STEINROE INVESTMENT TRUST
N-30D, 1996-05-17
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Semiannual Report
March 31, 1996
Stein Roe
Equity Funds
Growth and Income Funds
Total Return Fund
Growth & Income Fund

Growth Funds
Growth Stock Fund
Special Fund
Special Venture Fund
Capital Opportunities Fund
International Fund

Photographic image of little girl.
<PAGE>
Contents
From the President................................................   1

   Tim Armour's thoughts on the markets and investing

Performance.......................................................   3

   How the Stein Roe Equity Funds have done over time

Q&A
Total Return Fund.................................................   7
Growth & Income Fund..............................................   11
Growth Stock Fund.................................................   15
Special Fund......................................................   19
Special Venture Fund..............................................   22
Capital Opportunities Fund........................................   27
International Fund................................................   31

   Interviews with the portfolio managers and a summary of 
   major shifts in the Funds' investments over the past 
   12 months

Investments.......................................................   35

   A complete list of each Fund's investments with
   market values

Financial Statements..............................................   56

   Balance sheets, statements of operations, and
   changes in net assets

Notes.............................................................   64

   Notes to financial statements

Financial Highlights..............................................   69

   Selected per-share data

General Information...............................................   81

   A guide to products and services
<PAGE>
Photographic image of Timothy K. Armour.

From the President
To Our Shareholders
We are pleased to present this semiannual report for Stein Roe's Growth &
Income Funds -- Total Return Fund and Growth & Income Fund -- and Stein Roe's
Growth Funds -- Growth Stock Fund, Special Fund, Special Venture Fund, Capital
Opportunities Fund and International Fund. This report covers the six months
ended March 31, 1996.
   By virtually all measures, 1995 was a stellar year for the stock market. A
seemingly picture-perfect backdrop, characterized by moderate economic growth,
low unemployment, minimal inflation, declining interest rates, surging exports
and increased corporate profits, helped the stock market post several
recordbreaking gains. And, judging from the record inflows into stocks and
stock mutual funds, many investors appeared confident that the stock market
would continue its march forward in 1996.
   In early March, however, the U.S. government released stronger-than-expected
economic reports that cited an increase in housing starts, a pickup in auto 
sales, firmer retail sales and an unexpected surge in job growth. Investors -- 
who just a month before were concerned that the economy might possibly be 
slipping into a recession -- were suddenly worried that the economy might be
growing enough to rekindle inflation, sending both the stock and bond markets
- -- at least temporarily -- into retreat.

Shades of 1994? 
Those government reports left some investors worried that 1996 might turn out 
to be another 1994, when stocks and bonds ended the year with lackluster 
returns. That's because some market fundamentals are similar to those that 
were in place during 1994. For example, the economy appears to be showing 
increased strength -- spearheaded by the surprisingly strong February 
jobs report -- and long-term interest rates have risen in reaction. Both of
these events also characterized 1994.
   We, however, do not see serious cause for alarm in these events. For
example, February's surprisingly strong economic numbers may have been
misinterpreted or obscured by extreme weather, strikes at some major
industrial employers and government shutdowns. Nonetheless, February's events
do serve as a reminder to investors that the markets can be strongly
influenced by any number of factors, and will, at times, react abruptly to
events. 
<PAGE>
What's Ahead
Our outlook remains an optimistic -- albeit cautious -- one. We expect moderate
economic growth this year, and we think long-term interest rates could 
eventually slide downward, which could help keep stocks in a bullish mode and
inflation at bay. Still, unless the economy slips into a recession -- which 
we believe is unlikely -- there's a limit to how much lower long-term interest
rates can go. And, judging from the headlong rush by many corporations to 
issue debt with long maturities -- some as much as 100 years -- many corporate
officials also believe that today's rates are scraping rock bottom. Without 
the tailwind of declining interest rates, we think it's unlikely that 
investors will reap stock market gains on the order of last year's gain, 
which, as measured by the S&P 500, reached more than 37 percent.
   Still, we think there's probably no reason for investors to bail out of the
stock market. Interest rates remain relatively low and many corporations
continue to meet or exceed their earnings expectations. In addition, a new
element has added to the momentum of the market: As companies shift away from
defined-benefit pension plans to self-directed 401(k) plans, individuals are
forced to take more responsibility for the investment decisions in their
retirement plans -- and they are increasingly choosing stocks and stock mutual
funds to do so. We think this major shift in the burden of retirement savings
will likely provide a reliable source of liquidity for the markets on an
ongoing basis. 
The Basics
While no one can predict what might happen to stock funds or the markets in 
the future, we believe investors must understand the factors that move the 
markets, not just 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's 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 meet your 
investment objectives across various market cycles.
   Please call us at 800-338-2550 with your comments and suggestions. As
always, we look forward to serving your investment needs.

Sincerely,


Timothy K. Armour
President
April 25, 1996
<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, 1996
<CAPTION>
                                        Past 1    Past 3    Past 5     Past 10
                                         Year      Years     Years      Years
<S>                                     <C>         <C>      <C>       <C>
Total Return Fund                       23.46%      9.99%    11.78%    10.13%
Growth Stock Fund                       32.43      12.84     13.83     12.67
Special Fund                            21.80      11.72     13.73     13.83
Capital Opportunities Fund              58.73      29.40     23.92     14.32
S&P 500                                 32.07      15.69     14.64     13.95
S&P MidCap                              28.61      13.93     15.85     14.78
Nasdaq Industrials                      27.83      12.83     13.46     10.55
Russell 2000                            29.09      14.76     16.01     10.42
<CAPTION>
                                        Past 1    Past 3    Past 5      Life
                                         Year      Years     Years    of Fund*
<S>                                     <C>        <C>       <C>       <C>
Growth & Income Fund                    31.52%     14.14%    15.15%    11.49%
S&P 500                                 32.07      15.69     14.64     12.66
<CAPTION>
                                              Past 1               Life
                                               year              of Fund*
<S>                                           <C>                <C>
Special Venture Fund                          29.91%             28.36%
S&P 500                                       32.07              27.90
Russell 2000                                  29.09              20.15
<CAPTION>
                                              Past 1               Life
                                               year              of Fund*
<S>                                           <C>                 <C>
International Fund                            14.46%              4.29%
EAFE                                          12.33               6.50
<FN>
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. Total
return performance includes changes in share price and reinvestment of income
and capital gains distributions.

* Inception dates: International Fund -- March 1, 1994; Special Venture Fund
- -- October 17, 1994; Growth & Income Fund -- March 23, 1987. Because index
returns are calculated on a monthly basis, those marked "Life of Fund" are
calculated from the month-end results that fall closest to the Funds'
inception dates.
</TABLE>
<PAGE>
<TABLE>
Investment Comparison
Comparison of change in value of a $10,000 investment for the years ended
September 30.
Special, Growth Stock, Capital Opportunities and Total Return Funds
<CAPTION>
                    Capital             Total           Growth
Year                Opportunities Fund  Return Fund     Stock Fund     S&P 500   Special Fund
<S>                 <C>                 <C>             <C>            <C>       <C>
9/30/86             10000               10000           10000          10000     10000
9/30/87             15099               11859           15102          14342     13821
9/30/88             11584               11161           11221          12565     13120
9/30/89             15832               13479           15021          16705     18368
9/30/90              9894               12554           14394          15162     16756
9/30/91             15188               16279           19668          19875     22148
9/30/92             16098               18092           22496          22070     24132
9/30/93             21572               20727           23642          24932     30732
9/30/94             22070               20001           24138          25850     31355
9/30/95             30337               23815           30937          33529     35934
3/31/96             38850               26222           34119          37452     39315

Growth & Income Fund
<CAPTION>
DATE         Growth & Income Fund      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
9/30/95      24075                     26172
3/31/96      27224                     29235
</TABLE>
These graphs compares the performance of Stein Roe's Funds to the S&P 500
Index and the Morgan Stanley EAFE Index, each an unmanaged group of stocks
that differs from the composition of each Stein Roe Fund. The Morgan Stanley
EAFE Index, which refers to Europe, Australia and the Far East, contains 18
country sub-indices.
<PAGE>
Investment Comparison
Comparison of change in value of a $10,000 investment for the years ended
September 30.
Special Venture Fund
<TABLE>
<CAPTION>
DATE                Special Venture Fund     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
 6/30/95            10805                   10729
 9/30/95            10805                   10729
 3/31/96            14039                   14172

International Fund
<CAPTION>
Date                International Fund  MSCIEAFE Index
<S>                 <C>                 <C>
 3/31/94             9760               10000
 6/30/94             9990               10511
 9/30/94            10610               10522
12/31/94            10096               10415
 3/31/95             9534               10608
 6/30/95            10240               10685
 9/30/95            10732               11130
 3/31/96            11182               11916
<FN>
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. Total
return performance includes changes in share price and reinvestment of income
and capital gains distributions.
</TABLE>
<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 mutual
fund 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 Stein Roe
account representative at 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 debt securities.

Fund Inception:
August 25, 1949

Total Net Assets:
$231.6 Million

Photographic image of Robert A. Christensen and Lynn C. Maddox

Q: On April 17, 1996, Total Return Fund changed both its name and its 
investment objective, becoming Stein Roe Balanced Fund. What prompted this
change? 
A: When Portfolio Manager Bob Christensen announced his retirement in the 
first quarter of 1996, it provided an opportunity to re-examine the Fund's
investment objectives and strategies. We concluded that changing the Fund to a
balanced fund would enable us to provide our investors with a fund that would
help meet meet their growth and income objectives while allocating investments
among equities, debt securities and cash in a manner that leverages the best
thinking of the investment strategists of Stein Roe & Farnham.
   As previously announced, Harvey Hirschhorn has been named manager of
Balanced Fund. Harvey succeeds Bob, whose retirement was effective March 31 --
the end of this reporting period. A 23-year veteran of Stein Roe & Farnham,
Harvey is the firm's chief economist and investment strategist, and, for the
past year, also has served as co-manager of Stein Roe Growth Stock Fund. We
believe his considerable skill and experience uniquely qualify him to manage
the Fund under this new strategy.

Q: What are the differences between an equity income fund and a balanced fund?
A: Balanced funds and equity income funds are in many ways similar: both are
conservative in nature, and both seek to provide a steady stream of current
income. Equity income funds, however, generally have a slightly higher
concentration of equities, while balanced funds normally have a primary
objective of preserving principal by keeping a balance between equities and
fixed income securities.
<PAGE>
Q: How did Total Return Fund perform over the past six months?
A: For the six months ended March 31, 1996, Total Return Fund's 10.1 percent
return underperformed both the 10.6 percent median return of its Lipper equity 
income peer group and the 11.7 percent return of the S&P 500. The Fund's more
conservative, defensive portfolio led it to underperform the rest of the 
market.

Q: What factors affected performance?
A: In particular, the Fund's performance was hindered by its fixed income
exposure and the lackluster performance of its real estate investment trusts
(REITs). The Fund's fixed income securities, which comprised approximately 15
percent to 20 percent of the portfolio, underperformed when -- following the
release of stronger-than-expected economic reports -- increased selling sent
yields on 30-year Treasury bonds from 6 percent to roughly 6 3/4 percent.
REITs performed as expected, but still lagged the S&P 500.

Q: What kind of changes to the Fund's portfolio do you foresee as a result of
the new investment strategy? 
A: We've taken a number of steps to prepare the Fund for its conversion from 
an equity income fund to a balanced fund. Going forward, convertible 
securities will represent more of an opportunistic part of the Fund's 
strategy -rather than part of its core equity strategy, as was the case with 
Total Return Fund.

Q: Did you buy any new issues during the reporting period?
A: We made several new purchases, including Loewen Group, North America's
second largest funeral home operator (1.3 percent of total net assets). In
1995, a funeral parlor operator in Mississippi charged Loewen with breach of
contract. The matter was settled, and although the costs of litigation were
significant, we think the company's fundamentals remain quite strong and their
growth will continue. Relieved investors seem to agree -- soon after the
settlement was announced, the price of the stock surged. We also deliberately
switched out of Abbott Labs and into Sandoz (1.8 percent of total net assets).
This move helped performance since our Sandoz stock experienced a healthy gain
after it announced it would merge with Ciba-Geigy, another Swiss
pharmaceutical company. Finally, with natural gas prices creeping higher and
drilling and exploration on the rise, we think the turnaround in the oil
industry may finally be taking hold. As a result, we purchased Baker Hughes
(1.4 percent of total net assets), an oil service company, to increase our
exposure to the energy sector.
<PAGE>
Q: In light of the stock market's returns, the modest returns of REITs seem
somewhat unremarkable, yet you maintain a 5.6 percent exposure. Why is that?
A: REITs -- pools of properties that exhibit some of the trading
characteristics of stocks -- have trailed the stock market averages for the
past two years. Yet, because they also exhibit some characteristics of the
real estate market, we think the recent turnaround in the commercial real
estate market makes REITs a potentially attractive investment. The
fundamentals are really quite exciting; the real estate recovery is still in a
relatively early stage -- developers are building once again, and apartment
and office-building landlords are no longer desperate for tenants. Plus, we
think REITs look undervalued on two counts; in many REITs, the liquidation
value of the properties in the pool exceeds the total market value of the
stock, and price-to-cash-flow multiples are historically low. And if interest
rates resume their decline, as we believe they might, we think money from
other income-oriented investments could pour into REITs. While not all REITs
will shine, we think high-quality REITs that aren't laden with debt are a good
place for more conservative investors.

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.
Portfolio holdings are as of March 31, 1996, and are subject to change. Total
return performance includes changes in share price and reinvestment of income
and capital gains distributions. The S&P 500 is an unmanaged group of stocks
that differs from the composition of the Fund; it is not available for direct
investment. According to Lipper Analytical Services, an independent monitor of
mutual fund performance, the median returns for the Fund's equity income fund
peer group for the one-, five- and 10-year periods ended March 31, 1996, were
26.88 percent, 13.92 percent and 11.58 percent, respectively.
<PAGE>
<TABLE>
Fund Highlights
Total Return Fund
<CAPTION>
Top 10 Holdings (% of Total Net Assets)
<S>                                 <C>
Citicorp                             2.5%
BankAmerica Corporation              2.3
British Petroleum                    2.1
General Motors Corporation-Class E   2.0
General Electric Company             2.0
LM Ericsson Convertible Bonds        1.9
Enron Corp.                          1.9
U.S. Filter 144A Conv. Bonds         1.9
DuPont                               1.9
Plum Creek Timber                    1.8
Total                               20.3%
<CAPTION>
Equity Portfolio Highlights
                                     Portfolio             S&P 500
<S>                                  <C>                  <C>
Number of Holdings                      36                  500
Median Market Value ($ Mil.)         9,499                5,038

Pie Chart:
Economic Sector Breakdown
As of March 31, 1996
<CAPTION>
                              Equity Portfolio         S&P 500
<S>                                  <C>                <C>
Basic Materials                      10%                 6%
Consumer Cyclical                     5                 14
Consumer noncyclical                 13                 22
Energy                               14                 10
Financial                            21                 13
Industrial                           17                 10
Technology                           13                 13
Utilities                             7                 12

Pie Chart:
Asset Allocation
<CAPTION>
                    As of September 30, 1995      As of March 31, 1996
<S>                   <C>                           <C>
Bonds               $24.9 (10.9%)                 $44.9 (19.4%)
Cash & Equivalents  $7.1 (3.1%)                   $11.4 (4.9%)
Stocks              $97.3 (42.6%)                 $107.1 (46.2%)
Convertibles        $99.3 (43.3%)                 $68.2 (29.5%)
</TABLE>
<PAGE>
Q&A
An Interview with Growth & Income Fund's 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, the Fund will
normally emphasize investments in equity securities of companies with market
capitalizations greater than $1 billion. The Fund is designed to provide more
dividend income than a portfolio focused exclusively on growth.

Fund Inception:
March 24, 1987

Total Net Assets:
$166.1 Million

Bob Christensen, a 34-year veteran of Stein Roe and co-manager of Growth &
Income Fund since 1994, retired at the end of March. Dan Cantor will continue
to manage the Fund.

Photographic image of Robert A. Christensen and Daniel K. Cantor

Q: How did the Fund perform?
A: For the six-month period ended March 31, 1996, the Fund's 13.1 percent
return edged out both the S&P 500's 11.7 percent return and the 10.3 percent
median return of its Lipper growth & income peer group. It might also be
interesting to highlight the one-year performance numbers, since this
reporting period marks Dan Cantor's first anniversary as the Fund's manager.
For the year ended March 31, 1996, the Fund's 31.5 percent return outpaced the
28.0 percent median return of its growth & income peer group and was just shy
of the 32.1 percent gain of the S&P 500. Additionally, during the year the
Fund outperformed its peer group in each of the four quarters, and -- in a
strong market -- it topped the S&P 500 for the two most recent quarters. (1)
<PAGE>
Q: What drove performance?
A: We believe much of the Fund's across-the-board strength can be attributed
to our stock selection process. Several of the Fund's key holdings performed 
well over the past six-month period, especially the portfolio's financial and 
consumer-related stocks.
   In the financial area, our key holdings included American Express, Citicorp
and Fannie Mae (2.8 percent, 2.9 percent and 3.0 percent of total net assets,
respectively). All three stocks performed well, benefiting from improved
earnings prospects, expanding P/E multiples and a relatively benign interest
rate environment. Among the best performing consumer nondurable stocks were
Albertson's, Nike and Warner Lambert (2.1 percent, 2.2 percent and 2.4 percent
of total net assets, respectively). Albertson's and Nike benefited from
strengthening internal growth, while Warner benefited from a growing
recognition of its favorable product pipeline.
   Partially offsetting these strong results, however, were less-than-
stellar performances by the Fund's paper stocks, Champion and Georgia Pacific
(0.5 percent and 0.8 percent of total net assets, respectively), which was
caused by a sudden downturn in paper demand and pricing.

Q: In recent months, the number of companies initiating stock buybacks has
risen. Why?
A: The buyback trend has been fueled in large part by robust cash flow growth
and a greater dedication among executives to boosting share holder value, not
by paying dividends, but by shrinking the number of shares outstanding. In
addition, more and more companies are using a concept called Economic Value
Added(C), or EVA, to evaluate existing business lines and potential investment
projects. Corporations use the EVA model to judge whether a business will
generate returns in excess of the corporate cost of capital. Consequently,
rather than funneling cash into a business that may not pan out, many
companies are choosing instead to distribute wealth in the form of stock
repurchase programs.
   One positive effect of corporate buybacks is that companies that initiate
share repurchase programs tend to be undergoing positive changes, either in
the structure of their business, the rate of their earnings growth, or both.
As a result, we think repurchase plans can be an indication that a company's
management has confidence in its business strategies going forward and that it
believes its stock is a good investment relative to the value and growth
potential of the business. Consequently, if a company's management believes
its stock is a good investment, other investors will usually give the company
a closer look.
   The buyback trend might also help to bolster the market during bearish
phases. In fact, some believe that repurchase announcements by dozens of
companies during the depths of the 1987 crash probably helped to shore up
investor confidence and stem losses.
<PAGE>
Q: Recent newspaper reports suggest that the era of low price volatility may
be over. What is causing a spike in volatility, and how do you react to 
uncertain market conditions?
A: There are several reasons for the recent increase in volatility in the U.S.
bond and stock markets, but we think the release of stronger-than-expected
economic reports in early March was probably the biggest contributing factor.
Bond traders, fearing the Federal Reserve might respond to the reports by
raising interest rates, started selling, which quickly bid up long-term
yields. The stock market responded in kind, suffering similar -- though less
extreme -- short-term losses.
   Still, while it's not much consolation for investors who are worried about
the market's recent movements, this kind of volatility is really not that
unusual. The concern is that we've gone more than five years without a 10
percent correction, and in the last three years, volatility has hovered near
historic lows. Our research suggests that, in the last 40 years, market
corrections have tended to occur, on average, about once every 30 months.
   It's also important to note that increased volatility can offer long-term
investors the opportunity to pick up additional shares at a discount. That's
because heightened volatility can cause a stock's price to go down too far,
and as a result, it gives investors a chance to pick up that stock at an
attractive price.
   If there is a market correction, we will attempt to use it as an
opportunity to buy interesting companies whose stock prices do not fully
reflect their long-term prospects. We will also try to use any market downturn
to step up our commitment to the stocks we already own provided they still
exhibit attractive fundamentals. As always, we will cautiously manage downside
risk by actively monitoring our holdings.
<PAGE>
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.
Portfolio holdings are as of March 31, 1996, and are subject to change. Total
return performance includes changes in share price and reinvestment of income
and capital gains distributions. The S&P 500 is an unmanaged group of stocks
that differs from the composition of the Fund; it is not available for direct
investment. According to Lipper Analytical Services, an independent monitor of
mutual fund performance, the median returns for the Fund's growth and income
fund peer group for the one-year, five-year and Life of Fund periods ended
March 31, 1996, were 27.69 percent, 13.53 percent and 10.98 percent,
respectively.

For the second quarter ended June 30, 1995, the third quarter ended September
30, 1995, the fourth quarter ended December 31, 1995 and the first quarter
ended March 31, 1996, Growth & Income Fund posted returns of 8.21 percent,
7.48 percent, 6.93 percent and 5.75 percent, respectively, outpacing the 8.02
percent, 7.27 percent, 4.92 percent, and 5.45 percent respective median
returns of its Lipper growth and income peer group for the same time periods.
Additionally, for the fourth quarter ended December 31, 1995, and for the
first quarter ended March 31, 1996, Growth & Income Fund's respective returns
of 6.93 percent and 5.75 percent topped the 6.02 percent and 5.37 percent
respective returns of the S&P 500 for the same time periods.
<PAGE>
<TABLE>
Fund Highlights 
Growth & Income Fund
<CAPTION>
Top 10 Holdings (% of Total Net Assets)
<S>                                 <C>
General Electric Company             3.2%
Monsanto Company                     3.1
Federal National Mortgage Assn.      3.0
Honeywell Inc.                       3.0
Citicorp                             2.9
American Express                     2.8
General Motors Corporation-Class E   2.5
Emerson Electric Co.                 2.5
First Interstate Bancorp             2.5
Warner Lambert                       2.4
Total                               27.9%
<CAPTION>
Equity Portfolio Highlights
                                            Portfolio             S&P 500
<S>                                            <C>                 <C>
Number of Holdings                                 49                500
Median Market Value ($ Mil.)                   12,336              5,038

Pie Chart:
Economic Sector Breakdown
As of March 31, 1996
<CAPTION>
                                       Equity Portfolio          S&P 500
<S>                                         <C>                    <C>
Basic Materials                              6%                     6%
Consumer Cyclical                           13                     14
Consumer noncyclical                        22                     22
Energy                                       6                     10
Financial                                   18                     13
Industrial                                  22                     10
Technology                                   8                     13
Utilities                                    5                     12

Pie Chart:
Asset Allocation
<CAPTION>
                        As of September 30, 1995    As of March 31, 1996 
<S>                            <C>                         <C>
Equities                    $104.9 (75.2%)*              $131.5 (79.1%)* 
Cash & Equivalents           $31.5 (22.6%)                $31.6 (19.0%)
Bonds                         $3.1 (2.2%)                  $3.1  (1.9) 
<FN>
                        *Excludes S&P Futures      *Excludes S&P Futures
                              (Long)=10.5%               (Long)=9.8%
</TABLE>
<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:
$389.5 Million

Photographic image of Erik P. Gustafson and Harvey B. Hirschhorn

Effective April 17, 1996, Harvey Hirschhorn has been named manager of Stein
Roe Balanced Fund, formerly Total Return Fund. Erik Gustafson will continue to
manage Growth Stock Fund.

Q: How did the Fund perform?
A: Growth Stock Fund returned 10.3 percent for the six-month period ended
March 31, 1996. While that beat the 7.9 percent median return of the Fund's
Lipper growth fund peer group for the same time period, it trailed the 11.7
percent return of the S&P 500. Much of the Fund's underperformance versus the
S&P can be traced to early March, when the government released
stronger-than-expected economic data. These reports -- particularly the news
that 705,000 non-farm jobs were created in February -- led many investors to
conclude that the economy was much stronger than previously believed. That
triggered an investor shift out of the high-quality, large-capitalization
growth stocks that do well in a slow-growth economy into more
cyclical-oriented issues, which tend to benefit from a stronger economy.
   Our overweighting in technology also hurt us as the technology sector
suffered a major selloff late last year, and smaller, broader-based selloffs
in January and again in early March. We do not think that this recent
volatility points to larger problems in the technology sector. In fact, while
we expect some additional short-term volatility as first-quarter earnings
results are announced, we're optimistic about the long-term growth prospects
of this sector.
<PAGE> 
Q: What were the Fund's brightest spots?
A: The strongest performances were turned in by the Fund's energy holdings,
Schlumberger and Renaissance Energy (2.0 percent and 1.4 percent of total net
assets, respectively), which benefited from a turnaround in the oil industry.
And our retail holdings, including Home Depot, Kohl's and Albertson's (4.1
percent, 1.8 percent and 1.3 percent of total net assets, respectively), which
had languished in Wall Street's bargain bin for most of 1995, rebounded this
year, helping performance.

Q: There have been a number of headline-grabbing merger deals over the past
six months. Have any of these deals had an effect on the Fund's performance?
A: Actually, yes. One of our holdings, Sandoz, responded to competitive
threats and rapid consolidation in the pharmaceutical industry by agreeing to
merge with Ciba-Geigy, another Swiss pharmaceutical company. The deal
propelled the combined company into the pharmaceutical world's number three
spot and sent Sandoz's stock price soaring. We sold our Sandoz stock, which we
had purchased at $42 a share just a month before, for $58 a share on the day
the merger was announced -- a handsome profit.

Q: What are some of the investment themes you've been focusing on lately?
A: There are a number of demographic trends that we believe will have an
impact on the markets in the future. For example, we are extremely optimistic
about opportunities in the financial services sector. We think increased
concern over the future solvency of the Social Security system will spark a
growing legion of baby boomers to start thinking seriously about retirement --
many for the first time. As a result, we think many will step up their
contributions to 401(k)s, IRAs and other retirement plans, and we think this
trend could be a long-term benefit to the financial services industry.
<PAGE>
   Similarly, we think the aging of America will provide ample investment
opportunities in health-related industries. As a result, we purchased several
new health care holdings, including Baxter International and pharmaceutical
giants Merck and SmithKline Beecham (1.7 percent, 1.4 percent and 1.3 percent
of total net assets, respectively). We think the national push to cut medical
costs will gradually force more people to join managed care systems. Such
providers tend to favor drug therapy over costlier treatments, such as
surgery. Consequently, we think drug companies whose products are geared
toward age-related ailments, such as osteoporosis, high blood pressure and
congestive heart failure, should do particularly well. We think smaller niche
businesses, such as health care information management companies, could also
benefit from this trend. As a result, we recently purchased Medaphis Corp.
(0.6 percent of total net assets), which provides business management systems
to physicians and hospitals. We think this is a rapidly growing business, and
with just 3 percent of the market, Medaphis is the biggest player. In
addition, we think the company's margins could explode later this year, when
they introduce a paperless business system that will file insurance and other
forms electronically.
   Finally, we think technology continues to be a compelling long-term
investment. It's one of the few sectors that, in our opinion, can show growth
of 20 percent or more a year.
<PAGE>
Q: What are your expectations for the coming months?
A: We believe there's been an unusual amount of fixation on economic data
recently. After February's unexpectedly strong employment report, many
investors are focusing on each and every scrap of information about the
economy. While the most recent jobs report (released on April 5) seems to
buttress the position that the economy is somewhat stronger than expected, we
think some of the details of these economic reports may have been misinter
preted. For example, according to the government's survey of households, many
of the newly created jobs were temporary or part time. Clearly, that means
corporate sector jobs are being replaced by more unstable temporary jobs, and
we believe there's little danger of increased inflation from this type of
hiring. We also believe some of the job data was distorted by bad weather,
seasonal adjustments, returning strikers, government shutdowns and a
longer-than-usual survey period in February, making the data somewhat
unreliable.
   So, despite recent economic reports, we are not revising our investment
strategy. We do not believe the economy is growing as rapidly as the data
suggests. As a result, we think we have positioned the portfolio to perform
well in the slow-growth, low-inflation environment that we see going forward.

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.
Portfolio holdings are as of March 31, 1996, and are subject to change. Total
return performance includes changes in share price and reinvestment of income
and capital gains distributions. The S&P 500 is an unmanaged group of stocks
that differs from the composition of the Fund; it is not available for direct
investment. According to Lipper Analytical Services, an independent monitor of
mutual fund performance, the median returns of the Fund's growth fund peer
group for the one-, five- and 10-year periods ended March 31, 1996, were 28.25
percent, 13.54 percent and 12.30 percent, respectively.
<PAGE>
<TABLE>
Fund Highlights
Growth Stock Fund
<CAPTION>
Top 10 Holdings (% of Total Net Assets)
<S>                                 <C>
The Home Depot, Inc.                 4.1%
General Electric Company             3.2
The Coca-Cola Company                3.0
Federal National Mortgage Assn.      2.9
Johnson & Johnson                    2.7
First Data Corporation               2.7
The Gillette Company                 2.7
Microsoft Corporation                2.6
The Procter & Gamble Co.             2.6
Travelers Group                      2.5
Total                               29.0%
<CAPTION>
Equity Portfolio Highlights
                                                 Portfolio             S&P 500
<S>                                                  <C>                 <C>
Number of Holdings                                       49                500
Median Market Value ($ Mil.)                         15,420              5,038

Pie Chart:
Economic Sector Breakdown
As of March 31, 1996
<CAPTION>
                                Equity Portfolio              S&P 500
<S>                                  <C>                         <C>
Basic Materials                        2%                        6%
Consumer Cyclical                     15                        14
Consumer noncyclical                  32                        22
Energy                                 2                        10
Financial                             17                        13
Industrial                            10                        10
Technology                            19                        13
Utilities                              3                        12

Pie Chart:
Asset Allocation
<CAPTION>
                      As of September 30, 1995     As of March 31, 1996
<S>                         <C>                             <C>
Stocks                     $339.9 (94.3%)             $365.5 (93.9%)
Cash & Equivalents          $20.4  (5.7%)              $24.0  (6.1%)
</TABLE>
<PAGE>
Q&A
An Interview with Special Fund's and Special Venture Fund's Portfolio Managers

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 undervalued,
underfollowed or out-of-favor companies. Funds that emphasize investments in
smaller companies may experience short-term price volatility.

Fund Inception:
May 22, 1968

Total Net Assets:
$1,123.1 Million

Photographic image of: E. Bruce Dunn and Richard B. Peterson

Special Fund Q & A

Q: How did the Fund perform?
A: For the six months ended March 31, 1996, Special Fund's return of 9.4
percent topped the 7.9 percent median return of its Lipper growth fund peer
group, but lagged the 11.7 percent return of the S&P 500. Because the Fund has
a significant weighting in small- and mid-cap stocks, we believe it may also
be useful to measure the Fund's perfor - m ance against the Russell 2000 Index
and the S&P MidCap Index, the most comprehensive small- and mid-cap stock
indices. The Fund's six-month return outpaced both the 7.4 percent return of
the Russell 2000 and the 7.7 percent return of the S&P MidCap.

Q: What factors accounted for the Fund's improving performance?
A: Many of the factors that hurt the Fund's performance last year have helped
performance in 1996. For instance, the prices of many of the Fund's small- and
mid-cap holdings, which had been out of favor recently, have started to rise.
The Fund's foreign holdings also have shown signs of improvement.
   Over the past six months, much of the Fund's performance was driven by its
consumer cyclical, industrial and financial holdings. As of March 31, 1996,
these sectors represented 55 percent of total net assets, but produced 89
percent of the Fund's six-month return. These sectors have benefited as
stronger-than-expected economic data spurred investors to shift out of stable
growth companies and into more cyclical companies.
   We think our decision to limit the Fund's technology exposure also paid off
recently, as many technology stocks have shown signs of weakness. While
technology was the Fund's weakest performing sector, the overall impact on the
Fund's performance was relatively modest, since our position was 9 percent of
total net assets, versus 13 percent for the S&P at March 31.
<PAGE>
Q: You've mentioned on numerous occasions that you look for companies that have
entrepreneurial managers with the talent, commitment and decision-making
skills needed to build shareholder wealth. How do you evaluate management and
can you give an example of a company where management has made a difference?
A: There's an old adage on Wall Street that says a company is only as good as
its management. That's why we think that investment success is closely tied to
who runs the company.
   In evaluating management, we talk to competitors who contribute valuable
insight into the best managers in their respective industries. We also look
for managements that have a significant personal investment in the company's
stock. Most importantly, because we believe past winners tend to be future
winners, we look for evidence of past business success. Of course we seek an
operationally strong company, but management skills and leadership leverage
that strength to build future wealth for shareholders.
   An example of a management team that has made a significant improvement is
that of Zale. Bob DiNicola, an experienced merchandiser, was asked by the
Board of Directors to join the company in early 1994, shortly after its
emergence from bankruptcy. Bob assembled a top-notch retailing team that
included Beryl Raff -- who is in charge of the Zale Division -- and completely
remerchandised its store base. The result: improving comparable store sales
growth, improving cash flow margins and a stock price more than double the
price we initially paid.

Q: There's been a lot of talk about mergers recently, but a number of
companies also have announced plans to spin off divisions to shareholders. Do
spin-offs offer the same lucrative return potential as mergers often do? 
A: We think spin-offs can be just as rewarding as mergers. As of March 31, a
sampling of the Fund's holdings that were spin-offs included AVX Corp.,
Airtouch Communications, Allstate, Cox Communications, Interim Services,
Littelfuse, Minerals Technologies and National Mutual Asia (1.4 percent, 2.4
percent, 2.4 percent, 2.2 percent, 2.3 percent, 2.7 percent, 1.8 percent and
2.3 percent of total net assets, respectively).
   A recent study by Penn State University's Smeal School of Business confirms
our view, documenting that spun-off subsidiaries tend to outperform their
peers and show better- than-average growth in sales and income. There are a
number of reasons for this. When a company is part of a larger organization,
access to capital may be difficult. Senior corporate management may not
recognize the potential that the operators believe exists. Once a company is
spun off, however, its management can focus on what it does best. Direct
ownership often infuses managers with a newfound entrepreneurial spirit.
"Owners" tend to operate differently than "employees."
<PAGE> 
Q: Where are you finding interesting investment ideas right now? 
A: We are extremely optimistic about the opportunities in outsourcing. In the
rush to improve efficiency, corporate America is increasingly parceling out 
everything from customer service to manufacturing. In fact, according to a 
1995 study by A.T. Kearney, about 86 percent of major corporations now 
outsource at least some services, up from 58 percent in 1992. We think Olsten,
one of the Fund's largest holdings (2.9 percent of total net assets), is a 
leader in this regard.
   We've also found some interesting ideas in the health care sector,
particularly among medical equipment companies. For example, we have a 2.6
percent stake in Boston Scientific, a pioneer producer of catheter and
angioplasty devices.

Q: How long do you tend to hold a stock?
A: Our preference is to buy a stock and hold it for at least three to five
years -- which is about the same time frame that we think it takes for a
company to execute its business plan. This kind of investing isn't as easy as
it sounds. That's why we think it's important to design a portfolio that can
stand up to all kinds of financial "weather," not just the conditions that
prevail right now. That usually means resisting the temptation to get caught
up in short-term market trends, and instead focusing on the long-term
prospects of specific companies.

Q: So, what prompts you to sell a stock?
A: Because we research each of the Fund's holdings carefully, we really
believe in the long-term profit potential of each one. As a result, our
portfolio turnover rate is usually moderate. We will consider selling a stock
if, for example, we think it starts taking on too much debt, or if it shifts
its business focus away from what we think the company does well. We might
also sell a holding if, in our opinion, there is an unfavorable change in
senior management or if we think the stock is overvalued.

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.
Portfolio holdings are as of March 31, 1996, and are subject to change. Total
return performance includes changes in share price and reinvestment of income
and capital gains distributions. The S&P 500, the S&P MidCap and the Russell
2000 are unmanaged groups of stocks that differ from the composition of the
Fund; they are not available for direct investment. According to Lipper
Analytical Services, an independent monitor of mutual fund performance, the
median returns for the Fund's growth fund peer group for the one-, five- and
10-year periods ended March 31, 1996, were 28.25 percent, 13.54 percent and
12.30 percent, respectively.
<PAGE> 
Special Venture Fund Q & A

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 mid-sized companies based principally on 
management appraisal and stock valuation. Funds that emphasize investments in
smaller companies may experience short-term price volatility.

Fund Inception:
October 17, 1994

Total Net Assets:
$96.8 Million

Q: How did the Fund perform?
A: For the six-month period ended March 31, 1996, Special Venture Fund posted
a return of 13.2 percent, outpacing the 11.7 percent return of the S&P 500 and
the 7.9 percent return of its Lipper small company peer group. Because the
Fund's median market capitalization of about $470 million marks Special
Venture as a small-cap fund, we think it might be interesting to compare the
Fund to an index that measures small-cap performance, such as the Russell
2000. The Fund outperformed the Russell 2000 Index, which returned 7.4 percent
for the six-month period.
   Since its launch in October of 1994, Special Venture Fund has posted a
return of 43.7 percent, which outperformed the 30.4 percent return of the
Russell 2000 and nearly equaled the S&P 500 return of 43.5 percent for the
same time period.
   We're quite pleased with the Fund's performance to date, and believe it is
attributable to our risk management investment approach.
<PAGE>
Q: Can you elaborate on that investment approach?
A: Unlike many small company funds, Special Venture Fund is not an "emerging
growth" fund. In fact, the companies that we invest in come in all stages of
development. Many are in businesses that are neither new nor emerging -some
might even consider them mundane. Our holdings do tend to share a few
characteristics, however. In particular, they tend to be smaller,
entrepreneurially managed, adequately financed and underfollowed companies
whose stock prices, in our opinion, do not fully reflect their prospects for
growth.
   In particular, we look for managements that have demonstrated success in
building wealth. We invest in many different types of businesses and focus on
limiting the risks that may face companies in today's competitive environment.
For example, the Fund has 15 percent of total net assets in technology stocks.
Histori cally, this has been a volatile sector because of the exposure
companies have to rapid obsolescence in the industry. In attempting to limit
risk, we have invested in attractive growth companies that we think have a
much broader customer base and product lines that are not dependent on the
success of one product or one significant customer.
   For example, Keane, Inc. (3.9 percent of total net assets) offers soft ware
services and personnel to corporations and health care facilities that are
looking to outsource their technological needs; Zytec (2.6 percent of total
net assets), a manu facturer of AC-DC power connectors, has a large,
established customer base; and Kent Electronics (2.1 percent of total net
assets), a specialty elec tronics distributor, sells its products to
manufacturers in the computer, telecommunications and medical equipment
industries.

Q: What factors contributed to the Fund's performance?
A: Although the Fund generated positive returns across a broad range of
industry groups, its performance was driven primarily by its technology,
consumer noncyclical and industrial holdings. These three sectors represented
56 percent of the Fund, but produced 62 percent of the Fund's six-month
return.
   The Fund's weakest sector was consumer cyclicals. Although they made only a
small contribution during the past six months, performance has improved
recently, as the Fund's retail stocks have rallied.
   We're also encouraged by the positive relative performance of our larger
holdings over the past six months. As of March 31, the Fund's top 10 holdings
represented 34 percent of total net assets. For instance, our largest holding,
OM Group, a specialty chemical company (4.2 percent of total net assets), was
up 22 percent over the last six months. Another top-10 holding that performed
well was AmeriSource (4.0 percent of total net assets), a wholesale
distributor of drugs and health care products -- AmeriSource was up 22
percent.
<PAGE>
Q: How much do economic conditions or market trends affect your investment
decisions?
A: We generally don't make direct investment decisions based on consensus
economic expectations. Instead, we invest in specific companies that we think
will do well over the long term.
   For instance, we purchased Boston Scientific (2.0 percent of total net
assets), one of the Fund's best performing long-term holdings, at a time when
federal regulation of health and medical companies was quite hostile.

Q: Any final thoughts?
A: We're optimistic about the long-term growth potential of small-cap stocks.
According to Ibbotson Associates, a research firm based in Chicago, small-cap
stocks outperform large-cap stocks in cycles -- and these cycles typically
last at least five years. The most recent period of small-cap outperformance
began in late 1990 and lasted until February 1994. At that point, large-cap
stocks recaptured their market dominance over small-cap stocks, helped in
large part by ideal conditions -- including a strong U.S. economy and a weak
dollar that helped boost sales abroad. By historical standards, however, this
cycle -- lasting three years rather than five years -was unusually brief. For
that reason, we think the small-cap cycle may only have stalled rather than
ended.
   In fact, we think the stage could be set for a longer-term cycle during
which small-cap stocks could outperform. After the run-up in large-cap stocks,
we think smaller-cap stocks appear to offer a much better value. Plus, as
economic growth slows, it may be harder for many large-cap stocks to sustain
their recent earnings growth, especially since the dollar appears to have
bottomed out. Still, investors should remember that while small-cap stocks
offer significant growth potential, they also tend to experience greater price
volatility than the stock market in general.

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.
Portfolio holdings are as of March 31, 1996, and are subject to change. Total
return performance includes changes in share price and reinvestment of income
and capital gains distributions. The S&P 500 and the Russell 2000 are
unmanaged groups of stocks that differ from the composition of the Fund; they
are not available for direct investment. According to Lipper Analytical
Services, an independent monitor of mutual fund performance, the median
returns for the Fund's small company peer group for the one-year and Life of
Fund periods ended March 31, 1996, were 30.54 percent and 24.21 percent,
respectively.
<PAGE>
<TABLE>
Fund Highlights
Special Fund
<CAPTION>
Top 10 Holdings (% of Total Net Assets)
<S>                                 <C>
Harley-Davidson, Inc.                4.1%
Borders Group                        3.0
The Olsten Corporation               2.9
Littelfuse Inc.                      2.7
Molex Inc.                           2.7
The Progressive Corporation          2.6
Boston Scientific                    2.6
Airtouch Communications              2.4
The Allstate Corporation             2.4
Interim Services                     2.3
Total                               27.7%

<CAPTION>
Equity Portfolio Highlights
                                                 Portfolio             S&P 500
<S>                                                 <C>                  <C>
Number of Holdings                                     57                  500
Median Market Value ($ Mil.)                        1,320                5,038

Pie Chart:
Economic Sector Breakdown
As of March 31, 1996
<CAPTION>
                                  Equity Portfolio         S&P 500
<S>                                     <C>                   <C>
Basic Materials                          7%                   6%
Consumer Cyclical                       26                   14
Consumer noncyclical                    12                   22
Energy                                   3                   10
Financial                               17                   13
Industrial                              19                   10
Technology                               9                   13
Utilities                                7                   12

Pie Chart:
Asset Allocation
<CAPTION>
                       As of September 30, 1995        As of March 31, 1996
<S>                               <C>                         <C>
Equities                    $1,127.3 (93.8%)               $1,029.5 (91.6%)
Cash                           $63.1  (5.3%)                  $93.6  (8.4%)
</TABLE>
<PAGE>
Fund Highlights
Special Venture Fund
<TABLE>
<CAPTION>
Top 10 Holdings (% of Total Net Assets)
<S>                                  <C>
OM Group                              4.2%
AmeriSource Distribution Corporation  4.0
Keane Inc.                            3.9
G&K Services Inc.                     3.7
Zale Corporation                      3.6
Triad Guaranty Inc.                   3.3
Invacare Corporation                  3.2
Cambrex                               2.8
Zytec Corporation                     2.6
National Mutual Asia Ltd.             2.6
Total                                33.9%
<CAPTION>
Equity Portfolio Highlights
                                                 Portfolio             S&P 500
<S>                                                 <C>                  <C>
Number of Holdings                                   44                    500
Median Market Value ($ Mil.)                        468                  5,038

Pie Chart:
Economic Sector Breakdown
As of March 31, 1996
<CAPTION>
                                      Equity Portfolio         S&P 500
<S>                                          <C>                 <C>
Basic Materials                              12%                  6%
Consumer Cyclical                            18                  14
Consumer Noncyclical                         22                  22
Energy                                        6                  10
Financial                                     8                  13
Industrial                                   15                  10
Technology                                   19                  13
Utilities                                     0                  12

Pie Chart:
Asset Allocation
<CAPTION>
                    As of September 30, 1995       As of March 31, 1996 
<S>                        <C>                          <C>
Equities                   52.2% (86.2%)               $83.4 (86.1%)
Cash                       $8.3  (13.8%)               $13.4 (13.9%)
</TABLE>
<PAGE>
Q&A An Interview with Capital Opportunities Fund's Portfolio Managers
Fund Data 
Investment Objective: 
Seeks long-term capital appreciation by investing in aggressive growth 
companies, including securities of smaller emerging companies as well
as securities of any size that offer strong earnings growth potential. Funds
that emphasize investments in smaller companies may experience short-term
price volatility.

Fund Inception:
March 31, 1969

Total Net Assets:
$696.1 Million

Photographic image of Gloria J. Santella and Erik S. Maddix.

Q: How did the Fund perform?
A: The Fund performed extremely well. For the six-month period ended March 31,
1996, the Fund posted a return of 28.1 percent, significantly outpacing both
the 11.7 percent return of the S&P 500 and the 8.3 percent median return of
its Lipper capital appreciation peer group. The Fund also outperformed the
small- to mid-cap growth benchmarks, surpassing the 7.7 percent return of the
S&P MidCap Index and the 4.4 percent return of the Nasdaq Industrials Index.

Q: What factors drove the Fund's performance over the past six months?
A: The Fund's outperformance rela tive to the S&P 500 was pri marily earnings
driven, as many of the Fund's small- and mid-cap holdings reported strong
earnings growth. During the first quarter of 1996, for example, about 70
percent of the companies in the Fund's portfolio reported earnings that were
in line with our expectations, while 25 percent reported earnings above our
expectations.
   The Fund generated positive returns across a broad range of industry
groups. The top performing groups were business services and technology. On a
price basis, the average business services holding was up 28 percent, while
the average technology holding was up 36 percent for the six-month period. The
Fund's business services holdings continued to benefit from the market's
willingness -- while dealing with an uncertain economic environment -- to
reward companies that can exhibit high recurring revenues. Our technology
holdings benefited from a renewed -- yet selective -- interest in this sector
following the fourth quarter 1995 selloff. In addition, the passage of the
tele communications bill helped the performance of the Fund's telecom
munications equipment companies.
   The only group to make a negative contribution was the Fund's consumer
products holdings, which experienced an average share price decline of 2
percent over the six-month period.
<PAGE>
Q: Are you exploring any new investment themes?
A: Most of our recent investment activity has been concentrated in existing
holdings. We did, however, begin to investigate health care information
technology. During the reporting period, we purchased three companies that
provide information systems to health care organizations, allowing them to
better manage their patients and improve the quality of care.
   As health care becomes a more competitive business, we are starting to see
health care providers adopt more widely recognized business strategies to
increase their profitabil ity. One area where health care companies still
remain well behind the curve, however, is technology spending -- our research
suggests that corporate America spends 8 to 10 percent of earnings on tech
nology, while health care companies spend only 2 percent. As a result, we
believe the health care industry will increase significantly the amount it
spends on information technology in the next few years, and we think the
companies we own should benefit from this trend.

Q: Do you plan on making any changes to your investment strategy?
A: No, we will continue to utilize a bottom-up approach to invest in companies
that we believe offer sustainable, long-term earnings potential. We will most
likely continue to focus on technology, business services, health care and
consumer/ retail companies, as we have, in the past, found significant growth
opportunities in these areas. We do, however, have self-imposed limits -- we
will not devote more than 25 percent of our holdings to any given industry. At
22 percent of the portfolio, technology is approaching this limit, and
business services, at 17 percent, is also at the high end. While we obviously
will not exceed our limit, we are comfortable with these weightings, as long
as the underlying fundamentals of the companies remain intact.
<PAGE>
Q: The 'January effect' -- the tendency of smaller-cap stocks to outperform
large-cap stocks during the month of January -- fell short of expectations
this year. Why was that? A: The S&P 500 rose 3.3 percent in the first month of
1996, while the Nasdaq Industrials Index was up only 0.5 percent and the
Russell 2000 dropped slightly. We think there are a few possible explanations
for this occurrence. First, because large gains in 1995 decreased year-end tax
selling, there was less of a rebound for stocks in early 1996. Second, foreign
investors generally prefer investments in blue-chip stocks over smaller
companies -- especially now in the face of a rebounding dollar and continued
growth of U.S. companies and the U.S. economy as a whole. Finally, there's the
"bandwagon effect" -- many portfolio managers missed the rise of large-cap
stocks during 1995 and, as a result, they have stayed in large-cap stocks for
fear of missing out on another large-cap rally.

Q: What are your expectations for the coming months?
A: Several factors have increased market volatility recently. But while a
stock market correction is certainly possible, our research leads us to
believe that the Fund is no more susceptible to market risks than it has been
in the past. If a company's fundamentals remain intact and its earnings are in
line with expectations, then -regardless of whether interest rates are rising
or falling or the economy is growing or slipping -- we think that company's
long-term performance should mirror its earnings growth. As a result, we will
continue to look for companies that we think are capable of generating high
earnings growth despite an uncertain environment.

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.
Portfolio holdings are as of March 31, 1996, and are subject to change. Total
return performance includes changes in share price and reinvestment of income
and capital gains distributions. The S&P 500, the S&P MidCap and the Nasdaq
Industrials are unmanaged groups of stocks that differ from the composition of
the Fund; they are not available for direct investment. According to Lipper
Analytical Services, an independent monitor of mutual fund performance, the
median returns of the Fund's Lipper capital appreciation peer group for the
one-, five- and 10-year periods ended March 31, 1996, were 29.60 percent,
13.87 percent and 11.91 percent, respectively.
<PAGE>
<TABLE>
Fund Highlights
<CAPTION>
Capital Opportunities Fund
Top 10 Holdings (% of Total Net Assets)
<S>                                <C>
Gartner Group, Inc.                 3.5%
HFS, Inc.                           3.5
Clear Channel Communications, Inc.  3.5
PhyCor, Inc.                        3.3
Paychex, Inc.                       3.2
Papa John's International, Inc.     2.8
Tellabs, Inc.                       2.8
HBO and Company                     2.7
StrataCom, Inc.                     2.6
Sunglass Hut International          2.4
Total                              30.3%
<CAPTION>
Equity Portfolio Highlights
                                            Portfolio             S&P 500
<S>                                            <C>                  <C>
Number of Holdings                                54                  500
Median Market Value ($ Mil.)                   1,510                5,038

Pie Chart:
Economic Sector Breakdown
As of March 31, 1996
<CAPTION>
                         Equity Portfolio          S&P 500
<S>                           <C>                     <C>
Basic Materials                0%                     6%
Consumer Cyclical             29                     14
Consumer noncyclical          19                     22
Energy                         0                     10
Financial                      3                     13
Industrial                    27                     10
Technology                    22                     13
Utilities                      0                     12

Asset Allocation
<CAPTION>
                         As of September 30, 1995     As of March 31, 1996 
<S>                              <C>                      <C>
Cash & Equivalents             $27.1 (11.2%)             $80.9 (11.6%)
Convertibles                  $208.6 (86.1%)            $612.0 (87.9%)
Stocks                          $6.6  (2.7%)              $3.2 (0.5%)
</TABLE>
<PAGE>
Q&A An Interview with International Fund's Portfolio Managers 

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 
least three countries outside of the United States. Foreign investments 
involve market, political and currency risks not generally associated with 
U.S. investments.

Fund Inception:
March 1, 1994

Total Net Assets:
$113.9 Million

Photographic image of Bruno Bertocci and David Harris.

Q: How did the Fund perform?
A: For the six-month period ended March 31, 1996, the Fund's return of 4.19
percent lagged both the 6.37 percent median return of its Lipper international
fund peer group and the 7.06 percent return of the Morgan Stanley Capital
International Europe, Australia and Far East (MSCI EAFE) Index. We saw a
substantial improvement in performance, however, in the latter half of the
reporting period, when the Fund's 4.0 percent return outpaced EAFE's 2.9
percent return.
   Until recently, the international equity markets have been led by the
markets of low-growth economies and, within those markets, large-cap blue
chips have been the strongest performers. By contrast, the Fund's holdings are
concentrated in traditional cyclical industries, which were negatively
affected by recessionary fears and expectations of slower global growth.
   The Fund also has a significant commitment to several emerging markets in
Southeast Asia and Latin America, which have little representation in the EAFE
Index. While these markets were volatile over the six-month period, we think
they offer significant potential appreciation over the long term. As a result,
we took advantage of market weakness to add stocks from developing regions at
what we believed were attractive valuations.
<PAGE>
   Finally, our performance was dampened by a lack of exposure to Japanese
bank stocks, a sector that significantly outperformed early in the reporting
period -- up 13 percent in the month of December alone. (1) We've chosen not 
to invest in Japanese banking stocks as we believe they are overvalued.
   We think it's important to note that we've started to see a distinct
reversal in many of the trends that held back the Fund's performance last
year. One of the most significant is the shift in investor attention from the
stable, blue-chip stocks of more developed economies to emerging markets. We
believe that investors are once again recognizing the exceptional values and
growth potential of the world's less developed equity markets. We think that
will lead to a significant recovery in these areas.
<PAGE>
Q: Can you give us a quick tour of the international landscape? 
A: We think the outlook in western Europe is largely positive, particularly 
in smaller "soft currency" countries -- such as Finland, Italy and Sweden -- 
where stocks are trading at prices well below their U.S. counterparts. 
Europe's economic recovery is at an earlier stage than the U.S. recovery. As a
result, we're just starting to see the positive effects of corporate 
restructuring and technological innovation -- two factors that fueled the 
recent U.S. rally -- take hold on the Continent. Many European markets also
figure to get a boost from lower interest rates, which should help support 
stock prices.
   Our forecast for Japan is much cloudier. The Bank of Japan seems determined
to revive the recession-ridden economy by pumping up the nation's money supply
and cutting interest rates. If that strategy works, the Nikkei could rebound.
If economic growth remains stagnant, however, we think stock prices could
continue their recent retreat. In the face of such uncertainties, we are
taking a cautious stance, selectively picking stocks that we believe could
still prosper even if the broad Japanese stock market doesn't perform well.
For example, we recently purchased Yamazen (1.7 percent of total net assets),
Japan's largest machine tool distributor, which we believe should benefit from
a rebound in capital spending both in Japan and abroad. The balance of our
Japanese holdings are focused on sectors where we think there is attractive
relative value.
   We're looking with renewed interest at the Latin American equity markets.
While many stocks in this region were tainted by Mexico's economic woes -- the
so-called 'tequila effect' -- we think there are some attractive buying
opportunities that exist in these markets, particularly in Argentina and
Brazil. We're cautiously optimistic about investment opportunities in Mexico.
Although political uncertainty and a fragile banking system still pose
significant risks, we're encouraged by falling interest rates, a slowdown in
the unemployment rate and increased cement usage -- all indicators that
Mexico's economic problems may finally be on the mend.
   We see bright prospects for emerging markets across Asia. Korea remains one
of our top choices. After being rocked by a political corruption scandal in
1995, many stocks are selling at extremely low single-digit multiples, yet we
think the Korean economy could grow at an annual rate of more than 8 percent.
<PAGE>
Q: Any new purchases?
A: We purchased several new holdings, including Inchcape (1.9 percent of total
net assets), a U.K.-based company that distributes Japanese cars throughout
the United Kingdom and Southeast Asia. We think this company will benefit from
a new -- and highly regarded -- management team and a major restructuring plan
that we think should improve margins. We also bought Samchully (0.8 percent of
total net assets), Korea's largest natural gas distributor, which we think
will benefit from the expansion of Korea's pipeline infrastructure.
   In addition, we purchased Norsk Hydro (1.5 percent of total net assets) and
added to our position in Kemira (1.7 percent of total net assets), two
Scandinavian agricultural chemical companies that should benefit from
increased demand for fertilizers. Global inventories of wheat and corn are
currently at record low levels, and the current crops appear to be among the
worst on record. As a result, to boost yields, farmers are expected to
significantly increase their fertilizer use, which bodes well for these
companies since they are among the world's largest fertilizer producers.

Q: What's your outlook?
A: We are optimistic about the prospects for the non-U.S. markets this year.
Valuations are attractive, particularly in sectors where direct comparisons to
U.S. stocks can be made. Economic growth has continued in the developing
world, which we believe will eventually translate into higher share prices.

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.
Portfolio holdings are as of March 31, 1996, and subject to change. Total
return performance includes changes in share price and reinvestment of income
and capital gains distributions. The MSCI EAFE is an unmanaged group of
foreign stocks that differs from the composition of the Fund; it is not
available for direct investment. According to Lipper Analytical Services, an
independent monitor of mutual fund performance, the median returns for the
Fund's international fund peer group for the one-year and Life of Fund periods
ended March 31, 1996, were 16.03 percent and 4.70 percent, respectively.

1 Source: Morgan Stanley Capital International, 1996
<PAGE>
<TABLE>
Fund Highlights
<CAPTION>
International Fund
Top 10 Holdings (% of Total Net Assets)
<S>                                <C>
Bladex                              2.0%
Canon                               2.0
Inchcape                            1.9
Matsushita Electric                 1.8
Avesta-Sheffield                    1.8
Sandoz                              1.7
Generale de Banque                  1.7
Yamazen Corporation                 1.7
Kemira                              1.7
Enso Gutzeit                        1.6
Total                              17.9%
<CAPTION>
Equity Portfolio Highlights
                                          Portfolio             S&P 500
<S>                                          <C>               <C>
Number of Holdings                           90                1,110
Median Market Value ($ Bil.)                1.8                  2.2

Pie Chart:
Economic Sector Breakdown
As of March 31, 1996
<CAPTION>
                            Equity Portfolio          MSCI EAFE
<S>                              <C>                    <C>
Capital Equipment                18.4%                  12.9%
Consumer Goods                   13.6                   19.9
Energy                           10.1                    9.4
Finance                          14.5                   26.1
Materials                        16.0                   11.0
Multi-Industry                    6.5                    3.5
Services                         20.9                   17.2

Asset Allocation
<CAPTION>
                     As of September 30, 1995          As of March 31, 1996
<S>                         <C>                            <C>
Equities                   $74.9 (90.1%)                 $118.8 (98.2%)
Cash % Equivalents          $5.9  (7.0%)                   $2.1  (1.8%)
Bonds                       $2.4% (2.9%)                       --
</TABLE>
<PAGE>
<TABLE>
Total Return Fund
Investments as of March 31, 1996
(Dollar Amounts In Thousands)
(Unaudited)
<CAPTION>
                                                                        Number    Market
Equity-Related Securities (75.7%) ................................   of Shares     Value
<S>                                                                   <C>        <C>
Common Stocks (46.2%)
Automotive (1.5%)
General Motors Corp. .............................................    66,000     $ 3,515
Banking (4.7%)
BankAmerica Corporation ..........................................    68,000       5,270
Citicorp .........................................................    72,602       5,808
                                                                                 -------
                                                                                  11,078
Chemicals (1.9%)
Dupont (E.I.) DeNeMours & Company ................................    52,000       4,316
Computers (1.6%)
International Business Machines Corp. ............................    33,000       3,667
Conglomerates and Miscellaneous (2.9%)
Hanson Plc ADRs ..................................................   180,000       2,700
Harris Corporation ...............................................    64,000       3,960
                                                                                 -------
                                                                                   6,660
Data Processing & Duplicating (1.1%)
Xerox ............................................................    20,000       2,510
Distribution (0.9%)
Wal-Mart Stores, Inc. ............................................    91,500       2,116
Drugs and Health Products (5.2%)
Bristol-Myers Squibb Company .....................................    46,500       3,982
Eli Lilly & Co. ..................................................    60,000       3,900
Sandoz ADRs ......................................................    70,000       4,101
                                                                                 -------
                                                                                  11,983
Electrical Equipment (5.3%)
Emerson Electric Co. .............................................    50,000       4,037
General Electrical Company .......................................    60,000       4,673
Hubbell Inc. Class B .............................................    54,000       3,503
                                                                                 -------
                                                                                  12,213
Food, Beverage & Tobacco (0.8%)
General Mills, Inc. ..............................................    30,000       1,751
Machinery (1.4%)
Tenneco, Inc. ....................................................    60,000       3,353
Natural Gas (1.9%)
Enron Corp. ......................................................   120,000       4,425
Oil and Natural Gas (3.2%)
Baker Hughes Inc. ................................................   110,000       3,218
Unocal Corp. .....................................................   125,000       4,172
                                                                                 -------
                                                                                   7,390
Paper & Forest Products (1.8%)
Plum Creek Timber Company, L.P. ..................................   160,000       4,260
Petroleum (2.1%)
British Petroleum Company Plc ADRs ...............................    44,844       4,765
<PAGE>
<CAPTION>
Total Return Fund CONTINUED
                                                                       Number     Market
                                                                    of Shares      Value
<S>                                                                   <C>        <C>
Real Estate (4.0%)
Kimco Realty Corporation .........................................    120,000   $  3,240
RFS Hotel Investors, Inc. ........................................    120,000      2,085
United Dominion Realty Trust Inc. ................................    280,000      4,095
                                                                                --------
                                                                                   9,420
Services (1.9%)
General Motors Corporation Class E Series C ......................     80,000      4,560
Telecommunications (1.8%)
Frontier Corp. ...................................................    132,000      4,158
Transportation (0.7%)
Canadian National Railway ........................................     87,700      1,513
Utilities-Electric (1.5%)
Empresa Nacional de Electricidad, S.A. de C.V., ADRs .............     60,000      3,420
                                                                                --------
Total Common Stock (Cost $72,458) ................................               107,073
Preferred Stocks (8.3%)
Computer Software (0.5%)
Salomon Inc. (Microsoft Corp. ELKS) $3.994 .......................     10,000      1,063
Food, Beverage & Tobacco (1.2%)
RJR Nabisco Holdings Corp. PERCS .................................    435,000      2,664
Machinery (1.2%)
*Elsag Bailey $2.750 Cv ..........................................     60,000      2,685
Mining (1.3%)
Freeport-McMoran Gold & Copper Inc. $1.750 Cv ....................     97,000      3,068
Real Estate Management (1.5%)
Rouse $3.250 Cv ..................................................     65,000      3,526
Services (1.2%)
Loewen Group Series C $1.250 Cv ..................................    125,000      2,897
Utilities (1.4%)
Citizens Utility Co. $2.500 Cv ...................................     70,000      3,290
                                                                                --------
Total Preferred Stocks (Cost $18,515) ............................                19,193
                                                                    Principal
Convertible Subordinated Debentures (21.2%) ......................     Amount
Automotive (1.0%)
Masotech 4.500% 12/15/03 .........................................   $  3,000      2,329
Electronics (1.9%)
LM Ericsson 4.250% 6/30/00 .......................................      1,500      4,453
Energy (1.4%)
SFP Pipelines Holdings 11.160% 8/15/10 ...........................      2,500      3,275
Financial (1.5%)
Elan International Financial Ltd.  Zero Coupon
   (Effective Yield 4.652%) 10/16/12 .............................      5,000      3,475
<PAGE>
<CAPTION>
Total Return Fund CONTINUED
                                                                     Principal    Market
                                                                       Amount      Value
<S>                                                                  <C>        <C>
Health Care (3.4%)
Nationwide Health Inc. 6.250% 1/01/99 ............................   $  3,700   $  3,663
*Roche Holdings Ltd. Zero Coupon
(Effective Yield 4.750%) 9/23/08 .................................      5,000      4,200
                                                                                --------
                                                                                   7,863
Insurance (1.0%)
Fremont General Zero Coupon (Effective Yield 9.270%)
10/12/13 .........................................................      5,000      2,281
Retail (2.3%)
Proffits Inc. 4.750% 11/01/03 ....................................      3,000      2,850
Starbucks
   4.500% 8/01/03 ................................................      1,000      1,533
   4.250% 11/01/02 ...............................................        900        991
                                                                                --------
                                                                                   5,374
Restaurants (1.3%)
Boston Chicken Zero Coupon (Effective Yield 7.597%)
6/01/15 ..........................................................     10,000      3,037
Services (6.1%)
Danka Business Systems 6.750% 4/01/02 ............................      1,500      2,379
LTC Properties 8.500% 1/01/00 ....................................      2,000      2,168
OHM Corporation 8.000% 10/01/06 ..................................      1,500      1,326
*U.S. Filter 6.000% 9/15/05 ......................................      3,600      4,347
Valhi, Inc. Zero Coupon (Effective Yield 8.693%)
   (Convertible into shares of Dresser) 10/20/07 .................      9,000      3,937
                                                                                --------
                                                                                  14,157
Technology (0.8%)
WMX Technologies, Inc. 2.000% 1/24/05 ............................      2,000      1,770
Transportation (0.5%)
Roadmaster Industries, Inc. 8.000% 8/15/03 .......................      1,500      1,031
Total Convertible Subordinated Debentures (Cost $40,022) .........                49,045
Total Equity-Related Securities (Cost $130,995) ..................               175,311
Bonds and Notes (19.4%)
U.S. Government Obligations (5.9%)
U.S. Treasury Bonds
   7.250% 5/15/16 ................................................      3,000      3,137
   7.875% 2/15/21 ................................................      3,000      3,354
U.S. Treasury Notes
   6.375% 1/15/99 ................................................      3,500      3,541
   6.875% 8/31/99 ................................................      3,500      3,592
                                                                                --------
                                                                                  13,624
U.S. Government Agency Mortgage-Backed Securities (3.3%)
Federal Home Loan Mortgage Corporation Gold
   6.500% 2/01/11 ................................................      2,000      1,958
   6.500% 3/01/26 ................................................      3,060      2,911
Federal National Mortgage Association (Multi-family housing)
   (Variable Rate) 9.038% 6/01/97 ................................         39         39
**Government National Mortgage Association
   8.000% 3/15/26 ................................................      2,500      2,551
                                                                                --------
                                                                                   7,459
<PAGE>
<CAPTION>
Total Return Fund CONTINUED
                                                                    Principal     Market
                                                                       Amount      Value
<S>                                                                  <C>        <C>

Air Transportation (1.6%)
Federal Express Corporation 1994 Pass-Through Certificates
   Series A310-A1 7.530% 9/23/06 .................................   $  2,215   $  2,258
United Airlines Series 1991 9.200% 3/22/08 .......................      1,383      1,515
                                                                                --------
                                                                                   3,773
Commercial Bank ( 0.9%)
Den Danske Bank 6.550% 9/15/03 ...................................      2,250      2,171
Communication (1.4%)
Telecommunications 8.250% 1/15/03 ................................      3,000      3,127
Financial (2.8%)
Alps 94-1 Pass Thru Trust 9.350% 9/15/04 .........................      2,487      2,534
Kansallis Osake Panki Supranational Bank 10.000% 5/01/02 .........      3,000      3,456
MDC Mortgage Funding Corporation Series Q Class 5
8.850% 3/20/18 ...................................................        515        532
                                                                                --------
                                                                                   6,522
Foreign Government Regional Bonds (0.6%)
*Corporacion Andina de Fomento 6.625% 10/14/98 ...................      1,500      1,480
Major Chemicals (1.1%)
Hanson Overseas 7.375% 1/15/03 ...................................      2,500      2,549
Mortgage-Backed Securities (1.8%)
American Mortgage Trust Series 1993-3 Class 3B 8.190%
9/27/22 ..........................................................      2,353      2,219
*Lennar 8.120% 9/15/02 ...........................................      2,000      2,000
                                                                                --------
                                                                                   4,219
                                                                                --------
Total Bonds and Notes (Cost $44,815) .............................                44,924
Short Term Obligations (5.2%)
Commercial Paper (5.2%)
Heller Financial Corp. 5.470% 4/02/96 ............................     10,000      9,995
UBS Finance 5.500% 4/01/96 .......................................      2,080      2,079
                                                                                --------
Total Short-Term Obligations (Amortized Cost $12,074) ............                12,074
Total Investments (100.3%)
(Cost basis $187,884) ............................................               232,309
Other Assets, Less Liabilities (-0.3%) ...........................                  (714)
                                                                                --------
Total Net Assets (100.0%) ........................................              $231,595
                                                                                ========
<FN>
* These securities are subject to contractual or legal restrictions on their
resale. At March 31, 1996, the aggregate value of these securities represented
6.4% of net assets. 
** Security purchased on a when-issued or delayed delivery basis for which the
Fund had not taken delivery as of March 31, 1996.

See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Growth and Income Fund
Investments as of March 31, 1996
(Dollar Amounts In Thousands)
(Unaudited)
<CAPTION>
                                                                       Number     Market
Equity-Related Securities (79.1%) ................................  of Shares      Value
<S>                                                                    <C>      <C>
Common Stocks (78.6%)
Aircraft Manufacturing (2.0%)
McDonnell Douglas Corporation ....................................     36,000   $  3,299
Banks (7.1%)
Chase Manhattan Corp. ............................................     10,000        735
Citicorp .........................................................     60,616      4,849
First Interstate Bancorp .........................................     23,500      4,077
Republic New York Corporation ....................................     35,000      2,083
                                                                                --------
                                                                                  11,744
Business Services (3.9%)
*DST Systems Inc. ................................................     12,000        368
General Motors Corporation Class E ...............................     74,000      4,218
The Interpublic Group of Companies, Inc. .........................     40,400      1,909
                                                                                --------
                                                                                   6,495
Computers (1.5%)
International Business Machines Corp. ............................     22,000      2,445
Construction (1.6%)
Fluor Corp. ......................................................     39,300      2,682
Consumer-Related (6.7%)
The Gillette Company .............................................     72,200      3,736
Nike, Inc. Class B ...............................................     44,000      3,575
The Procter & Gamble Co. .........................................     45,000      3,814
                                                                                --------
                                                                                  11,125
Distribution (4.5%)
Albertson's Inc. .................................................     96,000      3,564
Walgreen Co. .....................................................    120,000      3,915
                                                                                --------
                                                                                   7,479
Drugs (3.0%)
SmithKline Beecham Plc ADRs ......................................     20,000      1,030
Warner-Lambert ...................................................     39,000      4,027
                                                                                --------
                                                                                   5,057
Electrical Equipment (10.8%)
Emerson Electric Co. .............................................     52,000      4,199
General Electric Company .........................................     68,000      5,296
Honeywell Inc. ...................................................     90,000      4,973
Hubbell Incorporated, Class B ....................................     54,700      3,549
                                                                                --------
                                                                                  18,017
Energy (5.0%)
Amoco Corporation ................................................     36,500      2,637
British Petroleum Company Plc ADRs ...............................     31,552      3,352
Enron Corp. ......................................................     62,500      2,305
                                                                                --------
                                                                                   8,294
Financial (5.8%)
American Express Co. .............................................     94,000      4,641
Federal National Mortgage Association ............................    156,000      4,973
                                                                                --------
                                                                                   9,614
<PAGE>
<CAPTION>
Growth and Income Fund CONTINUED
                                                                       Number     Market
                                                                    of Shares      Value
<S>                                                                    <C>      <C>
Food, Beverage & Tobacco (5.2%)
PepsiCo, Inc. ....................................................     40,000   $  2,530
Philip Morris Companies ..........................................     45,000      3,949
Sara Lee Corporation .............................................     67,000      2,186
                                                                                --------
                                                                                   8,665
Health Care (2.7%)
Abbott Laboratories ..............................................     68,500      2,791
Roche Holding Ltd. ...............................................        200      1,660
                                                                                --------
                                                                                   4,451
Leisure & Entertainment (0.8%)
The Walt Disney Co. ..............................................     22,035      1,407
Media (1.7%)
Tribune Company ..................................................     25,000      1,647
*Viacom International Incorporated, Class B ......................     27,190      1,145
                                                                                --------
                                                                                   2,792
Paper and Forest Products (2.9%)
Alco Standard Corporation ........................................     49,000      2,554
Champion International ...........................................     20,000        905
Georgia Pacific ..................................................     20,000      1,387
                                                                                --------
                                                                                   4,846
Printing (0.4%)
Deluxe Corp. .....................................................     20,000        627
Real Estate (1.4%)
Equity Residential Properties ....................................     36,000      1,125
Nationwide Health Properties, Inc. ...............................     60,000      1,260
                                                                                --------
                                                                                   2,385
Rubber, Plastics, and Related Products (1.4%)
Goodyear Tire & Rubber Co. .......................................     45,000      2,295
Specialty Chemicals (3.6%)
Monsanto Co. .....................................................     34,000      5,219
Union Carbide Corporation ........................................     15,000        744
                                                                                --------
                                                                                   5,963
Telecommunications (3.9%)
AT&T .............................................................     40,222      2,464
Nynex Corp. ......................................................     80,000      3,990
                                                                                --------
                                                                                   6,454
Transportation (1.9%)
Conrail Inc. .....................................................     33,000      2,364
Kansas City Southern Industries, Inc. ............................     17,000        790
                                                                                --------
                                                                                   3,154
Other (0.8%)
Minnesota Mining & Manufacturing Co. .............................     20,000      1,297
                                                                                --------
Total Common Stocks (Cost $88,218) ...............................               130,587
Preferred Stock (0.5%)
Media (0.5%)
News Corp. Ltd. ADRs
   (Cost $636) ...................................................     43,000        871
Total Equity-Related Securities (Cost $88,854) ...................               131,458
<PAGE>
<CAPTION>
Growth and Income Fund CONTINUED
                                                                    Principal     Market
                                                                       Amount      Value
<S>                                                                  <C>        <C>
Note (1.9%)
U.S. Government Obligation
U.S. Treasury Note 7.125% 9/30/99
   (Cost $2,964) .................................................   $  3,000   $  3,103
Short-Term Obligations (18.7%)
Commercial Paper (17.8%)
International Business Machines 5.420% 4/02/96 ...................      8,000      7,996
Merrill Lynch Corp. 5.400% 4/01/96 ...............................      8,000      7,998
Pacific Telesis Group 5.500% 4/01/96 .............................      6,600      6,598
UBS Finance 5.520% 4/03/96 .......................................      7,000      6,996
                                                                                --------
                                                                                  29,588
U.S. Government Obligation (0.9%)
**U.S. Treasury Bill 4.915% 5/02/96 ..............................      1,500      1,493
                                                                                --------
Total Short-Term Obligations
(Amortized Cost $31,081) .........................................                31,081
Total Investments (99.7%)
(Cost $122,899) ..................................................               165,642
Other Assets, Less Liabilities (0.3%) ............................                   496
                                                                                --------
Total Net Assets (100.0%) ........................................              $166,138
                                                                                ========
<FN>
**Non-income producing.
**Security was pledged to cover margin requirements for open futures contracts.

Futures contracts which were open at March 31, 1996 were as follows:
                                                                Unrealized
                          Number of    Contract                       Loss
Type                      Contracts       Value    Expiration   at 3/31/96
Standard & Poor's
500 Index (Long)                  50    $16,281    June, 1996         $295

See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Growth Stock Fund
Investments as of March 31, 1996
(Dollar Amounts In Thousands)
(Unaudited)
<CAPTION>
                                                                       Number     Market
Common Stocks (93.9%) ............................................  of Shares      Value
<S>                                                                   <C>       <C>
Banks & Savings and Loans (7.4%)
Citicorp .........................................................    110,000   $  8,800
Fifth Third Bancorp ..............................................    162,000      9,396
MBNA Corp. .......................................................    225,000      6,665
Royal Bank of Scotland Plc .......................................    518,000      3,859
                                                                                --------
                                                                                  28,720
Business Services (3.3%)
First Data Corporation ...........................................    150,000     10,575
*Medaphis Corp. ..................................................     50,000      2,425
                                                                                --------
                                                                                  13,000
Chemicals (1.6%)
Hercules Inc. ....................................................    100,000      6,200
Computers and Computer Software (5.1%)
Bay Networks Inc. ................................................    100,000      3,075
*Microsoft Corporation ...........................................    100,000     10,313
Sun Microsystems Inc. ............................................    150,000      6,563
                                                                                --------
                                                                                  19,951
Construction (1.9%)
Fluor Corp. ......................................................    110,000      7,508
Consumer-Related (8.9%)
*CUC International Inc. ..........................................    250,000      7,312
The Gillette Company .............................................    200,000     10,350
*Kohl's Corporation ..............................................    110,000      6,971
The Proctor & Gamble Co. .........................................    120,000     10,170
                                                                                --------
                                                                                  34,803
Distribution-Retail (6.3%)
Albertson's Inc. .................................................    140,000      5,197
*Corporate Express Inc. ..........................................    100,000      3,300
The Home Depot, Inc. .............................................    333,333     15,958
                                                                                --------
                                                                                  24,455
Distribution-Wholesale (0.4%)
Sysco Corporation ................................................     50,000      1,644
Electrical Equipment (5.5%)
General Electric Company .........................................    160,000     12,460
Thermo Electron Corp. ............................................    150,000      8,925
                                                                                --------
                                                                                  21,385
Energy (3.4%)
*Renaissance Energy Ltd. .........................................    200,000      5,248
Schlumberger Ltd. ................................................    100,000      7,913
                                                                                --------
                                                                                  13,161
Financial Services (4.1%)
Federal Home Loan Mortgage Corporation ...........................     50,000      4,263
Federal National Mortgage Association ............................    360,000     11,475
                                                                                --------
                                                                                  15,738
<PAGE>
<CAPTION>
Growth Stock Fund CONTINUED
                                                                       Number     Market
                                                                    of Shares      Value
<S>                                                                   <C>       <C>
Food, Beverage & Tobacco (5.1%)
The Coca Cola Company ............................................    140,000   $ 11,567
Nabisco Holdings Corp. ...........................................    250,000      8,188
                                                                                --------
                                                                                  19,755
Health Care (6.8%)
Johnson & Johnson ................................................    115,000     10,609
**Roche Holding Ltd. ADSs ........................................    100,000      8,299
United Healthcare ................................................    125,000      7,688
                                                                                --------
                                                                                  26,596
Hotels (3.4%)
*HFS Incorporated ................................................    200,000      9,725
*Sun International Hotels Ltd. ...................................    100,000      3,600
                                                                                --------
                                                                                  13,325
Insurance (4.9%)
American International Group, Inc. ...............................     97,500      9,128
The Travelers ....................................................    150,000      9,900
                                                                                --------
                                                                                  19,028
Leisure & Entertainment (1.6%)
The Walt Disney Co. ..............................................    100,000      6,387
Media (0.8%)
*Viacom International Incorporated, Class B ......................     75,000      3,159
Medical Supplies (3.4%)
Baxter International Inc. ........................................    150,000      6,787
Medtronic, Inc. ..................................................    110,000      6,559
                                                                                --------
                                                                                  13,346
Pharmaceutical (5.3%)
Eli Lilly & Co. ..................................................    150,000      9,750
Merck and Company, Inc. ..........................................     90,000      5,603
SmithKline Beecham Plc ADRs ......................................    100,000      5,150
                                                                                --------
                                                                                  20,503
Restaurants (2.2%)
McDonalds Corporation ............................................    175,000      8,400
Rubber, Plastic & Related (2.1%)
Illinois Tool Works Inc. .........................................    125,000      8,078
Technology Services (3.3%)
General Motors Corp. Series E-1 ..................................    140,000      7,980
*Tellabs Inc. ....................................................    100,000      4,838
                                                                                --------
                                                                                  12,818
Telecommunications (7.1%)
*Airtouch Communications .........................................    225,000      7,003
LM Ericsson Telecommunications ADRs Class B ......................    350,000      7,481
Motorola, Inc. ...................................................    150,000      7,950
Telefonica Argentina ADRs ........................................    200,000      5,125
                                                                                --------
                                                                                  27,559
                                                                                --------
Total Common Stocks (Cost $235,925) ..............................               365,519
<PAGE>
<CAPTION>
Growth Stock Fund CONTINUED
                                                                    Principal     Market
                                                                       Amount      Value
<S>                                                                  <C>        <C>
Short-Term Obligations (6.7%)
Commercial Paper (6.7%)
Heller Financial Corp. 5.470% 4/02/96 ............................   $ 14,000   $ 13,994
UBS Finance 5.500% 4/01/96 .......................................     12,250     12,246
                                                                                --------
Total Short-Term Obligations (Cost $26,240) ......................                26,240
Total Investments (100.6%)
(Cost basis $262,165) ............................................               391,759
Other Assets, Less Liabilities (-0.6%) ...........................                (2,279)
                                                                                --------
Total Net Assets (100.0%) ........................................              $389,480
                                                                                ========
<FN>
*  Non-income producing.
**These securities are subject to contractual or legal restrictions on their
resale. At March 31, 1996, the aggregate value of these securities represented
2.1% of net assets.

See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Special Fund
Investments as of March 31, 1996
(Dollar Amounts In Thousands)
(Unaudited)
<CAPTION>

                                                                       Number     Market
Common Stocks (91.6%) ............................................  of Shares      Value
<S>                                                                   <C>       <C>
Automotive (2.4%)
Mark IV Industries ...............................................    525,000   $ 11,550
Superior Industries International, Inc. ..........................    636,000     15,900
                                                                                --------
                                                                                  27,450
Banks (1.8%)
Golden West Financial ............................................    380,000     20,377
Broadcasting (3.5%)
*Cox Communications .............................................   1,150,000     25,156
Grupo Radio Centro, S.A. de C.V. ADSs ............................    352,500      2,952
*Scandinavian Broadcasting System S.A ............................    490,000     11,025
                                                                                --------
                                                                                  39,133
Business Services (10.4%)
Alco Standard Corporation ........................................    494,000     25,749
*DST Systems Inc. ................................................     13,700        419
*Interim Services Inc. ...........................................    680,000     26,010
The Interpublic Group of Companies Inc. ..........................    425,000     20,081
The Olsten Corporation ...........................................  1,011,600     32,624
Unitog Company ...................................................    488,850     12,221
                                                                                --------
                                                                                 117,104
Chemicals (2.4%)
Cabot Corp. ......................................................    602,800     18,385
**Reliance Industries GDS ........................................    650,000      8,937
                                                                                --------
                                                                                  27,322
Consumer-Related (4.0%)
Harley-Davidson, Inc. ............................................  1,172,000     45,562
Data Products and Reproduction (2.0%)
Xerox ............................................................    182,000     22,841
Electrical Equipment (2.7%)
*Littelfuse, Inc.
   Common ........................................................    585,000     22,084
   Warrants ......................................................    273,600      8,105
                                                                                --------
                                                                                  30,189
Electronics & Instrumentation (5.3%)
AVX Corporation ..................................................    718,400     15,715
*General Instrument Corp. ........................................    495,000     13,551
Molex Inc. Class A ...............................................    938,827     30,042
                                                                                --------
                                                                                  59,308
Energy & Related Services (5.3%)
Cross Timbers Oil Company ........................................    996,100     17,183
*Renaissance Energy Ltd. .........................................    985,000     25,847
Schlumberger Ltd. ................................................    125,000      9,891
Southwestern Energy Company ......................................    555,900      6,671
                                                                                --------
                                                                                  59,592
<PAGE>
<CAPTION>
Special Fund CONTINUED
                                                                       Number     Market
                                                                    of Shares      Value
<S>                                                                <C>          <C>
Financial Services (13.7%)
The Allstate Corporation .........................................    638,000   $ 26,876
American Express Co. .............................................    455,000     22,466
Household International Inc. .....................................    340,000     22,865
National Mutual Asia Ltd. ........................................ 27,850,000     25,390
The Progressive Corporation ......................................    642,300     28,663
TCF Financial Corp. ..............................................    310,000     11,237
*20th Century Industries .........................................    980,100     16,417
                                                                                --------
                                                                                 153,914
Health Services & Equipment (12.5%)
*Boston Scientific ...............................................    623,000     28,658
Cardinal Health Inc. .............................................    350,000     22,488
Invacare Corp. ...................................................    850,000     24,013
*Lincare Holdings Inc. ...........................................    350,000     11,375
*McKesson Corporation ............................................    170,000      8,713
Sandoz AG ........................................................     21,000     24,609
Stryker Corporation ..............................................    359,800     17,698
*Sybron International Corporation ................................    117,700      2,884
                                                                                --------
                                                                                 140,438
Industrial Products (1.8%)
Carlisle Corp. ...................................................    360,100     15,619
Hon Industries ...................................................    194,700      4,478
                                                                                --------
                                                                                  20,097
Media (1.4%)
*Viacom International Incorporated, Class B ......................    363,500     15,312
Real Estate (0.7%)
The Town and Country Trust Class A ...............................    557,000      7,868
Retail (7.2%)
*Borders Group ...................................................  1,200,000     34,200
**Hornbach Baumarket Bearer Shares ...............................     49,990      1,676
*Proffitt's Inc. .................................................    625,700     19,710
*Zale Corp. ......................................................  1,437,200     24,702
                                                                                --------
                                                                                  80,288
Security (1.5%)
Pittston Brinks Group ............................................    637,600     17,056
Specialty Chemicals (6.3%)
*Lydall, Inc. ....................................................    979,000     24,475
Minerals Technology Corp. Class A ................................    599,200     20,747
OM Group, Inc. ...................................................    673,000     24,985
                                                                                --------
                                                                                  70,207
Textiles & Apparel (1.5%)
Unifi, Inc. ......................................................    668,475     16,461

Telecommunications (5.2%)
*Airtouch Communications .........................................    874,500     27,219
*Cellular Communications Inc., Series A ..........................    165,000      8,436
Frontier Corporation .............................................    400,000     12,600
*PriCellular .....................................................    800,000     10,700
                                                                                --------
                                                                                  58,955
                                                                                --------
Total Common Stocks
(Cost $710,535) ..................................................             1,029,474
<PAGE>
<CAPTION>
Special Fund CONTINUED
                                                                    Principal     Market
                                                                       Amount      Value
<S>                                                                  <C>        <C>
Short-Term Obligations (8.7%)
Commercial Paper (8.4%)
Heller Financial 5.470% 4/02/96 ..................................   $ 35,000   $   34,984
Merrill Lynch Corp. 5.400% 4/01/96 ...............................     25,000       24,993
UBS Finance 5.500% 4/01/96 .......................................     34,300       34,290
                                                                                ----------
                                                                                    94,267
U.S. Government Obligation (0.3%)
U.S. Treasury Bill 4.915% 5/02/96 ................................      3,000        2,986
                                                                                ----------
Total Short-Term Obligations
(Amortized cost $97,253) .........................................                  97,253
Total Investments (100.3%)
(Cost basis $807,788) ............................................               1,126,727
Other Assets, Less Liabilities (-0.3%) ...........................                  (3,648)
                                                                                ----------
Total Net Assets (100.0%) ........................................              $1,123,079
                                                                                ==========
<FN>
*Non-income producing.
**These securities are subject to contractual or legal restrictions on their
resale. At March 31, 1996, the value of these securities represented 0.9% of
net assets.

See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Special Venture Fund
Investments as of March 31, 1996
(Dollar Amounts In Thousands)
(Unaudited)
<CAPTION>
                                                                        Number    Market
Common Stocks (86.1%) ............................................   of Shares     Value
<S>                                                                   <C>       <C>
Bank (1.9%)
Southern National Corp. ..........................................     66,800   $  1,854
Broadcasting (4.5%)
*Central European Media Enterprises ..............................     99,700      2,144
*Cox Communications ..............................................    101,100      2,212
                                                                                --------
                                                                                   4,356
Business Services (14.2%)
*Caribiner International .........................................     16,000        412
Danka Business Systems  Plc ADRs .................................     54,400      2,298
G & K Services Class A ...........................................    134,500      3,598
*Interim Services Inc. ...........................................     43,000      1,645
*Keane Inc. ......................................................    126,600      3,782
*Romac International .............................................     41,000      1,261
Unitog Company ...................................................     30,000        750
                                                                                --------
                                                                                  13,746
Chemicals (0.8%)
*CFC International, Inc. .........................................     64,000        752
Computers and Computer Software (0.2%)
*Documentum Inc. .................................................      4,700        166
Electrical Equipment (2.1%)
*Littelfuse, Inc.
   Common ........................................................     30,300      1,144
   Warrants ......................................................     30,000        889
                                                                                --------
                                                                                   2,033
Electronics (8.3%)
*Brightpoint .....................................................     51,200        934
*C.P. Clare Corp. ................................................     61,800      1,205
*Kent Electronics Corp. ..........................................     56,000      1,981
Woodhead Inds. Inc. ..............................................     96,000      1,404
*Zytec Corp. .....................................................    133,500      2,537
                                                                                --------
                                                                                   8,061
Extractive-Energy (6.4%)
*Alexander Energy Corp. ..........................................    150,000        600
*Barrett Resources Corp. .........................................     73,800      1,845
Cross Timbers Oil Company ........................................    113,800      1,963
*Renaissance Energy Ltd. .........................................     69,200      1,816
                                                                                --------
                                                                                   6,224
Health Services & Equipment (16.9%)
*AmeriSource Distribution Corp. ..................................    117,600      3,881
*Boston Scientific ...............................................     41,000      1,886
Henry Schein, Inc. ...............................................     55,300      1,618
Invacare Corp. ...................................................    109,400      3,091
*NCS Healthcare, Inc. ............................................     40,500        992
*Patterson Dental ................................................     61,000      1,845
Respironics Inc. .................................................     54,200      1,138
Stryker Corp. ....................................................     37,700      1,854
                                                                                --------
                                                                                  16,305
<PAGE>
<CAPTION>
Special Venture Fund CONTINUED
                                                                       Number     Market
                                                                    of Shares      Value
<S>                                                                  <C>        <C>
Insurance (8.2%)
Meadow Brook Insurance ...........................................     40,100   $  1,283
National Mutual Asia Ltd. ........................................  2,705,000      2,466
*Triad Guaranty Inc. .............................................    105,800      3,200
*Twentieth Century Industries ....................................     61,700      1,033
                                                                                --------
                                                                                   7,982
Packaging and Containers (1.2%)
Crown Cork and Seal Company, Inc. ................................     24,400      1,190
Retail (9.2%)
*General Nutrition Companies, Inc. ...............................     67,800      1,695
*Proffitt's Inc. .................................................     69,800      2,199
Quality Food Centers .............................................     61,500      1,507
*Zale Corp
   Common ........................................................    192,600      3,310
   Warrants ......................................................     20,000        152
                                                                                --------
                                                                                   8,863
Specialty Chemicals (10.2%)
Cambrex Corp. ....................................................     59,000      2,721
Culligan Water Technologies, Inc. ................................     44,800      1,456
Minerals Technology Corp Class A .................................     47,200      1,634
OM Group Inc. ....................................................    109,400      4,061
                                                                                --------
                                                                                   9,872
Telecommunications (2.0%)
*Plantronics Inc. ................................................     52,100      1,967
                                                                                --------
Total Common Stocks (Cost $67,631) ...............................                83,371
                                                                    Principal
                                                                       Amount
Short-Term Obligations
Commercial Paper (12.6%)
Heller Financial 5.500% 4/01/96 ..................................   $  4,000      3,999
Pacific Telesis 5.500% 4/01/96 ...................................      4,200      4,198
UBS Finance 5.520% 4/02/96 .......................................      4,000      3,998
                                                                                --------
Total Short-Term Obligations (Amortized cost $12,195) ............                12,195
Total Investments (98.7%)
(Cost basis $79,826) .............................................                95,566
Other Assets, Less Liabilities (1.3%) ............................                 1,231
                                                                                --------
Total Net Assets (100.0%) ........................................              $ 96,797
                                                                                ========
<FN>
* Non-income producing
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Capital Opportunities Fund
Investments as of March 31, 1996
(Dollar Amounts In Thousands)
(Unaudited)
<CAPTION>
                                                                       Number     Market
Equity-Related Securities (88.4%) ................................  of Shares      Value
<S>                                                                   <C>       <C>
Common Stocks (87.9%)
Business Services (14.9%)
*Alternative Resources Corporation ...............................    320,000   $ 10,400
*The Bisys Group Inc. ............................................    172,500      5,714
*CBT Group PLC ...................................................    100,000      7,350
*CSG Systems Intl. Inc. ..........................................     85,000      1,955
*Corporate Express, Inc. .........................................    360,000     11,880
*Danka Business Systems PLC ......................................    280,000     11,830
*Fritz Companies, Inc. ...........................................    200,000      7,800
*Gartner Group, Inc. .............................................    400,000     24,400
Paychex, Inc. ....................................................    385,000     22,523
                                                                                --------
                                                                                 103,852
Consumer Products (1.8%)
*Authentic Fitness Corporation ...................................    200,000      5,175
*Oakley, Inc. ....................................................    200,000      7,550
                                                                                --------
                                                                                  12,725
Financial Services (2.9%)
CWM Mortgage Holdings, Inc. ......................................    220,000      3,548
Green Tree Financial Corporation .................................    480,000     16,500
                                                                                --------
                                                                                  20,048
Health Care (17.0%)
*Gulf South Medical Supply, Inc. .................................    240,000      9,060
HBO & Co. ........................................................    200,000     18,850
*HCIA Inc. .......................................................    150,000      7,050
*IDEXX Laboratories, Inc. ........................................    380,000     15,960
*IDX Systems Corp. ...............................................    120,000      3,480
*Medaphis Corporation ............................................    200,000      9,700
Omnicare, Inc. ...................................................    300,000     16,162
*PhyCor, Inc. ....................................................    520,000     22,880
*Physician Sales & Service, Inc. .................................    500,000     12,375
*Target Therapeutics, Inc. .......................................     50,000      3,031
                                                                                --------
                                                                                 118,548
Industrial Products (6.2%)
*Airgas, Inc. ....................................................    200,000      7,950
*Gentex Corporation ..............................................    250,000      7,438
Greenfield Industries, Inc. ......................................    250,000      8,656
*OEA Inc. ........................................................    250,000      9,125
*United States Filter Corp. ......................................    350,000      9,800
                                                                                --------
                                                                                  42,969
Leisure & Entertainment (11.7%)
Carnival Cruise Lines, Inc. ......................................    400,000     11,000
*Clear Channel Communications, Inc. ..............................    430,000     24,295
*HFS Incorporated ................................................    500,000     24,313
LaQuinta Inns, Inc. ..............................................    420,000     12,337
*Promus Hotel Corporation ........................................    360,000      9,360
                                                                                --------
                                                                                  81,305
Restaurants (4.4%)
*Outback Steakhouse, Inc. ........................................    280,000     10,552
*Papa John's International, Inc. .................................    442,500     19,747
                                                                                --------
                                                                                  30,299
<PAGE>
<CAPTION>
Capital Opportunities Fund CONTINUED
                                                                       Number     Market
                                                                    of Shares      Value
<S>                                                                   <C>       <C>
Specialty Retailing (7.1%)
*Autozone, Inc. ..................................................    190,000   $  6,436
*General Nutrition Companies, Inc. ...............................    400,000     10,000
*Kohl's Corporation ..............................................    130,000      8,239
*Starbucks Corp. .................................................    350,000      8,159
*Sunglass Hut International, Inc. ................................    500,000     16,562
                                                                                --------
                                                                                  49,396
Technology (19.7%)
*ADC Telecommunications Inc. .....................................    355,000     12,248
*Atmel Corporation ...............................................    280,000      7,140
*Aspen Technology, Inc. ..........................................    120,000      5,160
*Atria Software, Inc. ............................................    250,000     13,688
*Cascade Communications Corp. ....................................    150,000     13,463
*Objective Systems Integrators, Inc. .............................    150,000      6,825
*Parametric Technology Corp. .....................................    350,000     13,694
*Premisys Communications Inc. ....................................    150,000      4,875
*Shiva Corp. .....................................................    100,000      9,075
*StrataCom, Inc. .................................................    500,000     18,312
*Synopsys, Inc. ..................................................    250,000      8,000
*TCSI Corporation ................................................    175,000      5,337
*Tellabs, Inc. ...................................................    400,000     19,350
                                                                                --------
                                                                                 137,167
Miscellaneous (2.2%)
*Corrections Corporation of America ..............................    275,000     15,675
                                                                                --------
Total Common Stocks (Cost $440,527) ..............................               611,984
                                                                    Principal
Convertible Subordinated Debentures (0.5%)                             Amount
Leisure & Entertainment (0.5%)
Carnival Cruise Lines, Inc. 4.500% 7/01/97
   (Cost $2,294) .................................................   $  2,000      3,170
                                                                                --------
Total Equity-Related Securities (Cost $442,821) ..................               615,154
Short-Term Obligations (15.9%)
Commercial Paper (15.9%)
Bridgestone/Firestone 5.600% 4/15/96 .............................      5,000      4,988
International Business Machines 5.420% 4/02/96 ...................     30,000     29,986
Lehman Brothers 5.750% 4/03/96 ...................................     20,000     19,987
Merrill Lynch 5.400% 4/01/96 .....................................     25,000     24,992
UBS Finance 5.500% 4/01/96 .......................................     30,600     30,591
                                                                                --------
Total Short-Term Obligations
(Amortized cost $110,544) ........................................               110,544
Total Investments (104.3%)
(Cost basis $553,365) ............................................               725,698
Other Assets, Less Liabilities (-4.3%) ...........................               (29,617)
                                                                                --------
Total Net Assets (100.0%) ........................................              $696,081
                                                                                ========
<FN>
*Non-income producing.

See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
International Fund
Investments as of March 31, 1996
(Dollar Amounts In Thousands)
(Unaudited)
<CAPTION>
                                                                       Number     Market
                                                                    of Shares      Value
<S>                                                                   <C>       <C>
Stocks (98.2%)
Argentina (2.3%)
Telecom Argentina GDSs ...........................................     30,000   $  1,245
YPF Sociedad Anonima Sponsored ADRs ..............................     70,000      1,409
                                                                                --------
                                                                                   2,654
Australia (0.7%)
*Southern Pacific Petroleum ADRs .................................    620,000        775
Belgium (1.7%)
Generale de Banque ...............................................      5,500      1,953
Finland (5.8%)
Enso Gutzeit (Ordinary R Shares) .................................    256,000      1,873
Kemira Oy ........................................................    210,000      1,926
Metsa-Serla Oy (B Shares) ........................................     56,000      1,752
Nokia Pfd ADSs ...................................................     30,000      1,028
                                                                                --------
                                                                                   6,579
France (5.7%)
Alcatel Alsthom ..................................................     14,500      1,344
Ecco TT ..........................................................     18,000      1,591
Generale Des Eaux ................................................     14,000      1,432
Moulinex .........................................................     45,000        802
Total Petroles Class B ...........................................     19,674      1,328
                                                                                --------
                                                                                   6,497
Germany (5.2%)
Agiv AG ..........................................................     70,000      1,458
Friedrick Grohe AG ...............................................      5,300      1,303
Henkel KGAA ......................................................      4,500      1,667
Mannesmann AG ....................................................      4,000      1,462
                                                                                --------
                                                                                   5,890
Hong Kong (7.9%)
Champion Technology ..............................................  5,193,417        618
Companion Building ...............................................  3,703,200        603
Hong Kong & China Gas Co. ........................................    640,000      1,262
HKR International Ltd. ...........................................  1,000,000      1,086
International Bank of Asia .......................................  1,400,000        969
National Mutual Asia Ltd. ........................................    544,000        496
New World Development ............................................    274,615      1,278
Tian An China Investment .........................................    510,000         79
Vitasoy ..........................................................    999,364        439
World Houseware Holdings .........................................  3,907,680        606
Yizheng Chemical Fibre Company ...................................  6,102,000      1,578
                                                                                --------
                                                                                   9,014
India (1.7%)
Indian Petrochemical GDRs ........................................     65,000      1,040
**Reliance Industries GDSs .......................................     63,000        866
                                                                                --------
                                                                                   1,906
<PAGE>
<CAPTION>
International Fund CONTINUED
                                                                       Number     Market
                                                                    of Shares      Value
<S>                                                                  <C>        <C>
Indonesia (1.8%)
Chareon Pokphand .................................................    308,000   $    593
Ever Shine Text ..................................................    798,800        342
Matahari Putra Prime .............................................    520,000      1,090
                                                                                --------
                                                                                   2,025
Italy (4.5%)
*Olivetti ........................................................  3,146,000      1,613
Telecom Italia (Saving Shares) ...................................  1,296,000      1,829
Telecom Italia (Mobile) ..........................................  1,500,000      1,651
                                                                                --------
                                                                                   5,093
Japan (22.7%)
Amano Corp. ......................................................     71,000        917
Canon Inc. .......................................................    117,000      2,235
DDI ..............................................................        200      1,526
Hitachi ..........................................................    155,000      1,509
Ito Yokado .......................................................     27,000      1,605
*Japan OTC Fund ..................................................        740        925
Jusco Co. ........................................................     67,000      1,750
Kaneshita Construction ...........................................     42,000        523
Kokusai Securities ...............................................    100,000      1,582
Matsushita Electric Industrial ...................................    125,000      2,037
Mitsui Marine & Fire Insurance Co. ...............................    243,000      1,834
Mori Seiki .......................................................     77,000      1,629
Murata Manufacturing .............................................     45,000      1,551
Promise Co. ......................................................     37,000      1,646
Suzuki Motor .....................................................    101,000      1,248
Tokyo Style ......................................................     85,000      1,409
Yamazen Corporation ..............................................    341,000      1,944
                                                                                --------
                                                                                  25,870
Malaysia (0.4%)
Kim Hin Industry Berhad ..........................................    185,000        406
Mexico (2.6%)
Grupo Carso Series A1 ............................................    175,000      1,360
Grupo Situr Series BCP ...........................................  1,139,000        265
Transportacion Maritima Mexicana ADRs ............................    160,000      1,320
                                                                                --------
                                                                                   2,945
Netherlands (5.0%)
Fortis AMEV ......................................................     25,299      1,784
IHC Caland N.V ...................................................     35,800      1,460
KPN ..............................................................     40,651      1,599
Sphinx Kon CVA ...................................................     45,713        802
                                                                                --------
                                                                                   5,645
New Zealand (2.9%)
Brierley Investments Ltd. Ord. Shares ............................  1,824,883      1,685
Lion Nathan Ltd. Ord. Shares .....................................    656,000      1,618
                                                                                --------
                                                                                   3,303
Norway (3.5%)
Helikopter Service ...............................................     90,000      1,031
*Norsk Hydro AS ..................................................     39,000      1,700
Saga Petroleum A Free ............................................    103,000      1,317
                                                                                --------
                                                                                   4,048
Panama (2.0%)
Bladex ADRs ......................................................     46,200      2,281
<PAGE>
<CAPTION>
International Fund CONTINUED
                                                                       Number     Market
                                                                    of Shares      Value
<S>                                                                   <C>       <C>
Portugal (2.0%)
*Portucel Industrial Local Shares ................................     34,800   $    210
***Portucel Industrial ADSs ......................................    110,000        660
*Portugal Telecom S.A. ADRs ......................................     60,157      1,361
                                                                                --------
                                                                                   2,231
Russia (0.6%)
*Fleming Russia Securities Fund ..................................    139,000        730
Singapore (0.9%)
Jardine Matheson Holdings Ltd. ...................................    134,576      1,050
South Korea (3.5%)
Korea Exchange Bank ..............................................     91,900      1,234
Samchully Co. ....................................................     14,054        970
*Samsung Electronics .............................................        897        106
*Samsung Electronics Pfd. ........................................     23,425      1,692
                                                                                --------
                                                                                   4,002
Spain (1.0%)
Acerinox SA ......................................................     10,000      1,128
Sweden (3.3%)
Avesta-Sheffield .................................................    201,000      2,030
SSAB Svenskt Stal AB B Shares ....................................    145,000      1,703
                                                                                --------
                                                                                   3,733
Switzerland (1.7%)
Sandoz AG ........................................................      1,700      1,992
Taiwan (1.3%)
*ROC Taiwan Fund .................................................    145,400      1,509
Thailand (0.5%)
Sino Thai Engineering & Construction .............................     96,000        559
United Kingdom (5.7%)
Helene of London Plc .............................................    338,354         54
Inchcape Plc .....................................................    500,000      2,183
Intrum Justitia Plc ..............................................    305,000        452
Lasmo Plc ........................................................    382,000      1,094
Powerscreen International Plc ....................................    129,200        858
Smithkline Beecham Plc Class A ...................................    128,083      1,285
Transtec Plc .....................................................    382,535        602
                                                                                --------
                                                                                   6,528
United States (1.3%)
Tele-Communications International, Inc. ..........................     68,000      1,454
                                                                                --------
Total Stocks (Cost $105,423) .....................................               111,800
<PAGE>
<CAPTION>
International Fund CONTINUED
                                                                    Principal     Market
                                                                       Amount      Value
<S>                                                                  <C>        <C>
Short-Term Obligations (2.6%)
United States (2.6%)
Commercial Paper (2.6%)
UBS Financial 5.500% 4/01/96 .....................................   $  3,000   $  2,999
(Amortized cost $2,999)
Total Investments (100.8%)
(Cost Basis $108,422) ............................................               114,799
Other Assets, Less Liabilities (-0.8%) ...........................                  (909)
                                                                                --------
Total Net Assets (100.0%) ........................................              $113,890
                                                                                ========
<FN>
*Non-income producing.
**These securities are subject to contractual or legal restrictions on their
resale. At March 31, 1996, the value of these securities represented 1.3% of
net assets.

See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Balance Sheets
March 31, 1996
(All Amounts In Thousands, except per-share data)
(Unaudited)
<CAPTION>
                                                    Total        Growth     Growth
                                                    Return       & Income   Stock     Special
                                                    Fund         Fund       Fund      Fund
<S>                                                 <C>          <C>        <C>       <C>
Assets
Investments, at market value......................  $232,309     $165,642   $391,759  $1,126,727
Receivable for investments and currencies sold....       846           --         --       8,133
Receivable for fund shares sold...................        63          253         57         439
Dividends and interest receivable.................     1,335          331        442         795
Cash and other assets.............................       140          235        344       1,381
                                                    --------     --------   --------  ----------
   Total Assets...................................  $234,693     $166,461   $392,602  $1,137,475
                                                    ========     ========   ========  ==========
Liabilities
Payable for investments and currencies purchased..  $  2,573     $     --   $  2,284  $   10,864
Payable for fund shares redeemed..................       177           55        379       2,253
Payable to investment adviser and transfer agent..       173          131        334         964
Other liabilities.................................       175          137        125         315
                                                    --------     --------   --------  ----------
   Total Liabilities..............................     3,098          323      3,122      14,396
                                                    --------     --------   --------  ----------
Capital
Paid-in capital ..................................   174,319     119,019     233,883     754,881
Net unrealized appreciation of investments and 
   foreign currencies.............................    44,425      42,448     129,594     319,300
Accumulated undistributed (overdistributed) net
   investment income..............................       616         263         400         474
Accumulated undistributed net realized gains 
   (losses) on investments and foreign currency 
   transactions...................................    12,235       4,408      25,603      48,424
                                                    --------     --------   --------  ----------
   Total Capital (Net Assets).....................   231,595      166,138    389,480   1,123,079
                                                    --------     --------   --------  ----------
   Total Liabilities and Capital..................  $234,693     $166,461   $392,602  $1,137,475
                                                    ========     ========   ========  ==========
Shares Outstanding (Unlimited Number Authorized)..     7,911        9,748     14,848      44,183
                                                    ========     ========   ========  ==========
Net Asset Value (Capital) Per Share...............  $  29.27     $  17.04   $  26.23  $    25.42
                                                    ========     ========   ========  ==========
<PAGE>
<CAPTION>
                                                    Special    Capital
                                                    Venture    Opportunities  International
                                                    Fund       Fund           Fund
<S>                                                 <C>        <C>            <C>
Assets
Investments, at market value......................  $95,566    $725,698       $114,799
Receivable for investments and currencies sold....      745          --          1,357
Receivable for fund shares sold...................      557      12,875            313
Dividends and interest receivable.................       11          62            209
Cash and other assets.............................      110       4,833            244
                                                    -------    --------       --------
   Total Assets...................................  $96,989    $743,468       $116,922
                                                    =======    ========       ========
Liabilities
Payable for investments and currencies purchased..  $   --     $ 46,541       $  2,786
Payable for fund shares redeemed..................       61          --             14
Payable to investment adviser and transfer agent..       70         524            108
Other liabilities.................................       61         322            124
                                                    -------    --------       --------
   Total Liabilities..............................      192      47,387          3,032
                                                    -------    --------       --------
Capital
Paid-in capital ..................................   80,959     518,309        108,776
Net unrealized appreciation of investments and 
   foreign currencies.............................   15,740     172,333          6,375
Accumulated undistributed (overdistributed) net
   investment income..............................      (56)      (445)            (13)
Accumulated undistributed net realized gains 
   (losses) on investments and foreign currency 
   transactions...................................       15       5,884         (1,248)
                                                    -------    --------       --------
   Total Capital (Net Assets).....................   96,797     696,081        113,890
                                                    -------    --------       --------
   Total Liabilities and Capital..................  $96,989    $743,468       $116,922
                                                    =======    ========       ========
Shares Outstanding (Unlimited Number Authorized)..    7,103      26,184         10,795
                                                    =======    ========       ========
Net Asset Value (Capital) Per Share...............  $ 13.63    $  26.58       $  10.55
                                                    =======    ========       ========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Statements of Operations
For The Six Months Ended
March 31, 1996
(All Amounts In Thousands)
(Unaudited)
<CAPTION>
                                                             Total    Growth    Growth
                                                            Return  & Income     Stock   Special
                                                              Fund      Fund      Fund      Fund
<S>                                                        <C>       <C>       <C>       <C>
Investment Income
Dividends ..............................................   $ 2,614   $ 1,190   $ 1,968   $ 5,322
Interest ...............................................     2,602       942       721     1,991
                                                           -------   -------   -------   -------
                                                             5,216     2,132     2,689     7,313
Foreign taxes withheld .................................        --        --        --        --
                                                           -------   -------   -------   -------
        Total Investment Income ........................     5,216     2,132     2,689     7,313
                                                           -------   -------   -------   -------
Expenses
Management fees ........................................       619       450     1,113     4,006
Transfer agent fees ....................................       247       165       408     1,230
Administrative fees ....................................       169       112       278       745
Custodian fees .........................................        19        12        10        90
SEC and state registration fees ........................        16        21        23        18
Accounting fees ........................................        15        14        17        26
Trustees' fees .........................................         8         8        11        23
Amortization of organization expenses ..................        --        --        --        --
Other ..................................................        95        90       151       518
                                                           -------   -------   -------   -------
                                                             1,188       872     2,011     6,656
Reimbursement of expenses by investment adviser ........        --        --        --        --
                                                           -------   -------   -------   -------
        Total Expenses .................................     1,188       872     2,011     6,656
                                                           -------   -------   -------   -------
        Net Investment Income ..........................     4,028     1,260       678       657
                                                           -------   -------   -------   -------
Realized and Unrealized Gains on Investments and
        Foreign Currency Transactions
Net realized gains on investments ......................    13,204     3,307    27,176    58,730
Net realized gains on foreign currency transactions ....        --        --        --        --
Net realized gains on futures transactions .............        --     1,713        --        --
Net change in unrealized appreciation or depreciation
        of investments and foreign currency transactions     4,748    12,162     8,803    39,442
                                                           -------   -------   -------   -------
        Net Gains on Investments and Foreign
          Currency Transactions ........................    17,952    17,182    35,979    98,172
                                                           -------   -------   -------   -------
Net Increase in Net Assets Resulting from Operations ...   $21,980   $18,442   $36,657   $98,829
                                                           =======   =======   =======   =======
<PAGE>
Statements of Operations
For The Six Months Ended
March 31, 1996
(All Amounts In Thousands)
(Unaudited)
<CAPTION>
                                                              Special       Capital
                                                              Venture Opportunities International
                                                                 Fund          Fund          Fund
<S>                                                          <C>          <C>            <C>
Investment Income
Dividends ................................................   $    148      $    292      $    649
Interest .................................................        243         1,522           296
                                                             --------      --------      --------
                                                                  391         1,814           945
Foreign taxes withheld ...................................         --            --           (68)
                                                             --------      --------      --------
        Total Investment Income ..........................        391         1,814           877
                                                             --------      --------      --------
Expenses
Management fees ..........................................        317         1,342           460
Transfer agent fees ......................................         78           395           101
Administrative fees ......................................          _           267            --
Custodian fees ...........................................         15            12            60
SEC and state registration fees ..........................         21            78            25
Accounting fees ..........................................         13            17            13
Trustees' fees ...........................................          8             9             8
Amortization of organization expenses ....................          3            --            --
Other ....................................................         39            86            47
                                                             --------      --------      --------
                                                                  494         2,206           714
Reimbursement of expenses by investment adviser ..........        (53)           --            --
                                                             --------      --------      --------
        Total Expenses ...................................        441         2,206           714
                                                             --------      --------      --------
        Net Investment Income ............................        (50)         (392)          163
                                                             --------      --------      --------
Realized and Unrealized Gains on Investments and
        Foreign Currency Transactions
Net realized gains on investments ........................        180         5,883           688
Net realized gains on foreign currency transactions ......         --            --            35
Net realized gains on futures transactions ...............         --            --            --
Net change in unrealized appreciation or depreciation
        of investments and foreign currency transactions .      9,806        91,698         3,634
                                                             --------      --------      --------
        Net Gains on Investments and Foreign
          Currency Transactions ..........................      9,986        97,581         4,357
                                                             --------      --------      --------
Net Increase in Net Assets Resulting from Operations .....   $  9,936      $ 97,189      $  4,520
                                                             ========      ========      ========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Statements of Changes in Net Assets
For The Year Ended September 30, 1995
and Six Months Ended March 31, 1996
(All Amounts In Thousands)
(Unaudited)
<CAPTION>
                                                                    Total Return Fund           Growth & Income Fund
                                                                    1995           1996           1995          1996
<S>                                                            <C>            <C>           <C>           <C>
Operations
Net investment income ......................................   $  11,415      $   4,028      $   2,253     $   1,260
Net realized gains on investments and foreign
        currency transactions ..............................       4,680         13,204         12,531         5,020
Net change in unrealized appreciation or depreciation
        of investments .....................................      13,869          4,748          9,832        12,162
                                                               ---------      ---------      ---------     ---------
        Net Increase in Net Assets Resulting from Operations      29,964         21,980         24,616        18,442
                                                               ---------      ---------      ---------     ---------
Distributions To Shareholders
Dividends from net investment income .......................     (10,573)        (4,592)        (1,706)       (1,939)
Capital gain distributions ............................           (2,423)        (5,662)        (5,016)      (12,376)
                                                               ---------      ---------      ---------     ---------
        Total Distributions to Shareholders ................     (12,996)       (10,254)        (6,722)      (14,315)
                                                               ---------      ---------      ---------     ---------
Share Transactions
Subscriptions to fund shares ...............................      27,078         10,778         27,756        25,773
Investment income dividends reinvested .....................       8,385          3,633          1,429         1,653
Capital gain distributions reinvested ......................       2,142          4,944          4,619        11,083
Redemptions of fund shares .................................     (55,287)       (28,046)       (41,839)      (16,037)
                                                               ---------      ---------      ---------     ---------
        Net Increase (Decrease) from Share Transactions ....     (17,682)        (8,691)        (8,035)       22,472
                                                               ---------      ---------      ---------     ---------
        Net Increase (Decrease) in Net Assets ..............        (714)         3,035          9,859        26,599
Total Net Assets
Beginning of period ........................................     229,274        228,560        129,680       139,539
                                                               ---------      ---------      ---------     ---------
End of period ..............................................   $ 228,560      $ 231,595      $ 139,539     $ 166,138
                                                               =========      =========      =========     =========
Accumulated Undistributed Net Investment Income at
        End of Period ......................................   $   1,180      $     616      $     942     $     263
                                                               =========      =========      =========     =========
Analyses of Changes in Shares of Beneficial Interest
Subscriptions to fund shares ...............................       1,052            380          1,884         1,530
Investment income dividends reinvested .....................         329            130             99           101
Capital gain distributions reinvested ......................          89            180            337           697
                                                               ---------      ---------      ---------     ---------
                                                                   1,470            690          2,320         2,328
Redemptions of fund shares .................................      (2,146)          (996)        (2,856)         (961)
                                                               ---------      ---------      ---------     ---------
Net increase (decrease) in fund shares .....................        (676)          (306)          (536)        1,367
Shares outstanding at beginning of period ..................       8,893          8,217          8,917         8,381
                                                               ---------      ---------      ---------     ---------
Shares outstanding at end of period ........................       8,217          7,911          8,381         9,748
                                                               =========      =========      =========     =========
<PAGE>
Statements of Changes in Net Assets
For The Year Ended September 30, 1995
and Six Months Ended March 31, 1996
(All Amounts In Thousands)
(Unaudited)
<CAPTION>
                                                                    Growth Stock Fund
                                                                    1995         1996
<S>                                                            <C>          <C>
Operations
Net investment income ......................................   $   1,800    $     678
Net realized gains on investments and foreign
        currency transactions ..............................      35,566       27,176
Net change in unrealized appreciation or depreciation
        of investments .....................................      44,475        8,803
                                                               ---------    ---------
        Net Increase in Net Assets Resulting from Operations      81,841       36,657
                                                               ---------    ---------
Distributions To Shareholders
Dividends from net investment income .......................      (1,950)      (1,400)
Capital gain distributions .................................     (39,914)     (32,877)
                                                               ---------    ---------
        Total Distributions to Shareholders ................     (41,864)     (34,277)
                                                               ---------    ---------
Share Transactions
Subscriptions to fund shares ...............................      30,276       32,530
Investment income dividends reinvested .....................       1,611        1,156
Capital gain distributions reinvested ......................      35,003       28,779
Redemptions of fund shares .................................     (68,033)     (35,701)
                                                               ---------    ---------
        Net Increase (Decrease) from Share Transactions ..        (1,143)      26,764
                                                               ---------    ---------
        Net Increase (Decrease) in Net Assets ..............      38,834       29,144
Total Net Assets
Beginning of period ........................................     321,502      360,336
                                                               ---------    ---------
End of period ..............................................   $ 360,336    $ 389,480
                                                               =========    =========
Accumulated Undistributed Net Investment Income at
        End of Period ......................................   $   1,122    $     400
                                                               =========    =========
Analyses of Changes in Shares of Beneficial Interest
Subscriptions to fund shares ...............................       1,358        1,237
Investment income dividends reinvested .....................          80           47
Capital gain distributions reinvested ......................       1,733        1,166
                                                               ---------    ---------
                                                                   3,171        2,450
Redemptions of fund shares .................................      (3,017)      (1,392)
                                                               ---------    ---------
Net increase (decrease) in fund shares .....................         154        1,058
Shares outstanding at beginning of period ..................      13,636       13,790
                                                               ---------    ---------
Shares outstanding at end of period ........................      13,790       14,848
                                                               =========    =========

See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Statements of Changes in Net Assets
For The Year Ended September 30, 1995
and Six Months Ended March 31, 1996
(All Amounts In Thousands)
(Unaudited)
<CAPTION>
                                                                                                    Special
                                                                  Special Fund                   Venture Fund
                                                                 1995           1996            1995*          1996
<S>                                                       <C>            <C>             <C>            <C>
Operations
Net investment income .................................   $     6,683    $       657     $        39    $       (50)
Net realized gains (losses) on investments and foreign
        currency transactions .........................        85,576         58,730           3,073            180
Net change in unrealized appreciation or depreciation
        of investments ................................        70,232         39,442           5,934          9,806
                                                          -----------    -----------     -----------    -----------
        Net Increase (Decrease) in Net Assets Resulting
          from Operations .............................       162,491         98,829           9,046          9,936
                                                          -----------    -----------     -----------    -----------
Distributions To Shareholders
Dividends from net investment income ..................        (7,700)        (4,825)            (45)            --
Capital gain distributions ............................       (69,358)       (85,187)            (82)        (3,017)
                                                          -----------    -----------     -----------    -----------
        Total Distributions to Shareholders ...........       (77,058)       (90,012)           (127)        (3,017)
                                                          -----------    -----------     -----------    -----------
Share Transactions
Subscriptions to fund shares ..........................       189,907         70,830          57,989         30,466
Investment income dividends reinvested ................         7,014          4,332              33             (3)
Capital gain distributions reinvested .................        65,654         79,815              79          2,899
Redemptions of fund shares ............................      (390,424)      (242,184)         (6,487)        (4,017)
                                                          -----------    -----------     -----------    -----------
        Net Increase (Decrease) from Share Transactions      (127,849)       (87,207)         51,614         29,345
                                                          -----------    -----------     -----------    -----------
        Net Increase (Decrease) in Net Assets .........       (42,416)       (78,390)         60,533         36,264
Total Net Assets
Beginning of period ...................................     1,243,885      1,201,469              --         60,533
                                                          -----------    -----------     -----------    -----------
End of period .........................................   $ 1,201,469    $ 1,123,079     $    60,533    $    96,797
                                                          ===========    ===========     ===========    ===========
Accumulated Undistributed (Overdistributed) Net
        Investment Income at End of Period ............   $     4,642    $       474     $        (6)   $       (56)
                                                          ===========    ===========     ===========    ===========
Analyses of Changes in Shares of Beneficial Interest
Subscriptions to fund shares ..........................         8,272          2,897           5,362          2,379
Shares issued in connection with stock split** ........            --             --              --             --
Investment income dividends reinvested ................           327            187               3             --
Capital gain distributions reinvested .................         3,064          3,445               8            236
                                                          -----------    -----------     -----------    -----------
                                                               11,663          6,529           5,373          2,615
Redemptions of fund shares ............................       (16,938)        (9,915)           (567)          (318)
                                                          -----------    -----------     -----------    -----------

Net increase (decrease) in fund shares ................        (5,275)        (3,386)          4,806          2,297
Shares outstanding at beginning of period .............        52,844         47,569              --          4,806
                                                          -----------    -----------     -----------    -----------

Shares outstanding at end of period ...................        47,569         44,183           4,806          7,103
                                                          ===========    ===========     ===========    ===========
</TABLE>
<PAGE>
<TABLE>
Statements of Changes in Net Assets
For The Year Ended September 30, 1995
and Six Months Ended March 31, 1996
(All Amounts In Thousands)
(Unaudited)
<CAPTION>
                                                                  Capital
                                                             Opportunities Fund          International Fund
                                                               1995         1996         1995          1996
<S>                                                       <C>          <C>          <C>           <C>
Operations
Net investment income .................................   $     152    $    (392)   $   1,031     $     163
Net realized gains (losses) on investments and foreign
        currency transactions .........................      18,194        5,883       (1,820)          723
Net change in unrealized appreciation or depreciation
        of investments ................................      45,624       91,698          (33)        3,634
                                                          ---------    ---------    ---------     ---------
        Net Increase (Decrease) in Net Assets Resulting
          from Operations .............................      63,970       97,189         (822)        4,520
                                                          ---------    ---------    ---------     ---------
Distributions To Shareholders
Dividends from net investment income ..................        (105)        (150)        (340)       (1,075)
Capital gain distributions ............................           _      (12,960)      (1,229)            _
                                                          ---------    ---------    ---------     ---------
        Total Distributions to Shareholders ...........        (105)     (13,110)      (1,569)       (1,075)
                                                          ---------    ---------    ---------     ---------
Share Transactions
Subscriptions to fund shares ..........................      90,143      453,624       26,531        35,514
Investment income dividends reinvested ................          87          129          242           760
Capital gain distributions reinvested .................          --       11,772        1,153            --
Redemptions of fund shares ............................     (87,401)     (95,904)     (17,332)       (8,849)
                                                          ---------    ---------    ---------     ---------
        Net Increase (Decrease) from Share Transactions       2,829      369,621       10,594        27,425
                                                          ---------    ---------    ---------     ---------
        Net Increase (Decrease) in Net Assets .........      66,694      453,700        8,203        30,870
Total Net Assets
Beginning of period ...................................     175,687      242,381       74,817        83,020
                                                          ---------    ---------    ---------     ---------
End of period .........................................   $ 242,381    $ 696,081    $  83,020     $ 113,890
                                                          =========    =========    =========     =========
Accumulated Undistributed (Overdistributed) Net
        Investment Income at End of Period ............   $      97    $    (445)   $     865     $     (13)
                                                          =========    =========    =========     =========
Analyses of Changes in Shares of Beneficial Interest
Subscriptions to fund shares ..........................       2,765       18,655        2,669         3,493
Shares issued in connection with stock split** ........       5,511           --           --            --
Investment income dividends reinvested ................           2            6           25            77
Capital gain distributions reinvested .................           _          527          118            --
                                                          ---------    ---------    ---------     ---------
                                                              8,278       19,188        2,812         3,570
Redemptions of fund shares ............................      (2,669)      (4,177)      (1,766)         (875)
                                                          ---------    ---------    ---------     ---------
Net increase (decrease) in fund shares ................       5,609       15,011        1,046         2,695
Shares outstanding at beginning of period .............       5,564       11,173        7,054         8,100
                                                          ---------    ---------    ---------     ---------
Shares outstanding at end of period ...................      11,173       26,184        8,100        10,795
                                                          =========    =========    =========     =========
<FN>
* From commencement of operations on October 17, 1994 
** Capital Opportunities declared a 2 for 1 stock split effective August 25,
1995.

See accompanying notes to financial statements.
</TABLE>
<PAGE>
Notes to the Financial Statements (Unaudited)
Note 1. Significant Accounting Policies
The following are the significant accounting policies of Stein Roe Total
Return Fund, Stein Roe Growth & Income Fund, Stein Roe Growth Stock Fund,
Stein Roe Special Fund, Stein Roe Special Venture Fund, and Stein Roe
International Fund (the "Funds"), each a series of the Stein Roe Investment
Trust (a Massachusetts business trust). The policies are in conformity with
generally accepted accounting principles. The preparation of financial
statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts
of increases and decreases in net assets from operations during the reporting
period. Actual results could differ from those estimates.

Security Valuations
All securities are valued as of March 29, 1996, the last business day of the
period. Domestic 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 domestic over-the-counter security for which the last sale
price is available from NASDAQ is valued at that price. All other domestic
over-the-counter securities for which reliable quotations are available are
valued at the latest bid quotation. Domestic 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. Foreign
security valuations are generally based upon local convention or regulation,
which may be last sales price, last bid or asked price, or the mean between
last bid and asked priced as of, in each case, the close of the appropriate
exchange or other designated time.
   Other assets and securities of the Fund are valued by a method that the
Board of Trustees believes represents a fair value.
<PAGE>
Futures Contracts
During the period ended March 31, 1996, Growth & Income 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
requirements. 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, 1996, the Special 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, 1996:

Settlement          Contract to
 Date            Receive   Deliver
 June 13, 1996   $11,952   13,736 CHF
 June 13, 1996     3,185    3,736 CHF

   Net unrealized appreciation of $362 on these contracts at March 31, 1996,
is included in the accompany ing financial statements.

Federal Income Taxes
No provision is made for federal income taxes since each Fund elects to be
taxed as a "regulated invest ment company" and makes such distrib utions to
its 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 up to eight years
following the year of the loss, and offset such losses against any future
realized gains.

Distributions to Shareholders
On May 1, 1996, the Board of Trustees declared a dividend from net investment
income of $0.22 per share for Total Return Fund and $0.05 per share for Growth
& Income Fund, payable May 20, 1996, to share holders of record on May 10,
1996.
   Distributions in excess of tax basis earnings are reported in the financial
statements as a return of capital. Differences in the recognition or
classification of income between the financial statements and tax earnings
that result in temporary overdistribu tions are classified as distributions in
excess of net investment income or net realized gains, and any perma nent
differences are reclassified to paid-in capital.
<PAGE>
Other Information
Realized gains or losses from sales of securities are determined on the
specific identified cost basis. All amounts, except per-share amounts, are
shown in thousands.

Note 2. Trustees' Fees and Transactions with Affiliates
The Funds pay monthly management fees, and, certain Funds, administrative fees
to Stein Roe & Farnham, Incorporated (the "Adviser"), an indirect,
majority-owned subsidiary of Liberty Mutual Insurance Company, for its
services as investment adviser and manager.
   The management and admin istrative fees for the following Funds are
computed at annual rates as a percentage of average daily net assets as
follows:
Total Return Fund 
Management Fees 
0.55% up to $500 million 
0.50% of next $500 million 
0.45% thereafter 

Administrative Fees 
0.15% up to $500 million
0.125% of next $500 million 
0.10% thereafter 

Growth & Income Fund and Growth Stock Fund
Management Fees 
0.60% up to $500 million 
0.55% of next $500 million 
0.50% thereafter 

Administrative Fees
0.15% up to $500 million 
0.125% of next $500 million 
0.10% thereafter 

Capital Opportunities Fund and Special Fund 
Management Fees 
0.75% up to $500 million 
0.70% of next $500 million 
0.65% of next $500 million 
0.60% thereafter

Administrative Fees 
0.15% up to $500 million 
0.125% of next $500 million 
0.10% of next $500 million 
0.075% thereafter
<PAGE>
   The management fee for Special Venture Fund is .90 percent of average daily
net assets and the fee for International Fund is 1 percent of average daily
net assets.
   The administrative agreement for Total Return Fund, Growth & Income Fund,
Growth Stock Fund, Capital Opportunities Fund and Special Fund, and the
investment advisory agreement for Special Venture Fund and International Fund,
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 the Fund's shares are offered for sale. In addition, the
Adviser has agreed to reimburse Special Venture Fund and International Fund to
the extent that their expenses exceed 1.25 percent and 1.65%, respectively, of
average daily net assets. These expense limitations expire on January 31,
1997, subject to earlier termination by the Adviser on 30 days' notice.
   The transfer agent fees are paid to SteinRoe Services Inc., an indirect,
majority-owned subsidiary of Liberty Mutual Insurance Company.
   The Adviser also provides the Funds with certain fund accounting services.
For the period ended March 31, 1996, Total Return Fund, Growth & Income Fund,
Growth Stock Fund, Special Fund, Special Venture Fund, Capital Opportunities
Fund and the International Fund incurred charges of $15, $14, $17, $26, $13,
$17 and $13, respectively.
   Certain officers and trustees of the Trust are also officers of the
Adviser. The compensation of trustees not affiliated with the Adviser for
Total Return Fund, Growth & Income Fund, Growth Stock Fund, Special Fund,
Special Venture Fund, Capital Opportunities Fund and the International Fund
for the period ended March 31, 1996, was $8, $8, $11, $23, $8, $9 and $8,
respectively. No remuneration was paid to any other trustee or officer of the
Trust.

Note 3. Short-Term Debt
To facilitate portfolio liquidity, the Funds maintains borrowing arrangements
under which they can borrow against portfolio securities. The Funds had no
borrowings during the period ended March 31, 1996.
<PAGE>
<TABLE>
Note 4. Investment Transactions
The aggregate cost of purchases and proceeds from sales other than short-term
obligations for the period ended March 31, 1996, were:
<CAPTION>
Fund                                                    Purchases          Sales
<S>                                                      <C>            <C>
Total Return...........................................  $ 78,221       $ 97,249
Growth & Income........................................    20,804         10,317
Growth Stock...........................................    86,388         96,685
Special................................................   182,032        387,681
Special Venture........................................    32,258         11,323
Capital Opportunities..................................   337,952         41,856
International..........................................    58,170         28,882

   At March 31, 1996, unrealized appreciation and depreciation on a tax basis
and the cost of investments for federal income tax purposes and for financial
reporting purposes were as follows:
<CAPTION>
                                                                                 Cost of Investments
                                                                                             Federal
                                                                   Net           Financial    Income
Fund                               Appreciation     Depreciation   Appreciation  Reporting       Tax
<S>                                <C>              <C>            <C>           <C>        <C>
Total Return................       $50,311          $5,074         $45,237       $187,884   $187,072
Growth & Income.............        43,428             685          42,743        122,899    122,899
Growth Stock................       131,472           1,878         129,594        262,165    262,165
Special.....................       347,608          28,686         318,922        807,788    807,805
Special Venture.............        16,255             515          15,740         79,826     79,826
Capital Opportunities.......       172,914             604         172,310        553,365    553,388
International...............        11,268           4,893           6,375        108,422    108,422
</TABLE>
<PAGE>
<TABLE>
Financial Highlights
Special Venture Fund
(Unaudited)
Selected per-share data (for a share outstanding throughout each period), 
ratios and supplemental data.
<CAPTION>
                                                                          Period        Six Months
                                                                          Ended         Ended
                                                                          Sept. 30,     Mar. 31,
                                                                          1995(a)       1996
<S>                                                                       <C>           <C>
Net Asset Value, Beginning of Period ..................................   $  10.00      $  12.60
                                                                          --------      --------
Income From Investment Operations
   Net investment income ..............................................       0.01         (0.01)
   Net realized and unrealized gains (losses) on
     investments ......................................................       2.67          1.61
                                                                          --------      --------
      Total from investment operations ................................       2.68          1.60
                                                                          --------      --------
Distributions
   Net investment income ..............................................      (0.03)      --
   Net realized capital gains .........................................      (0.05)        (0.57)
                                                                          --------      --------
      Total distributions .............................................      (0.08)        (0.57)
                                                                          --------      --------
Net Asset Value, End of Period ........................................   $  12.60      $  13.63
                                                                          ========      ========
Ratio of net expenses to average net assets (b)  ......................       1.25%*        1.25%*
Ratio of net investment income to average net assets (c) ..............       0.12%*      (0.14%)*
Portfolio turnover rate ...............................................         84%           18%
Average Commissions (Per Share) .......................................       --        $ 0.0212
Total return ..........................................................      26.96%        13.21%
Net assets, end of period .............................................   $ 60,533      $ 96,797
<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 by the Investment Adviser, this ratio would have been 2.87
percent for the year ended September 30, 1995, and 1.40% for the period ended
March 31, 1996. 
(c) Computed giving effect to Investment Adviser's expense limitation 
undertaking.
</TABLE>
<PAGE>
<TABLE>
Total Return Fund
(Unaudited)
Selected per-share data (for a share outstanding throughout each period),
ratios and supplemental data.
<CAPTION>
                                                                                                            Nine
                                                                                                          Months
                                                                                   Years Ended             Ended
                                                                                    Dec. 31,           Sept. 30,
                                                                                    1986        1987        1988
<S>                                                                             <C>         <C>         <C>
Net Asset Value, Beginning of Period ........................................   $  25.04    $  25.07    $  22.25
                                                                                --------    --------    --------
Income From Investment Operations
        Net investment income ...............................................       1.33        1.32        0.97
        Net realized and unrealized gains (losses) on investments ...........       2.75       (1.06)       0.45
                                                                                --------    --------    --------
          Total from investment operations ..................................       4.08        0.26        1.42
                                                                                --------    --------    --------
Distributions
        Net investment income ...............................................      (1.35)      (1.63)      (0.90)
        Net realized capital gains ..........................................      (2.70)      (1.45)      (0.11)
                                                                                --------    --------    --------
          Total distributions ...............................................      (4.05)      (3.08)      (1.01)
                                                                                --------    --------    --------
Net Asset Value, End of Period ..............................................   $  25.07    $  22.25    $  22.66
                                                                                ========    ========    ========
Ratio of net expenses to average net assets .................................      0.79%       0.80%      0.87%*
Ratio of net investment income to average net assets.........................      5.21%       5.12%      5.68%*
Portfolio turnover rate......................................................       108%         86%        85% 
Average Commissions (Per Share)..............................................        --          --         --
Total return.................................................................     17.11%       0.74%      6.51%
Net assets, end of period....................................................   $149,831    $140,279    $134,225
<PAGE>
<CAPTION>
                                                                                 Years Ended Sept. 30,
                                                                        1989         1990          1991         1992
<S>                                                                 <C>          <C>          <C>           <C>
Net Asset Value, Beginning of Period ............................   $  22.66     $  25.41     $   21.68     $  26.08
                                                                    --------     --------     ---------     --------
Income From Investment Operations
        Net investment income ...................................       1.37         1.28          1.32         1.31
        Net realized and unrealized gains (losses) on investments       3.10        (2.92)         4.85         1.48
                                                                    --------     --------     ---------     --------
          Total from investment operations ......................       4.47        (1.64)         6.17         2.79
                                                                    --------     --------     ---------     --------
Distributions
        Net investment income ...................................      (1.34)       (1.36)        (1.26)       (1.34)
        Net realized capital gains ..............................      (0.38)       (0.73)        (0.51)       (0.62)
                                                                    --------     --------     ---------     --------
          Total distributions ...................................      (1.72)       (2.09)        (1.77)       (1.96)
                                                                    --------     --------     ---------     --------
Net Asset Value, End of Period ..................................   $  25.41     $  21.68     $   26.08     $  26.91
                                                                    ========     ========     =========     ========
Ratio of net expenses to average net assets .....................       0.90%        0.88%         0.87%        0.85%
Ratio of net investment income to average net assets ............       5.83%        5.36%         5.50%        4.94%
Portfolio turnover rate .........................................         93%          75%           71%          59%
Average Commissions (Per Share)..................................         --           --            --           --
Total return ....................................................      20.76%       (6.86%)       29.67%       11.13%
Net assets, end of period .......................................   $144,890      $124,592    $ 150,689     $173,417
<PAGE>
<CAPTION>
                                                                                                                Six
                                                                                                             Months
                                                                                                              Ended
                                                                             Years Ended Sept. 30,        March 31,
                                                                        1993         1994         1995         1996
<S>                                                                 <C>          <C>          <C>          <C>
Net Asset Value, Beginning of Period ............................   $  26.91     $  27.57     $  25.78     $  27.82
                                                                    --------     --------     --------     --------
Income From Investment Operations
        Net investment income ...................................       1.26         1.15         1.33         0.51
        Net realized and unrealized gains (losses) on investments       2.37        (1.06)        2.22         2.21
                                                                    --------     --------     --------     --------
          Total from investment operations ......................       3.63         0.09         3.55         2.72
                                                                    --------     --------     --------     --------
Distributions
        Net investment income ...................................      (1.30)       (1.17)       (1.23)       (0.57)
        Net realized capital gains ..............................      (1.67)       (0.71)       (0.28)       (0.70)
                                                                    --------     --------     --------     --------
          Total distributions ...................................      (2.97)       (1.88)       (1.51)       (1.27)
                                                                    --------     --------     --------     --------
Net Asset Value, End of Period ..................................   $  27.57     $  25.78     $  27.82     $  29.27
                                                                    ========     ========     ========     ========
Ratio of net expenses to average net assets .....................       0.81%        0.83%        0.87%        1.06%*
Ratio of net investment income to average net assets ............       4.69%        4.53%        5.14%        3.58%*
Portfolio turnover rate 53% .....................................         53%          29%          45%          36%
Average Commissions (Per Share)..................................         --           --           --     $  0.0606
Total return ....................................................      14.57%        0.36%       14.49%       10.11%
Net assets, end of period .......................................   $222,292     $229,274     $228,560     $231,595
<FN>
*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>
Growth & Income Fund
(Unaudited)
Selected per-share data (for a share outstanding throughout each period),
ratios and supplemental data.
<CAPTION>
                                                        Period Ended
                                                           Sept. 30,
                                                             1987 (a)            1988           1989
<S>                                                        <C>             <C>            <C>
Net Asset Value, Beginning of Period ...................   $    10.00      $    10.49     $     8.88
                                                           ----------      ----------     ----------
Income From Investment Operations
        Net investment income ..........................         0.05            0.17           0.22
        Net realized and unrealized gains (losses)
                on investments .........................         0.47           (1.64)          2.46
                                                           ----------      ----------     ----------
                Total from investment operations .......         0.52           (1.47)          2.68
                                                           ----------      ----------     ----------
Distributions
        Net investment income ..........................        (0.03)          (0.14)         (0.22)
        Net realized capital gains .....................        --              --             --
                                                           ----------      ----------     ----------
                Total distributions ....................        (0.03)          (0.14)         (0.22)
                                                           ----------      ----------     ----------
Net Asset Value, End of Period                             $    10.49      $     8.88     $    11.34
                                                           ==========      ==========     ==========
Ratio of net expenses to average net assets (b) ........       1.91%*           1.47%          1.24%
Ratio of net investment income to average net assets (c)       1.43%*           2.03%          2.28%
Portfolio turnover rate ................................         32%             105%            63%
Average Commissions (Per Share) ........................        --              --             --
Total return ...........................................       5.20%          (13.90%)        30.63%
Net assets, end of period ..............................   $   22,863      $   23,002     $   32,562
<PAGE>
<CAPTION>
                                                                      Years Ended September 30,
                                                                1990         1991         1992         1993
<S>                                                         <C>         <C>          <C>          <C>
Net Asset Value, Beginning of Period ....................   $  11.34    $   10.49    $   12.27    $   13.42
                                                            --------    ---------    ---------    ---------
Income From Investment Operations
        Net investment income ...........................       0.26         0.26         0.19         0.17
        Net realized and unrealized gains (losses)
                on investments ..........................      (0.85)        2.17         1.49         2.16
                                                            --------    ---------    ---------    ---------
                Total from investment operations ........      (0.59)        2.43         1.68         2.33
                                                            --------    ---------    ---------    ---------
Distributions
        Net investment income ...........................      (0.26)       (0.29)       (0.18)       (0.16)
        Net realized capital gains ......................        --         (0.36)       (0.35)       (0.76)
                                                            --------    ---------    ---------    ---------
                Total distributions .....................      (0.26)       (0.65)       (0.53)       (0.92)
                                                            --------    ---------    ---------    ---------
Net Asset Value, End of Period ..........................   $  10.49    $   12.27    $   13.42    $   14.83
                                                            ========    =========    =========    =========
Ratio of net expenses to average net assets (b) .........      1.08%        1.00%        0.97%        0.88%
Ratio of net investment income to average net assets (c)       2.40%        2.27%        1.46%        1.23%
Portfolio turnover rate                                          51%          48%          40%          50%
Average Commissions (Per Share) .........................       --           --           --           --
Total return ............................................     (5.25%)      24.12%       14.00%       17.98%
Net assets, end of period ...............................   $ 43,446    $  54,820    $  70,724    $ 100,365
<PAGE>
<CAPTION>
                                                                                               Six
                                                                                            Months
                                                                                             Ended
                                                             Years Ended September 30,   March 31,
                                                                  1994            1995        1996
<S>                                                        <C>            <C>            <C>
Net Asset Value, Beginning of Period ...................   $    14.83     $   14.54      $   16.65
                                                           ----------     ---------      ---------
Income From Investment Operations
        Net investment income ..........................         0.18          0.34           0.14
        Net realized and unrealized gains (losses)
                on investments .........................         0.40          2.56           1.90
                                                           ----------     ---------      ---------
                Total from investment operations .......         0.58          2.90           2.04
                                                           ----------     ---------      ---------
Distributions
        Net investment income ..........................        (0.16)        (0.20)         (0.22)
        Net realized capital gains .....................        (0.71)        (0.59)         (1.43)
                                                           ----------     ---------      ---------
                Total distributions ....................        (0.87)        (0.79)         (1.65)
                                                           ----------     ---------      ---------
Net Asset Value, End of Period .........................   $    14.54     $   16.65      $   17.04
                                                           ==========     =========      =========
Ratio of net expenses to average net assets (b).........        0.90%         0.96%         1.16%*
Ratio of net investment income to average net assets (c)        1.18%         1.78%         1.68%*
Portfolio turnover rate ................................          85%           70%             9%
Average Commissions (Per Share) ........................         --            --        $  0.0718
Total return ...........................................        4.03%        21.12%         13.08%
Net assets, end of period ..............................   $  129,680     $ 139,539      $ 166,138
<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 
percent for the period ended September 30, 1987, and 1.09 percent for the 
year ended September 30, 1990.
(c) Computed giving effect to Investment Adviser's expense limitation
undertaking. 
</TABLE>
<PAGE>
<TABLE>
Growth Stock Fund
(Unaudited)
Selected per-share data (for a share outstanding throughout each period),
ratios and supplemental data.
<CAPTION>
                                                                                                           Nine
                                                                                                         Months
                                                                                  Years Ended             Ended
                                                                                     Dec. 31,         Sept. 30,
                                                                           1986            1987            1988
<S>                                                                 <C>             <C>             <C>
Net Asset Value, Beginning of Period ............................   $     17.43     $     16.97     $     14.67
                                                                    -----------     -----------     -----------
Income From Investment Operations
        Net investment income ...................................          0.26            0.24            0.19
        Net realized and unrealized gains (losses) on investments          2.75            0.46           (0.11)
                                                                    -----------     -----------     -----------
                Total from investment operations ................          3.01            0.70            0.08
                                                                    -----------     -----------     -----------
Distributions
        Net investment income ...................................         (0.25)          (0.29)          (0.15)
        Net realized capital gains ..............................         (3.22)          (2.71)           --
                                                                    -----------     -----------     -----------
                Total distributions .............................         (3.47)          (3.00)          (0.15)
                                                                    -----------     -----------     -----------
Net Asset Value, End of Period ..................................   $     16.97     $     14.67     $     14.60
                                                                    ===========     ===========     ===========
Ratio of net expenses to average net assets .....................          0.67%           0.65%           0.76%*
Ratio of net investment income to average net assets ............          1.34%           1.25%           1.62%*
Portfolio turnover rate .........................................           137%            143%             84%
Average Commissions (Per Share) .................................          --              --              --
Total return ....................................................         16.91%           5.57%           0.54%
Net assets, end of period .......................................   $   226,604     $   232,658     $   195,641
<PAGE>
<CAPTION>
                                                                                  Years Ended Sept. 30,
                                                                         1989         1990         1991        1992
<S>                                                                 <C>          <C>         <C>          <C>
Net Asset Value, Beginning of Period ............................   $   14.60    $   19.05   $    17.90   $   22.79
                                                                    ---------    ---------   ----------   ---------
Income From Investment Operations
        Net investment income ...................................        0.34         0.39         0.33        0.18
        Net realized and unrealized gains (losses) on investments        4.51        (1.17)        5.90        3.01
                                                                    ---------    ---------   ----------   ---------
                Total from investment operations ................        4.85        (0.78)        6.23        3.19
                                                                    ---------    ---------   ----------   ---------
Distributions
        Net investment income ...................................       (0.34)       (0.37)       (0.42)      (0.16)
        Net realized capital gains ..............................       (0.06)       --           (0.92)      (1.17)
                                                                    ---------    ---------   ----------   ---------
                Total distributions .............................       (0.40)       (0.37)       (1.34)      (1.33)
                                                                    ---------    ---------   ----------   ---------
Net Asset Value, End of Period ..................................   $   19.05    $   17.90   $    22.79   $   24.65
                                                                    =========    =========   ==========   =========
Ratio of net expenses to average net assets .....................        0.77%        0.73%        0.79%       0.92%
Ratio of net investment income to average net assets ............        2.05%        2.03%        1.63%       0.75%
Portfolio turnover rate .........................................          47%          40%          34%         23%
Average Commissions (Per Share) .................................        --           --           --          --
Total return ....................................................       33.86%       (4.17%)      36.64%      14.37%
Net assets, end of period .......................................   $ 206,476    $ 206,031   $  291,767   $ 372,758
<PAGE>
<CAPTION>
                                                                                                                  Six
                                                                                                               Months
                                                                                                                Ended
                                                                               Years Ended Sept. 30,        March 31,
                                                                         1993          1994          1995        1996
<S>                                                                 <C>           <C>          <C>          <C>
Net Asset Value, Beginning of Period ............................   $   24.65     $   24.89    $    23.58   $   26.13
                                                                    ---------     ---------    ----------   ---------
Income From Investment Operations
        Net investment income ...................................        0.15          0.13          0.12        0.04
        Net realized and unrealized gains (losses) on investments        1.14          0.41          5.60        2.49
                                                                    ---------     ---------    ----------   ---------
                Total from investment operations ................        1.29          0.54          5.72        2.53
                                                                    ---------     ---------    ----------   ---------
Distributions
        Net investment income ...................................       (0.10)        (0.12)        (0.15)      (0.10)
        Net realized capital gains ..............................       (0.95)        (1.73)        (3.02)      (2.33)
                                                                    ---------     ---------    ----------   ---------
                Total distributions .............................       (1.05)        (1.85)        (3.17)      (2.43)
                                                                    ---------     ---------    ----------   ---------
Net Asset Value, End of Period ..................................   $   24.89     $   23.58    $    26.13   $   26.23
                                                                    =========     =========    ==========   =========
Ratio of net expenses to average net assets .....................        0.93%         0.94%         0.99%       1.08%*
Ratio of net investment income to average net assets ............        0.59%         0.50%         0.56%       0.37%*
Portfolio turnover rate .........................................          29%           27%           36%         25%
Average Commissions (Per Share) .................................          --            --            --   $   0.0513
Total return ....................................................        5.09%         2.10%        28.18%      10.28%
Net assets, end of period .......................................   $ 373,921     $ 321,502    $  360,336   $ 389,480
<FN>
*Annualized
Note: For the year ended September 30, 1989, the average amount of debt 
outstanding was $124, the average number of shares outstanding was 11,745, 
and the average amount of debt outstanding per share was $0.0106. The Fund had
no borrowings during any other periods.
</TABLE>
<PAGE>
<TABLE>
Special Fund
(Unaudited)
Selected per-share data (for a share outstanding throughout each period),
ratios and supplemental data.
<CAPTION>
                                                                                                           Nine
                                                                                                         Months
                                                                             Years Ended                  Ended
                                                                               Dec. 31,               Sept. 30,
                                                                           1986            1987            1988
<S>                                                                 <C>             <C>             <C>
Net Asset Value, Beginning of Period ............................   $     18.41     $     16.95     $     12.83
                                                                    -----------     -----------     -----------
Income From Investment Operations
        Net investment income ...................................          0.35            0.23            0.14
        Net realized and unrealized gains (losses) on investments          2.33            0.12            2.16
                                                                    -----------     -----------     -----------
                Total from investment operations ................          2.68            0.35            2.30
                                                                    -----------     -----------     -----------
Distributions
        Net investment income ...................................         (0.34)          (0.57)          (0.01)
        Net realized capital gains ..............................         (3.80)          (3.90)            --
                                                                    -----------     -----------     -----------
                Total distributions .............................         (4.14)          (4.47)          (0.01)
                                                                    -----------     -----------     -----------
Net Asset Value, End of Period ..................................   $     16.95     $     12.83     $     15.12
                                                                    ===========     ===========     ===========
Ratio of net expenses to average net assets .....................          0.92%           0.96%           0.99%*
Ratio of net investment income to average net assets ............          1.75%           1.32%           1.31%*
Portfolio turnover rate .........................................           116%            103%             42%
Average Commissions (Per Share) .................................            --              --              --
Total return ....................................................         14.70%           4.27%          17.94%
Net assets, end of period .......................................   $   253,693     $   187,997     $   224,628
<PAGE>
<CAPTION>
                                                                                     Years Ended Sept. 30,
                                                                           1989            1990         1991          1992
<S>                                                                 <C>             <C>           <C>            <C>      
Net Asset Value, Beginning of Period ............................   $     15.12     $   20.79     $    16.64     $   19.87
                                                                    -----------     ---------     ----------     ---------
Income From Investment Operations
        Net investment income ...................................          0.36          0.42           0.34          0.21
        Net realized and unrealized gains (losses) on investments          5.58         (2.10)          4.55          1.50
                                                                    -----------     ---------     ----------     ---------
                Total from investment operations ................          5.94         (1.68)          4.89          1.71
                                                                    -----------     ---------     ----------     ---------
Distributions
        Net investment income ...................................         (0.21)        (0.39)         (0.34)        (0.37)
        Net realized capital gains ..............................         (0.06)        (2.08)         (1.32)        (0.31)
                                                                    -----------     ---------     ----------     ---------
                Total distributions .............................         (0.27)        (2.47)         (1.66)        (0.68)
                                                                    -----------     ---------     ----------     ---------
Net Asset Value, End of Period ..................................   $     20.79     $   16.64     $    19.87     $   20.90
                                                                    ===========     =========     ==========     =========
Ratio of net expenses to average net assets .....................          0.96%         1.02%          1.04%         0.99%
Ratio of net investment income to average net assets ............          2.12%         2.33%          2.11%         0.99%
Portfolio turnover rate .........................................            85%           70%            50%           40%
Average Commissions (Per Share) .................................          --            --             --            --
Total return ....................................................         40.00%        (8.78%)        32.18%         8.96%
 Net assets, end of period ......................................   $   322,056     $ 361,065     $  587,259     $ 626,080
<PAGE>
<CAPTION>
                                                                                                                         Six
                                                                                                                      Months
                                                                                                                       Ended
                                                                                Years Ended Sept. 30,              March 31,
                                                                          1993           1994           1995            1996
<S>                                                                 <C>            <C>            <C>            <C>
Net Asset Value, Beginning of Period ............................   $    20.90     $    25.04     $    23.54     $     25.26
                                                                    ----------     ----------     ----------     -----------
Income From Investment Operations
        Net investment income ...................................         0.17           0.15           0.13            0.02
        Net realized and unrealized gains (losses) on investments         5.31           0.33           3.05            2.16
                                                                    ----------     ----------     ----------     -----------
                Total from investment operations ................         5.48           0.48           3.18            2.18
                                                                    ----------     ----------     ----------     -----------
Distributions
        Net investment income ...................................        (0.18)         (0.21)         (0.15)          (0.11)
        Net realized capital gains ..............................        (1.16)         (1.77)         (1.31)          (1.91)
                                                                    ----------     ----------     ----------     -----------
                Total distributions .............................        (1.34)         (1.98)         (1.46)          (2.02)
                                                                    ----------     ----------     ----------     -----------
Net Asset Value, End of Period ..................................   $    25.04     $    23.54     $    25.26     $     25.42
                                                                    ==========     ==========     ==========     ===========
Ratio of net expenses to average net assets .....................         0.97%          0.96%          1.02%           1.19%*
Ratio of net investment income to average net assets ............         0.92%          0.91%          0.56%           0.12%*
Portfolio turnover rate .........................................           42%           58%            41%             17%
Average Commissions (Per Share) .................................           --            --             --      $    0.0500
Total return ....................................................        27.35%          2.02%         14.60%           9.41%
 Net assets, end of period ......................................   $1,076,818     $1,243,885     $1,201,469     $ 1,123,079
<FN>
*Annualized
Note: For the year ended December 31, 1986, the average amount of debt
outstanding was $203, the average number of shares outstanding was 15,251, and
the average amount of debt outstanding per share was $0.0133. The Fund had no
borrowings during any other periods. 
</TABLE>
<PAGE>
<TABLE>
Capital Opportunities Fund 
(Unaudited) 
Selected per-share data (for a share outstanding throughout each period), 
ratios and supplemental data.
<CAPTION>
                                                                                                     Nine
                                                                                                   Months
                                                                           Years Ended              Ended
                                                                             Dec. 31,           Sept. 30,
                                                                         1986          1987          1988
<S>                                                                 <C>           <C>           <C> 
Net Asset Value, Beginning of Period ............................   $   11.91     $   13.38     $   10.62
                                                                    ---------     ---------     ---------
Income From Investment Operations
        Net investment income ...................................        0.03          0.03          0.03
        Net realized and unrealized gains (losses) on investments        1.97          0.62          0.13
                                                                    ---------     ---------     ---------
                Total from investment operations ................        2.00          0.65          0.16
                                                                    ---------     ---------     ---------
Distributions
        Net investment income ...................................       (0.10)        (0.05)         --
        Net realized capital gains ..............................       (0.43)        (3.36)         --
                                                                    ---------     ---------     ---------
                Total distributions .............................       (0.53)        (3.41)         --
                                                                    ---------     ---------     ---------
Net Asset Value, End of Period ..................................   $   13.38     $   10.62     $   10.78
                                                                    =========     =========     =========
Ratio of net expenses to average net assets .....................        0.95%         0.95%         1.01%*
Ratio of net investment income to average net assets ............        0.19%         0.18%         0.34%*
Portfolio turnover rate .........................................         116%          133%          164%
Average Commissions (Per Share) .................................        --            --            --
Total return ....................................................       16.77%         9.38%         1.51%
Net assets, end of period .......................................   $ 191,415     $ 171,973     $ 194,160
<PAGE>
<CAPTION>
                                                                                 Years Ended Sept. 30,
                                                                        1989         1990         1991         1992
<S>                                                                 <C>          <C>          <C>          <C>
Net Asset Value, Beginning of Period ............................   $  10.78     $  14.58     $   7.32     $  11.00
                                                                    --------     --------     --------     --------
Income From Investment Operations
        Net investment income ...................................       0.05         0.06         0.11         0.06
        Net realized and unrealized gains (losses) on investments       3.86        (4.72)        3.73         0.60
                                                                    --------     --------     --------     --------
                Total from investment operations ................       3.91        (4.66)        3.84         0.66
                                                                    --------     --------     --------     --------
Distributions
        Net investment income ...................................      (0.05)       (0.06)       (0.08)       (0.10)
        Net realized capital gains ..............................      (0.06)       (2.54)       (0.08)     --
                                                                    --------     --------     --------     --------
                Total distributions .............................      (0.11)       (2.60)       (0.16)       (0.10)
                                                                    --------     --------     --------     --------
Net Asset Value, End of Period ..................................   $  14.58     $   7.32     $  11.00     $  11.56
                                                                    ========     ========     ========     ========
Ratio of net expenses to average net assets .....................       1.09%        1.14%        1.18%        1.06%
Ratio of net investment income to average net assets ............       0.42%        0.43%        1.19%        0.42%
Portfolio turnover rate .........................................        245%         171%          69%          46%
Average Commissions (Per Share) .................................         --           --           --           --
Total return ....................................................      36.68%      (37.51%)      53.51%        5.99%
Net assets, end of period .......................................   $272,805     $ 86,342     $129,711     $118,726
<PAGE>
<CAPTION>
                                                                                                                    Six
                                                                                                                 Months
                                                                                                                  Ended
                                                                                   Years Ended Sept. 30,      March 31,
                                                                        1993          1994          1995           1996
<S>                                                                 <C>          <C>           <C>           <C>       
Net Asset Value, Beginning of Period ............................   $  11.56     $   15.44     $   15.79     $    21.69
                                                                    --------     ---------     ---------     ----------
Income From Investment Operations
        Net investment income ...................................       0.01          0.02          0.01          (0.01)
        Net realized and unrealized gains (losses) on investments       3.91          0.34          5.91           5.90
                                                                    --------     ---------     ---------     ----------
                Total from investment operations ................       3.92          0.36          5.92           5.89
                                                                    --------     ---------     ---------     ----------
Distributions
        Net investment income ...................................      (0.04)        (0.01)        (0.02)         (0.01)
        Net realized capital gains ..............................      --            --           --              (0.99)
                                                                    --------     ---------     ---------     ----------
                Total distributions .............................      (0.04)        (0.01)        (0.02)         (1.00)
                                                                    --------     ---------     ---------     ----------
Net Asset Value, End of Period ..................................   $  15.44     $   15.79     $   21.69     $    26.58
                                                                    ========     =========     =========     ==========
Ratio of net expenses to average net assets .....................       1.06%         0.97%         1.05%          1.23%*
Ratio of net investment income to average net assets ............       0.09%         0.04%         0.08%         (0.22%)*
Portfolio turnover rate .........................................         55%           46%           60%            12%
Average Commissions (Per Share) .................................      --            --           --         $    0.0564
Total return ....................................................      34.01%         2.31%        37.46%         28.06%
Net assets, end of period .......................................   $153,101     $ 175,687     $ 242,381     $  696,081
<FN>
*Annualized
</TABLE>
<TABLE>
All per share amounts and Average Shares Outstanding During Period on the debt
table reflect a two-for-one stock split effective August 25, 1995.
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         17,050         $0.0026
December 31, 1986......           --             55         13,906          0.0039
December 31, 1987......           --            292         16,008          0.0183
September 30, 1988.....           --             56         17,206          0.0033
September 30, 1989.....           --            422         16,066          0.0263
September 30, 1990.....          200          1,042         15,944          0.0654
There were no bank borrowings during any other periods.
</TABLE>
<PAGE>
<TABLE>
International Fund
(Unaudited)
Selected per-share data (for a share outstanding throughout each period), 
ratios and supplemental data.
<CAPTION>
                                                                                                                 Six
                                                                                      Period       Year       Months
                                                                                       Ended      Ended        Ended
                                                                                   Sept. 30,   ept. 30,     March 31
                                                                                    1994 (a)       1995         1996
<S>                                                                               <C>          <C>           <C>
                                                                                  --------     --------     --------
Net Asset Value, Beginning of Period ..........................................   $  10.00     $  10.61     $  10.25
                                                                                  --------     --------     --------
Income From Investment Operations
   Net investment income ......................................................       0.03         0.12         0.01
   Net realized and unrealized gains (losses) on investments
      and foreign currency transactions .......................................       0.58        (0.26)        0.41
                                                                                  --------     --------     --------
      Total from investment operations ........................................       0.61        (0.14)        0.42
                                                                                  --------     --------     --------
Distributions
   Net investment income ......................................................       --          (0.05)       (0.12)
   Net realized capital gains .................................................       --          (0.17)        0.00
                                                                                  --------     --------     --------
      Total distributions .....................................................       --          (0.22)       (0.12)
                                                                                  --------     --------     --------
Net Asset Value, End of Period ................................................   $  10.61     $  10.25     $  10.55
                                                                                  ========     ========     ========
Ratio of net expenses to average net assets ...................................       1.61%*       1.59%        1.55%*
Ratio of net investment income to average net assets ..........................       0.61%*       1.41%        0.35%*
Portfolio turnover rate .......................................................         48%          59%          32%
Average Commissions (Per Share) ...............................................       --           --       $  0.0090
Total return ..................................................................       6.10%       (1.28%)       4.19%
Net assets, end of period .....................................................   $ 74,817     $ 83,020     $113,890
<FN>
*Annualized
(a) From commencement of operations on March 1, 1994.
</TABLE>
<PAGE>
To Contact Us. . .
By Phone 800-338-2550

You can discuss your investment questions with a Stein Roe 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
Stein Roe Fund account, including Stein Roe IRAs. We're available seven days a
week, from 7 a.m. to 8 p.m. weekdays and from 8 a.m. to 5 p.m. Saturday and
Sunday (central time).

Stein Roe's Funds-on-Call(R)
24-Hour Service Line
Using a touch-tone phone, call our toll-free number, day or night, for your
current account balance, the latest Stein Roe 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: o
Exchange shares between your
  Stein Roe accounts;
o Purchase Fund shares by electronic transfer;
o Order additional account
  statements and Money Market Fund checks;
o Redeem shares by check, wire or electronic transfer.
Retirement Plan Accounts
Call us for information about how we can assist you with your defined
contribution plan, including 401(k) plans. You can reach us toll free at
800-322-1130.
  For information on IRA plans, call us toll free at 800-338-2550.

By Mail

If you prefer to contact us by mail, please address all correspondence to: 
P.O. Box 804058, Chicago, IL 60680. You also may visit our Internet site -- 
www.steinroe.com -- to contact us by e-mail.
<PAGE>
In Person

If you are in the Chicago area, please visit our Investor Center located in
downtown Chicago at One South Wacker Drive, 32nd Floor. Our account
representatives can answer questions about your current Fund investments or
provide you infor mation about any of the Stein Roe Funds and retirement
plans. Stop by weekdays between 8 a.m. and
5:15 p.m.

This report must be preceded or accompanied by a prospectus.
<PAGE>
Funds for Every Investment Objective
The Stein Roe family of 100 percent no-load mutual funds offers a variety of
funds so you can select the right fund, or combination of funds, to meet your
investment objec tives. Call us at 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.

  o  Government Reserves Fund -- Invests primarily in securities issued or 
     guaranteed by the U.S. government and its agencies and instrumentalities.*

  o  Cash Reserves Fund -- 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.


  o  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 three years.

  o  Government Income Fund -- Invests primarily in securities issued or 
     guaranteed by the U.S. government and its agencies.*

  o  Intermediate Bond Fund-- Invests primarily in marketable debt securities
     with an average life of three to 10 years.

  o  Income Fund -- Pursues a higher level of current income by investing
     primarily in medium- and lower-quality bonds.
<PAGE>
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.

  o  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.*

*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.
<PAGE>
  o  Intermediate Municipals Fund -- Seeks high current yield through
     investments primarily in the three highest grades of intermediate-term
     municipal securities.

  o  Managed Municipals Fund -- Pursues high tax-free income by investing in a
     quality-conscious portfolio of long-term municipal bonds.

  o  High-Yield Municipals Fund -- Seeks a higher level of tax-free income
     from long-term municipal securities, primarily of medium or lower
     quality.

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.

  o  Balanced Fund +-- Seeks long-term growth of capital and current income
     consistent with reasonable investment risk by investing in equities, debt
     securities and cash equivalents.

  o  Growth & Income Fund -- Pursues income and long-term capital growth by
     investing primarily in large, well-established companies.
<PAGE>
Growth Funds
Growth funds offer long-term capital appreciation potential by investing
primarily in various types of stocks.

  o Growth Stock Fund -- Pursues long-term capital appreciation from stocks
with strong growth potential.

  o  Special Fund -- Invests in securities believed to have limited downside
     risk relative to their potential for above-average growth, including
     securities of undervalued, under followed or out-of-favor companies.

  o  Special Venture Fund -- Seeks capital appreciation through equity
     securities of entre preneurially managed companies.

  o Young Investor Fund -- Invests in securities of companies that affect the
lives of children or teenagers.

  o  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.

  o  International Fund -- Invests
     in a diversified portfolio of foreign securities.

+Formerly Total Return Fund; name and investment objective change effective 
April 17, 1996.
<PAGE>
Investment Trust
Trustees
Timothy K. Armour
President, Mutual Fund Division and
Director, Stein Roe & Farnham Incorporated
Kenneth L. Block
Chairman Emeritus, A. T. Kearney, Inc.
William W. Boyd
Chairman and Director, Sterling Plumbing
Group, Inc.
Lindsay Cook
Senior Vice President, Liberty Financial
Companies, Inc.
Francis W. Morley
Chairman, Employer Plan Administrators
and Consultants Co.
Charles R. Nelson
Van Voorhis Professor of Political Economy, University of Washington
Gordon R. Worley
Private investor
<PAGE>
Officers
Timothy K. Armour, President
Jilaine H. Bauer, Executive Vice President,
  Secretary
N. Bruce Callow, Executive Vice President
Hans P. Ziegler, Executive Vice President
Gary A. Anetsberger, Senior Vice President,
  Chief Financial Officer
Bruno Bertocci, Vice President
David P. Brady, Vice President
Thomas W. Butch, Vice President
Daniel K. Cantor, Vice President
E. Bruce Dunn, Vice President
Erik P. Gustafson, Vice President
David P. Harris, Vice President
Philip D. Hausken, Vice President
Harvey B. Hirschhorn, Vice President
Stephen P. Lautz, Vice President
Eric S. Maddix, Vice President
Lynn C. Maddox, Vice President
Anne E. Marcel, Vice President
Nicolette D. Parrish, Vice President,
  Assistant Secretary
Richard B. Peterson, Vice President
Gloria J. Santella, Vice President
Thomas P. Sorbo, Vice President
Sharon R. Robertson, Controller
Margaret O. Zwick, Treasurer
Janet B. Rysz, Assistant Secretary

Agents and Advisers
Stein Roe & Farnham Incorporated
Investment Advisor
State Street Bank and Trust Company
Custodian
SteinRoe Services Inc.
Transfer Agent
Bell, Boyd & Lloyd
Legal Counsel to the Trust
Arthur Andersen LLP
Independent Auditors
<PAGE>
                             The Stein Roe Funds
                      Stein Roe Government Reserves Fund
                         Stein Roe Cash Reserves Fund
                    Stein Roe Limited Maturity Income Fund
                       Stein Roe Government Income Fund
                       Stein Roe Intermediate Bond Fund
                            Stein Roe Income Fund
                    Stein Roe Municipal Money Market Fund
                    Stein Roe Intermediate Municipals Fund
                      Stein Roe Managed Municipals Fund
                     Stein Roe High-Yield Municipals Fund
                           Stein Roe Balanced Fund
                        Stein Roe Growth & Income Fund
                         Stein Roe Growth Stock Fund
                     Stein Roe Capital Opportunities Fund
                            Stein Roe Special Fund
                         Stein Roe International Fund
                        Stein Roe Young Investor Fund
                        Stein Roe Special Venture Fund

                                P.O. Box 804058
                            Chicago, Illinois 60680
                                 800-338-2550
          In Chicago, visit our Fund Center at One South Wacker Drive
                  Liberty Securities Corporation, Distributor
                               Member SIPC. 4/96
EQ12A


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