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Prospectus April 30, 1998
Stein Roe Mutual Funds
Stein Roe Large Company Focus Fund
Stein Roe Large Company Focus Fund seeks long-term growth of capital
by investing in a non-diversified portfolio of equity securities.
Stein Roe Large Company Focus Fund invests in a limited number of
large-cap companies, defined as those with market capitalizations in
excess of $5 billion, that Stein Roe & Farnham Incorporated believes
have above-average growth potential. Under normal conditions, the
Fund will invest at least 65% of its total assets in common stocks
of large-cap companies.
Large Company Focus Fund is a "no-load" fund. There are no sales or
redemption charges, and Large Company Focus Fund has no 12b-1 plan.
Large Company Focus Fund is series of Stein Roe Investment Trust.
The Trust is an open-end management investment company, each series
of which is diversified other than Large Company Focus Fund.
This prospectus contains information you should know before
investing in Stein Roe Large Company Focus Fund. Please read it
carefully and retain it for future reference.
A Statement of Additional Information dated April 30 1998,
containing more 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, www.sec.gov. This prospectus is also available
electronically by using Stein Roe's Internet address:
www.steinroe.com. You can get a free paper copy of the prospectus
and the Statement of Additional Information 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 ..............................3
The Fund ................................4
Investment Policies .....................4
Portfolio Investments and Strategies ....5
Investment Restrictions .................8
Risks and Investment Considerations..... 8
How to Purchase Shares ................. 9
By Check ............................10
By Wire..............................10
By Electronic Transfer ..............11
By Exchange .........................11
Conditions of Purchase ..............11
Purchases Through Third Parties......11
Purchase Price and Effective Date ...11
How to Redeem Shares ...................12
By Written Request ..................12
By Exchange .........................12
Special Redemption Privileges .......12
General Redemption Policies .........14
Shareholder Services ...................15
Net Asset Value ........................17
Distributions and Income Taxes .........17
Investment Return ......................18
Management..............................19
Organization and Description of Shares..20
Certificate of Authorization............21
SUMMARY
Stein Roe Large Company Focus Fund ("Large Company Focus Fund") is a
series of the Stein Roe Investment Trust ("Investment Trust"), an
open-end management investment company, each series of which is
diversified other than Large Company Focus Fund. Large Company
Focus Fund is a "no-load" fund. 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 Large Company Focus Fund are not qualified for sale.
Investment Objectives and Policies. Large Company Focus Fund seeks
long-term growth of capital by investing in a non-diversified
portfolio of equity securities. Large Company Focus Fund invests in
a limited number of large-cap companies, defined as those with
market capitalizations in excess of $5 billion, that Stein Roe &
Farnham Incorporated believes have above-average growth potential.
Under normal conditions, Large Company Focus Fund will hold between
15-25 common stocks and will invest at least 65% of its total assets
in common stocks of large-cap companies.
There can be no guarantee that Large Company Focus Fund will achieve
its investment objective. Please see Investment Policies and
Portfolio Investments and Strategies for further information.
Investment Risks. Large Company Focus Fund is designed for long-
term investors who can accept the fluctuations in portfolio value
and other risks associated with seeking long-term growth of capital
through investments in a limited number of common stocks.
Since Large Company Focus Fund 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. Such risks include fluctuations
in foreign currency exchange rates, possible imposition of exchange
controls, less complete financial information, political
instability, less liquidity, and greater price volatility.
Please see Investment Policies, Portfolio Investments and
Strategies, and Risks and Investment Considerations for further
information.
Purchases. The minimum initial investment for Large Company Focus
Fund is $2,500, and additional investments must be at least $100
(only $50 for purchases by electronic transfer). 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 no-load Stein Roe
Fund. For more detailed information, see How to Purchase Shares.
Redemptions. For information on redeeming Large Company Focus Fund
shares, including the special redemption privileges, see How to
Redeem Shares.
Net Asset Value. The purchase and redemption price of Large Company
Focus Fund's shares is its net asset value per share. The net asset
value is determined as of the close of regular session 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 Large Company Focus
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 no-load Stein Roe Fund. (See Distributions and Income Taxes
and Shareholder Services.)
Adviser and Fees. Stein Roe & Farnham Incorporated (the "Adviser")
provides administrative, investment management, and bookkeeping and
accounting services to Large Company Focus Fund. For a description
of the Adviser and its fees, see Management.
If you have any additional questions about Large Company Focus 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 (after fee
reimbursement; as a percentage of average
net assets)
Management and Administrative Fees (after fee
reimbursement)...................................0.85 %
12b-1 Fees.........................................None
Other Expenses.....................................0.65%
-----
Total Fund Operating Expenses (after fee
reimbursement)...................................1.50%
=====
___________________
* There is a $7.00 charge for wiring redemption proceeds to your
bank. A fee of $5.00 per quarter may be charged for accounts that
fall below stated minimums. See How to Redeem Shares--General
Redemption Policies.
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
------ -------
$15 $47
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 Large Company Focus Fund. Because Large Company
Focus Fund has no operating history, the information in the table is
based upon an estimate of expenses, assuming net assets of $50
million. The figures assume that the percentage amounts listed
under Annual Fund Operating Expenses remain the same during each of
the periods and that all income dividends and capital gains
distributions are reinvested in additional shares.
From time to time, the Adviser may voluntarily undertake to
reimburse Large Company Focus Fund for a portion of its operating
expenses. The Adviser has undertaken to reimburse Large Company
Focus Fund for its operating expenses to the extent such expenses
exceed 1.50% of its annual average net assets. This commitment
expires on January 31, 1999, subject to earlier termination by the
Adviser on 30 days' notice to Large Company Focus Fund. Absent such
reimbursement, the Management and Administrative Fees and Total
Operating Expenses would be 0.90% and 1.55%, respectively. Any such
reimbursement will lower Large Company Focus Fund's overall expense
ratio and increase its overall return to investors. (Also see
Management--Fees and Expenses.)
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 Large Company Focus 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 FUND
The mutual fund offered by this prospectus is Stein Roe Large
Company Focus Fund ("Large Company Focus Fund"). Large Company
Focus Fund is a no-load, non-diversified "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. Large Company Focus Fund does not impose commissions or
charges when shares are purchased or redeemed.
Large Company Focus Fund is a series of 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
management, administrative, and bookkeeping and accounting services
to Large Company Focus Fund. The Adviser 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.
INVESTMENT POLICIES
Large Company Focus Fund invests as described in the section below.
Additional information on portfolio investments and strategies may
be found under Portfolio Investments and Strategies in this
prospectus and in the Statement of Additional Information.
The investment objective of Large Company Focus Fund is long-term
growth of capital by investing in a non-diversified portfolio of
equity securities. Large Company Focus Fund attempts to achieve its
objective by investing in a limited number of large-cap companies,
defined as those with market capitalizations in excess of $5
billion, that the Adviser believes have above-average growth
potential. As a "focus" fund, under normal conditions, the Fund
will hold between 15-25 common stocks and will invest at least 65%
of its total assets in equity securities of large-cap companies.
As a "focus" fund, the Fund intends to invest in those companies
that the Adviser believes have substantial opportunity to be dominant
in their particular industry or market--meaning those companies with
earnings predictability that generate consistent earning growth
despite normal market declines.
As a "non-diversified" fund, the Fund is not limited under the
Investment Company Act of 1940 in the percentage of its assets that
it may invest in any one issuer. (See Risks and Investment
Considerations - Non-Diversification.)
PORTFOLIO INVESTMENTS AND STRATEGIES
Debt Securities. In pursuing its investment objective, Large
Company Focus Fund may invest in debt securities of corporate and
governmental issuers. Investments in unrated debt securities are
limited to those deemed to be of comparable quality by the Adviser.
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 by Large Company Focus Fund is lost
or reduced below investment grade, it is not required to dispose of
the security--the Adviser will, however, consider that fact in
determining whether it should continue to hold the security. Large
Company Focus Fund may invest up to 35% of its net assets in debt
securities, but does not expect to invest more than 5% of its net
assets in debt securities that are rated below investment grade. Debt
securities rated below investment grade are also referred to as "junk"
bonds. Subject to the above-mentioned limitations, the Fund is not
subject to a minimum rating requirement with respect to debt
securities.
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.
Conversely, an increase in rates usually reduces the value of debt
securities. 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, Large
Company Focus Fund may invest without limitation in high-quality
fixed income securities or hold assets in cash or cash equivalents.
Convertible Securities. By investing in convertible securities,
Large Company Focus Fund 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 security, the Adviser
will consider substantially the same criteria that would be
considered in purchasing the underlying stock. Although convertible
securities purchased by Large Company Focus Fund are frequently
rated investment grade, it also 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:
- - Tend to be more sensitive to interest rate and economic changes;
- - May be obligations of issuers who are less creditworthy than
issuers of higher-quality convertible securities; and
- - May be more thinly traded due to the fact that such securities
are less well known to investors than either common stock or
conventional debt securities.
As a result, the Adviser's own investment research and analysis tend
to be more important than other factors in the purchase of such
securities. Convertible securities rated below investment grade
will be deemed "junk" bonds for purposes of the 5% limitation noted
above.
Foreign Securities. Large Company Focus Fund may invest in foreign
securities. Other than American Depositary Receipts (ADRs), foreign
debt securities denominated in U.S. dollars, and securities
guaranteed by a U.S. person, Large Company Focus Fund is limited to
investing no more than 25% of its total assets in foreign
securities. (See Risks and Investment Considerations.) Large
Company Focus Fund may invest in sponsored or unsponsored ADRs. In
addition to, or in lieu of, such direct investment, Large Company
Focus Fund 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, Large Company
Focus Fund 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.
Large Company Focus Fund also may enter into foreign currency
contracts as a hedging technique to limit or reduce exposure to
currency fluctuations. In addition, Large Company Focus Fund may
use options and futures contracts, as described below, to limit or
reduce exposure to currency fluctuations.
Lending Portfolio Securities; When-Issued and Delayed-Delivery
Securities. Subject to certain restrictions described in the
Statement of Additional Information, Large Company Focus Fund may
make loans of its portfolio securities to broker-dealers and banks.
Large Company Focus Fund 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 Large Company Focus
Fund 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. Large Company Focus Fund 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.
Portfolio Turnover. Although Large Company Focus Fund does not
purchase securities with a view to rapid turnover, there are no
limitations on the length of time portfolio securities must be held-
- -the portfolio turnover rate may vary significantly from year to
year, but is not expected to exceed 100% under normal market and
other conditions. At times, Large Company Focus Fund may invest for
short-term capital appreciation. Flexibility of investment and
emphasis on capital appreciation may involve greater portfolio
turnover than that of mutual funds that have the objectives of
income or maintenance of a balanced investment position. 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.) Although it may produce varying
amounts of income, Large Company Focus Fund is not intended as an
investment for investors seeking dividend income.
Derivatives. Consistent with its objective, Large Company Focus
Fund 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. Large Company
Focus Fund 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 (including options and futures)
depends on the Adviser's ability to correctly predict changes in
the levels and directions of movements in currency exchange rates,
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 fluctuation, Large Company Focus Fund
may:
- -Purchase and write both call options and put options on
securities, indexes and foreign currencies;
- -Enter into interest rate, index and foreign currency futures
contracts;
- -Write options on such futures contracts; and
- -Purchase other types of forward or investment contracts linked to
individual securities, indexes or other benchmarks.
Large Company Focus Fund may write a call or put option only if the
option is covered. As the writer of a covered call option, Large
Company Focus Fund 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 Large Company Focus Fund 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. Large Company Focus Fund 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 Large Company Focus
Fund 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. Any potential gains in such securities,
however, 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
Large Company Focus Fund is non-diversified as that term is defined
in the Investment Company Act of 1940.
Large Company Focus Fund will not acquire more than 10% of the
outstanding voting securities of any one issuer. It may, however,
invest all of its assets in shares of another investment company
having the identical investment objective.
Large Company Focus Fund may not make loans, but it may:
- - Purchase money market instruments and enter into repurchase
agreements;
- - Acquire publicly distributed or privately placed debt securities;
- - Lend portfolio securities under certain conditions; and
- - Participate in an interfund lending program with other Stein Roe
funds and portfolios.
Large Company Focus Fund may not borrow money, except for
nonleveraging, temporary, or emergency purposes or in connection
with participation in the interfund lending program. Neither
aggregate borrowings (including reverse repurchase agreements) nor
aggregate loans at any one time may exceed 33 1/3% of the value of
total assets. Additional securities may not be purchased when
borrowings, less proceeds receivable from sales of portfolio
securities, exceed 5% of total assets.
Large Company Focus Fund 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.
The policies summarized in the second, third and fourth paragraphs
under this section and the policy with respect to concentration of
investments in any one industry described under Risks and Investment
Considerations 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
investment objective of Large Company Focus Fund 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 shareholders. 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. Large Company Focus Fund
is designed for long-term investors who can accept the fluctuations
in portfolio value and other risks associated with seeking long-term
growth of capital through investments in a limited number of common
stocks. Of course, there can be no guarantee that Large Company
Focus Fund will achieve its objective.
Debt securities rated in the fourth highest grade may have some
speculative characteristics, and changes in economic conditions or
other circumstances may lead to a weakened capacity of the issuers
of such securities to make principal and interest payments.
Securities rated below investment grade may possess speculative
characteristics, and changes in economic conditions are more likely
to affect the issuer's capacity to pay interest or repay principal.
Large Company Focus Fund generally allocates its investments among a
number of different industries rather than concentrating in a
particular industry or group of industries. Large Company Focus
Fund, however, 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. (See Investment Policies.)
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; 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.
Non-Diversification. As a "non-diversified" fund, Large Company
Focus Fund is not limited under the Investment Company Act of 1940
in the percentage of its assets that it may invest in any one
issuer. However, Large Company Focus Fund intends to comply with
the diversification standards applicable to regulated investment
companies under the Internal Revenue Code of 1986. In order to meet
those standards, among other requirements, at the close of each
quarter of its taxable year (a) at least 50% of the value of Large
Company Focus Fund's total assets must be represented by one or more
of the following: (i) cash and cash items, including receivables;
(ii) U.S. Government securities; (iii) securities of other regulated
investment companies; and (iv) securities (other than those in items
(ii) and (iii) above) of any one or more issuers as to which its
investment in an issuer does not exceed 5% of the value of Large
Company Focus Fund's total assets (valued at the time of investment);
and (b) not more than 25% of its total assets (valued at the time of
investment) may be invested in the securities of any one issuer (other
than U.S. Government securities or securities of other regulated
investment companies).
Since Large Company Focus Fund may invest more than 5% of its assets
in a single portfolio security, the appreciation or depreciation of
such a security will have a greater impact on the net asset value of
Large Company Focus Fund, and the net asset value per share of Large
Company Focus Fund can be expected to fluctuate more than would the
net asset value of a comparable "diversified" fund (which generally,
with respect to 75% of its assets, cannot invest more than 5% of
its assets in securities of any one issuer).
Master Fund/Feeder Fund Option. Rather than invest in securities
directly, Large Company Focus Fund may in the future seek to achieve
its investment objective by pooling its assets with those of other
investment companies for investment in another investment company
having the same investment objective and substantially the same
investment policies as Large Company Focus Fund. The purpose of
such an arrangement is to achieve greater operational efficiencies
and to reduce costs. It is expected that the assets of any such
investment company would be managed by the Adviser in substantially
the same manner as Large Company Focus Fund. Shareholders of Large
Company Focus Fund will be given at least 30 days' prior notice of
any such investment. Such investment would be made only if the
trustees determine it to be in the best interests of Large Company
Focus Fund and its shareholders.
HOW TO PURCHASE SHARES
You may purchase shares of Large Company Focus Fund by check, by
wire, by electronic transfer or by exchange from your account with
another no-load Stein Roe Fund. The initial purchase minimum per
Fund account is $2,500; the minimum for Uniform Gifts/Transfers to
Minors Act ("UGMA") accounts is $1,000; the minimum for accounts
established under an automatic investment plan (i.e., Regular
Investments, Dividend Purchase Option, or Automatic Exchange Plan)
is $1,000 for regular accounts and $500 for UGMA accounts; 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 the
Adviser. Subsequent purchases must be at least $100, or at least
$50 if you purchase by electronic transfer. If you wish to purchase
shares to be held by a tax-sheltered retirement plan sponsored by
the Adviser, you must obtain special forms for those plans. (See
Shareholder Services.)
By Check. To make an initial purchase of shares of Large Company
Focus 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. at P.O. Box 8900, Boston,
Massachusetts 02205. Participants in the Stein Roe Counselor
[service mark] program should send orders to SteinRoe Services Inc.
at 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 and subsequent
purchases into your account. Each individual check submitted for
purchase must be at least $100, 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 Large Company Focus Fund be cancelled because
your check does not clear, you will be responsible for any resulting
loss incurred by the 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 Large Company Focus Fund at 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
Large Company Focus 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. 21; Stein Roe Large Company Focus 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:
First National Bank of Boston
Boston, Massachusetts
ABA Routing No. 011000390
Attention: SteinRoe Services Inc.
Fund No. 21; Stein Roe Large Company Focus Fund
Account of (exact name(s) in registration)
Counselor Account No. ________
By Electronic Transfer. You also may 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 prescheduled intervals
("Regular Investments"). (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 Large Company Focus
Fund be cancelled because your electronic transfer does not clear,
you will be responsible for any resulting loss incurred by the Fund.
By Exchange. You may purchase shares by exchange of shares from
another no-load 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 Large Company Focus
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 the 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 Large Company Focus Fund's shareholders.
Investment Trust also reserves the right to waive or lower its
investment minimums for any reason. Investment Trust does not issue
certificates for shares.
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 or authorized designee
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 the
business day.
Some Intermediaries that maintain nominee accounts with Large
Company Focus 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.
The Adviser and Large Company Focus Fund's transfer agent share in
the expense of these fees, and the Adviser pays all sales and
promotional expenses.
Purchase Price and Effective Date. Each purchase of Large Company
Focus Fund's shares 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 Large Company Focus 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 Large Company Focus 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 Large Company Focus Fund shares through an
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.
HOW TO REDEEM SHARES
By Written Request. You may redeem all or a portion of your shares
of Large Company Focus Fund by submitting a written request in "good
order" to SteinRoe Services Inc. at P.O. Box 8900, Boston,
Massachusetts 02205. Participants in the Stein Roe Counselor
[service mark] program should send redemption requests to SteinRoe
Services Inc. at P.O. Box 803938, Chicago, Illinois 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, in English, 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 Large Company Focus
Fund by verifying your signature);
(4) Corporations and associations must submit with each request a
completed Certificate of Authorization included in this
prospectus (or a form of resolution acceptable to Investment
Trust); and
(5) 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 Large
Company Focus Fund shares and use the proceeds to purchase shares of
any other no-load 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 and carefully read the
prospectus for the no-load Stein Roe Fund in which you wish to
invest. 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 no-load Stein Roe Fund being
purchased. An exchange may be made by following the redemption
procedure described under By Written Request and indicating the no-
load 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
Telephone 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 are not
available to redeem shares held by a tax-sheltered retirement plan
sponsored by the Adviser. (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 Large Company Focus Fund may refuse requests for
Telephone Exchanges in excess of four round-trips (a round-trip
being the exchange out of Large Company Focus Fund into another no-
load Stein Roe Fund, and then back to Large Company Focus 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 Large Company
Focus 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 it as "market-timers" if the officers of Investment
Trust determine the order not to be in the best interests of
Investment 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 rather 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 Large Company Focus 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 Large Company
Focus 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 Large Company Focus
Fund account for investment in another no-load Stein Roe Fund
account on a regular basis.
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.
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.
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. If
you wish to redeem shares held by a tax-sheltered retirement plan
sponsored by the Adviser, special procedures of those plans apply to
such redemptions. (See Shareholder Services--Tax-Sheltered
Retirement Plans.) 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 will 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 to suspend, limit, modify or
terminate, at any time without prior notice, 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. Large Company Focus 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 Large Company Focus 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
Large Company Focus Fund immediately if there is a problem. If
Large Company Focus 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 if the shares in the account do
not have a value of at least $1,000. 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, other Stein Roe prototype retirement plans, accounts
with automatic investment plans (unless regular investments have
been discontinued), or omnibus or 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 Large Company Focus 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 you cause it
to sustain (such as loss from an uncollected check or electronic
transfer for the purchase of shares, or any 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 Large Company Focus Fund, as well as periodic statements
detailing distributions made by the Fund. Shares purchased by
reinvestment of dividends, by cross-reinvestment of dividends from
another Stein Roe fund, or through an automatic investment plan will
be confirmed to you quarterly. In addition, Investment Trust will
send you semiannual and annual reports showing portfolio holdings
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] Automated Telephone Service. To access
Stein Roe Funds-on-Call [registered], just call 800-338-2550 on any
touch-tone telephone and follow the recorded instructions. Funds-
on-Call [registered] 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]
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] 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 Plans. Booklets describing the following
programs and special forms necessary for establishing them are
available on request. You may use all of the no-load Stein Roe
Funds, except those investing primarily in tax-exempt securities, in
these plans. Please read the prospectus for each fund in which you
plan to invest before making your investment.
Individual Retirement Accounts ("IRAs") for employed persons and
their non-employed spouses.
Prototype Money Purchase Pension and Profit Sharing Plans for self-
employed individuals, partnerships and corporations.
Simplified Employee Pension Plans permitting employers to provide
retirement benefits to their employees by utilizing IRAs while
minimizing administration and reporting requirements.
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--diversify your Fund investments by having
distributions from one Stein Roe fund account automatically invested
in another no-load Stein Roe fund account. Before establishing this
option, obtain and carefully 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. The account
into which distributions are to be invested may be opened with an
initial investment of only $1,000.
Automatic Dividend Deposit (electronic transfer)--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--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)--redeem shares at
any time and have the proceeds deposited directly to your bank
account ($50 minimum; $100,000 maximum).
Regular Investments (electronic transfer)--purchase Fund shares at
regular intervals directly from your bank account ($50 minimum;
$100,000 maximum).
Special Investments (electronic transfer)--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--automatically redeem a fixed dollar amount
from your Fund account and invest it in another no-load Stein Roe
Fund account on a regular basis ($50 minimum; $100,000 maximum).
Automatic Redemptions (electronic transfer)--have a fixed dollar
amount redeemed and sent at regular intervals directly to your bank
account ($50 minimum; $100,000 maximum).
Systematic Withdrawals--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 or redemption price of Large Company Focus Fund's
shares is its net asset value per share. The net asset value of a
share of Large Company Focus Fund is determined as of the close of
regular session 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. 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 of Large Company Focus Fund 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. Large Company Focus 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. Large Company Focus Fund 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 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 no-load Stein Roe fund; or (4) applied to
purchase shares in a no-load 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 a shareholder elected to receive
dividends and/or capital gains distributions in cash and the postal
or other delivery service selected by the transfer agent is unable
to deliver checks to the shareholder's address of record, such
shareholder's distribution option will automatically be converted to
having all dividend and other distributions reinvested in additional
shares. 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 Large
Company Focus 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 January 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
will 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 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, Large Company Focus 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. Large Company
Focus Fund must promptly pay to the IRS all amounts withheld.
Therefore, it is usually not possible for Large Company Focus 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 Large Company Focus Fund is
measured by the distributions received (assuming reinvestment), 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 Large Company Focus Fund's total return with
alternative investments should consider differences between Large
Company Focus 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 no guarantee of future results.
MANAGEMENT
Trustees and Adviser. The Board of Trustees of Investment Trust has
overall management responsibility for Large Company Focus Fund. See
the Statement of Additional Information for the names of and
additional information about the trustees and officers.
The Adviser, Stein Roe & Farnham Incorporated, One South Wacker
Drive, Chicago, Illinois 60606, is responsible for managing Large
Company Focus Fund, subject to the direction of the 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 Manager. David P. Brady has been the portfolio manager
of Large Company Focus Fund since its inception in 1998. Mr.
Brady has been a portfolio manager of SR&F Growth Investor Portfolio
since its inception in 1997 and a portfolio manager of Stein Roe
Young Investor Fund since Mar. 1995. 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. The Adviser is entitled to receive a monthly
administrative fee from Large Company Focus Fund, computed and
accrued daily, at an annual rate of .15% of the first $500 million
of average net assets, .125% of the next $500 million, .10% of the
next $500 million, and .075% thereafter; and a monthly management
fee, computed and accrued daily, at an annual rate of .75% of the
first $500 million of average net assets, .70% of the next $500
million, .65% of the next $500 million , and .60% thereafter 75% of
the first $500 million of average net assets, .70% of the next $500
million, .65% of the next $500 million, and .60% thereafter.
However, as noted above under Fee Table, the Adviser may voluntarily
undertake to reimburse Large Company Focus Fund for a portion of its
operating expenses.
The Adviser provides office space and executive and other personnel
to Investment Trust. All expenses of Large Company Focus Fund
(other than those paid by the Adviser), including, but not limited
to, printing and postage charges, securities registration fees,
custodian and transfer agency fees, legal and auditing fees,
compensation of trustees not affiliated with the Adviser, and
expenses incidental to its organization, are paid out of the assets
of Large Company Focus Fund.
Under a separate agreement with Investment Trust, the Adviser
provides certain accounting and bookkeeping services to Large
Company Focus Fund, 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 Large Company Focus Fund are offered for
sale through Liberty Financial Investments, Inc. ("Distributor"),
One Financial Center, Boston, Massachusetts 02111. The Distributor
is a subsidiary of Colonial Management Associates, Inc., which is an
indirect subsidiary of Liberty Financial. Large Company Focus Fund
shares 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 the Adviser, including payments to the
Distributor for sales of Fund shares.
All Fund 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] program 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
Large Company Focus Fund. 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
January 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, 11 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
of Investment Trust 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.
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.
<PAGE>
Stein Roe Mutual Funds
Certificate of Authorization
for use by corporations and associations only
Corporations or associations must complete this Certificate and
submit it with the Fund Application, each written redemption,
transfer or exchange request, and each request to terminate or
change any of the Privileges or special service elections.
If the entity submitting the Certificate is an association, the word
"association" shall be deemed to appear each place the word
"corporation" appears. If the officer signing this Certificate is
named as an authorized person, another officer must countersign the
Certificate. If there is no other officer, the person signing the
Certificate must have his signature guaranteed. If you are not sure
whether you are required to complete this Certificate, call a Stein
Roe account representative at 800-338-2550 .
The undersigned hereby certifies that he is the duly elected
Secretary of ____________________________ (the "Corporation") and
(Name of Corporation/Association)
and that the following individual(s):
Authorized Persons
_____________________ ____________________
Name Title
_____________________ ____________________
Name Title
_____________________ ____________________
Name Title
is (are) duly authorized by resolution or otherwise to act on
behalf of the Corporation in connection with the Corporation's
ownership of shares of any mutual fund managed by Stein Roe &
Farnham Incorporated (individually, the "Fund" and collectively,
the "Funds") including, without limitation, furnishing any such
Fund and its transfer agent with instructions to transfer or redeem
shares of that Fund payable to any person or in any manner, or to
redeem shares of that Fund and apply the proceeds of such
redemption to purchase shares of another Fund (an "exchange"), and
to execute any necessary forms in connection therewith.
Unless a lesser number is specified, all of the Authorized Persons
must sign written instructions. Number of signatures required:
________.
If the undersigned is the only person authorized to act on behalf
of the Corporation, the undersigned certifies that he is the sole
shareholder, director, and officer of the Corporation and that the
Corporation's Charter and By-laws provide that he is the only
person authorized to so act.
Unless expressly declined on the application (or other form
acceptable to the Funds), the undersigned further certifies that
the Corporation has authorized by resolution or otherwise the
establishment of the Telephone Exchange and Telephone Redemption by
Check Privileges for the Corporation's account with any Fund
offering any such Privilege. If elected on the application (or
other form acceptable to the Funds), the undersigned also certifies
that the Corporation has similarly authorized establishment of the
Electronic Transfer, Telephone Redemption by Wire, and Check-
Writing Privileges for the Corporation's account with any Fund
offering said Privileges. The undersigned has further authorized
each Fund and its transfer agent to honor any written, telephonic,
or telegraphic instructions furnished pursuant to any such
Privilege by any person believed by the Fund or its transfer agent
or their agents, officers, directors, trustees, or employees to be
authorized to act on behalf of the Corporation and agrees that
neither the Fund nor its transfer agent, their agents, officers,
directors, trustees, or employees will be liable for any loss,
liability, cost, or expense for acting upon any such instructions.
These authorizations shall continue in effect until five business
days after the Fund and its transfer agent receive written notice
from the Corporation of any change.
IN WITNESS WHEREOF, I have hereunto subscribed my name as Secretary
and affixed the seal of this Corporation this ____ day of
_________________, 19___.
__________________________
Secretary
__________________________
Signature Guarantee*
Corporate
Seal
Here
<PAGE>
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 Capital Opportunities Fund
Stein Roe Growth Opportunities Fund
Stein Roe Large Company Focus Fund
Stein Roe International Fund
Stein Roe Emerging Markets Fund
Stein Roe Mutual Funds
P. O. Box 8900
Boston, Massachusetts 02205-8900
Financial Advisors call: 1-800-322-0593
Shareholders call 1-800-338-2550
www.steinroe.com
In Chicago, visit our Fund Center at One South Wacker Drive,
Suite 3200
Liberty Financial Investments, Inc., Distributor
