SteinRoe
Equity
Funds
Semiannual Report
March 31, 1995
Photo: of little girl
Growth & Income Funds
Total Return Fund
Prime Equities
Growth Funds
Growth Stock Fund
Special Fund
Special Venture Fund
Capital Opportunities Fund
International Fund
<PAGE>
Contents
From the President 1
Tim Armour's thoughts on the markets and investing
Performance 2-5
How the SteinRoe Equity Funds have done over time
Q&A 6-26
Interviews with the portfolio managers and
a summary of major shifts in the Funds' investments
over the past six months
Investments 27-47
A complete list of each Fund's investments with
market values
Financial Statements 48-55
Statements of assets and liabilities, operations, and
changes in net assets, as well as financial highlights
Notes 56-59
Notes to the financial statements
Financial Highlights 60-71
Selected per-share data
General Information 72-77
A guide to products and services
<PAGE>
From the President
To Our Shareholders
We are pleased to present this semiannual report for SteinRoe's Growth and
Income Funds -- Prime Equities and Total Return Fund -- and SteinRoe's Growth
Funds -- Growth Stock Fund, Special Fund, Special Venture Fund, Capital
Opportunities Fund and International Fund.
We never forget our relationship with you is built both on investment
management capabilities and performance and on service and communication.
That's why we have redesigned our semiannual report to make it simpler for you
to evaluate your Fund's performance. We hope you find it easier to read and
understand.
The Market
Despite the recent stock market rallies, many investors remain cautious. Are
we headed for a recession? Will the current weakness of the dollar lead to
additional rate hikes? These lingering fears are certainly understandable, yet
we believe the unsettling period that began more than a year ago when the
Federal Reserve Board first raised interest rates has run its course. In fact,
if the Fed can slow economic growth from last year's torrid pace to a more
stable rate of growth, many stocks should do reasonably well, particularly
those that can thrive in an economic climate of 1 to 2 percent growth.
Based on our current outlook, we expect to see economic growth slow to about 2
percent by the end of the year. This level would be sufficient to tame
inflation without sparking a recession -- a so-called "soft landing."
Recent economic data tend to confirm our view: auto makers and steel producers
are cutting back on production and cyclical stocks, which tend to underperform
in a downshifting economy, have fallen out of favor with investors only to be
replaced by traditional growth stocks that produce steady, reliable earnings
- -- even in periods of slower economic growth.
The Basics
Although no one can predict what might happen to the markets in the future, we
believe investors must understand the factors that move the markets, not only
to profit from them but to gain the patience to ride out short-term volatility
in their investments. As always, no matter what direction you think the
economy is heading, it is important to remember the basics. Think long term
and re-evaluate your investment portfolio from time to time to make sure it
continues to match your goals, risk tolerance and time horizon. And try to
follow a regular investment plan. By investing a certain amount of money each
month or quarter, you can take advantage of dollar cost averaging. Of course,
not everyone is in a position to follow a regular investment plan. And it
neither ensures a profit nor protects against a loss in a declining market.
This simple strategy, however, can help you turn market volatility to your
advantage.
Please call us at 1 800 338-2550 with your comments and suggestions. As
always, we look forward to serving your investment needs.
Sincerely,
Timothy K. Armour
President
March 31, 1995
Photo: of Tim Armour
<PAGE>
Fund Performance
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each performance
figure includes changes in a fund's share price, plus reinvestment of any
dividends (net investment income) and capital gains (the profits the fund
earns when it sells stocks that have grown in value).
<TABLE>
Average Annual Total Returns
Periods ended March 31, 1995
<CAPTION>
Past 1 Past 3 Past 5 Past 10
Year Years Years Years
<S> <C> <C> <C> <C>
Growth Stock Fund 9.53% 6.27% 11.60% 12.65%
Special Fund 8.23% 10.95% 11.72% 15.16%
Capital Opportunities Fund 14.27% 14.13% 11.10% 12.25%
Total Return Fund 4.26% 7.50% 9.99% 11.02%
S&P 500 15.54% 10.54% 11.39% 14.42%
<CAPTION>
Past 1 From
Year Inception*
<S> <C> <C>
International Fund -2.31% -4.32%
EAFE 6.08% 1.39%
<CAPTION>
From Inception*
<S> <C>
Special Venture Fund 8.05%
S&P 500 7.29%
<CAPTION>
Past 1 Past 3 Past 5 From
Year Years Years Inception*
<S> <C> <C> <C> <C>
Prime Equities 7.99% 9.56% 11.70% 9.53%
S&P 500 15.54% 10.54% 11.39% 10.44%
<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.
*Prime Equities--from 4/1/87 to 3/31/95. Special Venture Fund--from 10/17/94
to 3/31/95. International Fund--from 3/1/94 to 3/31/95.
</TABLE>
<PAGE>
Investment Comparison
Comparison of change in value of $10,000 investment for the years ended
September 30.
<TABLE>
Special, Growth Stock, Capital Opportunities and Total Return
This graph compares the performance of SteinRoe's Funds to the S&P 500 index,
an unmanaged group of stocks that differs from the composition of each
SteinRoe Fund.
<CAPTION>
Capital Total Growth
Year Opportunities Fund Return Fund Stock Fund S&P 500 Special Fund
<S> <C> <C> <C> <C> <C>
9/30/85 10000 10000 10000 10000 10000
9/30/86 13133 12567 12755 13165 12543
9/30/87 19830 14903 19263 18873 17335
9/30/88 15212 14027 14312 16528 16455
9/30/89 20790 16940 19158 21967 23038
9/30/90 12992 15778 18360 19942 21015
9/30/91 19945 20460 25087 26135 27777
9/30/92 21140 22738 28694 29009 30266
9/30/93 28329 26050 30155 32757 38544
9/30/94 28938 26144 30788 33959 39323
3/31/95 32142 26693 32863 37528 40479
Prime Equities
This graph compares the performance of Prime Equities to the S&P 500 index, an
unmanaged group of stocks that differs from the composition of Prime Equities.
<CAPTION>
DATE Prime Equities S&P 500
<S> <C> <C>
3/31/87 10000 10000
9/30/87 10746 11193
9/30/88 9252 9802
9/30/89 12085 13028
9/30/90 11450 11827
9/30/91 14212 15500
9/30/92 16202 17204
9/30/93 19115 19425
9/30/94 19885 20138
3/31/95 20708 22255
</TABLE>
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.
<PAGE>
Investment Comparison Continued
Comparison of change in value of $10,000 investment for the years ended
September 30.
Special Venture
This graph compares the performance of Special Venture to the S&P 500 index,
an unmanaged group of stocks that differs from the composition of Special
Venture.
<TABLE>
<CAPTION>
DATE Special Venture S&P 500
<S> <C> <C>
10/31/94 10000 10000
11/30/94 9902 9636
12/31/94 10244 9779
1/31/95 10175 10032
2/28/95 10539 10422
3/31/95 10805 10729
International
This graph compares the performance of International to the Morgan Stanley
EAFE Index, which is an unmanaged group of stocks whose composition is
different from International. The index refers to Europe, Australia and the
Far East and includes 18 country sub-indexes.
<CAPTION>
Date International S&P 500
<S> <C> <C>
2/28/94 10000 10000
3/31/94 9760 10000
6/30/94 9990 10511
9/30/94 10610 10522
12/31/94 10096 10415
3/31/95 9534 10609
</TABLE>
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.
<PAGE>
Investment Comparison Continued
Making the Most of Performance
The wide assortment of performance data available today can be a mixed
blessing. On one hand, a fund's performance results can be a valuable source
of information when considering an investment. On the other hand, even
seasoned investors may find the wide array of data and the different methods
of interpretation confusing.
That's why one of the most important pieces of advice we can give you is to
remember that a fund's past performance is just that -- past. While a fund's
past performance is not a guarantee of how it will perform in the future, it
can help you make rational decisions about the funds you currently hold or
about funds you might be considering. Many equity funds, for example, have a
history of growth over the long term, but will nonetheless experience
occasional downturns in the short term. The price and total return of a fund
that invests in stocks will change daily and if you sell your shares during a
downturn in the market, you might lose money. But, if you can ride out the
market's ups and downs, your fund might achieve a gain.
When your fund experiences a temporary downturn, it's important to remember
why you chose that fund in the first place. If your fund has an investment
strategy in which you believe and which is properly matched to your financial
goals, there is probably no reason to change course. It can be shortsighted to
sell an investment at its lowest point. In fact, that may be the time when you
should be investing more, to take advantage of a potential upturn.
No one can make your financial decisions better than you. We hope this
semiannual report helps you to better understand and evaluate your fund's
performance, and serves as a helpful aid in making intelligent, appropriate
investment decisions. If you have any questions, please call a SteinRoe
account representative at 1 800 338-2550.
<PAGE>
Q&A
An Interview with Total Return Fund's Portfolio Managers
Fund Data
Investment Objective:
Seeks current income and capital appreciation to achieve maximum total return,
consistent with reasonable investment risk, by investing in a combination of
equity, convertible and fixed income securities.
Fund Inception:
August 25, 1949
Total Net Assets:
$218,824,322.72
Photo: of Lynn C. Maddox
Photo: of Robert A. Christensen
Lynn Maddox, who joined the Fund's management team in March, is a senior vice
president and a 24-year veteran of the Fund's Adviser, Stein Roe & Farnham. In
addition to co-managing the Fund, he is a portfolio manager with the firm's
Investment Counsel division.
Q: How did the Fund perform?
A: Total Return Fund posted a gain of 2.1 percent for the six-month period
ended March 31, 1995, versus a 9.7 percent gain for the S&P 500.(1) The
principal reason the Fund underperformed the S&P 500 was its consciously
strong defensive position, reflected in its major weighting of
interest-sensitive stocks, which lagged the performance of the S&P 500. Fixed
income securities and cash, which made up approximately 20 percent of the
portfolio, produced returns considerably below the S&P 500. Convertible
securities, which comprised about 40 percent of the portfolio, also
underperformed, as did traditional defensive industry groups such as banks,
telephone companies, utilities, and real estate investment trusts (REITs).
Adding to the Fund's underperformance was its underweighting of the industry
groups that did especially well, such as technology, airline, and hotel
stocks. Few of these stocks fit our profile of above-average income and low
volatility.
Q: What investment approach do you use to pursue the Fund's goals?
A: An extremely conservative one. Theoretically, the investment objectives of
growth and income are exclusive, so our solution is to focus on income while
not precluding growth considerations. We really employ two different
strategies that are consistent with reasonable investment risk: one to
maximize the fixed income portion of the portfolio, and the other to maximize
the equity portion. It is important that both portions of the portfolio
receive attention to maximize the investor's total return. By investing in a
mix of equity and fixed income securities, investors can participate in the
long-term growth potential of stocks with the lower price volatility of bonds
(because historically bonds have had more stable prices than stocks), and they
can receive income from two sources: interest on fixed income securities and
dividend payouts from stocks.
<PAGE>
Q: What do you look for when you're shopping for an investment?
A: We look for stocks that offer growth potential, diversity, and attractive
dividend histories. We want the portfolio to provide a decent level of income
so we invest primarily in stocks that offer yield potential at least equal to
the average yield of the S&P 500. Reasonable investment risk is a major
consideration so we normally try to limit risk exposure by investing in
medium- or higher-quality bonds.
Q: Did you make any major purchases or sales for the Fund?
A: We added several holdings -- all of which have been defensive in nature. We
purchased issues that we believe can help the Fund achieve above-average
return potential through dividend and interest payments. We recently purchased
two issues that have very attractive current yields: a Federated Department
Store convertible debenture with a 9.9 percent current yield and a Fremont
General (insurance) convertible with an annual 10 percent yield-to-put in 3
years. We also purchased a Rouse Company (shopping center developer and
manager) convertible having a 6.5 percent current yield. These issues -- in
fact, the entire portfolio -- should do very well in a flat or declining stock
market.
We eliminated several positions, including Piedmont Natural Gas, Texas
Utilities, Kaufman & Broad, Grand Metropolitan, Freeport McMoran, Chiquita
Brands and Consolidated Natural Gas.
Q: What are your expectations for the Fund?
A: We do not plan on making any significant changes in the near term. We have
modest expectations for the stock market for the remainder of the year, so we
plan on maintaining our defensive posture. In fact, given the level of the
current market, and high valuations by several measures, we would not be
surprised by a market decline. If our economic forecast is right, then the
portfolio's defensive nature will be justified.
(1) Total return performance includes changes in share price and reinvestment
of income and capital gains distributions. Past performance is no guarantee of
future results. Share price and investment return will vary, so you may have a
gain or a loss when you sell shares. 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. Portfolio holdings are as of March 31,
1995.
<PAGE>
Fund Highlights
Top Ten Holdings (% of Total Net Assets)
Total Return Fund as of 3/31/95
James River Pref. 2.0% Gen'l Motors Cv. Pref. 1.7%
General Electric Company 1.9 Emerson Electric Co. 1.7
United Dominion Realty 1.9 Abbott Laboratories 1.7
LM Ericsson Telecom. Pref. 1.9 Integrated Health Serv. Cv. Deb. 1.7
Bristol-Meyers Squibb Co. 1.8 Enron Corp. 1.7
-----
Total 18.0%
<TABLE>
Economic Sector Breakdown
<CAPTION>
Portfolio Portfolio S&P 500
3/31/95 9/30/94 3/31/95
<S> <C> <C> <C>
Cyclicals 10% 11% 16%
Distribution 6 4 7
Energy 9 12 11
Health Care 12 8 9
Interest Sensitive 25 29 25
Stable Growth 22 25 20
Technology 6 5 10
Miscellaneous 10 6 2
Total 100% 100% 100%
</TABLE>
Pie charts showing:
Asset Allocation
As of September 30, 1994 As of March 31, 1995
Stocks: $101.1 (44.1%) Stocks: $87 (39.8%)
Cash: $10.8 (4.7%) Cash: $14.8 (6.8%)
Bonds: $24.5 (10.7%) Bonds: $25.1 (11.4%)
Convertibles: $92.8 (40.5%) Convertibles: $92 (42%)
<PAGE>
Q&A
An Interview with Prime Equities' Portfolio Managers
Fund Data
Investment Objective:
Seeks capital growth by investing primarily in common stocks, convertible
securities and other equity-type investments issued by well-established
companies. In an effort to limit volatility, 65 percent of the Fund's total
assets are normally invested in equity securities of companies with market
capitalizations greater than $1 billion. The Fund is designed to provide more
dividend income to shareholders than a portfolio focused exclusively on
growth.
Fund Inception:
March 24, 1987
Total Net Assets:
$124,429,909.51
Photo: of Robert A. Christensen
Photo: of Daniel K. Cantor
Dan Cantor joined the Fund's management team in early March. Dan, a senior
vice president of the Fund's Adviser, Stein Roe & Farnham, joined the firm in
1985. Prior to being named co-manager of Prime Equities, he served as a senior
equity analyst and co-manager of the Young Investor Fund.
Q: How did the Fund perform?
A: Not as well as we would have liked. The Fund underperformed the S&P 500 for
the six-month period ended March 31, 1995, increasing only 4.1 percent, versus
a 9.7 percent increase for the S&P 500.(1) The Fund was postured defensively,
with a large cash position and a sizable stake in energy issues and real
estate investment trust offerings (REITs). Although we were gradually reducing
the Fund's defensive posture, the renewed strength of the stock market left
the Fund sharply lagging the S&P. The Fund also had a meaningful exposure to
small- and medium-capitalization companies and international stocks, all of
which trailed the performance of larger-capitalization U.S. companies.
<PAGE>
Q: Have you made any changes to the Fund's investment strategy?
A: We made a number of significant changes to the portfolio -- all of which
have been consistent with the Fund's investment objective of seeking capital
appreciation by investing primarily in large, well-established companies. In
particular, we now have more of a bias toward larger-capitalization U.S.
growth companies that have attractive dividend potential. We're looking to
invest primarily in strong or improving companies whose stock prices, in our
judgment, do not reflect the companies' fundamental prospects. When we select
a security for the portfolio, we continue to use what is known as a
"bottom-up" investment approach. That means we look for companies that we
believe will provide superior investment performance, regardless of whether
their respective industry or the economy is performing well. We focus on a
company's financial characteristics, including its investment opportunities,
its margin structure, and its ability to generate excess cash. We also pay
particular attention to the people running a company. We try to visit with the
managements of each company in which we invest to better understand their
business strategies and potential for success. We do not try to time the
market or predict the latest market trend or fad.
Q: In keeping with the Fund's investment approach, did you sell any of the
Fund's holdings?
A: We sold a number of holdings that were no longer consistent with our
investment strategy. Some of the positions we eliminated included American
Classic Voyages, American Medical Response, Banco Latino Americano, Fossil,
Harvey Comics, Perceptron, Petroleum Geoservices, and Triton Energy. Further,
we closed the hedge (short position) on the market and established a long S&P
futures position reflecting a temporary increase in the Fund's cash position.
Additionally, in keeping with our desire to own a more manageable number of
stocks, we plan on further reducing the number of holdings in the Fund's
portfolio. We believe that will enable us to better leverage our ideas while
still maintaining the Fund's diversity.
Q: Did you buy any new issues?
A: We established initial stakes in Fannie Mae, Georgia Pacific and Procter &
Gamble. We also added modestly to selected existing holdings, such as
Albertson's, Electronic Data Systems, and Emerson Electric. These companies
have leading positions in their respective industries and improving growth
prospects, and each was purchased at a price that suggests an excellent
risk/reward trade-off.
Q: What is your six-month outlook?
A: We're optimistic that the changes we are making to the portfolio will allow
the Fund to better participate in market rallies. In addition, our emphasis on
containing risk at the stock selection level should help to cushion the
downside during inevitable market corrections.
(1) Total return performance includes changes in share price and reinvestment
of income and capital gains distributions. Past performance is no guarantee of
future results. Share price and investment return will vary, so you may have a
gain or a loss when you sell shares. 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. Portfolio holdings are as of March 31,
1995.
<PAGE>
Fund Highlights
Top Ten Holdings (% of Total Net Assets)
Prime Equities as of 3/31/95
First Financial Mgmt. Corp. 2.7% General Motors, Class E 2.3%
General Electric Company 2.5 Alco Standard Corp. 2.3
Enron Corp. 2.5 Microsoft Corporation 2.2
Emerson Electric Co. 2.4 Abbott Laboratories 2.1
Roche Holding Ltd. 2.3 The Procter & Gamble Co. 2.1
-----
Total 23.4%
<TABLE>
Economic Sector Breakdown
<CAPTION>
Portfolio Portfolio S&P 500
3/31/95 9/30/94 3/31/95
<S> <C> <C> <C>
Cyclicals 10% 12% 16%
Distribution 9 9 7
Energy 10 10 11
Health Care 6 8 9
Interest Sensitive 18 24 25
Stable Growth 35 22 20
Technology 6 10 10
Miscellaneous 6 5 2
Total 100% 100% 100%
</TABLE>
Pie charts showing:
Asset Allocation
As of September 30, 1994 As of March 31, 1995
Equities $120.0 (92.5%) Equities: $98.6 (79.3%)
Cash: $8.7 (6.7%) Cash: $19.8 (15.9%)
Bonds: $1.0 (0.8%) Bonds: $6.0 (4.8%)
<PAGE>
Q&A
An Interview with Growth Stock Fund's Portfolio Managers
Fund Data
Investment Objective:
Seeks long-term capital appreciation by investing, under normal conditions, at
least 65 percent of its total assets in common stocks and other equity-type
securities that are believed to have long-term appreciation possibilities.
Fund Inception:
July 1, 1958
Total Net Assets:
$317,877,439.53
Photo: of Erik P. Gustafson
Photo: of Harvey B. Hirschhorn
Harvey Hirschhorn joined the Fund's management team in March. Harvey, a
22-year veteran and an executive vice president of the Fund's Adviser, Stein
Roe & Farnham, is the firm's chief economist and investment strategist.
Q: How has the Fund performed?
A: During the six-month period ended March 31, 1995, Growth Stock Fund posted
a gain of 6.7 percent, versus a gain of 9.7 percent for the S&P 500.(1) The
primary reason Growth Stock Fund's performance lagged the S&P was the
continued strength of the S&P's cyclical sectors relative to growth stocks.
While growth stocks have participated in the market's first quarter rally, the
strength of so many of the stocks in the S&P's cyclical sector has made the
index difficult to beat.
Q: Have you made any changes to the Fund's sector weightings or its investment
strategy?
A: The Fund has not made any significant changes in its economic sector
weightings during the past six months. We have added several new positions
over the past six months, including Loewen Group, which owns and operates
funeral homes and cemeteries; Thermoelectron, a broadly diversified company in
the environmental and medical industries; Hercules, a diversified specialty
chemical maker; and Travelers, a financial services company. These additions
are not concentrated in any one sector and our investment strategy remains the
same -- the Fund continues to be fully invested in what we believe are the 50
best high-quality, large-capitalization growth stocks that meet our specific
qualitative and quantitative criteria.
Q: What are some of the investment themes you've been focusing on lately?
A: We are focusing on three
main investment themes: U.S. multinational companies, technology/information
companies, and classic consumer growth companies that have a dominant domestic
market and are in positions to benefit from a strong presence overseas. For
example, the Fund invests in Coca-Cola and Gillette, each of which generates
roughly 70 percent of its revenues overseas. These kinds of companies are well
positioned to benefit from growing overseas markets, as well as the recent
weakness of the U.S. dollar. We have been focusing on information technology
companies, such as Microsoft, Motorola, and CISCO Systems, which we believe
possess some of the best growth opportunities in the 90s. And finally,
we are invested in high-quality consumer stocks, including Disney, Abbott
Labs, and Johnson & Johnson.
<PAGE>
Q: What's your outlook for the Fund?
A: In the coming months, we plan to increase the portfolio's exposure to
sectors that we believe will benefit from an economic slowdown. For example,
because we believe interest rates will begin to decline later in the year, we
are starting to increase the Fund's holdings in interest rate sensitive
companies, such as those within the financial services sector.
For the past two years, the market has been dominated by cyclical stocks --
economically sensitive companies such as auto makers, paper companies and
metal producers, which typically perform well as the economy expands. However,
with economic growth expected to slow for the remainder of 1995, we believe
the market is once again poised to favor growth stocks. In a downshifting
economy, many investors tend to move away from cyclical stocks anticipating
that the slowing economy will hurt cyclical companies' earnings and they begin
to return to the classic growth companies that show increasing earnings
regardless of the economic cycle. In fact, as evidence of an economic slowdown
mounts, we are starting to see investment dollars begin to flow into growth
stocks. Moreover, growth stocks are selling at very attractive prices compared
with cyclical stocks. As we see it, the current overall economic conditions --
a slowing economy and decreasing pressure on interest rates -- are custom-made
for the potential success of both growth stocks and the Growth Stock Fund.
(1) Total return performance includes changes in share price and reinvestment
of income and capital gains distributions. Past performance is no guarantee of
future results. Share price and investment return will vary, so you may have a
gain or a loss when you sell shares. 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. Portfolio holdings are as of March 31,
1995.
<PAGE>
Fund Highlights
Top Ten Holdings (% of Total Net Assets)
Growth Stock Fund as of 3/31/95
The Home Depot, Inc. 4.6% The Procter & Gamble Co. 3.1%
The Gillette Company 4.5 Motorola, Inc. 2.9
Microsoft Corporation 3.9 AT&T Company 2.9
General Electric Company 3.8 GEICO Corporation 2.8
First Financial Mgmt. Corp. 3.2 Medtronic Incorporated 2.8
-----
Total 34.5%
<TABLE>
Economic Sector Breakdown
<CAPTION>
Portfolio Portfolio S&P 500
3/31/95 9/30/94 3/31/95
<S> <C> <C> <C>
Cyclicals 9% 9% 16%
Distribution 16 14 7
Energy 1 0 11
Health Care 10 8 9
Interest Sensitive 18 25 25
Stable Growth 26 24 20
Technology 17 14 10
Miscellaneous 3 6 2
Total 100% 100% 100%
</TABLE>
Pie charts showing:
Asset Allocation
As of September 30, 1994 As of March 31, 1995
Stocks: $296.7 (92.3%) Stocks: $304.2 (95.7%)
Cash & Equivalents: $24.7 (7.7%) Cash & Equivalents: $13.7 (4.3%)
<PAGE>
Q&A
An Interview with Special Fund's and Special Venture Fund's Portfolio Managers
Special Fund Data
Investment Objective:
Seeks to achieve capital appreciation by investing primarily in equity
securities that are considered to have limited downside risk relative to their
potential for above-average growth, including securities of under-valued,
under-followed or out-of-favor companies.
Fund Inception:
May 22, 1968
Total Net Assets:
$1,193,305,765.28
Photo: of E. Bruce Dunn
Photo: of Richard B. Peterson
Q: How does Special Fund's investment process differ from other growth equity
funds?
A: Special Fund is a company fund. That means we don't try to make bets on
sectors or industries. Our primary focus is to invest in companies with
entrepreneurial managements that have demonstrated records of success in
wealth building. We maintain a longer-term investment horizon, three years or
more, and concentrate on building relationships with the senior management
teams of the companies in which we invest. As of March 31, the Fund has
invested about 80 percent of equities in small- and mid-cap companies (under
$3 billion in market value) and 20 percent in larger-cap stocks.
Q: How did Special Fund perform over the past six months?
A: Not as well as we would have liked -- for the six-month period ended March
31, 1995, Special Fund posted a gain of 2.9 percent, versus a 9.7 percent gain
for the S&P 500.(1)
<PAGE>
Q: What are some of the factors that contributed to its underperformance?
A: The Fund's underperformance can be attributed to these main factors: the
market weakness of some of the smaller-cap issues in the Fund, the poor
performance of non-U.S. stocks, larger Fund holdings that were weak, and the
Fund's lower weighting in the technology sector.
Some of the smaller-cap issues in the Fund's portfolio did not benefit from
the stock market rally to the same extent that many of the large-cap issues in
the S&P 500 did. While the Fund owns companies of all sizes, its median
company market value as of March 31, 1995, was less than $1 billion;
therefore, it may be of some interest to measure the Fund against smaller-cap
indices. Returns on the Russell 2000 and S&P Mid-Cap, which measure small- and
mid-cap performance, were well below the returns for the S&P 500, which has a
large-cap median, as they posted gains for the six-month period of only 2.7
percent and 5.3 percent, respectively.(2)
Returns on non-U.S. stocks were negative for the past six months --in
particular, the Latin American and Far East markets were extremely weak during
the period. The Fund's total non-U.S. exposure was about 11 percent of
equities.
Among the Fund's larger long-term investments, Olsten, Harley Davidson and
Superior Industries had negative six-month returns for the period ended March
31, 1995. These companies' fundamentals remain unchanged; therefore, we
believe their valuations are now quite attractive.
Finally, we have a lesser weighting in technology relative to the market with
a 2 percent position, versus a 10 percent position for the S&P 500. Because of
this underweighting, we did not participate in the recent rally by technology
stocks.
Q: Do you anticipate any near-term changes that might bring investors'
interest back to small- and mid-cap or non-U.S. stocks?
A: Several years ago, many consultants were encouraging new or larger
allocations to small company or international stocks -- particularly in
emerging markets. New or outside demand was more than these markets could
easily accommodate, even with new underwritings and privatizations increasing
supply. After experiencing a sharp rise in stock prices in 1993, 1994 saw the
beginning of a market correction in the small-cap and international markets.
We believe company fundamentals are less changed than market sentiment. We
don't know exactly when investor interest will return to these areas, but we
believe they offer attractive opportunities for longer-term investors.
Q: Have any of the Fund's holdings made significant contributions over the
past six months?
A: We've seen some of the Fund's larger holdings perform well over the past
six months. The Fund's largest holding, Boston Scientific, which manufactures
less-invasive medical equipment and recently acquired a competitor in its
angioplasty business, has done extremely well -- its stock was up 56 percent
over the past six months. Other holdings that performed well for the six-month
period include these longer-term holdings: Allstate (property and casualty
insurer), Interpublic (worldwide advertising agency), Stryker (medical
devices), Revco (drug retailer), Alco Standard (office copiers and supplies),
and Interim Services (temporary help).
<PAGE>
Q: Although the Fund invests in individual companies, is it more heavily
weighted in any particular sectors or industries?
A: Special Fund maintains a diversified portfolio. Our largest industry
exposure was 10.5 percent in Business Services, followed by a 9.3 percent
exposure in Retail.
Q: Where are you finding attractive companies to own?
A: Powerful customer demands are currently driving many industries toward
consolidation and low-cost distribution. For this reason, Special Fund has
made important commitments to consolidators that we believe are well managed,
including Alco Standard, Interim Services, Invacare and Sunrise Medical. We
also like low-cost distributors, including LDDS Communications, Office Max,
20th Century Industries and Revco. We believe these strong, aggressive
managements have unusually favorable opportunities.
Q: Are there any current strategies you are focusing on for the Fund?
A: During the past six months, we continued to gradually increase the
concentration in our major holdings. The top ten holdings currently represent
27 percent of equities, versus 24 percent six months ago. Our current top ten
holdings have shown above-average appreciation over the past six months. Our
goal is to increase the concentration of the Fund's top ten holdings to 30 to
40 percent of total equities; therefore, if an investment works out, the stock
becomes a meaningful holding for our shareholders.
Q&A
Special Venture Fund Q&A
Special Venture Fund Data
Investment Objective:
Seeks to achieve long-term capital appreciation by investing primarily in
entrepreneurially managed companies. The Fund emphasizes investments in
financially strong small and medium-sized companies based principally on
management appraisal and stock valuation.
Fund Inception:
October 17, 1994
Total Net Assets:
$34,512,469.23
Q: Are there any differences in the investment process between Special Venture
and Special Fund?
A: The process is really the same -- the difference is that Special Venture
offers shareholders participation in stocks that may be too small for Special
Fund. Special Venture focuses on small and medium-sized companies with market
values of less than $1 billion and between $1 and $3 billion, respectively.
The portfolio will probably have a median capitalization in the $300 to $500
million range. Special Venture currently has fewer holdings, about half the
number of Special Fund.
Special Venture takes a longer-term perspective -- three to five years or more
- -- when looking at an investment. This tends to be the time frame in which a
company's management plans its business strategies. In addition, Special
Venture will have exposure to larger growth opportunities coming from the
smaller nature of its companies. There tend to be more risks involved in
investing in smaller companies; therefore, the Fund's investors should be able
to tolerate greater investment risks and price volatility.
Both Funds, however, look for companies with entrepreneurial managements that
have a demonstrated ability to create wealth for the company's investors. In
particular, we look for management teams that have sound long-term business
strategies and the financial strength to implement them. In sum, investors
should feel they can own both Funds since there are material differences
between them.
<PAGE>
Q: How has the Fund performed since it was launched in October of 1994?
A: From its inception on October 17, 1994, through March 31, 1995, Special
Venture posted a 10.6 percent return, versus an 8.05 percent gain for the S&P
500.(1) It may also be of interest to measure the Fund against the Russell
2000 Index, which tracks small-cap performance and posted a 3.1 percent return
for the six-month period.(2) We believe it is not meaningful to look at the
Fund's performance on a short-term basis -- in part because of the newness of
the Fund, but more specifically because of the longer-term investment time
horizon we take when making investments.
Q: How does your investment process differ from other funds that invest in
small and medium-sized companies?
A: A common misperception is that Special Venture is an emerging growth fund
and that's just not the case. In fact, some of our investments are in what
might be considered mundane businesses that are neither new nor emerging.
Many of these companies have a longer operating history and can take
advantage of opportunities because of their skillful management or unique
competitive advantages.
(1) Total return performance includes changes in share price and reinvestment
of income and capital gains distributions. Past performance is no guarantee of
future results. Share price and investment return will vary, so you may have a
gain or a loss when you sell shares. 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.
Portfolio holdings are as of March 31, 1995.
(2) The Russell 2000 and the S&P Mid-Cap are indices that represent an
unmanaged group of stocks that differ from the composition of each SteinRoe
Fund; they are not available for direct investment.
<PAGE>
Fund Highlights
Top Ten Holdings (% of Total Net Assets)
Special Fund as of 3/31/95
Boston Scientific Corp. 4.0% Unifi Inc. 2.5%
The Olsten Corporation 3.3 The Allstate Corporation 2.4
Revco D.S., Inc. 3.1 Harley-Davidson Inc. 2.3
Superior Industries Int'l 2.9 Alco Standard Corp. 2.2
The Interpublic Group 2.5 Burlington Resources Inc. 2.1
-----
Total 27.3%
<TABLE>
Economic Sector Breakdown
<CAPTION>
Portfolio Portfolio S&P 500
3/31/95 9/30/94 3/31/95
<S> <C> <C> <C>
Cyclicals 19% 18% 16%
Distribution 10 8 7
Energy 8 7 11
Health Care 9 6 9
Interest Sensitive 24 20 25
Stable Growth 23 28 20
Technology 2 3 10
Miscellaneous 5 10 2
Total 100% 100% 100%
</TABLE>
Pie charts showing:
Asset Allocation
As of September 30, 1994 As of March 31, 1995
Equities: $1,125.7 (90.5%) Equities: $1,126.5 (94.4%)
Cash: $115.7 (9.3%) Cash: $56.1 (4.7%)
Convertibles: $2.5 (0.2%) Short-Term Bonds: $10.7 (0.9%)
<PAGE>
Fund Highlights
Top Ten Holdings (% of Total Net Assets)
Special Venture Fund as of 3/31/95
Patterson Dental 3.7% Interim Services Inc. 3.3%
Boston Scientific Corp. 3.6 G & K Services Inc. 3.3
Superior Industries Int'l 3.4 Invacare Corp. 3.3
OM Group Inc. 3.3 Schulman A Inc. 3.3
Keane 3.3 Corrpro Cos Inc. 2.9
-----
Total 33.4%
<TABLE>
Economic Sector Breakdown
<CAPTION>
Portfolio S&P 500
3/31/95 3/31/95
<S> <C> <C>
Cyclicals 25% 16%
Distribution 16 7
Energy 9 11
Health Care 10 9
Interest Sensitive 9 25
Stable Growth 19 20
Technology 10 10
Miscellaneous 2 2
Total 100% 100%
</TABLE>
Pie charts showing:
Asset Allocation
As of March 31, 1995
Equities: $30.3 (87.8%)
Cash: $4.2 (12.2%)
<PAGE>
Q&A
An Interview with Capital Opportunities Fund's Portfolio Manager
Fund Data
Investment Objective:
Seeks long-term capital appreciation by investing in aggressive growth
companies, such as securities of smaller emerging companies as well as
securities of well-seasoned companies of any size that offer strong earnings
growth potential.
Fund Inception:
March 31, 1969
Total Net Assets:
$197,519,192.84
Photo: of Gloria J. Santella
Q: How did the Fund perform during the past six months?
A: The Fund performed extremely well. We topped the S&P 500, returning 10.9
percent, versus a gain of 9.7 percent for the S&P.(1) In addition, the Fund
significantly outpaced both the NASDAQ Industrial and the S&P Mid-Cap indices,
which tend to measure small- and mid-cap performance. These indices posted
gains of only 3.1 percent and 5.3 percent, respectively, for the six-month
period ended March 31, 1995.(2) As of March 31, 1995, the Fund's median market
capitalization was $879 million, which is considered in between the small- and
mid-cap range.
Q: To what do you attribute the Fund's strong performance?
A: Although the Fund performed well across all industry sectors, its
relatively high weighting in the technology sector (16 percent of the Fund's
holdings, versus a 10 percent weighting for the S&P 500) helped to boost the
Fund's performance. The Fund's technology holdings, which have contributed
more than half of its net gain over the past six months, reported strong sales
results, exceeded earnings projections, and experienced upward adjustments
in their forecasted earnings. Our outlook for the Fund's technology holdings
remains positive. We believe their recent earnings growth can be sustained as
our companies offer strong products in large and expanding markets. Also of
note was the strong recovery of the Fund's holdings in the financial services
sector during the first quarter of 1995. These holdings, which posted an
average gain of 24 percent, benefited from investors' perceptions that
short-term interest rates were at -- or near -- their peak.
Q: Did you make any changes in your investment strategy?
A: No, the Fund's investment strategy is to build wealth through long-term
investment in high-growth companies. This is frequently at a relatively early
- -- although not speculative -- stage in their growth process. That means we
buy small- and mid-cap companies and grow with them. This strategy targets
superior performance over a full market cycle and does not vary with market
conditions.
<PAGE>
Q: How do you select the stocks you include in the Fund's portfolio?
A: We are an earnings-driven fund, meaning that earnings growth drives the
price of our stocks. We look for companies with high earnings growth, but more
importantly, we look for companies with sustainable earnings growth. We take a
long-term view when we select stocks for the portfolio. In particular, we look
for companies that not only pursue large opportunities, but companies that can
have the potential to benefit from those opportunities over a long period of
time. Once we have identified such a company, we examine its strategy for
growth to make sure it has sufficient resources and infrastructure to grow.
We'll only invest in a company if it meets all of our investment criteria --
that way we can take advantage of a company's full growth potential, while
avoiding companies that may prove to be a disappointment in the long run.
Q: What is your outlook for the Fund and, in particular, aggressive growth
stocks?
A: We remain optimistic about the long-term potential for high-quality,
aggressive growth stocks such as those held in the Fund. Additionally, the
portfolio's current price/earnings-to-growth ratio of 79 percent is
attractive, especially given our confidence in the projections for earnings
growth underlying this valuation.
(1) Total return performance includes changes in share price and reinvestment
of income and capital gains distributions. Past performance is no guarantee of
future results. Share price and investment return will vary, so you may have a
gain or a loss when you sell shares. 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. Portfolio holdings are as of March 31,
1995.
(2) The NASDAQ Industrial and the S&P Mid-Cap are indices that represent an
unmanaged group of stocks that differs from the composition of each SteinRoe
Fund; they are not available for direct investment.
<PAGE>
Fund Highlights
Top Ten Holdings (% of Total Net Assets)
Capital Opportunities Fund as of 3/31/95
Gartner Group Inc. 3.9% LaQuinta Inns, Inc. 2.8%
Green Tree Financial Corp. 3.7 Clear Channel Comm., Inc. 2.7
Tellabs, Inc. 3.5 Value Health, Inc. 2.7
PhyCor, Inc. 3.1 ADC Telecommunications 2.4
Medaphis Corporation 3.0 IDEXX Laboratories, Inc. 2.3
-----
Total 30.1%
<TABLE>
Economic Sector Breakdown
<CAPTION>
Portfolio Portfolio S&P 500
3/31/95 9/30/94 3/31/95
<S> <C> <C> <C>
Cyclicals 14% 15% 16%
Distribution 18 17 7
Energy 0 0 11
Health Care 10 10 9
Interest Sensitive 9 14 25
Stable Growth 30 25 20
Technology 16 15 10
Miscellaneous 3 4 2
Total 100% 100% 100%
</TABLE>
Pie charts showing:
Asset Allocation
As of September 30, 1994 As of March 31, 1995
Stocks: $143.6 (81.7%) Stocks: $155.4 (78.7%)
Cash: $22.3 (12.7%) Cash: $32.2 (16.3%)
Convertibles: $9.8 (5.6%) Convertibles: $9.9 (5.0%)
<PAGE>
Q&A
An Interview with International Fund's Portfolio Manager
Fund Data
Investment Objective:
Seeks long-term growth of capital by investing primarily in a diversified
portfolio of foreign securities. Under normal market conditions, the Fund will
invest at least 65 percent of its total assets in foreign securities of at
last three countries outside of the United States.
Fund Inception:
March 1, 1994
Total Net Assets:
$72,343,872.19
Photo: of Bruno Bertocci
Q: How have the global markets performed over the past six months?
A: The financial markets around the world remained extremely volatile. The
weakness of the U.S. dollar relative to the Japanese yen and the German mark
made many investors fear that there would be a significant slowdown in the
German economy, as well as a renewed recession in Japan. As the European
economic recovery slowed, many European cyclical stocks started to decline
toward the end of the six-month period. The Latin American markets were
turbulent as problems in the Mexican market spilled over into Brazil and
Argentina. And while Japan's domestic economy showed little sign of strength,
its trade surplus was maintained at a high level.
Q: How has the Fund performed?
A: The Fund's return since its inception on March 1, 1994, has been
- -4.7 percent, compared to a 2.4 percent return for the Morgan Stanley Capital
International Europe, Australia and Far East index (MSCI EAFE). During the
six-month period ended March 31, 1995, the Fund's total return declined 10.1
percent, while the MSCI EAFE increased 1.0 percent. (1, 2)
Q: Can you explain why the Fund lagged the MSCI EAFE?
A: The extreme weakness of the U.S. dollar had a negative effect on many of
the Fund's holdings, which are geared to industries and sectors that benefit
from a stronger dollar, causing the Fund to underperform the market for the
past six months.
Although we maintain a relatively low weighting in the Japanese sector, the
stocks we own are primarily dollar-linked exporters, which have declined more
than the market as the yen strengthened. Although we do not predict short-term
currency movements, the current yen/dollar exchange rate of 82 yen to the
dollar is extreme and, in our opinion, not sustainable. We believe, however,
that the export-oriented stocks we own in Japan are among the most
attractively valued in the entire market, and they will eventually rebound as
the exchange rate moves back to equilibrium levels. Additionally, we believe
that, despite fears that the Japanese economy will enter a second recession,
the Bank of Japan will move to boost the economy by increasing liquidity,
which will restore confidence in the consumer-related sectors the Fund owns.
The weakness of the U.S. dollar affected the Fund's European stocks. The Fund
has a large exposure to the export-sensitive sectors in Finland and Germany,
and these stocks declined more than the market as the German mark strengthened
against the dollar.
Although some of our Mexican and Latin American investments continued to
decline after we purchased them, we have seen a significant recovery. Timing a
market bottom is always difficult. On the other hand, it is usually impossible
to establish positions as market conditions recover because prices can rebound
very quickly.
<PAGE>
Q: With continued volatility in overseas markets, what areas look attractive?
A: Despite the recent volatility of worldwide markets, we believe there are
selected areas in Europe selling at extremely low valuations. For example,
Finnish paper producers are at low single-digit price-to-earnings ratios --
despite rapid and continued earnings growth and little planned capacity
additions. European steel companies are also attractive relative to their
counterparts in the United States and elsewhere. And, after a sharp decline,
the Mexican and Latin American equity markets have finally started to recover
and should prove to be very successful on a longer-term perspective.
Q: What are your expectations for the rest of 1995?
A: Although it may take some time for investors to regain their confidence, we
believe there are opportunities for those willing to look further ahead. We
believe equity valuations outside the United States are significantly lower as
these markets have declined while the U.S. market rose. This suggests that
non-U.S. opportunities are now quite attractive, and that the Fund is
well positioned to participate in a rebound in 1995.
(1) Total return performance includes changes in share price and reinvestment
of income and capital gains distributions. Past performance is no guarantee of
future results. Share price and investment return will vary, so you may have a
gain or a loss when you sell shares.
(2) MSCI EAFE (Morgan Stanley Capital International Europe, Australia and Far
East index) is an unmanaged group of stocks that differs from the composition
of the SteinRoe International Fund; it is not available for direct investment.
Portfolio holdings are as of March 31, 1995, and are subject to change.
Foreign investments involve greater risks and potential rewards than U.S.
investments. These risks include political and economic uncertainties of
foreign countries, as well as the risk of currency fluctuations.
<PAGE>
Fund Highlights
Top Ten Holdings (% of Total Net Assets)
International Fund as of 3/31/95
Jardine Matheson Holdings 2.7% Yizheng Chemical Fibre 2.2%
Burns-Philip & Co. 2.7 Telecom Italia 2.2
Promise Co. 2.5 Henkel KGAA 2.1
Astra AB 2.5 Enso Gutzeit 2.0
Lion Nathan Ltd. 2.2 Veba 2.0
-----
Total 23.1%
<TABLE>
Top Ten Industries
<CAPTION>
Portfolio MSCI EAFE
3/31/95 3/31/95
<S> <C> <C>
Telecommunications 7.6% 3.4%
Machinery & Engineering 7.5 2.8
Electrical & Electronics 7.1 3.5
Business & Public Services 7.1 2.2
Food & Household Products 6.7 3.8
Energy Sources 5.7 4.7
Health & Personal Care 5.3 6.0
Forest Products & Paper 5.0 1.4
Financial Services 4.8 2.2
Appliances & Household Durables 4.8 2.2
Other 38.4 67.8
Total 100% 100%
</TABLE>
Pie charts showing:
Asset Allocation
As of September 30, 1994 As of March 31, 1995
Equities: $71.6 (95.7%) Equities: $67.3 (93.1%)
Bonds: $1.6 (2.2%) Bonds: $3.2 (4.4%)
Cash: $1.6 (2.1%) Cash: $1.8 (2.5%)
<PAGE>
<TABLE>
Total Return Fund
Investments as of March 31, 1995
(Dollar Amounts In Thousands)
(Unaudited)
<CAPTION>
Number Market
Equity-Related Securities (81.8%) of Shares Value
<S> <C> <C>
Common Stocks (33.8%)
Banking (3.7%)
Bank America Corporation 71,000 $3,426
Fleet Financial Group 88,000 2,849
JP Morgan & Company, Inc. 30,000 1,830
------
8,105
Conglomerates and Miscellaneous (2.6%)
Borden Chemicals & Plastics 125,000 2,266
Hanson Plc ADRs 180,000 3,397
------
5,663
Distribution (1.1%)
Wal-Mart Stores, Inc. 91,500 2,333
Drugs and Health Products (4.7%)
Abbott Laboratories 104,000 3,705
Bristol-Meyers Squibb Company 62,000 3,906
Glaxo Holding Plc ADRs 120,000 2,745
------
10,356
Electrical Equipment (3.6%)
Emerson Electric Co. 56,000 3,724
General Electrical Company 78,000 4,222
------
7,946
Food, Beverage & Tobacco (1.2%)
General Mills, Inc. 46,000 2,743
Hotels (0.8%)
Manufacturing (1.5%)
Minnesota Mining and Manufacturing Company 56,000 3,255
Natural Gas (1.7%)
Enron Corp. 112,000 3,696
Paper & Forest Products (1.5%)
Plum Creek Timber Company, L.P. 155,000 3,410
Petroleum (3.1%)
Atlantic Richfield Company 125,000 3,125
British Petroleum Company Plc ADRs 42,344 3,552
------
6,677
Real Estate (4.3%)
Kimco Realty Corporation 92,000 3,530
RFS Hotel Investors, Inc. 130,000 1,853
United Dominion Realty Trust Inc. 293,000 4,065
------
9,448
Retail (1.1%)
Penny (J.C.) Company, Inc. 52,000 2,334
Telephone (2.5%)
American Telephone and Telegraph Company 55,000 2,846
GTE Corporation 77,000 2,560
------
5,406
<PAGE>
<CAPTION>
Total Return Fund Continued
Number Market
of Shares Value
<S> <C> <C>
Utilities-Electric (1.2%)
Empressa Nacional de Electricidad,
S.A. de C.V., ADRs 60,000 $ 2,542
-------
Total Common Stocks (Cost $56,807) 76,464
Preferred Stocks (19.3%)
Computer Software (1.1%)
Salomon Inc. (Microsoft Corp. ELKS) $3.994 25,000 2,481
Construction (0.2%)
*UDC Homes, Inc. Cv. 291,470 401
Consumer (2.1%)
James River Corporation of Virginia 187,500 4,500
Food, Beverage & Tobacco (1.2%)
RJR Nabisco Holdings Corp. PERCS 400,000 2,550
Electronics (1.9%)
LM Ericsson $1.578 Cv. 2,000,000 4,062
Extractive Energy (0.7%)
**Gerrity Oil & Gas Corporation $1.500 Cv. 120,000 1,425
Financial (2.5%)
Citicorp $5.375 Cv. 26,000 3,055
GATX Corporation Series A $3.875 Cv. 45,000 2,453
-------
5,508
Gaming (1.0%)
Salomon Inc. (Promus Companies ELKS) $3.017 55,000 2,145
Investments (1.3%)
SunAmerica Inc. PERCS $2.780 Cv. 70,000 2,896
Industrial Products (1.3%)
Corning Inc. $3.000 Cv. 54,000 2,875
Mining (1.3%)
Freeport-McMoran Gold & Copper Inc. $1.750 Cv. 117,000 2,940
Oil & Natural Gas (1.0%)
**Unocal Corporation $3.500 Cv. 43,000 2,268
Real Estate Management (1.4%)
Rouse $3.205 Cv. 60,000 3,060
Services (1.7%)
General Motors Corporation Class E Series C $3.250 Cv. 65,000 3,738
Telephone (0.6%)
Telefonos de Mexico PRIDES 45,000 1,328
-------
Total Preferred Stocks (Cost $39,599) 39,627
<PAGE>
<CAPTION>
Principal
Convertible Subordinated Debentures (28.7%) Amount
<S> <C> <C>
Automotive (0.9%)
Masotech 4.500% 12/15/03 $3,000 2,062
Broadcasting & Publishing (2.5%)
Time Warner Inc.
Zero Coupon (Effective Yield 6.228%) 12/17/12
(Convertible into shares of Hasbro Inc.) 7,500 2,381
8.500% 1/10/15 3,000 2,996
-------
5,377
<CAPTION>
Total Return Fund Continued
Principal Market
Amount Value
<S> <C> <C>
Business Services (2.7%)
**Laidlaw ADT 6.000% 1/15/99 $2,500 $ 2,700
Staples, Inc. 5.000% 11/01/99 2,500 3,325
--------
6,025
Conglomerates and Miscellaneous (1.4%)
Electrical Equipment (1.3%)
Cooper Industries 7.050% 1/01/15 2,905 2,949
Energy (2.3%)
Kelley Oil & Gas Partners Ltd. 8.500% 4/01/00 2,470 2,053
SFP Pipelines Holdings 10.410% 8/15/10 2,500 3,075
--------
5,128
Fabricated Metal Products (1.0%)
TriMas Corporation 5.000% 8/01/03 2,000 2,095
Health Care (5.8%)
Integrated Health Services Inc. 6.000% 1/01/03 3,000 3,705
Nationwide Health Inc. 6.250% 1/01/99 3,500 3,308
Olsten Corporation 4.875% 5/15/03 2,400 2,664
**Roche Holdings Ltd. Zero Coupon
(Effective Yield 4.750%) 9/23/08 5,000 3,075
--------
12,752
<PAGE>
Insurance (1.4%)
Fremont General Zero Coupon (Effective Yield 9.270%) 10/12/13 9,000 2,992
Leisure Products (1.3%)
Roadmaster Industries, Inc. 8.000% 8/15/03 3,000 2,798
Paper (1.3%)
Albany International 5.250% 3/15/02 3,200 2,776
Retail (1.4%)
Federated Department Stores Inc.
Zero Coupon (Effective Yield 9.720%) 2/15/04 3,000 3,004
Services (4.3%)
LTC Properties 8.500% 1/01/11 2,000 1,997
OHM Corporation 8.000% 10/01/06 2,800 2,457
Service Corporation 6.500% 9/01/01 1,500 2,066
Valhi, Inc. Zero Coupon (Effective Yield 8.693%)
(Convertible into shares of Dresser) 8/01/03 9,000 2,959
--------
9,479
Technology (1.3%)
WMX Technologies, Inc. 2.000% 1/24/05 3,452 2,779
Utilities (1.2%)
National Power 6.250% 9/23/08 1,600 2,629
--------
Total Convertible Subordinated Debentures (Cost $58,704) 62,845
Total Equity-Related Securities (Cost $155,110) 178,936
Bonds and Notes (11.4%)
U.S. Government Obligation (1.3%)
U.S. Treasury Note 7.500% 11/15/01 2,750 2,800
U.S. Government Agency Mortgage-Backed Securities (1.8%)
Federal Home Loan Mortgage Corporation Gold Pool
8.000% 11/01/22 1,065 1,055
Federal National Mortgage Association 8.500% 2/01/05 2,500 2,571
<PAGE>
<CAPTION>
Total Return Fund Continued
Principal Market
Amount Value
U.S. Government Agency Mortgage-Backed Securities (continued)
<S> <C> <C>
Federal National Mortgage Association
(Multi-family housing) 9.038% 6/01/97 $ 40 $ 40
Government National Mortgage Association
9.000% 3/15/20 175 181
9.000% 4/15/20 125 130
--------
3,977
Air Transportation (0.6%)
United Airline Series 1991 9.200% 3/22/08 1,422 1,376
Automotive (2.0%)
Ford Motor Corporation
5.750% 5/14/98 3,000 2,859
8.875% 1/15/22 1,500 1,599
--------
4,458
Commercial Bank (0.9%)
Den Danske Bank 6.550% 9/15/03 2,250 2,009
Financial (3.1%)
Alps 94-1 Pass Thru Trust 9.350% 9/15/04 2,500 2,497
American Residential Mortgage Medium
Term Note 6.110% 2/03/99 2,000 1,896
Household Credit Card Trust Series
1991-2 B 6.7000% 7/05/97 1,700 1,691
MDC Mortgage Funding Corporation
Series Q Class 5 8.850% 3/20/18 637 649
--------
6,733
<PAGE>
Mortgage-Backed Securities (0.9%)
**Lennar 8.120% 9/15/02 2,000 1,969
Wholesale (0.8%)
Sears Roebuck & Co. Medium Term Note
10.000% 2/03/12 1,500 1,740
--------
Total Bonds and Notes (Cost $22,713) 25,062
Short-Term Obligations (4.9%)
Commercial Paper (4.9%)
Countrywide Funding 6.110% 4/05/95 5,000 4,997
UBS Financial 6.250% 4/03/95 5,773 5,771
--------
Total Short-Term Obligations (Amortized cost $10,768) 10,768
Total Investments (98.1%)
(Cost basis $188,591) 214,766
Other Assets, Less Liabilities (1.9%) 4,058
--------
Total Net Assets (100.0%) $218,824
========
*Non-income producing.
**These securities are subject to contractual or legal restrictions on
their resale.
At March 31, 1995, the aggregate value of these securities represented 5.2%
of net assets.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Prime Equities
Investments as of March 31, 1995
(Dollar Amounts In Thousands)
(Unaudited)
<CAPTION>
Number Market
Equity-Related Securities (79.3%) of Shares Value
<S> <C> <C>
Common Stocks (73.1%)
Aircraft (1.8%)
McDonnell Douglas Corporation 41,000 $2,286
Banks (4.9%)
Bank for International Settlements-American Issue 1661,356
First Interstate Bancorp 30,500 2,409
Republic New York Corporation 47,000 2,309
------
6,074
Broadcasting & Communications (4.9%)
Airtouch Communications 65,000 1,771
Capital Cities ABC, Inc. 21,000 1,853
The Interpublic Group of Companies, Inc. 67,000 2,504
------
6,128
Business Services (2.7%)
First Financial Management Corporation 47,000 3,396
Computer-Related Products (2.2%)
*Microsoft Corporation 39,000 2,774
Consumer (5.7%)
The Gillette Company 29,100 2,375
Nike, Inc. Class B 27,000 2,015
The Procter & Gamble Co. 40,000 2,650
------
7,040
<PAGE>
Distribution (5.6%)
Albertson's Inc. 81,000 2,612
Dayton Hudson Corp. 23,000 1,645
Walgreen Co. 55,000 2,647
------
6,904
Electrical Equipment and Appliances (8.0%)
Electrolux AB ADRs 26,000 1,183
Emerson Electric Co. 45,000 2,993
General Electric Company 58,000 3,139
Hubbell Incorporated, Class B 47,700 2,564
------
9,879
Energy (7.5%)
Amoco Corporation 36,500 2,322
British Petroleum Company Plc ADRs 31,220 2,618
El Paso Natural Gas Company 48,000 1,374
Enron Corp. 92,500 3,053
------
9,367
Financial (1.2%)
Federal National Mortgage Association 19,000 1,546
Food, Beverage & Tobacco (4.0%)
PepsiCo, Inc. 40,000 1,560
RJR Nabisco, Inc. 240,000 1,530
Sara Lee Corporation 72,000 1,881
------
4,971
<PAGE>
<CAPTION>
Prime Equities Continued
Number Market
of Shares Value
<S> <C> <C>
Health Care (4.4%)
Abbott Laboratories 73,500 $ 2,618
Roche Holdings Ltd. 500 2,904
-------
5,522
Industrial Products (1.5%)
*Itel Corp. 47,000 1,804
Media (5.5%)
Comcast Corp.
Class A 28,000 436
Special 97,000 1,516
*LIN Broadcasting Corp. 11,000 1,339
Tribune Company 25,000 1,381
*Viacom International Incorporated, Class B 47,190 2,112
-------
6,784
Paper and Forest Products (2.9%)
Alco Standard Corporation 39,000 2,828
Georgia Pacific 10,000 798
-------
3,626
Real Estate (2.5%)
Equity Residential Properties 36,000 936
Nationwide Health Properties, Inc. 30,000 1,106
RFS Hotel Investors, Inc. 73,000 1,040
-------
3,082
Rubber, Plastics and Related Products (1.6%)
Goodyear Tire & Rubber Co. 55,000 2,021
Specialty Chemicals (2.8%)
Air Products & Chemicals Inc. 31,500 1,642
Minerals Technologies Inc., Class A 57,300 1,848
-------
3,490
Telecommunications (3.3%)
American Telephone and Telegraph Company 40,222 2,081
Southwestern Bell Corporation 48,000 2,022
-------
4,103
Miscellaneous (0.1%) 114
-------
Total Common Stocks (Cost $66,668) 90,911
<PAGE>
Preferred Stocks (6.2%)
Banks (1.2%)
Citicorp $5.375 Cv. 13,000 1,527
Broadcasting (0.9%)
News Corp. Ltd. ADRs $0.500 65,000 1,121
Industrial Products (1.8%)
Corning Inc. Cv. $3.000 42,000 2,237
Technology Services (2.3%)
General Motors Corporation Series E-1 $2.860 Cv. 74,000 2,877
-------
Total Preferred Stocks (Cost $9,971) 7,762
Total Equity-Related Securities (Cost $76,639) 98,673
<PAGE>
<CAPTION>
Prime Equities Continued
Principal Market
Amount Value
<S> <C> <C>
Bonds and Notes (4.8%)
U.S. Government and Agency Obligation (4.8%)
U.S. Treasury Note 7.125% 09/30/99
(Cost $5,920) $6,000 $ 6,011
Short-Term Obligations (14.1%)
Commercial Paper (12.9%)
General Motors Acceptance Corp. 6.050% 4/04/95 5,375 5,372
Lehman Brothers Holdings 6.150% 4/06/95 4,610 4,606
UBS Financial 6.250% 6/08/95 6,016 6,014
--------
15,992
U.S. Government Obligations (1.2%)
**U.S. Treasury Bill 5.835% 6/08/95 1,500 1,484
--------
Total Short-Term Obligations
(Amortized cost $17,476) 17,476
Total Investments (98.2%)
(Cost basis $100,035) 122,160
Other Assets, Less Liabilities (1.8%) 2,270
--------
Total Net Assets (100.0%) $124,430
========
<FN>
*Non-income producing.
**Security was pledged to cover margin requirements for open futures contracts.
<PAGE>
Futures contracts which were open at March 31, 1995 were as follows:
Unrealized
Number of Contract Gain
Type Contracts Value Expiration at 3/31/95
- ---- -------- ------- --------- --------
Standard & Poor's
500 Index (Long) 20 $5,044 June, 1995 $161
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Growth Stock Fund
Investments as of March 31, 1995
(Dollar Amounts In Thousands)
(Unaudited)
<CAPTION>
Number Market
Equity-Related Securities (95.7%) of Shares Value
<S> <C> <C>
Common Stocks (94.5%)
Banks (1.8%)
Fifth Third Bancorp 108,000 $ 5,589
Business Services (1.6%)
First Data Corporation 100,000 5,188
Chemicals (0.6%)
Hercules Inc. 40,000 1,865
Computer Software (4.4%)
*Microsoft Corporation 175,000 12,447
*Oracle Systems Corp. 52,500 1,641
-------
14,088
Consumer-Related (14.0%)
*Autozone, Inc. 125,000 3,109
*CUC International Inc. 100,000 3,888
Duracell International Inc. 160,000 7,160
The Gillette Company 175,000 14,284
*Kohl's Corporation 110,000 4,868
The Loewen Group Inc. 50,000 1,362
The Proctor & Gamble Co. 150,000 9,938
-------
44,609
Distribution-Retail (8.2%)
Albertson's Inc. 260,000 8,385
*Barnes & Noble, Inc. 100,000 3,037
The Home Depot, Inc. 333,333 14,750
-------
26,172
<PAGE>
Distribution-Wholesale (2.5%)
Sysco Corporation 300,000 7,875
Electrical Equipment (6.8%)
General Electric Company 225,000 12,178
*Thermo Electron Corp. 100,000 5,088
Whirlpool Corporation 80,000 4,380
-------
21,646
Energy (0.7%)
*Renaissance Energy 100,000 2,085
Financial Services (8.1%)
Federal National Mortgage Association 100,000 8,138
First Financial Management Corporation 140,000 10,115
Green Tree Acceptance Inc. 180,000 7,380
-------
25,633
Food, Beverage & Tobacco (4.7%)
The Coca Cola Company 150,000 8,475
*Nabisco Holdings Corp. 50,000 1,431
PepsiCo, Inc. 125,000 4,875
-------
14,781
Health Care (8.2%)
Abbott Laboratories 225,000 8,016
*Elan Corp. Plc ADRs 40,000 1,490
Johnson & Johnson 125,000 7,438
**Roche Holdings Ltd. ADSs 100,000 5,808
Growth Stock Fund Continued
<PAGE>
<CAPTION>
Number Market
of Shares Value
<S> <C> <C>
Health Care (continued)
United Healthcare 75,000 $ 3,506
--------
26,258
Insurance (5.8%)
American International Group, Inc. 75,000 7,819
GEICO Corporation 175,000 8,816
*The Travelers 50,000 1,931
--------
18,566
Leisure & Entertainment (3.9%)
Carnival Cruise Lines Inc. 300,000 7,013
Disney (Walt) Co. 100,000 5,337
--------
12,350
Media (1.0%)
*Viacom International Incorporated, Class B 75,000 3,356
Medical Supplies (2.8%)
Medtronic, Inc. 126,000 8,741
Mining (2.0%)
*Barrick Gold Corp. 250,000 6,250
Restaurants (1.9%)
McDonalds Corporation 175,000 5,972
Rubber, Plastic & Related (1.9%)
Illinois Tool Works Inc. 125,000 6,109
Services (1.2%)
Cintas Corp. 100,000 3,750
Technology Services (3.0%)
*Cisco Systems, Inc. 109,400 4,171
General Motors Corp. Series E-1 140,000 5,443
--------
9,614
<PAGE>
Telecommunications (8.2%)
American Telephone and Telegraph Company 175,000 9,056
Hong Kong Telecommunications Ltd. ADRs 125,000 2,437
LM Ericsson Telecommunications ADRs Class B 85,000 5,254
Motorola, Inc. 170,000 9,286
--------
26,033
Utilities (1.2%)
China Light and Power ADRs 800,000 3,880
--------
Total Common Stocks
(Cost $212,071) 300,410
Preferred Stock (1.2%)
Electronics (1.2%)
Nokia Corp. ADSs (Cost $3,716) 50,000 3,675
Total Equity-Related Securities (Cost $215,790) 304,085
<PAGE>
<CAPTION>
Principal
Short-Term Obligations (3.3%) Amount
<S> <C> <C>
Commercial Paper (3.3%)
UBS Financial 6.250% 4/03/95
(Amortized cost $10,727) $10,730 10,727
<CAPTION>
Growth Stock Fund Continued
Market
Value
<S> <C> <C>
Total Investments (99.0%)
(Cost basis $226,514) $314,812
Other Assets, Less Liabilities (1.0%) 3,065
--------
Total Net Assets (100.0%) $317,877
========
<FN>
*Non-income producing.
**This security is subject to contractual or legal restrictions on its resale.
At March 31, 1995, the aggregate value of this security represented 1.8% of net assets.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Special Fund
Investments as of March 31, 1995
(Dollar Amounts In Thousands)
(Unaudited)
<CAPTION>
Number Market
Common Stocks (94.4%) of Shares Value
<S> <C> <C>
Automotive (3.9%)
Superior Industries International, Inc. 1,356,000 $ 34,578
Mark IV Industries 600,000 12,300
--------
46,878
Banks (5.5%)
First Fidelity Bancorporation 400,000 19,800
First Interstate Bancorp 308,000 24,332
Wilmington Trust Company 529,500 12,840
Westpac Banking Corporation ADRs 475,000 8,313
--------
65,285
Broadcasting (0.2%)
Grupo Radio Centro, S.A. de C.V. ADSs 337,500 2,616
Business Services (10.5%)
Alco Standard Corporation 355,000 25,738
*Interim Service Inc. 705,000 20,974
The Interpublic Group of Companies Inc. 810,000 30,274
The Olsten Corporation 1,111,400 39,038
Unitog Company 488,850 8,799
--------
124,823
Chemicals (2.7%)
Reliance Industries GDS 100,000 1,600
**Reliance Industries GDS 660,000 10,560
Shanghai Petrochemical Company Limited ADRs 700,000 20,650
--------
32,810
Conglomerates (0.8%)
*Grupo Carso S.A. de C.V. 2,215,000 9,665
Consumer-Related (5.4%)
*Brinker International, Inc. 850,000 14,131
Harley-Davidson, Inc. 1,162,000 27,888
Sunbeam 655,500 14,995
*Quilmes Industrial 457,000 7,541
--------
64,555
Electrical Equipment (2.0%)
*Littlefuse, Inc.
Common 635,000 18,097
Warrants 293,600 6,019
--------
24,116
<PAGE>
Electronics & Instrumentation (2.0%)
Molex Inc. Class A 719,062 24,268
Energy & Related Services (7.3%)
Burlington Resources Inc. 622,400 25,363
Cross Timbers Oil Company 870,000 12,180
*
** Renaissance Energy Ltd. 40,000 830
*Renaissance Energy 845,000 17,620
Southwestern Energy Company 1,155,000 17,325
*Weatherford International Incorporated 1,290,600 13,551
--------
86,869
Financial Services (8.0%)
The Allstate Corporation 1,003,000 28,836
American Express Co. 400,000 13,950
*National Mutual Asia Ltd. 26,350,000 16,273
<PAGE>
<CAPTION>
Special Fund Continued
Number Market
of Shares Value
<S> <C> <C>
Financial Services (continued)
The Progressive Corporation 592,300 $ 24,062
*20th Century Industries 1,088,000 12,784
---------
95,905
Health Care (8.5%)
*Boston Scientific 1,958,000 48,216
Invacare Corp. 445,000 15,686
*Ligand Pharmaceutical Incorporated Class B 621,243 4,193
Stryker Corporation 369,800 16,918
Sunrise Medical, Inc. 445,300 15,919
---------
100,932
Industrial Products (3.8%)
Carlisle Corp. 360,100 13,234
Hon Industries 558,000 15,066
Stewart & Stevenson Services, Inc. 470,000 16,568
---------
44,868
Media (3.1%)
*International Family Entertainment, Inc. Class B 623,9009,592
*Scandinavian Broadcasting 530,000 12,190
*Viacom International Incorporated, Class B 343,500 15,372
---------
37,154
Real Estate (2.2%)
The Newhall Land and Farming Company 982,100 14,486
The Town and Country Trust Class A 837,000 11,300
---------
25,786
Retail (9.3%)
*Bombay Co. Inc. 1,565,000 14,281
**Hornbach Baumarket Bearer Shares 24,000 14,031
Office Max 500,800 12,833
*Proffitt's Inc. 625,700 15,251
*Revco D.S., Inc. 1,626,965 37,420
*Zale Corp. 1,437,200 16,887
---------
110,703
<PAGE>
Rubber, Plastics and Related Products (1.5%)
Goodyear Tire & Rubber Company 500,000 18,375
Specialty Chemicals (7.2%)
Crompton & Knowles Corporation 784,500 13,140
*Lydall, Inc. 427,000 14,411
Minerals Technology Corp. Class A 594,200 19,163
OM Group, Inc. 633,000 15,825
A. Schulman, Inc. 775,937 23,056
---------
85,595
Textiles & Apparel (3.9%)
Burlington Industries 1,450,000 16,494
Unifi, Inc. 1,118,475 30,199
---------
46,693
Telecommunications (6.6%)
*Airtouch Communications 879,500 23,966
*Cellular Communications Inc., Series A 280,000 13,370
*LDDS Communications 800,000 18,700
*LIN Broadcasting Corp. 123,000 14,975
*PriCellular 1,000,000 7,125
---------
78,136
---------
<PAGE>
<CAPTION>
Special Fund Continued
Principal Market
Amount Value
<S> <C> <C>
Total Common Stocks
(Cost $927,873) $1,126,032
Bond (0.9%)
Young Broadcasting Inc. 11.750% 11/15/04
(Cost $10,083) $10,000 10,725
Short-Term Obligations (4.8%)
Commercial Paper (4.8%)
Countrywide Funding 6.110% 4/05/1995 30,000 29,980
UBS Financial 6.250% 4/03/1995 28,000 27,990
---------
Total Short-Term Obligations
(Amortized cost $57,970) 57,970
Total Investments (100.1%)
(Cost basis $995,926) 1,194,727
Other Assets, Less Liabilities (-0.1%) (1,421)
---------
Total Net Assets (100.0%) $1,193,306
=========
<FN>
*Non-income producing.
**These securities are subject to contractual or legal restrictions on their resale.
At March 31, 1995, the value of these securities represented 2.1% of net assets.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Special Venture Fund
Investments as of March 31, 1995
(Dollar Amounts In Thousands)
(Unaudited)
<CAPTION>
Number Market
Common Stocks (87.8%) of Shares Value
<S> <C> <C>
Automotive (5.5%)
*Tower Automotive 89,000 $ 745
Superior Inds. International Inc. 46,000 1,173
------
1,918
Business Services (12.8%)
*Corrpro Companies Inc. 59,000 1,003
G & K Services Class A 61,000 1,129
*Interim Services Inc. 38,000 1,130
*Keane Inc. 47,000 1,140
------
4,402
Consumer-Related (1.3%)
Northland Cranberries Inc. 27,000 439
Electrical Equipment (1.7%)
*Littlefuse, Inc. 20,000 570
Electronics (8.2%)
ACT Manufacturing 27,000 385
*Kent Electronics Corp. 27,000 796
*Sheldahl Co. 38,000 456
Woodhead Inds. Inc. 32,000 640
*Zytec Corp 74,500 577
------
2,854
Energy & Related Services (7.5%)
*Alexander Energy Corp. 111,000 583
Cross Timbers Oil Company 47,000 658
*Renaissance Energy Ltd. 32,000 667
Vintage Petroleum, Inc. 35,000 696
------
2,604
Health & Personal Care (1.9%)
Arjo 40,000 657
Health Services & Equipment (12.1%)
*Boston Scientific 51,000 1,256
Invacare Corp. 32,000 1,128
*Patterson Dental 51,000 1,275
Stryker Corp 11,000 503
------
4,162
<PAGE>
Industrial Products (3.5%)
*Featherlite Manufacturing. 36,000 351
Hon Industries Inc. 32,000 864
------
1,215
Insurance (5.0%)
*National Mutual Asia Ltd. 1,400,000 865
*Triad Guaranty Inc. 54,000 850
------
1,715
Media (3.6%)
*Scandinavian Broadcasting 21,000 483
*Young Broadcasting Inc. 33,800 752
------
1,235
<PAGE>
<CAPTION>
Special Venture Fund Continued
Number Market
of Shares Value
<S> <C> <C>
Retail (8.4%)
*Proffitt's Inc. 32,000 $ 780
*Revco D.S., Inc. 26,000 598
*Ultimate Electric, Inc. 70,000 647
*Zale Corp 73,000 858
-------
2,883
Specialty Chemicals (11.7%)
Crompton & Knowles Corporation 47,000 787
Minerals Technology Corp Class A 30,500 984
OM Group Inc. 46,000 1,150
A. Schulman Inc. 37,000 1,128
-------
4,049
Telecommunications (4.6%)
*ABC Communication Holdings Ltd. 580,000 150
Allen Group 33,000 817
Palmer Wireless Inc. 43,600 627
-------
1,594
-------
Total Common Stocks (Cost $28,783) 30,297
<PAGE>
<CAPTION>
Principal
Short-Term Obligations (15.0%) Amount
<S> <C> <C>
Commercial Paper (15.0%)
Countrywide Funding 6.110% 4/05/95 $1,500 1,499
Exxon Imperial 6.400% 4/03/95 1,010 1,010
General Motors Acceptance 6.050% 4/04/95 1,315 1,314
Lehman Brothers Holdings 6.400% 4/03/95 1,370 1,370
-------
Total Short-Term Obligations
(Amortized cost $5,193) 5,193
Total Investments (102.8%)
(Cost basis $33,976) 35,490
Other Assets, Less Liabilities (-2.8%) (978)
-------
Total Net Assets (100.0%) $34,512
=======
<FN>
*Non-income producing.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Capital Opportunities Fund
Investments as of March 31, 1995
(Dollar Amounts In Thousands)
(Unaudited)
<CAPTION>
Number Market
Equity-Related Securities (83.7%) of Shares Value
<S> <C> <C>
Common Stocks (78.7%)
Business Services (11.6%)
Danka Business Systems Plc ADRs 160,000 $ 4,200
First Financial Management Corporation 35,000 2,529
*Gartner Group, Inc. 180,000 7,740
Paychex, Inc. 90,000 4,140
Sensormatic Electronics Corporation 150,000 4,200
-------
22,809
Consumer Products (3.2%)
*Authentic Fitness Corporation 200,000 3,200
Thomas Nelson, Inc. 156,250 3,086
-------
6,286
Financial Services (6.7%)
CWM Mortgage Holdings, Inc. 50,000 525
*Credit Acceptance Corporation 100,000 2,200
Foothill Group, Inc. 160,000 3,180
Green Tree Financial Corporation 180,000 7,380
-------
13,285
Health Care (12.2%)
*IDEXX Laboratories, Inc. 110,000 4,565
*Medaphis Corporation 95,000 5,985
Omnicare, Inc. 40,000 2,100
*PhyCor Inc. 180,000 6,165
*Value Health, Inc. 140,000 5,355
-------
24,170
Industrial Products (5.3%)
*Gentex Corporation 200,000 4,200
Greenfield Industries, Inc. 120,000 3,390
Superior Industries International, Inc. 115,000 2,932
-------
10,522
<PAGE>
Leisure & Entertainment (10.2%)
Carnival Cruise Lines, Inc. 150,000 3,506
*Clear Channel Communications, Inc. 90,000 5,355
*Hospitality Franchise Systems, Inc. 45,000 1,440
LaQuinta Inns, Inc. 200,000 5,425
*Prime Hospitality Corp. 120,000 1,260
Royal Caribbean Cruises, Ltd. 120,000 3,135
-------
20,121
Restaurants (4.8%)
*Brinker International, Inc. 150,000 2,494
Morrison Restaurants Inc. and Subsidiaries 100,000 2,200
*Outback Steakhouse, Inc. 120,000 3,045
*Papa John's International, Inc. 50,000 1,788
-------
9,527
Specialty Retailing (8.7%)
*Autozone, Inc. 170,000 4,229
*Baby Superstore, Inc. 70,000 2,748
*The Gymboree Corporation 120,000 3,045
*Kohl's Corporation 70,000 3,097
Lowe's Companies, Inc. 90,000 3,105
<PAGE>
<CAPTION>
Capital Opportunities Fund Continued
Number Market
of Shares Value
<S> <C> <C>
Specialty Retailing (continued)
*Starbucks Corporation 40,000 $ 960
--------
17,184
Technology (16.0%)
*ADC Telecommunications Inc. 160,000 4,720
*Atmel Corporation 40,000 1,545
*Atria Software, Inc. 75,000 3,562
*Cascade Communications Corp. 15,000 1,035
*Chipcom Corp. 100,000 3,775
*Digital Link Corporation 120,000 3,690
*StrataCom, Inc. 60,000 2,580
*Synopsys, Inc. 75,000 3,581
*Tellabs, Inc. 120,000 6,990
--------
31,478
--------
Total Common Stocks (Cost $112,680) 155,382
<PAGE>
<CAPTION>
Principal
Convertible Subordinated Debentures (5.0%) Amount
<S> <C> <C>
Health Care Services (0.5%)
Quantum Health Resources, Inc. 4.750% 10/01/00 $1,000 858
Industrial Products (2.1%)
TriMas Corporation 5.000% 8/01/03 4,000 4,190
Leisure & Entertainment (1.0%)
Carnival Cruise Lines, Inc. 4.500% 7/01/97 1,500 2,038
Specialty Retailing (1.4%)
Starbucks Corporation 4.500% 8/01/03 3,000 2,775
--------
Total Convertible Subordinated Debentures (Cost $9,451) 9,861
Total Equity-Related Securities (Cost $122,131) 165,243
Short-Term Obligations (15.4%)
Commercial Paper (15.4%)
Countrywide Funding Corporation 6.100% 4/05/95 6,325 6,321
Fleet Mortgage Corporation 6.230% 4/07/95 8,135 8,127
KFW International Financial Inc. 6.100% 4/03/95 8,000 7,997
Lehman Brothers Holding Company 6.150% 4/06/95 8,030 8,023
--------
Total Short-Term Obligations
(Amortized cost $30,468) 30,468
Total Investments (99.1%)
(Cost basis $152,599) 195,711
Other Assets, Less Liabilities (0.9%) 1,808
--------
Total Net Assets (100.0%) $197,519
========
<FN>
*Non-income producing.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
International Fund
Investments as of March 31, 1995
(Dollar Amounts In Thousands)
(Unaudited)
<CAPTION>
Number Market
Equity-Related Securities (93.1%) of Shares Value
<S> <C> <C>
Common Stocks (92.6%)
Argentina (3.1%)
Telecom Argentina GDSs 29,500 $1,276
YPF Sociedad Anonima Sponsored ADRs 50,000 950
------
2,226
Australia (3.2%)
Burns-Philip & Co. 816,864 1,917
*Peptide Technology 261,000 115
*Southern Pacific Petroleum ADRs 118,000 77
*Werrie Gold 366,000 174
------
2,283
Austria (1.1%)
Austria Mikro Systems International AG 5,000 470
BWT (New Shares) 2,100 289
------
759
Belgium (1.1%)
Generale de Banque 2,530 754
Denmark (1.5%)
International Service System (B Shares) 40,000 1,091
Finland (4.2%)
Enso - Gutzeit (Ordinary R Shares) 190,000 1,467
*Kemira Oy 47,000 366
Metsa - Serla Oy (B Shares) 32,500 1,202
------
3,035
<PAGE>
France (3.3%)
*CNIM 3,525 170
CSEE 3,000 194
Europe 1 Communications 1,200 332
*M6 - Metropole Television 3,000 198
*Moulinex 20,000 490
Total Petroles Class B 17,251 1,032
------
2,416
Germany (8.2%)
*Agiv AG 3,300 1,102
Fresenius AG New Shares 680 422
Henkel KGAA 4,000 1,507
Mannesmann AG 5,600 1,459
Veba 4,000 1,459
------
5,949
Hong Kong (7.6%)
Companion Building 1,436,000 292
Dairy Farm International 891,837 1,142
Guangdong Investment Ltd. 410,000 199
Hong Kong & China Gas Co. 710,000 1267
International Bank of Asia 800,000 326
National Mutual Asia Ltd. 386,000 238
Oriental Press 506,000 216
World Houseware Holdings 1,006,400 212
Yizheng Chemical Fibre Company 4,464,000 1,588
------
5,480
<PAGE>
<CAPTION>
International Fund Continued
Number Market
of Shares Value
<S> <C> <C>
Indonesia (0.8%)
*Duta Anggada Realty 151,666 $ 97
PT Dharmala Initland (Foreign Shares) 213,000 128
Panin Bank (Foreign Shares) 135,000 172
Summarecon (Foreign Shares) 144,690 152
-------
549
Italy (2.2%)
Telecom Italia (Savings Shares) 846,000 1,580
Japan (23.7%)
Amano Corp. 87,000 1,188
Canon Inc. 70,000 1,159
*DDI 62 538
Hitachi 90,000 938
Ito Yokado 27,000 1,344
*JVC (Victor Co. of Japan) 91,000 1,022
*Kokusai Securities 39,000 506
Kuraya Corp. 45,600 755
Matsushita Electric Industrial 90,000 1,458
Mr. Max Corp. 59,400 1,306
Promise Co. 42,000 1,842
Sharp Corp. 70,000 1,142
Sony Corp. 25,000 1,259
Suzuki Motor 125,000 1,344
Tokyo Style 55,000 885
*Wako Securities 71,000 494
-------
17,180
<PAGE>
Malaysia (2.3%)
Arab-Malaysian Finance
Foreign Registered Shares 66,666 200
ICULS 66,666 30
Associated Koalin Industries 54,000 205
*Berjaya Sports 85,000 81
Hume Industries 50,000 205
*Kim Hin Industry Berhad 35,000 170
Land and General Holdings 82,500 252
Sungei Way Holdings 87,500 352
*Time Engineering 85,000 198
-------
1,693
Mexico (2.3%)
*Grupo Carso Series A1 90,000 393
*Groupo Iusacell "L" ADRs 34,000 404
*Grupo Situr Series BCP 839,000 316
Tolmex S.A. De C.V. Series B2 181,600 422
*Transportation Maritima Mexicana ADRs 19,000 109
-------
1,644
Netherlands (4.9%)
Fortis AMEV 30,000 1,453
*IHC Caland N.V. 11,800 295
KPN 39,000 1,392
Sphinx Kon CVA 12,443 415
-------
3,555
New Zealand (5.1%)
Brierley Investment Ltd. Ord. Shares 2,024,884 1,426
<PAGE>
<CAPTION>
International Fund Continued
Number Market
of Shares Value
<S> <C> <C>
New Zealand (continued)
Fletcher Challenge Ltd. Ord. Shares 279,000 $ 661
Lion Nathan Ltd. Ord. Shares 800,000 1,590
-------
3,677
Norway (1.9%)
*Petroleum Geo Services 15,625 350
*Saga Petroleum A Free 80,000 1,057
-------
1,407
Panama (1.3%)
Bladex ADRs 37,000 944
Russia (0.8%)
*Fleming Russia Securities Fund 128,000 576
Singapore (3.2%)
*Jardine Matheson Holdings Ltd. 215,902 1,943
*Super Coffeemix 330,000 154
*United Overseas Bank Foreign Registered Shares 24,000 238
-------
2,335
South Africa (1.8%)
Iscor 1,041,001 1,319
Sweden (3.5%)
Arjo 19,200 315
Astra AB Series B 70,700 1,837
*Sintercas Series A Free Shares 12,960 352
-------
2,504
<PAGE>
Switzerland (0.8%)
*AFG Arbonia Forster 13 15
Danzas Holding Registered Shares 280 247
*Sarna Kunststroff Werte Registered D Shares 280 341
-------
603
Thailand (0.7%)
Krung Thai Bank (Local Shares) 100,000 282
Sino Thai Engineering & Construction 16,000 199
-------
481
United Kingdom (4.0%)
Act Group Plc 169,000 303
*Helene of London Plc 820,000 294
Intrum Justitia Plc 305,000 373
Lasmo Plc 382,000 1,008
Powerscreen International Plc 90,000 367
Transtec Plc 680,000 576
-------
2,921
Misc. (0.0%) 20
-------
Total Common Stocks (Cost $70,218) 66,981
Preferred Stock (0.5%)
Germany (0.5%)
Jil Sander DEM 50 (Cost $352) 570 364
Total Equity-Related Securities (Cost $70,571) 67,345
<PAGE>
International Fund Continued
<CAPTION>
Principal Market
Amount Value
Bonds and Notes (4.4%)
<S> <C> <C>
Argentina (1.3%)
Republic of Argentina 4.250% 3/31/23 2,350USD $ 963
Italy (1.8%)
IMI Bank International Zero Coupon
(Effective rate 11.586%) 6/13/06 8,000,000ITL 1,264
New Zealand (1.3%)
New Zealand Treasury Bonds 8.000% 4/15/04 1,450NZD 946
-------
Total Bonds and Notes (Cost $3,322) 3,173
Short-Term Obligations (3.9%)
Mexico (1.5%)
Government Agency Obligations (1.5%)
Mexican Cete 29.711% 4/06/95 3,499,200MXN 519
Mexican Tesobono 17.000% 11/30/95 $ 650,000 584
-------
1,103
United States (2.4%)
Government Agency Obligations (2.4%)
Federal Home Loan Mortgage Corp. 6.043% 4/18/95 $1,000,000 997
Federal National Mortgage Association
5.971% 04/18/95 $ 750,000 749
-------
1,746
-------
Total Short-Term Obligations
(Amortized cost $2,972) 2,849
Total Investments (101.4%)
(Cost basis $76,864) 73,367
Other Assets (-1.4%)
Foreign Currencies (Cost $160) 162
Other Assets, Less Liabilities (1,185)
-------
Total Net Assets (100.0%) $72,344
=======
<FN>
*Non-income producing.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Balance Sheets
March 31, 1995
(All Amounts In Thousands)
(Unaudited)
<CAPTION>
Total Growth Special Capital
Return Prime Stock Special Venture Opport. Intern.
Fund Equities Fund Fund Fund Fund Fund
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets
Investments, at market value $214,766 $122,160 $314,812 $1,194,727 $35,490 $195,711 $73,367
Receivable for investments and currencies sold 2,550 5,890 2,957 10,316 2,363 2,165 3,950
Receivable for fund shares sold 56 66 112 868 216 435 25
Dividends and interest receivable 1,718 214 429 695 7 129 264
Cash and other assets 302 237 380 680 48 479 536
--------- --------- --------- ---------- -------- --------- --------
Total Assets $219,392 $128,567 $318,690 $1,207,286 $38,124 $198,919 $78,142
======== ======== ======== ========= ======= ======== =======
Liabilities
Payable for investments and
currencies purchased $ -- $ 3,963 $ -- $ 11,936 $ 3,518 $ 937 $ 4,555
Payable to investment adviser and
transfer agent 136 84 236 914 71 149 105
Other liabilities 432 90 577 1,130 23 314 1,138
--------- --------- --------- ---------- -------- --------- --------
Total Liabilities 568 4,137 813 13,980 3,612 1,400 5,798
--------- --------- --------- ---------- -------- --------- --------
Capital
Paid-in capital 194,127 100,464 226,306 963,792 32,338 149,447 77,618
Net unrealized appreciation (depreciation) of
investments and foreign currencies 26,175 22,286 88,298 198,801 1,514 43,112 (4,367)
Accumulated undistributed net
investment income 751 199 408 1,528 -- 205 (8)
Accumulated undistributed net realized gains
(losses) on investments and foreign
currency transactions (2,229) 1,481 2,865 29,185 660 4,755 (899)
--------- --------- --------- ---------- -------- --------- --------
Total Capital (Net Assets) 218,824 124,430 317,877 1,193,306 34,512 197,519 72,344
--------- --------- --------- ---------- -------- --------- --------
Total Liabilities and Capital $219,392 $128,567 $318,690 $1,207,286 $38,124 $198,919 $78,142
======== ======== ======== ========= ======= ======== =======
Shares Outstanding (Unlimited
Number Authorized) 8,629 8,645 14,606 52,589 3,143 5,643 7,750
======== ======== ======== ========= ======= ======== =======
Net Asset Value (Capital) Per Share $ 25.36 $ 14.39 $ 21.76 $ 22.69 $ 10.98 $ 35.00 $ 9.33
======== ======== ======== ========= ======= ======== =======
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Statement of Operations
for the Six Months Ended
March 31, 1995
(All Amounts In Thousands)
(Unaudited)
<CAPTION>
Total Growth Special Capital
Return Prime Stock Special Venture Opport. Intern.
Fund Equities Fund Fund Fund* Fund Fund
------- -------- ------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment Income
Dividends $ 3,661 $1,009 $ 2,058 $ 6,016 $ 50 $ 247 $ 407
Interest 3,324 381 506 3,216 106 837 339
------ ------ ------- ------- ------ ------- -------
6,985 1,390 2,564 9,232 156 1,084 746
Foreign taxes withheld -- -- -- -- -- -- (41)
------ ------ ------- ------- ------ ------- -------
Total Investment Income 6,985 1,390 2,564 9,232 156 1,084 705
------ ------ ------- ------- ------ ------- -------
Expenses
Management fees 608 362 1,151 4,465 80 656 361
Transfer agent fees 144 91 164 756 19 119 33
Custodian fees 9 5 9 39 9 6 56
SEC and state registration fees 15 14 13 40 1 15 19
Accounting fees 5 4 5 8 11 5 13
Trustees' fees 6 6 8 14 3 6 3
Amortization of organization expenses -- -- -- -- 8 -- 16
Other 129 71 128 341 35 17 96
------ ------ ------- ------- ------ ------- -------
916 553 1,478 5,663 166 824 597
Reimbursement of expenses by investment advisor -- -- -- -- (55) -- --
------ ------ ------- ------- ------ ------- -------
Total Expenses 916 553 1,478 5,663 111 824 597
------ ------ ------- ------- ------ ------- -------
Net Investment Income 6,069 837 1,086 3,569 45 260 108
------ ------ ------- ------- ------ ------- -------
<PAGE>
Realized and Unrealized Gains (Losses)
on Investments and Foreign Currency Transactions
Net realized gains (losses)
on investments (2,242) 2,122 7,127 37,346 742 9,989 (752)
Net realized gains on foreign
currency transactions -- -- -- -- -- -- 18
Net realized gains on futures transactions -- 126 -- 2,536 -- -- --
Net change in unrealized appreciation or
depreciation of investments and foreign
currency transactions 368 1,840 11,982 (10,843) 1,515 8,100 (7,137)
------ ------ ------- ------- ------ ------- -------
Net Gains (Losses) on Investments and
Foreign Currency Transactions (1,874) 4,088 19,109 29,039 2,257 18,089 (7,871)
------ ------ ------- ------- ------ ------- -------
Net Increase (Decrease) in Net Assets
Resulting from Operations $ 4,195 $4,925 $20,195 $32,608 $2,302 $18,349 $(7,763)
====== ====== ======= ======= ====== ======= =======
<FN>
*From commencement of operations on October 17, 1994.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Statements of Changes in Net Assets
for the Year Ended September 30, 1994
and Six Months Ended March 31, 1995
(All Amounts In Thousands)
(Unaudited)
<CAPTION>
Total Return Fund Prime Equities Growth Stock Fund
1994 1995 1994 1995 1994 1995
<S> <C> <C> <C> <C> <C> <C>
Operations
Net investment income $ 10,292 $ 6,069 $ 1,365 $ 837 $ 1,726 $ 1,086
Net realized gains (losses) on investments 2,616 (2,242) 4,432 2,248 39,191 7,127
Net change in unrealized appreciation or
depreciation of investments (12,214) 368 (1,368) 1,840 (33,109) 11,982
-------- -------- -------- -------- -------- --------
Net Increase in Net Assets Resulting
from Operations 694 4,195 4,429 4,925 7,808 20,195
-------- -------- -------- -------- -------- --------
Distributions To Shareholders
Dividends from net investment income (9,985) (5,656) (1,246) (1,033) (1,725) (1,950)
Capital gain distributions (5,841) (2,424) (5,029) (5,015) (24,671) (39,914)
-------- -------- -------- -------- -------- --------
Total Distributions to Shareholders (15,826) (8,080) (6,275) (6,048) (26,396) (41,864)
-------- -------- -------- -------- -------- --------
Share Transactions
Subscriptions to fund shares 51,989 13,514 49,000 15,390 48,719 19,739
Investment income dividends reinvested 7,805 4,494 1,044 873 1,458 1,611
Capital gain distributions reinvested 5,123 2,142 4,618 4,619 22,247 35,003
Redemptions of fund shares (42,803) (26,715) (23,501) (25,009) (106,255) (38,309)
-------- -------- -------- -------- -------- --------
Net Increase (Decrease) from Share Transactions 22,114 (6,565) 31,161 (4,127) (33,831) 18,044
-------- -------- -------- -------- -------- --------
Net Increase (Decrease) in Net Assets 6,982 (10,450) 29,315 (5,250) (52,419) (3,625)
Total Net Assets
Beginning of period 222,292 229,274 100,365 129,680 373,921 321,502
-------- -------- -------- -------- -------- --------
End of period $229,274 $218,824 $129,680 $124,430 $321,502 $317,877
======== ======== ======== ======== ======== ========
Accumulated Undistributed Net Investment Income
at End of Period $ 338 $ 751 $ 395 $ 199 $ 1,272 $ 408
======== ======== ======== ======== ======== ========
Analyses of Changes in Shares of Beneficial Interest
Subscriptions to fund shares 1,964 540 3,371 1,086 2,031 918
Investment income dividends reinvested 298 181 72 63 61 80
Capital gain distributions reinvested 193 89 323 337 932 1,733
-------- -------- -------- -------- -------- --------
2,455 810 3,766 1,486 3,024 2,731
Redemptions of fund shares (1,625) (1,074) (1,617) (1,758) (4,412) (1,761)
-------- -------- -------- -------- -------- --------
Net increase (decrease) in fund shares 830 (264) 2,149 (272) (1,388) 970
Shares outstanding at beginning of period 8,063 8,893 6,768 8,917 15,024 13,636
-------- -------- -------- -------- -------- --------
Shares outstanding at end of period 8,893 8,629 8,917 8,645 13,636 14,606
======== ======== ======== ======== ======== ========
See accompanying notes to financial statements.
<PAGE>
Statements of Changes in Net Assets
for the Year Ended September 30, 1994
and Six Months Ended March 31, 1995
(All Amounts In Thousands)
(Unaudited)
<CAPTION>
Special
Venture Capital
Special Fund Fund Opportunities Fund International Fund
1994 1995 1995* 1994 1995 1994** 1995
<S> <C> <C> <C> <C> <C> <C> <C>
Operations
Net investment income $ 10,736 $ 3,569 $ 45 $ 69 $ 260 $ 210 $ 108
Net realized gains (losses) on investments
and foreign currency transactions 66,155 39,882 742 15,801 9,989 1,076 (734)
Net change in unrealized appreciation or
depreciation of investments and
foreign currency transactions (54,800) (10,843) 1,515 (13,678) 8,100 2,774 (7,137)
---------- ---------- ------- -------- -------- ------- -------
Net Increase (Decrease) in Net Assets
Resulting from Operations 22,091 32,608 2,302 2,192 18,349 4,060 (7,763)
---------- ---------- ------- -------- -------- ------- -------
Distributions To Shareholders
Dividends from net investment income (9,600) (7,700) (45) (65) (105) -- (340)
Capital gain distributions (79,302) (69,358) (82) -- -- -- (1,228)
---------- ---------- ------- -------- -------- ------- -------
Total Distributions to Shareholders (88,902) (77,058) (127) (65) (105) -- (1,568)
---------- ---------- ------- -------- -------- ------- -------
Share Transactions
Subscriptions to fund shares 432,282 113,541 32,709 100,413 53,486 72,981 11,144
Investment income dividends reinvested 8,798 7,013 33 54 87 -- 242
Capital gain distributions reinvested 75,860 65,654 79 -- -- -- 1,153
Redemptions of fund shares (283,062) (192,337) (484) (80,008) (49,985) (2,224) (5,681)
---------- ---------- ------- -------- -------- ------- -------
Net Increase (Decrease) from
Share Transactions 233,878 (6,129) 32,337 20,459 3,588 70,757 6,858
---------- ---------- ------- -------- -------- ------- -------
Net Increase (Decrease) in Net Assets 167,067 (50,579) 34,512 22,586 21,832 74,817 (2,473)
Total Net Assets
Beginning of period 1,076,818 1,243,885 -- 153,101 175,687 -- 74,817
---------- ---------- ------- -------- -------- ------- -------
End of period $1,243,885 $1,193,306 $34,512 $175,687 $197,519 $74,817 $72,344
========= ========= ======= ======== ======== ======= =======
Accumulated Undistributed (Overdistributed) Net
Investment Income at End of Period $ 5,659 $ 1,528 $ -- $ 50 $ 205 $ 210 $ (8)
========= ========= ======= ======== ======== ======= =======
<PAGE>
Analyses of Changes in Shares of Beneficial
Interest Subscriptions to fund shares 18,327 5,058 3,177 3,192 1,638 7,268 1,134
Investment income dividends reinvested 377 327 3 2 3 -- 25
Capital gain distributions reinvested 3,256 3,064 8 -- -- -- 118
---------- ---------- ------- -------- -------- ------- -------
21,960 8,449 3,188 3,194 1,641 7,268 1,277
Redemptions of fund shares (12,127) (8,704) (45) (2,588) (1,562) (214) (581)
---------- ---------- ------- -------- -------- ------- -------
Net increase (decrease) in fund shares 9,833 (255) 3,143 606 79 7,054 696
Shares outstanding at beginning of period 43,011 52,844 -- 4,958 5,564 -- 7,054
---------- ---------- ------- -------- -------- ------- -------
Shares outstanding at end of period 52,844 52,589 3,143 5,564 5,643 7,054 7,750
========= ========= ======= ======== ======== ======= =======
<FN>
*From commencement of operations on October 17, 1994.
**From commencement of operations on March 1, 1994.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Notes (Unaudited)
Note 1. Significant Accounting Policies
The following are the significant accounting policies of SteinRoe Total Return
Fund, SteinRoe Prime Equities, SteinRoe Growth Stock Fund, SteinRoe Special
Fund, SteinRoe Special Venture Fund, SteinRoe Capital Opportunities Fund and
SteinRoe International Fund (the "Funds"), each a series of SteinRoe
Investment Trust (a Massachusetts business trust).
Security Valuations
All securities are valued as of March 31, 1995. For all Funds except the
International Fund, securities traded on national securities exchanges are
valued at the last reported sales price or, if there are no sales, at the
latest bid quotation. Each over-the-counter security for which the last sale
price is available from NASDAQ is valued at that price. All other
over-the-counter securities for which reliable quotations are available are
valued at the latest bid quotation. Securities convertible into equity
securities and long-term debt obligations are valued at a fair value using a
procedure determined in good faith by the Board of Trustees which has
authorized the use of valuations provided by a pricing service. For
International Fund, security valuations are generally based upon market
quotations which, depending upon local convention or regulation, may be last
sales price, last bid or asked price, or the mean between last bid and asked
prices as of, in each case, the close of the appropriate exchange or other
designated time. Other assets and securities of the Funds are valued by a
method that the Board of Trustees believes represents a fair value.
Futures Contracts
During the six months ended March 31, 1995, Prime Equities and Special Fund
entered into stock index futures contracts to either hedge against expected
declines of its portfolio securities or as a temporary substitute for the
purchase of individual stocks. Risks of entering into futures contracts
include the possibility that there may be an illiquid market at the time the
Fund seeks to close out a contract and changes in the value of the futures
contract may not correlate with changes in the value of the portfolio
securities being hedged.
Upon entering into a futures contract, the Fund deposits with its custodian
cash or securities in an amount sufficient to meet the initial margin
requirement. Subsequent payments are made or received by the Fund equal to the
daily change in the contract value and are recorded as unrealized gains or
losses. The Fund recognizes a realized gain or loss when the contract is
closed or expires.
<PAGE>
Forward Currency Exchange Contracts
At March 31, 1995, the International Fund had entered into forward currency
exchange contracts under which it is obligated to exchange currencies at
specified future dates. Risks arise from the possible inability of
counterparties to meet the terms of their contracts and from movements in
currency values. The Fund had the following outstanding contracts at March 31,
1995:
<TABLE>
<CAPTION>
Settlement Contract to
-----------
Date Receive Deliver
- -------- ------ ---------
<S> <C> <C>
4/18/95 $3,485 18,500 FRF
4/18/95 3,661 360,000 JPY
</TABLE>
Net unrealized depreciation of $872 on these contracts and appreciation of $2
on other foreign currency positions at March 31, 1995, is included in the
accompanying financial statements.
Federal Income Taxes
No provision is made for Federal income taxes since the Funds elect to be
taxed as "regulated investment companies" and make such distributions to their
shareholders as to be relieved of all Federal income taxes under provisions of
current Federal tax law.
The Funds intend to utilize provisions of the Federal income tax laws, which
allow them to carry a realized capital loss forward for eight years following
the year of the loss and offset such losses against any future realized gains.
At September 30, 1994, Capital Opportunities Fund had a capital loss
carryforward of $5,176, which expires September 30, 2000.
<PAGE>
Distributions to Shareholders
On May 1, 1995, the Board of Trustees declared a dividend from net investment
income of $0.29 per share for Total Return Fund and $0.03 per share for Prime
Equities, payable May 22, 1995, to shareholders of record on May 10, 1995.
Foreign Currency Translations
The books and records of the International Fund are maintained in U.S.
dollars. All assets and liabilities of the Fund denominated in foreign
currencies are translated into U.S. dollar amounts at the mean between the bid
and asked market rates for such currencies. Purchases and sales of foreign
securities and income derived from foreign securities are converted at the
prevailing rate of exchange on the respective dates of such transactions. The
Fund may enter into "forward currency contracts" with its custodian bank for
purchases and sales of securities denominated in foreign currency, thus fixing
the U.S. dollar price of the security traded.
Other Information
Effective October 1, 1993, the Funds adopted Statement of Position 93-2
"Determination, Disclosure and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by Investment Companies." The
Statement distinguishes between distributions on a tax basis and a financial
reporting basis and requires that only distributions in excess of tax basis
earnings be reported in the financial statements as a return of capital. It
also requires that differences in the recognition or classification of income
between the financial statements and tax earnings which result in temporary
over-distributions be classified as distributions in excess of net investment
income or net realized gains, and that any permanent differences be
reclassified to paid-in capital.
Notes Continued
Permanent differences in the accumulated undistributed net investment income
and accumulated realized gain accounts have been reclassified to paid-in
capital.
Realized gains or losses from sales of securities are determined on the
specific identified cost basis.
All amounts, except per-share amounts and number of shares in the schedule of
investments, are shown in thousands.
<PAGE>
Note 2. Transactions with Affiliates and Trustees' Fees
The Funds pay a monthly management fee 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. The
management fee for Total Return Fund is computed at an annual rate of .625 of
1% of the first $100 million of average daily net assets and .50 of 1%
thereafter. The management fee for Prime Equities is computed at an annual
rate of .60 of 1% of the first $100 million of average daily net assets, .55
of 1% of the next $100 million, and .50 of 1% thereafter. The management fee
for Growth Stock Fund is computed at an annual rate of .75 of 1% of the first
$250 million of average daily net assets, .70 of 1% of the next $250 million,
and .60 of 1% thereafter. The management fee for Special Fund and Capital
Opportunities Fund is computed at an annual rate of .75 of 1% of average daily
net assets and the management fee for Special Venture Fund and International
Fund is 1% of average daily net assets. For International Fund, Rockefeller &
Co., Inc. (the "Sub-Adviser") has been engaged to provide the Fund with
advisory services, including portfolio management. For its services, the
Adviser pays the Sub-Adviser a fee, which is computed at an annual rate of .50
of 1% of the average daily net assets of the Fund.
The investment advisory agreements of the Funds provide that the Adviser will
reimburse each Fund to the extent that annual expenses, excluding certain
expenses, exceed the applicable limits prescribed by any state in which shares
of each Fund are offered for sale. In addition, the Adviser has agreed to
reimburse Special Venture Fund to the extent that its expenses exceed 1.25% of
average daily net assets. This expense limitation expires January 31, 1996,
subject to earlier termination by the Adviser on 30 days notice.
Effective May 1, 1995, the Adviser also has agreed to reimburse International
Fund to the extent that its expenses exceed 1.65% of average daily net assets.
This limitation expires on January 31, 1996, subject to earlier termination by
the Adviser on 30 days' notice.
The transfer agent fees of the Funds are paid to SteinRoe Services Inc., an
indirect, wholly owned subsidiary of Liberty Mutual Insurance Company.
Pursuant to an agreement with the Funds, the Advisor provides certain
accounting services. For the six months ended March 31, 1995, the Total Return
Fund, Prime Equities Fund, Growth Stock Fund, Special Fund, Special Venture
Fund, Capital Opportunities Fund and the International Fund incurred charges
of $5, $4, $5, $8, $11, $5 and $13 respectively.
Certain officers and trustees of the Trust also are officers of the Adviser.
The compensation of trustees not affiliated with the Adviser for Total Return
Fund, Prime Equities, Growth Stock Fund, Special Fund, Special Venture Fund,
Capital Opportunities Fund and International Fund, for the period ended March
31, 1995, was $6, $6, $8, $14, $3, $6 and $3, respectively. No remuneration
was paid to any other trustee or officer of the Trust.
<PAGE>
Note 3. Short-Term Debt
To facilitate portfolio liquidity, the Funds maintain borrowing arrangements
under which they can borrow against portfolio securities. There were no
borrowings for the Funds during the period ended March 31, 1995.
Note 4. Investment Transactions
The aggregate cost of purchases and proceeds from sales of securities other
than short-term obligations for the period ended March 31, 1995, were:
<TABLE>
<CAPTION>
Fund Purchases Sales
--------- ---------
<S> <C> <C>
Total Return $ 52,207 $ 65,311
Prime Equities 49,584 68,234
Growth Stock 46,869 58,550
Special 251,601 271,393
Special Venture 32,700 2,937
Capital Opportunities 40,193 46,304
International 29,950 24,770
</TABLE>
At March 31, 1995, unrealized appreciation and depreciation of investments on
a tax basis and the cost of investments for financial reporting purposes and
for Federal income tax purposes were as follows:
<TABLE>
<CAPTION>
Cost of Investments
Net Federal
Appreciation Financial Income
Fund Appreciation Depreciation (Depreciation) Reporting Tax
--------- --------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
Total Return $ 36,196 $ 9,873 $ 26,323 $188,591 $188,443
Prime Equities 22,337 383 21,954 100,035 100,206
Growth Stock 89,675 1,377 88,298 226,514 226,514
Special 253,198 54,438 198,760 995,926 995,967
Special Venture 2,238 724 1,514 33,976 33,976
Capital Opportunities 45,947 2,835 43,112 152,599 152,599
International 4,924 8,421 (3,497) 76,864 76,864
</TABLE>
<PAGE>
<TABLE>
Financial Highlights
Total Return Fund
(Unaudited)
Selected per-share data (for a share outstanding throughout each period),
ratios and supplemental data.
<CAPTION>
Nine
Months
Ended
Years Ended December 31, Sept. 30,
1985 1986 1987 1988
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 21.37 $ 25.04 $ 25.07 $ 22.25
-------- -------- -------- --------
Income From Investment Operations
Net investment income 1.41 1.33 1.32 .97
Net realized and unrealized gains (losses)
on investments 3.87 2.75 (1.06) .45
-------- -------- -------- --------
Total from investment operations 5.28 4.08 .26 1.42
-------- -------- -------- --------
Distributions
Net investment income (1.42) (1.35) (1.63) (.90)
Net realized capital gains (.19) (2.70) (1.45) (.11)
-------- -------- -------- --------
Total distributions (1.61) (4.05) (3.08) (1.01)
-------- -------- -------- --------
Net Asset Value, End of Period $ 25.04 $ 25.07 $ 22.25 $ 22.66
======== ======== ======== ========
Ratio of expenses to average net assets 0.77% 0.79% 0.80% 0.87%*
Ratio of net investment income to average
net assets 6.30% 5.21% 5.12% 5.68%*
Portfolio turnover rate 100% 108% 86% 85%
Total return 25.78% 17.11% 0.74% 6.51%
Net assets, end of period $128,676 $149,831 $140,279 $134,225
<PAGE>
<CAPTION>
Six
Months
Ended
Years Ended September 30, March 31,
1989 1990 1991 1992 1993 1994 1995
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 22.66 $ 25.41 $ 21.68 $ 26.08 $ 26.91 $ 27.57 $ 25.78
-------- -------- -------- -------- -------- -------- --------
Income From Investment Operations
Net investment income 1.37 1.28 1.32 1.31 1.26 1.15 .69
Net realized and unrealized gains (losses)
on investments 3.10 (2.92) 4.85 1.48 2.37 (1.06) (.18)
-------- -------- -------- -------- -------- -------- --------
Total from investment operations 4.47 (1.64) 6.17 2.79 3.63 .09 .51
-------- -------- -------- -------- -------- -------- --------
Distributions
Net investment income (1.34) (1.36) (1.26) (1.34) (1.30) (1.17) (.65)
Net realized capital gains (.38) (.73) (.51) (.62) (1.67) (.71) (.28)
-------- -------- -------- -------- -------- -------- --------
Total distributions (1.72) (2.09) (1.77) (1.96) (2.97) (1.88) (.93)
-------- -------- -------- -------- -------- -------- --------
Net Asset Value, End of Period $ 25.41 $ 21.68 $ 26.08 $ 26.91 $ 27.57 $ 25.78 $ 25.36
======== ======== ======== ======== ======== ======== ========
Ratio of expenses to average net assets 0.90% 0.88% 0.87% 0.85% 0.81% 0.83% 0.84%*
Ratio of net investment income to average
net assets 5.83% 5.36% 5.50% 4.94% 4.69% 4.53% 5.56%*
Portfolio turnover rate 93% 75% 71% 59% 53% 29% 25%
Total return 20.76% (6.86%) 29.67% 11.13% 14.57% 0.36% 2.10%
Net assets, end of period $144,890 $124,592 $150,689 $173,417 $222,292 $229,274 $218,824
* Annualized
Note: For the year ended December 31, 1986, the average amount of debt
outstanding was $2, the average number of shares outstanding was 5,506, and
the average amount of debt outstanding per share was $0.0004. The Fund had no
borrowings during any other periods.
</TABLE>
<PAGE>
<TABLE>
Financial Highlights Continued
Prime Equities
(Unaudited)
Selected per-share data (for a share outstanding throughout each period),
ratios and supplemental data.
<CAPTION>
Six
Months
Period Ended Ended
September 30, Years Ended September 30, March 31,
1987(a) 1988 1989 1990 1991 1992 1993 1994 1995
------- ------- ------- ------- ------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 10.00 $ 10.49 $ 8.88 $ 11.34 $ 10.49 $ 12.27 $ 13.42 $ 14.83 $ 14.54
------- ------- ------- ------- ------- ------- -------- -------- --------
Income From Investment Operations
Net investment income .05 .17 .22 .26 .26 .19 .17 .18 .10
Net realized and unrealized gains
(losses) on investments .47 (1.64) 2.46 (.85) 2.17 1.49 2.16 .40 .47
------- ------- ------- ------- ------- ------- -------- -------- --------
Total from investment operations .52 (1.47) 2.68 (.59) 2.43 1.68 2.33 .58 .57
------- ------- ------- ------- ------- ------- -------- -------- --------
Distributions
Net investment income (.03) (.14) (.22) (.26) (.29) (.18) (.16) (.16) (.12)
Net realized capital gains -- -- -- -- (.36) (.35) (.76) (.71) (.60)
------- ------- ------- ------- ------- ------- -------- -------- --------
Total distributions (.03) (.14) (.22) (.26) (.65) (.53) (.92) (.87) (.72)
------- ------- ------- ------- ------- ------- -------- -------- --------
Net Asset Value, End of Period $ 10.49 $ 8.88 $ 11.34 $ 10.49 $ 12.27 $ 13.42 $ 14.83 $ 14.54 $ 14.39
======= ======= ======= ======= ======= ======= ======== ======== ========
Ratio of net expenses to average
net assets (b) 1.91%* 1.47% 1.24% 1.08% 1.00% 0.97% 0.88% 0.90% 0.91%*
Ratio of net investment income to
average net assets (c) 1.43%* 2.03% 2.28% 2.40% 2.27% 1.46% 1.23% 1.18% 1.37%*
Portfolio turnover rate 32% 105% 63% 51% 48% 40% 50% 85% 46%
Total return 5.20% (13.90%) 30.63% (5.25%) 24.12% 14.00% 17.98% 4.03% 4.14%
Net assets, end of period $22,863 $23,002 $32,562 $43,446 $54,820 $70,724 $100,365 $129,680 $124,430
<FN>
* Annualized
(a) From commencement of operations on March 23, 1987.
(b) If the Fund had paid all of its expenses and there had been no
reimbursement by the investment Adviser, this ratio would have been 2.49% for
the period ended September 30, 1987, and 1.09% for the year ended September
30, 1990.
(c) Computed giving effect to investment Adviser's expense limitation
undertaking.
</TABLE>
<PAGE>
<TABLE>
Financial Highlights Continued
Growth Stock Fund
(Unaudited)
Selected per-share data (for a share outstanding throughout each period),
ratios and supplemental data.
<CAPTION>
Nine
Months
Ended
Years Ended December 31, Sept. 30,
1985 1986 1987 1988
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 14.04 $ 17.43 $ 16.97 $ 14.67
-------- -------- -------- --------
Income From Investment Operations
Net investment income .31 .26 .24 .19
Net realized and unrealized gains (losses)
on investments 3.38 2.75 .46 (.11)
-------- -------- -------- --------
Total from investment operations 3.69 3.01 .70 .08
-------- -------- -------- --------
Distributions
Net investment income (.30) (.25) (.29) (.15)
Net realized capital gains -- (3.22) (2.71) --
-------- -------- -------- --------
Total distributions (.30) (3.47) (3.00) (.15)
-------- -------- -------- --------
Net Asset Value, End of Period $ 17.43 $ 16.97 $ 14.67 $ 14.60
======== ======== ======== ========
Ratio of expenses to average net assets 0.67% 0.67% 0.65% 0.76%*
Ratio of net investment income to average
net assets 1.89% 1.34% 1.25% 1.62%*
Portfolio turnover rate 114% 137% 143% 84%
Total return 26.55% 16.91% 5.57% 0.54%
Net assets, end of period $224,371 $226,604 $232,658 $195,641
<PAGE>
<CAPTION>
Six
Months
Ended
Years Ended September 30, March 31,
1989 1990 1991 1992 1993 1994 1995
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 14.60 $ 19.05 $ 17.90 $ 22.79 $ 24.65 $ 24.89 $ 23.58
-------- -------- -------- -------- -------- -------- --------
Income From Investment Operations
Net investment income .34 .39 .33 .18 .15 .13 .08
Net realized and unrealized gains (losses)
on investments 4.51 (1.17) 5.90 3.01 1.14 .41 1.27
-------- -------- -------- -------- -------- -------- --------
Total from investment operations 4.85 (.78) 6.23 3.19 1.29 .54 1.35
-------- -------- -------- -------- -------- -------- --------
Distributions
Net investment income (.34) (.37) (.42) (.16) (.10) (.12) (.15)
Net realized capital gains (.06) -- (.92) (1.17) (.95) (1.73) (3.02)
-------- -------- -------- -------- -------- -------- --------
Total distributions (.40) (.37) (1.34) (1.33) (1.05) (1.85) (3.17)
-------- -------- -------- -------- -------- -------- --------
Net Asset Value, End of Period $ 19.05 $ 17.90 $ 22.79 $ 24.65 $ 24.89 $ 23.58 $ 21.76
======== ======== ======== ======== ======== ======== ========
Ratio of expenses to average net assets 0.77% 0.73% 0.79% 0.92% 0.93% 0.94% 0.95%*
Ratio of net investment income to average
net assets 2.05% 2.03% 1.63% 0.75% 0.59% 0.50% 0.70%*
Portfolio turnover rate 47% 40% 34% 23% 29% 27% 16%
Total return 33.86% (4.17%) 36.64% 14.37% 5.09% 2.10% 6.74%
Net assets, end of period $206,476 $206,031 $291,767 $372,758 $373,921 $321,502 $317,877
<FN>
* Annualized
Note: For the periods indicated below, bank borrowing activity was as follows:
<CAPTION>
Debt Average Average shares
outstanding debt outstanding outstanding Average debt
at end during period during period per share
Period ended of period (in thousands) (in thousands) during period
- ------------- ----------- --------------- ------------- ------------
<S> <C> <C> <C> <C>
December 31, 1985 -- $ 5 13,977 $0.0004
September 30, 1989 -- 124 11,745 0.0106
There were no bank borrowings during any other periods.
</TABLE>
<PAGE>
<TABLE>
Financial Highlights Continued
Special Fund
(Unaudited)
Selected per-share data (for a share outstanding throughout each period),
ratios and supplemental data.
<CAPTION> Nine
Months
Ended
Years Ended December 31, Sept. 30,
1985 1986 1987 1988
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 14.88 $ 18.41 $ 16.95 $ 12.83
-------- -------- -------- --------
Income From Investment Operations
Net investment income .25 .35 .23 .14
Net realized and unrealized gains (losses)
on investments 4.01 2.33 .12 2.16
-------- -------- -------- --------
Total from investment operations 4.26 2.68 .35 2.30
-------- -------- -------- --------
Distributions
Net investment income (.19) (.34) (.57) (.01)
Net realized capital gains (.54) (3.80) (3.90) --
-------- -------- -------- --------
Total distributions (.73) (4.14) (4.47) (.01)
-------- -------- -------- --------
Net Asset Value, End of Period $ 18.41 $ 16.95 $ 12.83 $ 15.12
======== ======== ======== ========
Ratio of expenses to average net assets 0.92% 0.92% 0.96% 0.99%*
Ratio of net investment income to average
net assets 2.07% 1.75% 1.32% 1.31%*
Portfolio turnover rate 96% 116% 103% 42%
Total return 29.41% 14.70% 4.27% 17.94%
Net assets, end of period $278,082 $253,693 $187,997 $224,628
<PAGE>
<CAPTION>
Six
Months
Ended
Years Ended September 30, March 31,
1989 1990 1991 1992 1993 1994 1995
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 15.12 $ 20.79 $ 16.64 $ 19.87 $ 20.90 $ 25.04 $ 23.54
-------- -------- -------- -------- -------- -------- --------
Income From Investment Operations
Net investment income .36 .42 .34 .21 .17 .15 .07
Net realized and unrealized gains (losses)
on investments 5.58 (2.10) 4.55 1.50 5.31 .33 .53
-------- -------- -------- -------- -------- -------- --------
Total from investment operations 5.94 (1.68) 4.89 1.71 5.48 .48 .60
-------- -------- -------- -------- -------- -------- --------
Distributions
Net investment income (.21) (.39) (.34) (.37) (.18) (.21) (.14)
Net realized capital gains (.06) (2.08) (1.32) (.31) (1.16) (1.77) (1.31)
-------- -------- -------- -------- -------- -------- --------
Total distributions (.27) (2.47) (1.66) (.68) (1.34) (1.98) (1.45)
-------- -------- -------- -------- -------- -------- --------
Net Asset Value, End of Period $ 20.79 $ 16.64 $ 19.87 $ 20.90 $ 25.04 $ 23.54 $ 22.69
======== ======== ======== ======== ======== ======== ========
Ratio of expenses to average net assets 0.96% 1.02% 1.04% 0.99% 0.97% 0.96% 0.95%*
Ratio of net investment income to average
net assets 2.12% 2.33% 2.11% 0.99% 0.92% 0.91% 0.60%*
Portfolio turnover rate 85% 70% 50% 40% 42% 58% 23%
Total return 40.00% (8.78%) 32.18% 8.96% 27.35% 2.02% 2.94%
Net assets, end of period $322,056 $361,065 $587,259 $626,080 $1,076,818 $1,243,885 $1,193,306
<FN>
* Annualized
Note: For the periods indicated below, bank borrowing activity was as follows:
<CAPTION>
Debt Average Average shares
outstanding debt outstanding outstanding Average debt
at end during period during period per share
Period ended of period (in thousands) (in thousands) during period
- ------------- ----------- --------------- ------------- ------------
<S> <C> <C> <C> <C>
December 31, 1986 -- $203 15,251 $0.0133
There were no bank borrowings during any other periods.
</TABLE>
<PAGE>
<TABLE>
Financial Highlights Continued
Special Venture Fund
(Unaudited)
Selected per-share data (for a share outstanding throughout each period),
ratios and supplemental data.
<CAPTION>
Period
Ended
March 31,
1995 (a)
-------
<S> <C>
Net Asset Value, Beginning of Period $ 10.00
-------
Income From Investment Operations
Net investment income 0.03
Net realized and unrealized gains on investments 1.03
-------
Total from investment operations 1.06
-------
Distributions
Net investment income (0.03)
Net realized capital gains (0.05)
-------
Total distributions (0.08)
-------
Net Asset Value, End of Period $ 10.98
=======
Ratio of net expenses to average net assets (b) 1.25%*
Ratio of net investment income to average net assets (c) 0.51%*
Portfolio turnover rate 17%
Total return 10.64%
Net assets, end of period $34,512
<FN>
* Annualized
(a) From commencement of operations on October 17, 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 1.86% for the period ended March 31, 1995.
(c) Computed giving effect to investment Adviser's expense limitation
undertaking.
</TABLE>
<PAGE>
<TABLE>
International Fund
(Unaudited)
Selected per-share data (for a share outstanding throughout each period),
ratios and supplemental data.
<CAPTION>
Six
Period Months
Ended Ended
Sept. 30, March 31,
1994 (a) 1995
------- -------
<S> <C> <C>
Net Asset Value, Beginning of Period $ 10.00 $ 10.61
------- -------
Income From Investment Operations
Net investment income .03 .01
Net realized and unrealized gains (losses) on
investments and foreign currency transactions .58 (1.07)
------- -------
Total from investment operations .61 (1.06)
------- -------
Distributions
Net investment income -- (.05)
Net realized capital gains -- (.17)
------- -------
Total distributions -- (.22)
------- -------
Net Asset Value, End of Period $ 10.61 $ 9.33
======= =======
Ratio of net expenses to average net assets 1.61%* 1.66%*
Ratio of net investment income to average net assets 0.61%* 0.35%*
Portfolio turnover rate 48% 35%
Total return 6.10% -10.14%
Net assets, end of period $74,817 $72,344
<FN>
* Annualized
(a) From commencement of operations on March 1, 1994.
</TABLE>
<PAGE>
<TABLE>
Financial Highlights Continued
Capital Opportunities Fund
(Unaudited)
Selected per-share data (for a share outstanding throughout each period),
ratios and supplemental data.
<CAPTION>
Nine
Months
Ended
Years Ended December 31, Sept. 30,
1985 1986 1987 1988
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 19.37 $ 23.81 $ 26.75 $ 21.23
-------- -------- -------- --------
Income From Investment Operations
Net investment income .20 .06 .06 .05
Net realized and unrealized gains (losses)
on investments 4.53 3.93 1.24 .27
-------- -------- -------- --------
Total from investment operations 4.73 3.99 1.30 .32
-------- -------- -------- --------
Distributions
Net investment income (.29) (.20) (.09) --
Net realized capital gains -- (.85) (6.73) --
-------- -------- -------- --------
Total distributions (.29) (1.05) (6.82) --
-------- -------- -------- --------
Net Asset Value, End of Period $ 23.81 $ 26.75 $ 21.23 $ 21.55
======== ======== ======== ========
Ratio of expenses to average net assets 0.95% 0.95% 0.95% 1.01%*
Ratio of net investment income to average
net assets 0.94% 0.19% 0.18% 0.34%*
Portfolio turnover rate 90% 116% 133% 164%
Total return 24.58% 16.77% 9.38% 1.51%
Net assets, end of period $176,099 $191,415 $171,973 $194,160
<PAGE>
<CAPTION>
Six
Months
Ended
Years Ended September 30, March 31,
1989 1990 1991 1992 1993 1994 1995
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 21.55 $ 29.15 $ 14.63 $ 22.00 $ 23.12 $ 30.88 $ 31.58
-------- -------- -------- -------- -------- -------- --------
Income From Investment Operations
Net investment income .10 .12 .22 .11 .02 .03 .05
Net realized and unrealized gains (losses)
on investments 7.71 (9.46) 7.47 1.21 7.82 .68 3.39
-------- -------- -------- -------- -------- -------- --------
Total from investment operations 7.81 (9.34) 7.69 1.32 7.84 .71 3.44
-------- -------- -------- -------- -------- -------- --------
Distributions
Net investment income (.10) (.11) (.16) (.20) (.08) (.01) (.02)
Net realized capital gains (.11) (5.07) (.16) -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Total distributions (.21) (5.18) (.32) (.20) (.08) (.01) (.02)
-------- -------- -------- -------- -------- -------- --------
Net Asset Value, End of Period $ 29.15 $ 14.63 $ 22.00 $ 23.12 $ 30.88 $ 31.58 $ 35.00
======== ======== ======== ======== ======== ======== ========
Ratio of expenses to average net assets 1.09% 1.14% 1.18% 1.06% 1.06% 0.97% 0.94%*
Ratio of net investment income to average
net assets 0.42% 0.43% 1.19% 0.42% 0.09% 0.04% 0.30%*
Portfolio turnover rate 245% 171% 69% 46% 55% 46% 26%
Total return 36.68% (37.51%) 53.51% 5.99% 34.01% 2.31% 10.90%
Net assets, end of period $272,805 $86,342 $129,711 $118,726 $153,101 $175,687 $197,519
<FN>
* Annualized
Note: For the periods indicated below, bank borrowing activity was as follows:
<CAPTION>
Debt outstanding Average Average shares
at end debt outstanding outstanding Average debt
of period during period during period per share
Period ended (in thousands) (in thousands) (in thousands) during period
- ------------- ---------------- --------------- ------------- -------------
<S> <C> <C> <C> <C>
December 31, 1985 $ -- $ 43 8,525 $0.0051
December 31, 1986 -- 55 6,953 0.0079
December 31, 1987 -- 292 8,004 0.0365
September 30, 1988 -- 56 8,603 0.0065
September 30, 1989 -- 422 8,033 0.0526
September 30, 1990 200 1,042 7,972 0.1307
There were no bank borrowings during any other periods.
</TABLE>
<PAGE>
A Guide to SteinRoe 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 1 800 338-2550.
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 $1,000 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.
* Special Redemption Option -- If you do not want to pre-schedule 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.
<PAGE>
Recordkeeping
* Summary of Investments -- 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.
Funds for Every Investment Objective
The SteinRoe family of 100% no-load mutual funds offers a variety of funds so
you can select the right fund, or combination of funds, to meet your
investment objectives. Call us at 1 800 338-2550 for a prospectus and more
complete information on any of the funds, including management fees and
expenses. Please read the prospectus carefully before you invest or
send money.
Money Market Funds
Money market funds seek to provide income while preserving principal and
maintaining liquidity. These funds offer free check writing.
* Government Reserves -- Invests primarily in securities issued or guaranteed
by the U.S. government and its agencies and instrumentalities.*
* Cash Reserves -- Invests in high-quality, short-term money market
securities such as certificates of deposit, banker's acceptances and
commercial paper.*
Bond Funds
Bond funds seek high current income by investing primarily in fixed income
securities.
* Limited Maturity Income Fund -- Invests primarily in U.S. government and
other high-quality debt securities. The dollar-weighted average effective
maturity will not exceed 3 years.
* Government Income Fund -- Invests primarily in securities issued or
guaranteed by the U.S. government and its agencies.
* Intermediate Bond Fund -- Invests primarily in marketable debt securities
with an average life of three to ten years.
* Income Fund -- Pursues a higher level of current income by investing
primarily in medium- and lower-quality bonds.
Tax-Exempt Funds
These funds help investors keep more of their earnings by investing in
instruments that earn income free from federal income tax. Income may be
subject to federal alternative minimum tax and state and local taxes; capital
gains are subject to state, local and federal taxes.
* Municipal Money Market Fund -- Seeks to provide the liquidity and stability
of a money market fund plus current tax-free income. Free check writing
available.*
* Intermediate Municipals -- Seeks high current yield through investments
primarily in the three highest grades of intermediate-term municipal
securities.
* Managed Municipals -- Pursues high tax-free income by investing in a
quality-conscious portfolio of long-term municipal bonds.
* High-Yield Municipals -- Seeks a higher level of tax-free income from
long-term municipal securities primarily of medium or lower quality.
<PAGE>
Growth and Income Funds
These funds seek to provide a conservative investment that is well positioned
for long-term growth and current income. Each fund's approach is designed to
limit the effects of market volatility.
* Total Return Fund -- Strives for maximum total return consistent with
reasonable investment risk by investing in stocks, bonds and convertible
securities.
* Prime Equities -- Pursues long-term capital growth by investing primarily
in large, well-established companies.
Growth Funds
Growth funds offer long-term capital appreciation potential by investing
primarily in various types of stocks.
* Growth Stock Fund -- Pursues long-term capital appreciation from stocks
with strong growth potential.
* Special Fund -- Invests in securities believed to have limited downside
risk relative to their potential for above-average growth, including
securities of under-valued, under-followed or out-of-favor companies.
* Special Venture Fund -- Seeks capital appreciation through equity
securities of entrepreneurially managed funds.
* Young Investor Fund -- Invests in securities of companies that affect the
lives of children or teenagers.
* Capital Opportunities Fund -- Takes a long-term approach to emerging growth
by selecting quality companies with the potential to generate high levels of
earnings growth over a three- to five-year period.
* International Fund -- Invests in a diversified portfolio of foreign
securities.
*Money market mutual funds strive to maintain a $1 per share net asset value,
but there is no assurance that the fund will be able to maintain a stable net
asset value. The net asset value of a fund that invests in securities issued
or guaranteed by the U.S. government is not guaranteed.
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Investment Trust
Trustees
Timothy K. Armour
President of Mutual Fund Division and
Director of Stein Roe & Farnham Incorporated
Kenneth L. Block
Chairman Emeritus, A. T. Kearney, Inc.
William W. Boyd
Chairman and Director of Sterling Plumbing Group, Inc.
Lindsay Cook
Senior Vice-President of 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
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, Controller
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
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
Kenneth A. Kalina, Treasurer
Janet B. Rysz, Assistant Secretary
Agents and Advisers
Stein Roe & Farnham Incorporated
Investment Adviser
Rockefeller & Co., Inc.
Investment Sub-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
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To Contact Us. . .
By Phone 1 800 338-2550
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 weekdays from
7 a.m. to 7 p.m. (central time). And starting in July, you can reach us 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-Call(R)
24-Hour Service Line
Using a touch-tone phone, call our toll-free number anytime, 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 1 800
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. 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
anytime between 8 a.m. and 5:15 p.m.
This report must be preceded or accompanied by a prospectus.
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The SteinRoe Funds
SteinRoe Government Reserves
SteinRoe Cash Reserves
SteinRoe Limited Maturity Income Fund
SteinRoe Government Income Fund
SteinRoe Intermediate Bond Fund
SteinRoe Income Fund
SteinRoe Municipal Money Market Fund
SteinRoe Intermediate Municipals
SteinRoe Managed Municipals
SteinRoe High-Yield Municipals
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
1 800 338-2550
In Chicago, visit our Investor Center
at One South Wacker Drive
Liberty Securities Corporation, Distributor
5/95
20056
