inc. 223 7,735
--------
16,870
--------
PETROLEUM REFINING - 2.3%
BP Amoco PLC ADR 187 10,817
--------
TRANSPORTATION EQUIPMENT - 0.7%
Lear Corp. (a) 98 3,311
--------
- --------------------------------------------------------------------------------
RETAIL TRADE - 8.2%
BUILDING, HARDWARE & GARDEN SUPPLY - 1.9%
Home Depot, Inc. 115 8,713
--------
GENERAL MERCHANDISE STORES - 4.8%
Dollar General Corp. 378 9,968
Wal-Mart Stores, Inc. 218 12,442
--------
22,410
--------
RESTAURANTS - 1.5%
McDonald's Corp. 173 7,140
--------
- --------------------------------------------------------------------------------
SERVICES - 13.9%
AUTO REPAIR, RENTAL & PARKING - 1.3%
Hertz Corp., Class A 136 5,912
--------
BIOTECHNOLOGY - 1.3%
Genentech, Inc. (a) 40 5,859
--------
BUSINESS SERVICES - 1.8%
Young & Rubicam, Inc. 180 8,235
--------
COMPUTER RELATED SERVICES - 2.3%
IMS Health, Inc. 370 10,733
--------
COMPUTER SOFTWARE - 5.4%
Microsoft Corp. (a) 188 17,420
Novell, Inc. (a) 395 7,925
--------
25,345
--------
MOTION PICTURES - 1.8%
Time Warner, Inc. 121 8,418
--------
- --------------------------------------------------------------------------------
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITATION SERVICES - 13.8%
BROADCASTING - 5.3%
AMFM, Inc. (a) 51 3,570
CBS Corp. 220 10,714
Clear Channel Communications, Inc. (a) 132 10,618
--------
24,902
--------
ELECTRIC SERVICES - 2.4%
AES Corp. 196 11,050
--------
TELECOMMUNICATION - 6.1%
MCI WorldCom, Inc. (a) 125 10,684
Sprint Corp. 120 8,918
Williams Communications Group, Inc. (a) 275 8,766
--------
28,368
--------
TOTAL COMMON STOCKS (cost of $347,366) (b) 441,602
--------
SHORT-TERM OBLIGATIONS - 2.8%
PAR
- --------------------------------------------------------------------------------
Repurchase agreement with Lehman Brothers Corp.,
dated 10/29/99, due 11/01/99 at 5.220%,
collateralized by U.S. Treasury bonds and/or
notes with various maturities to 2009, market
value $13,347 (repurchase proceeds $13,028) $13,022 13,022
--------
OTHER ASSETS & LIABILITIES - 2.4% 11,166
- --------------------------------------------------------------------------------
NET ASSETS - 100.0% $465,790
========
NOTES TO INVESTMENT PORTFOLIO:
- --------------------------------------------------------------------------------
(a) Non-income producing.
(b) Cost for financial statement and federal income tax purposes is the same.
Acronym Name
------- ----
ADR American Depositary Receipt
COMMON STOCKS - 94.2% SHARES VALUE
- --------------------------------------------------------------------------------
FINANCE, INSURANCE & REAL ESTATE - 17.4%
DEPOSITORY INSTITUTIONS - 5.0%
Bank One Corp. 12 $ 436
J.P. Morgan & Co., Inc. 3 445
Wells Fargo & Co. 12 565
--------
1,446
--------
INSURANCE CARRIERS - 10.0%
Allstate Corp. 15 431
Loews Corp. 6 432
MBIA, Inc. 6 360
Travelers Property Casualty Corp. 13 468
United Healthcare Corp. 14 713
UNUM Corp. 14 455
--------
2,859
--------
NONDEPOSITORY CREDIT INSTITUTIONS - 2.4%
Associates First Capital Corp. 7 266
Freddie Mac 8 422
--------
688
--------
- --------------------------------------------------------------------------------
MANUFACTURING - 47.6%
CHEMICALS & ALLIED PRODUCTS - 5.9%
Abbott Laboratories 19 775
Merck & Co., Inc. 6 469
Sherwin-Williams Co. 20 457
--------
1,701
--------
COMMUNICATIONS EQUIPMENT - 1.5%
Motorola, Inc. 4 429
--------
FABRICATED METAL - 2.1%
Newell Rubbermaid, Inc. 17 592
--------
FOOD & KINDRED PRODUCTS - 9.7%
Bestfoods 12 717
Conagra, Inc. 18 459
Nabisco Holdings Corp. 10 377
PepsiCo, Inc. 14 486
Philip Morris Companies, Inc. 17 431
Tyson Foods, Inc. 21 313
--------
2,783
--------
HOUSEHOLD APPLIANCES - 0.8%
Whirlpool Corp. 3 237
--------
MACHINERY & COMPUTER EQUIPMENT - 1.5%
Compaq Computer Corp. 14 258
Hewlett-Packard Co. 2 178
--------
436
--------
MEASURING & ANALYZING INSTRUMENTS - 2.5%
Eastman Kodak Co. 5 365
Raytheon Co., Class A 13 346
--------
711
--------
MISCELLANEOUS MANUFACTURING - 1.5%
Mattel, Inc. 31 416
--------
PAPER PRODUCTS - 5.3%
International Paper Co. 11 558
Kimberly Clark Corp. 8 499
Temple-Inland, Inc. 8 477
--------
1,534
--------
PETROLEUM REFINING - 6.9%
Ashland, Inc. 13 426
Repsol SA ADR 19 394
Royal Dutch Petroleum Co. 11 665
USX-Marathon Group 17 489
--------
1,974
--------
PRIMARY METAL - 2.0%
Nucor Corp. 11 565
--------
STONE, CLAY, GLASS & CONCRETE - 1.7%
Minnesota Mining & Manufacturing Co. 5 494
--------
TRANSPORTATION EQUIPMENT - 6.2%
Boeing Co. 14 649
Delphi Automotive Systems Corp. 25 411
General Motors Corp. 6 415
Lockheed Martin Corp. 15 304
--------
1,779
--------
- --------------------------------------------------------------------------------
MINING & ENERGY - 5.7%
CRUDE PETROLEUM & NATURAL GAS - 1.3%
Burlington Resources, Inc. 11 380
--------
GOLD & SILVER MINING - 1.2%
American Barrick Resources Corp. 19 344
--------
OIL & GAS FIELD SERVICES - 3.2%
Diamond Offshore Drilling, Inc. 11 346
Schlumberger Ltd. 9 563
--------
909
--------
- --------------------------------------------------------------------------------
RETAIL TRADE - 6.5%
APPAREL & ACCESSORY STORES - 1.0%
Nordstrom, Inc. 12 294
--------
FOOD STORES - 1.1%
Albertson's, Inc. 9 323
--------
GENERAL MERCHANDISE STORES - 0.9%
Kmart Corp. 25 251
--------
MISCELLANEOUS RETAIL - 3.5%
Office Depot, Inc. (a) 38 473
Toys R Us, Inc. (a) 38 532
--------
1,005
--------
- --------------------------------------------------------------------------------
SERVICES - 7.8%
BUSINESS SERVICES - 2.2%
Manpower, Inc. 18 639
--------
COMPUTER RELATED SERVICES - 3.6%
Electronic Data Systems Corp. 9 503
First Data Corp. 12 530
--------
1,033
--------
HEALTH SERVICES - 2.0%
Columbia/HCA Healthcare Corp. 23 565
--------
- --------------------------------------------------------------------------------
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITATION SERVICES - 9.2%
ELECTRIC SERVICES - 4.0%
Central & South West Corp. 14 315
Entergy Corp. 11 314
PG&E Corp. 10 218
Reliant Energy, Inc. 11 294
--------
1,142
--------
GAS SERVICES - 1.8%
Coastal Corp. 12 510
--------
TELECOMMUNICATION - 3.4%
AT&T Corp. 12 570
US West Communications Group 7 409
--------
979
--------
TOTAL COMMON STOCKS (cost of $28,666)(b) 27,017
--------
SHORT-TERM OBLIGATIONS - 3.0% PAR
- --------------------------------------------------------------------------------
Repurchase agreement with Lehman Brothers Corp.,
dated 10/29/99, due 11/01/99 at 5.220%,
collateralized by U.S. Treasury bonds and/or
notes with various maturities to 2009, market
value $890 (repurchase proceeds $868) $868 $ 868
--------
OTHER ASSETS & LIABILITIES - 2.8% 798
- --------------------------------------------------------------------------------
NET ASSETS - 100.0% $28,683
=======
NOTES TO INVESTMENT PORTFOLIO:
- --------------------------------------------------------------------------------
(a) Non-income producing.
(b) Cost for financial statement and federal income tax purposes is the same.
Acronym Name
------- ----
ADS American Depositary Shares
See notes to financial statements.
<PAGE>
<TABLE>
- ---------------------------------
STATEMENT OF ASSETS & LIABILITIES
- ---------------------------------
October 31, 1999
(In thousands except for per share amounts and footnotes)
<CAPTION>
SRATMGF SRATMVF
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investments at value (cost $347,366 and $28,666,
respectively) $441,602 $27,017
Short-term obligations 13,022 868
-------- -------
454,624 27,885
Cash $ 9,232 $ --
Receivable for:
Investments sold 13,725 1,058
Fund shares sold 3,180 928
Dividends 748 24
Interest 6 --
Expense reimbursement due from Advisor -- 20
Other -- 8
------- ------
Total Assets 26,891 2,038
-------- -------
481,515 29,923
LIABILITIES
Payable for:
Investments purchased 13,874 1,129
Fund shares repurchased 1,306 61
Accrued:
Management fee 217 17
Administration fee 145 7
Distribution fee - Class B -- 3
Distribution fee - Class C 2 1
Transfer agent fee 89 5
Bookkeeping fee 14 2
Deferred Trustees fees 1 --
Other 77 15
------- ------
Total liabilities 15,725 1,240
-------- -------
Net Assets $465,790 $28,683
======== =======
Net asset value & redemption price per share --
Class A ($97,531/5,674) and ($7,528/708),
respectively $ 17.19(a) $ 10.64(a)
-------- -------
Maximum offering price per share -- Class A
($17.19/0.9425) and ($10.64/0.9425), respectively $ 18.24(b) $ 11.29(b)
-------- -------
Net asset value & offering price per share -- Class B
($303,726/18,056) and ($14,622/1,378), respectively $ 16.82(a) $ 10.61(a)
-------- -------
Net asset value & offering price per share -- Class C
($46,869/2,787) and ($4,137/390), respectively $ 16.82(a) $ 10.61(a)
-------- -------
Net asset value & redemption price per share --
Class E ($1,089/64) $ 17.14 $ --
-------- -------
Maximum offering price per share -- Class E
($17.14/0.9500) $ 18.04(b) $ --
-------- -------
Net asset value & offering price per share -- Class F
($2,025/121) $ 16.77(a) $ --
-------- -------
Net asset value & redemption price per share --
Class G ($6,427/374) $ 17.17 $ --
-------- -------
Maximum offering price per share -- Class G
($17.17/0.9550) $ 17.98(b) $ --
-------- -------
Net asset value & offering price per share --
Class H ($8,122/482) $ 16.83(a) $ --
-------- -------
Net asset value, offering & redemption price per
share -- Class Z ($1/(c)) and ($2,396/225),
respectively $ 17.23 $ 10.65
-------- -------
COMPOSITION OF NET ASSETS
Capital paid in $383,399 $30,988
Accumulated net investment loss (6) --
Accumulated net realized loss (11,839) (656)
Net unrealized appreciation (depreciation) 94,236 (1,649)
-------- -------
$465,790 $28,683
======== =======
(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.
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
- -----------------------
STATEMENT OF OPERATIONS
- -----------------------
For the Year Ended October 31, 1999
(In thousands)
<CAPTION>
SRATMGF SRATMVF (a)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends $ 4,008 $ 97
Interest 755 14
------- --------
Total Investment Income (net of nonrebatable
foreign taxes withheld at source which amounted
to $25 for SRATMGF, and $0 for SRATMVF,
respectively) 4,763 111
EXPENSES
Management fee $ 1,988 $ 50
Administration fee 1,325 13
Service fee --
Class A 182 3
Class B 548 10
Class C 80 3
Class E 3 --
Class F 4 --
Class G 13 --
Class H 16 --
Distribution fee --
Class A -- 1
Class B 1,609 21
Class C 235 5
Class E 1 --
Class F 12 --
Class G 5 --
Class H 47 --
Transfer agent fee 884 15
Bookkeeping fee 125 11
Trustees fee 17 2
Custodian fee 29 5
Audit fee 31 7
Legal fee 12 2
Registration fee 108 74
Reports to shareholders 22 3
Other 88 1
------- -------
7,384 226
Fees waived or borne by the Advisor -- 7,384 (89) 137
------- ------- ------- --------
Net Investment Loss (2,621) (26)
------- --------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON PORTFOLIO POSITIONS
Net realized loss (1,673) (656)
Net change in unrealized appreciation/depreciation
during the period 74,131 (1,649)
------- -------
Net Gain (Loss) 72,458 (2,305)
------- --------
Increase (Decrease) in Net Assets from Operations $69,837 $ (2,331)
======= ========
(a) From commencement of operations on June 1, 1999.
See notes to financial statments.
</TABLE>
<PAGE>
<TABLE>
- ----------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- ----------------------------------
(In thousands)
<CAPTION>
SRATMGF SRATMVF
------------------------- -----------
YEARS ENDED PERIOD ENDED
OCTOBER 31 OCTOBER 31
------------------------- -----------
INCREASE (DECREASE) IN NET ASSETS 1999(a) 1998 1999(b)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATIONS:
Net investment loss $ (2,621) $ (437) $ (26)
Net realized loss (1,673) (9,588) (656)
Net change in unrealized appreciation/depreciation 74,131 15,288 (1,649)
-------- -------- -------
Net Increase (Decrease) from Operations 69,837 5,263 (2,331)
-------- -------- -------
Fund Share Transactions:
Receipts for shares sold -- Class A 46,082 33,019 8,591
Cost of shares repurchased -- Class A (9,706) (6,257) (428)
-------- -------- -------
36,376 26,762 8,163
-------- -------- -------
Receipts for shares sold -- Class B 157,970 89,269 16,075
Cost of shares repurchased -- Class B (23,672) (5,858) (332)
-------- -------- -------
134,298 83,411 15,743
-------- -------- -------
Receipts for shares sold -- Class C 24,882 14,237 4,454
Cost of shares repurchased -- Class C (3,326) (1,755) (46)
-------- -------- -------
21,556 12,482 4,408
-------- -------- -------
Receipts for shares sold -- Class E 263 312 --
Cost of shares repurchased -- Class E (78) (20) --
-------- -------- -------
185 292 --
-------- -------- -------
Receipts for shares sold -- Class F 584 652 --
Cost of shares repurchased -- Class F (12) (8) --
-------- -------- -------
572 644 --
-------- -------- -------
Receipts for shares sold -- Class G 1,999 1,975 --
Cost of shares repurchased -- Class G (56) (54) --
-------- -------- -------
1,943 1,921 --
-------- -------- -------
Receipts for shares sold -- Class H 2,919 2,703 --
Cost of shares repurchased -- Class H (15) (88) --
-------- -------- -------
2,904 2,615 --
-------- -------- -------
Receipts for shares sold -- Class Z 1 -- 2,700
-------- -------- -------
1 -- 2,700
-------- -------- -------
Net Increase from Fund Share Transactions 197,835 128,127 31,014
-------- -------- -------
Total Increase 267,672 133,390 28,683
NET ASSETS
Beginning of period 198,118 64,728 --
-------- -------- -------
End of period (net of accumulated net investment loss of
$6, $2 and $0, respectively) $465,790 $198,118 $28,683
-------- -------- -------
NUMBER OF FUND SHARES
Sold -- Class A 2,882 2,450 747
Repurchased -- Class A (604) (478) (39)
-------- -------- -------
2,278 1,972 708
-------- -------- -------
Sold -- Class B 10,095 6,699 1,410
Repurchased -- Class B (1,496) (457) (32)
-------- -------- -------
8,599 6,242 1,378
-------- -------- -------
Sold -- Class C 1,576 1,066 394
Repurchased -- Class C (212) (138) (4)
-------- -------- -------
1,364 928 390
-------- -------- -------
Sold -- Class E 18 24 --
Repurchased -- Class E (5) (2) --
-------- -------- -------
13 22 --
-------- -------- -------
Sold -- Class F 38 49 --
Repurchased -- Class F (1) (c) --
-------- -------- -------
37 49 --
-------- -------- -------
Sold -- Class G 127 148 --
Repurchased -- Class G (4) (4) --
-------- -------- -------
123 144 --
-------- -------- -------
Sold -- Class H 189 204 --
Repurchased -- Class H (1) (7) --
-------- -------- -------
188 197 --
-------- -------- -------
Sold -- Class Z (c) -- 225
-------- -------- -------
(c) -- 225
-------- -------- -------
(a) Class Z shares were initially offered on January 11, 1999.
(b) From the commencement of operations on June 1, 1999.
(c) Rounds to less than one.
See notes to financial statements.
</TABLE>
<PAGE>
- ---------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
- ---------------------------------
October 31, 1999
NOTE 1. ACCOUNTING POLICIES
ORGANIZATION
Stein Roe Advisor Tax-Managed Growth Fund (SRATMGF) and Stein Roe Advisor-Tax
Managed Value Fund (SRATMVF), are each a series of Liberty Funds Trust I,
formerly Colonial Trust I (individually referred to as a Fund, collectively
referred to as the Funds) and are diversified portfolios. Liberty Funds Trust
I is a Massachusetts business trust registered under the Investment Company
Act of 1940, as amended, as an open-end management investment company. The
Funds' investment objectives seek to maximize long-term capital growth while
reducing shareholder exposure to taxes. The Funds may issue an unlimited
number of shares. SRATMGF offers eight classes of shares: Class A, Class B,
Class C, Class E, Class F, Class G, Class H and Class Z. SRATMVF offers four
classes of shares: Class A, Class B, Class C and Class Z. Class A shares are
sold with a front-end sales charge and a 1.00% contingent deferred sales
charge 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. Class B shares will convert to
Class A shares when they have been outstanding approximately eight 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 E, Class F, Class G and Class H shares are trust shares. Class E
and Class G shares are sold with a front-end sales charge and are subject to
an annual distribution fee and Class F and Class H shares are subject to an
annual distribution fee and a contingent deferred sales charge. Class F and
Class H shares will convert to Class E and Class G shares, respectively, after
they have been outstanding approximately eight years. Effective January 11,
1999, SRATMGF began offering Class Z shares which are offered continuously at
net asset value. There are certain restrictions on the purchase of Class Z
shares, as described in each Fund's prospectus.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies that are consistently followed by the Funds in
preparation of their financial statements.
SECURITY VALUATION AND TRANSACTIONS
Equity securities generally are valued at the last sale price or, in the case
of unlisted or listed securities for which there were no sales during the day,
at current quoted bid prices.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
Portfolio positions for which market quotations are not readily available are
valued at fair value under procedures approved by the Trustees.
Security transactions are accounted for on the date the securities are
purchased, sold or mature.
Cost is determined and gains (losses) are based upon the specific
identification method for both financial statement and federal income tax
purposes.
DETERMINATION OF CLASS NET ASSET VALUES AND
FINANCIAL HIGHLIGHTS
All income, expenses (other than applicable 12b-1 fees) (see Note 2:
Underwriting discounts, 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.
The per share data is calculated using the average shares outstanding during
the period. Net investment income per share data reflects the distribution fee
per share where applicable.
Ratios are calculated by adjusting the expense and net investment income
ratios for each Fund for the entire period by the distribution fee and service
fee where applicable.
FEDERAL INCOME TAXES
Consistent with the Funds' policy to qualify as regulated investment companies
and to distribute all of their taxable income, no federal income tax has been
accrued.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded on the ex-date.
The amount and character of income and gains to be distributed are determined
in accordance with income tax regulations which may differ from generally
accepted accounting principles. Reclassifications are made to the Funds'
capital accounts to reflect income and gains available for distribution (or
available capital loss carryforwards) under income tax regulations.
OTHER
Corporate actions are recorded on the ex-date. Interest income is recorded on
the accrual basis.
The Funds' custodian takes possession through the federal book-entry system of
securities collateralizing repurchase agreements. Collateral is marked-to-
market daily to ensure that the market value of the underlying assets remains
sufficient to protect the Fund. The Fund may experience costs and delays in
liquidating the collateral if the issuer defaults or enters bankruptcy.
NOTE 2. FEES AND COMPENSATION PAID TO AFFILIATES
MANAGEMENT FEE
Stein Roe & Farnham, Inc. (the Advisor) is the investment Advisor of each Fund
and receives a monthly fee based on each Fund's average net assets as follows:
SRATMGF
0.60% annually
SRATMVF
0.80% annually
ADMINISTRATION FEE
Colonial Management Associates, Inc. (the Administrator), an affiliate of the
Advisor, provides accounting and other services and office facilities for a
monthly fee based on each Fund's average net assets as follows:
SRATMGF
0.40% annually
SRATMVF
0.20% annually
BOOKKEEPING FEE
For each Fund, the Administrator provides bookkeeping and pricing services for
$27,000 per year plus 0.035% of the Fund's average net assets over $50
million.
TRANSFER AGENT FEE
Liberty Funds Services, Inc., formerly Colonial Investor Services, Inc., (the
Transfer Agent), an affiliate of the Administrator, provides shareholder
services for a monthly fee equal to 0.236% annually of each Fund's average net
assets and receives reimbursement for certain out-of-pocket expenses.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES
Liberty Funds Distributor, Inc. (the Distributor), a subsidiary of the
Administrator, is the Funds' principal underwriter. During the period ended
October 31, 1999, each Fund has been advised that the Distributor retained net
underwriting discounts on SRATMGF and SRATMVF of $1,728,743 and $396,712,
respectively, on sales of the Funds' Class A shares and received contingent
deferred sales charges (CDSC) of $10,595 and $0 on Class A share redemptions,
$491,967 and $988 on Class B share redemptions and $11,191 and $156 on Class C
share redemptions, respectively. SRATMGF had contingent deferred sales charges
(CDSC) of $5,508 and none on Class F and Class H, respectively.
SRATMGF has adopted a 12b-1 plan which requires the payment of a service fee
to the Distributor equal to 0.25% annually on Class A, Class B, Class C, Class
E, Class F, Class G and Class H net assets as of the 20th of each month. The
plan also requires the payment of a distribution fee to the Distributor equal
to 0.75% annually of the average net assets attributable to Class B, Class C,
Class F and Class H shares; 0.10% of the average net assets attributable to
Class E shares; and up to 0.25% of average net assets attributable to Class G
shares. The actual fee with respect to Class G shares will be 0.10% on Class G
assets attributable to shares outstanding for less than five years and 0.25%
on Class G assets attributable to shares outstanding five years or more.
SRATMVF has adopted a 12b-1 plan which requires the payment of a service fee
to the Distributor 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 0.05% of the average net assets
attributable to Class A and 0.75% of the average net assets attributable to
Class B and Class C shares.
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.
EXPENSE LIMITS
The Advisor/Administrator has agreed, until further notice, to waive fees and
bear certain Fund expenses to the extent that total expenses (exclusive of
service fees and distribution fees, brokerage commissions, interest, taxes and
extraordinary expenses, if any) exceed 1.25% annually of the first $100
million of the Fund's average net assets and 1.50% annually thereafter on
SRATMGF, and 1.50% annually of the Fund's average net assets on SRATMVF.
For the year ended October 31, 1999, SRATMGF's total expenses as defined above
did not exceed the expense limit.
OTHER
The Funds pay no compensation to its officers, all of whom are employees of
the Advisor or Administrator.
The Funds' Trustees may participate in a deferred compensation plan which may
be terminated at any time. Obligations of the plan will be paid solely out of
the Funds' assets.
NOTE 3. PORTFOLIO INFORMATION
INVESTMENT ACTIVITY
For the period ended October 31, 1999, purchases and sales of investments,
other than short-term obligations, were as follows:
PURCHASES SALES
- ------------------------------------------------------------------------
SRATMGF $430,702,160 $249,327,005
STRATMVF 32,570,010 3,248,919
Unrealized appreciation (depreciation) at October 31, 1999, based on cost of
investments for financial statement and federal income tax purposes was:
STRATMGF SRATMVF
- ------------------------------------------------------------------------
Gross unrealized appreciation $98,754,234 $ 1,105,042
Gross unrealized depreciation (4,517,946) (2,753,773)
---------- ---------
Net unrealized appreciation
(depreciation) $94,236,288 $(1,648,731)
=========== ===========
CAPITAL LOSS CARRYFORWARDS
At October 31, 1999, capital loss carryforwards available (to the extent
provided in regulations) to offset future realized gains were approximately as
follows:
YEAR OF CAPITAL LOSS
EXPIRATION CARRYFORWARD
---------- ------------
SRATMGF 2005 $ 559,000
2006 9,584,000
2007 1,696,000
-----------
$11,839,000
===========
YEAR OF CAPITAL LOSS
EXPIRATION CARRYFORWARD
---------- ------------
SRATMVF 2007 $656,000
Expired capital loss carryforwards, if any, are recorded as a reduction of
capital paid in.
To the extent loss carryforwards are used to offset any future realized gains,
it is unlikely that such gains would be distributed since they may be taxable
to shareholders as ordinary income.
OTHER
The Funds may focus their investments in certain industries, subjecting each
to greater risk than a fund that is more diversified.
NOTE 4. LINE OF CREDIT
The Funds may borrow up to 33 1/3% of its net assets under a line of credit
for temporary or emergency purposes. Any borrowings bear interest at one of
the following options determined at the inception of the loan: (1) federal
funds rate plus 1/2 of 1%, (2) the lending bank's base rate or (3) IBOR
offshore loan rate plus 1/2 of 1%. There were no borrowings under the line of
credit during the period ended October 31, 1999.
NOTE 5. OTHER RELATED PARTY TRANSACTIONS
At October 31, 1999, Colonial Management Associates, Inc. owned 15.74%, 8.28%,
and 100% of Class E, Class F and Class Z, respectively of SRATMGF, and 1.18%,
2.22% and 100% of Class A, Class C and Class Z of SRATMVF.
During the year ended October 31, 1999, SRATMVF used Alphatrade, a wholly
owned subsidiary of Colonial Management Associates, Inc., as a broker. Total
commissions paid to Alphatrade during the year were $17,354.
<PAGE>
<TABLE>
- --------------------
FINANCIAL HIGHLIGHTS
- --------------------
Selected data for a share of each class outstanding
throughout each period are as follows:
STEIN ROE ADVISOR TAX-MANAGED GROWTH FUND
- --------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
YEAR ENDED OCTOBER 31, 1999
-------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS E CLASS F CLASS G CLASS H CLASS Z(b)
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.390 $ 13.200 $ 13.200 $ 13.360 $ 13.210 $ 13.380 $ 13.210 $ 15.560
-------- -------- -------- -------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment loss(a)(c) (0.034) (0.151) (0.152) (0.050) (0.151) (0.050) (0.151) (0.016)
Net realized and unrealized gain 3.834 3.771 3.772 3.830 3.711 3.840 3.771 1.686
-------- -------- -------- -------- -------- -------- -------- --------
Total from Investment Operations 3.800 3.620 3.620 3.780 3.560 3.790 3.620 1.670
-------- -------- -------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 17.190 $ 16.820 $ 16.820 $ 17.140 $ 16.770 $ 17.170 $ 16.830 $ 17.230
======== ======== ======== ======== ======== ======== ======== ========
Total return(d) 28.38% 27.42% 27.42% 28.29% 26.95% 28.33% 27.40% 10.73%(e)
======== ======== ======== ======== ======== ======== ======== ========
RATIOS TO AVERAGE NET ASSETS
Expenses(f) 1.64% 2.39% 2.39% 1.74% 2.39% 1.74% 2.39% 0.79%(g)
Net investment loss(f) (0.21)% (0.96)% (0.96)% (0.31)% (0.96)% (0.31)% (0.96)% (0.13)%(g)
Portfolio turnover 80% 80% 80% 80% 80% 80% 80% 80%
Net assets at end of period (000) $ 97,531 $303,726 $ 46,869 $ 1,089 $ 2,025 $ 6,427 $ 8,122 $ 1
(a) Net of fees and expenses waived
or borne by the Advisor/
Administrator which amounted to: $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ --
(b) Class Z shares were initially offered on January 11, 1999.
(c) Per share data was calculated using average shares outstanding during the period.
(d) Total return at net asset value assuming no initial sales charge or contingent deferred sales charge.
(e) Not annualized
(f) The benefits derived from custody credits and directed brokerage arrangements had no impact.
(g) Annualized.
</TABLE>
<TABLE>
YEAR ENDED OCTOBER 31, 1998
<CAPTION>
--------------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS E CLASS F CLASS G CLASS H
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.040 $ 11.960 $ 11.960 $ 12.020 $ 11.970 $ 12.040 $ 11.960
-------- -------- -------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (a)(b) 0.029 (0.069) (0.069) 0.016 (0.069) 0.016 (0.069)
Net realized and unrealized gain 1.321 1.309 1.309 1.324 1.309 1.324 1.319
-------- -------- -------- -------- -------- -------- --------
Total from Investment Operations 1.350 1.240 1.240 1.340 1.240 1.340 1.250
-------- -------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 13.390 $ 13.200 $ 13.200 $ 13.360 $ 13.210 $ 13.380 $ 13.210
======== ======== ======== ======== ======== ======== ========
Total return (c)(d) 11.21% 10.37% 10.37% 11.15% 10.36% 11.13% 10.45%
======== ======== ======== ======== ======== ======== ========
RATIOS TO AVERAGE NET ASSETS
Expenses (e) 1.56% 2.31% 2.31% 1.66% 2.31% 1.66% 2.31%
Net investment income (loss) (e) 0.22% (0.53)% (0.53)% 0.12% (0.53)% 0.12% (0.53)%
Fees and expenses waived or borne by the
Advisor/Administrator (e) 0.12% 0.12% 0.12% 0.12% 0.12% 0.12% 0.12%
Portfolio turnover 91% 91% 91% 91% 91% 91% 91%
Net assets at end of period (000) $ 45,472 $124,829 $ 18,786 $ 680 $ 1,105 $ 3,359 $ 3,887
(a) Net of fees and expenses waived or borne
by the Advisor/Administrator which
amounted to: $ 0.016 $ 0.016 $ 0.016 $ 0.016 $ 0.016 $ 0.016 $ 0.016
(b) Per share data was calculated using average shares outstanding during the period.
(c) Total return at net asset value assuming no initial sales charge or contingent deferred sales charge.
(d) Had the Advisor/Administrator not waived or reimbursed a portion of expenses, total return would have been reduced.
(e) The benefits derived from custody credits and directed brokerage arrangements had no impact.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31, 1997 (b)
---------------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS E CLASS F CLASS G CLASS H
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $ 10.080 $ 10.080 $ 10.080 $ 10.080 $ 10.080 $ 10.080 $ 10.080
-------- -------- -------- -------- -------- -------- --------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income
(loss) (a)(d) 0.040 (0.032) (0.032) 0.030 (0.032) 0.030 (0.032)
Net realized and
unrealized gain 1.920 1.912 1.912 1.910 1.922 1.930 1.912
-------- -------- -------- -------- -------- -------- --------
Total from Investment
Operations 1.960 1.880 1.880 1.940 1.890 1.960 1.880
-------- -------- -------- -------- -------- -------- --------
NET ASSET VALUE, END
OF PERIOD $ 12.040 $ 11.960 $ 11.960 $ 12.020 $ 11.970 $ 12.040 $ 11.960
======== ======== ======== ======== ======== ======== ========
Total return (e)(f) 19.44%(g) 18.65%(g) 18.65%(g) 19.25%(g) 18.75%(g) 19.44%(g) 18.65%(g)
======== ======== ======== ======== ======== ======== ========
RATIOS TO AVERAGE NET ASSETS
Expenses (e) 1.50%(i) 2.25%(i) 2.25%(i) 1.60%(i) 2.25%(i) 1.60%(i) 2.25%(i)
Net investment income
(loss) (h) 0.39%(i) (0.36)%(i) (0.36)%(i) 0.29%(i) (0.36)%(i) 0.29%(i) (0.36)%(i)
Fees and expenses
waived or borne by
the Advisor/
Administrator (h) 0.98%(i) 0.98%(i) 0.98%(i) 0.98%(i) 0.98%(i) 0.98%(i) 0.98%(i)
Portfolio turnover 51%(g) 51%(g) 51%(g) 51%(g) 51%(g) 51%(g) 51%(g)
Net assets at end of
period (000) $ 17,142 $ 38,452 $ 5,923 $ 346 $ 421 $ 1,288 $ 1,156
(a) Net of fees and expenses
waived or borne by the
Advisor/Administrator
which amounted to: $ 0.096 $ 0.096 $ 0.096 $ 0.096 $ 0.096 $ 0.096 $ 0.096
(b) The Fund commenced investment operations on December 16, 1996, the activity shown is from the effective date of regisration
(December 30, 1996) with the Securities and Exchange Commission.
(c) Effective July 1, 997, Class D shares were redesignated Class C shares.
(d) Per share data was calculated using average shares outstanding during the period.
(e) Total return at net asset value assuming no initial sales charge or contingent deferred sales charge.
(f) Had the Advisor/Administrator not waived or reimbursed a portion of expenses, total return would have been reduced.
(g) Not annualized.
(h) The benefits derived from custody credits and directed brokerage arrangements had no impact.
(i) Annualized.
</TABLE>
<PAGE>
<TABLE>
- --------------------
FINANCIAL HIGHLIGHTS
- --------------------
Selected data for a share of each class outstanding
throughout each period are as follows:
STEIN ROE ADVISOR TAX-MANAGED VALUE FUND
- ------------------------------------------------------------------------------------------------------------
<CAPTION>
PERIOD ENDED OCTOBER 31, 1999 (a)
----------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS Z
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.000 $ 12.000 $ 12.000 $ 12.000
-------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (b)(c) 0.000(h) (0.038) (0.038) 0.012
Net realized and unrealized loss (1.360) (1.352) (1.352) (1.362)
-------- -------- -------- --------
Total from Investment Operations (1.360) (1.390) (1.390) (1.350)
-------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 10.640 $ 10.610 $ 10.610 $ 10.650
======== ======== ======== ========
Total return (d)(e) (11.33%) (11.58%) (11.58%) (11.25%)
-------- -------- -------- --------
RATIOS TO AVERAGE NET ASSETS
Expenses (f)(g) 1.77% 2.60% 2.60% 1.50%
Net investment income (loss) (f)(g) (0.00%) (0.83%) (0.83%) 0.27%
Portfolio turnover (e) 19% 19% 19% 19%
Net assets at end of period (000) $ 7,528 $ 14,622 $ 4,137 $ 2,396
(a) From commencement of operations on
June 1, 1999.
(b) Net of fees and expenses waived or
borne by the Advisor/Administrator
which amounted to: $ 0.065 $ 0.065 $ 0.065 $ 0.065
(c) Per share data was calculated using average shares outstanding during the period.
(d) Total return at net asset value assuming no initial sales charge or contingent deferred sales charge.
(e) Not annualized.
(f) The benefits derived from custody credits and directed brokerage arrangements had no impact.
(g) Annualized.
(h) Rounds to less than 0.001.
</TABLE>
<PAGE>
- ---------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
- ---------------------------------
TO THE TRUSTEES OF LIBERTY FUNDS TRUST I AND THE SHAREHOLDERS OF STEIN ROE
ADVISOR TAX-MANAGED GROWTH FUND AND STEIN ROE ADVISOR TAX-MANAGED VALUE FUND
In our opinion, the accompanying statements of assets and liabilities,
including the investment portfolios, and the related statements of operations,
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Stein Roe Advisor Tax-Managed
Growth Fund and Stein Roe Advisor Tax-Managed Value Fund, (each a series of
Liberty Funds Trust I, formerly Colonial Trust I) at October 31, 1999, the
results of its operations, the changes in its net assets and the financial
highlights for the periods indicated, in conformity with generally accepted
accounting principles. These financial statements and the financial highlights
(hereafter referred to as "financial statements") are the responsibility of
the Funds' management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of portfolio positions at October 31,
1999 by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
December 13, 1999
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
Trustees & Transfer Agent
- --------------------------------------------------------------------------------
ROBERT J. BIRNBAUM WILLIAM E. MAYER
Consultant (formerly Special Partner, Development Capital, LLC
Counsel, Dechert, Price & Rhoads; (formerly Dean, College of Business
President and Chief Operating and Management, University of
Officer, New York Stock Exchange, Maryland; Dean, Simon Graduate
Inc.; President, American Stock School of Business, University of
Exchange Inc.) Rochester; Chairman and Chief
Executive Officer, CS First Boston
TOM BLEASDALE Merchant Bank; and President and
Retired (formerly Chairman of the Chief Executive Officer, The First
Board and Chief Executive Officer, Boston Corporation)
Shore Bank & Trust Company)
JAMES L. MOODY, JR.
JOHN V. CARBERRY Retired (formerly Chairman of the
Senior Vice President of Liberty Board, Chief Executive Officer and
Financial Companies, Inc. (formerly Director Hannaford Bros. Co.)
Managing Director, Salomon
Brothers) JOHN J. NEUHAUSER
Academic Vice President and Dean of
LORA S. COLLINS Faculties, Boston College (former
Attorney (formerly Attorney, Dean, Boston College School of
Kramer, Levin, Naftalis & Frankel) Management)
JAMES E. GRINNELL THOMAS E. STITZEL
Private Investor (formerly Senior Professor of Finance, College of
Vice President-Operations, The Business, Boise State University;
Rockport Company) Business Consultant and Author
RICHARD W. LOWRY ROBERT L. SULLIVAN
Private Investor (formerly Chairman Retired Partner, KPMG LLP (formerly
and Chief Executive Officer, U.S. Management Consultant, Saatchi and
Plywood Corporation) Saatchi Consulting Ltd. and
Principal and International
SALVATORE MACERA Practice Director, Management
Private Investor (formerly Consulting, Peat Marwick Main &
Executive Vice President of Itek Co.)
Corp. and President of Itek Optical
& Electronic Industries, Inc.) ANNE-LEE VERVILLE
Consultant (formerly General
Manager, Global Education Industry,
and President, Applications
Solutions Division, IBM
Corporation)
- --------------------------------------------------------------------------------
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Stein Roe Advisor Tax-Managed Funds is:
Liberty Funds Services, Inc.
P.O. Box 1722
Boston, MA 02105-1722
1-800-345-6611
The Funds mail 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 Tax-Managed
Funds. 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 Funds and with the most
recent copy of the Liberty Funds Distributor, Inc. Performance Update.
<PAGE>
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.
- --------------------------------------------------------------------------------
L I B E R T Y
- ---------------
F U N D S
- --------------------------------------------------------------------------------
ALL-STAR Institutional money management approach for individual investors.
COLONIAL Fixed-income and value style equity investing.
CRABBE
HUSON A contrarian approach to fixed-income and equity investing.
NEWPORT A leader in international investing.
STEIN ROE Growth style equity investing.
ADVISOR
[graphic omitted]
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 your
financial goals.
- ---------------------------------------------------
STEIN ROE ADVISOR TAX-MANAGED FUNDS ANNUAL REPORT
- ---------------------------------------------------
---------------
BULK RATE
U.S. POSTAGE
PAID
[Graphic HOLLISTON, MA
Omitted] L I B E R T Y PERMIT NO. 20
----------------- ---------------
F U N D S
ALL-STAR o 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
www.libertyfunds.com
MG-02/079I-1099 (12/99) 99/1536
