STEIN ROE INVESTMENT TRUST, 485APOS, 1997-12-01

STEIN ROE INVESTMENT TRUST
485APOS, 1997-12-01

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1933 Act Registration No. 33-11351
1940 Act File No. 811-4978

SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Post Effective Amendment No. 43 [X]

and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 44 [X]

STEIN ROE INVESTMENT TRUST
(Exact Name of Registrant as Specified in Charter)

One South Wacker Drive, Chicago, Illinois 60606
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code: 1-800-338-2550

Jilaine Hummel Bauer Cameron S. Avery
Executive Vice-President Bell, Boyd & Lloyd
& Secretary Three First National Plaza
Stein Roe Investment Trust Suite 3300
One South Wacker Drive 70 W. Madison Street
Chicago, Illinois 60606 Chicago, Illinois 60602
(Name and Address of Agents for Service)

It is proposed that this filing will become effective (check
appropriate box):

[ ] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[X] on February 2, 1998 pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of rule 485

Registrant has previously elected to register pursuant to Rule
24f-2 an indefinite number of shares of beneficial interest of
the following series: Stein Roe Growth & Income Fund, Stein Roe
Balanced 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, Stein Roe Emerging Markets Fund, and Stein
Roe Growth Opportunities Fund. The Rule 24f-2 Notice for the
fiscal year ended September 30, 1996 was filed on November 14,
1996.

This amendment to the Registration Statement has also been signed
by SR&F Base Trust as it relates to Stein Roe Growth & Income
Fund, Stein Roe Balanced Fund, Stein Roe Growth Stock Fund, Stein
Roe Young Investor Fund, Stein Roe Special Fund, Stein Roe Special
Venture Fund, and Stein Roe International Fund.

<PAGE>

STEIN ROE INVESTMENT TRUST
CROSS REFERENCE SHEET

Item
No. Caption
Part A
1 Front cover
2 Fee Table; Summary
3 (a) Financial Highlights
(b) Financial Highlights
(c) Investment Return
(d) Financial Highlights
4 Organization and Description of Shares; The Fund[s];
Investment Policies; Investment Restrictions; Risks
and Investment Considerations; Portfolio Investments and
Strategies; Summary--Investment Risks
5 (a) Management--Trustees and Investment Adviser
(b) Management--Trustees and Investment Adviser,
Fees and Expenses
(c) Management--Portfolio Managers
(d) Inapplicable
(e) Management--Transfer Agent
(f) Management--Fees and Expenses; Financial Highlights
(g) Inapplicable
5A Inapplicable
6 (a) Organization and Description of Shares; see Statement of
Additional Information--General Information and History
(b) Inapplicable
(c) Organization and Description of Shares
(d) Organization and Description of Shares
(e) Summary
(f) Distributions and Income Taxes; Shareholder Services
(g) Distributions and Income Taxes
(h) Master Fund/Feeder Fund Structure
7 How to Purchase Shares
(a) Management--Distributor
(b) How to Purchase Shares;
Net Asset Value
(c) Inapplicable
(d) How to Purchase Shares
(e) Inapplicable
(f) Inapplicable
(g) Inapplicable
8 (a) How to Redeem Shares; Shareholder Services
(b) How to Purchase Shares
(c) How to Redeem Shares
(d) How to Redeem Shares
9 Inapplicable

Part B
10 Cover page
11 Table of Contents
12 General Information and History
13 Investment Policies; Portfolio Investments and Strategies;
Investment Restrictions
14 Management
15(a) Inapplicable
(b) Principal Shareholders
(c) Principal Shareholders
16(a) Investment Advisory Services; Management; see prospectus:
Management
(b) Investment Advisory Services
(c) Inapplicable
(d) Investment Advisory Services
(e) Inapplicable
(f) Inapplicable
(g) Inapplicable
(h) Custodian; Independent Public Accountants
(i) Transfer Agent
17(a) Portfolio Transactions
(b) Inapplicable
(c) Portfolio Transactions
(d) Portfolio Transactions
(e) Inapplicable
18 General Information and History
19(a) Purchases and Redemptions; see prospectus: How to Purchase
Shares, How to Redeem Shares, Shareholder Services
(b) Purchases and Redemptions; see prospectus: Net Asset Value
(c) Purchases and Redemptions
20 Additional Income Tax Considerations; Portfolio Investments
and Strategies--Taxation of Options and Futures
21(a) Distributor
(b) Inapplicable
(c) Inapplicable
22(a) Inapplicable
(b) Investment Performance
23 Financial Statements

Part C
24 Financial Statements and Exhibits
25 Persons Controlled By or Under Common Control with Registrant
26 Number of Holders of Securities
27 Indemnification
28 Business and Other Connections of Investment Adviser
29 Principal Underwriters
30 Location of Accounts and Records
31 Management Services
32 Undertakings

<PAGE>

The prospectuses and statements of additional information relating to
Stein Roe Growth & Income Fund, Stein Roe Balanced Fund, Stein Roe
Growth Stock Fund, Stein Roe Special Fund, Stein Roe Special Venture
Fund, Stein Roe Capital Opportunities Fund, Stein Roe International
Fund, Stein Roe Emerging Markets Fund and Stein Roe Growth
Opportunities Fund, all of the series of Stein Roe Investment Trust,
are not affected by the filing of this post-effective amendment No.
43.

<PAGE>

Prospectus Feb. 2, 1998

Stein Roe Mutual Funds

Stein Roe Young Investor Fund

The investment objective of Young Investor Fund is to provide
long-term capital appreciation. Young Investor Fund invests all
of its net investable assets in SR&F Growth Investor Portfolio
("Growth Investor Portfolio"), which has the same investment
objective and substantially the same investment policies as Young
Investor Fund. (See Master Fund/Feeder Fund: Structure and Risk
Factors.) Growth Investor Portfolio invests primarily in
securities of companies that are believed to have above-average
growth prospects, many of which affect the lives of young people.
Young Investor Fund also has an educational objective. It seeks
to provide education and insight about mutual funds, basic
economic principles, and personal finance through a variety of
educational materials prepared and paid for by Young Investor
Fund.

Young Investor Fund is a "no-load" fund. There are no sales
or redemption charges, and Young Investor Fund has no 12b-1 plan.
Young Investor Fund is a series of the Stein Roe Investment Trust
and Growth Investor Portfolio is a series of SR&F Base Trust.
Each Trust is an open-end management investment company.

This prospectus contains information you should know before
investing in Young Investor Fund. Please read it carefully and
retain it for future reference.

If you have any questions about new Fund accounts, please
call 800-403-KIDS (800-403-5437); for existing accounts,
shareholders should call 800-338-2550.

A Statement of Additional Information dated Feb. 2, 1998,
containing more detailed information, has been filed with the
Securities and Exchange Commission and (together with any
supplements thereto) is incorporated herein by reference. That
information, material incorporated by reference, and other
information regarding registrants that file electronically with
the SEC is available at the SEC's website, http://www.sec.gov.
This prospectus is also available electronically by using Stein
Roe's Internet address: http://www. steinroe.com. You can get a
free paper copy of the prospectus, the Statement of Additional
Information, and the most recent financial statements by calling
800-338-2550 or by writing to Stein Roe Funds, Suite 3200, One
South Wacker Drive, Chicago, Illinois 60606.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

TABLE OF CONTENTS

Page
Summary.................................... 2
Fee Table................................. 4
Financial Highlights........................5
The Fund................................... 6
Investment Policies........................ 7
Portfolio Investments and Strategies........8
Investment Restrictions....................10
Risks and Investment Considerations........11
How to Purchase Shares.................... 12
By Check................................ 12
By Wire................................. 12
By Electronic Transfer...................13
By Exchange............................. 13
Conditions of Purchase...................13
Purchases Through Third Parties..........13
Purchase Price and Effective Date.......14
How to Redeem Shares...................... 14
By Written Request...................... 14
By Exchange............................. 14
Special Redemption Privileges........... 15
General Redemption Policies............. 16
Shareholder Services...................... 17
Net Asset Value........................... 19
Distributions and Income Taxes............ 20
Investment Return......................... 21
Management................................ 21
Organization and Description of Shares.....23
Master Fund/Feeder Fund:
Structure and Risk Factor................24

SUMMARY

Stein Roe Young Investor Fund ("Young Investor Fund") is a series
of the Stein Roe Investment Trust, an open-end management
investment company. Young Investor Fund is a "no-load" fund,
which means that there are no sales or redemption charges. (See
The Fund and Organization and Description of Shares.) This
prospectus is not a solicitation in any jurisdiction in which
shares of Young Investor Fund are not qualified for sale.

Investment Objective and Policies. The investment objective of
Young Investor Fund is to provide long-term capital appreciation
by investing primarily in common stocks and other equity-type
securities that Stein Roe believes to have long-term appreciation
potential. Young Investor Fund invests all of its net investable
assets in SR&F Growth Investor Portfolio ("Growth Investor
Portfolio"), which has the same investment objective and
substantially the same investment policies as Young Investor Fund.
Growth Investor Portfolio invests primarily in securities of
companies that are believed to have above-average growth prospects,
many of which that affect the lives of young people.

In addition to the investment objective and policies, Young
Investor Fund also has an educational objective. It seeks to
provide education and insight about mutual funds, basic economic
principles, and personal finance through a variety of educational
materials prepared and paid for by Young Investor Fund.

Young Investor Fund is designed to be appropriate for growth-
oriented investors of all ages. Its focus on companies that
affect the lives of young people and its educational objective and
materials may make it especially appropriate for young people and
investors for whom education is an important objective.

There can be no guarantee that Young Investor Fund and Growth
Investor Portfolio will achieve their common investment objective.
Please see Investment Policies and Portfolio Investments and
Strategies for further information.

Investment Risks. Young Investor Fund is designed for long-term
investors who are willing to accept the investment risk and
volatility of equity-type securities in general, as well as the
specific types of equity securities emphasized by Growth Investor
Portfolio. By investing in companies whose products or services
appeal to young investors, Growth Investor Portfolio emphasizes
various consumer goods sectors. Since Growth Investor Portfolio
may invest in foreign securities, investors should understand and
carefully consider the risks involved in foreign investing.
Investing in foreign securities involves certain risks and
opportunities not typically associated with investing in U.S.
securities. Please see Investment Policies, Portfolio Investments
and Strategies, and Risks and Investment Considerations for
further information.

Purchases. The minimum initial investment for Young Investor Fund
is $2,500; the minimum investment for Uniform Gifts/Transfers to
Minors Act accounts is $1,000. Additional investments must be at
least $50. Lower initial investment minimums apply to IRAs, UGMAs
and automatic investment plans. Shares may be purchased by check,
by bank wire, by electronic transfer, or by exchange from another
Stein Roe Fund. For more detailed information, see How to
Purchase Shares.

Redemptions. For information on redeeming Young Investor Fund
shares, including the special redemption privileges, see How to
Redeem Shares.

Net Asset Value. The purchase and redemption price of Young
Investor Fund's shares is its net asset value per share. The net
asset value is determined as of the close of trading on the New
York Stock Exchange. (For more detailed information, see Net
Asset Value.)

Distributions. Dividends are normally declared and paid annually.
Distributions will be reinvested in additional Fund shares unless
you elect to have them paid in cash, deposited by electronic
transfer into your bank account, or invested in shares of another
Stein Roe Fund. (See Distributions and Income Taxes and
Shareholder Services.)

Management and Fees. Stein Roe & Farnham Incorporated ("Stein
Roe") provides investment management services to Growth Investor
Portfolio and provides administrative and bookkeeping and
accounting services to Young Investor Fund and Growth Investor
Portfolio. For a description of Stein Roe and its fees, see
Management.

If you have any additional questions about Young Investor
Fund, please feel free to discuss them with a Stein Roe account
representative by calling 800-338-2550.

FEE TABLE

Shareholder Transaction Expenses
Sales Load Imposed on Purchases.......................None
Sales Load Imposed on Reinvested Dividends............None
Deferred Sales Load...................................None
Redemption Fees*......................................None
Exchange Fees.........................................None

Annual Fund Operating Expenses (as a percentage
of average net assets)
Management and Administrative Fees................... 0.80%
12b-1 Fees............................................None
Other Expenses........................................0.69%
-----
Total Fund Operating Expenses.........................1.49%
=====
__________
*There is a $7.00 charge for wiring redemption proceeds to your
bank.

Example. You would pay the following expenses on a $1,000
investment assuming (1) 5% annual return; and (2) redemption at
the end of each time period:

1 year 3 years 5 years 10 years
------ ------- ------- --------
$15 $47 $81 $178

The purpose of the Fee Table is to assist you in
understanding the various costs and expenses that you will bear
directly or indirectly as an investor in Young Investor Fund. The
table is based upon actual expenses incurred in the last fiscal
year.

Young Investor Fund pays Stein Roe an administrative fee
based on the Fund's average daily net assets, and Growth Investor
Portfolio pays Stein Roe a management fee based on its average
daily net assets. The expenses of both Young Investor Fund and
Growth Investor Portfolio are summarized in the Fee Table. (The
fees are described under Management.) Young Investor Fund bears
its proportionate share of Portfolio fees and expenses. The
trustees of Investment Trust have considered whether the annual
operating expenses of Young Investor Fund, including its
proportionate share of the expenses of Growth Investor Portfolio,
would be more or less than if Young Investor Fund invested
directly in the securities held by Growth Investor Portfolio, and
concluded that Young Investor Fund's expenses would not be greater
in such case.

For purposes of the Example above, the figures assume that
the percentage amounts listed for Young Investor Fund under Annual
Fund Operating Expenses remain the same in each of the periods;
that all income dividends and capital gains distributions are
reinvested in additional Fund shares; and that, for purposes of
fee breakpoints, net assets remain at the same level as in the
most recently completed fiscal year. The figures in the Example
are not necessarily indicative of past or future expenses, and
actual expenses may be greater or less than those shown. Although
information such as that shown in the Example and Fee Table is
useful in reviewing Young Investor Fund's expenses and in
providing a basis for comparison with other mutual funds, it
should not be used for comparison with other investments using
different assumptions or time periods.

FINANCIAL HIGHLIGHTS

The following table reflects the results of operations of Young
Investor Fund on a per-share basis for the period shown and has
been audited by Arthur Andersen LLP, independent public
accountants. The table should be read in conjunction with Young
Investor Fund's financial statements and notes thereto. Young
Investor Fund's annual report, which may be obtained from
Investment Trust without charge upon request, contains additional
performance information.

Period
Ended
Sept. 30, Years Ended Sept. 30,
1994 (a) 1995 1996 1997
Net Asset Value, Begin- --------- ------ ------ ------
ning of Period $10.00 $10.24 $14.29 $18.64
------ ------ ------ ------
Income from investment
operations
Net investment income
(loss) 0.03 0.06 0.05 (0.03)
Net realized and unrealized
gains on investments 0.21 4.07 4.86 4.78
------ ------ ------ ------
Total from investment
operations 0.24 4.13 4.91 4.75
Distributions
Net investment income -- (0.08) (0.05) (0.02)
Net realized capital gains -- -- (0.51) (0.62)
------ ------ ------ ------
Total Distributions -- (0.08) (0.56) (0.64)
------ ------ ------ ------
Net Asset Value, End of
Period $10.24 $14.29 $18.64 $22.75
====== ====== ====== ======
Ratio of net expenses to
average net assets (b) *0.99% 0.99% 1.21% 1.43%
Ratio of net investment
income to average net
assets (c) *1.07% 0.47% 0.30% (0.19%)
Portfolio turnover rate **12% 55% 98% 22%(d)
Average commissions (per
share) -- -- $0.0603 $0.0565(d)
Total return **2.40% 40.58% 35.55% 26.37%
Net assets, end of
period (000 omitted) $8,176 $31,401 $179,089 $475,506
________________________________
*Annualized.
**Not annualized.
(a) From commencement of operations on April 29, 1994.
(b) If Young Investor Fund had paid all of its expenses and there
had been no reimbursement of expenses by the investment
adviser, this ratio would have been 4.58% for the period ended
Sept. 30, 1994, and 2.87%, 2.04% and 1.49% for the years ended
Sept. 30, 1995 through 1997, respectively.
(c) Computed giving effect to the investment adviser's expense
limitation undertaking.
(d) Prior to commencement of operations of Growth Investor
Portfolio.

THE FUND

Stein Roe Young Investor Fund ("Young Investor Fund") is a no-load
"mutual fund." Mutual funds sell their own shares to investors
and use the money they receive to invest in a portfolio of
securities such as common stocks. A mutual fund allows you to
pool your money with that of other investors in order to obtain
professional investment management. Mutual funds generally make
it possible for you to obtain greater diversification of your
investments and simplify your recordkeeping. Young Investor Fund
does not impose commissions or charges when shares are purchased
or redeemed.

Young Investor Fund is a series of the Stein Roe Investment
Trust ("Investment Trust"), an open-end management investment
company, which is authorized to issue shares of beneficial
interest in separate series. Each series represents interests in
a separate portfolio of securities and other assets, with its own
investment objectives and policies.

Stein Roe & Farnham Incorporated ("Stein Roe") provides
administrative, management, and accounting and bookkeeping
services to Young Investor Fund and Growth Investor Portfolio, and
investment advisory services to Growth Investor Portfolio. Stein
Roe also manages and provides investment advisory services for
several other mutual funds with different investment objectives,
including other equity funds, international funds, taxable and
tax-exempt bond funds, and money market funds. To obtain
prospectuses and other information on any of those mutual funds,
please call 800-338-2550.

On Feb. 3, 1997, Young Investor Fund became a "feeder fund"--
that is, it invested all of its assets in SR&F Growth Investor
Portfolio ("Growth Investor Portfolio"), a "master fund" that has
an investment objective identical to that of Young Investor Fund.
Growth Investor Portfolio is a series of SR&F Base Trust ("Base
Trust"). Prior to converting to a feeder fund, Young Investor
Fund had invested its assets in a diversified group of securities.
Under the "master fund/feeder fund structure," a feeder fund and
one or more feeder funds pool their assets in a master portfolio
that has the same investment objective and substantially the same
investment policies as the feeder funds. The purpose of such an
arrangement is to achieve greater operational efficiencies and
reduce costs. The assets of Growth Investor Portfolio, Young
Investor Fund's master fund, are managed by Stein Roe in the same
manner as the assets of Young Investor Fund were managed before
conversion to the master fund/feeder fund structure. (For more
information, see Master Fund/Feeder Fund: Structure and Risk
Factors.)

INVESTMENT POLICIES

The investment objective of Young Investor Fund is to provide
long-term capital appreciation. Young Investor Fund invests all
of its net investable assets in Growth Investor Portfolio, which
has the same investment objective and substantially the same
investment policies as Young Investor Fund. Growth Investor
Portfolio seeks to achieve its objective by investing primarily in
common stocks and other equity-type securities that, in the
opinion of Stein Roe, have long-term appreciation potential.

Under normal circumstances, at least 65% of the total assets
of Growth Investor Portfolio will be invested in securities of
companies that, in the opinion of Stein Roe, directly or through
one or more subsidiaries, affect the lives of young people. Such
companies may include companies that produce products or services
that young people use, are aware of, or could potentially have an
interest in.

Although Growth Investor Portfolio invests primarily in
common stocks and other equity-type securities (such as preferred
stocks, securities convertible into or exchangeable for common
stocks, and warrants or rights to purchase common stocks), it may
invest up to 35% of its total assets in debt securities. It may
invest in securities of smaller emerging companies as well as
securities of well-seasoned companies of any size. Smaller
companies, however, involve higher risks in that they typically
have limited product lines, markets, and financial or management
resources. In addition, the securities of smaller companies may
trade less frequently and have greater price fluctuation than
larger companies, particularly those operating in countries with
developing markets. Growth Investor Portfolio may also employ
investment techniques described elsewhere in this prospectus.
(See Risks and Investment Considerations.)

PORTFOLIO INVESTMENTS AND STRATEGIES

Debt Securities. In pursuing its investment objective, Growth
Investor Portfolio may invest in debt securities. A debt security
is an obligation of a borrower to make payments of principal and
interest to the holder of the security. To the extent Growth
Investor Portfolio invests in debt securities, such holdings will
be subject to interest rate risk and credit risk. Interest rate
risk is the risk that the value of a portfolio will fluctuate in
response to changes in interest rates. Generally, the debt
component of a portfolio will tend to decrease in value when
interest rates rise and increase in value when interest rates
fall. Credit risk is the risk that an issuer will be unable to
make principal and interest payments when due. Investments in
debt securities are limited to those that are rated within the
four highest grades (generally referred to as "investment grade")
assigned by a nationally recognized statistical rating
organization. Investments in unrated debt securities are limited
to those deemed to be of comparable quality by Stein Roe.
Securities rated within the fourth highest grade may possess
speculative characteristics. If the rating of a security held by
Growth Investor Portfolio is lost or reduced below investment
grade, Growth Investor Portfolio is not required to dispose of the
security--Stein Roe will, however, consider that fact in
determining whether it should continue to hold the security. When
Stein Roe considers a temporary defensive position advisable, the
Growth Investor Portfolio may invest without limitation in high-
quality fixed income securities, or hold assets in cash or cash
equivalents.

Foreign Securities. Growth Investor Portfolio may invest up to
25% of its total assets in foreign securities. (See Risks and
Investment Considerations.) In addition to, or in lieu of, such
direct investment, it may construct a synthetic foreign debt
position by (a) purchasing a debt instrument denominated in one
currency, generally U.S. dollars; and (b) concurrently entering
into a forward contract to deliver a corresponding amount of that
currency in exchange for a different currency on a future date and
at a specified rate of exchange. Because of the availability of a
variety of highly liquid U.S. dollar debt instruments, a synthetic
foreign debt position utilizing such U.S. dollar instruments may
offer greater liquidity than direct investment in foreign currency
debt instruments. In connection with the purchase of foreign
securities, Growth Investor Portfolio may contract to purchase an
amount of foreign currency sufficient to pay the purchase price of
the securities at the settlement date. Such a contract involves
the risk that the value of the foreign currency may decline
relative to the value of the dollar prior to the settlement date--
this risk is in addition to the risk that the value of the foreign
security purchased may decline. As of Sept. 30, 1997, Growth
Investor Portfolio's holdings of foreign companies amounted to
2.8% of average net assets (none in foreign securities; and 2.8%
in ADRs and ADSs).

Lending Portfolio Securities; When-Issued and Delayed-Delivery
Securities. Growth Investor Portfolio may make loans of portfolio
securities to broker-dealers and banks and enter into reverse
repurchase agreements subject to certain restrictions described in
the Statement of Additional Information. It may participate in an
interfund lending program, subject to certain restrictions
described in the Statement of Additional Information. It may
invest in securities purchased on a when-issued or delayed-
delivery basis. Although the payment terms of these securities
are established at the time Growth Investor Portfolio enters into
the commitment, the securities may be delivered and paid for a
month or more after the date of purchase, when their value may
have changed. Growth Investor Portfolio will make such
commitments only with the intention of actually acquiring the
securities, but may sell the securities before settlement date if
it is deemed advisable for investment reasons.

Derivatives. Consistent with its objective, Growth Investor Portfolio
may invest in a broad array of financial instruments and securities,
including conventional, exchange-traded and non-exchange-traded
options, futures, contracts, futures options, forward contracts,
securities collateralized by underlying pools of mortgages or
other receivables, floating rate instruments, and other
instruments that securitize assets of various types
("Derivatives"). In each case, the value of the instrument or
security is "derived" from the performance of an underlying asset
or a "benchmark" such as a security index, or an interest rate.
Growth Investor Portfolio does not expect to invest more than 5%
of its net assets in any type of Derivative except for options,
futures contracts, and futures options.

Derivatives are most often used to manage investment
risk or to create an investment position indirectly because they
are more efficient or less costly than direct investment. They
also may be used in an effort to enhance portfolio returns.

The successful use of Derivatives depends on Stein Roe's
ability to correctly predict changes in the levels and directions
of movements in security prices, interest rates and other market
factors affecting the Derivative itself or the value of the
underlying asset or benchmark. In addition, correlations in the
performance of an underlying asset to a Derivative may not be well
established. Finally, privately negotiated and over-the-counter
Derivatives may not be as well regulated and may be less
marketable than exchange-traded Derivatives. For additional
information on Derivatives, please refer to the Statement of
Additional Information.

In seeking to achieve its desired investment objective,
provide additional revenue, or hedge against changes in security
prices, interest rates or currency fluctuations, Growth Investor
Portfolio may: (1) purchase and write both call options and put
options on securities, indexes and foreign currencies; (2) enter
into interest rate, index and foreign currency futures contracts;
(3) write options on such futures contracts; and (4) purchase
other types of forward or investment contracts linked to
individual securities, indexes, or other benchmarks. Growth
Investor Portfolio may write a call or put option only if the
option is covered. As the writer of a covered call option, it
foregoes, during the option's life, the opportunity to profit from
increases in market value of the security covering the call option
above the sum of the premium and the exercise price of the call.
There can be no assurance that a liquid market will exist when
Growth Investor Portfolio seeks to close out a position. In
addition, because futures positions may require low margin
deposits, the use of futures contracts involves a high degree of
leverage and may result in losses in excess of the amount of the
margin deposit.

Short Sales Against the Box. Growth Investor Portfolio may sell
short securities it owns or has the right to acquire without
further consideration, a technique called selling short "against
the box." Short sales against the box may protect against the
risk of losses in the value of portfolio securities because any
unrealized losses with respect to such securities should be wholly
or partly offset by a corresponding gain in the short position.
However, any potential gains in such securities should be wholly
or partially offset by a corresponding loss in the short position.
Short sales against the box may be used to lock in a profit on a
security when, for tax reasons or otherwise, Stein Roe does not
want to sell the security. For a more complete explanation,
please refer to the Statement of Additional Information.

INVESTMENT RESTRICTIONS

Each of Young Investor Fund and Growth Investor Portfolio is
diversified as that term is defined in the Investment Company Act
of 1940.

Neither Young Investor Fund nor Growth Investor Portfolio may
invest more than 5% of its assets in the securities of any one
issuer. This restriction applies only to 75% of the investment
portfolio, but does not apply to securities of the U.S. Government
or repurchase agreements /1/ for such securities, and would not
prevent Young Investor Fund from investing all of its assets in
shares of another investment company having the identical
investment objective under a master/feeder structure.
- -------
/1/ A repurchase agreement involves a sale of securities to the
Fund or the Portfolio in which the seller agrees to repurchase the
securities at a higher price, which includes an amount
representing interest on the purchase price, within a specified
time. In the event of bankruptcy of the seller, the Fund or the
Portfolio could experience both losses and delays in liquidating
its collateral.
- -------

Neither Young Investor Fund nor Growth Investor Portfolio may
invest more than 25% of its total assets (at the time of
investment) in the securities of companies in any one industry.

Neither Young Investor Fund nor Growth Investor Portfolio may
acquire more than 10% of the outstanding voting securities of any
one issuer. Young Investor Fund may, however, invest all of its
assets in shares of another investment company having the
identical investment objective under a master/feeder structure.

Neither Young Investor Fund nor Growth Investor Portfolio may
make loans except that each may (1) purchase money market
instruments and enter into repurchase agreements; (2) acquire
publicly distributed or privately placed debt securities; (3) lend
portfolio securities under certain conditions; and (4) participate
in an interfund lending program with other Stein Roe Funds or
Portfolios. Neither may borrow money, except for nonleveraging,
temporary, or emergency purposes or in connection with
participation in the interfund lending program. Neither the
aggregate borrowings (including reverse repurchase agreements) nor
aggregate loans at any one time may exceed 33 1/3% of the value of
total assets. Neither Young Investor Fund nor Growth Investor
Portfolio currently intend to borrow in excess of 5% of total
assets. Additional securities may not be purchased when
borrowings, less proceeds receivable from sales of portfolio
securities, exceed 5% of total assets.

Growth Investor Portfolio may invest in repurchase
agreements, provided that it will not invest more than 15% of net
assets in illiquid securities, including repurchase agreements
maturing in more than seven days. An investment in illiquid
securities could involve relatively greater risks and costs.

The investment restrictions described in the second through
fifth paragraphs of this section are fundamental policies and, as
such, can be changed only with the approval of a "majority of the
outstanding voting securities" as defined in the Investment
Company Act of 1940. The common investment objective of Young
Investor Fund and Growth Investor Portfolio is nonfundamental and,
as such, may be changed by the Board of Trustees without
shareholder approval, subject, however, to at least 30 days'
advance written notice to Young Investor Fund's shareholders. Any
such change may result in Young Investor Fund having an investment
objective different from the objective the shareholder considered
appropriate at the time of investment in Young Investor Fund. All
of the investment restrictions are set forth in the Statement of
Additional Information.

RISKS AND INVESTMENT CONSIDERATIONS

All investments, including those in mutual funds, have risks. No
investment is suitable for all investors. Young Investor Fund is
designed for long-term investors who desire to participate in the
stock market and places an emphasis on companies that are believed
to have above-average growth prospects, many of which affect the
lives of young people. These investors can accept more investment
risk and volatility than the stock market in general but want less
investment risk and volatility than aggressive capital
appreciation funds. Of course, there can be no guarantee that
Young Investor Fund or Growth Investor Portfolio will achieve its
objective. Young Investor Fund also has an educational objective.
It seeks to provide education and insight about mutual funds,
basic economic principles, and personal finance through a variety
of educational materials prepared and paid for by Young Investor
Fund.

Although Growth Investor Portfolio seeks to reduce risk by
investing in a diversified portfolio, diversification does not
eliminate all risk. However, Growth Investor Portfolio will not
invest more than 25% of the total value of its assets (at the time
of investment) in the securities of companies in any one industry.
By investing in companies whose products or services appeal to
young investors, Growth Investor Portfolio emphasizes various
consumer goods sectors.

Although Growth Investor Portfolio does not purchase
securities with a view to rapid turnover, there are no limitations
on the length of time portfolio securities must be held.
Accordingly, the portfolio turnover rate may vary significantly
from year to year, but is not expected to exceed 100% under normal
market conditions. A high rate of portfolio turnover may result
in increased transaction expenses and the realization of capital
gains and losses. (See Distributions and Income Taxes.) Young
Investor Fund is not intended to be an income-producing
investment, although it may produce income.

Investment in foreign securities may represent a greater
degree of risk (including risk related to exchange rate
fluctuations, tax provisions, exchange and currency controls, and
expropriation of assets) than investment in securities of domestic
issuers. Other risks of foreign investing include less complete
financial information on issuers, different accounting, auditing
and financial reporting standards, different settlement practices,
less market liquidity, more market volatility, less developed and
regulated markets, and greater political instability. In
addition, various restrictions by foreign governments on
investments by nonresidents may apply, including imposition of
exchange controls and withholding taxes on dividends, and seizure
or nationalization of investments owned by nonresidents. Foreign
investments also tend to involve higher transaction and custody
costs.

HOW TO PURCHASE SHARES

You may purchase Young Investor Fund shares by check, by wire, by
electronic transfer, or by exchange from your account with another
Stein Roe Fund. The initial purchase minimum per Fund account is
$2,500; the minimum for Uniform Gifts/Transfers to Minors Act
accounts is $1,000; the minimum for accounts established under an
automatic investment plan of at least $50 per month (i.e., Regular
Investments or the Automatic Exchange Plan) is $100; and the
minimum per account for Stein Roe IRAs is $500. The initial
purchase minimum is waived for shareholders who participate in the
Stein Roe Counselor [service mark] program and for clients of
Stein Roe. Subsequent purchases must be at least $50. (See
Shareholder Services.)

By Check. To make an initial purchase of shares of Young Investor
Fund by check, please complete and sign the application and mail
it, together with a check made payable to Stein Roe Mutual Funds,
to SteinRoe Services Inc., P.O. Box 8900, Boston, Massachusetts
02205. Participants in the Stein Roe Counselor [service mark]
program should send orders to SteinRoe Services Inc., P.O. Box
803938, Chicago, Illinois 60680.

You may make subsequent investments by submitting a check
along with either the stub from your Fund account confirmation
statement or a note indicating the amount of the purchase, your
account number, and the name in which your account is registered.
Money orders will not be accepted for initial purchases into new
accounts. Credit card convenience checks will not be accepted for
initial or subsequent purchases into your account. Each
individual check submitted for purchase must be at least $50, and
Investment Trust generally will not accept cash, drafts, third or
fourth party checks, or checks drawn on banks outside the United
States. Should an order to purchase shares of Young Investor Fund
be cancelled because your check does not clear, you will be
responsible for any resulting loss incurred by Young Investor
Fund.

By Wire. You also may pay for shares by instructing your bank to
wire federal funds (monies of member banks within the Federal
Reserve System) to the First National Bank of Boston. Your bank
may charge you a fee for sending the wire. If you are opening a
new account by wire transfer, you must first call 800-338-2550 to
request an account number and furnish your social security or
other tax identification number. Neither Young Investor Fund nor
Investment Trust will be responsible for the consequences of
delays, including delays in the banking or Federal Reserve wire
systems. Your bank must include the full name(s) in which your
account is registered and your Fund account number, and should
address its wire as follows:

First National Bank of Boston
Boston, Massachusetts
ABA Routing No. 011000390
Attention: SteinRoe Services Inc.
Fund No. 14; Stein Roe Young Investor Fund
Account of (exact name(s) in registration)
Shareholder Account No. ________

Participants in the Stein Roe Counselor [service mark] program
should address their wires as follows:

By Electronic Transfer. You may also make subsequent investments
by an electronic transfer of funds from your bank account.
Electronic transfer allows you to make purchases at your request
("Special Investments") by calling 800-338-2550 or at pre-
scheduled intervals ("Regular Investments") elected on your
application. (See Shareholder Services.) Electronic transfer
purchases are subject to a $50 minimum and a $100,000 maximum.
You may not open a new account through electronic transfer.
Should an order to purchase shares of Young Investor Fund be
cancelled because your electronic transfer does not clear, you
will be responsible for any resulting loss incurred by Young
Investor Fund.

By Exchange. You may purchase shares by exchange of shares from
another Stein Roe Fund account either by phone (if the Telephone
Exchange Privilege has been established on the account from which
the exchange is being made), by mail, in person, or automatically
at regular intervals (if you have elected the Automatic Exchange
Privilege). Restrictions apply; please review the information on
the Exchange Privilege under How to Redeem Shares--By Exchange.

Conditions of Purchase. Each purchase order for Young Investor
Fund must be accepted by an authorized officer of Investment Trust
or its authorized agent and is not binding until accepted and
entered on the books of Young Investor Fund. Once your purchase
order has been accepted, you may not cancel or revoke it; you may,
however, redeem the shares. Investment Trust reserves the right
not to accept any purchase order that it determines not to be in
the best interests of Investment Trust or of Young Investor Fund's
shareholders. Investment Trust also reserves the right to waive
or lower its investment minimums for any reason.

Purchases Through Third Parties. You may purchase (or redeem)
shares through certain broker-dealers, banks, or other
intermediaries ("Intermediaries"). These Intermediaries may
charge for their services or place limitations on the extent to
which you may use the services offered by Investment Trust. There
are no charges or limitations imposed by Investment Trust, other
than those described in this prospectus, if shares are purchased
(or redeemed) directly from Investment Trust.

An Intermediary, who accepts orders that are processed at the
net asset value next determined after receipt of the order by the
Intermediary, accepts such orders as agent of the Fund. The
Intermediary is required to segregate any orders received on a
business day after the close of regular session trading on the New
York Stock Exchange and transmit those orders separately for
execution at the net asset value next determined after that
business day.

Some Intermediaries that maintain nominee accounts with Young
Investor Fund for their clients for whom they hold Fund shares
charge an annual fee of up to 0.25% of the average net assets held
in such accounts for accounting, servicing, and distribution
services they provide with respect to the underlying Fund shares.
Stein Roe and the Fund's transfer agent share in the expense of
these fees, and Stein Roe pays all sales and promotional expenses.

Purchase Price and Effective Date. Each purchase of shares made
directly with the Fund is made at its net asset value (see Net
Asset Value) next determined after receipt of an order in good
form, including receipt of payment as follows:

A purchase by check or wire transfer is made at the net asset
value next determined after Young Investor Fund receives the check
or wire transfer of funds in payment of the purchase.

A purchase by electronic transfer is made at the net asset
value next determined after Young Investor Fund receives the
electronic transfer from your bank. A Special Electronic Transfer
Investment instruction received by telephone on a business day
before 3:00 p.m., central time, is effective on the next business
day.

Each purchase of Young Investor Fund shares through an
Intermediary that is an authorized agent of the Trust for the
receipt of orders is made at the net asset value next determined
after the receipt of the order by the Intermediary.

HOW TO REDEEM SHARES

By Written Request. You may redeem all or a portion of your
shares of Young Investor Fund by submitting a written request in
"good order" to SteinRoe Services Inc., P.O. Box 8900, Boston, MA
02205. Participants in the Stein Roe Counselor [service mark]
program should send redemption requests to SteinRoe Services Inc.,
P.O. Box 803938, Chicago, IL 60680. A redemption request will be
considered to have been received in good order if the following
conditions are satisfied:

(1) The request must be in writing, and must indicate the number
of shares or the dollar amount to be redeemed and identify the
shareholder's account number;
(2) The request must be signed by the shareholder(s) exactly as
the shares are registered;
(3) The signatures on the written redemption request must be
guaranteed (a signature guarantee is not a notarization, but
is a widely accepted way to protect you and Young Investor
Fund by verifying your signature);
(4) The request must include other supporting legal documents as
required from organizations, executors, administrators,
trustees, or others acting on accounts not registered in their
names.

By Exchange. You may redeem all or any portion of your Fund
shares and use the proceeds to purchase shares of any other Stein
Roe Fund offered for sale in your state if your signed, properly
completed application is on file. An exchange transaction is a
sale and purchase of shares for federal income tax purposes and
may result in capital gain or loss. Before exercising the
Exchange Privilege, you should obtain the prospectus for the Stein
Roe Fund in which you wish to invest and read it carefully. The
registration of the account to which you are making an exchange
must be exactly the same as that of the Fund account from which
the exchange is made and the amount you exchange must meet any
applicable minimum investment of the Stein Roe Fund being
purchased. An exchange may be made by following the redemption
procedure described under By Written Request and indicating the
Stein Roe Fund to be purchased--a signature guarantee normally is
not required. (See also the discussion below of the Telephone
Exchange Privilege and Automatic Exchanges.)

Special Redemption Privileges. The Telephone Exchange Privilege
and the Telephone Redemption by Check Privilege will be
established automatically for you when you open your account
unless you decline these Privileges on your application. Other
Privileges must be specifically elected. If you do not want the
Telephone Exchange and Redemption Privileges, check the box(es)
under the section "Telephone Redemption Options" when completing
your application. In addition, a signature guarantee may be
required to establish a Privilege after you open your account. If
you establish both the Telephone Redemption by Wire Privilege and
the Electronic Transfer Privilege, the bank account that you
designate for both Privileges must be the same.

The Telephone Redemption by Check Privilege, Telephone
Redemption by Wire Privilege, and Special Electronic Transfer
Redemptions may not be used to redeem shares held by a tax-
sheltered retirement plan sponsored by Stein Roe. (See also
General Redemption Policies.)

Telephone Exchange Privilege. You may use the Telephone
Exchange Privilege to exchange an amount of $50 or more from your
account by calling 800-338-2550 or by sending a telegram; new
accounts opened by exchange are subject to the $2,500 initial
purchase minimum. Generally, you will be limited to four
Telephone Exchange round-trips per year and Young Investor Fund
may refuse requests for Telephone Exchanges in excess of four
round-trips (a round-trip being the exchange out of Young Investor
Fund into another Stein Roe Fund, and then back to Young Investor
Fund). In addition, Investment Trust's general redemption
policies apply to redemptions of shares by Telephone Exchange.
(See General Redemption Policies.)

Investment Trust reserves the right to suspend or terminate,
at any time and without prior notice, the use of the Telephone
Exchange Privilege by any person or class of persons. Investment
Trust believes that use of the Telephone Exchange Privilege by
investors utilizing market-timing strategies adversely affects
Young Investor Fund. Therefore, regardless of the number of
telephone exchange round-trips made by an investor, Investment
Trust generally will not honor requests for Telephone Exchanges by
shareholders identified by Investment Trust as "market-timers" if
the officers of the Trust determine the order not to be in the
best interests of the Trust or its shareholders. Investment Trust
generally identifies as a "market-timer" an investor whose
investment decisions appear to be based on actual or anticipated
near-term changes in the securities markets other than for
investment considerations. Moreover, Investment Trust reserves
the right to suspend, limit, modify, or terminate, at any time and
without prior notice, the Telephone Exchange Privilege in its
entirety. Because such a step would be taken only if the Board of
Trustees believes it would be in the best interests of Young
Investor Fund, Investment Trust expects that it would provide
shareholders with prior written notice of any such action unless
the resulting delay in the suspension, limitation, modification,
or termination of the Telephone Exchange Privilege would adversely
affect Young Investor Fund. If Investment Trust were to suspend,
limit, modify, or terminate the Telephone Exchange Privilege, a
shareholder expecting to make a Telephone Exchange might find that
an exchange could not be processed or that there might be a delay
in the implementation of the exchange. (See How to Redeem Shares-
- -By Exchange.) During periods of volatile economic and market
conditions, you may have difficulty placing your exchange by
telephone.

Automatic Exchanges. You may use the Automatic Exchange
Privilege to automatically redeem a fixed amount from your Fund
account for investment in another Stein Roe Fund account on a
regular basis.

Telephone Redemption by Wire Privilege. You may use this
Privilege to redeem shares from your account ($1,000 minimum;
$100,000 maximum) by calling 800-338-2550. The proceeds will be
transmitted by wire to your account at a commercial bank
previously designated by you that is a member of the Federal
Reserve System. The fee for wiring proceeds (currently $7.00 per
transaction) will be deducted from the amount wired.

Telephone Redemption by Check Privilege. You may use the
Telephone Redemption by Check Privilege to redeem an amount of
$1,000 or more from your account by calling 800-338-2550. The
proceeds will be sent by check to your registered address.

Electronic Transfer Privilege. You may redeem shares by
calling 800-338-2550 and requesting an electronic transfer
("Special Redemption") of the proceeds to a bank account
previously designated by you at a bank that is a member of the
Automated Clearing House. You may also request electronic
transfers at scheduled intervals ("Automatic Redemptions"--see
Shareholder Services). Electronic transfers are subject to a $50
minimum and a $100,000 maximum. A Special Redemption request
received by telephone after 3:00 p.m., central time, is deemed
received on the next business day.

General Redemption Policies. You may not cancel or revoke your
redemption order once instructions have been received and
accepted. Investment Trust cannot accept a redemption request
that specifies a particular date or price for redemption or any
special conditions. Please call 800-338-2550 if you have any
questions about requirements for a redemption before submitting
your request. Investment Trust reserves the right to require a
properly completed application before making payment for shares
redeemed.

The price at which your redemption order will be executed is
the net asset value next determined after proper redemption
instructions are received. (See Net Asset Value.) Because the
redemption price you receive depends upon the net asset value per
share at the time of redemption, it may be more or less than the
price you originally paid for the shares and may result in a
realized capital gain or loss.

Investment Trust will generally mail payment for shares
redeemed within seven days after proper instructions are received.
However, Investment Trust normally intends to pay proceeds of a
Telephone Redemption paid by wire on the next business day. If
you attempt to redeem shares within 15 days after they have been
purchased by check or electronic transfer, Investment Trust may
delay payment of the redemption proceeds to you until it can
verify that payment for the purchase of those shares has been (or
will be) collected. To reduce such delays, Investment Trust
recommends that your purchase be made by federal funds wire
through your bank.

Generally, you may not use any Special Redemption Privilege
to redeem shares purchased by check (other than certified or
cashiers' checks) or electronic transfer until 15 days after their
date of purchase.

Investment Trust reserves the right at any time without prior
notice to suspend, limit, modify, or terminate any Privilege or
its use in any manner by any person or class.

Neither Investment Trust, its transfer agent, nor their
respective officers, trustees, directors, employees, or agents
will be responsible for the authenticity of instructions provided
under the Privileges, nor for any loss, liability, cost or expense
for acting upon instructions furnished thereunder if they
reasonably believe that such instructions are genuine. Young
Investor Fund employs procedures reasonably designed to confirm
that instructions communicated by telephone under any Special
Redemption Privilege or the Special Electronic Transfer Redemption
Privilege are genuine. Use of any Special Redemption Privilege or
the Special Electronic Transfer Redemption Privilege authorizes
Young Investor Fund and its transfer agent to tape-record all
instructions to redeem. In addition, callers are asked to
identify the account number and registration, and may be required
to provide other forms of identification. Written confirmations
of transactions are mailed promptly to the registered address; a
legend on the confirmation requests that the shareholder review
the transactions and inform Young Investor Fund immediately if
there is a problem. If Young Investor Fund does not follow
reasonable procedures for protecting shareholders against loss on
telephone transactions, it may be liable for any losses due to
unauthorized or fraudulent instructions.

Investment Trust reserves the right to redeem shares in any
account and send the proceeds to the owner of record if the shares
in the account do not have a value of at least $1,000. If the
value of the account is more than $10, a shareholder would be
notified that his account is below the minimum and would be
allowed 30 days to increase the account before the redemption is
processed. Investment Trust reserves the right to redeem any
account with a value of $10 or less without prior written notice
to the shareholder. Due to the proportionately higher costs of
maintaining small accounts, the transfer agent may charge and
deduct from the account a $5 per quarter minimum balance fee if
the account is a regular account with a balance below $2,000 or an
UGMA account with a balance below $800. This minimum balance fee
does not apply to Stein Roe IRAs and other Stein Roe prototype
retirement plans, accounts with automatic investment plans (unless
regular investments have been discontinued), and omnibus and
nominee accounts. The transfer agent may waive the fee, at its
discretion, in the event of significant market corrections.

Shares in any account you maintain with Young Investor Fund
or any of the other Stein Roe Funds may be redeemed to the extent
necessary to reimburse any Stein Roe Fund for any loss it sustains
that is caused by you (such as losses from uncollected checks and
electronic transfers for the purchase of shares, or any Stein Roe
Fund liability under the Internal Revenue Code provisions on
backup withholding).

SHAREHOLDER SERVICES

Reporting to Shareholders. You will receive a confirmation
statement reflecting each of your purchases and redemptions of
shares of Young Investor Fund. Shares purchased by reinvestment
of dividends, by cross-reinvestment of dividends from another
Fund, or through an automatic investment plan will be confirmed to
you quarterly. Investment Trust will send you quarterly materials
on Young Investor Fund and portfolio holdings, will send you
semiannual and annual reports, and will provide you annually with
tax information.

To reduce the volume of mail you receive, only one copy of
certain materials, such as prospectuses and shareholder reports,
will be mailed to your household (same address). Please call 800-
338-2550 if you wish to receive additional copies free of charge.
This policy may not apply if you purchased shares through an
Intermediary.

Funds-on-Call [registered mark] Automated Telephone Service. To
access Stein Roe Funds-on-Call [registered mark], just call 800-
338-2550 on any touch-tone telephone and follow the recorded
instructions. Funds-on-Call [registered mark] provides yields,
prices, latest dividends, account balances, last transaction, and
other information 24 hours a day, seven days a week. You also may
use Funds-on-Call [registered mark] to make Special Investments
and Redemptions, Telephone Exchanges, and Telephone Redemptions by
Check. These transactions are subject to the terms and conditions
of the individual privileges. (See How to Purchase Shares and How
to Redeem Shares.) Information regarding your account is
available to you via Funds-on-Call [registered mark] only after
you follow an activation process the first time you call. Your
account information is protected by a personal identification
number (PIN) that you establish.

Stein Roe Counselor [service mark] Program. The Stein Roe
Counselor [service mark] program is a professional investment
advisory service available to shareholders. This program is
designed to provide investment guidance in helping investors to
select a portfolio of Stein Roe Funds.

Tax-Sheltered Retirement Plan. Booklets describing the Individual
Retirement Account ("IRA") program and special forms necessary for
establishing it are available on request. IRAs are available for
employed persons and their non-employed spouses. You may use all
of the Stein Roe Funds, except those investing primarily in tax-
exempt securities, in the plan. Please read the prospectus for
each fund in which you plan to invest before making your
investment.

Special Services. The following special services are available to
shareholders. Please call 800-338-2550 or write Investment Trust
for additional information and forms.

Dividend Purchase Option--to diversify your Fund investments
by having distributions from one Fund account automatically
invested in another Stein Roe Fund account. Before establishing
this option, you should obtain and read the prospectus of the
Stein Roe Fund into which you wish to have your distributions
invested. The account from which distributions are made must be
of sufficient size to allow each distribution to usually be at
least $25.

Automatic Dividend Deposit (electronic transfer)--to have
income dividends and capital gains distributions deposited
directly into your bank account.

Telephone Redemption by Check Privilege ($1,000 minimum) and
Telephone Exchange Privilege ($50 minimum)--established
automatically when you open your account unless you decline them
on your application. (See How to Redeem Shares--Special
Redemption Privileges.)

Telephone Redemption by Wire Privilege--to redeem shares from
your account by phone and have the proceeds transmitted by wire to
your bank account ($1,000 minimum; $100,000 maximum).

Special Redemption Option (electronic transfer)--to redeem
shares at any time and have the proceeds deposited directly to
your bank account ($50 minimum; $100,000 maximum).

Regular Investments (electronic transfer)--to purchase Fund
shares at regular intervals directly from your bank account ($50
minimum; $100,000 maximum).

Special Investments (electronic transfer)--to purchase Fund
shares by telephone and pay for them by electronic transfer of
funds from your bank account ($50 minimum; $100,000 maximum).

Automatic Exchange Plan--to automatically redeem a fixed
dollar amount from your Fund account and invest it in another
Stein Roe Fund account on a regular basis ($50 minimum; $100,000
maximum).

Automatic Redemptions (electronic transfer)--to have a fixed
dollar amount redeemed and sent at regular intervals directly to
your bank account ($50 minimum; $100,000 maximum).

Systematic Withdrawals--to have a fixed dollar amount,
declining balance, or fixed percentage of your account redeemed
and sent at regular intervals by check to you or another payee.

NET ASSET VALUE

The purchase and redemption price of Young Investor Fund's shares
is its net asset value per share. The net asset value of a share
of Young Investor Fund is determined as of the close of trading on
the New York Stock Exchange ("NYSE") (currently 3:00 p.m., central
time) by dividing the difference between the values of its assets
and liabilities by the number of shares outstanding. If trading
is closed prior to 3:00 p.m., central time, solely in response to
market conditions, the net asset value of Fund shares will be
determined at 3:00 p.m., central time, unless, in the judgment of
the Board of Trustees, the net asset value should be determined at
an earlier time. Growth Investor Portfolio allocates net asset
value, income, and expenses to Young Investor Fund and any other
of its feeder funds in proportion to their respective interests in
Growth Investor Portfolio.

Net asset value will not be determined on days when the NYSE
is closed unless, in the judgment of the Board of Trustees, the
net asset value should be determined on any such day, in which
case the determination will be made at 3:00 p.m., central time.

Each security traded on a national stock exchange is valued
at its last sale price on that exchange on the day of valuation
or, if there are no sales that day, at the latest bid quotation.
Each over-the-counter security for which the last sale price on
the day of valuation is available from Nasdaq is valued at that
price. All other over-the-counter securities for which reliable
quotations are available are valued at the latest bid quotation.

Long-term straight-debt obligations and securities
convertible into stocks are valued at a fair value using a
procedure determined in good faith by the Board of Trustees.
Pricing services approved by the Board provide valuations (some of
which may be "readily available market quotations"). These
valuations are reviewed by Stein Roe. If Stein Roe believes that
a valuation received from the service does not represent a fair
value, it values the obligation using a method that the Board
believes represents fair value. The Board may approve the use of
other pricing services and any pricing service used may employ
electronic data processing techniques, including a so-called
"matrix" system, to determine valuations. Other assets and
securities are valued by a method that the Board believes
represents fair value.

DISTRIBUTIONS AND INCOME TAXES

Distributions. Income dividends are normally declared and paid
annually. Young Investor Fund intends to distribute by the end of
each calendar year at least 98% of any net capital gains realized
from the sale of securities during the 12-month period ended Oct.
31 in that year. It intends to distribute any undistributed net
investment income and net realized capital gains in the following
year.

All of your income dividends and capital gains distributions
will be reinvested in additional shares of Young Investor Fund
unless you elect to have distributions either (1) paid by check;
(2) deposited by electronic transfer into your bank account; (3)
applied to purchase shares in your account with another Stein Roe
Fund; or (4) applied to purchase shares in a Stein Roe Fund
account of another person. (See Shareholder Services.)
Reinvestment into the same Fund account normally occurs one
business day after the record date. Investment of distributions
into another Stein Roe Fund account occurs on the payable date.
If you choose to receive your distributions in cash, your
distribution check normally will be mailed approximately 15 days
after the record date. Investment Trust reserves the right to
reinvest the proceeds and future distributions in additional Fund
shares if checks mailed to you for distributions are returned as
undeliverable or are not presented for payment within six months.
No interest will accrue on amounts represented by uncashed
distribution or redemption checks.

Income Taxes. Your distributions will be taxable to you, under
income tax law, whether received in cash or reinvested in
additional shares. For federal income tax purposes, any
distribution that is paid in Jan. but was declared in the prior
calendar year is deemed paid in the prior calendar year.

You will be subject to federal income tax at ordinary rates
on income dividends and distributions of net short-term capital
gains. Distributions of net long-term capital gains will be
taxable to you as long-term capital gains regardless of the length
of time you have held your shares.

You will be advised annually as to the source of
distributions for tax purposes. If you are not subject to tax on
your income, you may not be required to pay tax on these amounts.

If you realize a loss on the sale or exchange of Fund shares
held for six months or less, your short-term loss is
recharacterized as long-term to the extent of any long-term
capital gains distributions you have received with respect to
those shares.

The Taxpayer Relief Act of 1997 (the "Act") reduced from 28%
to 20% the maximum tax rate on long-term capital gains. This
reduced rate generally applies to securities held for more than 18
months and sold after July 28, 1997, and securities held for more
than one year and sold between May 6, 1997 and July 29, 1997.

For federal income tax purposes, Young Investor Fund is
treated as a separate taxable entity distinct from the other
series of Investment Trust.

This discussion of taxation is not intended to be a full
discussion of income tax laws and their effect on shareholders.
You may wish to consult your own tax advisor. The foregoing
information applies to U.S. shareholders. Foreign shareholders
should consult their tax advisors as to the tax consequences of
ownership of Fund shares.

Backup Withholding. Investment Trust may be required to withhold
federal income tax ("backup withholding") from certain payments to
you--generally redemption proceeds. Backup withholding may be
required if:

- - You fail to furnish your properly certified social security or
other tax identification number;
- - You fail to certify that your tax identification number is
correct or that you are not subject to backup withholding due to
the underreporting of certain income;
- - The Internal Revenue Service informs Investment Trust that your
tax identification number is incorrect.

These certifications are contained in the application that
you should complete and return when you open an account. Young
Investor Fund must promptly pay to the IRS all amounts withheld.
Therefore, it is usually not possible for Young Investor Fund to
reimburse you for amounts withheld. You may, however, claim the
amount withheld as a credit on your federal income tax return.

INVESTMENT RETURN

The total return from an investment in Young Investor Fund is
measured by the distributions received (assuming reinvestment of
dividends and capital gains), plus or minus the change in the net
asset value per share for a given period. A total return
percentage may be calculated by dividing the value of a share at
the end of the period (including reinvestment of distributions) by
the value of the share at the beginning of the period and
subtracting one. For a given period, an average annual total
return may be calculated by finding the average annual compounded
rate that would equate a hypothetical $1,000 investment to the
ending redeemable value.

Comparison of Young Investor Fund's total return with
alternative investments should consider differences between Young
Investor Fund and the alternative investments, the periods and
methods used in calculation of the return being compared, and the
impact of taxes on alternative investments. Of course, past
performance is not necessarily indicative of future results.

MANAGEMENT

Trustees and Adviser. The Board of Trustees of Investment Trust
and the Board of Trustees of Base Trust have overall management
responsibility for Young Investor Fund and Growth Investor
Portfolio, respectively. See the Statement of Additional
Information for the names of and additional information about the
trustees and officers. Since Investment Trust and Base Trust have
the same trustees, the trustees have adopted conflict of interest
procedures to monitor and address potential conflicts between the
interests of Young Investor Fund and Growth Investor Portfolio.

Stein Roe & Farnham Incorporated, One South Wacker Drive,
Chicago, Illinois 60606, is responsible for managing the business
affairs of Young Investor Fund, Growth Investor Portfolio, and the
Trusts and the investment portfolio of Growth Investor Portfolio,
subject to the direction of the respective Boards. Stein Roe is
registered as an investment adviser under the Investment Advisers
Act of 1940. Stein Roe (and its predecessor) has advised and
managed mutual funds since 1949. Stein Roe is a wholly owned
indirect subsidiary of Liberty Financial Companies, Inc. ("Liberty
Financial"), which in turn is a majority owned indirect subsidiary
of Liberty Mutual Insurance Company.

Portfolio Managers. Erik P. Gustafson and David P. Brady have
been portfolio managers of Growth Investor Portfolio since its
inception in 1997. Mr. Gustafson had been portfolio manager of
Young Investor Fund since Feb. 1995 and Mr. Brady since Mar. 1995.
As of Sept. 30, 1997, Messrs. Gustafson and Brady were responsible
for co-managing $1.2 billion and $475 million in mutual fund net
assets, respectively.

Mr. Gustafson is a senior vice president of Stein Roe and Mr.
Brady is a vice president of Stein Roe. Before joining Stein Roe,
Mr. Gustafson was an attorney with Fowler, White, Burnett, Hurley,
Banick & Strickroot from 1989 to 1992. He holds a B.A. from the
University of Virginia (1985) and M.B.A. and J.D. degrees from
Florida State University (1989). Mr. Brady, who joined Stein Roe
in 1993, was an equity investment analyst with State Farm Mutual
Automobile Insurance Company from 1986 to 1993. A chartered
financial analyst, Mr. Brady earned a B.S. in Finance, graduating
Magna Cum Laude, from the University of Arizona (1986), and an
M.B.A. from the University of Chicago (1989).

Fees and Expenses. In return for its services, Stein Roe is
entitled to receive an administrative fee from Young Investor Fund
at an annual rate of .20% of the first $500 million of average net
assets, .15% of the next $500 million, and .125% thereafter; and a
management fee from Growth Investor Portfolio at an annual rate of
.60% of the first $500 million, .55% of the next $500 million, and
.50% thereafter. Prior to Feb. 3, 1997, the management fee was
paid by Young Investor Fund. For the fiscal year ended Sept. 30,
1997, such fees amounted to .34% and .39% of the average net
assets of Young Investor Fund and Growth Investor Portfolio,
respectively. At September 30, 1997, Young Investor Fund owned
99.98% of Growth Investor Portfolio.

Because Young Investor Fund also has as an objective being an
educational experience for investors, its non-advisory expenses
may be higher than other mutual funds due to regular educational
and other reporting to shareholders.

Under a separate agreement with each Trust, Stein Roe
provides certain accounting and bookkeeping services to Young
Investor Fund and Growth Investor Portfolio, including computation
of net asset value and calculation of its net income and capital
gains and losses on disposition of assets.

Portfolio Transactions. Stein Roe places the orders for the
purchase and sale of portfolio securities and options and futures
transactions. In doing so, Stein Roe seeks to obtain the best
combination of price and execution, which involves a number of
judgmental factors.

Transfer Agent. SteinRoe Services Inc., One South Wacker Drive,
Chicago, Illinois 60606, a wholly owned subsidiary of Liberty
Financial, is the agent of Investment Trust for the transfer of
shares, disbursement of dividends, and maintenance of shareholder
accounting records.

Distributor. Shares of Young Investor Fund are distributed by
Liberty Financial Investments, Inc., One Financial Center, Boston,
Massachusetts 02111, a subsidiary of Colonial Management
Associates, Inc., which is an indirect subsidiary of Liberty
Financial. Shares of Young Investor Fund are offered for sale
without any sales commissions or charges to the Fund or to its
shareholders. All distribution and promotional expenses are paid
by Stein Roe, including payments to a distributor for sales of
shares. All correspondence (including purchase and redemption
orders) should be mailed to SteinRoe Services Inc. at P.O. Box
8900, Boston, Massachusetts 02205. Participants in the Stein Roe
Counselor [service mark] programs should send orders to SteinRoe
Services Inc. at P.O. Box 803938, Chicago, Illinois 60680.

Custodian. State Street Bank and Trust Company (the "Bank"), 225
Franklin Street, Boston, Massachusetts 02101, is the custodian for
Young Investor Fund and Growth Investor Portfolio. Foreign
securities are maintained in the custody of foreign banks and
trust companies that are members of the Bank's Global Custody
Network or foreign depositories used by such members. (See
Custodian in the Statement of Additional Information.)

ORGANIZATION AND DESCRIPTION OF SHARES

Investment Trust is a Massachusetts business trust organized under
an Agreement and Declaration of Trust ("Declaration of Trust")
dated Jan. 8, 1987, which provides that each shareholder shall be
deemed to have agreed to be bound by the terms thereof. The
Declaration of Trust may be amended by a vote of either Investment
Trust's shareholders or its trustees. Investment Trust may issue
an unlimited number of shares, in one or more series as the Board
may authorize. Currently, 10 series are authorized and
outstanding.

Under Massachusetts law, shareholders of a Massachusetts
business trust such as Investment Trust could, in some
circumstances, be held personally liable for unsatisfied
obligations of the trust. The Declaration of Trust provides that
persons extending credit to, contracting with, or having any claim
against, Investment Trust or any particular series shall look only
to the assets of Investment Trust or of the respective series for
payment under such credit, contract or claim, and that the
shareholders, trustees and officers shall have no personal
liability therefor. The Declaration of Trust requires that notice
of such disclaimer of liability be given in each contract,
instrument or undertaking executed or made on behalf of Investment
Trust. The Declaration of Trust provides for indemnification of
any shareholder against any loss and expense arising from personal
liability solely by reason of being or having been a shareholder.
Thus, the risk of a shareholder incurring financial loss on
account of shareholder liability is believed to be remote, because
it would be limited to circumstances in which the disclaimer was
inoperative and Investment Trust was unable to meet its
obligations.

The risk of a particular series incurring financial loss on
account of unsatisfied liability of another series of Investment
Trust also is believed to be remote, because it would be limited
to claims to which the disclaimer did not apply and to
circumstances in which the other series was unable to meet its
obligations.

MASTER FUND/FEEDER FUND: STRUCTURE AND RISK FACTORS

Commencing Feb. 3, 1997, Young Investor Fund, which is an open-end
management investment company, seeks to achieve its objective by
investing all of its assets in another mutual fund having an
investment objective identical to that of Young Investor Fund.
The shareholders of Young Investor Fund approved this policy of
permitting Young Investor Fund to act as a feeder fund by
investing in Growth Investor Portfolio. Please refer to
Investment Policies, Portfolio Investments and Strategies, and
Investment Restrictions for a description of the investment
objectives, policies, and restrictions of Young Investor Fund and
Growth Investor Portfolio. The management fees and expenses of
Young Investor Fund and Growth Investor Portfolio are described
under Fee Table and Management. Young Investor Fund bears its
proportionate share of Growth Investor Portfolio's expenses.

Stein Roe has provided investment management services in
connection with other mutual funds employing the master
fund/feeder fund structure since 1991.

SR&F Growth Investor Portfolio is a separate series of SR&F
Base Trust ("Base Trust"), a Massachusetts common law trust
organized under an Agreement and Declaration of Trust
("Declaration of Trust") dated Aug. 23, 1993. The Declaration of
Trust of Base Trust provides that Young Investor Fund and other
investors in Growth Investor Portfolio will be liable for all
obligations of Growth Investor Portfolio that are not satisfied by
Growth Investor Portfolio. However, the risk of Young Investor
Fund incurring financial loss on account of such liability is
limited to circumstances in which liability was inadequately
insured and Growth Investor Portfolio was unable to meet its
obligations. Accordingly, the trustees of Investment Trust
believe that neither Young Investor Fund nor its shareholders will
be adversely affected by reason of Young Investor Fund's investing
in Growth Investor Portfolio.

The Declaration of Trust of Base Trust provides that Growth
Investor Portfolio will terminate 120 days after the withdrawal of
Young Investor Fund or any other investor in Growth Investor
Portfolio, unless the remaining investors vote to agree to
continue the business of Growth Investor Portfolio. The trustees
of Investment Trust may vote Young Investor Fund's interests in
Growth Investor Portfolio for such continuation without approval
of Young Investor Fund's shareholders.

The common investment objective of Young Investor Fund and
Growth Investor Portfolio is nonfundamental and may be changed
without shareholder approval, subject, however, to at least 30
days' advance written notice to Young Investor Fund's
shareholders.

The fundamental policies of Young Investor Fund and the
corresponding fundamental policies of Growth Investor Portfolio
can be changed only with shareholder approval. If Young Investor
Fund, as a Portfolio investor, is requested to vote on a change in
a fundamental policy of Growth Investor Portfolio or any other
matter pertaining to Growth Investor Portfolio (other than
continuation of the business of Growth Investor Portfolio after
withdrawal of another investor), Young Investor Fund will solicit
proxies from its shareholders and vote its interest in Growth
Investor Portfolio for and against such matters proportionately to
the instructions to vote for and against such matters received
from Fund shareholders. Young Investor Fund will vote shares for
which it receives no voting instructions in the same proportion as
the shares for which it receives voting instructions. There can
be no assurance that any matter receiving a majority of votes cast
by Fund shareholders will receive a majority of votes cast by all
investors in the Portfolio. If other investors hold a majority
interest in Growth Investor Portfolio, they could have voting
control over Growth Investor Portfolio.

In the event that Growth Investor Portfolio's fundamental
policies were changed so as to be inconsistent with those of Young
Investor Fund, the Board of Trustees of Investment Trust would
consider what action might be taken, including changes to Young
Investor Fund's fundamental policies, withdrawal of Young Investor
Fund's assets from Growth Investor Portfolio and investment of
such assets in another pooled investment entity, or the retention
of an investment adviser to invest those assets directly in a
portfolio of securities. Any of these actions would require the
approval of Young Investor Fund's shareholders. Young Investor
Fund's inability to find a substitute master fund or comparable
investment management could have a significant impact upon its
shareholders' investments. Any withdrawal of Young Investor
Fund's assets could result in a distribution in kind of portfolio
securities (as opposed to a cash distribution) to Young Investor
Fund. Should such a distribution occur, Young Investor Fund would
incur brokerage fees or other transaction costs in converting such
securities to cash. In addition, a distribution in kind could
result in a less diversified portfolio of investments for Young
Investor Fund and could affect the liquidity of Young Investor
Fund.

Each investor in Growth Investor Portfolio, including Young
Investor Fund, may add to or reduce its investment in Growth
Investor Portfolio on each day the NYSE is open for business. The
investor's percentage of the aggregate interests in Growth
Investor Portfolio will be computed as the percentage equal to the
fraction (i) the numerator of which is the beginning of the day
value of such investor's investment in Growth Investor Portfolio
on such day plus or minus, as the case may be, the amount of any
additions to or withdrawals from the investor's investment in
Growth Investor Portfolio effected on such day; and (ii) the
denominator of which is the aggregate beginning of the day net
asset value of Growth Investor Portfolio on such day plus or
minus, as the case may be, the amount of the net additions to or
withdrawals from the aggregate investments in Growth Investor
Portfolio by all investors in Growth Investor Portfolio. The
percentage so determined will then be applied to determine the
value of the investor's interest in Growth Investor Portfolio as
of the close of business.

Base Trust may permit other investment companies and/or other
institutional investors to invest in Growth Investor Portfolio,
but members of the general public may not invest directly in
Growth Investor Portfolio. Other investors in Growth Investor
Portfolio are not required to sell their shares at the same public
offering price as Young Investor Fund, might incur different
administrative fees and expenses than Young Investor Fund, and
might charge a sales commission. Therefore, Young Investor Fund
shareholders might have different investment returns than
shareholders in another investment company that invests
exclusively in Growth Investor Portfolio. Investment by such
other investors in Growth Investor Portfolio would provide funds
for the purchase of additional portfolio securities and would tend
to reduce the operating expenses as a percentage of Growth
Investor Portfolio's net assets. Conversely, large-scale
redemptions by any such other investors in Growth Investor
Portfolio could result in untimely liquidations of Growth Investor
Portfolio's security holdings, loss of investment flexibility, and
increases in the operating expenses of Growth Investor Portfolio
as a percentage of Growth Investor Portfolio's net assets. As a
result, Growth Investor Portfolio's security holdings may become
less diverse, resulting in increased risk.

Information regarding other investors in Growth Investor
Portfolio may be obtained by writing to SR&F Base Trust at Suite
3200, One South Wacker Drive, Chicago, IL 60606, or by calling
800-338-2550. Stein Roe may provide administrative or other
services to one or more of such investors.

<PAGE>

[STEIN ROE MUTUAL FUNDS LOGO]

The Stein Roe Funds
Stein Roe Cash Reserves Fund
Stein Roe Intermediate Bond Fund
Stein Roe Income Fund
Stein Roe High Yield 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 Young Investor Fund
Stein Roe Special Fund
Stein Roe Special Venture Fund
Stein Roe Growth Opportunities Fund
Stein Roe Capital Opportunities Fund
Stein Roe International Fund
Stein Roe Emerging Markets Fund

800-338-2550

In Chicago, visit our Fund Center at One South Wacker Drive, Suite
3200

Liberty Securities Corporation, Distributor

<PAGE>

[STEIN ROE MUTUAL FUNDS LOGO]

PROSPECTUS Feb. 2, 1998
Defined Contribution Plans

Stein Roe Young Investor Fund

The investment objective of Young Investor Fund is to provide
long-term capital appreciation. Young Investor Fund invests all
of its net investable assets in SR&F Growth Investor Portfolio,
which has the same investment objective and substantially the same
investment policies as Young Investor Fund. (See Master
Fund/Feeder Fund Structure and Risk Factors.) Growth Investor
Portfolio invests primarily in securities of companies that are
believed to have above-average growth prospects, many of which
affect the lives of young people. It seeks to provide education
and insight about mutual funds, basic economic principles, and
personal finance through a variety of educational materials
prepared and paid for by Young Investor Fund.

This prospectus relates only to shares of Young Investor Fund
purchased through eligible employer-sponsored defined contribution
plans ("defined contribution plans").

Young Investor Fund is a "no-load" fund. There are no sales or
redemption charges, and Young Investor Fund has no 12b-1 plan.
Young Investor Fund is a series of the Stein Roe Investment Trust
and Growth Investor Portfolio is a series of SR&F Base Trust.
Each Trust is an open-end management investment company.

This prospectus contains information you should know before
investing in Young Investor Fund. Please read it carefully and
retain it for future reference.

A Statement of Additional Information dated Feb. 2, 1998,
containing more detailed information, has been filed with the
Securities and Exchange Commission and (together with any
supplements thereto) is incorporated herein by reference. The
Statement of Additional Information and the most recent financial
statements may be obtained without charge by writing to the Stein
Roe Mutual Funds at Suite 3200, One South Wacker Drive, Chicago,
IL 60606 or by calling 800-322-1130. The Statement of Additional
Information contains information relating to other series of the
Stein Roe Investment Trust that may not be available as investment
vehicles for your defined contribution plan.

Table of Contents

Page
Fee Table................................... 2
Financial Highlights.........................3
The Fund.....................................3
Investment Policies..........................4
Portfolio Investments and Strategies.........4
Investment Restrictions..................... 6
Risks and Investment Considerations......... 7
How to Purchase Shares.......................8
How to Redeem Shares........................ 8
Net Asset Value............................. 8
Distributions and Income Taxes...............9
Investment Return............................9
Management..................................10
Organization and Description of Shares......11
Master Fund/Feeder Fund: Structure
and Risk Factors.........................12
For More Information....................... 13

__________________________
Fee Table

Example. You would pay the following expenses on a $1,000
investment assuming (1) 5% annual return; and (2) redemption at
the end of each time period:

1 year 3 years 5 years 10 years
------ ------- ------- --------
$15 $47 $81 $178

The purpose of the Fee Table is to assist you in understanding the
various costs and expenses that you will bear directly or
indirectly as an investor in Young Investor Fund. The table is
based on expenses incurred in the last fiscal year.

Young Investor Fund pays the Adviser an administrative fee based
on the Fund's average daily net assets, and Growth Investor
Portfolio pays the Adviser a management fee based on its average
daily net assets. The expenses of both Young Investor Fund and
Growth Investor Portfolio are summarized in the Fee Table. (The
fees are described under Management.) Young Investor Fund bears
its proportionate share of Portfolio fees and expenses. The
trustees of Investment Trust have considered whether the annual
operating expenses of Young Investor Fund, including its
proportionate share of the expenses of Growth Investor Portfolio,
would be more or less than if Young Investor Fund invested
directly in the securities held by Growth Investor Portfolio, and
concluded that Young Investor Fund's expenses would not be greater
in such case.

For purposes of the Example above, the figures assume that the
percentage amounts listed for Young Investor Fund under Annual
Fund Operating Expenses remain the same in each of the periods;
that all income dividends and capital gains distributions are
reinvested in additional Young Investor Fund shares; and that, for
purposes of fee breakpoints, net assets remain at the same level
as in the most recently completed fiscal year. The figures in the
Example are not necessarily indicative of past or future expenses,
and actual expenses may be greater or less than those shown.
Although information such as that shown in the Example and Fee
Table is useful in reviewing Young Investor Fund's expenses and in
providing a basis for comparison with other mutual funds, it
should not be used for comparison with other investments using
different assumptions or time periods. The Example does not
reflect any charges or expenses related to your employer's plan.
__________________________
Financial Highlights

The following table reflects the results of operations of Young
Investor Fund on a per-share basis for the periods shown and has
been audited by Arthur Andersen LLP, independent public
accountants. The table should be read in conjunction with Young
Investor Fund's financial statements and notes thereto. Young
Investor Fund's annual report, which may be obtained from
Investment Trust without charge upon request, contains additional
performance information.

__________________________
The Fund

Young Investor Fund is a series of the Stein Roe Investment Trust
("Investment Trust"), an open-end management investment company,
which is authorized to issue shares of beneficial interest in
separate series. Each series represents interests in a separate
portfolio of securities and other assets, with its own investment
objectives and policies.

Stein Roe & Farnham Incorporated (the "Adviser") provides
investment management, administrative, and bookkeeping and
accounting services to Young Investor Fund and Growth Investor
Portfolio. The Adviser also manages several other mutual funds
with different investment objectives, including other equity
funds, international funds, taxable and tax-exempt bond funds, and
money market funds. To obtain prospectuses and other information
on opening a regular account in any of these mutual funds, please
call 800-338-2550.

On Feb. 3, 1997, Young Investor Fund became a "feeder fund"--that
is, it invested all of its assets in SR&F Growth Investor
Portfolio ("Growth Investor Portfolio"), a "master fund" that has
an investment objective identical to that of Young Investor Fund.
Growth Investor Portfolio is a series of SR&F Base Trust ("Base
Trust"). Prior to converting to a feeder fund, Young Investor
Fund had invested its assets in a diversified group of securities.
Under the "master fund/feeder fund structure," a feeder fund and
one or more feeder funds pool their assets in a master portfolio that
has the same investment objective and substantially the same
investment policies as the feeder funds. The purpose of such an
arrangement is to achieve greater opormation, see Master
Fund/Feeder Fund: Structure and Risk Factors.)vestor Portfolio,
Young Investor Fund's master fund, are managed by the Adviser in
the same manner as the assets of Young Investor Fund were managed
before conversion to the master fund/feeder fund structure. (For
more information, see Master Fund/Feeder Fund: Structure and Risk
Factors.)

__________________________
Investment Policies

The investment objective of Young Investor Fund is long-term
capital appreciation. Young Investor Fund invests all of its net
investable assets in Growth Investor Portfolio, which has the same
investment objective and substantially the same investment
policies as Young Investor Fund. Growth Investor Portfolio
invests primarily in common stocks and other equity-type
securities that, in the opinion of the Adviser, have long-term
appreciation potential.

Although Growth Investor Portfolio invests primarily in common
stocks and other equity-type securities (such as preferred stocks,
securities convertible into or exchangeable for common stocks, and
warrants or rights to purchase common stocks), it may invest up to
35% of its total assets in debt securities. Growth Investor
Portfolio may invest in securities of smaller emerging companies
as well as securities of well-seasoned companies of any size.
Smaller companies, however, involve higher risks in that they
typically have limited product lines, markets, and financial or
management resources. In addition, the securities of smaller
companies may trade less frequently and have greater price
fluctuation than larger companies, particularly those operating in
countries with developing markets. Growth Investor Portfolio may
also employ investment techniques described elsewhere in this
prospectus. (See Risks and Investment Considerations and
Portfolio Investments and Strategies.)

__________________________
Portfolio Investments and Strategies

Debt Securities.
In pursuing its investment objective, Growth Investor Portfolio
may invest in debt securities. A debt security is an obligation
of a borrower to make payments of principal and interest to the
holder of the security. To the extent Growth Investor Portfolio
invests in debt securities, such holdings will be subject to
interest rate risk and credit risk. Interest rate risk is the
risk that the value of a portfolio will fluctuate in response to
changes in interest rates. Generally, the debt component of a
portfolio will tend to decrease in value when interest rates rise
and increase in value when interest rates fall. Credit risk is
the risk that an issuer will be unable to make principal and
interest payments when due. Investments in debt securities are
limited to those that are rated within the four highest grades
(generally referred to as "investment grade") assigned by a
nationally recognized statistical rating organization.
Investments in unrated debt securities are limited to those deemed
to be of comparable quality by the Adviser. Securities rated
within the fourth highest grade may possess speculative
characteristics. If the rating of a security held by Growth
Investor Portfolio is lost or reduced below investment grade,
Growth Investor Portfolio is not required to dispose of the
security--the Adviser will, however, consider that fact in
determining whether Growth Investor Portfolio should continue to
hold the security. When the Adviser considers a temporary
defensive position advisable, Growth Investor Portfolio may invest
without limitation in high-quality fixed income securities, or
hold assets in cash or cash equivalents.

Foreign Securities.
Growth Investor Portfolio may invest up to 25% of its total assets
in foreign securities. (See Risks and Investment Considerations.)
In addition to, or in lieu of, such direct investment, Growth
Investor Portfolio may construct a synthetic foreign debt position
by (a) purchasing a debt instrument denominated in one currency,
generally U.S. dollars; and (b) concurrently entering into a
forward contract to deliver a corresponding amount of that
currency in exchange for a different currency on a future date and
at a specified rate of exchange. Because of the availability of a
variety of highly liquid U.S. dollar debt instruments, a synthetic
foreign debt position utilizing such U.S. dollar instruments may
offer greater liquidity than direct investment in foreign currency
debt instruments. In connection with the purchase of foreign
securities, Growth Investor Portfolio may contract to purchase an
amount of foreign currency sufficient to pay the purchase price of
the securities at the settlement date. Such a contract involves
the risk that the value of the foreign currency may decline
relative to the value of the dollar prior to the settlement date--
this risk is in addition to the risk that the value of the foreign
security purchased may decline. As of Sept. 30, 1997, Growth
Investor Portfolio's holdings of foreign companies amounted to
2.8% of net assets (none in foreign securities and 2.8% in ADRs
and ADSs).

When-Issued and Delayed-Delivery Securities.
Growth Investor Portfolio may make loans of portfolio securities
to broker-dealers and banks and enter into reverse repurchase
agreements subject to certain restrictions described in the
Statement of Additional Information. It may participate in an
interfund lending program, subject to certain restrictions
described in the Statement of Additional Information. Growth
Investor Portfolio may invest in securities purchased on a when-
issued or delayed-delivery basis. Although the payment terms of
these securities are established at the time Growth Investor
Portfolio enters into the commitment, the securities may be
delivered and paid for a month or more after the date of purchase,
when their value may have changed. Growth Investor Portfolio will
make such commitments only with the intention of actually
acquiring the securities, but may sell the securities before
settlement date if it is deemed advisable for investment reasons.

Derivatives.
Consistent with its objective, Growth Investor Portfolio may
invest in a broad array of financial instruments and securities,
including conventional, exchange-traded and non-exchange-traded
options, futures contracts, futures options, forward contracts,
securities collateralized by underlying pools of mortgages or
other receivables, floating rate instruments, and other
instruments that securitize assets of various types
("Derivatives"). In each case, the value of the instrument or
security is "derived" from the performance of an underlying asset
or a "benchmark" such as a security index, or an interest rate.
Growth Investor Portfolio does not expect to invest more than 5%
of its net assets in any type of Derivative except for options,
futures contracts, and futures options.

Derivatives are most often used to manage investment risk or to
create an investment position indirectly because they are more
efficient or less costly than direct investment. They also may be
used in an effort to enhance portfolio returns.

The successful use of Derivatives depends on the Adviser's ability
to correctly predict changes in the levels and directions of
movements in security prices, interest rates and other market
factors affecting the Derivative itself or the value of the
underlying asset or benchmark. In addition, correlations in the
performance of an underlying asset to a Derivative may not be well
established. Finally, privately negotiated and over-the-counter
Derivatives may not be as well regulated and may be less
marketable than exchange-traded Derivatives. For additional
information on Derivatives, please refer to the Statement of
Additional Information.

In seeking to achieve its desired investment objective, provide
additional revenue, or hedge against changes in security prices,
interest rates or currency fluctuations, Growth Investor Portfolio
may: (1) purchase and write both call options and put options on
securities, indexes and foreign currencies; (2) enter into
interest rate, index and foreign currency futures contracts; (3)
write options on such futures contracts; and (4) purchase other
types of forward or investment contracts linked to individual
securities, indexes, or other benchmarks. Growth Investor
Portfolio may write a call or put option only if the option is
covered. As the writer of a covered call option, Growth Investor
Portfolio foregoes, during the option's life, the opportunity to
profit from increases in market value of the security covering the
call option above the sum of the premium and the exercise price of
the call. There can be no assurance that a liquid market will
exist when Growth Investor Portfolio seeks to close out a
position. In addition, because futures positions may require low
margin deposits, the use of futures contracts involves a high
degree of leverage and may result in losses in excess of the
amount of the margin deposit.

Short Sales Against the Box.
Growth Investor Portfolio may sell short securities it owns or has
the right to acquire without further consideration, a technique
called selling short "against the box." Short sales against the
box may protect Growth Investor Portfolio against the risk of
losses in the value of its portfolio securities because any
unrealized losses with respect to such securities should be wholly
or partly offset by a corresponding gain in the short position.
However, any potential gains in such securities should be wholly
or partially offset by a corresponding loss in the short position.
Short sales against the box may be used to lock in a profit on a
security when, for tax reasons or otherwise, the Adviser does not
want to sell the security. For a more complete explanation,
please refer to the Statement of Additional Information.
__________________________
Investment Restrictions

Each of Young Investor Fund and Growth Investor Portfolio is
diversified as that term is defined in the Investment Company Act
of 1940.

- ----------
/2/ A repurchase agreement involves a sale of securities to Growth
Investor Portfolio in which the seller agrees to repurchase the
securities at a higher price, which includes an amount
representing interest on the purchase price, within a specified
time. In the event of bankruptcy of the seller, Growth Investor
Portfolio could experience both losses and delays in liquidating
its collateral.
- ----------

Neither Young Investor Fund nor Growth Investor Portfolio may
invest more than 25% of its total assets (at the time of
investment) in the securities of companies in any one industry.

Neither Young Investor Fund nor Growth Investor Portfolio may make
loans except that each may (1) purchase money market instruments
and enter into repurchase agreements; (2) acquire publicly
distributed or privately placed debt securities; (3) lend
portfolio securities under certain conditions; and (4) participate
in an interfund lending program with other Stein Roe Funds and
Portfolios. Neither may borrow money, except for nonleveraging,
temporary, or emergency purposes or in connection with
participation in the interfund lending program. Neither the
aggregate borrowings (including reverse repurchase agreements) nor
aggregate loans at any one time may exceed 33 1/3% of the value of
total assets. Neither Growth Investor Fund nor Growth Investor
Portfolio currently intend to borrow in excess of 5% of total
assets. Additional securities may not be purchased when
borrowings, less proceeds receivable from sales of portfolio
securities, exceed 5% of total assets.

Growth Investor Portfolio may invest in repurchase agreements,
provided that it will not invest more than 15% of its net assets
in illiquid securities, including repurchase agreements maturing
in more than seven days. An investment in illiquid securities
could involve relatively greater risks and costs.

The investment restrictions described in the second through fifth
paragraphs of this section are fundamental policies and, as such,
can be changed only with the approval of a "majority of the
outstanding voting securities" as defined in the Investment
Company Act of 1940. The common investment objective of Young
Investor Fund and Growth Investor Portfolio is non-fundamental
and, as such, may be changed by the Board of Trustees without
shareholder approval, subject, however, to at least 30 days'
advance written notice to Young Investor Fund's shareholders. Any
such change may result in Young Investor Fund having an investment
objective different from the objective the shareholder considered
appropriate at the time of investment in Young Investor Fund. All
of the investment restrictions are set forth in the Statement of
Additional Information.
__________________________
Risks and Investment Considerations

Although Growth Investor Portfolio does not purchase securities
with a view to rapid turnover, there are no limitations on the
length of time portfolio securities must be held. Accordingly,
the portfolio turnover rate may vary significantly from year to
year, but is not expected to exceed 100% under normal market
conditions. A high rate of portfolio turnover may result in
increased transaction expenses and the realization of capital
gains and losses. (See Distributions and Income Taxes.) Young
Investor Fund is not intended to be an income-producing
investment, although it may produce income.

Investment in foreign securities may represent a greater degree of
risk (including risk related to exchange rate fluctuations, tax
provisions, exchange and currency controls, and expropriation of
assets) than investment in securities of domestic issuers. Other
risks of foreign investing include less complete financial
information on issuers, different accounting, auditing and
financial reporting standards, different settlement practices,
less market liquidity, more market volatility, less developed and
regulated markets, and greater political instability. In
addition, various restrictions by foreign governments on
investments by nonresidents may apply, including imposition of
exchange controls and withholding taxes on dividends, and seizure
or nationalization of investments owned by nonresidents. Foreign
investments also tend to involve higher transaction and custody
costs.
__________________________
How to Purchase Shares

All shares must be purchased through your employer's defined
contribution plan. For more information about how to purchase
shares of Young Investor Fund through your employer or limitations
on the amount that may be purchased, please consult your employer.
Shares are sold to eligible defined contribution plans at Young
Investor Fund's net asset value (see Net Asset Value) next
determined after receipt of an order in good form, including
receipt of payment by Young Investor Fund. Each purchase of
shares through a broker-dealer, bank, or other intermediary
("Intermediary") that is an authorized agent of Investment Trust
for the receipt of orders is made at the net asset value next
determined after the receipt of the order by the Intermediary. An
Intermediary, who accepts orders that are processed at the net
asset value next determined after receipt of the order by the
Intermediary, accepts such orders as agent of the Fund. The
Intermediary is required to segregate any orders received on a
business day after the close of regular session trading on the New
York Stock Exchange and transmit those orders separately for
execution at the net asset value next determined after that
business day.

Each purchase order must be accepted by an authorized officer of
Investment Trust or its authorized agent and is not binding until
accepted and entered on the books of Young Investor Fund. Once
your purchase order has been accepted, you may not cancel or
revoke it; you may, however, redeem the shares. Investment Trust
reserves the right not to accept any purchase order that it
determines not to be in the best interests of Investment Trust or
of Young Investor Fund's shareholders.

Shares purchased by reinvestment of dividends will be confirmed
quarterly. All other purchases and redemptions will be confirmed
as transactions occur.
__________________________
How to Redeem Shares

Subject to restrictions imposed by your employer's plan, Young
Investor Fund shares may be redeemed any day the New York Stock
Exchange is open. For more information about how to redeem your
shares of Young Investor Fund through your employer's plan,
including any charges that may be imposed by the plan, please
consult with your employer.

Exchange Privilege.
Subject to your plan's restrictions, you may redeem all or any
portion of your Young Investor Fund shares and use the proceeds to
purchase shares of any other Stein Roe Fund available through your
employer's defined contribution plan. (An exchange is commonly
referred to as a "transfer.") Before exercising the Exchange
Privilege, you should obtain the prospectus for the Stein Roe Fund
in which you wish to invest and read it carefully. Contact your
plan administrator for instructions on how to exchange your shares
or to obtain prospectuses of other Stein Roe Funds available
through your plan. Young Investor Fund reserves the right to
suspend, limit, modify, or terminate the Exchange Privilege or its
use in any manner by any person or class; shareholders would be
notified of such a change.

General Redemption Policies.
Redemption instructions may not be cancelled or revoked once they
have been received and accepted by Investment Trust. Investment
Trust cannot accept a redemption request that specifies a
particular date or price for redemption or any special conditions.

The price at which your redemption order will be executed is the
net asset value next determined after proper redemption
instructions are received. (See Net Asset Value.) Because the
redemption price you receive depends upon Young Investor Fund's
net asset value per share at the time of redemption, it may be
more or less than the price you originally paid for the shares.
__________________________
Net Asset Value

Net asset value will not be determined on days when the NYSE is
closed unless, in the judgment of the Board of Trustees, the net
asset value should be determined on any such day, in which case
the determination will be made at 3:00 p.m., central time.

Each security traded on a national stock exchange is valued at its
last sale price on that exchange on the day of valuation or, if
there are no sales that day, at the latest bid quotation. Each
over-the-counter security for which the last sale price on the day
of valuation is available from Nasdaq is valued at that price.
All other over-the-counter securities for which reliable
quotations are available are valued at the latest bid quotation.

Long-term straight-debt obligations and securities convertible
into stocks are valued at a fair value using a procedure
determined in good faith by the Board of Trustees. Pricing
services approved by the Board provide valuations (some of which
may be "readily available market quotations"). These valuations
are reviewed by the Adviser. If the Adviser believes that a
valuation received from the service does not represent a fair
value, it values the obligation using a method that the Board
believes represents fair value. The Board may approve the use of
other pricing services and any pricing service used may employ
electronic data processing techniques, including a so-called
"matrix" system, to determine valuations. Other assets and
securities are valued by a method that the Board believes
represents fair value.
__________________________
Distributions and Income Taxes

Distributions.
Income dividends are normally declared and paid annually. Young
Investor Fund intends to distribute by the end of each calendar
year at least 98% of any net capital gains realized from the sale
of securities during the 12-month period ended Oct. 31 in that
year. It intends to distribute any undistributed net investment
income and net realized capital gains in the following year.

The terms of your plan will govern how you may receive
distributions from Young Investor Fund. Generally, dividend and
capital gains distributions will be reinvested in additional
shares of Young Investor Fund.

Income Taxes.
Young Investor Fund intends to qualify as a "regulated investment
company" for federal income tax purposes and to meet all other
requirements that are necessary for it to be relieved of federal
taxes on income and gain it distributes. Young Investor Fund will
distribute substantially all of its ordinary income and net
capital gains on a current basis. Generally, Young Investor Fund
distributions are taxable as ordinary income, except that any
distributions of net long-term capital gains will be taxed as
such. However, distributions by Young Investor Fund to employer-
sponsored defined contribution plans that qualify for tax-exempt
treatment under federal income tax laws will not be taxable.
Special tax rules apply to investments through such plans. You
should consult your tax advisor to determine the suitability of
Young Investor Fund as an investment through such a plan and the
tax treatment of distributions (including distributions of amounts
attributable through an investment in Young Investor Fund) from
such a plan. This section is not intended to be a full discussion
of income tax laws and their effect on shareholders.
__________________________
Investment Return

Comparison of Young Investor Fund's total return with alternative
investments should consider differences between Young Investor
Fund and the alternative investments, the periods and methods used
in calculation of the return being compared, and the impact of
taxes on alternative investments. Young Investor Fund's total
return does not reflect any charges or expenses related to your
employer's plan. Of course, past performance is not necessarily
indicative of future results.
__________________________
Management

Trustees and Adviser.
The Board of Trustees of Investment Trust and the Board of Base
Trust have overall management responsibility for Young Investor
Fund and Growth Investor Portfolio, respectively. See the
Statement of Additional Information for the names of and
additional information about the trustees and officers. Since
Investment Trust and Base Trust have the same trustees, the
trustees have adopted conflict of interest procedures to monitor
and address potential conflicts between the interests of Young
Investor Fund and Growth Investor Portfolio.

The Adviser, Stein Roe & Farnham Incorporated, One South Wacker
Drive, Chicago, Illinois 60606, is responsible for managing Young
Investor Fund and Growth Investor Portfolio, subject to the
direction of the respective Board of Trustees. The Adviser is
registered as an investment adviser under the Investment Advisers
Act of 1940. The Adviser and its predecessor have advised and
managed mutual funds since 1949. The Adviser is a wholly owned
indirect subsidiary of Liberty Financial Companies, Inc. ("Liberty
Financial"), which in turn is a majority owned indirect subsidiary
of Liberty Mutual Insurance Company.

Portfolio Managers.
Erik P. Gustafson and David P. Brady have been portfolio managers
of Growth Investor Portfolio since its inception in 1997. Mr.
Gustafson had been portfolio manager of Young Investor Fund since
Feb. 1995 and Mr. Brady since Mar. 1995. As of Sept. 30, 1997,
Messrs. Gustafson and Brady were responsible for co-managing $1.2
billion and $475 million in mutual fund net assets, respectively.

Mr. Gustafson is a senior vice president of the Adviser and Mr.
Brady is a vice president of the Adviser. Before joining the
Adviser, Mr. Gustafson was an attorney with Fowler, White,
Burnett, Hurley, Banick & Strickroot from 1989 to 1992. He holds
a B.A. from the University of Virginia (1985) and M.B.A. and J.D.
degrees from Florida State University (1989). Mr. Brady, who
joined the Adviser in 1993, was an equity investment analyst with
State Farm Mutual Automobile Insurance Company from 1986 to 1993.
A chartered financial analyst, Mr. Brady earned a B.S. in Finance,
graduating Magna Cum Laude, from the University of Arizona (1986),
and an M.B.A. from the University of Chicago (1989).

Fees and Expenses.
In return for its services, Stein Roe is entitled to receive an
administrative fee from Young Investor Fund at an annual rate of
.20% of the first $500 million of average net assets, .15% of the
next $500 million, and .125% thereafter; and a management fee from
Growth Investor Portfolio at an annual rate of .60% of the first
$500 million, .55% of the next $500 million, and .50% thereafter.
Prior to Feb. 3, 1997, the management fee was paid by Young
Investor Fund. For the fiscal year ended Sept. 30, 1997, such
fees amounted to .34% and .39% of the average net assets of Young
Investor Fund and Growth Investor Portfolio, respectively. At
September 30, 1997, Young Investor Fund owned 99.98% of Growth
Investor Portfolio.

Under a separate agreement with each Trust, the Adviser provides
certain accounting and bookkeeping services to Young Investor Fund
and Growth Investor Portfolio, including computation of net asset
value and calculation of net income and capital gains and losses
on disposition of assets.

Portfolio Transactions.
The Adviser places the orders for the purchase and sale of
portfolio securities and options and futures transactions. In
doing so, the Adviser seeks to obtain the best combination of
price and execution, which involves a number of judgmental
factors.

Transfer Agent.
SteinRoe Services Inc., One South Wacker Drive, Chicago, Illinois
60606, a wholly owned subsidiary of Liberty Financial, is the
agent of Investment Trust for the transfer of shares, disbursement
of dividends, and maintenance of shareholder accounting records.

Distributor.
The shares of Young Investor Fund are offered for sale through
Liberty Financial Investments, Inc. ("Distributor") without any
sales commissions or charges to Young Investor Fund or to its
shareholders. The Distributor is a subsidiary of Colonial
Management Associates, Inc., which is an indirect subsidiary of
Liberty Financial. The business address of the Distributor is One
Financial Center, Boston, Massachusetts 02111; however, all Fund
correspondence (including purchase and redemption orders) should
be mailed to SteinRoe Services Inc., P.O. Box 8900, Boston,
Massachusetts 02205. All distribution and promotional expenses
are paid by the Adviser, including payments to the Distributor for
sales of Fund shares.

Custodian.
State Street Bank and Trust Company (the "Bank"), 225 Franklin
Street, Boston, Massachusetts 02101, is the custodian for Young
Investor Fund and Growth Investor Portfolio. Foreign securities
are maintained in the custody of foreign banks and trust companies
that are members of the Bank's Global Custody Network or foreign
depositories used by such members. (See Custodian in the
Statement of Additional Information.)
__________________________
Organization and Description of Shares

Under Massachusetts law, shareholders of a Massachusetts business
trust such as Investment Trust could, in some circumstances, be
held personally liable for unsatisfied obligations of the trust.
The Declaration of Trust provides that persons extending credit
to, contracting with, or having any claim against, Investment
Trust or any particular series shall look only to the assets of
Investment Trust or of the respective series for payment under
such credit, contract or claim, and that the shareholders,
trustees and officers shall have no personal liability therefor.
The Declaration of Trust requires that notice of such disclaimer
of liability be given in each contract, instrument or undertaking
executed or made on behalf of Investment Trust. The Declaration
of Trust provides for indemnification of any shareholder against
any loss and expense arising from personal liability solely by
reason of being or having been a shareholder. Thus, the risk of a
shareholder incurring financial loss on account of shareholder
liability is believed to be remote, because it would be limited to
circumstances in which the disclaimer was inoperative and
Investment Trust was unable to meet its obligations.

__________________________
Master Fund/Feeder Fund:
Structure and Risk Factors

The Adviser has provided investment management services in
connection with other mutual funds employing the master
fund/feeder fund structure since 1991.

Growth Investor Portfolio is a separate series of SR&F Base Trust
("Base Trust"), a Massachusetts common law trust organized under
an Agreement and Declaration of Trust ("Declaration of Trust")
dated Aug. 23, 1993. The Declaration of Trust of Base Trust
provides that Young Investor Fund and other investors in Growth
Investor Portfolio will be liable for all obligations of Growth
Investor Portfolio that are not satisfied by Growth Investor
Portfolio. However, the risk of Young Investor Fund incurring
financial loss on account of such liability is limited to
circumstances in which liability was inadequately insured and
Growth Investor Portfolio was unable to meet its obligations.
Accordingly, the trustees of Investment Trust believe that neither
Young Investor Fund nor its shareholders will be adversely
affected by reason of Young Investor Fund's investing in Growth
Investor Portfolio.

The common investment objective of Young Investor Fund and Growth
Investor Portfolio is non-fundamental and may be changed without
shareholder approval, subject, however, to at least 30 days'
advance written notice to Young Investor Fund's shareholders.

In the event that Growth Investor Portfolio's fundamental policies
were changed so as to be inconsistent with those of Young Investor
Fund, the Board of Trustees of Investment Trust would consider
what action might be taken, including changes to Young Investor
Fund's fundamental policies, withdrawal of Young Investor Fund's
assets from Growth Investor Portfolio and investment of such
assets in another pooled investment entity, or the retention of an
investment adviser to invest those assets directly in a portfolio
of securities. Any of these actions would require the approval of
Young Investor Fund's shareholders. Young Investor Fund's
inability to find a substitute master fund or comparable
investment management could have a significant impact upon its
shareholders' investments. Any withdrawal of Young Investor
Fund's assets could result in a distribution in kind of portfolio
securities (as opposed to a cash distribution) to Young Investor
Fund. Should such a distribution occur, Young Investor Fund would
incur brokerage fees or other transaction costs in converting such
securities to cash. In addition, a distribution in kind could
result in a less diversified portfolio of investments for Young
Investor Fund and could affect the liquidity of Young Investor
Fund.

Information regarding other investors in Growth Investor Portfolio
may be obtained by writing to SR&F Base Trust at Suite 3200, One
South Wacker Drive, Chicago, IL 60606, or by calling 800-338-2550.
The Adviser may provide administrative or other services to one or
more of such investors.
__________________________
For More Information

Contact a Stein Roe Retirement Plan Representative at 800-322-1130
for more information about Young Investor Fund.
________________

<PAGE>

Statement of Additional Information Dated Feb. 2, 1998

STEIN ROE INVESTMENT TRUST
Suite 3200, One South Wacker Drive, Chicago, Illinois 60606
800-338-2550

Stein Roe Young Investor Fund

This Statement of Additional Information is not a prospectus,
but provides additional information that should be read in
conjunction with the prospectus of Stein Roe Young Investor Fund
dated Feb. 2, 1998, and any supplements thereto ("Prospectus").
The Prospectus may be obtained at no charge by telephoning 800-
338-2550.

TABLE OF CONTENTS
Page
General Information and History.....................2
Investment Policies.................................3
Portfolio Investments and Strategies................4
Investment Restrictions............................21
Additional Investment Considerations...............23
Purchases and Redemptions..........................24
Management.........................................26
Financial Statements...............................29
Principal Shareholders.............................30
Investment Advisory Services.......................30
Distributor........................................33
Transfer Agent.....................................33
Custodian..........................................33
Independent Public Accountants.....................34
Portfolio Transactions.............................34
Additional Income Tax Considerations...............36
Investment Performance.............................37
Appendix--Ratings..................................41

GENERAL INFORMATION AND HISTORY

Stein Roe Young Investor Fund ("Young Investor Fund") is a
series of Stein Roe Investment Trust ("Investment Trust"). On
Feb. 1, 1996, the name of Young Investor Fund and of Investment
Trust was changed to separate "SteinRoe" into two words.

As of the date of this Statement of Additional Information,
ten series of Investment Trust are authorized and outstanding.
Each share of a series, without par value, is entitled to
participate pro rata in any dividends and other distributions
declared by the Board on shares of that series, and all shares of
a series have equal rights in the event of liquidation of that
series. Each whole share (or fractional share) outstanding on the
record date established in accordance with the By-Laws shall be
entitled to a number of votes on any matter on which it is
entitled to vote equal to the net asset value of the share (or
fractional share) in United States dollars determined at the close
of business on the record date (for example, a share having a net
asset value of $10.50 would be entitled to 10.5 votes). As a
business trust, Investment Trust is not required to hold annual
shareholder meetings. However, special meetings may be called for
purposes such as electing or removing trustees, changing
fundamental policies, or approving an investment advisory
contract. If requested to do so by the holders of at least 10% of
its outstanding shares, Investment Trust will call a special
meeting for the purpose of voting upon the question of removal of
a trustee or trustees and will assist in the communications with
other shareholders as if Investment Trust were subject to Section
16(c) of the Investment Company Act of 1940. All shares of all
series of Investment Trust are voted together in the election of
trustees. On any other matter submitted to a vote of
shareholders, shares are voted in the aggregate and not by
individual series, except that shares are voted by individual
series when required by the Investment Company Act of 1940 or
other applicable law, or when the Board of Trustees determines
that the matter affects only the interests of one or more series,
in which case shareholders of the unaffected series are not
entitled to vote on such matters.

Special Considerations Regarding Master Fund/Feeder Fund Structure

Young Investor Fund converted into a "feeder fund" on Feb. 3,
1997; that is, rather than invest in securities directly, it seeks
to achieve its objective by pooling its assets with those of other
investment companies for investment in a separate "master fund"
having the same investment objective and substantially the same
investment policies as the Fund. The purpose of such an
arrangement is to achieve greater operational efficiencies and
reduce costs. Each master fund is a series of SR&F Base Trust
("Base Trust"). For more information, please refer to the
Prospectus under the caption Master Fund/Feeder Fund: Structure
and Risk Factors.

Stein Roe & Farnham Incorporated (the "Adviser") provides
administrative and accounting and recordkeeping services to Young
Investor Fund and provides investment management services to
Growth Investor Portfolio.

INVESTMENT POLICIES

Young Investor Fund seeks to achieve its objective by
investing in SR&F Growth Investor Portfolio ("Growth Investor
Portfolio"). Their common investment objective is long-term
capital appreciation. Growth Investor Portfolio invests primarily
in common stocks and other equity-type securities that, in the
opinion of the Adviser, have long-term appreciation potential.

Under normal circumstances, at least 65% of the total assets
of Growth Investor Portfolio will be invested in securities of
companies that, in the opinion of the Adviser, directly or through
one or more subsidiaries, affect the lives of young people. Such
companies may include companies that produce products or services
that young people use, are aware of, or could potentially have an
interest in. Although Growth Investor Portfolio invests primarily
in common stocks and other equity-type securities (such as
preferred stocks, securities convertible into or exchangeable for
common stocks, and warrants or rights to purchase common stocks),
it may invest up to 35% of its total assets in debt securities.

In pursuing its objective, Growth Investor Portfolio may
employ the investment techniques described in the Prospectus and
under Portfolio Investments and Strategies. The investment
objective is a non-fundamental policy and may be changed by the
Board of Trustees without the approval of a "majority of the
outstanding voting securities." /1/
- ----------
/1/ A "majority of the outstanding voting securities" means the
approval of the lesser of (i) 67% or more of the shares at a
meeting if the holders of more than 50% of the outstanding shares
are present or represented by proxy or (ii) more than 50% of the
outstanding shares.
- ----------

PORTFOLIO INVESTMENTS AND STRATEGIES

Debt Securities

In pursuing its investment objective, Growth Investor
Portfolio may invest in debt securities of corporate and
governmental issuers. The risks inherent in debt securities
depend primarily on the term and quality of the obligations in the
investment portfolio as well as on market conditions. A decline
in the prevailing levels of interest rates generally increases the
value of debt securities, while an increase in rates usually
reduces the value of those securities.

Debt securities within the four highest grades are generally
referred to as "investment grade") . Growth Investor Portfolio
may invest up to 35% of their net assets in debt securities, but
do not expect to invest more than 5% of their net assets in debt
securities that are rated below investment grade.

Securities in the fourth highest grade may possess
speculative characteristics, and changes in economic conditions
are more likely to affect the issuer's capacity to pay interest
and repay principal. If the rating of a security held is lost or
reduced below investment grade, Growth Investor Portfolio is not
required to dispose of the security, but the Adviser will consider
that fact in determining whether to should continue to hold the
security.

Securities that are rated below investment grade are
considered predominantly speculative with respect to the issuer's
capacity to pay interest and repay principal according to the
terms of the obligation and therefore carry greater investment
risk, including the possibility of issuer default and bankruptcy.

When the Adviser determines that adverse market or economic
conditions exist and considers a temporary defensive position
advisable, Growth Investor Portfolio may invest without limitation
in high-quality fixed income securities or hold assets in cash or
cash equivalents.

Derivatives

Consistent with its objective, Growth Investor Portfolio may
invest in a broad array of financial instruments and securities,
including conventional exchange-traded and non-exchange-traded
options, futures contracts, futures options, securities
collateralized by underlying pools of mortgages or other
receivables, floating rate instruments, and other instruments that
securitize assets of various types ("Derivatives"). In each case,
the value of the instrument or security is "derived" from the
performance of an underlying asset or a "benchmark" such as a
security index, an interest rate, or a currency.

Derivatives are most often used to manage investment risk or
to create an investment position indirectly because it is more
efficient or less costly than direct investment that cannot be
readily established directly due to portfolio size, cash
availability, or other factors. They also may be used in an
effort to enhance portfolio returns.

The successful use of Derivatives depends on the Adviser's
ability to correctly predict changes in the levels and directions
of movements in security prices, interest rates and other market
factors affecting the Derivative itself or the value of the
underlying asset or benchmark. In addition, correlations in the
performance of an underlying asset to a Derivative may not be well
established. Finally, privately negotiated and over-the-counter
Derivatives may not be as well regulated and may be less
marketable than exchange-traded Derivatives.

Growth Investor Portfolio does not currently intend to
invest more than 5% of its net assets in any type of Derivative
except for options, futures contracts, and futures options.
International Portfolio currently intends to invest no more than
5% of its net assets in any type of Derivative other than options,
futures contracts, futures options, and forward contracts. (See
Options and Futures below.)

Some mortgage-backed debt securities are of the "modified
pass-through type," which means the interest and principal
payments on mortgages in the pool are "passed through" to
investors. During periods of declining interest rates, there is
increased likelihood that mortgages will be prepaid, with a
resulting loss of the full-term benefit of any premium paid by
Growth Investor Portfolio on purchase of such securities; in
addition, the proceeds of prepayment would likely be invested at
lower interest rates.

Mortgage-backed securities provide either a pro rata interest
in underlying mortgages or an interest in collateralized mortgage
obligations ("CMOs") that represent a right to interest and/or
principal payments from an underlying mortgage pool. CMOs are not
guaranteed by either the U.S. Government or by its agencies or
instrumentalities, and are usually issued in multiple classes each
of which has different payment rights, prepayment risks, and yield
characteristics. Mortgage-backed securities involve the risk of
prepayment on the underlying mortgages at a faster or slower rate
than the established schedule. Prepayments generally increase
with falling interest rates and decrease with rising rates but
they also are influenced by economic, social, and market factors.
If mortgages are pre-paid during periods of declining interest
rates, there would be a resulting loss of the full-term benefit of
any premium paid by Growth Investor Portfolio on purchase of the
CMO, and the proceeds of prepayment would likely be invested at
lower interest rates.

Non-mortgage asset-backed securities usually have less
prepayment risk than mortgage-backed securities, but have the risk
that the collateral will not be available to support payments on
the underlying loans that finance payments on the securities
themselves.

Floating rate instruments provide for periodic adjustments in
coupon interest rates that are automatically reset based on
changes in amount and direction of specified market interest
rates. In addition, the adjusted duration of some of these
instruments may be materially shorter than their stated
maturities. To the extent such instruments are subject to
lifetime or periodic interest rate caps or floors, such
instruments may experience greater price volatility than debt
instruments without such features. Adjusted duration is an
inverse relationship between market price and interest rates and
refers to the approximate percentage change in price for a 100
basis point change in yield. For example, if interest rates
decrease by 100 basis points, a market price of a security with an
adjusted duration of 2 would increase by approximately 2%.

Convertible Securities

By investing in convertible securities, Growth Investor
Portfolio obtains the right to benefit from the capital
appreciation potential in the underlying stock upon exercise of
the conversion right, while earning higher current income than
would be available if the stock were purchased directly. In
determining whether to purchase a convertible, the Adviser will
consider substantially the same criteria that would be considered
in purchasing the underlying stock. While convertible securities
it purchases are frequently rated investment grade, Growth
Investor Portfolio may purchase unrated securities or securities
rated below investment grade if the securities meet the Adviser's
other investment criteria. Convertible securities rated below
investment grade (a) tend to be more sensitive to interest rate
and economic changes, (b) may be obligations of issuers who are
less creditworthy than issuers of higher quality convertible
securities, and (c) may be more thinly traded due to such
securities being less well known to investors than investment
grade convertible securities, common stock or conventional debt
securities. As a result, the Adviser's own investment research
and analysis tend to be more important in the purchase of such
securities than other factors.

Foreign Securities

The Portfolio may invest up to 25% of its total assets in
foreign securities, which may entail a greater degree of risk
(including risks relating to exchange rate fluctuations, tax
provisions, or expropriation of assets) than investment in
securities of domestic issuers. For this purpose, foreign
securities do not include American Depositary Receipts (ADRs) or
securities guaranteed by a United States person. ADRs are
receipts typically issued by an American bank or trust company
evidencing ownership of the underlying securities. Growth
Investor Portfolio may invest in sponsored or unsponsored ADRs.
In the case of an unsponsored ADR, Growth Investor Portfolio is
likely to bear its proportionate share of the expenses of the
depositary and it may have greater difficulty in receiving
shareholder communications than it would have with a sponsored
ADR. Growth Investor Portfolio does not intend to invest, nor
during the past fiscal year has it invested, more than 5% of its
net assets in unsponsored ADRs.

As of Sept. 30, 1997, holdings of foreign companies amounted
to 2.8% of average net assets of Growth Investor Portfolio (none
in foreign securities and 2.8% in ADRs and ADSs).

With respect to portfolio securities that are issued by
foreign issuers or denominated in foreign currencies, investment
performance is affected by the strength or weakness of the U.S.
dollar against these currencies. For example, if the dollar falls
in value relative to the Japanese yen, the dollar value of a yen-
denominated stock held in the portfolio will rise even though the
price of the stock remains unchanged. Conversely, if the dollar
rises in value relative to the yen, the dollar value of the yen-
denominated stock will fall. (See discussion of transaction
hedging and portfolio hedging under Currency Exchange
Transactions.)

Investors should understand and consider carefully the risks
involved in foreign investing. Investing in foreign securities,
positions which are generally denominated in foreign currencies,
and utilization of forward foreign currency exchange contracts
involve certain considerations comprising both risks and
opportunities not typically associated with investing in U.S.
securities. These considerations include: fluctuations in
exchange rates of foreign currencies; possible imposition of
exchange control regulation or currency restrictions that would
prevent cash from being brought back to the United States; less
public information with respect to issuers of securities; less
governmental supervision of stock exchanges, securities brokers,
and issuers of securities; lack of uniform accounting, auditing,
and financial reporting standards; lack of uniform settlement
periods and trading practices; less liquidity and frequently
greater price volatility in foreign markets than in the United
States; possible imposition of foreign taxes; possible investment
in securities of companies in developing as well as developed
countries; and sometimes less advantageous legal, operational, and
financial protections applicable to foreign sub-custodial
arrangements.

Although Growth Investor Portfolio will try to invest in
companies and governments of countries having stable political
environments, there is the possibility of expropriation or
confiscatory taxation, seizure or nationalization of foreign bank
deposits or other assets, establishment of exchange controls, the
adoption of foreign government restrictions, or other adverse
political, social or diplomatic developments that could affect
investment in these nations.

Currency Exchange Transactions. Currency exchange
transactions may be conducted either on a spot (i.e., cash) basis
at the spot rate for purchasing or selling currency prevailing in
the foreign exchange market or through forward currency exchange
contracts ("forward contracts"). Forward contracts are
contractual agreements to purchase or sell a specified currency at
a specified future date (or within a specified time period) and
price set at the time of the contract. Forward contracts are
usually entered into with banks and broker-dealers, are not
exchange traded, and are usually for less than one year, but may
be renewed.

Growth Investor Portfolio's foreign currency exchange
transactions are limited to transaction and portfolio hedging
involving either specific transactions or portfolio positions.
Transaction hedging is the purchase or sale of forward contracts
with respect to specific receivables or payables of Growth
Investor Portfolio arising in connection with the purchase and
sale of its portfolio securities. Portfolio hedging is the use of
forward contracts with respect to portfolio security positions
denominated or quoted in a particular foreign currency. Portfolio
hedging allows it to limit or reduce its exposure in a foreign
currency by entering into a forward contract to sell such foreign
currency (or another foreign currency that acts as a proxy for
that currency) at a future date for a price payable in U.S.
dollars so that the value of the foreign-denominated portfolio
securities can be approximately matched by a foreign-denominated
liability. Growth Investor Portfolio may not engage in portfolio
hedging with respect to the currency of a particular country to an
extent greater than the aggregate market value (at the time of
making such sale) of the securities held in its portfolio
denominated or quoted in that particular currency, except that it
may hedge all or part of its foreign currency exposure through the
use of a basket of currencies or a proxy currency where such
currencies or currency act as an effective proxy for other
currencies. In such a case, Growth Investor Portfolio may enter
into a forward contract where the amount of the foreign currency
to be sold exceeds the value of the securities denominated in such
currency. The use of this basket hedging technique may be more
efficient and economical than entering into separate forward
contracts for each currency it holds. Growth Investor Portfolio
may not engage in "speculative" currency exchange transactions.

At the maturity of a forward contract to deliver a particular
currency, Growth Investor Portfolio may either sell the portfolio
security related to such contract and make delivery of the
currency, or it may retain the security and either acquire the
currency on the spot market or terminate its contractual
obligation to deliver the currency by purchasing an offsetting
contract with the same currency trader obligating it to purchase
on the same maturity date the same amount of the currency.

It is impossible to forecast with absolute precision the
market value of portfolio securities at the expiration of a
forward contract. Accordingly, it may be necessary for Growth
Investor Portfolio to purchase additional currency on the spot
market (and bear the expense of such purchase) if the market value
of the security is less than the amount of currency it is
obligated to deliver and if a decision is made to sell the
security and make delivery of the currency. Conversely, it may be
necessary to sell on the spot market some of the currency received
upon the sale of the portfolio security if its market value
exceeds the amount of currency it is obligated to deliver.

If Growth Investor Portfolio retains the portfolio security
and engages in an offsetting transaction, it will incur a gain or
a loss to the extent that there has been movement in forward
contract prices. If Growth Investor Portfolio engages in an
offsetting transaction, it may subsequently enter into a new
forward contract to sell the currency. Should forward prices
decline during the period between Growth Investor Portfolio's
entering into a forward contract for the sale of a currency and
the date it enters into an offsetting contract for the purchase of
the currency, it will realize a gain to the extent the price of
the currency it has agreed to sell exceeds the price of the
currency it has agreed to purchase. Should forward prices
increase, Growth Investor Portfolio will suffer a loss to the
extent the price of the currency it has agreed to purchase exceeds
the price of the currency it has agreed to sell. A default on the
contract would deprive it of unrealized profits or force it to
cover its commitments for purchase or sale of currency, if any, at
the current market price.

Hedging against a decline in the value of a currency does not
eliminate fluctuations in the prices of portfolio securities or
prevent losses if the prices of such securities decline. Such
transactions also preclude the opportunity for gain if the value
of the hedged currency should rise. Moreover, it may not be
possible for Growth Investor Portfolio to hedge against a
devaluation that is so generally anticipated that it is not able
to contract to sell the currency at a price above the devaluation
level it anticipates. The cost to Growth Investor Portfolio of
engaging in currency exchange transactions varies with such
factors as the currency involved, the length of the contract
period, and prevailing market conditions. Since currency exchange
transactions are usually conducted on a principal basis, no fees
or commissions are involved.

Swaps, Caps, Floors and Collars

Growth Investor Portfolio may enter into swaps and may
purchase or sell related caps, floors and collars. It would enter
into these transactions primarily to preserve a return or spread
on a particular investment or portion of its portfolio, to protect
against currency fluctuations, as a duration management technique
or to protect against any increase in the price of securities it
purchases at a later date. Growth Investor Portfolio intends to
use these techniques as hedges and not as speculative investments
and will not sell interest rate income stream it may be obligated
to pay.

A swap agreement is generally individually negotiated and
structured to include exposure to a variety of different types of
investments or market factors. Depending on its structure, a swap
agreement may increase or decrease the exposure to changes in the
value of an index of securities in which Growth Investor Portfolio
might invest, the value of a particular security or group of
securities, or foreign currency values. Swap agreements can take
many different forms and are known by a variety of names. Growth
Investor Portfolio may enter into any form of swap agreement if
the Adviser determines it is consistent with its investment
objective and policies.

A swap agreement tends to shift Growth Investor Portfolio's
investment exposure from one type of investment to another. For
example, if it agrees to exchange payments in dollars at a fixed
rate for payments in a foreign currency the amount of which is
determined by movements of a foreign securities index, the swap
agreement would tend to increase exposure to foreign stock market
movements and foreign currencies. Depending on how it is used, a
swap agreement may increase or decrease the overall volatility of
its investments and its net asset value.

The performance of a swap agreement is determined by the
change in the specific currency, market index, security, or other
factors that determine the amounts of payments due to and from
Growth Investor Portfolio. If a swap agreement calls for payments
by Growth Investor Portfolio, it must be prepared to make such
payments when due. If the counterparty's creditworthiness
declines, the value of a swap agreement would be likely to
decline, potentially resulting in a loss. Growth Investor
Portfolio will not enter into any swap, cap, floor or collar
transaction unless, at the time of entering into such transaction,
the unsecured long-term debt of the counterparty, combined with
any credit enhancements, is rated at least A by Standard & Poor's
Corporation or Moody's or has an equivalent rating from a
nationally recognized statistical rating organization or is
determined to be of equivalent credit quality by the Adviser.

The purchase of a cap entitles the purchaser to receive
payments on a notional principal amount from the party selling the
cap to the extent that a specified index exceeds a predetermined
interest rate or amount. The purchase of a floor entitles the
purchaser to receive payments on a notional principal amount from
the party selling such floor to the extent that a specified index
falls below a predetermined interest rate or amount. A collar is
a combination of a cap and floor that preserves a certain return
within a predetermined range of interest rates or values.

At the time Growth Investor Portfolio enters into swap
arrangements or purchases or sells caps, floors or collars, liquid
assets having a value at least as great as the commitment
underlying the obligations will be segregated on the books of
Growth Investor Portfolio and held by the custodian throughout the
period of the obligation.

Lending of Portfolio Securities

Subject to restriction (5) under Investment Restrictions in
this Statement of Additional Information, Growth Investor
Portfolio may lend its portfolio securities to broker-dealers and
banks. Any such loan must be continuously secured by collateral
in cash or cash equivalents maintained on a current basis in an
amount at least equal to the market value of the securities loaned
by Growth Investor Portfolio. It would continue to receive the
equivalent of the interest or dividends paid by the issuer on the
securities loaned, and would also receive an additional return
that may be in the form of a fixed fee or a percentage of the
collateral. It would have the right to call the loan and obtain
the securities loaned at any time on notice of not more than five
business days. It would not have the right to vote the securities
during the existence of the loan but would call the loan to permit
voting of the securities if, in the Adviser's judgment, a material
event requiring a shareholder vote would otherwise occur before
the loan was repaid. In the event of bankruptcy or other default
of the borrower, It could experience both delays in liquidating
the loan collateral or recovering the loaned securities and
losses, including (a) possible decline in the value of the
collateral or in the value of the securities loaned during the
period while it seeks to enforce its rights thereto, (b) possible
subnormal levels of income and lack of access to income during
this period, and (c) expenses of enforcing its rights. Growth
Investor Portfolio did not loan portfolio securities during the
fiscal year ended Sept. 30, 1997 nor does it currently intend to
loan more than 5% of its net assets.

Repurchase Agreements

Growth Investor Portfolio may invest in repurchase
agreements, provided that it will not invest more than 15% of net
assets in repurchase agreements maturing in more than seven days
and any other illiquid securities. A repurchase agreement is a
sale of securities to Growth Investor Portfolio in which the
seller agrees to repurchase the securities at a higher price,
which includes an amount representing interest on the purchase
price, within a specified time. In the event of bankruptcy of the
seller, Growth Investor Portfolio could experience both losses and
delays in liquidating its collateral.

When-Issued and Delayed-Delivery Securities; Reverse Repurchase
Agreements

Growth Investor Portfolio may purchase securities on a when-
issued or delayed-delivery basis. Although the payment and
interest terms of these securities are established at the time
Growth Investor Portfolio enters into the commitment, the
securities may be delivered and paid for a month or more after the
date of purchase, when their value may have changed. Growth
Investor Portfolio makes such commitments only with the intention
of actually acquiring the securities, but may sell the securities
before settlement date if the Adviser deems it advisable for
investment reasons. During its last fiscal year, Growth Investor
Portfolio did not, nor does it currently intend to have,
commitments to purchase when-issued securities in excess of 5% of
its net assets.

Growth Investor Portfolio may enter into reverse repurchase
agreements with banks and securities dealers. A reverse
repurchase agreement is a repurchase agreement in which Growth
Investor Portfolio is the seller of, rather than the investor in,
securities and agrees to repurchase them at an agreed-upon time
and price. Use of a reverse repurchase agreement may be
preferable to a regular sale and later repurchase of securities
because it avoids certain market risks and transaction costs.
Growth Investor Portfolio did not enter into any reverse
repurchase agreements during the fiscal year ended Sept. 30, 1997.

At the time Growth Investor Portfolio enters into a binding
obligation to purchase securities on a when-issued basis or enters
into a reverse repurchase agreement, liquid assets (cash, U.S.
Government securities or other "high-grade" debt obligations) of
Growth Investor Portfolio having a value at least as great as the
purchase price of the securities to be purchased will be
segregated on the books of Growth Investor Portfolio and held by
the custodian throughout the period of the obligation. The use of
these investment strategies, as well as borrowing under a line of
credit as described below, may increase net asset value
fluctuation.

Short Sales "Against the Box"

Growth Investor Portfolio may sell securities short against
the box; that is, enter into short sales of securities that it
currently owns or has the right to acquire through the conversion
or exchange of other securities that it owns at no additional
cost. Growth Investor Portfolio may make short sales of
securities only if at all times when a short position is open
Growth Investor Portfolio owns at least an equal amount of such
securities or securities convertible into or exchangeable for
securities of the same issue as, and equal in amount to, the
securities sold short, at no additional cost.

In a short sale against the box, Growth Investor Portfolio
does not deliver from its portfolio the securities sold.
Instead, it borrows the securities sold short from a broker-dealer
through which the short sale is executed, and the broker-dealer
delivers such securities, on its behalf, to the purchaser of such
securities. Growth Investor Portfolio is required to pay to the
broker-dealer the amount of any dividends paid on shares sold
short. Finally, to secure its obligation to deliver to such
broker-dealer the securities sold short, it must deposit and
continuously maintain in a separate account with its custodian an
equivalent amount of the securities sold short or securities
convertible into or exchangeable for such securities at no
additional cost. Growth Investor Portfolio is said to have a
short position in the securities sold until it delivers to the
broker-dealer the securities sold. It may close out a short
position by purchasing on the open market and delivering to the
broker-dealer an equal amount of the securities sold short, rather
than by delivering portfolio securities.

Short sales may protect against the risk of losses in the
value of its portfolio securities because any unrealized losses
with respect to such portfolio securities should be wholly or
partially offset by a corresponding gain in the short position.
However, any potential gains in such portfolio securities should
be wholly or partially offset by a corresponding loss in the short
position. The extent to which such gains or losses are offset
will depend upon the amount of securities sold short relative to
the amount it owns, either directly or indirectly, and, in the
case where it owns convertible securities, changes in the
conversion premium.

Short sale transactions involve certain risks. If the price
of the security sold short increases between the time of the short
sale and the time Growth Investor Portfolio replaces the borrowed
security, it will incur a loss and if the price declines during
this period, it will realize a short-term capital gain. Any
realized short-term capital gain will be decreased, and any
incurred loss increased, by the amount of transaction costs and
any premium, dividend or interest which it may have to pay in
connection with such short sale. Certain provisions of the
Internal Revenue Code may limit the degree to which Growth
Investor Portfolio is able to enter into short sales. There is no
limitation on the amount of assets that, in the aggregate, may be
deposited as collateral for the obligation to replace securities
borrowed to effect short sales and allocated to segregated
accounts in connection with short sales. Growth Investor
Portfolio currently expects that no more than 5% of its total
assets would be involved in short sales against the box.

Rule 144A Securities

Growth Investor Portfolio may purchase securities that have
been privately placed but that are eligible for purchase and sale
under Rule 144A under the 1933 Act. That Rule permits certain
qualified institutional buyers, such as Growth Investor Portfolio,
to trade in privately placed securities that have not been
registered for sale under the 1933 Act. The Adviser, under the
supervision of the Board of Trustees, will consider whether
securities purchased under Rule 144A are illiquid and thus subject
to the restriction of investing no more than 15% of its net assets
in illiquid securities. A determination of whether a Rule 144A
security is liquid or not is a question of fact. In making this
determination, the Adviser will consider the trading markets for
the specific security, taking into account the unregistered nature
of a Rule 144A security. In addition, the Adviser could consider
the (1) frequency of trades and quotes, (2) number of dealers and
potential purchasers, (3) dealer undertakings to make a market,
and (4) nature of the security and of marketplace trades (e.g.,
the time needed to dispose of the security, the method of
soliciting offers, and the mechanics of transfer). The liquidity
of Rule 144A securities would be monitored and if, as a result of
changed conditions, it is determined that a Rule 144A security is
no longer liquid, Growth Investor Portfolio's holdings of illiquid
securities would be reviewed to determine what, if any, steps are
required to assure that it does not invest more than 15% of its
assets in illiquid securities. Investing in Rule 144A securities
could have the effect of increasing the amount of assets invested
in illiquid securities if qualified institutional buyers are
unwilling to purchase such securities. Growth Investor Portfolio
does not expect to invest as much as 5% of its total assets in
Rule 144A securities that have not been deemed to be liquid by the
Adviser.

Line of Credit

Subject to restriction (6) under Investment Restrictions in
this Statement of Additional Information, Growth Investor
Portfolio may establish and maintain a line of credit with a major
bank in order to permit borrowing on a temporary basis to meet
share redemption requests in circumstances in which temporary
borrowing may be preferable to liquidation of portfolio
securities.

Interfund Borrowing and Lending Program

Pursuant to an exemptive order issued by the Securities and
Exchange Commission, Growth Investor Portfolio has received
permission to lend money to, and borrow money from, other mutual
funds advised by the Adviser. Growth Investor Portfolio will
borrow through the program when borrowing is necessary and
appropriate and the costs are equal to or lower than the costs of
bank loans.

Portfolio Turnover

Although Growth Investor Portfolio does not purchase
securities with a view to rapid turnover, there are no limitations
on the length of time that portfolio securities must be held.
Portfolio turnover can occur for a number of reasons such as
general conditions in the securities markets, more favorable
investment opportunities in other securities, or other factors
relating to the desirability of holding or changing a portfolio
investment. Growth Investor Portfolio may have greater portfolio
turnover than that of a mutual funds that have the primary
objectives of income or maintenance of a balanced investment
position. The future turnover rate may vary greatly from year to
year. A high rate of portfolio turnover, if it should occur,
would result in increased transaction expenses, which must be
borne by Growth Investor Portfolio. High portfolio turnover may
also result in the realization of capital gains or losses and, to
the extent net short-term capital gains are realized, any
distributions resulting from such gains will be considered
ordinary income for federal income tax purposes. (See Risks and
Investment Considerations and Distributions and Income Taxes in
the Prospectus, and Additional Income Tax Considerations in this
Statement of Additional Information.)

Options on Securities and Indexes

Growth Investor Portfolio may purchase and sell put options
and call options on securities, indexes or foreign currencies in
standardized contracts traded on recognized securities exchanges,
boards of trade, or similar entities, or quoted on Nasdaq. Growth
Investor Portfolio may purchase agreements, sometimes called cash
puts, that may accompany the purchase of a new issue of bonds from
a dealer.

An option on a security (or index) is a contract that gives
the purchaser (holder) of the option, in return for a premium, the
right to buy from (call) or sell to (put) the seller (writer) of
the option the security underlying the option (or the cash value
of the index) at a specified exercise price at any time during the
term of the option (normally not exceeding nine months). The
writer of an option on an individual security or on a foreign
currency has the obligation upon exercise of the option to deliver
the underlying security or foreign currency upon payment of the
exercise price or to pay the exercise price upon delivery of the
underlying security or foreign currency. Upon exercise, the
writer of an option on an index is obligated to pay the difference
between the cash value of the index and the exercise price
multiplied by the specified multiplier for the index option. (An
index is designed to reflect specified facets of a particular
financial or securities market, a specific group of financial
instruments or securities, or certain economic indicators.)

Growth Investor Portfolio will write call options and put
options only if they are "covered." For example, in the case of a
call option on a security, the option is "covered" if Growth
Investor Portfolio owns the security underlying the call or has an
absolute and immediate right to acquire that security without
additional cash consideration (or, if additional cash
consideration is required, cash or cash equivalents in such amount
are held in a segregated account by its custodian) upon conversion
or exchange of other securities held in its portfolio.

If an option written by Growth Investor Portfolio expires, it
realizes a capital gain equal to the premium received at the time
the option was written. If an option purchased by Growth Investor
Portfolio expires, it realizes a capital loss equal to the premium
paid.

Prior to the earlier of exercise or expiration, an option may
be closed out by an offsetting purchase or sale of an option of
the same series (type, exchange, underlying security or index,
exercise price, and expiration). There can be no assurance,
however, that a closing purchase or sale transaction can be
effected when it is desired.

Growth Investor Portfolio will realize a capital gain from a
closing purchase transaction if the cost of the closing option is
less than the premium received from writing the option, or, if it
is more, it will realize a capital loss. If the premium received
from a closing sale transaction is more than the premium paid to
purchase the option, Growth Investor Portfolio will realize a
capital gain or, if it is less, it will realize a capital loss.
The principal factors affecting the market value of a put or a
call option include supply and demand, interest rates, the current
market price of the underlying security or index in relation to
the exercise price of the option, the volatility of the underlying
security or index, and the time remaining until the expiration
date.

A put or call option purchased by Growth Investor Portfolio
is an asset of the Portfolio, valued initially at the premium paid
for the option. The premium received for an option written by
Growth Investor Portfolio is recorded as a deferred credit. The
value of an option purchased or written is marked-to-market daily
and is valued at the closing price on the exchange on which it is
traded or, if not traded on an exchange or no closing price is
available, at the mean between the last bid and asked prices.

Risks Associated with Options on Securities and Indexes.
There are several risks associated with transactions in options.
For example, there are significant differences between the
securities markets, the currency markets, and the options markets
that could result in an imperfect correlation between these
markets, causing a given transaction not to achieve its
objectives. A decision as to whether, when and how to use options
involves the exercise of skill and judgment, and even a well-
conceived transaction may be unsuccessful to some degree because
of market behavior or unexpected events.

There can be no assurance that a liquid market will exist
when Growth Investor Portfolio seeks to close out an option
position. If it were unable to close out an option that it had
purchased on a security, it would have to exercise the option in
order to realize any profit or the option would expire and become
worthless. If it were unable to close out a covered call option
that it had written on a security, it would not be able to sell
the underlying security until the option expired. As the writer
of a covered call option on a security, it foregoes, during the
option's life, the opportunity to profit from increases in the
market value of the security covering the call option above the
sum of the premium and the exercise price of the call.

If trading were suspended in an option purchased or written
by Growth Investor Portfolio, it would not be able to close out
the option. If restrictions on exercise were imposed, it might be
unable to exercise an option it has purchased.

Futures Contracts and Options on Futures Contracts

Growth Investor Portfolio may use interest rate futures
contracts, index futures contracts, and foreign currency futures
contracts. An interest rate, index or foreign currency futures
contract provides for the future sale by one party and purchase by
another party of a specified quantity of a financial instrument or
the cash value of an index /2/ at a specified price and time. A
public market exists in futures contracts covering a number of
indexes (including, but not limited to: the Standard & Poor's 500
Index, the Value Line Composite Index, and the New York Stock
Exchange Composite Index) as well as financial instruments
(including, but not limited to: U.S. Treasury bonds, U.S. Treasury
notes, Eurodollar certificates of deposit, and foreign
currencies). Other index and financial instrument futures
contracts are available and it is expected that additional futures
contracts will be developed and traded.
- --------
/2/ A futures contract on an index is an agreement pursuant to
which two parties agree to take or make delivery of an amount of
cash equal to the difference between the value of the index at the
close of the last trading day of the contract and the price at
which the index contract was originally written. Although the
value of a securities index is a function of the value of certain
specified securities, no physical delivery of those securities is
made.
- --------

Growth Investor Portfolio may purchase and write call and put
futures options. Futures options possess many of the same
characteristics as options on securities, indexes and foreign
currencies (discussed above). A futures option gives the holder
the right, in return for the premium paid, to assume a long
position (call) or short position (put) in a futures contract at a
specified exercise price at any time during the period of the
option. Upon exercise of a call option, the holder acquires a
long position in the futures contract and the writer is assigned
the opposite short position. In the case of a put option, the
opposite is true. Growth Investor Portfolio might, for example,
use futures contracts to hedge against or gain exposure to
fluctuations in the general level of stock prices, anticipated
changes in interest rates or currency fluctuations that might
adversely affect either the value of its securities or the price
of the securities that it intends to purchase. Although other
techniques could be used to reduce or increase exposure to stock
price, interest rate and currency fluctuations, Growth Investor
Portfolio may be able to achieve its exposure more effectively and
perhaps at a lower cost by using futures contracts and futures
options.

Growth Investor Portfolio will only enter into futures
contracts and futures options that are standardized and traded on
an exchange, board of trade, or similar entity, or quoted on an
automated quotation system.

The success of any futures transaction depends on the Adviser
correctly predicting changes in the level and direction of stock
prices, interest rates, currency exchange rates and other factors.
Should those predictions be incorrect, Growth Investor Portfolio's
return might have been better had the transaction not been
attempted; however, in the absence of the ability to use futures
contracts, the Adviser might have taken portfolio actions in
anticipation of the same market movements with similar investment
results but, presumably, at greater transaction costs.

When a purchase or sale of a futures contract is made by
Growth Investor Portfolio, it is required to deposit with its
custodian (or broker, if legally permitted) a specified amount of
cash or U.S. Government securities or other securities acceptable
to the broker ("initial margin"). The margin required for a
futures contract is set by the exchange on which the contract is
traded and may be modified during the term of the contract. The
initial margin is in the nature of a performance bond or good
faith deposit on the futures contract, which is returned to Growth
Investor Portfolio upon termination of the contract, assuming all
contractual obligations have been satisfied. Growth Investor
Portfolio expects to earn interest income on its initial margin
deposits. A futures contract held is valued daily at the official
settlement price of the exchange on which it is traded. Each day
Growth Investor Portfolio pays or receives cash, called "variation
margin," equal to the daily change in value of the futures
contract. This process is known as "marking-to-market."
Variation margin paid or received by Growth Investor Portfolio
does not represent a borrowing or loan by it but is instead
settlement between it and the broker of the amount one would owe
the other if the futures contract had expired at the close of the
previous day. In computing daily net asset value, Growth Investor
Portfolio will mark-to-market its open futures positions.

Growth Investor Portfolio is also required to deposit and
maintain margin with respect to put and call options on futures
contracts written by it. Such margin deposits will vary depending
on the nature of the underlying futures contract (and the related
initial margin requirements), the current market value of the
option, and other futures positions held.

Although some futures contracts call for making or taking
delivery of the underlying securities, usually these obligations
are closed out prior to delivery by offsetting purchases or sales
of matching futures contracts (same exchange, underlying security
or index, and delivery month). If an offsetting purchase price is
less than the original sale price, Growth Investor Portfolio
engaging in the transaction realizes a capital gain, or if it is
more, it realizes a capital loss. Conversely, if an offsetting
sale price is more than the original purchase price, it realizes a
capital gain, or if it is less, it realizes a capital loss. The
transaction costs must also be included in these calculations.

Risks Associated with Futures

There are several risks associated with the use of futures
contracts and futures options. A purchase or sale of a futures
contract may result in losses in excess of the amount invested in
the futures contract. In trying to increase or reduce market
exposure, there can be no guarantee that there will be a
correlation between price movements in the futures contract and in
the portfolio exposure sought. In addition, there are significant
differences between the securities and futures markets that could
result in an imperfect correlation between the markets, causing a
given transaction not to achieve its objectives. The degree of
imperfection of correlation depends on circumstances such as:
variations in speculative market demand for futures, futures
options and the related securities, including technical influences
in futures and futures options trading and differences between the
securities market and the securities underlying the standard
contracts available for trading. For example, in the case of
index futures contracts, the composition of the index, including
the issuers and the weighting of each issue, may differ from the
composition of the investment portfolio, and, in the case of
interest rate futures contracts, the interest rate levels,
maturities, and creditworthiness of the issues underlying the
futures contract may differ from the financial instruments held in
the investment portfolio. A decision as to whether, when and how
to use futures contracts involves the exercise of skill and
judgment, and even a well-conceived transaction may be
unsuccessful to some degree because of market behavior or
unexpected stock price or interest rate trends.

Futures exchanges may limit the amount of fluctuation
permitted in certain futures contract prices during a single
trading day. The daily limit establishes the maximum amount that
the price of a futures contract may vary either up or down from
the previous day's settlement price at the end of the current
trading session. Once the daily limit has been reached in a
futures contract subject to the limit, no more trades may be made
on that day at a price beyond that limit. The daily limit governs
only price movements during a particular trading day and therefore
does not limit potential losses because the limit may work to
prevent the liquidation of unfavorable positions. For example,
futures prices have occasionally moved to the daily limit for
several consecutive trading days with little or no trading,
thereby preventing prompt liquidation of positions and subjecting
some holders of futures contracts to substantial losses. Stock
index futures contracts are not normally subject to such daily
price change limitations.

There can be no assurance that a liquid market will exist at
a time when Growth Investor Portfolio seeks to close out a futures
or futures option position. Growth Investor Portfolio would be
exposed to possible loss on the position during the interval of
inability to close, and would continue to be required to meet
margin requirements until the position is closed. In addition,
many of the contracts discussed above are relatively new
instruments without a significant trading history. As a result,
there can be no assurance that an active secondary market will
develop or continue to exist.

Limitations on Options and Futures

If other options, futures contracts, or futures options of
types other than those described herein are traded in the future,
Growth Investor Portfolio may also use those investment vehicles,
provided the Board of Trustees determines that their use is
consistent with the investment objective.

Growth Investor Portfolio will not enter into a futures
contract or purchase an option thereon if, immediately thereafter,
the initial margin deposits for futures contracts held by it plus
premiums paid by it for open futures option positions, less the
amount by which any such positions are "in-the-money," /3/ would
exceed 5% of total assets.
- -----------
/3/ A call option is "in-the-money" if the value of the futures
contract that is the subject of the option exceeds the exercise
price. A put option is "in-the-money" if the exercise price
exceeds the value of the futures contract that is the subject of
the option.
- -----------

When purchasing a futures contract or writing a put option on
a futures contract, Growth Investor Portfolio must maintain with
its custodian (or broker, if legally permitted) cash or cash
equivalents (including any margin) equal to the market value of
such contract. When writing a call option on a futures contract,
Growth Investor Portfolio similarly will maintain with its
custodian cash or cash equivalents (including any margin) equal to
the amount by which such option is in-the-money until the option
expires or is closed out.

Growth Investor Portfolio may not maintain open short
positions in futures contracts, call options written on futures
contracts or call options written on indexes if, in the aggregate,
the market value of all such open positions exceeds the current
value of the securities in its portfolio, plus or minus unrealized
gains and losses on the open positions, adjusted for the
historical relative volatility of the relationship between the
portfolio and the positions. For this purpose, to the extent it
has written call options on specific securities in its portfolio,
the value of those securities will be deducted from the current
market value of the securities portfolio.

In order to comply with Commodity Futures Trading Commission
Regulation 4.5 and thereby avoid being deemed a "commodity pool
operator," Growth Investor Portfolio will use commodity futures or
commodity options contracts solely for bona fide hedging purposes
within the meaning and intent of Regulation 1.3(z), or, with
respect to positions in commodity futures and commodity options
contracts that do not come within the meaning and intent of
1.3(z), the aggregate initial margin and premiums required to
establish such positions will not exceed 5% of the fair market
value of the assets of Growth Investor Portfolio, after taking
into account unrealized profits and unrealized losses on any such
contracts it has entered into [in the case of an option that is
in-the-money at the time of purchase, the in-the-money amount (as
defined in Section 190.01(x) of the Commission Regulations) may be
excluded in computing such 5%].

Taxation of Options and Futures

If Growth Investor Portfolio exercises a call or put option
that it holds, the premium paid for the option is added to the
cost basis of the security purchased (call) or deducted from the
proceeds of the security sold (put). For cash settlement options
and futures options exercised by it, the difference between the
cash received at exercise and the premium paid is a capital gain
or loss.

If a call or put option written by Growth Investor Portfolio
is exercised, the premium is included in the proceeds of the sale
of the underlying security (call) or reduces the cost basis of the
security purchased (put). For cash settlement options and futures
options written by it, the difference between the cash paid at
exercise and the premium received is a capital gain or loss.

Entry into a closing purchase transaction will result in
capital gain or loss. If an option written by Growth Investor
Portfolio was in-the-money at the time it was written and the
security covering the option was held for more than the long-term
holding period prior to the writing of the option, any loss
realized as a result of a closing purchase transaction will be
long-term. The holding period of the securities covering an in-
the-money option will not include the period of time the option is
outstanding.

If Growth Investor Portfolio writes an equity call option /4/
other than a "qualified covered call option," as defined in the
Internal Revenue Code, any loss on such option transaction, to the
extent it does not exceed the unrealized gains on the securities
covering the option, may be subject to deferral until the
securities covering the option have been sold.
- --------
/4/ An equity option is defined to mean any option to buy or sell
stock, and any other option the value of which is determined by
reference to an index of stocks of the type that is ineligible to
be traded on a commodity futures exchange (e.g., an option
contract on a sub-index based on the price of nine hotel-casino
stocks). The definition of equity option excludes options on
broad-based stock indexes (such as the Standard & Poor's 500
index).
- --------

A futures contract held until delivery results in capital
gain or loss equal to the difference between the price at which
the futures contract was entered into and the settlement price on
the earlier of delivery notice date or expiration date. If Growth
Investor Portfolio delivers securities under a futures contract,
it also realizes a capital gain or loss on those securities.

For federal income tax purposes, Growth Investor Portfolio
generally is required to recognize as income for each taxable year
its net unrealized gains and losses as of the end of the year on
futures, futures options and non-equity options positions ("year-
end mark-to-market"). Generally, any gain or loss recognized with
respect to such positions (either by year-end mark-to-market or by
actual closing of the positions) is considered to be 60% long-term
and 40% short-term, without regard to the holding periods of the
contracts. However, in the case of positions classified as part
of a "mixed straddle," the recognition of losses on certain
positions (including options, futures and futures options
positions, the related securities and certain successor positions
thereto) may be deferred to a later taxable year. Sale of futures
contracts or writing of call options (or futures call options) or
buying put options (or futures put options) that are intended to
hedge against a change in the value of securities held: (1) will
affect the holding period of the hedged securities; and (2) may
cause unrealized gain or loss on such securities to be recognized
upon entry into the hedge.

If Growth Investor Portfolio were to enter into a short index
future, short index futures option or short index option position
and its portfolio were deemed to "mimic" the performance of the
index underlying such contract, the option or futures contract
position and its stock positions would be deemed to be positions
in a mixed straddle, subject to the above-mentioned loss deferral
rules.

In order for Growth Investor Portfolio to continue to qualify
for federal income tax treatment as a regulated investment
company, at least 90% of its gross income for a taxable year must
be derived from qualifying income; i.e., dividends, interest,
income derived from loans of securities, and gains from the sale
of securities or foreign currencies, or other income (including
but not limited to gains from options, futures, or forward
contracts). Any net gain realized from futures (or futures
options) contracts will be considered gain from the sale of
securities and therefore be qualifying income for purposes of the
90% requirement.

Young Investor Fund distributes to shareholders annually any
net capital gains that have been recognized for federal income tax
purposes (including year-end mark-to-market gains) on options and
futures transactions. Such distributions are combined with
distributions of capital gains realized on its other investments,
and shareholders are advised of the nature of the payments.

The Taxpayer Relief Act of 1997 (the "Act") imposed
constructive sale treatment for federal income tax purposes on
certain hedging strategies with respect to appreciated securities.
Under these rules, taxpayers will recognize gain, but not loss,
with respect to securities if they enter into short sales of
"offsetting notional principal contracts" (as defined by the Act)
or futures or "forward contracts" (as defined by the Act) with
respect to the same or substantially identical property, or if
they enter into such transactions and then acquire the same or
substantially identical property. These changes generally apply
to constructive sales after June 8, 1997. Furthermore, the
Secretary of the Treasury is authorized to promulgate regulations
that will treat as constructive sales certain transactions that
have substantially the same effect as short sales, offsetting
notional principal contracts, and futures or forward contracts to
deliver the same or substantially similar property.

INVESTMENT RESTRICTIONS

Young Investor Fund and Growth Investor Portfolio operate
under the following investment restrictions. The may not:

(1) with respect to 75% of its total assets, invest more than
5% of its total assets, taken at market value at the time of a
particular purchase, in the securities of a single issuer, except
for securities issued or guaranteed by the U. S. Government or any
of its agencies or instrumentalities or repurchase agreements for
such securities, and [Young Investor Fund only] except that all or
substantially all of the assets of the Fund may be invested in
another registered investment company having the same investment
objective and substantially similar investment policies as the
Fund;

(2) acquire more than 10%, taken at the time of a particular
purchase, of the outstanding voting securities of any one issuer,
[Young Investor Fund only] except that all or substantially all of
the assets of the Fund may be invested in another registered
investment company having the same investment objective and
substantially similar investment policies as the Fund;

(3) act as an underwriter of securities, except insofar as it
may be deemed an underwriter for purposes of the Securities Act of
1933 on disposition of securities acquired subject to legal or
contractual restrictions on resale, [Young Investor Fund only]
except that all or substantially all of the assets of the Fund may
be invested in another registered investment company having the
same investment objective and substantially similar investment
policies as the Fund;

(4) purchase or sell real estate (although it may purchase
securities secured by real estate or interests therein, or
securities issued by companies which invest in real estate or
interests therein), commodities, or commodity contracts, except
that it may enter into (a) futures and options on futures and (b)
forward contracts;

(5) make loans, although it may (a) lend portfolio securities
and participate in an interfund lending program with other Stein
Roe Funds and Portfolios provided that no such loan may be made
if, as a result, the aggregate of such loans would exceed 33 1/3%
of the value of its total assets (taken at market value at the
time of such loans); (b) purchase money market instruments and
enter into repurchase agreements; and (c) acquire publicly
distributed or privately placed debt securities;

(6) borrow except that it may (a) borrow for nonleveraging,
temporary or emergency purposes, (b) engage in reverse repurchase
agreements and make other borrowings, provided that the
combination of (a) and (b) shall not exceed 33 1/3% of the value
of its total assets (including the amount borrowed) less
liabilities (other than borrowings) or such other percentage
permitted by law, and (c) enter into futures and options
transactions; it may borrow from banks, other Stein Roe Funds and
Portfolios, and other persons to the extent permitted by
applicable law;

(7) invest in a security if more than 25% of its total assets
(taken at market value at the time of a particular purchase) would
be invested in the securities of issuers in any particular
industry, except that this restriction does not apply to
securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities, and [Young Investor Fund only]
except that all or substantially all of the assets of the Fund may
be invested in another registered investment company having the
same investment objective and substantially similar investment
policies as the Fund; or

(8) issue any senior security except to the extent permitted
under the Investment Company Act of 1940.

The above restrictions are fundamental policies and may not
be changed without the approval of a "majority of the outstanding
voting securities" as defined above. Young Investor Fund and
Growth Investor Portfolio are also subject to the following non-
fundamental restrictions and policies, which may be changed by the
Board of Trustees. None of the following restrictions shall
prevent Young Investor Fund from investing all or substantially
all of its assets in another investment company having the same
investment objective and substantially the same investment
policies as the Fund. Young Investor Fund and Growth Investor
Portfolio may:

(a) invest in any of the following: (i) interests in oil,
gas, or other mineral leases or exploration or development
programs (except readily marketable securities, including but not
limited to master limited partnership interests, that may
represent indirect interests in oil, gas, or other mineral
exploration or development programs); (ii) puts, calls, straddles,
spreads, or any combination thereof (except that it may enter into
transactions in options, futures, and options on futures); (iii)
shares of other open-end investment companies, except in
connection with a merger, consolidation, acquisition, or
reorganization; and (iv) limited partnerships in real estate
unless they are readily marketable;

(b) invest in companies for the purpose of exercising control
or management;

(c) purchase more than 3% of the stock of another investment
company or purchase stock of other investment companies equal to
more than 5% of its total assets (valued at time of purchase) in
the case of any one other investment company and 10% of such
assets (valued at time of purchase) in the case of all other
investment companies in the aggregate; any such purchases are to
be made in the open market where no profit to a sponsor or dealer
results from the purchase, other than the customary broker's
commission, except for securities acquired as part of a merger,
consolidation or acquisition of assets;

(d) invest more than 5% of its net assets (valued at time of
purchase) in warrants, nor more than 2% of its net assets in
warrants that are not listed on the New York or American Stock
Exchange;

(e) write an option on a security unless the option is issued
by the Options Clearing Corporation, an exchange, or similar
entity;

(f) invest more than 25% of its total assets (valued at time
of purchase) in securities of foreign issuers (other than
securities represented by American Depositary Receipts (ADRs) or
securities guaranteed by a U.S. person);

(g) purchase a put or call option if the aggregate premiums
paid for all put and call options exceed 20% of its net assets
(less the amount by which any such positions are in-the-money),
excluding put and call options purchased as closing transactions;

(h) purchase securities on margin (except for use of short-
term credits as are necessary for the clearance of transactions),
or sell securities short unless (i) it owns or has the right to
obtain securities equivalent in kind and amount to those sold
short at no added cost or (ii) the securities sold are "when
issued" or "when distributed" securities which it expects to
receive in a recapitalization, reorganization, or other exchange
for securities it contemporaneously owns or has the right to
obtain and provided that transactions in options, futures, and
options on futures are not treated as short sales;

(i) invest more than 5% of its total assets (taken at market
value at the time of a particular investment) in restricted
securities, other than securities eligible for resale pursuant to
Rule 144A under the Securities Act of 1933;

(j) invest more than 15% of its net assets (taken at market
value at the time of a particular investment) in illiquid
securities, including repurchase agreements maturing in more than
seven days.

ADDITIONAL INVESTMENT CONSIDERATIONS

The Adviser seeks to provide superior long-term investment
results through a disciplined, research-intensive approach to
investment selection and prudent risk management. In working to
build wealth for generations it has been guided by three primary
objectives which it believes are the foundation of a successful
investment program. These objectives are preservation of capital,
limited volatility through managed risk, and consistent above-
average returns as appropriate for the particular client or
managed account. Because every investor's needs are different,
Stein Roe mutual funds are designed to accommodate different
investment objectives, risk tolerance levels, and time horizons.
In selecting a mutual fund, investors should ask the following
questions:

What are my investment goals?
It is important to a choose a fund that has investment objectives
compatible with your investment goals.

What is my investment time frame?
If you have a short investment time frame (e.g., less than three
years), a mutual fund that seeks to provide a stable share price,
such as a money market fund, or one that seeks capital
preservation as one of its objectives may be appropriate. If you
have a longer investment time frame, you may seek to maximize your
investment returns by investing in a mutual fund that offers
greater yield or appreciation potential in exchange for greater
investment risk.

What is my tolerance for risk?
All investments, including those in mutual funds, have risks which
will vary depending on investment objective and security type.
However, mutual funds seek to reduce risk through professional
investment management and portfolio diversification.

In general, equity mutual funds emphasize long-term capital
appreciation and tend to have more volatile net asset values than
bond or money market mutual funds. Although there is no guarantee
that they will be able to maintain a stable net asset value of
$1.00 per share, money market funds emphasize safety of principal
and liquidity, but tend to offer lower income potential than bond
funds. Bond funds tend to offer higher income potential than
money market funds but tend to have greater risk of principal and
yield volatility.

In addition, the Adviser believes that investment in a high
yield fund provides an opportunity to diversify an investment
portfolio because the economic factors that affect the performance
of high-yield, high-risk debt securities differ from those that
affect the performance of high quality debt securities or equity
securities.

PURCHASES AND REDEMPTIONS

Purchases and redemptions are discussed in the Prospectus
under the headings How to Purchase Shares, How to Redeem Shares,
Net Asset Value, and Shareholder Services, and that information is
incorporated herein by reference. The Prospectus discloses that
you may purchase (or redeem) shares through investment dealers,
banks, or other institutions. It is the responsibility of any
such institution to establish procedures insuring the prompt
transmission to Investment Trust of any such purchase order. The
state of Texas has asked that Investment Trust disclose in its
Statement of Additional Information, as a reminder to any such
bank or institution, that it must be registered as a securities
dealer in Texas.

The net asset value of Young Investor Fund is determined on
days on which the New York Stock Exchange (the "NYSE") is open for
trading. The NYSE is regularly closed on Saturdays and Sundays
and on New Year's Day, the third Monday in Jan., the third Monday
in Feb., Good Friday, the last Monday in May, Independence Day,
Labor Day, Thanksgiving, and Christmas. If one of these holidays
falls on a Saturday or Sunday, the NYSE will be closed on the
preceding Friday or the following Monday, respectively. Net asset
value will not be determined on days when the NYSE is closed
unless, in the judgment of the Board of Trustees, net asset value
of Young Investor Fund should be determined on any such day, in
which case the determination will be made at 3:00 p.m., Chicago
time.

Investment Trust intends to pay all redemptions in cash and
is obligated to redeem shares solely in cash up to the lesser of
$250,000 or one percent of the net assets of Investment Trust
during any 90-day period for any one shareholder. However,
redemptions in excess of such limit may be paid wholly or partly
by a distribution in kind of securities. If redemptions were made
in kind, the redeeming shareholders might incur transaction costs
in selling the securities received in the redemptions.

Investment Trust reserves the right to suspend or postpone
redemptions of shares during any period when: (a) trading on the
NYSE is restricted, as determined by the Securities and Exchange
Commission, or the NYSE is closed for other than customary weekend
and holiday closings; (b) the Securities and Exchange Commission
has by order permitted such suspension; or (c) an emergency, as
determined by the Securities and Exchange Commission, exists,
making disposal of portfolio securities or valuation of net assets
not reasonably practicable.

MANAGEMENT

The following table sets forth certain information with
respect to the trustees and officers of Investment Trust:

<TABLE>
<CAPTION>
POSITION(S) HELD WITH PRINCIPAL OCCUPATION(S)
NAME AGE INVESTMENT TRUST DURING PAST FIVE YEARS
<S> <C> <C> <C>

William D. Andrews 50 Executive Vice-President Executive vice president of Stein Roe & Farnham
(4) Incorporated (the "Adviser")

Gary A. Anetsberger (4) 42 Senior Vice-President Chief
financial officer of the Mutual Funds division of the Adviser;
senior vice president of the Adviser since Apr. 1996; vice
president of the Adviser prior thereto

Timothy K. Armour (1)(2) (4) 49 President; Trustee
President of the Mutual Funds division of the Adviser and director
of the Adviser

Jilaine Hummel Bauer (4) 42 Executive Vice-President;
Secretary General counsel and secretary (since Nov. 1995) and
senior vice president of the Adviser

Bruno Bertocci 43 Vice-President Vice president of
Colonial Management Associates, Inc. since Jan. 1996; senior vice
president of the Adviser since May, 1995; global equity portfolio
manager with Rockefeller & Co. prior thereto

William W. Boyd (2)(3)(4) 71 Trustee Chairman and
director of Sterling Plumbing Group, Inc. (manufacturer of
plumbing products)

David P. Brady 33 Vice-President Vice president of the
Adviser since Nov. 1995; portfolio manager for the Adviser since
1993; equity investment analyst, State Farm Mutual Automobile
Insurance Company prior thereto

Thomas W. Butch 41 Executive Vice-President Senior
vice president of the Adviser since Sept. 1994; first vice
president, corporate communications, of Mellon Bank Corporation
prior thereto

Daniel K. Cantor 33 Vice-President Senior vice
president of the Adviser

Lindsay Cook (1)(4) 45 Trustee Executive vice
president of Liberty Financial Companies, Inc. (the indirect
parent of the Adviser) since Mar. 1997; senior vice president
prior thereto

Philip J. Crosley 51 Vice-President Senior vice
president of the Adviser since Feb. 1996; vice president,
institutional sales-Advisor Sales, Invesco Funds Group prior
thereto

Erik P. Gustafson 34 Vice-President Senior portfolio
manager of the Adviser; senior vice president of the Adviser since
Apr. 1996; vice president of the Adviser from May, 1994 to Apr.
1996; associate of the Adviser prior thereto

Douglas A. Hacker (3)(4) 42 Trustee Senior vice
president and chief financial officer of United Airlines, since
July, 1994; senior vice president, finance, United Airlines, Feb.
1993 to July, 1994; vice president, American Airlines prior
thereto

Loren A. Hansen (4) 49 Executive Vice-President
Executive vice president of the Adviser since Dec., 1995; vice
president of The Northern Trust (bank) prior thereto

David P. Harris 33 Vice-President Vice president of
Colonial Management Associates, Inc. since Jan. 1996; vice
president of the Adviser since May, 1995; global equity portfolio
manager with Rockefeller & Co. prior thereto

Harvey B. Hirschhorn 48 Vice-President Executive vice
president, senior portfolio manager, and chief economist and
investment strategist of the Adviser; director of research of the
Adviser, 1991 to 1995

Janet Langford Kelly (3)(4) 40 Trustee Senior vice
president, secretary and general counsel of Sara Lee Corporation
(branded, packaged, consumer-products manufacturer), since 1995;
partner, Sidley & Austin (law firm) prior thereto

Eric S. Maddix 34 Vice-President Vice president of the
Adviser since Nov. 1995; portfolio manager or research assistant
for the Adviser since 1987

Lynn C. Maddox 57 Vice-President Senior vice president
of the Adviser

Anne E. Marcel 40 Vice-President Vice president of the
Adviser since Apr. 1996; manager, mutual fund sales & services of
the Adviser since Oct., 1994; supervisor of the Counselor
Department of the Adviser prior thereto

John S. McLandsborough 30 Vice-President Portfolio
manager for the Adviser since Apr., 1996; securities analyst, CS
First Boston from June, 1993 to Dec., 1995; securities analyst,
National City Bank of Cleveland from Nov., 1992 to June, 1993

Arthur J. McQueen 39 Vice-President Senior vice
president of the Adviser

Charles R. Nelson (3)(4) 55 Trustee Van Voorhis
Professor of Political Economy, Department of Economics of the
University of Washington

Nicolette D. Parrish (4) 48 Vice-President; Assistant
Secretary Senior compliance administrator and assistant
secretary of the Adviser since Nov. 1995; senior legal assistant
for the Adviser prior thereto

Richard B. Peterson 57 Vice-President Senior vice
president of the Adviser

Sharon R. Robertson (4) 36 Controller Accounting
manager for the Adviser's Mutual Funds division

Janet B. Rysz (4) 42 Assistant Secretary Senior
compliance administrator and assistant secretary of the Adviser

M. Gerard Sandel 43 Vice-President Senior vice
president of the Adviser since July, 1997; vice president of M&I
Investment Management Corporation from Oct. 1993 to June, 1997;
vice president of Acorn Asset Management Corporation prior thereto

Gloria J. Santella 40 Vice-President Senior vice
president of the Adviser since Nov. 1995; vice president of the
Adviser prior thereto

Thomas C. Theobald (3) (4) 60 Trustee Managing
director, William Blair Capital Partners (private equity fund)
since 1994; chief executive officer and chairman of the Board of
Directors of Continental Bank Corporation, 1987-1994

Scott E. Volk (4) 26 Treasurer Financial reporting
manager for the Adviser's Mutual Funds division since Oct. 1997;
senior auditor with Ernst & Young LLP from Sept. 1993 to Apr. 1996
and from Oct. 1996 to Sept. 1997; financial analyst with John
Nuveen & Company Inc. from May 1996 to Sept. 1996; full-time
student prior to Sept. 1993

Heidi J. Walter (4) 30 Vice-President Legal counsel
for the Adviser since Mar. 1995; associate with Beeler Schad &
Diamond, PC (law firm) prior thereto

Stacy H. Winick (4) 32 Vice-President Senior legal
counsel for the Adviser since Oct. 1996; associate of Bell, Boyd &
Lloyd (law firm), June, 1993 to Sept. 1996; associate of Debevoise
& Plimpton (law firm) prior thereto

Hans P. Ziegler (4) 56 Executive Vice-President Chief
executive officer of the Adviser since May, 1994; president of the
Investment Counsel division of the Adviser from July, 1993 to
June, 1994; president and chief executive officer, Pitcairn
Financial Management Group prior thereto

Margaret O. Zwick (4) 31 Assistant Treasurer Project
manager for the Adviser's Mutual Funds division since Apr. 1997;
compliance manager from Aug. 1995 to Apr. 1997; compliance
accountant, Jan. 1995 to July 1995; section manager, Jan. 1994 to
Jan. 1995; supervisor prior thereto
_________________________
(1) Trustee who is an "interested person" of Investment Trust and
of the Adviser, as defined in the Investment Company Act of
1940.
(2) Member of the Executive Committee of the Board of Trustees,
which is authorized to exercise all powers of the Board with
certain statutory exceptions.
(3) Member of the Audit Committee of the Board, which makes
recommendations to the Board regarding the selection of
auditors and confers with the auditors regarding the scope and
results of the audit.
(4) This person holds the corresponding officer or trustee
position with Base Trust.

Certain of the trustees and officers of Investment Trust and
Base Trust are trustees or officers of other investment companies
managed by the Adviser. The address of Mr. Boyd is 2900 Golf Road,
Rolling Meadows, Illinois 60008; that of Mr. Cook is 600 Atlantic
Avenue, Boston, Massachusetts 02210; that of Mr. Hacker is P.O.
Box 66100, Chicago, IL 60666; that of Ms. Kelly is Three First
National Plaza, Chicago, Illinois 60602; that of Mr. Nelson is
Department of Economics, University of Washington, Seattle,
Washington 98195; that of Mr. Theobald is Suite 3300, 222 West
Adams Street, Chicago, IL 60606; that of Messrs. Bertocci, Cantor,
and Harris is 1330 Avenue of the Americas, New York, New York
10019; and that of the other officers is One South Wacker Drive,
Chicago, Illinois 60606.

Officers and trustees affiliated with the Adviser serve
without any compensation from Investment Trust. In compensation
for their services to Investment Trust, trustees who are not
"interested persons" of Investment Trust or the Adviser are paid
an annual retainer of $8,000 (divided equally among the series of
Investment Trust) plus an attendance fee from each series for each
meeting of the Board or standing committee thereof attended at
which business for that series is conducted. The attendance fees
(other than for a Nominating Committee or Compensation Committee
meeting) are based on each series' net assets as of the preceding
Dec. 31. For a series with net assets of less than $50 million,
the fee is $50 per meeting; with $51 to $250 million, the fee is
$200 per meeting; with $251 million to $500 million, $350; with
$501 million to $750 million, $500; with $751 million to $1
billion, $650; and with over $1 billion in net assets, $800. For
a series participating in the master fund/feeder fund structure,
the trustees' attendance fees are paid solely by the master
portfolio. Each non-interested trustee also receives $500 from
Investment Trust for attending each meeting of the Nominating
Committee or Compensation Committee. Investment Trust has no
retirement or pension plan. The following table sets forth
compensation paid by Investment Trust during the fiscal year ended
Sept. 30, 1997 to each of the trustees:

Aggregate
Name of Compensation Total Compensation from
Trustee from Investment Trust the Stein Roe Fund Complex*
- ---------------- --------------------- ---------------------------
Timothy K. Armour -0- -0-
Lindsay Cook -0- -0-
Douglas A. Hacker $21,926 $90,643
Janet Langford Kelly 17,650 77,500
William W. Boyd 22,426 92,643
Charles R. Nelson 22,426 92,643
Thomas C. Theobald 21,926 90,643
Kenneth L. Block** 21,076 84,743
Francis W. Morley** 21,926 90,993
_______________
* At Sept. 30, 1997, the Stein Roe Fund Complex consisted of ten
series of Investment Trust, seven series of Stein Roe Advisor
Trust, six series of Stein Roe Income Trust, four series of
Stein Roe Municipal Trust, one series of Stein Roe
Institutional Trust, one series of Stein Roe Trust, and nine
series of Base Trust.
** Messrs. Block and Morley retired as trustees of Dec. 31, 1997.

FINANCIAL STATEMENTS

Please refer to the Sept. 30, 1997 Financial Statements
(balance sheets and schedules of investments as of Sept. 30, 1997
and the statements of operations, changes in net assets, and notes
thereto) and the report of independent public accountants
contained in the Sept. 30, 1997 Annual Report of Young Investor
Fund. The Financial Statements and the report of independent
public accountants (but no other material from the Annual Report )
are incorporated herein by reference. The Annual Report may be
obtained at no charge by telephoning 800-338-2550.

PRINCIPAL SHAREHOLDERS

As of Dec. 31, 1997, the only persons known by Investment
Trust to own of record or "beneficially" 5% or more of the
outstanding shares of Young Investor Fund within the definition of
that term as contained in Rule 13d-3 under the Securities Exchange
Act of 1934 were as follows:

NAME AND ADDRESS APPROXIMATE % OF
OUTSTANDING
SHARES HELD
- ---------------------- -----------------
First Bank National Association*
410 N. Michigan Avenue
Chicago, IL 60611

Charles Schwab & Co., Inc.*
Attn: Mutual Fund Dept.
101 Montgomery Street
San Francisco, CA 94104
____________________________________
*Shares held of record, but not beneficially.

The following table shows shares of Young Investor Fund held
by the categories of persons indicated as of Dec. 31, 1997, and in
each case the approximate percentage of outstanding shares
represented:

Clients of the Adviser Trustees and
in their Client Accounts* Officers
------------------------ -------------------
Shares Held Percent Shares Held Percent
----------- ------- ----------- -------
**
_________________________
*The Adviser may have discretionary authority over such shares
and, accordingly, they could be deemed to be owned "beneficially"
by the Adviser under Rule 13d-3. However, the Adviser disclaims
actual beneficial ownership of such shares.
**Represents less than 1% of the outstanding shares.

INVESTMENT ADVISORY SERVICES

Stein Roe & Farnham Incorporated provides investment
management services to Growth Investor Portfolio and
administrative services to Young Investor Fund. The Adviser is a
wholly owned subsidiary of SteinRoe Services Inc. ("SSI"), Young
Investor Fund's transfer agent, which is a wholly owned subsidiary
of Liberty Financial Companies, Inc. ("Liberty Financial"), which
is a majority owned subsidiary of LFC Holdings, Inc., which is a
wholly owned subsidiary of Liberty Mutual Equity Corporation,
which is a wholly owned subsidiary of Liberty Mutual Insurance
Company. Liberty Mutual Insurance Company is a mutual insurance
company, principally in the property/casualty insurance field,
organized under the laws of Massachusetts in 1912.

The directors of the Adviser are Kenneth R. Leibler, Harold
W. Cogger, C. Allen Merritt, Jr., Timothy K. Armour, and Hans P.
Ziegler. Mr. Leibler is President and Chief Executive Officer of
Liberty Financial; Mr. Cogger is Executive Vice President of
Liberty Financial; Mr. Merritt is Executive Vice President and
Treasurer of Liberty Financial; Mr. Armour is President of the
Adviser's Mutual Funds division; and Mr. Ziegler is Chief
Executive Officer of the Adviser. The business address of Messrs.
Leibler, Cogger, and Merritt is Federal Reserve Plaza, Boston,
Massachusetts 02210; and that of Messrs. Armour, and Ziegler is
One South Wacker Drive, Chicago, Illinois 60606.

The Adviser and its predecessor have been providing
investment advisory services since 1932. The Adviser acts as
investment adviser to wealthy individuals, trustees, pension and
profit sharing plans, charitable organizations, and other
institutional investors. As of Sept. 30, 1997, the Adviser
managed over $29 billion in assets: over $5 billion in equities
and over $17 billion in fixed income securities (including $1.7
billion in municipal securities). The $29 billion in managed
assets included over $7 billion held by open-end mutual funds
managed by the Adviser (approximately 15% of the mutual fund
assets were held by clients of the Adviser). These mutual funds
were owned by over 265,000 shareholders. The $7 billion in mutual
fund assets included over $728 million in over 42,000 IRA
accounts. In managing those assets, the Adviser utilizes a
proprietary computer-based information system that maintains and
regularly updates information for approximately 9,000 companies.
The Adviser also monitors over 1,400 issues via a proprietary
credit analysis system. At Sept. 30, 1997, the Adviser employed
16 research analysts and 55 account managers. The average
investment-related experience of these individuals was 24 years.

Stein Roe Counselor [service mark] and Stein Roe Personal
Counselor [service mark] are professional investment advisory
services offered to Fund shareholders. Each is designed to help
shareholders construct Fund investment portfolios to suit their
individual needs. Based on information shareholders provide about
their financial circumstances, goals, and objectives in response
to a questionnaire, the Adviser's investment professionals create
customized portfolio recommendations for investments in the mutual
funds managed by the Adviser. Shareholders participating in Stein
Roe Counselor [service mark] are free to self direct their
investments while considering the Adviser's recommendations;
shareholders participating in Stein Roe Personal Counselor
[service mark] enjoy the added benefit of having the Adviser
implement portfolio recommendations automatically for a fee of 1%
or less, depending on the size of their portfolios. In addition
to reviewing shareholders' circumstances, goals, and objectives
periodically and updating portfolio recommendations to reflect any
changes, the shareholders who participate in these programs are
assigned a dedicated Counselor [service mark] representative.
Other distinctive services include specially designed account
statements with portfolio performance and transaction data,
newsletters, and regular investment, economic, and market updates.
A $50,000 minimum investment is required to participate in either
program.

Please refer to the descriptions of the Adviser, management
agreement, administrative agreement, fees, expense limitations,
and transfer agency services under Fee Table and Management in the
Prospectus, which are incorporated herein by reference. The table
below shows gross fees paid for the three most recent fiscal years
and any expense reimbursements by the Adviser:

YEAR YEAR YEAR
TYPE OF ENDED ENDED ENDED
FUND PAYMENT 9/30/97 9/30/96 9/30/95
- ------------- ------------ ---------- ---------- ----------
Young Investor
Fund Management fee $501,602 $476,810 $130,982
Administrative fee 695,027 158,937 N/A
Reimbursement 196,907 663,230 322,803
Growth Investor
Portfolio Management fee 1,567,638 N/A N/A

The Adviser provides office space and executive and other
personnel to Young Investor Fund, and bears any sales or
promotional expenses. Young Investor Fund pays all expenses other
than those paid by the Adviser, including but not limited to
printing and postage charges and securities registration and
custodian fees and expenses incidental to its organization.

The administrative agreement provides that the Adviser shall
reimburse Young Investor Fund to the extent that its total annual
expenses (including fees paid to the Adviser, but excluding taxes,
interest, commissions and other normal charges incident to the
purchase and sale of portfolio securities, and expenses of
litigation to the extent permitted under applicable state law)
exceed the applicable limits prescribed by any state in which its
shares are being offered for sale to the public; provided,
however, the Adviser is not required to reimburse Young Investor
Fund an amount in excess of fees paid by the Fund under that
agreement for such year. In addition, in the interest of further
limiting expenses of Young Investor Fund, the Adviser may
voluntarily waive its management fee and/or absorb certain
expenses, as described under Fee Table in the Prospectus. Any
such reimbursement will enhance the yield of the Fund.

Each management agreement provides that neither the Adviser,
nor any of its directors, officers, stockholders (or partners of
stockholders), agents, or employees shall have any liability to
the Trust or any shareholder of the Trust for any error of
judgment, mistake of law or any loss arising out of any
investment, or for any other act or omission in the performance by
the Adviser of its duties under the agreement, except for
liability resulting from willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from
reckless disregard by it of its obligations and duties under the
agreement.

Any expenses that are attributable solely to the
organization, operation, or business of Young Investor Fund shall
be paid solely out of its assets. Any expenses incurred by
Investment Trust that are not solely attributable to a particular
Fund are apportioned in such manner as the Adviser determines is
fair and appropriate, unless otherwise specified by the Board of
Trustees.

Bookkeeping and Accounting Agreement

Pursuant to separate agreements with Investment Trust and
Base Trust, the Adviser receives a fee for performing certain
bookkeeping and accounting services for Young Investor Fund and
Growth Investor Portfolio. For services provided to Investment
Trust, the Adviser receives an annual fee of $25,000 per Fund plus
.0025 of 1% of average net assets over $50 million. During the
fiscal years ended Sept. 30, 1995, 1996 and 1997, the Adviser
received aggregate fees of $192,479, $265,246 and $315,067,
respectively, from Investment Trust for services performed under
this Agreement.

DISTRIBUTOR

Shares of Young Investor Fund are distributed by Liberty
Financial Investments, Inc. ("Distributor") under a Distribution
Agreement as described under Management in the Prospectus, which
is incorporated herein by reference. The Distributor is a
subsidiary of Colonial Management Associates, Inc., which is an
indirect subsidiary of Liberty Financial. The Distribution
Agreement continues in effect from year to year, provided such
continuance is approved annually (i) by a majority of the trustees
or by a majority of the outstanding voting securities of
Investment Trust, and (ii) by a majority of the trustees who are
not parties to the Agreement or interested persons of any such
party. Investment Trust has agreed to pay all expenses in
connection with registration of its shares with the Securities and
Exchange Commission and auditing and filing fees in connection
with registration of its shares under the various state blue sky
laws and assumes the cost of preparation of prospectuses and other
expenses.

As agent, the Distributor offers shares to investors in
states where the shares are qualified for sale, at net asset
value, without sales commissions or other sales load to the
investor. In addition, no sales commission or "12b-1" payment is
paid by Young Investor Fund. The Distributor offers Young
Investor Fund shares only on a best-efforts basis.

TRANSFER AGENT

SSI performs certain transfer agency services for Investment
Trust, as described under Management in the Prospectus. For
performing these services, SSI receives from Young Investor Fund a
fee based on an annual rate of .22 of 1% of average net assets.
Investment Trust believes the charges by SSI to Young Investor
Fund are comparable to those of other companies performing similar
services. (See Investment Advisory Services.) Under a separate
agreement, SSI also provides certain investor accounting services
to Growth Investor Portfolio.

CUSTODIAN

State Street Bank and Trust Company (the "Bank"), 225
Franklin Street, Boston, Massachusetts 02101, is the custodian for
Investment Trust and Base Trust. It is responsible for holding
all securities and cash, receiving and paying for securities
purchased, delivering against payment securities sold, receiving
and collecting income from investments, making all payments
covering expenses, and performing other administrative duties, all
as directed by authorized persons. The Bank does not exercise any
supervisory function in such matters as purchase and sale of
portfolio securities, payment of dividends, or payment of
expenses.

Portfolio securities purchased in the U.S. are maintained in
the custody of the Bank or of other domestic banks or
depositories. Portfolio securities purchased outside of the U.S.
are maintained in the custody of foreign banks and trust companies
that are members of the Bank's Global Custody Network and foreign
depositories ("foreign sub-custodians"). Each of the domestic and
foreign custodial institutions holding portfolio securities has
been approved by the Board of Trustees in accordance with
regulations under the Investment Company Act of 1940.

Each Board of Trustees reviews, at least annually, whether it
is in the best interests of Growth Investor Portfolio and Young
Investor Fund and its shareholders to maintain assets in each of
the countries in which Growth Investor Portfolio invests with
particular foreign sub-custodians in such countries, pursuant to
contracts between such respective foreign sub-custodians and the
Bank. The review includes an assessment of the risks of holding
assets in any such country (including risks of expropriation or
imposition of exchange controls), the operational capability and
reliability of each such foreign sub-custodian, and the impact of
local laws on each such custody arrangement. Each Board of
Trustees is aided in its review by the Bank, which has assembled
the network of foreign sub-custodians utilized by Growth Investor
Portfolio, as well as by the Adviser and counsel. However, with
respect to foreign sub-custodians, there can be no assurance that
Growth Investor Portfolio, and the value of its shares, will not
be adversely affected by acts of foreign governments, financial or
operational difficulties of the foreign sub-custodians,
difficulties and costs of obtaining jurisdiction over, or
enforcing judgments against, the foreign sub-custodians, or
application of foreign law to the foreign sub-custodial
arrangements. Accordingly, an investor should recognize that the
non-investment risks involved in holding assets abroad are greater
than those associated with investing in the United States.

Growth Investor Portfolio may invest in obligations of the
Bank and may purchase or sell securities from or to the Bank.

INDEPENDENT PUBLIC ACCOUNTANTS

The independent public accountants for Investment Trust and
Growth Investor Portfolio are Arthur Andersen LLP, 33 West Monroe
Street, Chicago, Illinois 60603. The accountants audit and report
on the annual financial statements, review certain regulatory
reports and the federal income tax returns, and perform other
professional accounting, auditing, tax and advisory services when
engaged to do so by the Trust.

PORTFOLIO TRANSACTIONS

The Adviser places the orders for the purchase and sale of
portfolio securities and options and futures contracts. The
Adviser's overriding objective in effecting portfolio transactions
is to seek to obtain the best combination of price and execution.
The best net price, giving effect to brokerage commissions, if
any, and other transaction costs, normally is an important factor
in this decision, but a number of other judgmental factors may
also enter into the decision. These include: the Adviser's
knowledge of negotiated commission rates currently available and
other current transaction costs; the nature of the security being
traded; the size of the transaction; the desired timing of the
trade; the activity existing and expected in the market for the
particular security; confidentiality; the execution, clearance and
settlement capabilities of the broker or dealer selected and
others which are considered; the Adviser's knowledge of the
financial stability of the broker or dealer selected and such
other brokers or dealers; and the Adviser's knowledge of actual or
apparent operational problems of any broker or dealer.
Recognizing the value of these factors, Growth Investor Portfolio
may pay a brokerage commission in excess of that which another
broker or dealer may have charged for effecting the same
transaction. Evaluations of the reasonableness of brokerage
commissions, based on the foregoing factors, are made on an
ongoing basis by the Adviser's staff while effecting portfolio
transactions. The general level of brokerage commissions paid is
reviewed by the Adviser, and reports are made annually to the
Board of Trustees.

With respect to issues of securities involving brokerage
commissions, when more than one broker or dealer is believed to be
capable of providing the best combination of price and execution
with respect to a particular portfolio transaction for Growth
Investor Portfolio, the Adviser often selects a broker or dealer
that has furnished it with research products or services such as
research reports, subscriptions to financial publications and
research compilations, compilations of securities prices,
earnings, dividends, and similar data, and computer data bases,
quotation equipment and services, research-oriented computer
software and services, and services of economic and other
consultants. Selection of brokers or dealers is not made pursuant
to an agreement or understanding with any of the brokers or
dealers; however, the Adviser uses an internal allocation
procedure to identify those brokers or dealers who provide it with
research products or services and the amount of research products
or services they provide, and endeavors to direct sufficient
commissions generated by its clients' accounts in the aggregate,
including Growth Investor Portfolio, to such brokers or dealers to
ensure the continued receipt of research products or services the
Adviser feels are useful. In certain instances, the Adviser
receives from brokers and dealers products or services that are
used both as investment research and for administrative,
marketing, or other non-research purposes. In such instances, the
Adviser makes a good faith effort to determine the relative
proportions of such products or services which may be considered
as investment research. The portion of the costs of such products
or services attributable to research usage may be defrayed by the
Adviser (without prior agreement or understanding, as noted above)
through brokerage commissions generated by transactions by clients
(including Growth Investor Portfolio), while the portion of the
costs attributable to non-research usage of such products or
services is paid by the Adviser in cash. No person acting on
behalf of Growth Investor Portfolio is authorized, in recognition
of the value of research products or services, to pay a commission
in excess of that which another broker or dealer might have
charged for effecting the same transaction. The Adviser also may
receive research in connection with selling concessions and
designations in fixed price offerings in which Growth Investor
Portfolio participates. Research products or services furnished
by brokers and dealers may be used in servicing any or all of the
clients of the Adviser and not all such research products or
services are used in connection with the management of Growth
Investor Portfolio.

With respect to Growth Investor Portfolio's purchases and
sales of portfolio securities transacted with a broker or dealer
on a net basis, the Adviser may also consider the part, if any,
played by the broker or dealer in bringing the security involved
to the Adviser's attention, including investment research related
to the security and provided to Growth Investor Portfolio.

The table below shows information on brokerage commissions
paid by Young Investor Fund:

Total amount of brokerage commissions paid during
fiscal year ended 9/30/97.............................$512,584
Amount of commissions paid to brokers or dealers who
supplied research services to the Adviser............. 484,845
Total dollar amount involved in such transactions
(000 omitted)..........................................334,188
Amount of commissions paid to brokers or dealers that
were allocated to such brokers or dealers by a
portfolio manager because of research services
provided...............................................109,459
Total dollar amount involved in such transactions
(000 omitted)..........................................119,168
Total amount of brokerage commissions paid during
fiscal year ended 9/30/96...............................174,919
Total amount of brokerage commissions paid during
fiscal year ended 9/30/95...............................38,043

Each Trust has arranged for its custodian to act as a
soliciting dealer to accept any fees available to the custodian as
a soliciting dealer in connection with any tender offer for
portfolio securities. The custodian will credit any such fees
received against its custodial fees. In addition, the Board of
Trustees has reviewed the legal developments pertaining to and the
practicability of attempting to recapture underwriting discounts
or selling concessions when portfolio securities are purchased in
underwritten offerings. However, the Board has been advised by
counsel that recapture by a mutual fund currently is not permitted
under the Rules of the Association of the National Association of
Securities Dealers.

During the last fiscal year, Growth Investor Portfolio held
securities issued by one or more of their regular broker-dealers
or the parent of such broker-dealers that derive more than 15% of
gross revenue from securities-related activities. Such holdings
were as follows at Sept. 30, 1997:
Amount of
Securities Held
Broker-Dealer (in thousands)
- --------------------------------------- ----------------
Associates Corporation of North America $14,525

ADDITIONAL INCOME TAX CONSIDERATIONS

Young Investor Fund and Growth Investor Portfolio intends to
comply with the special provisions of the Internal Revenue Code
that relieve it of federal income tax to the extent of its net
investment income and capital gains currently distributed to
shareholders.

Because dividend and capital gain distributions reduce net
asset value, a shareholder who purchases shares shortly before a
record date will, in effect, receive a return of a portion of his
investment in such distribution. The distribution would
nonetheless be taxable to him, even if the net asset value of
shares were reduced below his cost. However, for federal income
tax purposes the shareholder's original cost would continue as his
tax basis.

Young Investor Fund expects that less than 100% of its
dividends will qualify for the deduction for dividends received by
corporate shareholders.

To the extent Growth Investor Portfolio invests in foreign
securities, it may be subject to withholding and other taxes
imposed by foreign countries. Tax treaties between certain
countries and the United States may reduce or eliminate such
taxes. Investors may be entitled to claim U.S. foreign tax
credits with respect to such taxes, subject to certain provisions
and limitations contained in the Code. Specifically, if more than
50% of total assets at the close of any fiscal year consist of
stock or securities of foreign corporations, the Fund may file an
election with the Internal Revenue Service pursuant to which its
shareholders will be required to (i) include in ordinary gross
income (in addition to taxable dividends actually received) their
pro rata shares of foreign income taxes paid by Young Investor
Fund even though not actually received, (ii) treat such respective
pro rata shares as foreign income taxes paid by them, and (iii)
deduct such pro rata shares in computing their taxable incomes,
or, alternatively, use them as foreign tax credits, subject to
applicable limitations, against their United States income taxes.
Shareholders who do not itemize deductions for federal income tax
purposes will not, however, be able to deduct their pro rata
portion of foreign taxes paid by Young Investor Fund, although
such shareholders will be required to include their share of such
taxes in gross income. Shareholders who claim a foreign tax
credit may be required to treat a portion of dividends received
from Young Investor Fund as separate category income for purposes
of computing the limitations on the foreign tax credit available
to such shareholders. Tax-exempt shareholders will not ordinarily
benefit from this election relating to foreign taxes. Each year,
Young Investor Fund will notify shareholders of the amount of (i)
each shareholder's pro rata share of foreign income taxes paid by
Young Investor Fund and (ii) the portion of Fund dividends which
represents income from each foreign country, if Young Investor
Fund qualifies to pass along such credit.

INVESTMENT PERFORMANCE

Young Investor Fund may quote certain total return figures
from time to time. A "Total Return" on a per share basis is the
amount of dividends distributed per share plus or minus the change
in the net asset value per share for a period. A "Total Return
Percentage" may be calculated by dividing the value of a share at
the end of a period by the value of the share at the beginning of
the period and subtracting one. For a given period, an "Average
Annual Total Return" may be computed by finding the average annual
compounded rate that would equate a hypothetical initial amount
invested of $1,000 to the ending redeemable value.
n
Average Annual Total Return is computed as follows: ERV = P(1+T)

Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000
payment made at the beginning of the period at the
end of the period (or fractional portion thereof).

For example, for a $1,000 investment in Young Investor Fund,
the "Total Return," the "Total Return Percentage," and the
"Average Annual Total Return" at Sept. 30, 1997 were:

TOTAL RETURN AVERAGE ANNUAL
TOTAL RETURN PERCENTAGE TOTAL RETURN
------------ ------------- --------------
1 year $1,264 26.37% 26.37%
Life of Fund* 2,466 146.59 30.20
______________________________________
*Life of Fund is from its date of public offering, 4/29/94 .

Investment performance figures assume reinvestment of all
dividends and distributions and do not take into account any
federal, state, or local income taxes which shareholders must pay
on a current basis. They are not necessarily indicative of future
results. The performance of Young Investor Fund is a result of
conditions in the securities markets, portfolio management, and
operating expenses. Although investment performance information
is useful in reviewing performance and in providing some basis for
comparison with other investment alternatives, it should not be
used for comparison with other investments using different
reinvestment assumptions or time periods.

In advertising and sales literature, Young Investor Fund may
compare its performance with that of other mutual funds, indexes
or averages of other mutual funds, indexes of related financial
assets or data, and other competing investment and deposit
products available from or through other financial institutions.
The composition of these indexes or averages differs from that of
Young Investor Fund. Comparison of Young Investor Fund to an
alternative investment should be made with consideration of
differences in features and expected performance.

All of the indexes and averages noted below will be obtained
from the indicated sources or reporting services, which Investment
Trust believes to be generally accurate. Young Investor Fund may
also note its mention or recognition in newspapers, magazines, or
other media from time to time. However, Investment Trust assumes
no responsibility for the accuracy of such data. Newspapers and
magazines which might mention Young Investor Fund include, but are
not limited to, the following:

Architectural Digest
Arizona Republic
Atlanta Constitution
Associated Press
Barron's
Bloomberg
Boston Herald
Business Week
Chicago Tribune
Chicago Sun-Times
Cleveland Plain Dealer
CNBC
CNN
Crain's Chicago Business
Consumer Reports
Consumer Digest
Dow Jones Newswire
Fee Advisor
Financial Planning
Financial World
Forbes
Fortune
Fund Action
Fund Decoder
Gourmet
Individual Investor
Investment Adviser
Investment Dealers' Digest
Investor's Business Daily
Kiplinger's Personal Finance Magazine
Knight-Ridder
Lipper Analytical Services
Los Angeles Times
Louis Rukeyser's Wall Street
Money
Morningstar
Mutual Fund Market News
Mutual Fund News Service
Mutual Funds Magazine
Newsweek
The New York Times
No-Load Fund Investor
Pension World
Pensions and Investment
Personal Investor
Physicians Financial News
Jane Bryant Quinn (syndicated column)
The San Francisco Chronicle
Securities Industry Daily
Smart Money
Smithsonian
Strategic Insight
Time
Travel & Leisure
USA Today
U.S. News & World Report
Value Line
The Wall Street Journal
The Washington Post
Working Women
Worth
Your Money

Young Investor Fund may compare its performance to the
Consumer Price Index (All Urban), a widely recognized measure of
inflation. Its performance also may be compared to the following
indexes or averages:

Dow-Jones Industrial Average New York Stock Exchange Composite
Index
Standard & Poor's 500 Stock Index American Stock Exchange Composite
Index
Standard & Poor's 400 Industrials NASDAQ Composite
Wilshire 5000 NASDAQ Industrials
(These indexes are widely (These indexes generally reflect
recognized indicators of the performance of stocks
general U.S. stock market traded in the indicated
results.) markets.)

In addition, Young Investor Fund may compare performance as
indicated below:

Lipper Equity Fund Average
Lipper General Equity Fund Average
Lipper Growth Fund Average
Lipper Growth Fund Index
Morningstar All Equity Funds Average
Morningstar Domestic Stock Average
Morningstar Equity Fund Average
Morningstar General Equity Average*
Morningstar Growth Fund Average
Morningstar Hybrid Fund Average
Morningstar Total Fund Average
Morningstar U.S. Diversified Average
_________
*Includes Morningstar Aggressive Growth, Growth, Balanced, Equity
Income, and Growth and Income Averages.

Lipper Growth Fund index reflects the net asset value
weighted total return of the largest thirty growth funds and
thirty growth and income funds, respectively, as calculated and
published by Lipper. The Lipper and Morningstar averages are
unweighted averages of total return performance of mutual funds as
classified, calculated, and published by these independent
services that monitor the performance of mutual funds. Young
Investor Fund may also use comparative performance as computed in
a ranking by Lipper or category averages and rankings provided by
another independent service. Should Lipper or another service
reclassify Young Investor Fund to a different category or develop
(and place it into) a new category, it may compare its performance
or ranking with those of other funds in the newly assigned
category, as published by the service.

Young Investor Fund may also cite its rating, recognition, or
other mention by Morningstar or any other entity. Morningstar's
rating system is based on risk-adjusted total return performance
and is expressed in a star-rating format. The risk-adjusted
number is computed by subtracting a fund's risk score (which is a
function of the fund's monthly returns less the 3-month T-bill
return) from its load-adjusted total return score. This numerical
score is then translated into rating categories, with the top 10%
labeled five star, the next 22.5% labeled four star, the next 35%
labeled three star, the next 22.5% labeled two star, and the
bottom 10% one star. A high rating reflects either above-average
returns or below-average risk, or both.

Of course, past performance is not indicative of future
results.
________________

To illustrate the historical returns on various types of
financial assets, Young Investor Fund may use historical data
provided by Ibbotson Associates, Inc. ("Ibbotson"), a Chicago-
based investment firm. Ibbotson constructs (or obtains) very
long-term (since 1926) total return data (including, for example,
total return indexes, total return percentages, average annual
total returns and standard deviations of such returns) for the
following asset types:

Common stocks
Small company stocks
Long-term corporate bonds
Long-term government bonds
Intermediate-term government bonds
U.S. Treasury bills
Consumer Price Index
_____________________

Young Investor Fund may also use hypothetical returns to be
used as an example in a mix of asset allocation strategies. One
such example is reflected in the chart below, which shows the
effect of tax deferral on a hypothetical investment. This chart
assumes that an investor invested $2,000 a year on Jan. 1, for any
specified period, in both a Tax-Deferred Investment and a Taxable
Investment, that both investments earn either 6%, 8% or 10%
compounded annually, and that the investor withdrew the entire
amount at the end of the period. (A tax rate of 39.6% is applied
annually to the Taxable Investment and on the withdrawal of
earnings on the Tax-Deferred Investment.)

</TABLE>
<TABLE>
<CAPTION>
TAX-DEFERRED INVESTMENT VS. TAXABLE INVESTMENT

Interest
Rate 3% 5% 7% 9% 3% 5% 7% 9%
- --------------------------------------------------------------------------------
Com-
pound-
ing
Years Tax-Deferred Investment Taxable Investment
- ---- ------------------------------------ ------------------------------------

Dollar Cost Averaging. Dollar cost averaging is an
investment strategy that requires investing a fixed amount of
money in Fund shares at set intervals. This allows you to
purchase more shares when prices are low and fewer shares when
prices are high. Over time, this tends to lower your average cost
per share. Like any investment strategy, dollar cost averaging
can't guarantee a profit or protect against losses in a steadily
declining market. Dollar cost averaging involves uninterrupted
investing regardless of share price and therefore may not be
appropriate for every investor.

From time to time, Young Investor Fund may offer in its
advertising and sales literature to send an investment strategy
guide, a tax guide, or other supplemental information to investors
and shareholders. It may also mention the Stein Roe Counselor
[service mark] and the Stein Roe Personal Counselor [service mark]
programs and asset allocation and other investment strategies.

APPENDIX--RATINGS

RATINGS IN GENERAL

A rating of a rating service represents the service's opinion
as to the credit quality of the security being rated. However,
the ratings are general and are not absolute standards of quality
or guarantees as to the creditworthiness of an issuer.
Consequently, the Adviser believes that the quality of debt
securities in which a fund invests should be continuously reviewed
and that individual analysts give different weightings to the
various factors involved in credit analysis. A rating is not a
recommendation to purchase, sell or hold a security because it
does not take into account market value or suitability for a
particular investor. When a security has received a rating from
more than one service, each rating should be evaluated
independently. Ratings are based on current information furnished
by the issuer or obtained by the rating services from other
sources which they consider reliable. Ratings may be changed,
suspended or withdrawn as a result of changes in or unavailability
of such information, or for other reasons.

The following is a description of the characteristics of
ratings of corporate debt securities used by Moody's Investors
Service, Inc. ("Moody's") and Standard & Poor's Corporation
("S&P").

RATINGS BY MOODY'S

Aaa. Bonds rated Aaa are judged to be the best quality. They
carry the smallest degree of investment risk and are generally
referred to as "gilt edge." Interest payments are protected by a
large or an exceptionally stable margin and principal is secure.
Although the various protective elements are likely to change,
such changes as can be visualized are more unlikely to impair the
fundamentally strong position of such bonds.

Aa. Bonds rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are
generally known as high grade bonds. They are rated lower than
the best bonds because margins of protection may not be as large
as in Aaa bonds or fluctuation of protective elements may be of
greater amplitude or there may be other elements present which
make the long-term risks appear somewhat larger than in Aaa bonds.

A. Bonds rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate,
but elements may be present which suggest a susceptibility to
impairment sometime in the future.

Baa. Bonds rated Baa are considered as medium grade obligations;
i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the
present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such
bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.

Ba. Bonds which are rated Ba are judged to have speculative
elements; their future cannot be considered as well assured.
Often the protection of interest and principal payments may be
very moderate and thereby not well safeguarded during both good
and bad times over the future. Uncertainty of position
characterizes bonds in this class.

B. Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal
payments or of maintenance of other terms of the contract over any
long period of time may be small.

Caa. Bonds which are rated Caa are of poor standing. Such issues
may be in default or there may be present elements of danger with
respect to principal or interest.

Ca. Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or
have other marked shortcomings.

NOTE: Moody's applies numerical modifiers 1, 2, and 3 in
each generic rating classification from Aa through B in its
corporate bond rating system. The modifier 1 indicates that the
security ranks in the higher end of its generic rating category;
the modifier 2 indicates a mid-range ranking; and the modifier 3
indicates that the issue ranks in the lower end of its generic
rating category.

RATINGS BY S&P

AAA. Debt rated AAA has the highest rating. Capacity to pay
interest and repay principal is extremely strong.

AA. Debt rated AA has a very strong capacity to pay interest and
repay principal and differs from the highest rated issues only in
small degree.

A. Debt rated A has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than
debt in higher rated categories.

BBB. Debt rated BBB is regarded as having an adequate capacity to
pay interest and repay principal. Whereas it normally exhibits
adequate protection parameters, adverse economic conditions or
changing circumstances are more likely to lead to a weakened
capacity to pay interest and repay principal for debt in this
category than for debt in higher rated categories.

BB, B, CCC, CC, and C. Debt rated BB, B, CCC, CC, or C is
regarded, on balance, as predominantly speculative with respect to
capacity to pay interest and repay principal in accordance with
the terms of the obligation. BB indicates the lowest degree of
speculation and C the highest degree of speculation. While such
debt will likely have some quality and protective characteristics,
these are outweighed by large uncertainties or major risk
exposures to adverse conditions.

C1. This rating is reserved for income bonds on which no interest
is being paid.

D. Debt rated D is in default, and payment of interest and/or
repayment of principal is in arrears. The D rating is also used
upon the filing of a bankruptcy petition if debt service payments
are jeopardized.

NOTES:
The ratings from AA to CCC may be modified by the addition of a
plus (+) or minus (-) sign to show relative standing within the
major rating categories. Foreign debt is rated on the same basis
as domestic debt measuring the creditworthiness of the issuer;
ratings of foreign debt do not take into account currency exchange
and related uncertainties.

The "r" is attached to highlight derivative, hybrid, and certain
other obligations that S&P believes may experience high volatility
or high variability in expected returns due to non-credit risks.
Examples of such obligations are: securities whose principal or
interest return is indexed to equities, commodities, or
currencies; certain swaps and options; and interest only and
principal only mortgage securities. The absence of an "r" symbol
should not be taken as an indication that an obligation will
exhibit no volatility or variability in total return.
_______________________

<PAGE>

PART C. OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) 1. Financial statements included in Part A of this Amendment
to the Registration Statement: Financial Highlights.

2. Financial statements included in Part B of this
Amendment:

(a) Financial statements (investments as of September 30,
1996, balance sheets as of September 30, 1996,
statements of operations for the year ended September
30, 1996, statements of changes in net assets for each
of the two years in the period ended September 30,
1996, and notes thereto) and report of independent
public accountants are incorporated by reference to
Registrant's September 30, 1996 annual report relating
to Stein Roe Balanced Fund, Stein Roe Growth & Income
Fund, Stein Roe Growth Stock Fund, Stein Roe Special
Fund, Stein Roe Special Venture Fund, Stein Roe
Capital Opportunities Fund, and Stein Roe
International Fund.

(b) Financial statements (investments as of September 30,
1996, balance sheet as of September 30, 1997,
statement of operations for the year ended September
30, 1997, statement of changes in net assets for each
of the two years in the period ended September 30,
1997, and notes thereto) and report of independent
public accountants are incorporated by reference to
Registrant's September 30, 1997 annual report relating
to Stein Roe Young Investor Fund.

(b) Exhibits: [Note: As used herein, the term "Registration
Statement" refers to the Registration Statement of the
Registrant on Form N-1A under the Securities Act of 1933, No.
33-11351. The terms "Pre-Effective Amendment" and "PEA"
refer, respectively, to a pre-effective amendment and a post-
effective amendment to the Registration Statement.]

1. (a) Agreement and Declaration of Trust as amended through
February 1, 1996. (Exhibit 1 to PEA #32.)*
(b) Amendment dated December 31, 1996 to Agreement and
Declaration of Trust. (Exhibit 1(b) to PEA #37.)*

2. By-Laws of Registrant as amended through February 3,
1993. (Exhibit 2 to PEA #34).*

3. None.

4. Inapplicable.

5. Management agreement between Registrant and Stein Roe
& Farnham Incorporated (the "Adviser") as amended
through July 1, 1996. (Exhibit 5(a) to PEA #34.)*

6. (a) Underwriting agreement between Registrant and Liberty
Securities Corporation dated June 22, 1987 as amended
through October 28, 1992. (Exhibit 6 to PEA #34).*
(b) Specimen copy of selected dealer agreement. (Exhibit
6(b) to PEA #40.)*

7. None.

8. Custodian contract between Registrant and State Street
Bank and Trust Company as amended through May 8, 1995.
(Exhibit 8 to PEA #31.)*

9. (a) Restated Transfer Agency Agreement between Registrant
and SteinRoe Services Inc. dated August 1,
1995.(Exhibit 9(a) to PEA #31.)*
(b) Accounting and Bookkeeping Agreement dated August 1,
1994. (Exhibit 9(b) to PEA #34.)*
(c) Administrative Agreement between Registrant and the
Adviser dated August 15, 1995 as amended through July
1, 1996. (Exhibit 9(c) to PEA #34.)*
(d) Sub-transfer agent agreement with Colonial Investors
Service Center as amended through June 30, 1997.
(Exhibit 9(d) to PEA #41.)*

10. (a) Opinions and consents of Ropes & Gray. (Exhibit 10(a)
to PEA #34).*
(b) Opinions and consents of Bell, Boyd & Lloyd with
respect to SteinRoe Prime Equities (now named Stein
Roe Growth & Income Fund), Stein Roe Capital
Opportunities Fund, Stein Roe Special Fund, SteinRoe
Stock Fund (now named Stein Roe Growth Stock Fund),
SteinRoe Total Return Fund (now named Stein Roe
Balanced Fund), Stein Roe International Fund,
Stein Roe Young Investor Fund, and Stein Roe Special
Venture Fund. (Exhibit 10(b) to PEA #34).*
(c) Opinion and consent of Bell, Boyd & Lloyd with
respect to Stein Roe Emerging Markets Fund. (Exhibit
10(c) to PEA #37.)*
(d) Opinion and consent of Bell, Boyd & Lloyd with
respect to Stein Roe Growth Opportunities Fund.
(Exhibit 10(d) to PEA #39.)*

11. (a) Consent of Arthur Andersen LLP, independent public
accountants.
(b) Consent of Morningstar, Inc. (Exhibit 11(b) to PEA
#34).*

12. None.

13. Inapplicable.

14. (a) Stein Roe & Farnham Funds Individual Retirement
Account Plan. (Exhibit 14 to PEA #41.)*
(b) Stein Roe & Farnham Prototype Paired Defined
Contribution Plan.**

15. None.

16. Schedules for computation of each performance
quotation provided in the Registration Statement in
response to Item 22 for SteinRoe Prime Equities (now
named Stein Roe Growth & Income Fund), Stein Roe Total
Return Fund (now named Stein Roe Balanced Fund), Stein
Roe Stock Fund (now named Stein Roe Growth Stock Fund),
Stein Roe Capital Opportunities Fund, Stein Roe Special
Fund, Stein Roe International Fund, Stein Roe Young
Investor Fund, and Stein Roe Special Venture Fund.
(Exhibit 16 to PEA #34).*

17. (a) Financial Data Schedule--Stein Roe Growth & Income
Fund.
(b) Financial Data Schedule--Stein Roe Balanced Fund.
(c) Financial Data Schedule--Stein Roe Growth Stock Fund.
(d) Financial Data Schedule--Stein Roe Capital
Opportunities Fund.
(e) Financial Data Schedule--Stein Roe Special Fund.
(f) Financial Data Schedule--Stein Roe International
Fund.
(g) Financial Data Schedule--Stein Roe Young Investor
Fund.
(h) Financial Data Schedule--Stein Roe Special Venture
Fund.
(i) Financial Data Schedule--Stein Roe Emerging Markets
Fund
(j) Financial Data Schedule--Stein Roe Growth
Opportunities Fund

18. Inapplicable

19. (Miscellaneous.)
(a) Mutual Fund Application. (Exhibit 19(a) to PEA #40.)*
(b) Automatic Redemption Services Application. (Exhibit
19(c) to PEA #34).*
_______________________
*Incorporated by reference.
**Incorporated by reference to Exhibit 14(b) to post-effective
amendment No. 33 to the Registration Statement on Form N-1A of
Stein Roe Income Trust, No. 33-02633.

Item 25. Persons Controlled By or Under Common Control with
Registrant.

The Registrant does not consider that it is directly or indirectly
controlling, controlled by, or under common control with other
persons within the meaning of this Item. See "Investment Advisory
Services," "Management," and "Transfer Agent" in the Statement of
Additional Information, each of which is incorporated herein by
reference.

Item 26. Number of Holders of Securities.

Number of Record Holders
Title of Series as of September 30, 1997
--------------------------------- -------------------------
Stein Roe Growth & Income Fund 8,858
Stein Roe International Fund 4,403
Stein Roe Young Investor Fund 99,536
Stein Roe Special Venture Fund 4,814
Stein Roe Emerging Markets Fund 3,399
Stein Roe Growth Opportunities Fund 3,710
Stein Roe Balanced Fund 6,300
Stein Roe Growth Stock Fund 14,922
Stein Roe Capital Opportunities Fund 37,090
Stein Roe Special Fund 32,583

Item 27. Indemnification.

Article Tenth of the Agreement and Declaration of Trust of
Registrant (Exhibit 1), which Article is incorporated herein by
reference, provides that Registrant shall provide indemnification
of its trustees and officers (including each person who serves or
has served at Registrant's request as a director, officer, or
trustee of another organization in which Registrant has any
interest as a shareholder, creditor or otherwise) ("Covered
Persons") under specified circumstances.

Section 17(h) of the Investment Company Act of 1940 ("1940 Act")
provides that neither the Agreement and Declaration of Trust nor
the By-Laws of Registrant, nor any other instrument pursuant to
which Registrant is organized or administered, shall contain any
provision which protects or purports to protect any trustee or
officer of Registrant against any liability to Registrant or its
shareholders to which he would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of his office. In
accordance with Section 17(h) of the 1940 Act, Article Tenth shall
not protect any person against any liability to Registrant or its
shareholders to which he would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of his office.

Unless otherwise permitted under the 1940 Act,

(i) Article Tenth does not protect any person against any
liability to Registrant or to its shareholders to which he would
otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties involved in
the conduct of his office;

(ii) in the absence of a final decision on the merits by a
court or other body before whom a proceeding was brought that a
Covered Person was not liable by reason of willful misfeasance,
bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of his office, no indemnification is
permitted under Article Tenth unless a determination that such
person was not so liable is made on behalf of Registrant by (a)
the vote of a majority of the trustees who are neither "interested
persons" of Registrant, as defined in Section 2(a)(19) of the 1940
Act, nor parties to the proceeding ("disinterested, non-party
trustees"), or (b) an independent legal counsel as expressed in a
written opinion; and

(iii) Registrant will not advance attorneys' fees or other
expenses incurred by a Covered Person in connection with a civil
or criminal action, suit or proceeding unless Registrant receives
an undertaking by or on behalf of the Covered Person to repay the
advance (unless it is ultimately determined that he is entitled to
indemnification) and (a) the Covered Person provides security for
his undertaking, or (b) Registrant is insured against losses
arising by reason of any lawful advances, or (c) a majority of the
disinterested, non-party trustees of Registrant or an independent
legal counsel as expressed in a written opinion, determine, based
on a review of readily available facts (as opposed to a full
trial-type inquiry), that there is reason to believe that the
Covered Person ultimately will be found entitled to
indemnification.

Any approval of indemnification pursuant to Article Tenth does not
prevent the recovery from any Covered Person of any amount paid to
such Covered Person in accordance with Article Tenth as
indemnification if such Covered Person is subsequently adjudicated
by a court of competent jurisdiction not to have acted in good
faith in the reasonable belief that such Covered Person's action
was in, or not opposed to, the best interests of Registrant or to
have been liable to Registrant or its shareholders by reason of
willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of such Covered
Person's office.

Article Tenth also provides that its indemnification provisions
are not exclusive.

Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers, and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, Registrant has been advised that in the
opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by Registrant of expenses incurred or paid by a trustee, officer,
or controlling person of Registrant in the successful defense of
any action, suit, or proceeding) is asserted by such trustee,
officer, or controlling person in connection with the securities
being registered, Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.

Registrant, its trustees and officers, its investment adviser, the
other investment companies advised by the adviser, and persons
affiliated with them are insured against certain expenses in
connection with the defense of actions, suits, or proceedings, and
certain liabilities that might be imposed as a result of such
actions, suits, or proceedings. Registrant will not pay any
portion of the premiums for coverage under such insurance that
would (1) protect any trustee or officer against any liability to
Registrant or its shareholders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the
conduct of his office or (2) protect its investment adviser or
principal underwriter, if any, against any liability to Registrant
or its shareholders to which such person would otherwise be
subject by reason of willful misfeasance, bad faith, or gross
negligence, in the performance of its duties, or by reason of its
reckless disregard of its duties and obligations under its
contract or agreement with the Registrant; for this purpose the
Registrant will rely on an allocation of premiums determined by
the insurance company.

Pursuant to the indemnification agreement among the Registrant,
its transfer agent and its investment adviser dated July 1, 1995,
the Registrant, its trustees, officers and employees, its transfer
agent and the transfer agent's directors, officers and employees
are indemnified by Registrant's investment adviser against any and
all losses, liabilities, damages, claims and expenses arising out
of any act or omission of the Registrant or its transfer agent
performed in conformity with a request of the investment adviser
that the transfer agent and the Registrant deviate from their
normal procedures in connection with the issue, redemption or
transfer of shares for a client of the investment adviser.

Registrant, its trustees, officers, employees and representatives
and each person, if any, who controls the Registrant within the
meaning of Section 15 of the Securities Act of 1933 are
indemnified by the distributor of Registrant's shares (the
"distributor"), pursuant to the terms of the distribution
agreement, which governs the distribution of Registrant's shares,
against any and all losses, liabilities, damages, claims and
expenses arising out of the acquisition of any shares of the
Registrant by any person which (i) may be based upon any wrongful
act by the distributor or any of the distributor's directors,
officers, employees or representatives or (ii) may be based upon
any untrue or alleged untrue statement of a material fact
contained in a registration statement, prospectus, statement of
additional information, shareholder report or other information
covering shares of the Registrant filed or made public by the
Registrant or any amendment thereof or supplement thereto or the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statement
therein not misleading if such statement or omission was made in
reliance upon information furnished to the Registrant by the
distributor in writing. In no case does the distributor's
indemnity indemnify an indemnified party against any liability to
which such indemnified party would otherwise be subject by reason
of willful misfeasance, bad faith, or negligence in the
performance of its or his duties or by reason of its or his
reckless disregard of its or his obligations and duties under the
distribution agreement.

Item 28. Business and Other Connections of Investment Adviser.

The Adviser is a wholly-owned subsidiary of SteinRoe Services Inc.
("SSI"), which in turn is a wholly-owned subsidiary of Liberty
Financial Companies, Inc., which is a majority owned subsidiary
of LFC Holdings, Inc., which in turn is a subsidiary of Liberty
Mutual Equity Corporation, which in turn is a subsidiary of
Liberty Mutual Insurance Company. The Adviser acts as investment
adviser to individuals, trustees, pension and profit-sharing
plans, charitable organizations, and other investors. In addition
to Registrant, it also acts as investment adviser to other
investment companies having different investment policies.

For a two-year business history of officers and directors of the
Adviser, please refer to the Form ADV of Stein Roe & Farnham
Incorporated and to the section of the statement of additional
information (part B) entitled "Investment Advisory Services."

Certain directors and officers of the Adviser also serve and have
during the past two years served in various capacities as
officers, directors, or trustees of SSI and of the Registrant,
SR&F Base Trust, and/or other investment companies managed by
the Adviser. (The listed entities are located at One South
Wacker Drive, Chicago, Illinois 60606, except for SteinRoe
Variable Investment Trust and Keyport Variable Investment Trust,
which are located at Federal Reserve Plaza, Boston, MA 02210
and LFC Utilities Trust, which is located at One Financial
Center, Boston, MA 02111.) A list of such capacities is given
below.
POSITION FORMERLY
HELD WITHIN
CURRENT POSITION PAST TWO YEARS
------------------- -----------------
STEINROE SERVICES INC.
Gary A. Anetsberger Vice President
Timothy K. Armour Vice President
Jilaine Hummel Bauer Vice President; Secretary
Kenneth J. Kozanda Vice President; Treasurer
Kenneth R. Leibler Director
C. Allen Merritt, Jr. Director; Vice President
Hans P. Ziegler Director, President, Vice Chairman
Chairman

SR&F BASE TRUST
William D. Andrews Executive Vice-President
Gary A. Anetsberger Sr. Vice-President Treasurer
Timothy K. Armour President; Trustee
Jilaine Hummel Bauer Executive Vice-President; Secy.
Thomas W. Butch Executive Vice-President
Loren A. Hansen Executive Vice-President
Michael T. Kennedy Vice-President
Lynn C. Maddox Vice-President
Jane M. Naeseth Vice-President
Hans P. Ziegler Executive Vice-President

STEIN ROE INCOME TRUST; STEIN ROE INSTITUTIONAL TRUST; AND
STEIN ROE TRUST
William D. Andrews Executive Vice-President
Gary A. Anetsberger Sr. Vice-President Treasurer
Timothy K. Armour President; Trustee
Jilaine Hummel Bauer Executive V-P; Secretary
Thomas W. Butch Executive Vice-President Vice-President
Philip J. Crosley Vice-President
Loren A. Hansen Executive Vice-President
Michael T. Kennedy Vice-President
Stephen F. Lockman Vice-President
Steven P. Luetger Vice-President
Lynn C. Maddox Vice-President
Anne E. Marcel Vice-President
Jane M. Naeseth Vice-President
Hans P. Ziegler Executive Vice-President

STEIN ROE INVESTMENT TRUST
William D. Andrews Executive Vice-President
Gary A. Anetsberger Sr. Vice-President Treasurer
Timothy K. Armour President; Trustee
Jilaine Hummel Bauer Executive V-P; Secretary
Bruno Bertocci Vice-President
David P. Brady Vice-President
Thomas W. Butch Executive Vice-President Vice-President
Daniel K. Cantor Vice-President
Philip J. Crosley Vice-President
E. Bruce Dunn Vice-President
Erik P. Gustafson Vice-President
Loren A. Hansen Executive Vice-President
David P. Harris Vice-President
Harvey B. Hirschhorn Vice-President
Eric S. Maddix Vice-President
Lynn C. Maddox Vice-President
Anne E. Marcel Vice-President
Arthur J. McQueen Vice-President
Richard B. Peterson Vice-President
M. Gerard Sandel Vice-President
Gloria J. Santella Vice-President
Hans P. Ziegler Executive Vice-President

STEIN ROE ADVISOR TRUST
William D. Andrews Executive Vice-President
Gary A. Anetsberger Sr. Vice-President Treasurer
Timothy K. Armour President; Trustee
Jilaine Hummel Bauer Executive V-P; Secretary
Bruno Bertocci Vice-President
David P. Brady Vice-President
Thomas W. Butch Executive Vice-President Vice-President
Daniel K. Cantor Vice-President
Philip J. Crosley Vice-President
E. Bruce Dunn Vice-President
Erik P. Gustafson Vice-President
Loren A. Hansen Executive Vice-President
David P. Harris Vice-President
Harvey B. Hirschhorn Vice-President
Michael T. Kennedy Vice-President
Stephen F. Lockman Vice-President
Eric S. Maddix Vice-President
Lynn C. Maddox Vice-President
Anne E. Marcel Vice-President
M. Jane McCart Vice-President
Arthur J. McQueen Vice-President
Richard B. Peterson Vice-President
M. Gerard Sandel Vice-President
Gloria J. Santella Vice-President
Hans P. Ziegler Executive Vice-President

STEIN ROE MUNICIPAL TRUST
William D. Andrews Executive Vice-President
Gary A. Anetsberger Sr. Vice-President Treasurer
Timothy K. Armour President; Trustee
Jilaine Hummel Bauer Executive V-P; Secretary
Thomas W. Butch Executive Vice-President Vice-President
Joanne T. Costopoulos Vice-President
Philip J. Crosley Vice-President
Loren A. Hansen Executive Vice-President
Lynn C. Maddox Vice-President
Anne E. Marcel Vice-President
M. Jane McCart Vice-President
Hans P. Ziegler Executive Vice-President

STEINROE VARIABLE INVESTMENT TRUST
Gary A. Anetsberger Treasurer
Timothy K. Armour Vice President
Jilaine Hummel Bauer Vice President
E. Bruce Dunn Vice President
Erik P. Gustafson Vice President
Harvey B. Hirschhorn Vice President
Michael T. Kennedy Vice President
Jane M. Naeseth Vice President
Richard B. Peterson Vice President

LFC UTILITIES TRUST
Gary A. Anetsberger Vice President
Ophelia L. Barsketis Vice President
Deborah A. Jansen Vice President

KEYPORT VARIABLE INVESTMENT TRUST
Ophelia L. Barsketis Vice President
Deborah A. Jansen Vice President

Item 29. Principal Underwriters.

Registrant's principal underwriter, Liberty Securities
Corporation, is a wholly owned subsidiary of Liberty Investment
Services, Inc., a wholly owned subsidiary of Liberty Financial
Services, Inc. which, in turn, is a wholly owned subsidiary of
Liberty Financial Companies, Inc. Liberty Financial Companies,
Inc. is a public corporation whose majority shareholder is LFC
Holdings, Inc., a wholly owned subsidiary of Liberty Mutual Equity
Corporation. Liberty Mutual Equity Corporation is a wholly owned
subsidiary of Liberty Mutual Insurance Company.

Liberty Securities Corporation is principal underwriter for the
following investment companies:

Stein Roe Income Trust
Stein Roe Municipal Trust
Stein Roe Investment Trust
Stein Roe Institutional Trust
Stein Roe Trust

Set forth below is information concerning the directors and
officers of Liberty Securities Corporation:
Positions
Positions and Offices and Offices
Name with Underwriter with Registrant
- ------------------ -------------------- --------------
Porter P. Morgan Chairman of the Board; Director None
Frank L. Tarantino President; Chief Operating
Officer; Director None
Robert L. Spadafora Executive Vice President -
Sales and Marketing None
John T. Treece, Jr. Senior Vice President - Operations None
John W. Reading Senior Vice President and
Assistant Secretary None
Valerie A. Arendell Senior Vice President - Sales None
Gerald H. Stanney, Vice President and Compliance
Jr. Officer (Boston) None
Jilaine Hummel Bauer Vice President and Compliance Exec. V-P &
Officer (Chicago) Secretary
Bruce F. Ripepi Vice President, General Counsel None
and Assistant Secretary
Timothy K. Armour Vice President President,
Trustee
Lindsay Cook Vice President Trustee
Ralph E. Nixon Vice President None
Joyce B. Riegel Vice President None
Heidi J. Walter Vice President V-P
Glenn E. Williams Assistant Vice President None
Philip J. Iudice Treasurer None
John A. Benning Secretary None
John A. Davenport Assistant Secretary None
Marjorie M. Pluskota Assistant Secretary None
C. Allen Merritt, Jr. Assistant Treasurer; Assistant
Secretary; Director None

The principal business address of Mr. Armour, Ms. Bauer, Ms.
Pluskota, Ms. Riegel and Ms. Walter is One South Wacker Drive,
Chicago, IL 60606; that of Mr. Williams is Two Righter Parkway,
Wilmington, DE 19803; that of Mr. Ripepi is 100 Manhattanville
Road, Purchase, NY 10577; and that of the other officers is 600
Atlantic Avenue, Boston, MA 02210-2214.

Item 30. Location of Accounts and Records.

Registrant maintains the records required to be maintained by it
under Rules 31a-1(a), 31a-1(b), and 31a-2(a) under the Investment
Company Act of 1940 at its principal executive offices at One
South Wacker Drive, Chicago, Illinois 60606. Certain records,
including records relating to Registrant's shareholders and the
physical possession of its securities, may be maintained pursuant
to Rule 31a-3 at the main office of Registrant's transfer agent or
custodian.

Item 31. Management Services.

None.

Item 32. Undertakings.

If requested to do so by the holders of at least 10% of the
Trust's outstanding shares, the Trust will call a special meeting
for the purpose of voting upon the question of removal of a
trustee or trustees and will assist in the communications with
other shareholders as if the Trust were subject to Section 16(c)
of the Investment Company Act of 1940.

Since the information called for by Item 5A is contained in the
latest annual reports to shareholders, Registrant undertakes with
respect to each series to furnish each person to whom a prospectus
is delivered with a copy of the latest annual report to
shareholders upon request and without charge.

<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
amendment to the Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Chicago and
State of Illinois on the 1st day of December, 1997.

STEIN ROE INVESTMENT TRUST

By TIMOTHY K. ARMOUR
Timothy K. Armour, President

Pursuant to the requirements of the Securities Act of 1933,
this amendment to the Registration Statement has been signed below
by the following persons in the capacities and on the dates
indicated:

Signature Title* Date
- ------------------------ --------------------- ---------------
TIMOTHY K. ARMOUR President and Trustee December 1, 1997
Timothy K. Armour
Principal Executive Officer

GARY A. ANETSBERGER Senior Vice-President December 1, 1997
Gary A. Anetsberger
Principal Financial Officer

SHARON R. ROBERTSON Controller December 1, 1997
Sharon R. Robertson
Principal Accounting Officer

KENNETH L. BLOCK Trustee December 1, 1997
Kenneth L. Block

WILLIAM W. BOYD Trustee December 1, 1997
William W. Boyd

LINDSAY COOK Trustee December 1, 1997
Lindsay Cook

DOUGLAS A. HACKER Trustee December 1, 1997
Douglas A. Hacker

JANET LANGFORD KELLY Trustee December 1, 1997
Janet Langford Kelly

FRANCIS W. MORLEY Trustee December 1, 1997
Francis W. Morley

CHARLES R. NELSON Trustee December 1, 1997
Charles R. Nelson

THOMAS C. THEOBALD Trustee December 1, 1997
Thomas C. Theobald

*This amendment to the Registration Statement has also been signed
by the above persons in their capacities as trustees and officers
of SR&F Base Trust.

<PAGE>

STEIN ROE INVESTMENT TRUST
INDEX TO EXHIBITS FILED WITH THIS AMENDMENT

Exhibit
Number Description
- ------- ------------

11(a) Consent of Arthur Andersen LLP

17(a) Financial Data Schedule--Stein Roe Growth & Income Fund

17(b) Financial Data Schedule--Stein Roe Balanced Fund

17(c) Financial Data Schedule--Stein Roe Growth Stock Fund

17(d) Financial Data Schedule--Stein Roe Capital
Opportunities Fund

17(e) Financial Data Schedule--Stein Roe Special Fund

17(f) Financial Data Schedule--Stein Roe International Fund

17(g) Financial Data Schedule--Stein Roe Young Investor Fund

17(h) Financial Data Schedule--Stein Roe Special Venture Fund

17(i) Financial Data Schedule--Stein Roe Emerging Markets
Fund

17(j) Financial Data Schedule--Stein Roe Growth Opportunities
Fund

Exhibit 11(a)

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of
our report dated November 11, 1996, and to all references to our
Firm included in or made a part of this Registration Statement on
Form N-1A of the Stein Roe Investment Trust (comprising the Stein
Roe Growth & Income Fund, Stein Roe Balanced Fund, Stein Roe Growth
Stock Fund, Stein Roe International Fund, Stein Roe Special Fund,
Stein Roe Capital Opportunities Fund and Stein Roe Special Venture
Fund).

ARTHUR ANDERSEN LLP

Chicago, Illinois
November 25, 1997

<PAGE>

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of
our report for Stein Roe Young Investor Fund and SR&F Growth Investor
Portfolio dated November 7, 1997, and to all references to our
Firm included in or made a part of this Registration Statement on
Form N-1A of the Stein Roe Investment Trust.

ARTHUR ANDERSEN LLP

Chicago, Illinois
November 25, 1997

<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> STEIN ROE GROWTH & INCOME FUND

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> MAR-31-1997
<INVESTMENTS-AT-COST> 210,355
<INVESTMENTS-AT-VALUE> 273,094
<RECEIVABLES> 444
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 81
<TOTAL-ASSETS> 273,619
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 995
<TOTAL-LIABILITIES> 995
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 207,040
<SHARES-COMMON-STOCK> 14,442
<SHARES-COMMON-PRIOR> 11,116
<ACCUMULATED-NII-CURRENT> 504
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 2,229
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 62,851
<NET-ASSETS> 272,624
<DIVIDEND-INCOME> 1,918
<INTEREST-INCOME> 1,518
<OTHER-INCOME> 0
<EXPENSES-NET> 1,419
<NET-INVESTMENT-INCOME> 2,017
<REALIZED-GAINS-CURRENT> 3,185
<APPREC-INCREASE-CURRENT> 9,369
<NET-CHANGE-FROM-OPS> 14,571
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,228
<DISTRIBUTIONS-OF-GAINS> 8,004
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 88,588
<NUMBER-OF-SHARES-REDEEMED> 31,958
<SHARES-REINVESTED> 7,268
<NET-CHANGE-IN-ASSETS> 68,237
<ACCUMULATED-NII-PRIOR> 716
<ACCUMULATED-GAINS-PRIOR> 7,047
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 671
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,419
<AVERAGE-NET-ASSETS> 248,385
<PER-SHARE-NAV-BEGIN> 18.39
<PER-SHARE-NII> 0.15
<PER-SHARE-GAIN-APPREC> 1.17
<PER-SHARE-DIVIDEND> (.18)
<PER-SHARE-DISTRIBUTIONS> (.65)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 18.88
<EXPENSE-RATIO> 1.15
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<SERIES>
<NUMBER> 5
<NAME> STEIN ROE BALANCED FUND

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> MAR-31-1997
<INVESTMENTS-AT-COST> 216,889
<INVESTMENTS-AT-VALUE> 254,188
<RECEIVABLES> 381
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 90
<TOTAL-ASSETS> 254,659
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 441
<TOTAL-LIABILITIES> 441
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 199,506
<SHARES-COMMON-STOCK> 8,765
<SHARES-COMMON-PRIOR> 7,685
<ACCUMULATED-NII-CURRENT> 134
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 5,051
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 49,527
<NET-ASSETS> 254,218
<DIVIDEND-INCOME> 1,334
<INTEREST-INCOME> 4,245
<OTHER-INCOME> 0
<EXPENSES-NET> 1,369
<NET-INVESTMENT-INCOME> 4,210
<REALIZED-GAINS-CURRENT> 7,326
<APPREC-INCREASE-CURRENT> 3,085
<NET-CHANGE-FROM-OPS> 14,621
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 4,459
<DISTRIBUTIONS-OF-GAINS> 18,743
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 40,125
<NUMBER-OF-SHARES-REDEEMED> 27,462
<SHARES-REINVESTED> 19,073
<NET-CHANGE-IN-ASSETS> 23,155
<ACCUMULATED-NII-PRIOR> (555)
<ACCUMULATED-GAINS-PRIOR> 16,469
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 688
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,369
<AVERAGE-NET-ASSETS> 260,391
<PER-SHARE-NAV-BEGIN> 30.07
<PER-SHARE-NII> .48
<PER-SHARE-GAIN-APPREC> 1.23
<PER-SHARE-DIVIDEND> (.52)
<PER-SHARE-DISTRIBUTIONS> (2.26)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 29.00
<EXPENSE-RATIO> 1.05
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<SERIES>
<NUMBER> 6
<NAME> STEIN ROE GROWTH STOCK FUND

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> MAR-31-1997
<INVESTMENTS-AT-COST> 303,993
<INVESTMENTS-AT-VALUE> 461,436
<RECEIVABLES> 3
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 412
<TOTAL-ASSETS> 461,851
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3,352
<TOTAL-LIABILITIES> 3,352
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 281,816
<SHARES-COMMON-STOCK> 16,476
<SHARES-COMMON-PRIOR> 14,517
<ACCUMULATED-NII-CURRENT> (160)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 14,608
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 162,235
<NET-ASSETS> 458,499
<DIVIDEND-INCOME> 1,921
<INTEREST-INCOME> 567
<OTHER-INCOME> 0
<EXPENSES-NET> 2,505
<NET-INVESTMENT-INCOME> (17)
<REALIZED-GAINS-CURRENT> 14,670
<APPREC-INCREASE-CURRENT> 3,566
<NET-CHANGE-FROM-OPS> 18,219
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,100
<DISTRIBUTIONS-OF-GAINS> 33,201
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 108,592
<NUMBER-OF-SHARES-REDEEMED> 79,126
<SHARES-REINVESTED> 27,151
<NET-CHANGE-IN-ASSETS> 40,535
<ACCUMULATED-NII-PRIOR> 957
<ACCUMULATED-GAINS-PRIOR> 33,139
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,281
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,505
<AVERAGE-NET-ASSETS> 467,880
<PER-SHARE-NAV-BEGIN> 28.79
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 1.34
<PER-SHARE-DIVIDEND> (0.07)
<PER-SHARE-DISTRIBUTIONS> (2.23)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 27.83
<EXPENSE-RATIO> 1.07
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<SERIES>
<NUMBER> 7
<NAME> STEIN ROE CAPITAL OPPORTUITIES FUND

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> MAR-31-1997
<INVESTMENTS-AT-COST> 984,809
<INVESTMENTS-AT-VALUE> 996,558
<RECEIVABLES> 5,135
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 480
<TOTAL-ASSETS> 1,002,173
<PAYABLE-FOR-SECURITIES> 3,208
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 7,669
<TOTAL-LIABILITIES> 10,877
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,050,759
<SHARES-COMMON-STOCK> 43,185
<SHARES-COMMON-PRIOR> 54,262
<ACCUMULATED-NII-CURRENT> (7,914)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (63,298)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 11,749
<NET-ASSETS> 991,296
<DIVIDEND-INCOME> 711
<INTEREST-INCOME> 2,846
<OTHER-INCOME> 0
<EXPENSES-NET> 8,263
<NET-INVESTMENT-INCOME> (4,706)
<REALIZED-GAINS-CURRENT> (54,874)
<APPREC-INCREASE-CURRENT> (330,535)
<NET-CHANGE-FROM-OPS> (390,115)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 316,076
<NUMBER-OF-SHARES-REDEEMED> 619,203
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 693,242
<ACCUMULATED-NII-PRIOR> (3,208)
<ACCUMULATED-GAINS-PRIOR> (8,424)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5,046
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 8,263
<AVERAGE-NET-ASSETS> 1,444,607
<PER-SHARE-NAV-BEGIN> 31.04
<PER-SHARE-NII> (.12)
<PER-SHARE-GAIN-APPREC> (7.97)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 22.95
<EXPENSE-RATIO> 1.15
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<SERIES>
<NUMBER> 8
<NAME> STEIN ROE SPECIAL FUND

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> MAR-31-1997
<INVESTMENTS-AT-COST> 728,978
<INVESTMENTS-AT-VALUE> 1,051,705
<RECEIVABLES> 51
<ASSETS-OTHER> 838
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,052,594
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,139
<TOTAL-LIABILITIES> 4,139
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 697,130
<SHARES-COMMON-STOCK> 42,112
<SHARES-COMMON-PRIOR> 42,299
<ACCUMULATED-NII-CURRENT> (2,627)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 29,557
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 324,395
<NET-ASSETS> 1,048,455
<DIVIDEND-INCOME> 3,387
<INTEREST-INCOME> 1,865
<OTHER-INCOME> 0
<EXPENSES-NET> 6,527
<NET-INVESTMENT-INCOME> (1,275)
<REALIZED-GAINS-CURRENT> 32,203
<APPREC-INCREASE-CURRENT> (44,570)
<NET-CHANGE-FROM-OPS> (13,642)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 86,857
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 92,723
<NUMBER-OF-SHARES-REDEEMED> 178,292
<SHARES-REINVESTED> 76,025
<NET-CHANGE-IN-ASSETS> (110,043)
<ACCUMULATED-NII-PRIOR> (2,611)
<ACCUMULATED-GAINS-PRIOR> 85,469
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,394
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 1,142,298
<PER-SHARE-NAV-BEGIN> 27.39
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> (.38)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (2.11)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 24.90
<EXPENSE-RATIO> 1.15
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

[ARTICLE] 6
[SERIES]
[NUMBER] 10
[NAME] STEIN ROE INTERNATIONAL FUND
<TABLE>
<S> <C>
[PERIOD-TYPE] 6-MOS
[FISCAL-YEAR-END] SEP-30-1997
[PERIOD-START] OCT-01-1996
[PERIOD-END] MAR-31-1997
[INVESTMENTS-AT-COST] 139,163
[INVESTMENTS-AT-VALUE] 140,064
[RECEIVABLES] 42
[ASSETS-OTHER] 0
[OTHER-ITEMS-ASSETS] 227
[TOTAL-ASSETS] 140,333
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 278
[TOTAL-LIABILITIES] 278
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 130,241
[SHARES-COMMON-STOCK] 12,770
[SHARES-COMMON-PRIOR] 12,369
[ACCUMULATED-NII-CURRENT] (116)
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 3,519
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 6,411
[NET-ASSETS] 140,055
[DIVIDEND-INCOME] 958
[INTEREST-INCOME] 149
[OTHER-INCOME] (77)
[EXPENSES-NET] 1,079
[NET-INVESTMENT-INCOME] (49)
[REALIZED-GAINS-CURRENT] 4,346
[APPREC-INCREASE-CURRENT] (1,188)
[NET-CHANGE-FROM-OPS] 3,109
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (1,000)
[DISTRIBUTIONS-OF-GAINS] (1,837)
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 21,071
[NUMBER-OF-SHARES-REDEEMED] 18,986
[SHARES-REINVESTED] 2,153
[NET-CHANGE-IN-ASSETS] 4,510
[ACCUMULATED-NII-PRIOR] 933
[ACCUMULATED-GAINS-PRIOR] 1,010
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 512
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 1,079
[AVERAGE-NET-ASSETS] 140,120
[PER-SHARE-NAV-BEGIN] 10.96
[PER-SHARE-NII] (.01)
[PER-SHARE-GAIN-APPREC] .24
[PER-SHARE-DIVIDEND] (.08)
[PER-SHARE-DISTRIBUTIONS] (.14)
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 10.97
[EXPENSE-RATIO] 1.55
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>

<ARTICLE> 6
<SERIES>
<NUMBER> 11
<NAME> STEIN ROE YOUNG INVESTOR FUND

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> SEP-30-1997
<INVESTMENTS-AT-COST> 365,322
<INVESTMENTS-AT-VALUE> 475,423
<RECEIVABLES> 690
<ASSETS-OTHER> 74
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 476,187
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 681
<TOTAL-LIABILITIES> 681
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 365,322
<SHARES-COMMON-STOCK> 20,899
<SHARES-COMMON-PRIOR> 9,609
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</TABLE>

<ARTICLE> 6
<SERIES>
<NUMBER> 12
<NAME> STEIN ROE SPECIAL VENTURE FUND

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> MAR-31-1997
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<NET-INVESTMENT-INCOME> (33)
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</TABLE>

<ARTICLE> 6
<SERIES>
<NUMBER> 13
<NAME> STEIN ROE EMERGING MARKETS FUND

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> FEB-28-1997
<PERIOD-END> MAR-31-1997
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<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<SERIES>
<NUMBER> 14
<NAME> STEIN ROE GROWTH OPPORTUNITIES FUND

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> MAY-09-1997
<PERIOD-END> SEP-30-1997
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</TABLE>