File No. 2-99356
Rule No. 497(e)
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STEIN ROE MUNICIPAL TRUST
Stein Roe Municipal Money Market Fund
Stein Roe Intermediate Municipals Fund
Stein Roe Managed Municipals Fund
Stein Roe High-Yield Municipals Fund
Supplement to Prospectus dated November 1, 1995
Wire Redemption Privilege. Effective February 1, 1996,
the Telephone Redemption by Wire Privilege (which was
previously available only to shareholders of Municipal Money
Market Fund and is described on pages 29 and 33 of the
Prospectus) is available for shareholders of all Funds. The
Privilege permits you to request a redemption from your Fund
account by phone and have the proceeds wired to your account
at a commercial bank, previously designated by you, that is a
member of the Federal Reserve System. The wire fee
(currently $3.50 per transaction) will be deducted from the
amount wired. If you also establish the Electronic Transfer
Privilege, the bank account that you designate for both
Privileges must be the same. There is a $1,000 minimum and a
$100,000 maximum amount on each Telephone Redemption by Wire
for shareholders of Intermediate Municipals Fund, Managed
Municipals Fund, and High-Yield Municipals Fund.
Shareholder Proposals. The Board of Trustees of Stein
Roe Municipal Trust has called a special meeting of
shareholders of each Fund for June 18, 1996. Among other
items, the Board has directed that shareholders of
Intermediate Municipals Fund, Managed Municipals Fund, and
High-Yield Municipals Fund consider replacing each Fund's
current investment advisory agreement, which provides for
both portfolio management and administrative services, with
separate new agreements for each such service. If approved
by shareholders, the proposed new agreements will become
effective on July 1, 1996. The current and proposed fee
schedules are as follows:
Current
Fee Schedule Proposed Fee Schedule
(dollar amounts (dollar amounts in millions)
in millions) ------------------------------
Management and Management Administrative Total
Fund Administrative Fee Fee Fee Fees
- -------- ----------------- -------------- ---------------- ------------
Inter-
mediate .600% up to $100, .450% up to $100,.150% up to $100, .600% up to $100,
Munic- .550% next $100, .425% next $100, .125% next $100, .550% next $100,
pals .500% thereafter .400% thereafter .100% thereafter .500% thereafter
Fund
High-
Yield .600% up to $100, .450% up to $100,.150% up to $100, .600% up to $100,
Munici- .550% next $100, .425% next $100, .125% next $100, .550% next $100,
pals .500% thereafter .400% thereafter .100% thereafter .500% thereafter
Fund
Managed .600% up to $100, .450% up to $100,.150% up to $100, .600% up to $100
Munici- .550% next $100, .425% next $100, .125% next $100, .550% next $100,
pals .500% next $800, .400% next $800, .100% next $800, .500% next $800,
Fund .450% thereafter .375% thereafter .075% thereafter .450% thereafter
The new agreements would not result in a fee increase. The
provision of portfolio management and administrative services
under separate agreements would facilitate future conversion
of a Fund into the Master Fund/Feeder Fund structure. (See
discussion under The Funds in the Prospectus.) Municipal
Money Market Fund converted into a Feeder Fund in 1995.
Shareholders of each Fund also are being asked to
consider changes in fundamental investment restrictions
regarding borrowing and lending that would permit the Fund to
join with other Stein Roe Funds in an "interfund lending
program."
The Date of this Supplement is April 17, 1996
