STEIN ROE MUTUAL FUNDS
SEMIANNUAL REPORT
MARCH 31, 2000
PHOTO OF: CORN IN FIELD
STEIN ROE EQUITY FUNDS
GROWTH AND INCOME FUNDS
BALANCED FUND
GROWTH & INCOME FUND, CLASS S
LOGO: STEIN ROE MUTUAL FUNDS
SENSIBLE RISKS. INTELLIGENT INVESTMENTS.(R)
<PAGE>
CONTENTS
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FROM THE PRESIDENT................................................ 1
Stephen E. Gibson's thoughts on the equity markets and investing
PERFORMANCE SUMMARY .............................................. 4
QUESTIONS & ANSWERS
Balanced Fund -- An interview with
Portfolio Manager Harvey Hirschhorn.......................... 7
Growth & Income Fund-- An interview with
Portfolio Manager Dan Cantor................................. 10
PORTFOLIOS OF INVESTMENTS......................................... 14
A complete list of investments with market values
FINANCIAL STATEMENTS.............................................. 24
Statements of assets and liabilities, operations
and changes in net assets
NOTES TO FINANCIAL STATEMENTS..................................... 34
FINANCIAL HIGHLIGHTS.............................................. 40
Selected per-share data and ratios
Must be preceded or accompanied by a prospectus.
<PAGE>
FROM THE PRESIDENT
================================================================================
DEAR SHAREHOLDER:
The six-month period ended March 31, 2000, proved to be a positive but
challenging one for Stein Roe Growth & Income Fund and Stein Roe Balanced Fund.
Both Funds gained, but not as quickly as the U.S. equity markets in general.
On the economic front, consumer spending reached record levels during the
past six months, while in the business sector, industrial production remained
strong. In total, the U.S. economy expanded at an annual inflation-adjusted rate
of 7.3% in the final quarter of 1999. Judging by preliminary data, it slowed
only slightly in the first three months of 2000. Creation of new jobs at good
pay remained strong, while consumer confidence and consumer spending on retail
items and autos continued at high levels.
All of this strength stirred up fears of higher inflation and, ultimately,
led our central bank, the Federal Reserve, to raise short-term interest rates
three times between September 30 and March 31. The Federal Reserve was concerned
about the possibility that the U.S. economy may be growing too quickly and that
inflationary pressures may derail our economic expansion, now in its ninth year.
In this rising-rate environment, results for the various sectors of the bond
market were mixed, though the overall outcome was positive. While higher
interest rates generally led to weaker prices and stronger yields for most
bonds, actions taken by the U.S. Treasury sent long-term U.S. Treasurys in the
opposite direction. Prices on Treasury bonds appreciated considerably after the
federal government announced a plan to use the government's surplus income to
retire Treasury debt with 10 years or more until maturity. Anticipating a drop
in the supply of these very safe long-term securities, investors were quick to
buy them, pushing their prices up and their yields down.
In the equity markets, worries about rapid economic growth, inflation, and
changing interest rates kept investors wondering and, for many stocks, put a
damper on price appreciation. Despite robust gains in earnings, overall stock
prices rose only moderately, with the exception of the technology sector.
Throughout the period, the market could clearly be divided into the "haves" --
most anything related to technology and telecommunications -- and the "have
nots" -- most everything else. In general, portfolios with large allocations to
technology shares sprinted ahead, while other portfolios lagged. In spite of a
selloff during the last three weeks of the period, technology and growth
investing were the undisputed victors for the six-month period.
1
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FROM THE PRESIDENT CONTINUED
================================================================================
The dichotomy between "old" and "new" economy stocks was striking. The NASDAQ
Composite, which has a large number of "new economy" technology issues,
dominated the markets for roughly two months in early 2000, reaching an
historical peak of 5132 by March 10, before retreating to 4573 at March 31. The
Standard & Poor's 500 Index, which measures a broad spectrum of the market,
including a fair number of technology stocks, also advanced strongly. In
contrast, the Dow Jones Industrial Average, which is heavily weighted toward
more traditional or "old economy" stocks, was strong in the fourth quarter of
1999, but lagged the other two indexes by a wide margin throughout most of the
first quarter of calendar year 2000.
Due to their objectives and investment strategies, the Funds could not
participate fully in the technology "boom." Yet both provided total returns for
the six-months that met or exceeded the long-term historical average for the
broad equity market. I attribute this to the disciplined, research-intensive
approach practiced by our portfolio managers.
In the following report, you will find detailed information about these
investment strategies. As you read the report, I think you will see why we
believe so strongly that diversification should be part of every investor's game
plan. Throughout the reports there are references to the sell-off in "new
economy" technology stocks -- the growth stocks of today's markets -- and a
shift toward "old economy" or value stocks during the final weeks. Historically,
growth and value have taken turns leading the market, and a well-conceived
investment strategy that includes both can help an investor pursue long-term
performance while controlling risk. Many of our portfolio managers anticipate
considerable levels of volatility in the market in the coming months, so now,
perhaps more than any time in the past few years, maintaining a diversified
portfolio may be important.
I encourage you to review this report carefully and to visit us on the
Internet at www.steinroe.com for quarterly updates on the Funds' progress.
2
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FROM THE PRESIDENT CONTINUED
================================================================================
As always, we thank you for choosing the Stein Roe Funds and for the
opportunity to serve your investment needs.
Sincerely,
/S/ Stephen E. Gibson
Stephen E. Gibson
President
[May 15, 2000]
Photo of: Stephen E. Gibson
3
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PERFORMANCE SUMMARY
================================================================================
SIX-MONTH CUMULATIVE AND AVERAGE ANNUAL TOTAL RETURNS
Periods ended March 31, 2000
SIX ONE FIVE
MONTHS YEAR YEARS 10 YEARS
------------------------------------------
STEIN ROE BALANCED FUND 12.87% 14.06% 15.80% 12.86%
Unmanaged Blend: 11.67% 13.87% 14.20% 11.17%
(60% MSCI World Index
40% Lehman Bros. Aggregate
Bond Index)
Standard & Poor's 500 Index 17.50% 17.93% 26.75% 18.82%
Lipper Balanced Fund Average 10.50% 10.47% 15.37% 12.39%
Number of Funds in Peer Group 474 459 234 62
Fund began operating on 8/25/49.
STEIN ROE GROWTH & INCOME FUND 8.22% 7.42% 20.06% 15.80%
Standard & Poor's 500 Index 17.50% 17.93% 26.75% 18.82%
Lipper Large-Cap Value Fund Average 10.04% 9.67% 20.37% 15.42%
Number of Funds in Peer Group 366 340 144 54
Fund began operating on 3/24/87
--------------------------------------------------------------------------------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT
RETURN WILL VARY, SO YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL SHARES. Total
return includes changes in share price and reinvestment of income and capital
gains distributions. Each index shown above is an unmanaged group of securities
that differs from the composition of each Stein Roe fund; they are not available
for direct investment. The MSCI World Index includes both U.S. and foreign
stocks. Foreign investing involves market, political, currency and accounting
risks not associated with domestic securities. Lipper, Inc., a widely respected
data provider in the industry, calculates an average total return for mutual
funds with similar investment objectives to the fund. Sources: Lipper, Inc.
4
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INVESTMENT COMPARISONS
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GROWTH OF A $10,000 INVESTMENT
3/31/90-3/31/2000
[LINE CHART]
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Balanced Fund
Date Balanced Fund S&P 500 Lipper Unmanaged Blend: Lehman
Balanced 60% MSCI World
Fund Index / 40%
Average Lehman Bros.
(62) Funds
3/31/90 10000 10000 10000 10000 10000
3/31/91 11389 11438 11266 10898 10675.5
3/31/92 12955 12697 12648 11324 12368.3
3/31/93 14937 14629 14353 12745 14005
3/31/94 15439 14842 14805 13900 15607.9
3/31/95 16097 17149 15895 14955 14961.2
3/31/96 19875 22648 19271 17397 17108.7
3/31/97 21930 27137 21380 18716 17879
3/31/98 27289 40152 27507 23202 19594.7
3/31/99 29385 47576 29386 25564 22110.4
3/31/00 33515 56107 32462 29110 21626
[LINE CHART]
================================================================================
GROWTH & INCOME FUND
Date Growth & Income Fund Lipper Large- S&P 500 Index
Cap Value Fund
Average (54 Funds)
3/31/90 10000 10000 10000
3/31/91 11295 11198 11438
3/31/92 13221 12662 12698
3/31/93 15271 14464 14630
3/31/94 16103 14994 14847
3/31/95 17387 16591 17151
3/31/96 22863 21343 22649
3/31/97 26614 24781 27134
3/31/98 37234 34805 40145
3/31/99 40369 36549 47559
3/31/00 43372 42736 56107
================================================================================
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT
RETURN WILL VARY, SO YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL SHARES. Each
illustration assumes a $10,000 investment on March 31, 1990, and reinvestment of
income and capital gains distributions. Each index shown above is an unmanaged
group of securities that differs from the composition of each Stein Roe fund;
they are not available for direct investment. The MSCI World Index includes both
U.S. and foreign stocks. Foreign investing involves market, political, currency
and accounting risks not associated with domestic securities. Source: Lipper,
Inc.
5
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QUESTIONS & ANSWERS
================================================================================
AN INTERVIEW WITH HARVEY HIRSCHHORN, PORTFOLIO
MANAGER OF THE STEIN ROE BALANCED FUND AND SR&F BALANCED PORTFOLIO
FUND DATA
INVESTMENT OBJECTIVE:
Stein Roe Balanced Fund seeks long-term growth of capital and current income,
consistent with reasonable investment risk, by investing primarily in a
diversified portfolio of equities, debt securities and cash.
FUND INCEPTION:
August 25, 1949
TOTAL NET ASSETS:
$247.9 million
[GRAPHIC]
Q: HOW DID THE BALANCED FUND PERFORM DURING THE SIX MONTHS ENDED MARCH 31, 2000?
HIRSCHHORN: We are pleased with the 12.87% total return for the Balanced Fund,
which is a portfolio of both equities and fixed-income securities. Although this
return is less than the 17.50% for the Standard & Poor's 500 Index, it exceeds
the 2.08% total return for the Lehman Brothers Aggregate Bond Index.
Q: THE PORTFOLIO INCLUDES STOCKS, BONDS AND CASH. HOW DID YOU ALLOCATE ASSETS
AMONG THESE THREE ASSET CLASSES?
HIRSCHHORN: At the beginning of the period, we held approximately 54% stocks,
34% fixed income and 12% cash. The allocation to cash was above normal for two
reasons. First, we were feeling somewhat tenuous about the stock market as a
whole. Second, a sizable portion of the stock portfolio was invested in the more
volatile technology sector. The higher cash level helped to balance this risk.
As the broad stock market improved, we put the cash to work in equities,
pushing the stock allocation above 75%. At the same time, we diversified away
from technology, investing instead in some foreign stocks and in domestic stocks
from areas that had been laggards, such as financial services and health care.
The modestly greater variety benefited the Fund when technology stocks declined
in March and investors turned to more reasonably valued sectors.
Q: HOW DID YOU MANAGE THE FIXED-INCOME PORTION OF THE PORTFOLIO?
HIRSCHHORN: We reduced the Portfolio's duration early in the period,
Photo of: Harvey Hirschhorn
6
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QUESTIONS & ANSWERS CONTINUED
================================================================================
so the negative effect of an interest-rate increase through November was
reduced. Later, we increased the share of assets invested in longer-term U.S.
Treasurys and captured some appreciation when prices rose in the first quarter
of 2000. At March 31, the Portfolio still was overweighted in long-term
Treasurys, and its duration was slightly higher than the benchmark Lehman
Brothers Aggregate Bond Index.
Q: WHICH EQUITY INVESTMENTS PERFORMED THE BEST? AND WHICH WERE THE MOST
DISAPPOINTING?
HIRSCHHORN: The leaders were a broadly diversified group. They included
technology stocks like Cisco Systems, Oracle, Sun Microsystems (3.5%, 2.5% and
1.7% of net assets, respectively) and EMC, Intel and Terradyne (0.8%, 3.1% and
0.5% of net assets, respectively). They also included companies like Enron,
Goldman Sachs, and Kohl's (1.5%, 0.3%, and 0.8%, respectively, of net assets).
The underperformers were largely consumer-related stocks. Among them were IMS
Health, Proctor & Gamble and SBC Communications (0.4%, 0.4%, and 0.8%,
respectively, of net assets). However, the impact was contained because the Fund
was underweighted in consumer-related sectors.
Q: WHY DID YOU INVEST IN MORE FOREIGN STOCKS?
HIRSCHHORN: First, we want to reduce our exposure to U.S. equities, which we
feel are likely to be quite volatile for awhile. Second, we see new
opportunities in foreign equities. A number of foreign nations appear to be
making the right moves to keep inflation down, strengthen their economies and
encourage investing.
Q: WHAT IS YOUR OUTLOOK FOR THE FUND?
HIRSCHHORN: I believe that there will be more rotation in the U.S. equity
market. Overall returns are likely to be less spectacular than they have been
for the last five or six years. We will be looking for opportunities to take
advantage of this rotation while considering additional investments in foreign
securities. In the fixed-income portion of the portfolio, we may shift some
Treasury securities into high-grade corporate bonds where spreads are wide.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT
RETURNS WILL VARY, SO YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL SHARES. Total
return includes changes in share price and reinvestment of all distributions.
Portfolio holdings are as of 3/31/00 and are subject to change. Foreign
investing involves market, political, currency and accounting risks not
associated with domestic securities. Each index mentioned is an unmanaged group
of stocks that differs from the composition of any Stein Roe fund; indices are
not available for direct investment.
7
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FUND HIGHLIGHTS AS OF 3/31/2000
================================================================================
SR&F Balanced Portfolio
TOP 10 EQUITY HOLDINGS (% OF NET ASSETS)
--------------------------------------------------------------------------------
General Electric 7.3% Oracle Corp. 2.5%
Citigroup 4.5 BPAmoco PLC 2.2
Cisco Systems 3.5 Bank America Corp. 2.1
Intel 3.1 Wal-Mart 1.9
Microsoft 2.6 Sun Microsystems, Inc. 1.7
--------------------------------------------------------------------------------
================================================================================
EQUITY PORTFOLIO HIGHLIGHTS
PORTFOLIO S&P 500 INDEX
---------------------------------
Number of Equity & Convertible Holdings 90 500
Dollar Weighted Median
Market Capitalization ($Mil.) 153,660.0 85,679.3
================================================================================
[PIE CHARTS:]
ECONOMIC SECTOR BREAKDOWN
Equity Portfolio S&P 500 Index
Technology 31% 35%
Financial 16% 13%
Utilities 7% 10%
Energy/Basic Materials 12% 8%
Consumer Non-Cyclical 9% 15%
Industrial 15% 7%
Consumer Cyclical 10% 12%
8
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QUESTIONS & ANSWERS
================================================================================
AN INTERVIEW WITH DANIEL CANTOR, PORTFOLIO MANAGER OF
STEIN ROE GROWTH & INCOME FUND AND SR&F GROWTH AND INCOME PORTFOLIO
FUND DATA
INVESTMENT OBJECTIVE:
Stein Roe Growth & Income Fund seeks both growth of capital and current
income by investing substantially all of its investable assets in SR&F Growth
and Income Portfolio. This Portfolio invests primarily in common stocks of
well-established companies having large market capitalizations. The portfolio
manager looks for common stocks that have the potential to appreciate in
value and pay dividends.
FUND INCEPTION:
March 24, 1987
TOTAL NET ASSETS:
$331.7 million
[GRAPHIC]
Q: HOW DID THE FUND PERFORM DURING THE FIRST HALF OF FISCAL YEAR 2000?
CANTOR: Growth & Income Fund pursues both capital appreciation and current
income by investing in large-capitalization value stocks. And, like most
large-cap value funds, it underperformed the broad market during the six months
ended March 31, 2000. The Fund generated a total return of 8.22%, compared to
17.50% for the Standard & Poor's 500 Index. However, we believe the Fund's
performance is comparable to other large-cap value mutual funds.
Q: TO WHAT DO YOU ATTRIBUTE THIS DIFFERENCE IN PERFORMANCE?
CANTOR: Quite simply, there was an intense rotation in the market toward
technology stocks, most of which are also growth stocks. Since these make up a
large portion of S&P 500 based on market value, the index advanced. The Fund
focuses heavily on stocks with more attractive valuations, and we stayed true to
our discipline. So, while technology took off, especially after the first of the
year, the Fund did not participate fully in the rally. When technology retreated
in March, the Fund did extremely well, gaining 12.44% in the month of March.
Q: WHICH STOCKS DID THE MOST TO BOOST PERFORMANCE?
CANTOR: Not surprisingly, our few technology holdings performed pretty well.
During the period, the price of our Applied Materials stock (2.3% of net assets)
more than
Photo: Dan Cantor
9
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QUESTIONS & ANSWERS CONTINUED
================================================================================
doubled during the six months and our Intel stock (1.6% of net assets) jumped by
approximately 78%.
Outside technology, the strongest performers were health care companies.
Warner-Lambert (4.4% of net assets) rose roughly 50%, primarily because it was a
takeover target. Both American Home Products and Pfizer pursued and were willing
to pay a premium for Warner-Lambert because of its top-selling
cholesterol-lowering drug, Lipitor. Monsanto, a life sciences company, also
posted gains. We owned shares of Monsanto when it merged with Pharmacia & Upjohn
during the period, and the combined company, now referred to as Pharmacia (2.4%
of net assets at March 31), is poised to bring innovative drugs to market,
bolster its research and development effort and create numerous cost
efficiencies.
Q: WHICH STOCKS PROVED TO BE DISAPPOINTMENTS?
CANTOR: The list of poorly performing stocks is littered with industrial and
consumer companies. These included Burlington Northern Santa Fe, Procter &
Gamble (1.3% and 1.4% of net assets, respectively), and Goodyear, which we sold
during the period. We also sold retailers Federated and Kmart. Despite good
fundamental characteristics and earnings, these stocks lagged the market by a
wide margin. In our opinion, their performance was driven by industry groups
rather than individual company merit throughout most of the period.
Q: HOW DID YOU RESPOND TO THE LATE-PERIOD CHANGE IN THE MARKETS?
CANTOR: We trimmed back or eliminated a number of holdings that on a relative
basis did not look as attractive and concentrated on those that, in our view,
had the greatest potential. We will continue to focus on the best opportunities
-- the ones that we feel are most likely to appreciate as investors stop chasing
the price momentum of technology stocks and rediscover more rational reasons to
buy.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT
RETURNS WILL VARY, SO YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL SHARES. Total
return includes changes in share price and reinvestment of all distributions.
Portfolio holdings are as of 3/31/00 and are subject to change. Foreign
investing involves market, political, currency and accounting risks not
associated with domestic securities. Each index mentioned is an unmanaged group
of stocks that differs from the composition of any Stein Roe fund; indices are
not available for direct investment.
10
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FUND HIGHLIGHTS AS OF 3/31/2000
================================================================================
Growth & Income Portfolio
TOP 10 HOLDINGS (% OF NET ASSETS)
--------------------------------------------------------------------------------
Warner-Lambert 4.4% IBM 3.7%
Citigroup 4.4 American Express 3.6
General Electric 4.1 Bell Atlantic 3.5
Kansas City Southern Ind. 3.9 Chase Manhattan 3.4
BP Amoco PLC 3.9 Wal-Mart Stores 3.2
--------------------------------------------------------------------------------
================================================================================
EQUITY PORTFOLIO HIGHLIGHTS
S&P 500
PORTFOLIO INDEX
-------------------------------
Number of Equity & Convertible Holdings 53 500
Dollar Weighted Median
Market Capitalization ($Mil.) 54,421.2 85,679.3
================================================================================
[PIE CHARTS]
ECONOMIC SECTOR BREAKDOWN
Equity Portfolio S&P 500 Index
Basic Materials 6% 2%
Consumer Cyclical 15% 12%
Consumer Non-cyclical 18% 15%
Energy 8% 6%
Financial 17% 13%
Industrial 15% 7%
Technology 16% 35%
Utilities 5% 10%
11
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SR&F BALANCED PORTFOLIO
================================================================================
Investment Portfolio
March 31, 2000 (Unaudited, in thousands)
NUMBER MARKET
COMMON STOCKS - 75.8% COUNTRY OF SHARES VALUE
================================================================================
FINANCE, INSURANCE & REAL ESTATE - 12.7%
DEPOSITORY INSTITUTIONS - 3.8%
BankAmerica Corp.................... 98 $ 5,136
Bayerische HypoVereinsbank.......... G 9 567
Chase Manhattan Corp................ 9 785
Royal Bank of Scotland Group PLC.... UK 133 1,872
The Bank of Tokyo-Mitsubishi, Ltd., ADR Ja 35 496
Wells Fargo & Co.................... 12 491
--------
9,347
FINANCIAL SERVICES - 0.3%
The Goldman Sachs Group, Inc........ 8 809
INSURANCE AGENTS & BROKERS - 0.5%
Marsh & McLennan Companies, Inc..... 12 1,324
INSURANCE CARRIERS - 6.2%
Ace, Ltd............................ 16 366
American International Group, Inc... 30 3,285
Citigroup, Inc...................... 187 11,077
Tokio Marine & Fire Insurance Co., Ltd. Ja 55 565
--------
15,293
INVESTMENT COMPANIES - 0.7%
World Equity Benchmark Share - Japan 110 1,808
NONDEPOSITORY CREDIT INSTITUTIONS - 1.2%
Capital One Financial Corp.......... 27 1,294
Fannie Mae.......................... 14 790
Freddie Mac......................... 21 928
--------
3,012
REAL ESTATE INVESTMENT TRUSTS - 0.0%
Equity Residential Properties Trust. 1 56
MANUFACTURING - 36.2%
CHEMICALS & ALLIED PRODUCTS - 5.7%
Amgen, Inc.......................... 13 798
American Home Products Corp......... 39 2,091
Bristol-Myers Squibb Co............. 52 3,003
E.I. DuPont De Nemours & Co......... 23 1,234
Elan Corp. PLC, ADR (a)............ Ir 40 1,900
Eli Lilly & Co...................... 47 2,930
Merck & Co., Inc.................... 20 1,243
Procter & Gamble Co................. 18 1,013
--------
14,212
COMMUNICATIONS EQUIPMENT - 1.7%
Motorola, Inc....................... 22 3,175
Nokia Oyj, ADR...................... Fi 5 1,086
--------
4,261
ELECTRICAL INDUSTRIAL EQUIPMENT - 8.2%
Emerson Electric Co................. 42 2,221
General Electric Co................. 117 18,157
--------
20,378
ELECTRONIC & ELECTRICAL EQUIPMENT - 0.2%
Utstarcom, Inc. (a)................. 5 414
12
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SR&F BALANCED PORTFOLIO CONTINUED
================================================================================
NUMBER MARKET
COUNTRY OF SHARES VALUE
================================================================================
MANUFACTURING - (CONTINUED)
ELECTRONIC COMPONENTS - 3.1%
Intel Corp.......................... 58 $ 7,652
FOOD & KINDRED PRODUCTS - 0.9%
General Mills, Inc.................. 23 832
PepsiCo, Inc........................ 39 1,348
--------
2,180
LUMBER & WOOD PRODUCTS - 0.2%
Georgia Pacific Corp................ 10 396
MACHINERY & COMPUTER EQUIPMENT - 5.9%
Cisco Systems, Inc. (a)............. 112 8,659
Caterpillar, Inc.................... 15 591
EMC Corp. (a)....................... 16 2,000
Fujitsu Ltd......................... Ja 20 613
International Business Machines Corp. 23 2,714
--------
14,577
MEASURING & ANALYZING INSTRUMENTS - 2.3%
Agilent Technologies, Inc. (a)...... 27 2,808
JDS Uniphase Corp. (a).............. 5 603
Medtronic, Inc...................... 20 1,029
Teradyne, Inc. (a).................. 15 1,234
--------
5,674
MISCELLANEOUS MANUFACTURING - 1.3%
Tyco International Ltd.............. 66 3,292
OFFICE MACHINES - 0.6%
Pitney Bowes, Inc................... 35 1,564
PAPER PRODUCTS - 0.2%
Packaging Corp. of America (a)...... 40 420
PETROLEUM REFINING - 3.7%
BP Amoco PLC, ADR................... UK 105 5,569
Exxon Mobil Corp.................... 47 3,654
--------
9,223
PRIMARY METAL - 0.7%
Alcoa, Inc.......................... 15 1,054
Nucor Corp.......................... 15 750
--------
1,804
STONE, CLAY, GLASS & CONCRETE - 0.9%
Corning, Inc........................ 12 2,328
TRANSPORTATION EQUIPMENT - 0.6%
Ford Motor Co....................... 31 1,424
MINING & ENERGY - 3.1%
CRUDE PETROLEUM & NATURAL GAS - 0.5%
Conoco, Inc., Class B............... 49 1,259
OIL & GAS EXTRACTION - 0.3%
PetroChina Co., Ltd., ADR (a)....... 54 881
13
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SR&F Balanced Portfolio Continued
================================================================================
NUMBER MARKET
COUNTRY OF SHARES VALUE
--------------------------------------------------------------------------------
MINING & ENERGY - (CONTINUED)
OIL & GAS FIELD SERVICES - 2.3%
Enron Corp.......................... 50 $ 3,744
Schlumberger Ltd.................... 25 1,913
--------
5,657
RETAIL TRADE - 5.5%
APPAREL & ACCESSORY STORES - 0.8%
Kohl's Corp. (a).................... 19 1,948
BUILDING, HARDWARE & GARDEN SUPPLY - 1.5%
Home Depot, Inc..................... 57 3,676
FOOD STORES - 0.7%
Safeway, Inc. (a)................... 40 1,810
GENERAL MERCHANDISE STORES - 1.9%
Wal-Mart Stores, Inc................ 85 4,718
RESTAURANTS - 0.6%
McDonald's Corp..................... 43 1,615
SERVICES - 9.3%
BUSINESS SERVICES - 2.3%
Concord EFS, Inc. (a)............... 56 1,283
Sun Microsystems, Inc. (a).......... 44 4,123
Young & Rubicam, Inc................ 7 320
--------
5,726
COMPUTER RELATED SERVICES - 1.1%
Crayfish Co., Ltd., ADR (a)......... Ja 9 350
IMS Health, Inc..................... 55 932
Network Appliance, Inc. (a)......... 12 993
World Online International NV (a)... Ne 22 482
--------
2,757
COMPUTER SOFTWARE - 5.7%
Affiliated Computer Services, Inc. Class A (a) 25 950
Microsoft Corp. (a)................. 60 6,375
Oracle Corp. (a).................... 80 6,245
Sycamore Networks, Inc. (a)......... 4 516
--------
14,086
ENGINEERING, ACCOUNTING, RESEARCH
& MANAGEMENT - 0.2%
Genentech, Inc. (a)................. 3 486
TRANSPORTATION, COMMUNICATION, ELECTRIC, GAS & SANITARY SERVICES - 8.8%
BROADCASTING - 1.0%
Clear Channel Communications, Inc. (a) 23 1,588
Infineon Technologies AG, ADR (a)... Gr 14 810
--------
2,398
COMMUNICATIONS - 0.5%
GT Group Telecom Inc., Class B (a).. 12 250
Infonet Services Corp., Class B (a). 44 996
--------
1,246
ELECTRIC SERVICES - 0.5%
AES Corp. (a) 16 1,260
14
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SR&F Balanced Portfolio Continued
================================================================================
NUMBER MARKET
COUNTRY OF SHARES VALUE
================================================================================
TRANSPORTATION, COMMUNICATION, ELECTRIC, GAS & SANITARY SERVICES - (CONTINUED)
GAS SERVICES - 0.6%
Kinder Morgan Energy Partners, L.P.. 35 $ 1,389
TELECOMMUNICATION - 6.2%
Bell Atlantic Corp.................. 32 1,956
Charter Communications Inc., Class A (a) 80 1,146
Comcast Corp., Special Class A...... 46 1,995
MCI Worldcom, Inc. (a).............. 60 2,719
Nippon Telegraph & Telephone Corp... Ja (b) 635
Nippon Telegraph & Telephone Corp. ADR Ja (b) 32
SBC Communications, Inc., Class A... 47 1,990
Sprint Corp. (PCS Group) (a)........ 18 1,176
Vodafone AirTouch PLC, ADR.......... UK 42 2,334
Williams Communications Group, Inc. (a) 25 1,300
--------
15,283
WHOLESALE TRADE - 0.2%
DURABLE GOODS
Softbank Corp....................... Ja 1 445
--------
TOTAL COMMON STOCKS (cost of $88,820).. 188,088
--------
================================================================================
BONDS & NOTES - 33.7% PAR
================================================================================
US GOVERNMENT & AGENCY OBLIGATIONS - 20.9%
GOVERNMENT AGENCIES - 9.2%
Federal Home Loan Mortgage Corp.:
6.500%, 2011-2026................. $11,532 10,906
7.000%, 2028...................... 1,630 1,568
--------
12,474
Federal National Mortgage Association:
5.125%, 2004...................... 2,623 2,452
6.625%, 2009...................... 3,200 3,076
--------
5,528
Government National Mortgage Association:
6.000%, 2029...................... 4,486 4,105
8.000%, 2025-2026................. 722 735
--------
4,840
GOVERNMENT OBLIGATIONS - 11.7%
U.S. Treasury Bonds:
7.625%, 2/15/25................... 2,350 2,800
8.125%, 8/15/19................... 6,600 8,024
--------
10,824
U.S. Treasury Notes:
5.750%, 8/15/03................... 3,650 3,575
6.250%, 2/15/07................... 3,300 3,293
6.625%, 5/15/07................... 4,900 4,989
7.250%, 8/15/04................... 5,200 5,369
7.875%, 11/15/04.................. 1,000 1,059
--------
18,285
--------
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(cost of $46,649)...................... 51,951
--------
================================================================================
15
<PAGE>
SR&F BALANCED PORTFOLIO CONTINUED
================================================================================
NON-AGENCY MORTGAGE BACKED & ASSET MARKET
BACKED SECURITIES - 1.4% PAR VALUE
================================================================================
COLLATERALIZED MORTGAGE OBLIGATIONS - 1.0%
American Mortgage Trust 1993-3,
8.190%, 9/27/22................... $ 1,184 $ 1,148
United Airlines, Inc.,
9.200%, 3/22/08................... 1,185 1,238
--------
2,386
ASSET BACKED SECURITIES - 0.4%
LB Commercial Conduit Mortgage Trust,
Series 1998-C4, Class A1B,
6.210%, 10/15/08.................. 1,000 907
--------
TOTAL NON-AGENCY MORTGAGE BACKED & ASSET BACKED SECURITIES
(cost of $3,281)....................... 3,293
--------
================================================================================
CORPORATE FIXED INCOME BONDS & NOTES - 11.4%
================================================================================
FINANCE, INSURANCE & REAL ESTATE - 5.4%
DEPOSITORY INSTITUTIONS - 2.6%
Citicorp,
8.040%, 12/15/19.................. 1,900 1,936
Deutsche Ausbank,
7.000%, 9/24/01................... 2,250 2,237
Den Danske Bank,
6.550%, 9/15/03................... 2,250 2,188
--------
6,361
INSURANCE CARRIERS - 1.3%
Florida Windstorm,
7.125%, 2/25/19................... 1,900 1,778
Transamerica Finance Corp.,
6.125%, 11/1/01................... 1,500 1,471
--------
3,249
NONDEPOSITORY CREDIT INSTITUTIONS - 1.5%
Household Finance Corp.,
5.875%, 11/1/02................... 2,000 1,928
National Rural Utilities Cooperative Finance Corp.,
5.000%, 10/1/02................... 2,000 1,899
--------
3,827
MANUFACTURING - 2.4%
CHEMICALS & ALLIED PRODUCTS - 0.9%
Hanson Overseas BV,
6.750%, 9/15/05................... 2,250 2,158
MISCELLANEOUS MANUFACTURING - 0.9%
Honeywell International,
7.500%, 3/1/10.................... 800 809
Raytheon Co.,
6.750%, 8/15/07................... 1,500 1,396
--------
2,205
PETROLEUM REFINING - 0.6%
USX Corp.,
6.850%, 3/1/08.................... 1,500 1,404
MINING & ENERGY - 1.0%
OIL & GAS EXTRACTION
BOC Group PLC,
5.875%, 1/29/01................... 2,500 2,480
16
<PAGE>
SR&F BALANCED PORTFOLIO CONTINUED
================================================================================
MARKET
PAR VALUE
================================================================================
RETAIL TRADE - 0.3%
GENERAL MERCHANDISE STORES
Wal-Mart Stores,
6.750%, 10/15/23.................. $ 900 $ 830
SERVICES - 0.6%
BUSINESS SERVICES
FDX Corp.,
Series A1,
7.530%, 9/23/06................... 1,575 1,558
TRANSPORTATION, COMMUNICATION, ELECTRIC, GAS & SANITARY SERVICES - 1.7%
ELECTRIC SERVICES
Israel Electric Corp., Ltd.,
7.750%, 3/1/09.................... 2,300 2,274
National Power PLC,
7.125%, 7/11/01................... 2,000 2,001
--------
4,275
--------
TOTAL CORPORATE FIXED INCOME
BONDS & NOTES (cost of $34,307)........ 28,347
--------
TOTAL BONDS & NOTES (cost of $84,237).. 83,591
--------
================================================================================
NUMBER
PREFERRED STOCKS - 1.0% OF SHARES
================================================================================
TRANSPORTATION, COMMUNICATION, ELECTRIC, GAS & SANITARY SERVICES - 1.0%
COMMUNICATIONS
TCI Pacific, Class A
(cost of $1,253).................... 7 2,520
--------
================================================================================
TOTAL INVESTMENTS - 110.5%
(cost of $174,310)(c).................. 274,199
OTHER ASSETS & LIABILITIES, NET - (10.5)% (26,059)
--------
NET ASSETS - 100.0%.................... $248,140
========
================================================================================
SECURITIES SOLD SHORT
BankAmerica Corp.................... 68 $ 3,560
BP Amoco PLC, ADR................... 68 3,608
Citigroup, Inc...................... 113 6,673
Eli Lilly & Co...................... 20 1,260
Emerson Electric Co................. 20 1,058
General Electric Co................. 70 10,863
Intel Corp.......................... 16 2,111
--------
TOTAL SECURITIES SOLD SHORT (proceeds of $15,138) $ 29,133
========
================================================================================
NOTES TO INVESTMENT PORTFOLIO
--------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Rounds to less than one.
(c) Cost for federal income tax purposes is the same.
17
<PAGE>
SR&F BALANCED PORTFOLIO CONTINUED
================================================================================
================================================================================
NOTES TO INVESTMENT PORTFOLIO (CONTINUED)
--------------------------------------------------------------------------------
Summary of Securities
by Country Country Value % of Total
--------------------------------------------------------------------------------
United States $256,443 93.5
United Kingdom UK 9,775 3.6
Japan Ja 3,136 1.1
Ireland Ir 1,900 0.7
Finland Fi 1,086 0.4
Greece Gr 810 0.3
Germany G 567 0.2
Netherlands Ne 482 0.2
-------- -----
$274,199 100.0
======== =====
Certain securities are listed by country of underlying exposure but may trade
predominantly on other exchanges.
Acronym Name
________ _____
ADR American Depositary Receipt
See notes to financial statements.
18
<PAGE>
SR&F GROWTH & INCOME PORTFOLIO
================================================================================
Investment Portfolio
March 31, 2000 (Unaudited, in thousands)
NUMBER MARKET
COMMON STOCKS - 98.8% OF SHARES VALUE
================================================================================
FINANCE, INSURANCE & REAL ESTATE - 17.0%
DEPOSITORY INSTITUTIONS - 6.4%
BankAmerica Corp.................................. 68 $ 3,560
Chase Manhattan Corp.............................. 129 11,230
Wells Fargo & Co.................................. 157 6,413
--------
21,203
INSURANCE CARRIERS - 4.3%
Citigroup, Inc.................................... 245 14,520
NONDEPOSITORY CREDIT INSTITUTIONS - 6.3%
American Express Co............................... 80 11,915
Fannie Mae........................................ 161 9,086
--------
21,001
MANUFACTURING - 54.9%
CHEMICALS & ALLIED PRODUCTS - 17.4%
Avon Products, Inc................................ 40 1,163
Bristol-Myers Squibb Co........................... 170 9,818
E.I. DuPont De Nemours & Co....................... 29 1,543
Ecolab, Inc....................................... 260 9,538
Millenium Chemicals, Inc.......................... 104 2,082
Monsanto Co....................................... 100 5,150
Pharmacia & Upjohn, Inc........................... 50 2,963
Procter & Gamble Co............................... 81 4,556
Union Carbide Corp................................ 111 6,479
Warner-Lambert Co................................. 150 14,625
--------
57,917
COMMUNICATIONS EQUIPMENT - 0.8%
Motorola, Inc..................................... 10 1,424
Sabre Group Holdings, Inc......................... 36 1,335
--------
2,759
ELECTRICAL INDUSTRIAL EQUIPMENT - 6.3%
Emerson Electric Co............................... 100 5,288
General Electric Co............................... 88 13,657
Hubbell, Inc., Class B............................ 70 1,927
--------
20,872
ELECTRONIC COMPONENTS - 1.6%
Intel Corp........................................ 40 5,278
FABRICATED METAL - 1.5%
Gillette Co....................................... 134 5,065
FOOD & KINDRED PRODUCTS - 2.0%
Philip Morris Companies, Inc...................... 203 4,288
Sara Lee Corp..................................... 144 2,592
--------
6,880
LUMBER & WOOD PRODUCTS - 2.6%
Georgia Pacific Corp.............................. 170 6,726
Georgia-Pacific Corp. Timber Group................ 75 1,922
--------
8,648
19
<PAGE>
SR&F GROWTH & INCOME PORTFOLIO CONTINUED
================================================================================
NUMBER MARKET
OF SHARES VALUE
================================================================================
MANUFACTURING - 54.9% (CONTINUED)
MACHINERY & COMPUTER EQUIPMENT - 9.6%
Applied Materials................................. 80 $ 7,540
Cisco Systems, Inc................................ 90 6,958
Compaq Computer Corp.............................. 195 5,191
International Business Machines Corp.............. 105 12,390
--------
32,079
MEASURING & ANALYZING INSTRUMENTS - 5.7%
Biomet, Inc....................................... 127 4,620
Baxter International, Inc......................... 100 6,268
Honeywell International, Inc...................... 158 8,298
--------
19,186
PETROLEUM REFINING - 3.9%
BP Amoco PLC ADR.................................. 243 12,884
PRINTING & PUBLISHING - 1.1%
Tribune Co........................................ 100 3,656
TRANSPORTATION EQUIPMENT - 2.4%
Boeing Co......................................... 100 3,779
Lear Corp......................................... 150 4,219
--------
7,998
MINING & ENERGY - 4.1%
CRUDE PETROLEUM & NATURAL GAS - 0.5%
Conoco, Inc. Class B.............................. 61 1,574
--------
OIL & GAS FIELD SERVICES - 3.6%
Conoco, Inc. Class A.............................. 105 2,581
Enron Corp........................................ 125 9,359
--------
11,940
RETAIL - 8.2%
APPAREL & ACCESSORY STORES - 1.9%
TJX Companies, Inc................................ 283 6,275
GENERAL MERCHANDISE STORES - 4.2%
Federated Department Stores, Inc.................. 80 3,340
Wal-Mart Stores, Inc.............................. 190 10,545
--------
13,885
MISCELLANEOUS RETAIL - 2.1%
Walgreen Co....................................... 280 7,210
SERVICES - 2.3%
AUTO REPAIR, RENTAL & PARKING - 0.6%
Hertz Corp. Class A............................... 60 2,044
BUSINESS SERVICES - 1.7%
Interpublic Group of Cos., Inc.................... 121 5,727
20
<PAGE>
SR&F GROWTH & INCOME PORTFOLIO CONTINUED
================================================================================
NUMBER MARKET
of SHARES VALUE
================================================================================
TRANSPORTATION, COMMUNICATION, ELECTRIC, GAS & SANITARY SERVICES - 12.3%
AIR TRANSPORTATION - 2.4%
Amr Corp.......................................... 50 $ 1,593
Continental Airlines, Inc. Class B................ 160 6,540
--------
8,133
RAILROAD - 5.3%
Burlington Northern Santa Fe Corp................. 200 4,425
Kansas City Southern Industries, Inc.............. 152 13,054
--------
17,479
TELECOMMUNICATION - 4.6%
AT&T Corp......................................... 65 3,675
Bell Atlantic Corp................................ 190 11,633
--------
15,308
TOTAL COMMON STOCKS (cost of $160,720)............... 329,521
--------
================================================================================
SHORT-TERM OBLIGATIONS
COMMERCIAL PAPER - 0.7% PAR
Associates First Capital,
4.17% (c) 4/3/00.................................. $2,315 2,314
--------
================================================================================
OTHER ASSETS & LIABILITIES, NET - 0.5%............... 1,694
--------
NET ASSETS - 100.0%.................................. $333,529
========
================================================================================
NOTES TO INVESTMENT PORTFOLIO:
--------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Cost for federal income tax purposes is the same.
(c) Rate represents yield at time of purchase.
Acronym Name
________ _____
ADR American Depositary Receipt
See notes to financial statements.
21
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
================================================================================
March 31, 2000 (Unaudited)
(In thousands)
SR&F
SR&F GROWTH
BALANCED & INCOME
PORTFOLIO PORTFOLIO
--------- ---------
ASSETS
Investments, at market value (cost of $174,310 and
$160,720, respectively)........................ $274,199 $329,521
Short-term obligations............................ -- 2,314
Deposit with broker for securities sold short..... 13,601 --
Cash including foreign currencies (cost of $179 and
none, respectively)............................ 184 --
Receivable for:
Investments sold............................... 5,166 4,085
Interest....................................... 1,090 --
Dividends...................................... 176 316
Foreign tax reclaims........................... 10 4
Other............................................. -- 4
--------- ---------
Total Assets................................... 294,426 336,244
--------- ---------
LIABILITIES
Securities sold short, at market value
(proceeds of $15,138)........................... 29,133 --
Payable due to custodian bank..................... 223 131
Loan payable to broker............................ 13,113 --
Payable for:
Investments purchased.......................... 3,572 2,340
Accrued:
Management fee................................. 114 160
Transfer agent fee............................. 1 1
Bookkeeping fee................................ 3 3
Other............................................. 127 80
--------- ---------
Total Liabilities.............................. 46,286 2,715
--------- ---------
Net assets..................................... $248,140 $333,529
========= =========
See notes to financial statements.
22
<PAGE>
STATEMENT OF OPERATIONS
================================================================================
For the Six Months Ended March 31, 2000 (Unaudited)
(In thousands)
SR&F
SR&F GROWTH &
BALANCED INCOME
PORTFOLIO PORTFOLIO
--------- ---------
INVESTMENT INCOME
Interest.......................................... $ 3,166 $ 460
Dividends......................................... 1,080 2,294
-------- --------
4,246 2,754
Dividend expense from short positions............. (195) --
Foreign taxes withheld............................ (12) (12)
-------- --------
Total Investment Income........................ 4,039 2,742
-------- --------
EXPENSES
Management fee.................................... 683 1,094
Transfer agent fee................................ 3 3
Bookkeeping fee................................... 15 17
Trustees' fee..................................... 9 9
Custodian fee..................................... 7 8
Audit & legal fees................................ 8 8
Other............................................. 8 9
-------- --------
Total expenses................................. 733 1,148
-------- --------
Net Investment Income.......................... 3,306 1,594
-------- --------
NET REALIZED & UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS
Net realized gain (loss) on:
Investments.................................... 8,632 19,462
Closed futures contracts....................... (111) 252
Foreign currency transactions.................. (4) (1)
Net change in unrealized appreciation/depreciation on:
Investments.................................... 18,818 7,039
Foreign currency transactions.................. (8) --
-------- --------
Net Gain....................................... 27,327 26,752
-------- --------
INCREASE IN NET ASSETS FROM OPERATIONS............ $30,633 $28,346
======== ========
See notes to financial statements.
23
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
================================================================================
(In thousands)
SR&F BALANCED PORTFOLIO SR&F GROWTH & INCOME PORTFOLIO
-------------------- ----------------------------
(UNAUDITED) (UNAUDITED)
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
MARCH 31, SEPTEMBER 30, MARCH 31, SEPTEMBER 30,
2000 1999 2000 1999
------------ --------------- ------------ ---------------
OPERATIONS
<S> <C> <C> <C> <C>
Net investment income......................................... $ 3,306 $ 7,352 $ 1,594 $ 5,114
Net realized gain............................................. 8,517 20,920 19,713 18,373
Net change in unrealized appreciation/depreciation............ 18,810 10,921 7,039 49,677
--------- --------- --------- ---------
Net Increase from Operations............................... 30,633 39,193 28,346 73,164
--------- --------- --------- ---------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTEREST
Contributions................................................. 3,407 4,122 1,143 22,804
Withdrawals................................................... (40,466) (36,994) (72,695) (72,426)
--------- ---------- --------- ---------
Net Decrease from transactions in investors' beneficial interest (37,059) (32,872) (71,552) (49,622)
--------- --------- --------- ---------
Total Increase (Decrease).................................. (6,426) 6,321 (43,206) 23,542
NET ASSETS
Beginning of period........................................... 254,566 248,245 376,735 353,193
--------- --------- --------- ---------
End of period................................................. $248,140 $254,566 $333,529 $376,735
========= ========= ========= =========
</TABLE>
See notes to financial statements.
24 and 25
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
================================================================================
March 31, 2000 (Unaudited)
(In thousands except for per share amounts)
SELECT
GROWTH &
BALANCED INCOME
FUND FUND
--------- ---------
ASSETS
Investment in Portfolio, at value................. $247,995 $333,351
Receivable for fund shares sold................... 37 251
Other............................................. 25 103
--------- ---------
Total Assets................................... 248,057 333,705
--------- ---------
LIABILITIES
Payable for fund shares repurchased............... 88 1,949
Accrued:
Administrative fee............................. 31 40
Transfer agent fee............................. 45 60
Bookkeeping fee................................ 3 3
Other............................................. 15 1
--------- ---------
Total Liabilities.............................. 182 2,053
--------- ---------
Net Assets..................................... $247,875 $331,652
========= =========
COMPOSITION OF NET ASSETS
Paid-in capital................................... $154,872 $145,049
Undistributed (overdistributed) net investment income (39) 95
Accumulated net realized gain allocated from Portfolio 7,111 17,839
Net unrealized appreciation allocated from Portfolio 85,931 168,669
--------- ---------
$247,875 $331,652
========= =========
Shares outstanding (unlimited number authorized).. 7,407 --
========= =========
Net asset value per share......................... $ 33.46 --
========= =========
Net asset value and redemption price per share
- Class A -- $ 27.02(a)
--------- ---------
-- ($148/5)
Maximum offering price per share - Class A........ -- $ 28.67(b)
--------- ---------
-- ($27.02/.9425)
Net asset value and offering price per share - Class B -- $ 26.97(a)
--------- ---------
-- ($434/16)
Net asset value and offering price per share - Class C -- $ 26.96(a)
--------- ---------
-- ($7/(c))
Net asset value, redemption and offering price per
share - Class S................................ -- $ 27.02
--------- ---------
--($331,062/12,250)
Net asset value, redemption and offering price per
share - Class Z................................ -- $ 27.02
--------- ---------
-- ($1/(c))
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
(b) On sales of $50,000 or more the offering price is reduced.
(c) Rounds to less than one.
See notes to financial statements.
26
<PAGE>
STATEMENT OF OPERATIONS
================================================================================
For the Six Months Ended March 31, 2000 (Unaudited)
(In thousands)
SELECT
GROWTH &
BALANCED INCOME
FUND FUND
-------- --------
INVESTMENT INCOME
Interest income allocated from Portfolio.......... $ 3,093 $ 460
Dividend income allocated from Portfolio.......... 883 2,292
-------- --------
3,976 2,752
Foreign taxes withheld allocated from Portfolio... (12) (12)
-------- --------
Total investment income........................ 3,964 2,740
-------- --------
EXPENSES
Expenses allocated from Portfolio................. 734 1,128
Administrative fee................................ 186 273
Transfer agent fee................................ 284 435
Bookkeeping fee................................... 15 16
12b-1 Service and Distribution fees............... -- (a)
Trustees' fee..................................... 4 4
Legal fee......................................... 3 2
Custodian fee..................................... 1 1
Audit fee......................................... 5 8
Registration fee.................................. 13 18
Reports to shareholders........................... 12 4
Other............................................. 15 23
-------- --------
1,272 1,912
-------- --------
Net Investment Income.......................... 2,692 828
-------- --------
NET REALIZED & UNREALIZED GAIN (LOSS)
ALLOCATED FROM PORTFOLIO
Net realized gain (loss) on:
Investments.................................... 8,521 19,397
Closed futures contracts....................... -- 197
Foreign currency transactions.................. (4) 22
Net change in unrealized appreciation/depreciation
during the period.............................. 18,883 7,073
-------- --------
Net Gain....................................... 27,400 26,689
-------- --------
INCREASE IN NET ASSETS FROM OPERATIONS............ $30,092 $27,517
======== ========
(a) Rounds to less than one.
See notes to financial statements.
27
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
(In thousands)
BALANCED FUND SELECT GROWTH & INCOME FUND
------------ ---------------------------
(UNAUDITED) (UNAUDITED)
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
MARCH 31, SEPTEMBER 30, MARCH 31, SEPTEMBER 30,
2000 1999 2000(B) 1999
------------ ------------- ------------ -------------
OPERATIONS
<S> <C> <C> <C> <C>
Net investment income......................................... $ 2,692 $ 6,346 $ 828 $ 3,410
Net realized gain allocated from Portfolio.................... 8,517 20,922 19,616 18,333
Net change in unrealized appreciation/depreciation allocated from Portfolio 18,883 10,843 7,073 49,228
--------- --------- --------- ---------
Net Increase from Operations............................... 30,092 38,111 27,517 70,971
--------- --------- --------- ---------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income.................................... (2,726) (6,767) -- --
From net realized capital gains............................... (19,000) (17,075) -- --
From net investment income - Class A.......................... -- -- (a) --
From net investment income - Class S.......................... -- -- (1,139) (3,859)
From net realized capital gains - Class S..................... -- -- (16,297) (5,981)
From net investment income - Class Z.......................... -- -- (a) --
--------- --------- --------- ---------
Total Distributions to Shareholders........................ (21,726) (23,842) (17,436) (9,840)
--------- --------- --------- ---------
FUND SHARE TRANSACTIONS
Receipts for shares sold...................................... 8,050 16,749 -- --
Value of distributions reinvested............................. 18,781 20,674 -- --
Cost of shares repurchased.................................... (38,012) (48,854) -- --
--------- --------- --------- ---------
(11,181) (11,431) -- --
--------- --------- --------- ---------
Receipts for shares sold - Class A............................ -- -- 172 --
Value of distributions reinvested - Class A................... -- -- (a) --
Cost of shares repurchased - Class A.......................... -- -- (26) --
--------- --------- --------- ---------
-- -- 146 --
--------- --------- --------- ---------
Receipts for shares sold - Class B............................ -- -- 416 --
Cost of shares repurchased - Class B.......................... -- -- (2) --
--------- --------- --------- ---------
-- -- 414 --
--------- --------- --------- ---------
Receipts for shares sold - Class C............................ -- -- 11 --
Cost of shares repurchased - Class C.......................... -- -- (4) --
--------- --------- --------- ---------
-- -- 7 --
--------- --------- --------- ---------
Receipts for shares sold - Class S............................ -- -- 13,896 91,029
Value of distributions reinvested - Class S................... -- -- 16,279 9,089
Cost of shares repurchased - Class S.......................... -- -- (84,961) (136,512)
--------- --------- --------- ---------
-- -- (54,786) (36,394)
--------- --------- --------- ---------
Receipts for shares sold - Class Z............................ -- -- 1 --
Value of distributions reinvested - Class Z................... -- -- (a) --
--------- --------- --------- ---------
-- -- 1 --
--------- --------- --------- ---------
Net Decrease from Fund Share Transactions.................. (11,181) (11,431) (54,218) (36,394)
--------- --------- --------- ---------
Total Increase (Decrease).................................. (2,815) 2,838 (44,137) 24,737
NET ASSETS
Beginning of period........................................... 250,690 247,852 375,789 351,052
--------- --------- --------- ---------
End of period................................................. $247,875 $250,690 $331,652 $375,789
========= ========= ========= =========
</TABLE>
(a) Rounds to less than one.
(b) Class A, Class B, Class C and Class Z shares were initially offered on
December 1, 1999.
28 and 29
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
================================================================================
CONTINUED
(In thousands)
BALANCED FUND SELECT GROWTH & INCOME FUND
------------ --------------------------
(UNAUDITED) (UNAUDITED)
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
MARCH 31, SEPTEMBER 30, MARCH 31, SEPTEMBER 30,
2000 1999 2000(B) 1999
------------ ------------- ------------ -------------
ANALYSIS OF CHANGES IN SHARES OF BENEFICIAL INTEREST
<S> <C> <C> <C> <C>
Sold.......................................................... 249 517 -- --
Issued for distributions reinvested........................... 593 670 -- --
Repurchased................................................... (1,185) (1,511) -- --
--------- --------- --------- ---------
(343) (324) -- --
--------- --------- --------- ---------
Sold - Class A................................................ -- -- 6 --
Issued for distributions reinvested - Class A................. -- -- (a) --
Repurchased - Class A......................................... -- -- (1) --
--------- --------- --------- ---------
-- -- 5 --
--------- --------- --------- ---------
Sold - Class B................................................ -- -- 16 --
Repurchased - Class B......................................... -- -- (a) --
--------- --------- --------- ---------
-- -- 16 --
--------- --------- --------- ---------
Sold - Class C................................................ -- -- (a) --
Repurchased - Class C......................................... -- -- (a) --
--------- --------- --------- ---------
-- -- (a) --
--------- --------- --------- ---------
Sold - Class S................................................ -- -- 529 3,502
Issued for distributions reinvested - Class S................. -- -- 616 367
Repurchased - Class S......................................... -- -- (3,274) (5,124)
--------- --------- --------- ---------
-- -- (2,129) (1,255)
--------- --------- --------- ---------
Sold - Class Z................................................ -- -- (a) --
Issued for distributions reinvested - Class Z................. -- -- (a) --
--------- --------- --------- ---------
-- -- (a) --
--------- --------- --------- ---------
Net Decrease in Fund Shares................................ (343) (324) (2,108) (1,255)
Shares outstanding at beginning of period..................... 7,750 8,074 14,379 15,634
--------- --------- --------- ---------
Shares outstanding at end of period........................... 7,407 7,750 12,271 14,379
========= ========= ========= =========
</TABLE>
(a) Rounds to less than one.
(b) Class A, Class B, Class C and Class Z shares were initially offered on
December 1, 1999.
See notes to financial statements.
30 and 31
<PAGE>
NOTES TO FINANCIAL STATEMENTS UNAUDITED
================================================================================
(All amounts in thousands)
NOTE 1. ORGANIZATION
Stein Roe Balanced Fund (SRBF) and Stein Roe Select Growth &Income Fund
(SRSG&IF) formerly Stein Roe Growth & Income Fund, (the "Funds") are series of
Liberty-Stein Roe Funds Investment Trust, (the "Trust"), formerly Stein Roe
Investment Trust, an open-end management investment company organized as a
Massachusetts business trust. Balanced Fund and Select Growth & Income Fund
invest substantially all of their assets in SR&F Balanced Portfolio and SR&F
Growth & Income Portfolio (the "Portfolio"), respectively. SRSG&IF may issue an
unlimited number of shares. SRSG&IF offers five classes of shares: Class A,
Class B, Class C, Class S and Class Z.
As of October 31, 1999, Class S closed to new investors. Each share has its
own sales charge and expense structure, please refer to the Fund's prospectus
for more information on Class A, Class B, Class C, and Class Z shares.
The Portfolios are a series of the SR&F Base Trust, a Massachusetts common
law trust organized under an Agreement and Declaration of Trust dated August 23,
1993. The Portfolios commenced operations on February 3, 1997. At commencement,
Balanced Fund and Select Growth & Income Fund contributed $260,013 and $239,175
in securities and other assets to SR&F Balanced Portfolio and SR&F Growth &
Income Portfolio, respectively, in exchange for beneficial ownership of those
Portfolios. The Portfolios allocate income, expenses, realized and unrealized
gains and losses to each investor on a daily basis, based on methods approved by
the Internal Revenue Service. At March 31, 2000, Balanced Fund owned 99.9% of
the SR&F Balanced Portfolio and Select Growth & Income Fund owned 99.9% of the
SR&F Growth & Income Portfolio.
32
<PAGE>
NOTES TO FINANCIAL STATEMENTS CONTINUED
================================================================================
NOTE 2. SIGNIFICANT
ACCOUNTING POLICIES
The following summarizes the significant accounting policies of the Funds and
Portfolios. These policies are in conformity with generally accepted accounting
principles, which requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME
Investment transactions are accounted for on trade date. Dividend income is
recorded on the ex-dividend date, and interest income is recorded on the accrual
basis. Interest income includes discount accretion on fixed income securities.
Realized gains and losses from investment transactions are reported on an
identified cost basis.
SECURITY VALUATIONS
Securities are valued at, depending on the security involved, the last reported
sales price, last bid or asked price, or the mean between last bid and asked
price as of the close of the appropriate exchange or other designated time. A
security that is listed or traded on more than one exchange is valued at the
quotation on the exchange determined to be the primary exchange for such
security. Securities and other assets for which market quotations are not
readily available are valued at fair value as determined in good faith by or
under the direction of the Board of Trustees.
FUTURES CONTRACTS
During the six months ended March 31, 2000, SR&F Growth & Income Portfolio
entered into stock index futures contracts to invest cash pending direct
investments in stocks and to enhance its return. Risks of entering into futures
contracts include the possibility that there may be an illiquid market at the
time the Portfolio seeks to close out a contract, and changes in the value of
the futures contract may not correlate with changes in the value of the
portfolio securities being hedged. Upon entering into a futures contract, the
Portfolio deposits with its custodian cash or securities in an amount sufficient
to meet the initial margin requirements. Subsequent payments are made or
received by the Portfolio equal to the daily change in the contract value and
are recorded as unrealized gains or losses. The Portfolio recognizes a realized
gain or loss when the contract is closed or expires.
SECURITIES SOLD SHORT AGAINST THE BOX
SR&F Balanced Portfolio engages in selling securities short against the box;
that is, enter into short sales of
33
<PAGE>
NOTES TO FINANCIAL STATEMENTS CONTINUED
================================================================================
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.
The Portfolio may make short sales of securities only if at all times when a
short position is open it 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.
DETERMINATION OF CLASS NET ASSET VALUES AND FINANCIAL HIGHLIGHTS:
For SRSG&IF all income, expenses (other than class specific transfer agent fees
and 12b-1 service and distribution fees), and realized and unrealized gains
(losses) are allocated to each class proportionately on a daily basis for
purposes of determining the net asset value of each class.
The per share data for Class S was calculated using average shares outstanding
during the period.
FEDERAL INCOME TAXES
No provision is made for federal income taxes since (a) the Funds elect to be
taxed as "regulated investment companies" and make distributions to their
shareholders to be relieved of all federal income taxes under provisions of
current federal tax law; and (b) the Portfolios are treated as partnerships for
federal income tax purposes and all of their income is allocated to their owners
based on methods approved by the Internal Revenue Service.
DISTRIBUTIONS TO SHAREHOLDERS
Each Fund declares and pays dividends of any net investment income at least
quarterly, and any net realized capital gains annually. Shareholder
distributions are recorded on the ex-dividend date. Dividends are determined in
accordance with income tax principles, which may treat certain transactions
differently from generally accepted accounting principles. Distributions in
excess of tax basis earnings are reported in the financial statements as a
return of capital. Permanent differences in the recognition or classification of
income between the financial statements and tax earnings are reclassified to
paid-in capital.
34
<PAGE>
NOTES TO FINANCIAL STATEMENTS CONTINUED
================================================================================
NOTE 3. TRUSTEES' FEES AND TRANSACTIONS WITH AFFILIATES
MANAGEMENT & ADMINISTRATION FEES
The Funds and Portfolios pay monthly management and administrative fees to Stein
Roe & Farnham Incorporated (the "Advisor"), an indirect, wholly-owned subsidiary
of Liberty Financial Companies, Inc. ("Liberty"), for its services as investment
Advisor and Administrator. The management fee for SR&F Balanced Portfolio is
computed at an annual rate of 0.55% of average daily net assets up to $500
million, 0.50% of the next $500 million, and 0.45% thereafter. The management
fee for SR&F Growth & Income Portfolio is computed at an annual rate of 0.60% of
average daily net assets up to $500 million, 0.55% of the next $500 million, and
0.50% thereafter. The administrative fees for the Funds are computed at an
annual rate of 0.15% of average daily net assets up to $500 million, 0.125% of
the next $500 million, and 0.10% thereafter.
BOOKKEEPING FEE
The Advisor provides bookkeeping and pricing services for a monthly fee equal to
$25 annually plus 0.0025% annually of the Funds' average net assets over $50
million.
TRANSFER AGENT FEE
Liberty Funds Services, Inc. (the Transfer Agent), an affiliate of Liberty,
provides shareholder services for a monthly fee equal to 0.22% annually of SRFBF
average daily net assets and SRFSG&IF average daily net assets attributable to
Class S shares and receives reimbursement for certain out of pocket expenses.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES
Liberty Funds Distributor, Inc. (the Distributor), a subsidiary of Liberty, is
SRSG&IF's principal underwriter.
SRSG&IF has adopted a 12b-1 plan which requires it to pay the Distributor a
service fee on Class A, Class B and Class C net assets. The plan also requires
the payment of a distribution fee to the Distributor on Class A, Class B and
Class C shares only.
OTHER
Certain officers and trustees of the Trust are also officers of the Advisor.
No remuneration was paid to any other trustee or officer of the Trust who is
affiliated with the Advisor.
35
<PAGE>
NOTES TO FINANCIAL STATEMENTS CONTINUED
================================================================================
NOTE 4. SHORT-TERM DEBT
To facilitate portfolio liquidity, the Funds and Portfolios maintain borrowing
arrangements under which they can borrow against portfolio securities. Neither
the Funds nor the Portfolios had borrowings during the six months ended March
31, 2000.
================================================================================
NOTE 5. INVESTMENT TRANSACTIONS
The aggregate cost of purchases and proceeds from sales other than short-term
obligations for the six months ended March 31, 2000, were:
Purchases Sales
-------- --------
SR&F Balanced Portfolio........................... $48,895 $55,438
SR&F Growth & Income Portfolio.................... $16,960 $56,845
Unrealized appreciation (depreciation) at March 31, 2000, based on cost of
investments for both financial statement and federal income tax purposes :
SRBP SRG&IP
----- --------
Gross unrealized appreciation..................... $106,198 $176,023
Gross unrealized depreciation..................... 20,304 7,222
-------- --------
Net unrealized appreciation..................... $85,894 $168,801
-------- --------
36
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37
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
================================================================================
BALANCED FUND
Selected data for a share outstanding throughout the period are as follows:
(UNAUDITED)
SIX MONTHS
ENDED
MARCH 31, YEARS ENDED SEPTEMBER 30,
2000 1999 1998 1997 1996 1995
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 32.35 $ 30.70 $ 33.41 $ 30.07 $ 27.82 $ 25.78
-------- -------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a)............................ 0.36 0.78 0.95 0.95 1.00 1.33
Net realized and unrealized gain (loss) on investments 3.61 3.85 (0.90) 5.61 2.96 2.22
-------- -------- -------- -------- -------- --------
Total from investment operations................... 3.97 4.63 0.05 6.56 3.96 3.55
-------- -------- -------- -------- -------- --------
DISTRIBUTIONS
Net investment income................................ (0.56) (0.90) (0.76) (0.96) (1.01) (1.23)
Net realized capital gains........................... (2.30) (2.08) (2.00) (2.26) (0.70) (0.28)
-------- -------- -------- -------- -------- --------
Total distributions................................ (2.86) (2.98) (2.76) (3.22) (1.71) (1.51)
-------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD.......................... $ 33.46 $ 32.35 $ 30.70 $ 33.41 $ 30.07 $ 27.82
======== ======== ======== ======== ======== ========
Ratio of net expenses to average net assets............. 1.03%(b) 1.14%(c) 1.03% 1.05% 1.05% 0.87%
Ratio of net investment income to average net assets.... 2.19%(b) 2.35%(c) 2.90% 3.02% 3.45% 5.14%
Portfolio turnover rate................................. N/A N/A N/A 15%(d) 87%(d) 45%(d)
Total return............................................ 12.87%(e) 15.74% 0.14% 23.60% 14.83% 14.49%
Net assets, end of year (000's)......................... $247,875 $250,690 $247,852 $284,846 $231,063 $228,560
</TABLE>
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Annualized.
(c) During the year ended September 30, 1999, the Fund experienced a one-time
reduction in its expenses of seven basis points as a result of expenses
accrued in a prior period. The Fund's ratios disclosed above reflects the
actual rate at which expenses were incurred throughout the current fiscal
year without the reduction.
(d) Prior to commencement of operations of the Portfolio.
(e) Not annualized.
<TABLE>
<CAPTION>
================================================================================
SR&F BALANCED PORTFOLIO
(UNAUDITED)
SIX MONTHS
ENDED PERIOD ENDED
MARCH 31, YEARS ENDED SEPTEMBER 30, SEPTEMBER 30,
2000 1999 1998 1997(A)
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Ratio of net expenses to average net assets............................... 0.59%(b) 0.71%(c) 0.61% 0.60%(b)
Ratio of net investment income to average net assets...................... 2.67%(b) 2.78%(c) 3.31% 3.52%(b)
Portfolio turnover rate................................................... 21% 41% 61% 21%
</TABLE>
(a) From commencement of operations on February 3, 1997.
(b) Annualized.
(c) During the year ended September 30, 1999, the Portfolio experienced a
one-time reduction in its expenses of two basis points as a result of
expenses accrued in a prior period. The Portfolio's ratios disclosed above
reflects the actual rate at which expenses were incurred throughout the
current fiscal year without the reduction.
38 and 39
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS CONTINUED
================================================================================
Select Growth & Income Fund
Selected data for a share outstanding throughout the period are as follows:
(UNAUDITED)
SIX MONTHS
ENDED
MARCH 31, YEARS ENDED SEPTEMBER 30,
2000 1999 1998 1997 1996 1995
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.................. $26.14 $22.45 $22.91 $18.39 $16.65 $14.54
-------- -------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS.....................
Net investment income (a).......................... 0.06 0.22 0.24 0.30 0.27 0.34
Net realized and unrealized gain on investments.... 2.06 4.10 0.55 5.15 3.22 2.56
-------- -------- -------- -------- -------- --------
Total from investment operations................. 2.12 4.32 0.79 5.45 3.49 2.90
-------- -------- -------- -------- -------- --------
DISTRIBUTIONS
Net investment income.............................. (0.08) (0.25) (0.28) (0.28) (0.32) (0.20)
Net realized capital gains......................... (1.16) (0.38) (0.97) (0.65) (1.43) (0.59)
-------- -------- -------- -------- -------- --------
Total distributions............................. (1.24) (0.63) (1.25) (0.93) (1.75) (0.79)
-------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF YEAR.......................... $ 27.02 $ 26.14 $ 22.45 $ 22.91 $ 18.39 $ 16.65
======== ======== ======== ======== ======== ========
Ratio of net expenses to average net assets........... 1.06%(b) 1.06%(c) 1.07% 1.13% 1.18% 0.96%
Ratio of net investment income to average net assets.. 0.45%(b) 0.79%(c) 1.02% 1.52% 1.65% 1.78%
Portfolio turnover rate............................... N/A N/A N/A 2%(d) 13%(d) 70%(d)
Total return.......................................... 8.22%(e) 19.39% 3.45% 30.81% 22.67% 21.12%
Net assets, end of period (000's)..................... $331,062 $375,789 $351,052 $337,466 $204,387 $139,593
</TABLE>
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Annualized.
(c) During the year ended September 30, 1999, the Fund experienced a one-time
reduction in its expenses of four basis points as a result of expenses
accrued in a prior period. The Fund's ratios disclosed above reflects the
actual rate at which expenses were incurred throughout the current fiscal
year without the reduction.
(d) Prior to commencement of operations of the Portfolio.
(e) Not annualized.
<TABLE>
<CAPTION>
================================================================================
SR&F GROWTH & INCOME PORTFOLIO
(UNAUDITED)
SIX MONTHS
ENDED PERIOD ENDED
MARCH 31, YEARS ENDED SEPTEMBER 30, SEPTEMBER 30,
2000 1999 1998 1997(A)
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Ratio of net expenses to average net assets.............................. 0.62%(b) 0.63%(c) 0.65% 0.65%(b)
Ratio of net investment income to average net assets..................... 0.89%(b) 1.22%(c) 1.44% 2.04%(b)
Portfolio turnover rate.................................................. 5% 7% 11% 7%
</TABLE>
(a) From commencement of operations on February 3, 1997.
(b) Annualized.
(c) During the year ended September 30, 1999, the Portfolio experienced a
one-time reduction in its expenses of two basis points as a result of
expenses accrued in a prior period. The Portfolio's ratios disclosed above
reflects the actual rate at which expenses were incurred throughout the
current fiscal year without the reduction.
40 and 41
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<PAGE>
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43
<PAGE>
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44
<PAGE>
INVESTMENT TRUST
================================================================================
TRUSTEES
John A. Bacon Jr.
Private Investor
William W. Boyd
Chairman and Director, Sterling Plumbing
Group Inc.
Lindsay Cook
Executive Vice President, Liberty Financial
Companies, Inc.
Douglas A. Hacker
Executive Vice President and Chief Financial
Officer, United Airlines
Janet Langford Kelly
Executive Vice President-Corporate Development,
General Counsel and Secretary, Kellogg Co.
Charles R. Nelson
Van Voorhis Professor of Political Economy,
University of Washington
Thomas C. Theobald
Managing Partner, William Blair Capital Partners
OFFICERS
Stephen E. Gibson, President
William D. Andrews, Executive Vice President
Loren A. Hansen, Executive Vice President
Kevin M. Carome, Executive Vice President,
Secretary
Christine Balzano, Vice President
David Brady, Vice President
Daniel Cantor, Vice President
J. Kevin Connaughton, Vice President, Treasurer
William Garrison, Vice President
Erik Gustafson, Vice President
Harvey Hirschhorn, Vice President
Gail D. Knudsen, Vice President, Controller
Lynn C. Maddox, Vice President
Mary D. McKenzie, Vice President
Art McQueen, Vice President
Nicholas Norton, Vice President
Michael Fisher, Assistant Treasurer
AGENTS AND ADVISORS
Stein Roe & Farnham Incorporated
Investment Advisor State
Street Bank and Trust Company
Custodian
SteinRoe Services Inc.
Transfer Agent
Bell, Boyd & Lloyd
Legal Counsel to the Fund
PricewaterhouseCoopers LLP
Independent Accountants
<PAGE>
THE STEIN ROE MUTUAL FUNDS
FIXED INCOME FUNDS
Cash Reserves Fund
Municipal Money Market Fund
Intermediate Municipals Fund
Managed Municipals Fund
High-Yield Municipals Fund
Intermediate Bond Fund
Income Fund
High Yield Fund
EQUITY FUNDS
Balanced Fund
Growth & Income Fund
Disciplined Stock Fund
Growth Stock Fund
Growth Investor Fund
Young Investor Fund
Midcap Growth Fund
Large Company Focus
Fund Capital Opportunities Fund
International Fund
Small Company Growth Fund
Stein Roe Mutual Funds
P.O. Box 8900
Boston, MA 02205-8900
Financial Advisors call: 800-322-0593
Shareholders call: 800-338-2550
www.steinroe.com
Liberty Funds Distributor, Inc.
DIR-03/215B-0400 (00/778) 5/00
