SteinRoe
Young Investor Fund
A different kind of annual report for a different kind of mutual fund
Annual Report
September 30, 1995
SteinRoe Mutual Funds
BUILDING WEALTH FOR GENERATIONS(SM)
Photo of man holding baby upside down.
<PAGE>
Contents
From the President 1
Tim Armour's thoughts on Young Investor Fund
The Companies We Invest In 2-3
The Fund's top 10 holdings
Q&A 4-6
An interview with the Young Investor Fund's portfolio managers
Fund Highlights 7
Information about the Fund
Investments 8-12
A complete list of the Fund's investments with market values
Financial Statements 13-15
Balance sheet, statements of operations and changes in net assets
Notes to Financial Statements 16-18
Financial Highlights 18
Selected per-share data
Report of Independent Auditors 19
General Information 20-22
A guide to products and services
<PAGE>
To Our Shareholders
Dear Investor,
With this annual report, the Young Investor Fund marks its first full fiscal
year in existence. Since our last annual report, Young Investor has attracted
more than $23 million in assets and gained more than 7,500 additional
accounts.
During the year, some of you may have tried to track Young Investor's net
asset value in the newspaper, only to find that it wasn't listed. That's
because most newspapers list only those mutual funds that have reached a
certain level of assets and shareholders. To be listed in the Wall Street
Journal, for example, a fund must have a total of $25 million in assets or
more than 1,000 shareholders. Smaller papers sometimes have a higher cut-off
point. The good news is that, with a total asset size of $30 million and
growing, Young Investor has joined the ranks of other funds in the pages of
most newspapers. If Young Investor Fund still isn't listed in your local
paper, you can call us at 800-338-2550, or you can check its performance on
your computer by accessing a financial page on one of the on-line services or
directly through the Internet. Once you're on the financial page, just type in
the Fund's symbol, SRYIX, for important performance information, such as its
daily net asset value per share (share price).
A mutual fund's value will change daily and past performance is no guarantee
of how it will perform in the future. But it can provide useful information.
What's important is "having a long-term view"-- understanding and accepting
that the value of a mutual fund that invests in stocks will change constantly.
It may go up -- as Young Investor did this year -- or down, but over time,
mutual funds have historically shown that they provide you with good growth
potential.
Thank you for investing with SteinRoe. Please write and tell us what you think
about Young Investor. We look forward to hearing from you.
Sincerely,
Timothy K. Armour
President, SteinRoe Mutual Funds
November 1, 1995
<PAGE>
The Companies We Invest In
Diversification means investing the fund's assets (money) in more than one
company to help reduce risk. Because a mutual fund invests in so many
companies, your investment is automatically diversified. That means if the
price of one security in the portfolio declines, it should have less of an
impact than if you only invested in that one security by itself. You can tell
the Young Investor Fund is broadly diversified because the top 10 holdings
made up only about 22 percent of the Fund's net assets on September 30.
As you probably know, a mutual fund invests in the stocks of many different
companies, both to pursue its investment objective and to help diversify its
holdings. To the right, you'll find the 10 largest holdings in the Fund as of
September 30, 1995.
Unlike some funds, we don't invest a large portion of our assets in a few
favorite stocks. Instead, Young Investor Fund typically will have between 40
and 50 holdings, with each holding representing roughly 2 percent of the
portfolio. And depending on what the market does, the Fund's top 10 holdings
may change from day to day. In any case, we seek to invest most of our assets
in companies that kids can relate to or that affect their lives in some way.
As you look at the Fund's holdings, you'll notice that some of the companies
are easy to recognize, like Nike or Motorola. Others might not be as familiar
to you. But -- while they may not be household names -- you're probably well
aware of the products and services they offer. For example, Edmark Corp. makes
some of the finest educational software products available, and LSI Logic
makes the computer chips for Sony Play Stations. A more complete list of the
Fund's holdings can be found on pages eight through 12.
<TABLE>
<CAPTION>
% of Total
Net Assets
on 9/30/95 Symbol Exchange
<S> <C> <C> <C>
1 Sitel Corp. 2.4% SITL NASDAQ*
2 Edmark 2.3 EDMK NASDAQ
3 LSI Logic 2.2 LSI NYSE**
4 Broderbund Software 2.2 BROD NASDAQ
5 Atmel Corporation 2.2 ATML NASDAQ
6 Nike, Inc. 2.2 NKE NYSE
7 American Oncology Resources 2.1 AORI NASDAQ
8 Bay Networks 2.1 BNET NASDAQ
9 MBNA Corp. 2.0 KRB NYSE
10 Motorola, Inc. 2.0 MOT NYSE
<FN>
* National Association of Securities Dealers Automated Quotation
** New York Stock Exchange
</TABLE>
<PAGE>
An Interview with the Portfolio Managers
Photo of: David Brady, Erik Gustafson, Eric Maddix
Q. How has the Fund performed this year?
A. The Fund earned a 40.6 percent total return for the fiscal year ended
September 30, 1995. This was a good bit higher than the 29.7 percent return of
the S&P 500, which is the most widely known index that measures the
performance of U.S. stocks.* Another way to measure performance is to compare
funds that invest in similar ways. Young Investor, for example, is a "growth
fund." That means it normally invests in companies whose long-term earnings
are expected to grow. According to Lipper Analytical Services, an independent
company that ranks the performance of mutual funds, Young Investor Fund ranked
22nd of 550 other growth funds for the year ended September 30.* Past
performance, however, is no guarantee of future results, and the Fund's share
price and investment return will vary, so you may have a gain or loss when you
sell shares.
Q. What accounted for the performance?
A. The main reason the Fund performed well this year was because it owned
stock in many technology companies. Technology companies make products like
personal computers, cellular phones and CD players. Some of the standout
performers among the Fund's technology holdings were LSI Logic (2.2 percent of
total net assets), a semiconductor manufacturer; plus The Learning Company, a
developer of educational and entertainment software for children, and
Spyglass, a developer of software that's used for browsing the Internet, both
of which were sold at a profit during the year. The Fund's holdings in the
financial services and health care sectors also did well. While we're pleased
with the Fund's strong performance to date, we want to emphasize that
investors shouldn't focus only on short-term results. Many factors have worked
together this year to create a favorable backdrop for investing --
particularly for the kinds of stocks that we invest in.
<PAGE>
Q. Many people are starting to say that technology stocks are so popular that
their prices are too high and are headed for a fall. Do you have any plans to
reduce the number of technology stocks in the Fund?
A. We don't have any immediate plans to reduce our holdings in technology. We
believe the long-term growth prospects for many technology companies appear
bright. These companies provide the products and services that people and
businesses need to save money and to improve productivity, both of which are
important today. Plus, many technology companies simply fit our profile of
quality growth companies that touch the lives of young people.
To help balance the short-term risks associated with our technology holdings,
we've also added more stocks of what we believe are stable growth companies
- --particularly food, financial services and health care stocks -- to the
portfolio.
Q. Do you ever get stock tips from your young investors?
A. Our primary sources for investment ideas are our own internal research team
and Wall Street analysts. We are, however, always looking for good ideas and
we encourage investors to write in with their suggestions and ideas. We like
to know what types of companies appeal to our investors. Oftentimes, when we
receive a suggestion from an investor, we already hold it in the Fund. That's
important to us because it means we're paying attention to what's affecting
kids' lives and it confirms the investment decisions we're making. It's also
interesting to note that kids aren't just writing and suggesting companies
like McDonald's or the Gap, they're suggesting a wide range of companies, from
Ford to Intel. That means kids understand that there are many different
companies out there that would make good investments.
<PAGE>
Q. Is the Young Investor Fund just for kids?
A. Not at all. While Young Investor Fund was designed with kids in mind, we
believe the Fund's investment philosophy appeals to grownups too. Our strategy
is to invest in companies whose products and services affect the lives of
young people. It just so happens that many of the companies that serve the
youth market are also among the finest quality growth companies available. The
educational materials we offer aren't just for kids either. These materials,
including our award-winning quarterly newsletter, Dollar Digest,SM and The
Parents Guide to Investing, were designed to help teach people about personal
finance, and they can help young and adult investors alike better understand
basic investment concepts.
Q. What's ahead for the stock market and the Young Investor Fund?
A. The stock market has been extremely strong over the last 12 months. This
kind of growth is often followed by a "market correction," when stock prices
fall sharply. While we believe this will eventually occur, we also believe the
companies that make up the Young Investor Fund are well-positioned for future
growth potential. Therefore, we would view the lower prices that come with a
market correction as a chance to buy more stocks.
* Total return performance includes changes in share price and reinvestment of
income and capital gains distributions. The Fund's Adviser currently limits
expenses to .99 percent of average net assets. Absent past expense limits,
total return would have been less. Expense limits are subject to termination
on 30 days' notice to the Fund. The S&P 500 is an unmanaged group of stocks
that differs from the composition of each SteinRoe Fund; the S&P 500 is not
available for direct investment. According to Lipper Analytical Services, an
independent monitor of mutual fund performance, the Fund belongs to the growth
fund peer group. For the one-year period ended September 30, 1995, Young
Investor ranked 22nd out of 550 growth funds in its peer group.
<PAGE>
Fund Data
Investment Objective:
Seeks to achieve long-term capital appreciation by investing primarily in
common stocks and other equity-type securities that we believe have long-term
appreciation potential. The Fund also has an educational objective to teach
children and teenagers about basic economic principles and personal finance
through a variety of educational materials prepared and paid for by the Fund.
Fund Inception: 4/29/94
Total Net Assets: $31,401
(In thousands)
Shareholders Approve New Agreements
At a special meeting on August 15, 1995, shareholders of SteinRoe Young
Investor Fund voted to approve a proposal that replaced the Fund's investment
advisory agreement with two new agreements. These new agreements essentially
carry forward the services Stein Roe & Farnham already provides to
shareholders, separating into two agreements the provision of administrative
and investment management services. In addition, shareholders approved a
Management Agreement between SR&F Base Trust and the Adviser that would
replace the proposed Management Agreement between Investment Trust and the
Adviser if and when the Fund converted to a master-feeder structure.
<TABLE>
<CAPTION>
The outcome of the voting was as follows:
<S> <C>
Record Date share position: 20,569,977
Total share position voted: 13,292,784
<CAPTION>
For Against Abstain
<S> <C> <C> <C>
A) Administrative Agreement 11,502,552 1,383,281 406,951
B) Management Agreement 11,486,836 1,384,549 421,411
C) Management Agreement
between SR&F Base Trust
and the Adviser 11,475,215 1,282,232 535,349
</TABLE>
<PAGE>
<TABLE>
Fund Highlights
Economic Sector Breakdown
<CAPTION>
Portfolio S&P 500
9/30/95 9/30/95
<S> <C> <C>
Basic Materials 0% 6%
Consumer Cyclical 35 14
Consumer Non-Cyclical 34 21
Energy 0 9
Financial 9 13
Industrial 2 10
Technology 18 14
Utilities 2 13
Total 100% 100%
Comparison of change in value of $10,000 investment. This graph compares the
performance of Young Investor Fund to the S&P 500 Index, an unmanaged group of
stocks that differs from the composition of the Fund.
<CAPTION>
DATE YIF S&P 500
<S> <C> <C>
4/29/94 10000 10000
6/30/94 9700 9915
9/30/94 10240 10399
12/31/94 10739 10397
3/31/95 11414 11408
6/30/95 12724 12496
9/30/95 14396 13488
Average Annual Total Returns as of September 30, 1995
<CAPTION>
Past 1 From
Year Inception*
<S> <C> <C>
Young Investor Fund 40.6% 43.9%
S&P 500 29.7 34.6
<FN>
Total return performance includes changes in share price and reinvestment of
income and capital gains distributions. This past performance is no guarantee
of future results. Share price and investment return will vary, so you may
have a gain or loss when you sell shares.
*4/29/94 through 9/30/95.
</TABLE>
<PAGE>
<TABLE>
SteinRoe Investment Trust
Young Investor Fund
Investments as of September 30, 1995
(Dollar amounts in thousands)
Some of Young Investor's holdings, like Activision and Microsoft, are in the
"technology sector." A sector is a particular group of stocks, usually found
in one industry. Many growth companies are in the technology sector -- and
they often are the companies whose names or products you recognize.
<CAPTION>
Number Market
Equity-Related Securities (87.1%) of Shares Value
<S> <C> <C>
Common Stocks (85.3%)
Banks (3.4%)
Fifth Third Bancorp
(Large regional banking
institution) 8,000 $ 459
MBNA Corp.
(Large credit card issuer) 15,000 624
------
1,083
Business Services (5.8%)
*Medaphis Corp.
(Provides business management
services to physicians and
hospitals) 20,000 560
*Pediatrix Medical Group Inc.
(Provides physician management
services to hospital neonatal intensive
care units) 25,000 513
*SITEL Corp.
(Leading independent provider of
telemarketing services) 30,000 735
------
1,808
Computer Software (10.8%)
*Activision, Inc.
(A diversified publisher of interactive software) 30,000 476
*Bay Networks
(Markets and manufactures a line of
networking products) 12,000 640
*Broderbund Software, Inc.
(Develops educational software) 9,000 685
*Edmark Corp.
(Leading developer and publisher of multimedia
educational software and other educational products) 15,000 722
*Microsoft Corporation
(Microcomputer software products) 5,000 452
*3D Systems Corp.
(Manufactures and markets equipment using three-
dimensional printing process that produces plastic
copies of computer-assisted design models) 25,000 419
------
3,394
See accompanying notes to financial statements.
<PAGE>
SteinRoe Investment Trust
Young Investor Fund
Investments (Continued)
(Dollar amounts in thousands)
With some simple math you can determine the share price of any stock in the
portfolio on the date of this report. All you have to do is divide the market
value by the number of shares. The equation for The Gillette Company:
$476,000 divided by 10,000 shares = $47.60 per share.
<CAPTION>
Number Market
Common Stocks (Continued) of Shares Value
<S> <C> <C>
Consumer Products (9.9%)
*CUC International Inc.
(Consumer marketing company) 15,000 $ 523
The Gillette Company
(Shaving and personal care products) 10,000 476
International Flavors & Fragrances Inc.
(Fragrance products sold to makers
of perfumes and personal
care products) 9,000 434
Nike Inc. Class B
(Designs, manufactures and
markets athletic footwear and
apparel products) 6,000 667
The Procter & Gamble Company
(Personal care products, pharma-
ceuticals, food and beverages) 6,000 462
Wolverine World Wide
(Makes, imports and markets casual
footwear sold under Hush Puppies,
Wolverine and other brand names) 20,000 548
------
3,110
Distribution-Retail (9.6%)
Albertson's Inc.
(Retail food and drug chain) 17,000 580
*Baby Superstore, Inc.
(Retailer of non-food baby and young children's products) 10,000 451
*Greenman Brothers
(Chain of toy stores under the name of Noodle Kidoodle) 20,000 245
*The Gymboree Corp.
(Specialty retailer of apparel and accessories for children) 14,000 422
The Home Depot Inc.
(Home improvement retail chain) 11,000 439
See accompanying notes to financial statements.
<PAGE>
SteinRoe Investment Trust
Young Investor Fund
Investments (Continued)
(Dollar amounts in thousands)
<CAPTION>
Number Market
Common Stocks (Continued) of Shares Value
<S> <C> <C>
Distribution-Retail (Continued)
*TOYS "R" US, Inc.
(Toy store operator) 15,000 $ 405
Walgreen Company
(Largest retail drugstore chain in
the United States) 17,000 476
------
3,018
Electronics (8.1%)
*Atmel Corp.
(Manufactures and markets a broad range
of high-performance memory and logic
integrated circuits) 20,000 675
*LSI Logic
(Designer and developer of application-specific
integrated circuit products) 12,000 693
Motorola, Inc.
(Producer of electronic and telecommunications equipment) 8,000 611
*StrataCom, Inc.
(Designs, manufactures and markets IPX cell switching
systems) 10,000 553
------
2,532
Entertainment (5.8%)
Carnival Corporation
(Operator of vacation cruise lines) 25,000 600
Disney (Walt) Company
(Theme parks, resorts and motion pictures) 8,000 459
Poly Gram NV
(Diversified international entertainment company) 8,000 522
*Viacom International Incorporated, Class B
(Entertainment and communications company) 5,000 249
------
1,830
Financial (3.6%)
American Express
(Leader in travel-related and investment services) 12,000 532
Green Tree Acceptance, Inc.
(Originates, sells and services conditional sales
contracts for manufactured homes) 10,000 610
------
1,142
See accompanying notes to financial statements.
<PAGE>
SteinRoe Investment Trust
Young Investor Fund
Investments (Continued)
(Dollar amounts in thousands)
<CAPTION>
Number Market
Common Stocks (Continued) of Shares Value
<S> <C> <C>
Food & Beverage (9.3%)
The Coca-Cola Company
(Producer and distributor of soft drink products) 8,000 $ 552
Heinz (H.J.)
(Produces a wide variety of food products worldwide) 13,000 595
Hershey Food Corporation
(Produces a broad line of chocolate, confectionery
and pasta products) 9,000 579
Nabisco Holdings Corp.
(Manufacturer and marketer of packaged foods) 20,000 592
Wrigley (Wm.) Jr. Company
(World's largest chewing gum manufacturer) 12,000 606
------
2,924
Health Care (7.2%)
Abbott Laboratories
(Diversified health care company) 14,000 597
*American Oncology Resources
(Multi-state physician practice management company
focusing exclusively on oncology) 15,000 645
Integrated Health
(Owner-operator of acute care facilities) 15,000 424
Johnson & Johnson
(Manufactures and markets a broad range of health care
and other products) 8,000 593
------
2,259
Publishing and Broadcasting (8.4%)
Evergreen Media Corp.
(Operates radio stations across the United States) 20,000 570
*International Family Entertainment
(Produces and distributes entertainment programming
targeted at families worldwide) 30,000 570
*LIN Television Corp.
(Operates network-affiliated television stations) 15,000 465
*New World Communications
(Entertainment company that operates 12 broadcast
television stations) 25,000 516
*Scholastic Corp.
(Publisher and distributor of children's books
and other educational materials) 8,000 502
------
2,623
See accompanying notes to financial statements.
<PAGE>
SteinRoe Investment Trust
Young Investor Fund
Investments (Continued)
(Dollar amounts in thousands)
<CAPTION>
Number Market
Common Stocks (Continued) of Shares Value
<S> <C> <C>
Restaurant (1.5%)
McDonald's Corporation
(Develops, licenses, leases and services a worldwide
system of restaurants) 12,000 $ 459
Telecommunications (1.9%)
American Telephone and Telegraph Company
(Carrier of long-distance telephone service) 9,000 592
-------
Total Common Stocks
(Cost $21,511) 26,774
Preferred Stock (1.8%)
Nokia Corp. ADSs
(International electronics and electrotechnical group)
(Cost $300) 8,000 558
-------
Total Equity-Related Securities
(Cost $21,811) 27,332
<CAPTION>
Principal
Amount
<S> <C> <C>
Short-Term Obligations (11.2%)
Commercial Paper (11.2%)
Associates Corp. of North America 6.750% 10/2/95 $1,348 1,348
Oak Funding Corp. 6.750% 10/6/95 1,000 999
Temple Inland Corp. 6.000% 10/4/95 1,200 1,199
-------
Total Short-Term Obligations
(Cost $3,546) 3,546
-------
Total Investments (98.3%)
(Cost $25,357) 30,878
Other Assets Less Liabilities (1.7%) 523
______
Total Net Assets (100%) $31,401
=======
<FN>
*Non-income producing.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
SteinRoe Investment Trust
Young Investor Fund
<CAPTION>
Balance Sheet
September 30, 1995
(All amounts in thousands)
<S> <C>
Assets
Investments, at market value $30,878
Receivable for investments sold 996
Receivable for fund shares sold 131
Receivable from investment adviser 61
Dividends Receivable 24
Cash and other assets 26
-------
Total Assets $32,116
=======
Liabilities
Payable for investments purchased $ 669
Other liabilities 46
-------
Total Liabilities 715
-------
Capital
Paid-in capital 24,523
Net unrealized appreciation 5,521
Accumulated undistributed net investment income 20
Accumulated net realized gains on investments 1,337
-------
Total Capital (Net Assets) 31,401
-------
Total Liabilities and Capital $32,116
=======
Shares Outstanding (Unlimited Number Authorized) 2,197
=======
Net Asset Value (Capital) Per Share $ 14.29
=======
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
SteinRoe Investment Trust
Young Investor Fund
The Young Investor Fund earns income in the form of dividends (from stocks)
and interest (from bonds and short-term investments). The Fund also realizes
gains (or losses) when it decides to sell its investments. This statement
lists the amounts that the Fund earns from these sources as well as the
expenses incurred by the Fund and the net change in value of the Fund's
current holdings.
<CAPTION>
Statement of Operations
For The Year Ended
September 30, 1995
(All amounts in thousands)
<S> <C>
Investment Income
Dividends $ 144
Interest 108
-------
Total Investment Income 252
-------
Expenses
Management and
administrative fees 131
Transfer agent fees 119
Printing and postage 116
Legal and audit fees 32
Accounting fees 25
Amortization of organization and
initial registration expenses 19
Registration fees 14
Trustees' fees 13
Custodian fees 11
Other expenses 14
-------
494
Reimbursement of expenses
by investment adviser (323)
-------
Total Expenses 171
-------
Net Investment Income 81
-------
Realized and Unrealized Gains on Investments
Net realized gains on investments 1,448
Net change in unrealized appreciation of investments 5,236
-------
Net Gains on Investments 6,684
-------
Net Increase in Net Assets Resulting from Operations $6,765
=======
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
SteinRoe Investment Trust
Young Investor Fund
<CAPTION>
Statements of Changes in Net Assets
For The Period Ended September 30, 1994, and Year Ended September 30, 1995
(All amounts in thousands)
Period Year
Ended Ended
Sept. 30, Sept. 30,
1994* 1995
<S> <C> <C>
Operations
Net investment income $ 25 $ 81
Net realized gains (losses) on investments (111) 1,448
Net change in unrealized appreciation or
depreciation of investments 285 5,236
------ -------
Net Increase in Net Assets Resulting
from Operations 199 6,765
------ -------
Distributions to Shareholders
Dividends from net investment income -- (85)
------ -------
Share Transactions
Subscriptions to fund shares 7,985 17,073
Investment income dividends reinvested -- 84
Redemptions of fund shares (8) (612)
------ -------
Net Increase from Share Transactions 7,977 16,545
------ -------
Net Increase in Net Assets 8,176 23,225
Total Net Assets
Beginning of period -- 8,176
------ -------
End of Period $8,176 $31,401
====== =======
Accumulated Undistributed Net Investment
Income at End of Period $ 25 $ 20
====== =======
Analyses of Changes in Shares of Beneficial Interest
Subscriptions to fund shares 799 1,439
Investment income dividends reinvested -- 8
Redemptions of fund shares (1) (48)
------ -------
Net increase in fund shares 798 1,399
Shares outstanding at beginning of period -- 798
------ -------
Shares outstanding at end of period 798 2,197
====== =======
<FN>
*From commencement of operations April 29, 1994.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Notes to Financial Statements
Note 1. Significant Accounting Policies
The following are the significant policies of the SteinRoe Young Investor Fund
(the "Fund"), a series of the SteinRoe Investment Trust (a Massachusetts
business trust).
Security Valuations
All securities are valued as of September 29, 1995, the last business day of
the Fund's fiscal year. Securities traded on national securities exchanges are
valued at the last reported sales price or, if there are no sales, at the
latest bid quotation. Each over-the-counter security for which the last sale
price is available from NASDAQ is valued at that price. All other
over-the-counter securities for which reliable quotations are available are
valued at the latest bid quotation. Other assets and securities of the Fund
are valued by a method that the Board of Trustees believes represents a fair
value.
Federal Income Taxes
No provision is made for federal income taxes since the Fund intends to elect
to be taxed as a "regulated investment company" and make such distributions to
its shareholders as to be relieved of all federal income taxes under
provisions of current federal tax law.
Other Information
Realized gains or losses from sales of securities are determined on the
specific identified cost basis.
All amounts, except per-share amounts, are shown in thousands.
Note 2. Trustees' Fees and Transactions with Affiliates
The Fund pays monthly management and administrative fees to Stein Roe &
Farnham Incorporated (the "Adviser"), an indirect wholly owned subsidiary of
Liberty Mutual Insurance Company, for its services as investment adviser and
manager.
<PAGE>
Effective September 1, 1995, the management and administrative fees for the
Fund are computed at annual rates as a percentage of average daily net assets
as follows:
Management Fee
0.60% up to $500 million
0.55% of next $500 million
0.50% thereafter
Administrative Fee
0.20% up to $500 million
0.15% of next $500 million
0.125% thereafter
Prior to September 1, 1995, the Adviser provided both portfolio management and
administrative services under an investment advisory agreement. The fee under
this agreement was computed at an annual rate of 0.75 percent up to $250
million of average net assets, 0.70 percent of next $250 million and 0.60
percent thereafter.
The administrative agreement provides that the Adviser will reimburse the Fund
to the extent that its annual expenses, excluding certain expenses, exceed the
applicable limits prescribed by any state in which the Fund's shares are
offered for sale. In addition, the Adviser has agreed to reimburse the Fund to
the extent that its expenses exceed 0.99 percent of average net assets. The
expense limitation expires January 31, 1996, subject to earlier termination by
the Adviser on 30 days' notice.
At September 30, 1995, Keyport Life Insurance Company, an indirect wholly
owned subsidiary of Liberty Mutual Insurance Company, owned 403 shares of the
Fund with a net asset value of $5,758.
The transfer agent fees are paid to SteinRoe Services Inc., an indirect wholly
owned subsidiary of Liberty Mutual Insurance Company.
The Adviser also provides the Fund with certain fund accounting services. For
the year ended September 30, 1995, the Fund incurred fees of $25.
Certain officers and trustees of the Trust are also officers of the Adviser.
The compensation of trustees not affiliated with the Adviser for the Fund for
the period ended September 30, 1995, was $13. No remuneration was paid to any
other trustee or officer of the Trust.
<PAGE>
Note 3. Short-Term Debt
To facilitate portfolio liquidity, the Fund maintains borrowing arrangements
under which they can borrow against portfolio securities. The Fund had no
borrowings during the period ended September 30, 1995.
Note 4. Investment Transactions
The aggregate cost of purchases and proceeds from sales or maturities of
securities (excluding short-term obligations) for the period ended September
30, 1995, were $22,515 and $8,640, respectively.
At September 30, 1995, the cost of investments for federal income tax purposes
and for financial reporting was the same. Unrealized appreciation and
depreciation of investments on a tax basis were $5,942 and $421, respectively.
Note 5. Financial Highlights
Selected per-share data (for a share outstanding throughout the period),
ratios and supplemental data.
The Financial Highlights page provides useful information about how the Fund
is doing. For instance, it provides you with such information as "total
return," an indication of the Fund's performance over time. Young Investor
Fund's total return for the year ended September 30, 1995, was 40.6 percent.
<TABLE>
<CAPTION>
Period Year
Ended Ended
Sept. 30, 1994 (a) Sept. 30, 1995
<S> <C> <C>
Net Asset Value, Beginning of Period $10.00 $ 10.24
------ -------
Income from investment operations
Net investment income 0.03 0.06
Net realized and unrealized gains on
investments 0.21 4.07
------ -------
Total from investment operations 0.24 4.13
Distributions from net investment income -- (0.08)
------ -------
Net Asset Value, End of Period $10.24 $ 14.29
====== =======
Ratio of net expenses to average net assets (b) 0.99%* 0.99%
Ratio of net investment income to average
net assets (c) 1.07%* 0.47%
Portfolio turnover rate 12%** 55%
Total return 2.40%** 40.58%
Net assets, end of period $8,176 $31,401
<FN>
* Annualized
** Not annualized
(a) The Fund commenced operations on April 29, 1994.
(b) If the Fund had paid all of its expenses and there had been no
reimbursement of expenses by the investment adviser, this ratio would have
been 4.58 percent for the period ended September 30, 1994, and 2.87 percent
for the year ended September 30, 1995.
(c) Computed giving effect to investment adviser's expense limitation
undertaking.
</TABLE>
<PAGE>
Report of Independent Auditors
Independent public account-ants who are not employed by SteinRoe audit the
information in the annual report to ensure that the financial statements are
free of material errors. This letter tells you that they have performed their
audit.
To the Board of Trustees and Shareholders
SteinRoe Young Investor Fund
We have audited the accompanying balance sheet, including the schedule of
investments, of the SteinRoe Young Investor Fund as of September 30, 1995, and
the related statements of operations, changes in net assets and the financial
highlights for the periods indicated thereon. These financial statements and
financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of September 30, 1995, by correspondence with the custodian and
brokers. As to securities purchased but not received, we requested
confirmation from brokers and, when replies were not received, we carried out
other alternative auditing procedures. An audit also includes assessing the
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly the
financial position of the SteinRoe Young Investor Fund at September 30, 1995,
the results of its operations, the changes in its net assets and the financial
highlights for the periods indicated thereon, in conformity with generally
accepted accounting principles.
ARTHUR ANDERSEN LLP
Chicago, Illinois
November 10, 1995
<PAGE>
A Guide to Stein Roe Services
We encourage you to take advantage of our free shareholder services. If you
would like additional information about how to establish or use a SteinRoe
service, just call us at 800-338-2550.
Purchases
In addition to sending us a check or wire to purchase additional fund shares,
you can take advantage of these convenient automatic services:
* Automatic Investment Plan -- Make regular investments ($50 minimum) in your
SteinRoe account directly from your bank checking account. You select monthly,
quarterly, semiannual or annual purchases.
* Special Investments -- Purchase shares by telephone and pay for them by
electronic transfer from your bank checking account.
Exchanges
* Telephone Exchange -- Call us to exchange $50 or more from your account in
one SteinRoe Fund to an identically registered account in another SteinRoe
Fund. You receive this service when you open a SteinRoe Fund account, unless
you elect not to.*
* Automatic Exchange -- SteinRoe will regularly exchange shares from your
account in one SteinRoe Fund to your account in another. You select
twice-monthly, monthly, quarterly, semiannual or annual exchanges.
Redemptions
* Telephone Redemption by Check -- Call to redeem $1,000 or more from your
account. A check will be sent to your registered address. You automatically
receive this service when you open a SteinRoe account, unless you elect not
to.
* Telephone Redemption by Wire -- Redeem shares by phone from your Money
Market Fund account ($1,000 minimum) and wire the proceeds to your bank
checking account. A small fee for wiring proceeds will be deducted from the
amount wired.
<PAGE>
* Special Redemption Option -- If you do not want to preschedule your
redemptions, you can redeem shares by telephone ($50 minimum/$100,000 maximum)
and have the proceeds sent directly to your bank checking account.
* Automatic Redemption Plan -- Redeem either a fixed dollar or share amount,
or a fixed percentage of your account, automatically, on a schedule you
establish. You select monthly, quarterly, semiannual or annual withdrawals
($50 minimum/$100,000 maximum), and the proceeds are sent either to your bank
checking account or to an address you specify.
* Money Market Fund Check Writing -- Write checks for $50 or more on your
Money Market Fund account.
Distributions
Most investors like to reinvest their dividends and capital gains
distributions and put them back to work. If, however, you do not want them
reinvested, consider these alternatives:
* Dividend Purchase Option -- Use the distributions from one SteinRoe Fund
account ($25 minimum) to automatically purchase shares in your account with
another SteinRoe Fund.
* Automatic Dividend Deposit -- Instead of receiving your dividends by check,
your distributions are deposited automatically into your bank checking
account.
Recordkeeping
* Summary of Investments -- This summary consolidates quarterly transaction
and investment information for any or all of your household's SteinRoe
accounts on one easy-to-read statement. At year end, SteinRoe provides a
complete summary of all account activity for the year.
* SteinRoe reserves the right to discontinue or modify the exchange privilege,
and certain restrictions apply. Please refer to your prospectus for details.
<PAGE>
To Contact Us...
By Phone 800-338-2550
You can discuss your investment questions with a SteinRoe account
representative by calling us toll free. We'll be happy to answer questions
about your current account, or to provide you with information about opening a
SteinRoe Fund account, including SteinRoe IRAs. We're available seven days a
week, from 7 a.m. to 8 p.m. weekdays and from 8 a.m. to 5 p.m. Saturday and
Sunday (central time).
SteinRoe's Funds-on-CallR24-Hour Service Line
Using a touch-tone phone, call our toll-free number, day or night, for your
current account balance, the latest SteinRoe Fund prices and yields, and other
information. In addition, if you have a Personal Identification Number (PIN),
you may place orders for the following transactions 24 hours a day:
* Exchange shares between your SteinRoe accounts;
* Purchase Fund shares by electronic transfer;
* Order additional account statements and Money Market Fund checks;
* Redeem shares by check, wire or electronic transfer.
Please contact an account representative if you would like
to apply for a PIN.
Retirement Plan Accounts
Call us for information about how we can assist you with your defined
contribution plan, including 401(k) plans. You can reach us toll free at
800-322-1130.
By Mail
If you prefer to contact us by mail, please address all correspondence to:
P.O. Box 804058, Chicago, IL 60680.
In Person
If you are in the Chicago area, please visit our Investor Center located in
downtown Chicago at One South Wacker Drive, 32nd Floor. Our account
representatives can answer questions about your current Fund investments or
provide you information about any of the SteinRoe Funds and retirement plans.
Stop by weekdays between 8 a.m. and 5:15 p.m.
This report must be preceded or accompanied by a prospectus.
<PAGE>
SteinRoe Investment Trust
Trustees
Timothy K. Armour
President, Mutual Fund Division and Director, Stein Roe & Farnham Incorporated
Kenneth L. Block
Chairman Emeritus, A.T. Kearney, Inc.
William W. Boyd
Chairman and Director, Sterling Plumbing Group Inc.
Lindsay Cook
Senior Vice President, Liberty Financial Companies, Inc.
Francis W. Morley
Chairman, Employer Plan Administrators and Consultants Co.
Charles R. Nelson
Van Voorhis Professor of Political Economy, University of Washington
Gordon R. Worley
Private Investor
Agents and Advisers
Stein Roe & Farnham Incorporated
Investment Adviser
State Street Bank and Trust Company
Custodian
SteinRoe Services, Inc.
Transfer Agent
Bell, Boyd & Lloyd
Legal Counsel to the Trust
Arthur Andersen LLP
Independent Public Accountants
<PAGE>
SteinRoe Investment Trust
Officers
Timothy K. Armour, President
Jilaine H. Bauer, Executive Vice President, Secretary
N. Bruce Callow, Executive Vice President
Hans P. Ziegler, Executive Vice President
Gary A. Anetsberger, Senior Vice President, Chief Financial Officer
Bruno Bertocci, Vice President
David P. Brady, Vice President
Thomas W. Butch, Vice President
Daniel K. Cantor, Vice President
Robert A. Christensen, Vice President
E. Bruce Dunn, Vice President
Erik P. Gustafson, Vice President
David P. Harris, Vice President
Philip D. Hausken, Vice President
Harvey B. Hirschhorn, Vice President
Stephen P. Lautz, Vice President
Eric S. Maddix, Vice President
Lynn C. Maddox, Vice President
Anne E. Marcel, Vice President
Nicolette D. Parrish, Vice President, Assistant Secretary
Richard B. Peterson, Vice President
Gloria J. Santella, Vice President
Thomas P. Sorbo, Vice President
Sharon R. Robertson, Controller
Margaret O. Zwick, Treasurer
Janet B. Rysz, Assistant Secretary
<PAGE>
The SteinRoe Funds
SteinRoe Government Reserves Fund
SteinRoe Cash Reserves Fund
SteinRoe Limited Maturity Income Fund
SteinRoe Government Income Fund
SteinRoe Intermediate Bond Fund
SteinRoe Income Fund
SteinRoe Municipal Money Market Fund
SteinRoe Intermediate Municipals Fund
SteinRoe Managed Municipals Fund
SteinRoe High-Yield Municipals Fund
SteinRoe Total Return Fund
SteinRoe Prime Equities
SteinRoe Young Investor Fund
SteinRoe Growth Stock Fund
SteinRoe Capital Opportunities Fund
SteinRoe Special Fund
SteinRoe Special Venture Fund
SteinRoe International Fund
P.O. Box 804058
Chicago, Illinois 60680
800 338-2550
In Chicago, visit our Investor Center
at One South Wacker Drive
Liberty Securities Corporation, Distributor
Member, SIPC
11/95
08014-Y11A
