LIBERTY STEIN ROE FUNDS INVESTMENT TRUST, 485BPOS, 2000-01-28

LIBERTY STEIN ROE FUNDS INVESTMENT TRUST
485BPOS, 2000-01-28

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

SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Post-Effective Amendment No. 65 [X]

and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 66 [X]

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

One Financial Center, Boston, Massachusetts 02111
(Address of Principal Executive Offices) (Zip Code)

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

Kevin M. Carome Cameron S. Avery
Exec. Vice-President Bell, Boyd & Lloyd
Liberty-Stein Roe Funds Suite 3300
Investment Trust Three First National Plaza
One Financial Center 70 W. Madison Street
Boston, MA 02111 Chicago, Illinois 60602
(Name and Address of Agents for Service)

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

[ ] immediately upon filing pursuant to paragraph (b)
[X] on February 1, 2000 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of rule 485

Registrant has previously elected to register pursuant to Rule
24f-2 an indefinite number of shares of beneficial interest of
the following series: Stein Roe Advisor Select Growth &
Income Fund, Stein Roe Balanced Fund, Stein Roe Growth Stock
Fund, Stein Roe Capital Opportunities Fund, Stein Roe
Disciplined Stock Fund, Stein Roe International Fund, Stein
Roe Young Investor Fund, Stein Roe Midcap Growth Fund, Stein
Roe Large Company Focus Fund, Stein Roe Asia Pacific Fund,
Stein Roe Small Company Growth Fund, and Stein Roe Advisor
Growth Investor Fund.

This amendment to the Registration Statement has also been
signed by SR&F Base Trust.

<PAGE>

The prospectus and statement of additional information
relating to the series of Stein Roe Investment Trust
designated Stein Roe Asia Pacific Fund are not affected by the
filing of this Post-Effective Amendment No. 65.

<PAGE>

Stein Roe Domestic Equity Funds

Balanced Fund
Growth & Income Fund, Class S
Disciplined Stock Fund
Growth Stock Fund
Growth Investor Fund, Class S
Midcap Growth Fund
Large Company Focus Fund
Capital Opportunities Fund
Small Company Growth Fund

Prospectus

February 1, 2000

The Securities and Exchange Commission has not approved or
disapproved these securities or determined whether this prospectus
is truthful or complete. Anyone who tells you otherwise is
committing a crime.

<PAGE>

Each fund section contains the following information specific to
that fund: investment goal; principal investment strategy;
principal investment risks; fund performance; and your expenses.

Please keep this prospectus as your reference manual.

1 Balanced Fund

9 Growth & Income Fund, Class S

16 Disciplined Stock Fund

25 Growth Stock Fund

29 Growth Investor Fund, Class S

37 Midcap Growth Fund

44 Large Company Focus Fund

51 Capital Opportunities Fund

57 Small Company Growth Fund

64 Financial Highlights

74 Your Account
Purchasing Shares
Opening an Account
Determining Share Price (NAV)
Selling Shares
Exchanging Shares
Reporting to Shareholders
Dividends and Distributions

89 Other Investments and Risks

94 The Funds' Management
Investment Adviser
Portfolio Managers
Master/Feeder Fund Structure

<PAGE>

[Callout]
DEFINING CAPITALIZATION

A company's market capitalization is simply its stock price
multiplied by the number of shares of stock it has issued and
outstanding. In the financial markets, companies generally are
sorted into one of three capitalization-based categories: large
capitalization (large cap); medium capitalization (midcap); or
small capitalization (small cap). In defining a company's market
capitalization, we use capitalization-based categories as they are
defined by Lipper, Inc.

According to Lipper, Inc. as of December 1999, large-cap companies
had market capitalizations greater than $9.0 billion, midcap
companies had market capitalizations between $2.2 and $9.0
billion, and small-cap companies had market capitalizations less
than $2.2 billion. These amounts are subject to change.

[End Callout]

THE FUNDS
BALANCED FUND

INVESTMENT GOAL Stein Roe Balanced Fund seeks long-term growth
of capital and current income consistent with reasonable
investment risk.

PRINCIPAL INVESTMENT STRATEGY Balanced Fund invests all of its
assets in SR&F Balanced Portfolio as part of a master fund/feeder
fund structure. Balanced Portfolio allocates its investments
among common stocks and securities convertible into common stocks,
bonds and cash. The Portfolio invests primarily in well-
established companies that have large market capitalizations. The
portfolio manager may invest in a company because it has a history
of steady to improving sales or earnings growth that they believe
can be sustained. He also may invest in a company because they
believe its stock is priced attractively compared to the value of
its assets. The Portfolio may invest up to 25% of its assets in
foreign stocks.

The Portfolio also invests at least 25% of its assets in bonds.
The Portfolio purchases bonds that are "investment grade"-that is,
within the four highest investment grades assigned by a nationally
recognized statistical rating organization. The Portfolio may
invest in unrated bonds if the portfolio managers believe that the
securities are investment-grade quality. To select debt
securities for the Portfolio, the portfolio manager considers a
bond's expected income together with its potential for price gains
or losses.

The portfolio manager sets the Portfolio's asset allocation
between stocks, bonds and cash. The portfolio manager may change
the allocation from time to time based upon economic, market and
other factors that affect investment opportunities.

The portfolio manager may sell a portfolio holding if the security
reaches the portfolio manager's price target or if the company has
a deterioration of fundamentals such as failing to meet key
operating benchmarks. The portfolio manager may also sell a
portfolio holding to fund redemptions.

PRINCIPAL INVESTMENT RISKS There are two basic risks for all
mutual funds that invest in stocks and bonds: management risk and
market risk. For bonds, market risk is primarily a factor of
interest rate changes. These risks may cause you to lose money by
investing in the Fund.

[Callout]
WHAT ARE MARKET AND MANAGEMENT RISKS?
Management risk means that Stein Roe's stock and bond selections
and other investment decisions might produce losses or cause the
Fund to underperform when compared to other funds with similar
goals. Market risk means that security prices in a market, sector
or industry may move down. Downward movements will reduce the
value of your investment. Because of management and market risk,
there is no guarantee that the Fund will achieve its investment
goal or perform favorably compared with competing funds.
[End Callout]

Because the Portfolio invests in stocks and bonds, the price of
the Fund's shares-its net asset value per share (NAV)-fluctuates
daily in response to changes in the market value of the stocks and
bonds.

Foreign Securities
Foreign securities are subject to special risks. Foreign stock
markets, especially in countries with developing stock markets,
can be extremely volatile. The liquidity of foreign securities
may be more limited than domestic securities, which means that the
Portfolio may at times be unable to sell them at desirable prices.
Fluctuations in currency exchange rates impact the value of
foreign securities. Brokerage commissions, custodial fees, and
other fees are generally higher for foreign investments. In
addition, foreign governments may impose withholding taxes which
would reduce the amount of income available to distribute to
shareholders. Other risks include: possible delays in settlement
of transactions; less publicly available information about
companies; the impact of political, social or diplomatic events;
and possible seizure, expropriation or nationalization of the
company or its assets.

Debt Securities

The Portfolio's investments in debt securities, generally bonds,
expose the Fund to interest rate risk. Interest rate risk is the
risk of a decline in the price of a bond when interest rates
increase or decrease. In general, if interest rates rise, bond
prices fall; and if interest rates fall, bond prices rise.
Changes in the value of bonds will not affect the amount of income
the Fund receives from them but will affect the value of the
Fund's shares. Interest rate risk is generally greater for bonds
having longer maturities.

An investment in the Fund is not a bank deposit and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency. It is not a complete investment program.

For more information on the Portfolio's investment techniques,
please refer to "Other Investments and Risks."

Who Should Invest in the Fund?

You may want to invest in Balanced Fund if you:
* are a long-term investor and want a fund that offers both stocks
and bonds in the same investment
* want a fund that can invest in both domestic and international
stocks
* are a first-time investor or want to invest primarily in just
one fund
* want to invest in stocks, but are uncomfortable with the risk
level of a fund that invests solely in stocks
* want to invest in bonds, but want more return potential than is
typically available from a fund that invests solely in bonds

Balanced Fund is not appropriate for investors who:

* want to avoid volatility or possible losses
* are saving for a short-term investment
* are not interested in generating taxable current income

FUND PERFORMANCE The following charts show the Fund's
performance for the past 10 calendar years through December 31,
1999. The returns include the reinvestment of dividends and
distributions. As with all mutual funds, past performance is no
guarantee of future results.

Year-by-Year Total Returns

Year-by-year calendar total returns show the Fund's volatility
over a period of time. This chart illustrates performance
differences for each calendar year and provides an indication of
the risks of investing in the Fund.

[bar chart]
YEAR-BY-YEAR TOTAL RETURNS
45% 47.95%
40%
35%
30%
25% 29.59%
20% 22.65%
15% 17.05% 17.47%
10% 12.34% 12.19%
5% 7.89%
0%
- -5% -1.72% -4.12%
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
[ ] Balanced Fund
[end of bar chart]

Best quarter: 4th quarter 1998, +12.53%
Worst quarter: 3rd quarter 1998, -9.49%

Average Annual Total Returns

Average annual total returns measure the Fund's performance over
time. We compare the Fund's returns with returns for the S&P 500
Index. We show returns for calendar years to be consistent with
the way other mutual funds report performance in their
prospectuses. This provides an indication of the risks of
investing in the Fund.

AVERAGE ANNUAL TOTAL RETURNS
Periods ending December 31, 1999
1 yr 5 yr 10 yr
Balanced Fund 47.95% 16.26% 12.13%
S&P 500 Index* 21.03% 28.54% 18.19%

*The S&P 500 Index is an unmanaged group of stocks that differs
from the Fund's composition; it is not available for direct
investment.

YOUR EXPENSES This table shows fees and expenses you may pay if
you buy and hold shares of the Fund. You do not pay any sales
charge when you purchase or sell your shares.(a) However, you pay
various other indirect expenses because the Fund or the Portfolio
pays fees and other expenses that reduce your investment return.

ANNUAL FUND OPERATING EXPENSES (b)
(expenses that are deducted from Fund assets)
Management fees(c) 0.70%
Distribution (12b-1) fees None
Other expenses 0.44%
Total annual fund operating expenses 1.14%

Expense Example

This example compares the cost of investing in the Fund to the
cost of investing in other mutual funds. It uses the same
hypothetical assumptions that other funds use in their
prospectuses:

* $10,000 initial investment
* 5% return each year
* the Fund's operating expenses remain constant as a percent of
net assets
* redemption at the end of each time period

Your actual costs may be higher or lower because in reality fund
returns and operating expenses change. This example reflects
expenses of both the Fund and the Portfolio. Expenses based on
these assumptions are:

EXPENSE EXAMPLE
1 yr 3 yrs 5 yrs 10 yrs
- ---------------------------------------------------------------
Balanced Fund $116 $362 $628 $1,386

<PAGE>

THE FUNDS

GROWTH & INCOME FUND, CLASS S

This Fund is closed to new investors except for purchases by
eligible investors as described under "Your Account."

INVESTMENT GOAL Stein Roe Growth & Income Fund seeks to provide
both growth of capital and current income.

PRINCIPAL INVESTMENT STRATEGY Growth & Income Fund invests all
of its assets in SR&F Growth & Income Portfolio as part of a
master fund/feeder fund structure. Growth & Income Portfolio
invests primarily in common stocks of well-established companies
having large market capitalizations. The Portfolio may also
invest in companies having midsized market capitalizations. The
Portfolio may invest up to 25% of its assets in foreign stocks.
To select investments for the Portfolio, the portfolio manager
looks for common stocks that have the potential to increase in
price and to pay dividends. The portfolio manager focuses on the
stocks of companies that have experienced management; broad,
highly diversified product lines; deep financial resources; easy
access to credit; and a history of paying dividends.

PRINCIPAL INVESTMENT RISKS There are two basic risks for all
mutual funds that invest in stocks: management risk and market
risk. These risks may cause you to lose money by investing in the
Fund.

[Callout]
WHAT ARE MARKET AND MANAGEMENT RISKS?
Management risk means that Stein Roe's stock selections and other
investment decisions might produce losses or cause the Fund to
underperform when compared to other funds with similar goals.
Market risk means that security prices in a market, sector or
industry may move down. Downward movements will reduce the value
of your investment. Because of management and market risk, there
is no guarantee that the Fund will achieve its investment goal or
perform favorably compared with competing funds.
[End Callout]

Because the Portfolio invests in stocks, the price of the Fund's
shares-its net asset value per share (NAV)-fluctuates daily in
response to changes in the market value of the securities.

Foreign Securities

Foreign securities are subject to special risks. Foreign stock
markets, especially in countries with developing stock markets,
can be extremely volatile. The liquidity of foreign securities
may be more limited than domestic securities, which means that the
Portfolio may at times be unable to sell them at desirable prices.
Fluctuations in currency exchange rates impact the value of
foreign securities. Brokerage commissions, custodial fees, and
other fees are generally higher for foreign investments. In
addition, foreign governments may impose withholding taxes which
would reduce the amount of income available to distribute to
shareholders. Other risks include: possible delays in settlement
of transactions; less publicly available information about
companies; the impact of political, social or diplomatic events;
and possible seizure, expropriation or nationalization of the
company or its assets.

An investment in the Fund is not a bank deposit and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency. It is not a complete investment program.

For more information on the Portfolio's investment techniques,
please refer to "Other Investments and Risks."

Who Should Invest in the Fund?

You may want to invest in Growth & Income Fund if you:
* want to invest in the stocks of large companies, but prefer to
temper stock price fluctuations by combining growth with the
potential of a steady source of income from dividends
* are a long-term investor looking for steady, not aggressive,
growth potential
* are a first-time investor or want to invest primarily in just
one stock fund

Growth & Income Fund is not appropriate for investors who:

* want to avoid the risk and volatility associated with stock
market investing
* are saving for a short-term investment
* are not interested in generating taxable current income

Year-by-Year Total Returns

[bar chart]
YEAR-BY-YEAR TOTAL RETURNS
45%
40%
35%
30% 32.42% 30.15%
25% 25.71%
20% 21.81%
15% 19.54%
10% 10.01% 12.86% 11.13%
5%
0%
- -5% -1.72% -0.14%
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
[ ] Growth & Income Fund
[end of bar chart]

Best quarter: 4th quarter 1998, +17.91%
Worst quarter: 3rd quarter 1990, -12.06%

Average Annual Total Returns

AVERAGE ANNUAL TOTAL RETURNS
Periods ending December 31, 1999
1 yr 5 yr 10 yr
- ----------------------------------------------------------------
Growth & Income Fund, Class S 11.13% 21.50% 15.63%
S&P 500 Index* 21.03% 28.54% 18.19%

*The S&P 500 Index is an unmanaged group of stocks that differs
from the Fund's composition; it is not available for direct
investment.

ANNUAL FUND OPERATING EXPENSES (b)
(expenses that are deducted from Fund assets)
Management fees(c) 0.75%
Distribution (12b-1) fees None
Other expenses 0.31%
Total annual fund operating expenses 1.06%

Expense Example

This example compares the cost of investing in the Fund to the
cost of investing in other mutual funds. It uses the same
hypothetical assumptions that other funds use in their
prospectuses:

* $10,000 initial investment
* 5% return each year
* the Fund's operating expenses remain constant as a percent of
net assets
* redemption at the end of each time period

EXPENSE EXAMPLE
1 yr 3 yrs 5 yrs 10 yrs
- ------------------------------------------------------------------
Growth & Income Fund, Class S $108 $337 $585 $1,294

<PAGE>

THE FUNDS
DISCIPLINED STOCK FUND

INVESTMENT GOAL Stein Roe Disciplined Stock Fund seeks long-term
growth.

PRINCIPAL INVESTMENT STRATEGY Disciplined Stock Fund invests all
of its assets in SR&F Disciplined Stock Portfolio as part of a
master fund/feeder fund structure. Under normal market
circumstances, Disciplined Stock Portfolio will invest primarily
in common stocks of midcapitalization companies. The Portfolio
may also invest in companies having large-market capitalizations.
The Portfolio may invest up to 25% of its assets in foreign
stocks. The portfolio will be "blend" in nature, meaning that the
managers will exercise latitude in investing in the stocks of
companies that have "growth" and/or "value" characteristics. The
portfolio managers will generally avoid growth stocks with very
high relative price/earnings ratios and growth rates. These
strategies reflect the Fund's more conservative posture than a
fund investing only in growth stocks. In selecting stocks with
value characteristics, the portfolio managers will look for
companies that are undervalued and are perhaps growing more
slowly, but whose valuation may be attractive based on factors
such as an improved earnings outlook, increasing free cash flow,
new product initiatives or changes in management.

The portfolio managers may sell a portfolio holding if the
security reaches the portfolio managers' price target or if the
company has a deterioration of fundamentals such as failing to
meet key operating benchmarks. The portfolio managers may also
sell a portfolio holding to fund redemptions.

PRINCIPAL INVESTMENT RISKS There are two basic risks for all
mutual funds that invest in stocks: management risk and market
risk. These risks may cause you to lose money by investing in the
Fund.

Because the Portfolio invests in stocks, the price of the Fund's
shares-its net asset value per share (NAV)-fluctuates daily in
response to changes in the market value of the securities.

Investments in stocks of midsized companies can be riskier than
investments in larger companies. Midsized companies often have
limited product lines, operating histories, markets, or financial
resources. They may depend heavily on a small management group
than larger companies. Midsized companies may trade less
frequently, in smaller volumes, and fluctuate more sharply in
price than larger companies. In addition, they may not be widely
followed by the investment community, which can lower the demand
for their stock.

Foreign Securities

An investment in the Fund is not a bank deposit and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency. It is not a complete investment program.

For more information on the Portfolio's investment techniques,
please refer to "Other Investments and Risks."

Who Should Invest in the Fund?

You may want to invest in Disciplined Stock Fund if you:
* want a fund that typically will blend both growth and value
characteristics
* are a long-term investor

Disciplined Stock Fund is not appropriate for investors who:
* want to avoid the volatility and risks of stock market investing
* are saving for a short-term investment
* need regular current income

Year-by-Year Total Returns

[bar chart]
YEAR-BY-YEAR TOTAL RETURNS
40%
35% 34.04%
30%
25% 25.94%
20% 20.42%
15% 18.73% 18.81%
10% 14.05% 10.51%
5%
0%
- -5% -5.81% -3.35%
- -10%
- -15% -11.25%
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
[ ] Disciplined Stock Fund
[end of bar chart]

Best quarter: 2nd quarter 1999, +20.87%
Worst quarter: 3rd quarter 1998, -18.13%

Average Annual Total Returns

Average annual total returns measure the Fund's performance over
time. We compare the Fund's returns with returns for the S&P
MidCap 400 Index. We show returns for calendar years to be
consistent with the way other mutual funds report performance in
their prospectuses. This provides an indication of the risks of
investing in the Fund.

AVERAGE ANNUAL TOTAL RETURNS
Periods ending December 31, 1999
1 yr 5 yr 10 yr
- ----------------------------------------------------------------
Disciplined Stock Fund 10.51% 11.74% 11.31%
S&P MidCap 400 Index* 14.72% 23.05% 17.32%

*The S&P MidCap 400 Index is an unmanaged group of stocks that
differs from the Fund's composition; it is not available for
direct investment.

ANNUAL FUND OPERATING EXPENSES (b)
(expenses that are deducted from Fund assets)
Management fees(c) 0.87%
Distribution (12b-1) fees None
Other expenses 0.29%
Total annual fund operating expenses 1.16%

Expense Example

This example compares the cost of investing in the Fund to the
cost of investing in other mutual funds. It uses the same
hypothetical assumptions that other funds use in their
prospectuses:

* $10,000 initial investment
* 5% return each year
* the Fund's operating expenses remain constant as a percent of
net assets
* redemption at the end of each time period

EXPENSE EXAMPLE
1 yr 3 yrs 5 yrs 10 yrs
- --------------------------------------------------------------
Disciplined Stock Fund $118 $368 $638 $1,409

<PAGE>

THE FUNDS
GROWTH STOCK FUND

This Fund is closed to new investors except for purchases by
eligible investors as described under "Your Account."

INVESTMENT GOAL Stein Roe Growth Stock Fund seeks long-term
growth.

PRINCIPAL INVESTMENT STRATEGY Growth Stock Fund invests all of
its assets in SR&F Growth Stock Portfolio as part of a master
fund/feeder fund structure. Growth Stock Portfolio invests
primarily in the common stocks of companies with large-market
capitalizations. The Portfolio emphasizes the technology,
financial services, health care, and global consumer franchise
sectors. The Portfolio may invest up to 25% of its assets in
foreign stocks. To select investments for the Portfolio, the
portfolio manager considers companies that he believes will
generate earnings growth over the long term regardless of the
economic environment.

PRINCIPAL INVESTMENT RISKS There are two basic risks for all
mutual funds that invest in stocks: management risk and market
risk. These risks may cause you to lose money by investing in the
Fund.

Because the Portfolio invests in stocks, the price of the Fund's
shares-its net asset value per share (NAV)-fluctuates daily in
response to changes in the market value of the securities.

The Portfolio's emphasis on certain market sectors may increase
volatility in the Fund's NAV. If sectors that the Portfolio
invests in do not perform well, the Fund's NAV could decrease.

Foreign Securities

An investment in the Fund is not a bank deposit and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency. It is not a complete investment program.

For more information on the Portfolio's investment techniques,
please refer to "Other Investments and Risks."

Who Should Invest in the Fund?

You may want to invest in Growth Stock Fund if you:
* are a long-term investor and want to participate in the market
for large-capitalization growth stocks
* can tolerate the risk and volatility associated with the general
stock market but want less risk and volatility than an
aggressive growth fund

Growth Stock Fund is not appropriate for investors who:

* want to avoid the risk and volatility associated with stock
market investing
* are saving for a short-term investment
* want regular current income

Year-by-Year Total Returns

[bar chart]
YEAR-BY-YEAR TOTAL RETURNS
45% 46.00%
40%
35% 35.63% 36.61%
30% 31.62%
25% 25.54%
20% 20.94%
15%
10%
5% 8.24%
0% 0.93% 2.84%
- -5% -3.78%
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
[ ] Growth Stock Fund
[end of bar chart]

Best quarter: 4th quarter 1999, +25.35%
Worst quarter: 3rd quarter 1990, -16.61%

Average Annual Total Returns

AVERAGE ANNUAL TOTAL RETURNS
Periods ending December 31, 1999
1 yr 5 yr 10 yr
- -------------------------------------------------------------
Growth Stock Fund 36.61% 29.93% 19.31%
S&P 500 Index* 21.03% 28.54% 18.19%

*The S&P 500 Index is an unmanaged group of stocks that differs
from the Fund's composition; it is not available for direct
investment.

ANNUAL FUND OPERATING EXPENSES (b)
(expenses that are deducted from Fund assets)
Management fees(c) 0.71%
Distribution (12b-1) fees None
Other expenses 0.26%
Total annual fund operating expenses 0.97%

Expense Example

This example compares the cost of investing in the Fund to the
cost of investing in other mutual funds. It uses the same
hypothetical assumptions that other funds use in their
prospectuses:

* $10,000 initial investment
* 5% return each year
* the Fund's operating expenses remain constant as a percent of
net assets
* redemption at the end of each time period

EXPENSE EXAMPLE
1 yr 3 yrs 5 yrs 10 yrs
- -------------------------------------------------------------
Growth Stock Fund $99 $309 $536 $1,190

<PAGE>

THE FUNDS
GROWTH INVESTOR FUND, CLASS S

This Fund is closed to new investors except for purchases by
eligible investors as described under "Your Account."

INVESTMENT GOAL Stein Roe Growth Investor Fund seeks long-term
growth.

Principal Investment Strategy Stein Roe Growth Investor Fund
invests all its assets in SR&F Growth Investor Portfolio as part
of a master fund/feeder fund structure. The Portfolio invests
primarily in common stocks believed to have long-term growth
potential. Under normal market conditions, the Portfolio invests
at least 65% of its total assets in common stocks of companies
that Stein Roe believes have long-term growth potential. The
Portfolio may invest in companies of any size including smaller,
emerging companies. It emphasizes companies in the technology
sector, including computer software, computer hardware,
semiconductors and Internet infrastructure companies, and various
consumer goods sectors, including personal care products,
pharmaceuticals and food products. The Portfolio may invest up to
25% of its assets in foreign stocks.

To select investments for the portfolio, the portfolio managers
look for companies that are market leaders with growing market
share in their respective industries. The managers also look for
companies with strong financial balance sheets and experienced
management teams.

The portfolio managers may sell a portfolio holding if the company
has a deterioration of fundamentals such as lower revenues or
earnings growth. The portfolio managers may also sell a portfolio
holding to fund redemptions.

PRINCIPAL INVESTMENT RISKS There are two basic risks for all
mutual funds that invest in stocks: management risk and market
risk. These risks may cause you to lose money by investing in the
Fund.

Because the Portfolio invests in stocks, the price of the Fund's
shares-its net asset value per share (NAV)-fluctuates daily in
response to changes in the market value of the securities.

Due to its focus on companies in the technology sector and various
consumer goods sectors, the Fund may perform differently than the
stock market. Financial, economic, business, political, and other
developments affecting the technology or consumer goods sectors
will have a greater effect on the Fund. The value of technology-
related companies is particularly vulnerable to rapidly changing
technology, extensive government regulation, and relatively high
costs of obsolescence caused by technological advances, which are
higher than in other industry sectors. Shares of a small company
may pose greater risks than shares of a large company due to
narrow product lines, limited financial resources, less depth in
management or a limited trading market for its stock.

An investment in the Fund is not a bank deposit and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency. It is not a complete investment program.

For more information on the Portfolio's investment techniques,
please refer to "Other Investments and Risks."

Who Should Invest in the Fund?

You may want to invest in Growth Investor Fund if you:
* are a long-term investor who wants to participate in the stock
market through a Fund that emphasizes growth companies
* can accept more investment risk and volatility than the general
stock market

Growth Investor Fund is not appropriate for shareholders who:
* want to avoid volatility or possible losses
* want to save for a short-term investment
* need regular current income

FUND PERFORMANCE The historical performance of the Fund shown in
the performance table is the performance of Stein Roe Young
Investor Fund, a separate feeder fund of the Portfolio.
Performance for Young Investor Fund is not restated to reflect the
higher gross annual operating expenses of Growth Investor Fund.
If those gross annual operating expenses were reflected,
performance of Young Investor Fund would be lower. The chart and
table give some indication of the risks of investing in the Fund.
The returns include the reinvestment of dividends and
distributions. As with all mutual funds, past performance does
not predict the Fund's future performance.

Year-by-Year Total Returns

Year-by-year calendar returns show the volatility of Young
Investor Fund since it started. This chart illustrates
performance differences for each calendar year and provides an
indication of the risks of investing in the Fund.

[bar chart]
YEAR-BY-YEAR TOTAL RETURNS
40%
35% 39.79% 35.10%
30% 31.68%
25% 26.28%
20%
15% 17.65%
10%
5%
0%
- -5%
1995 1996 1997 1998 1999
[ ] Young Investor Fund
[end of bar chart]

Best quarter: 4th quarter 1999, +28.42%
Worst quarter: 3rd quarter 1998, -16.46%

*Growth Investor Fund performance is the performance of Young
Investor Fund from April 29, 1994 through December 31, 1999.

Average Annual Total Returns

Stein Roe Growth Investor Fund commenced operations on March 31,
1999. The Fund's historical performance for all periods prior to
March 31, 1999, is the performance of Young Investor Fund and has
not been restated to reflect the higher gross annual operating
expenses of Growth Investor Fund. Average annual total returns
measure Young Investor Fund's performance over time. We compare
Young Investor Fund's return with returns for the S&P 500 Index.
We show returns for calendar years to be consistent with the way
other mutual funds report performance in their prospectuses. This
provides an indication of the risks of investing in the Fund.

AVERAGE ANNUAL TOTAL RETURNS
Periods ending December 31, 1999
1 yr 5 yr Since Inception
(April 29, 1994)
- --------------------------------------------------------------
Young Investor Fund 31.68% 29.87% 27.49%
S&P 500 Index* 21.03% 28.54% 25.65%

*The S&P 500 Index is an unmanaged group of stocks that differs
from the Fund's composition; it is not available for direct
investment. Since inception performance for the S&P 500 Index is
from April 30, 1994 to December 31, 1999.

ANNUAL FUND OPERATING EXPENSES (b)
(expenses that are deducted from Fund assets)
Management fees(c) 0.73%
Distribution (12b-1) fees None
Other expenses 1.61%
Total annual fund operating expenses 2.34%
Expense reimbursement(d) 1.24%
Net expenses 1.10%

(a) There is a $7 charge for wiring redemption proceeds to your
bank. A fee of $5 per quarter may be charged to accounts that
fall below the required minimum balance.
(b) Annual fund operating expenses consist of Fund expenses plus
the Fund's share of the expenses of the Portfolio. Fund
expenses include management fees and administrative costs such
as furnishing the Fund with offices and providing tax and
compliance services.
(c) Management fees include both the management fee and the
administrative fee charged to the Fund.
(d) Stein Roe will reimburse the Fund if its annual ordinary
operating expenses exceed 1.10% of average daily net assets.
This commitment expires on January 31, 2001. After
reimbursement, management fees will be 0.0% and other expenses
will be 1.10%. A reimbursement lowers the expense ratio and
increases overall return to investors.

Expense Example

This example compares the cost of investing in the Fund to the
cost of investing in other mutual funds. It uses the same
hypothetical assumptions that other funds use in their
prospectuses:

* $10,000 initial investment
* 5% return each year
* the Fund's operating expenses remain constant as a percent of
net assets
* redemption at the end of each time period

EXPENSE EXAMPLE
1 yr 3 yrs 5 yrs 10 yrs
- ------------------------------------------------------------
Growth Investor Fund $112 $611 $1,138 $2,581

<PAGE>

THE FUNDS
MIDCAP GROWTH FUND

INVESTMENT GOAL Stein Roe Midcap Growth Fund seeks long-term
growth.

PRINCIPAL INVESTMENT STRATEGY Under normal market conditions,
Midcap Growth Fund invests at least 65% of its assets in common
stocks of midcap companies that the portfolio manager believes
have long-term growth potential. The Fund may also invest in
small- and large-capitalization companies. The Fund may invest up
to 25% of its assets in foreign stocks. To select investments for
the Fund, the portfolio manager considers midcap companies that
show the potential to generate and sustain long-term earnings
growth at above-average rates. The portfolio manager selects
companies based on his view of long-term rather than short-term
earnings growth prospects.

PRINCIPAL INVESTMENT RISKS There are two basic risks for all
mutual funds that invest in stocks: management risk and market
risk. These risks may cause you to lose money by investing in the
Fund.

Because the Fund invests in stocks, the price of its shares-its
net asset value per share (NAV)-fluctuates daily in response to
changes in the market value of the securities.

Investments in stocks of midsized companies can be riskier than
investments in larger companies. Midsized companies often have
limited product lines, operating histories, markets, or financial
resources. They may depend heavily on a small management group.
Midsized companies may trade less frequently, in smaller volumes,
and fluctuate more sharply in price than larger companies. In
addition, they may not be widely followed by the investment
community, which can lower the demand for their stock.

Foreign Securities

Foreign securities are subject to special risks. Foreign stock
markets, especially in countries with developing stock markets,
can be extremely volatile. The liquidity of foreign securities
may be more limited than domestic securities, which means that the
Fund may at times be unable to sell them at desirable prices.
Fluctuations in currency exchange rates impact the value of
foreign securities. Brokerage commissions, custodial fees, and
other fees are generally higher for foreign investments. In
addition, foreign governments may impose withholding taxes which
would reduce the amount of income available to distribute to
shareholders. Other risks include: possible delays in settlement
of transactions; less publicly available information about
companies; the impact of political, social or diplomatic events;
and possible seizure, expropriation or nationalization of the
company or its assets.

An investment in the Fund is not a bank deposit and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency. It is not a complete investment program.

For more information on the Fund's investment techniques, please
refer to "Other Investments and Risks."

Who Should Invest in the Fund?

You may want to invest in Midcap Growth Fund if you:
* want a fund that emphasizes midcap companies
* are a long-term investor

Midcap Growth Fund is not appropriate for investors who:
* want to avoid the risk and volatility associated with small
stock investing
* are saving for a short-term investment
* need regular current income

FUND PERFORMANCE The following charts show the Fund's
performance for calendar years through December 31, 1999. The
returns include the reinvestment of dividends and distributions.
As with all mutual funds, past performance is no guarantee of
future results.

Year-by-Year Total Returns

[bar chart]
YEAR-BY-YEAR TOTAL RETURNS
45%
40% 42.73%
30%
25%
20%
15% 15.24%
10%
5%
0%
- -5%
1998 1999
[ ] Midcap Growth Fund
[end of bar chart]

Best quarter: 4th quarter 1999, +44.10%
Worst quarter: 3rd quarter 1998, -18.35%

Average Annual Total Returns

AVERAGE ANNUAL TOTAL RETURNS
Periods ending December 31, 1999
1 yr Since Inception
(June 30, 1997)
- ------------------------------------------------------------
Midcap Growth Fund 42.73% 26.57%
S&P 500 Index* 21.03% 24.26%

*The S&P 500 Index is an group of stocks that differs from the
Fund's composition; it is not available for direct investment.

YOUR EXPENSES This table shows fees and expenses you may pay if
you buy and hold shares of the Fund. You do not pay any sales
charge when you purchase or sell your shares.(a) However, you pay
various other indirect expenses because the Fund pays fees and
other expenses that reduce your investment return.

ANNUAL FUND OPERATING EXPENSES (b)
(expenses that are deducted from Fund assets)
Management fees(c) 0.90%
Distribution (12b-1) fees None
Other Expenses 0.64%
Total annual fund operating expenses 1.54%
Expense reimbursement(d) 0.29%
Net expenses 1.25%

(a) There is a $7 charge for wiring redemption proceeds to your
bank. A fee of $5 per quarter may be charged to accounts that
fall below the required minimum balance.
(b) Fund expenses include management fees and administrative costs
such as furnishing the Fund with offices and providing tax and
compliance services.
(c) Management fees include both the management fee and the
administrative fee charged to the Fund.
(d) Stein Roe will reimburse the Fund if its ordinary operating
expenses exceed 1.25% of annual average net assets. The
expense undertaking expires on January 31, 2001. After
reimbursement, management fees will be 0.61%. A reimbursement
lowers the expense ratio and increases overall return to
investors.

Expense Example

This example compares the cost of investing in the Fund to the
cost of investing in other mutual funds. It uses the same
hypothetical assumptions that other funds use in their
prospectuses:

* $10,000 initial investment
* 5% return each year
* the Fund's operating expenses remain constant as a percent of
net assets
* redemption at the end of each time period

Your actual costs may be higher or lower because in reality fund
returns and operating expenses change. Expense reimbursements are
in effect for the first year in the periods below. Expenses based
on these assumptions are:

EXPENSE EXAMPLE
1 yr 3 yrs 5 yrs 10 yrs
- ------------------------------------------------------------
Midcap Growth Fund $127 $458 $812 $1,810

<PAGE>

THE FUNDS
LARGE COMPANY FOCUS FUND

INVESTMENT GOAL Stein Roe Large Company Focus Fund seeks long-
term growth.

PRINCIPAL INVESTMENT STRATEGY Large Company Focus Fund invests
primarily in a limited number of large capitalization companies
that the portfolio manager believes have above-average growth
potential. As a "focus" fund, under normal conditions, the Fund
will primarily hold between 15-25 common stocks. To select
investments for the Fund, the portfolio manager considers
companies that are dominant in their particular industries or
markets that can generate consistent earnings growth. The
portfolio manager selects investments across many sectors. Since
the Fund is "non-diversified," the percentage of assets that it
may invest in any one issuer is not limited. The Fund may invest
up to 25% of its assets in foreign stocks.

PRINCIPAL INVESTMENT RISKS There are two basic risks for all
mutual funds that invest in stocks: management risk and market
risk. These risks may cause you to lose money by investing in the
Fund.

Because the Fund invests in stocks, the price of its shares-its
net asset value per share (NAV)-fluctuates daily in response to
changes in the market value of the securities.

The Fund invests in a limited number of stocks and it owns a
higher concentration in a single stock than a "diversified" fund.
As a result, a single stock's increase or decrease in value may
have a greater impact on the Fund's NAV and cause the Fund's NAV
to fluctuate more than the NAV of diversified growth funds.

Foreign Securities

Foreign securities are subject to special risks. Foreign stock
markets, especially in countries with developing stock markets,
can be extremely volatile. The liquidity of foreign securities
may be more limited than domestic securities, which means that the
Fund may at times be unable to sell them at desirable prices.
Fluctuations in currency exchange rates impact the value of
foreign securities. Brokerage commissions, custodial fees, and
other fees are generally higher for foreign investments. In
addition, foreign governments may impose withholding taxes which
would reduce the amount of income available to distribute to
shareholders. Other risks include: possible delays in settlement
of transactions; less publicly available information about
companies; the impact of political, social or diplomatic events;
and possible seizure, expropriation or nationalization of the
company or its assets.

An investment in the Fund is not a bank deposit and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency. It is not a complete investment program.

For more information on the Fund's investment techniques, please
refer to "Other Investments and Risks."

Who Should Invest in the Fund?

You may want to invest in Large Company Focus Fund if you:
* want a mutual fund that invests in a limited number of large-cap
growth stocks
* want the added performance potential of a focus fund and are
comfortable with the increased price volatility that may
accompany focused investing
* are a long-term investor

Large Company Focus Fund is not appropriate for investors who:

* want to avoid the greater price volatility associated with a
fund that invests in a limited number of stocks
* are saving for a short-term investment
* need regular current income

FUND PERFORMANCE The following charts show the Fund's
performance for calendar year 1999. The returns include the
reinvestment of dividends and distributions. As with all mutual
funds, past performance is no guarantee of future results.

Year-by-Year Total Returns

This chart illustrates performance for the one-year period ended
December 31, 1999 and provides an indication of the risks of
investing in the Fund.

[bar chart]
ANNUAL TOTAL RETURNS
40%
35% 37.99%
30%
25%
20%
15%
10%
5%
0%
- -5%
1999
[ ] Large Company Focus Fund
[end of bar chart]

Best quarter: 4th quarter 1999, +20.90%
Worst quarter: 3rd quarter 1998, -12.87%

Average Annual Total Returns

AVERAGE ANNUAL TOTAL RETURNS
Periods ending December 31, 1999
1 yr Since Inception
(June 26, 1998)
- --------------------------------------------------------------
Large Company Focus Fund 37.99% 26.36%
S&P 500 Index* 21.03% 20.46%

YOUR EXPENSES This table shows fees and expenses you may pay if
you buy and hold shares of the Fund. You do not pay any sales
charge when you purchase or sell your shares.(a) However, you pay
various other indirect expenses because the Fund pays fees and
other expenses that reduce your investment return.

ANNUAL FUND OPERATING EXPENSES(b)
(expenses that are deducted from Fund assets)
Management fees(c) 0.90%
Distribution (12b-1) fees None
Other expenses 0.71%
Total annual fund operating expenses 1.61%
Expense reimbursement(d) 0.11%
Net expenses 1.50%

(a) There is a $7 charge for wiring redemption proceeds to your
bank. A fee of $5 per quarter may be charged to accounts that
fall below the required minimum balance.
(b) Fund expenses include management fees and administrative costs
such as furnishing the Fund with offices and providing tax and
compliance services.
(c) Management fees include both the management fee and the
administrative fee charged to the Fund.
(d) Stein Roe will reimburse the Fund if its ordinary operating
expenses exceed 1.50% of annual average net assets. The
expense undertaking expires on January 31, 2001. After
reimbursement, management fees will be 0.79%. A reimbursement
lowers the expense ratio and increases overall return to
investors.

Expense Example

This example compares the cost of investing in the Fund to the
cost of investing in other mutual funds. It uses the same
hypothetical assumptions that other funds use in their
prospectuses:

* $10,000 initial investment
* 5% return each year
* the Fund's operating expenses remain constant as a percent of
net assets
* redemption at the end of each time period

EXPENSE EXAMPLE
1 yr 3 yrs 5 yrs 10 yrs
- -----------------------------------------------------------------
Large Company Focus Fund $153 $497 $866 $1,902

<PAGE>

THE FUNDS
STEIN ROE CAPITAL OPPORTUNITIES FUND

INVESTMENT GOAL Stein Roe Capital Opportunities Fund seeks long-
term growth.

PRINCIPAL INVESTMENT STRATEGY Capital Opportunities Fund invests
primarily in the common stocks of aggressive growth companies. An
aggressive growth company has the ability to increase its earnings
at an above-average rate. To select stocks for the Fund, the
managers concentrate on stocks of small and midcapitalization
companies which they believe have opportunities for growth. The
Fund may invest up to 25% of its assets in foreign stocks.

PRINCIPAL INVESTMENT RISKS There are two basic risks for all
mutual funds that invest in stocks: management risk and market
risk. These risks may cause you to lose money by investing in the
Fund.

Because the Fund invests in stocks, the price of its shares-its
net asset value per share (NAV)-fluctuates daily in response to
changes in the market value of the securities.

Investments in stocks of small and midsized companies can be
riskier than investments in larger companies. Small and midsized
companies often have limited product lines, operating histories,
markets, or financial resources. They may depend heavily on a
small management group. Small companies in particular are more
likely to fail or prove unable to grow. Small and midsized
companies may trade less frequently, in smaller volumes, and
fluctuate more sharply in price than larger companies. In
addition, they may not be widely followed by the investment
community, which can lower the demand for their stock.

Foreign Securities

Foreign securities are subject to special risks. Foreign stock
markets, especially in countries with developing stock markets,
can be extremely volatile. The liquidity of foreign securities
may be more limited than domestic securities, which means that the
Fund may at times be unable to sell them at desirable prices.
Fluctuations in currency exchange rates impact the value of
foreign securities. Brokerage commissions, custodial fees, and
other fees are generally higher for foreign investments. In
addition, foreign governments may impose withholding taxes which
would reduce the amount of income available to distribute to
shareholders. Other risks include: possible delays in settlement
of transactions; less publicly available information about
companies; the impact of political, social or diplomatic events;
and possible seizure, expropriation or nationalization of the
company or its assets.

An investment in the Fund is not a bank deposit and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency. It is not a complete investment program.

For more information on the Fund's investment techniques, please
refer to "Other Investments and Risks."

Who Should Invest in the Fund?

You may want to invest in Capital Opportunities Fund if you:
* like the significant growth potential of aggressive growth
companies and can tolerate their greater price volatility
* believe that a company's earnings growth drives its stock price
* are a long-term investor and prefer a fund with a long-term
investment horizon

Capital Opportunities Fund is not appropriate for investors who:

* want to avoid the increased price volatility and risks
associated with aggressive growth investing
* are saving for a short-term investment
* need regular current income

Year-by-Year Total Returns

[bar chart]
YEAR-BY-YEAR TOTAL RETURNS
65%
60% 62.79%
55%
50% 50.77%
45%
40% 40.33%
35%
30%
25% -29.09% 27.52%
20% 20.39%
15%
10%
5% 6.15%
0% 2.43% 0.00%
- -5% -1.61%
- -10%
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
[ ] Capital Opportunities Fund
[end of bar chart]

Best quarter: 4th quarter 1999, +43.85%
Worst quarter: 3rd quarter 1990, -33.14%

Average Annual Total Returns

AVERAGE ANNUAL TOTAL RETURNS
Periods ending December 31, 1999
1 yr 5 yr 10 yr
- ---------------------------------------------------------------
Capital Opportunities Fund 40.33% 21.61% 14.90%
S&P MidCap 400 Index* 14.72% 23.05% 17.32%

*The S&P MidCap 400 Index is an unmanaged group of stocks that
differs from the Fund's composition; it is not available for
direct investment.

YOUR EXPENSES This table shows fees and expenses you may pay if
you buy and hold shares of the Fund. You do not pay any sales
charge when you purchase or sell your shares.(a) However, you pay
various other indirect expenses because the Fund pays fees and
other expenses that reduce your investment return.

ANNUAL FUND OPERATING EXPENSES(b)
(expenses that are deducted from Fund assets)
Management fees(c) 0.89%
Distribution (12b-1) fees None
Other expenses 0.30%
Total annual fund operating expenses 1.19%

Expense Example

This example compares the cost of investing in the Fund to the
cost of investing in other mutual funds. It uses the same
hypothetical assumptions that other funds use in their
prospectuses:

* $10,000 initial investment
* 5% return each year
* the Fund's operating expenses remain constant as a percent of
net assets
* redemption at the end of each time period

Your actual costs may be higher or lower because in reality fund
returns and operating expenses change. Expenses based on these
assumptions are:

EXPENSE EXAMPLE
1 yr 3 yrs 5 yrs 10 yrs
Capital Opportunities Fund $121 $378 $654 $1,443

<PAGE>

THE FUNDS
SMALL COMPANY GROWTH FUND

INVESTMENT GOAL Stein Roe Small Company Growth Fund seeks long-
term growth.

PRINCIPAL INVESTMENT STRATEGY Under normal market conditions,
the Fund invests at least 65% of its assets in common stocks of
small-cap companies. The Fund may invest in new issuers during
periods when new issues are being brought to market. The Fund may
also invest in midcap companies. The Fund invests in companies
that compete within large and growing markets and that have the
ability to grow their market share. To find companies with these
growth characteristics, the portfolio manager seeks out companies
that are-or, in the portfolio manager's judgment, have the
potential to be-a market share leader within their respective
industry. He also looks for companies with strong management
teams that participate in the ownership of the companies.

PRINCIPAL INVESTMENT RISKS There are two basic risks for all
mutual funds that invest in stocks: management risk and market
risk. Investments in small- and medium-cap companies may increase
these risks relative to investments in larger-cap companies.
These risks may cause you to lose money by investing in the Fund.

[Callout]
WHAT ARE MARKET AND MANAGEMENT RISKS?
Management risk means that stock selections and other investment
decisions might produce losses or cause the Fund to underperform
when compared to other funds with similar goals. Market risk
means that security prices in a market, sector or industry may
move down. Downward movements will reduce the value of your
investment. Because of management and market risk, there is no
guarantee that the Fund will achieve its investment goal or
perform favorably compared with competing funds.
[End of callout]

The price of the Fund's shares-its net asset value (NAV)-may
fluctuate daily in response to changes in the market value of the
securities.

Small- and Medium-Cap Companies

The securities the Fund purchases may involve certain special
risks. Small- and medium-sized companies and new issuers often
have limited product lines, operating histories, markets, or
financial resources. They also may depend heavily on a small
management group. Small-cap companies in particular are more
likely to fail or prove unable to grow. Their securities may
trade less frequently, in smaller volumes, and fluctuate more
sharply in price than securities of larger companies.

An investment in the Fund is not a bank deposit and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency. It is not a complete investment program.

For more information on the Fund's investment techniques, please
refer to "Other Investments and Risks."

Who Should Invest in the Fund?

You may want to invest in Small Company Growth Fund if you:
* are a long-term investor who seeks the potentially greater
growth opportunities of small-cap stocks and can tolerate their
greater risks
* can tolerate fluctuations in the Fund's NAV due to greater
volatility of small-cap companies

Small Company Growth Fund is not appropriate for investors who:
* already have significant holdings in small-cap stocks or mutual
funds
* want to avoid volatility or possible losses
* are saving for a short-term investment
* need regular current income

Year-by-Year Total Returns

[bar chart]
YEAR-BY-YEAR TOTAL RETURNS*
50% 50.91%
40%
30%
20%
10% 19.93%
0% 7.85%
- -5%
1997 1998 1999
[ ] Small Company Growth Fund
[end of bar chart]

Best quarter: 4th quarter 1999, +36.33%
Worst quarter: 3rd quarter 1998, -19.32%

Average Annual Total Returns

Average annual total returns measure the Fund's performance over
time. We compare the Fund's returns with returns for the S&P
SmallCap 600 Index. We show returns for calendar years to be
consistent with the way other mutual funds report performance in
their prospectuses. This provides an indication of the risks of
investing in the Fund.

AVERAGE ANNUAL TOTAL RETURNS
Periods ending December 31, 1999
1 yr Since Inception
(March 25, 1996)
- --------------------------------------------------------------
Small Company Growth Fund* 50.91% 24.06%
S&P SmallCap 600 Index** 12.41% 13.33%

*On February 2, 1999, the Colonial Aggressive Growth Fund
(Predecessor Fund) was reorganized into the Fund. The Predecessor
Fund had multiple classes of shares, consisting of Class A, Class
B, and Class C shares. The performance information contained in
the table prior to February 2, 1999, is based on the historical
returns of the Predecessor Fund's Class A shares, which, unlike
the Fund, had a 0.25% 12b-1 fee. The table does not reflect the
sales load of the Predecessor Fund's Class A shares.
**The S&P SmallCap 600 Index is an unmanaged group of stocks that
differs from the Fund's composition; it is not available for
direct investment. Since inception performance for the S&P
SmallCap 600 Index is from March 31, 1996 to December 31, 1999.

YOUR EXPENSES This table shows fees and expenses you may pay if
you buy and hold shares of the Fund. You do not pay any sales
charge when you purchase or sell your shares.(a) However, you pay
various other indirect expenses because the Fund pays fees and
other expenses that reduce your investment return.

ANNUAL FUND OPERATING EXPENSES (b)
(expenses that are deducted from Fund assets)
Management fees (c) 1.00%
Distribution (12b-1) fees None
Other expenses 2.73%
Total annual fund operating expenses 3.73%
Expense reimbursement(d) 2.23%
Net expenses 1.50%

(a) There is a $7 charge for wiring redemption proceeds to your
bank. A fee of $5 per quarter may be charged to accounts that
fall below the required minimum balance.
(b) Management fees reflect increases effective February 1999. In
addition, the Fund's 12b-1 fee of 0.25% and load of 5.75% were
eliminated effective February 1999. Fund expenses include
management fees and administrative costs such as furnishing
the Fund with offices and providing tax and compliance
services.
(c) Management fees include both the management fee and the
administrative fee charged to the Fund.
(d) Stein Roe will reimburse the Fund if its annual ordinary
operating expenses exceed 1.50% of average daily net assets.
This commitment expires on January 31, 2001. After
reimbursement, management fees will be 0.0% and other expenses
will be 1.50%. A reimbursement lowers the expense ratio and
increases overall return to investors.

Expense Example

This example compares the cost of investing in the Fund to the
cost of investing in other mutual funds. It uses the same
hypothetical assumptions that other funds use in their
prospectuses:

* $10,000 initial investment
* 5% return each year
* the Fund's operating expenses remain constant as a percent of
net assets
* redemption at the end of each time period

EXPENSE EXAMPLE
1 yr 3 yrs 5 yrs 10 yrs
- -----------------------------------------------------------------
Small Company Growth Fund $153 $935 $1,737 $3,832

<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights tables explain the Funds' financial
performance. Consistent with other mutual funds, we show
information for the last five fiscal years or for the period of a
Fund's operations (if shorter). Each Fund's fiscal year runs from
October 1 to September 30. The total returns in the table
represent the return that investors earned assuming that they
reinvested all dividends and distributions. Certain information
in the tables reflects the financial results for a single Fund
share. This information is included in the Funds' financial
statements, which, for the year ended September 30, 1999, have
been audited by PricewaterhouseCoopers LLP, independent
accountants, whose report, along with the financial statements, is
included in the Funds' annual reports. Arthur Andersen LLP
audited the financial statements for the years 1995 through 1998
for Funds other than Small Company Growth Fund. To request an
annual report, please call 800-338-2550.

The fiscal year of Small Company Growth Fund ran from July 1 to
June 30 through June 30, 1999 when it was changed to September 30.
Information for that Fund through June 30, 1998, has been derived
from the financial statements of Colonial Aggressive Growth Fund
(Predecessor Fund). Certain information reflects the financial
results for a single share of Class A of the Predecessor Fund
outstanding throughout the period from March 31, 1996 through June
30, 1998. PricewaterhouseCoopers LLP has audited this information
for all periods presented for that Fund.

<PAGE>

<TABLE>
<CAPTION>
BALANCED FUND
PER SHARE DATA
Years ended September 30,
1999 1998 1997 1996 1995
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 30.70 $ 33.41 $ 30.07 $ 27.82 $ 25.78
Income from investment operations
Net investment income (c) 0.78 0.95 0.95 1.00 1.33
Net gains (losses) on securities
(both realized and unrealized) 3.85 (0.90) 5.61 2.96 2.22
Total income from investment
operations 4.63 0.05 6.56 3.96 3.55
Less distributions
Dividends (from net investment income) (0.90) (0.76) (0.96) (1.01) (1.23)
Distributions (from capital gains) (2.08) (2.00) (2.26) (0.70) (0.28)
Total distributions (2.98) (2.76) (3.22) (1.71) (1.51)
Net asset value, end of period $ 32.35 $ 30.70 $ 33.41 $ 30.07 $ 27.82
Total return 15.74% 0.14% 23.60% 14.83% 14.49%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000
omitted) $250,690 $247,852 $284,846 $231,063 $228,560
Ratio of net expenses to average
net assets .14%(b) 1.03% 1.05% 1.05% 0.87%
Ratio of net investment income to
average net assets 2.35%(b) 2.90% 3.02% 3.45% 5.14%
Portfolio turnover rate (a) 41% 61% 15% 87% 45%
<FN>
(a) Portfolio turnover rate for 1999 and 1998 shows the portfolio
turnover rate of the Portfolio. The Portfolio's turnover rate
from the commencement of operations on February 14, 1997
through September 30, 1997, was 21%. Portfolio turnover rate
for 1997, 1996 and 1995 shows that of the Fund prior to
commencement of operations of the Portfolio.
(b) During the year ended September 30, 1999, the Fund experienced
a one-time reduction in its expenses of 0.07% as a result of
expenses accrued in a prior period. The Fund's ratios
disclosed above reflect the actual rate at which expenses were
incurred through the current fiscal year without the
reduction.
(c) Per share data was calculated using average shares outstanding
during the period.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
GROWTH & INCOME FUND
PER SHARE DATA
Years ended September 30,
1999 1998 1997 1996 1995
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 22.45 $ 22.91 $ 18.39 $ 16.65 $ 14.54
Income from investment operations
Net investment income (c) 0.22 0.24 0.30 0.27 0.34
Net gains on securities (both
realized and unrealized) 4.10 0.55 5.15 3.22 2.56
Total income from investment operations 4.32 0.79 5.45 3.49 2.90
Less distributions
Dividends (from net investment income) (0.25) (0.28) (0.28) (0.32) (0.20)
Distributions (from capital gains) (0.38) (0.97) (0.65) (1.43) (0.59)
Total distributions (0.63) (1.25) (0.93) (1.75) (0.79)
Net asset value, end of period $ 26.14 $ 22.45 $ 22.91 $ 18.39 $ 16.65
Total return 19.39% 3.45% 30.81% 22.67% 21.12%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $375,789 $351,052 $337,466 $204,387 $139,539
Ratio of net expenses to
average net assets 1.06(b) 1.07% 1.13% 1.18% 0.96%
Ratio of net investment income to
average net assets 0.79%(b) 1.02% 1.52% 1.65% 1.78%
Portfolio turnover rate (a) 7% 11% 2% 13% 70%
<FN>
(a) Portfolio turnover rate for 1999 and 1998 shows the portfolio
turnover rate of the Portfolio. The Portfolio's turnover rate
from the commencement of operations on February 14, 1997
through September 30, 1997, was 7%. Portfolio turnover rate
for 1997, 1996 and 1995 shows that of the Fund prior to
commencement of operations of the Portfolio.
(b) During the year ended September 30, 1999, the Fund experienced
a one-time reduction in its expenses of 0.04% as a result of
expenses accrued in a prior period. The Fund's ratios
disclosed above reflect the actual rate at which expenses were
incurred through the current fiscal year without the
reduction.
(c) Per share data was calculated using average shares outstanding
during the period.
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
DISCIPLINED STOCK FUND(A)
PER SHARE DATA
Years ended September 30,
1999 1998 1997 1996 1995
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 24.48 $ 33.79 $ 27.39 $ 25.26 $ 23.54
Income from investment operations
Net investment income (loss) (d) 0.17 0.07 (0.06) 0.01 0.13
Net gains (losses) on securities
(both realized and unrealized) 2.64 (6.06) 8.57 4.14 3.05
Total income from investment operations 2.81 (5.99) 8.51 4.15 3.18
Less distributions
Dividends (from net investment income) (0.11) - - (0.11) (0.15)
Distributions (from capital gains) (4.57) (3.32) (2.11) (1.91) (1.31)
Total distributions (4.68) (3.32) (2.11) (2.02) (1.46)
Net asset value, end of period $ 22.61 $ 24.48 $ 33.79 $ 27.39 $ 25.26
Total return 13.57% (19.17%) 33.67% 17.89% 14.60%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $593,526 $911,650 $1,327,578 $1,158,498 $1,201,469
Ratio of net expenses to average net
assets 1.16%(c) 1.13% 1.14% 1.18% 1.02%
Ratio of net investment income (loss)
to average net assets 0.63%(c) 0.21% (0.17%) 0.03% 0.56%
Portfolio turnover rate (b) 47% 46% 7% 32% 41%
<FN>
(a) The name of the Fund was changed on May 6, 1999 from Stein Roe
Special Fund to Stein Roe Disciplined Stock Fund.
(b) Portfolio turnover rate for 1999 and 1998 shows the portfolio
turnover rate of the Portfolio. The Portfolio's turnover rate
from the commencement of operations on February 14, 1997
through September 30, 1997, was 8%. Portfolio turnover rate
for 1997, 1996 and 1995 shows that of the Fund prior to
commencement of operations of the Portfolio.
(c) During the year ended September 30, 1999, the Fund experienced
a one-time reduction in its expenses of 0.09% as a result of
expenses accrued in a prior period. The Fund's ratios
disclosed above reflect the actual rate at which expenses were
incurred through the current fiscal year without the
reduction.
(d) Per share data was calculated using average shares outstanding
during the period.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
GROWTH STOCK FUND
PER SHARE DATA
Years ended September 30,
1999 1998 1997 1996 1995
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 34.71 $ 35.29 $ 28.79 $ 26.13 $ 23.58
Income from investment operations
Net investment income (loss) (c) (0.08) (0.04) 0.01 0.08 0.12
Net gains on securities (both
realized and unrealized) 12.57 1.61 8.79 5.01 5.60
Total income from investment operations 12.49 1.57 8.80 5.09 5.72
Less distributions
Dividends (from net investment income) - - (0.07) (0.10) (0.15)
Distributions (from capital gains) - (2.15) (2.23) (2.33) (3.02)
Total distributions - (2.15) (2.30) (2.43) (3.17)
Net asset value, end of period $ 47.20 $ 34.71 $ 35.29 $ 28.79 $ 26.13
Total return 35.98% 4.69% 33.10% 21.04% 28.18%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $831,338 $615,345 $607,699 $417,964 $360,336
Ratio of net expenses to average
net assets 0.97%(b) 1.03% 1.07% 1.08% 0.99%
Ratio of net investment income (loss)
to average net assets (0.18%)(b) (0.10%) 0.04% 0.32% 0.56%
Portfolio turnover rate (a) 57% 39% 5% 39% 36%
<FN>
(a) Portfolio turnover rate for 1999 and 1998 shows the portfolio
turnover rate of the Portfolio. The Portfolio's turnover rate
from the commencement of operations on February 14, 1997
through September 30, 1997, was 22%. Portfolio turnover rate
for 1997, 1996 and 1995 shows that of the Fund prior to
commencement of operations of the Portfolio.
(b) During the year ended September 30, 1999, the Fund experienced
a one-time reduction in its expenses of 0.03% as a result of
expenses accrued in a prior period. The Fund's ratios
disclosed above reflect the actual rate at which expenses were
incurred through the current fiscal year without the
reduction.
(c) Per share data was calculated using average shares outstanding
during the period.
</TABLE>

<PAGE>

GROWTH INVESTOR FUND

PER SHARE DATA
Period ended
September 30,
1999(a)
- -----------------------------------------------------------------
Net asset value, beginning of period $ 10.00
Income from investment operations
Net investment loss (g) (0.02)
Net loss on securities (both realized and unrealized) (0.53)
Total from investment operations (0.55)
Net asset value, end of period $ 9.45
Total return (d) (5.50%)(e)

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $11,329
Ratio of net expenses to average net assets (b) 1.10%(c)
Ratio of net investment loss to average net assets (d) (0.34%)(c)
Portfolio turnover rate (f) 45%

(a) From commencement of operations on March 31, 1999.
(b) If the Fund had paid all of its expenses and there had been no
reimbursement by Stein Roe, this ratio would have been 2.34%
(annualized).
(c) Annualized.
(d) Computed giving effect to Stein Roe's expense limitation
undertaking.
(e) Not annualized.
(f) Portfolio turnover rate of the Portfolio.
(g) Per share data was calculated using average shares outstanding
during the period.

<PAGE>

MIDCAP GROWTH FUND (A)
PER SHARE DATA
Years ended Period ended
September 30, September 30,
1999 1998 1997(b)
- -----------------------------------------------------------------
Net asset value, beginning of period $ 10.41 $ 10.77 $ 10.00
Income from investment operations
Net investment loss (h) (0.10) (0.07) -
Net gains (losses) on securities
(both realized and unrealized) 2.20 (0.29) 0.77
Total from investment operations 2.10 (0.36) 0.77
Net asset value, end of period $ 12.51 $ 10.41 $ 10.77
Total return (f) 20.17% (3.34%) 7.70%(g)

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000 omitted) $44,359 $49,974 $49,830
Ratio of net expenses to average
net assets (c) 1.25% 1.25% 1.25%(e)
Ratio of net investment income
(loss) to average net assets(f) (0.97%)(d) (0.64%) 0.02%(e)
Portfolio turnover rate 133% 75% 3%(g)

(a) The name of the Fund was changed on May 6, 1999 from Stein Roe
Growth Opportunities Fund to Stein Roe Midcap Growth Fund.
(b) From commencement of operations on June 30, 1997.
(c) If the Fund had paid all of its expenses and there had been no
reimbursement by Stein Roe, this ratio would have been 1.54%
for the year ended September 30, 1999, 1.44% for the year
ended September 30, 1998, and 1.74% for the period ended
September 30, 1997.
(d) During the year ended September 30, 1999, the Fund experienced
a one-time reduction in its expenses of 0.11% as a result of
expenses accrued in a prior period. The Fund's gross expense
ratio and net investment income ratio disclosed above reflect
the actual rate at which expenses were incurred through the
current fiscal year without the reduction.
(e) Annualized.
(f) Computed giving effect to Stein Roe's expense limitation
undertaking.
(g) Not annualized.
(h) Per share data was calculated using average shares outstanding
during the period.

<PAGE>

LARGE COMPANY FOCUS FUND
PER SHARE DATA
Year ended Period ended
September 30, September 30,
1999 1998(a)
- -----------------------------------------------------------------
Net asset value, beginning of period $ 8.73 $ 10.00
Income from investment operations
Net investment income (loss) (f) (0.05) -
Net gain (loss) on securities (both
realized and unrealized) 3.10 (1.27)
Total from investment operations 3.05 (1.27)
Net asset value, end of period $ 11.78 $ 8.73
Total return (c) 35.05% (12.70%)(e)

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000 omitted) $59,647 $44,716
Ratio of net expenses to
average net assets (b) 1.49% 1.50%(d)
Ratio of net investment loss to
average net assets (c) (0.47%) (0.12%)(d)
Portfolio turnover rate 68% 21%(e)

(a) From commencement of operations on June 26, 1998.
(b) If the Fund had paid all of its expenses and there had been no
reimbursement by Stein Roe, this ratio would have been 1.61%
for the period ended September 30, 1998.
(c) Computed giving effect to Stein Roe's expense limitation
undertaking.
(d) Annualized.
(e) Not annualized.
(f) Per share data was calculated using average shares outstanding
during the period.

<PAGE>

<TABLE>
<CAPTION>
CAPITAL OPPORTUNITIES FUND
PER SHARE DATA
Years ended September 30,
1999 1998 1997 1996 1995
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 25.25 $ 29.10 $ 31.04 $ 21.69 $ 15.79
Income from investment operations
Net investment income (loss) (c) (0.17) (0.25) (0.17) (0.06) 0.01
Net gains (losses) on securities
(both realized and unrealized) 3.56 (3.60) (1.77) 10.41 5.91
Total income from investment operations 3.39 (3.85) (1.94) 10.35 5.92
Less distributions
Dividends (from net investment income) - - - (0.01) (0.02)
Distributions (from capital gains) - - - (0.99) -
Total distributions - - - (1.00) (0.02)
Net asset value, end of period $ 28.64 $ 25.25 $ 29.10 31.04 $ 21.69
Total return 13.43% (13.23%) (6.25%) 49.55% 37.46%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $411,347 $681,133 $1,110,642 $1,684,538 $242,381
Ratio of net expenses to average
net assets 1.19%(b) 1.20% 1.17% 1.22% 1.05%
Ratio of net investment income
(loss) to average net assets (0.72%)(b) (0.72%) (0.69%) (0.40%) 0.08%
Portfolio turnover rate 88% 47% 35% 22% 60%
<FN>
(a) All per-share amounts reflect a two-for-one stock split
effective August 25, 1995.
(b) During the year ended September 30, 1999, the Fund experienced
a one-time reduction in its expenses of 0.12% as a result of
expenses accrued in a prior period. The Fund's ratios
disclosed above reflect the actual rate at which expenses were
incurred throughout the current fiscal year without the
reduction.
(c) Per share data was calculated using average shares outstanding
during the period.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
SMALL COMPANY GROWTH FUND
PER SHARE DATA
Period ended Years ended Period ended
September 30 June 30, June 30,
------------ ------------------------- -------------
1999 1999 1998 1997 1996(b)
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $12.790 $14.390 $12.650 $11.300 $10.110
Income from investment operations
Net investment loss (a)(g) (0.031) (0.094) (0.143) (0.114) (0.016)
Net gains on securities (both
realized and unrealized) 0.741 0.194 2.783 1.484 1.206
Total income from investment operations 0.710 0.100 2.640 1.370 1.190
Less distributions
Dividends (from net investment income) - - - (0.005) -
Distributions (from capital gains) - (1.700) (0.900) (0.015) -
Total distributions - (1.700) (0.900) (0.020) -
Net asset value, end of period $13.500 $12.790 $14.390 $12.650 $11.300
Total return (c)(d) 5.55%(e) 1.71% 21.56% 12.14% 11.77%(e)

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $9,913 $9,293 $3,867 $3,185 $2,826
Ratio of net expenses to average net
assets (h) 1.50%(f) 1.52% 1.55% 1.55% 1.55%(f)
Fees and expenses borne by investment
adviser (h) 2.23%(f) 2.53% 2.21% 2.57% 1.38%(f)
Ratio of net investment loss to
average net assets(h) (0.93%)(f) (0.78%) (1.04%) (0.99%) (0.58%)(f)
Portfolio turnover rate 27%(e) 105% 70% 54% 0% (e)
<FN>
(a) Net of fees and expenses waived
or borne by the investment adviser
which amounted to: $0.073 $0.305 $0.301 $0.297 $0.038
(b) The Predecessor Fund commenced operations on March 25, 1996.
The activity shown is from the effective date of registration
(March 31, 1996) with the Securities and Exchange Commission.
(c) Total return at net asset value assuming all distributions
reinvested and no initial sales charge or contingent deferred
sales charge.
(d) Had the investment adviser not waived or reimbursed a portion
of expenses, total return would have been reduced.
(e) Not annualized.
(f) Annualized.
(g) Per share data was calculated using average shares outstanding
during the period.
(h) The benefit derived from custody credits and directed
brokerage arrangements had no impact.
(i) The Predecessor Fund was not publicly offered and may have
been managed differently than a publicly offered fund.
</TABLE>

<PAGE>

YOUR ACCOUNT

PURCHASING SHARES You will not pay a sales charge when you
purchase Fund shares. Your purchases are made at the NAV next
determined after the Fund receives your check, wire transfer or
electronic transfer. If a Fund receives your check, wire transfer
or electronic transfer after the close of regular trading on the
New York Stock Exchange (NYSE)-normally 4 p.m. Eastern time-your
purchase is effective on the next business day.

Growth Stock Fund, Growth & Income Fund, and Growth Investor Fund
Accounts

Growth Stock Fund is closed to purchases (including exchanges) by
new investors except for purchases by eligible investors as
described below. If you are already a shareholder of Growth Stock
Fund, you may continue to add to your account or open another
account with the Fund in your name. In addition, you may open a
new Growth Stock Fund account if:

* you are a shareholder of any other Stein Roe Fund, having
purchased shares directly from Stein Roe, as of October 15,
1997, and you are opening a new Growth Stock Fund account by
exchange or by dividend reinvestment;
* you are a client of Stein Roe;
* you are a trustee of the Trust; an employee of Stein Roe, or any
of its affiliated companies; or a member of the immediate family
of any trustee or employee;
* you purchase shares (i) under an asset allocation program
sponsored by a financial advisor, broker-dealer, bank, trust
company or other intermediary or (ii) from certain financial
advisors who charge a fee for services and who, as of October
15, 1997, had one or more clients who were Growth Stock Fund
shareholders; or
* you purchase shares for an employee benefit plan, the records
for which are maintained by a trust company or third-party
administrator under an investment program with Growth Stock
Fund.

Class S shares of Growth & Income Fund and Growth Investor Fund
are no longer available for purchase by new investors except for
purchases by eligible investors as described below. Shares of
those Funds outstanding on November 22, 1999, were redesignated
Class S shares. Like the existing shares from which they were
converted, Class S shares are no-load shares carrying no sales
charge or 12b-1 fee. If you own Class S shares of Growth & Income
Fund or Growth Investor Fund, you may continue to purchase
additional Class S shares of that Fund for your account or you may
open another Class S share account with that Fund. In addition,
you may open a new Class S share account if:

* as of October 31, 1999, you are a shareholder of any other Stein
Roe Fund, having purchased shares directly from Stein Roe, and
you are opening a new account by exchange or by dividend
reinvestment;
* you are a client of Stein Roe;
* you purchase shares (i) under an asset allocation program
sponsored by a financial advisor, broker-dealer, bank, trust
company or other intermediary or (ii) from certain financial
advisors who charge a fee for services and who, as of October
31, 1999, held shares of Growth & Income Fund or Growth Investor
Fund for its clients; or
* you purchase shares for an employee benefit plan whose records
are maintained by a trust company or plan administrator under an
investment program that included Growth & Income Fund or Growth
Investor Fund on October 31, 1999.

If you have questions about your eligibility to purchase shares of
Growth Stock Fund or Class S shares of Growth & Income Fund or
Growth Investor Fund, please call 800-338-2550.

Purchases through Third Parties

If you purchase Fund shares through certain broker-dealers, banks
or other intermediaries (intermediaries), they may charge a fee
for their services. They may also place limits on your ability to
use services the Funds offer. There are no charges or limitations
if you purchase shares directly from a Fund, except those fees
described in this prospectus.

If an intermediary is an agent or designee of the Funds, orders
are processed at the NAV next calculated after the intermediary
receives the order. The intermediary must segregate any orders it
receives after the close of regular trading on the NYSE and
transmit those orders separately for execution at the NAV next
determined.

Conditions of Purchase

An order to purchase Fund shares is not binding unless and until
an authorized officer, agent or designee of the Fund accepts it.
Once we accept your purchase order, you may not cancel or revoke
it; however, you may redeem your shares. A Fund may reject any
purchase order if it determines that the order is not in the best
interests of the Fund and its investors. A Fund may waive or
lower its investment minimums for any reason. If you participate
in the Stein Roe Counselor [service mark] program or are a client
of Stein Roe Private Capital Management, the minimum initial
investment is determined by those programs.

ACCOUNT MINIMUMS
Minimum to Minimum Minimum
Type of Account Open an Account Addition Balance
- ------------------------------------------------------------
Regular $2,500 $100 $1,000
Custodial (UGMA/UTMA) $1,000 $100 $1,000
Automatic Investment Plan $1,000 $50 -
Roth and Traditional IRA $500 $50 $500
Educational IRA $500 $50* $500

*Maximum $500 contribution per calendar year per child.

Opening an Account

OPENING OR ADDING TO AN ACCOUNT

Opening an Account BY MAIL:
Complete the application.
Make check payable to Stein Roe Mutual Funds.

Mail application and check to:
SteinRoe Services Inc.
P.O. Box 8900
Boston, MA 02205

BY WIRE:
Mail your application to the address listed on
the left, then call 800-338-2550 to obtain an
account number. Include your Social Security
Number. To wire funds, use the instructions
below.

Adding to an Account BY MAIL:
Make check payable to Stein Roe Mutual Funds.
Be sure to write your account number on the
check.

Fill out investment slip (stub from your
statement or confirmation) or include a note
indicating the amount of your purchase, your
account number, and the name in which your
account is registered.

Mail check with investment slip or note to the
address above.

BY WIRE:
Wire funds to:
First National Bank of Boston
ABA: 011000390
Attn: SSI, Account No. 560-99696
Fund No. __; Stein Roe ____ Fund
Your name (exactly as in the registration).
Fund account number.

Fund Numbers:
11-Growth & Income Fund (Class S)
20-Midcap Growth Fund
21-Large Company Focus Fund
25-Small Company Growth Fund
26-Growth Investor Fund (Class S)
31-Balanced Fund
32-Growth Stock Fund
33-Capital Opportunities Fund
34-Disciplined Stock Fund

OPENING OR ADDING TO AN ACCOUNT

Opening an Account BY ELECTRONIC FUNDS TRANSFER:
You cannot open a new account via electronic
transfer.

BY EXCHANGE:
By mail, phone, automatically (be
sure to elect the Automatic Exchange Privilege
on your application).

THROUGH AN INTERMEDIARY;
Contact your financial professional.

Adding to an Account BY ELECTRONIC FUNDS TRANSFER;
Call 800-338-2550 to make your purchase. To
set up prescheduled purchases, be sure to
elect the Automatic Investment Plan (Stein Roe
Asset [SERVICE MARK] Builder) option on your
application.

BY EXCHANGE:
By mail, phone, automatically (be
sure to elect the Automatic Exchange Privilege
on your application).

THROUGH AN INTERMEDIARY:
Contact your financial professional.

All checks must be made payable in U.S. dollars and drawn on U.S.
banks. Money orders and third-party checks will not be accepted.

DETERMINING SHARE PRICE (NAV) A Fund's share price is its NAV
next determined. NAV is the difference between the values of a
Fund's assets and liabilities divided by the number of shares
outstanding. We determine NAV at the close of regular trading on
the NYSE-normally 4 p.m. Eastern time. If you place an order
after that time, you receive the share price determined on the
next business day.

To calculate the NAV on a given day, we value each stock listed or
traded on a stock exchange at its latest sale price on that day.
If there are no sales that day, we value the security at the most
recently quoted bid price. We value each over-the-counter
security or National Association of Securities Dealers Automated
Quotation (Nasdaq) security as of the last sale price for that
day. We value all other over-the-counter securities that have
reliable quotes at the latest quoted bid price.

We value long-term debt obligations and securities convertible
into common stock at fair value. Pricing services provide the
Funds with the value of the securities. When the price of a
security is not available, including days when we determine that
the sale or bid price of the security does not reflect that
security's market value, we value the security at a fair value
determined in good faith under procedures established by the Board
of Trustees.

We value a security at fair value when events have occurred after
the last available market price and before the close of the NYSE
that materially affect the security's price. In the case of
foreign securities, this could include events occurring after the
close of the foreign market and before the close of the NYSE.
Foreign securities may trade on days when the NYSE is closed. We
will not price shares on days that the NYSE is closed for trading.
You will not be able to purchase or redeem shares until the next
NYSE-trading day.

SELLING SHARES You may sell your shares any day the Funds are
open for business. Please follow the instructions below.

SELLING SHARES
BY MAIL: Send a letter of instruction, in English, including
your account number and the dollar value or number
of shares you wish to sell. Sign the request
exactly as the account is registered. Be sure to
include a signature guarantee. All supporting legal
documents as required from executors, trustees,
administrators, or others acting on accounts not
registered in their names, must accompany the
request. We will mail the check to your registered
address.

BY PHONE: This feature is automatically added to your account
unless you decline it on your application. Call
800-338-2550 to redeem an amount of $1,000 or more.
We will mail a check to your registered address.

BY WIRE: Fill out the appropriate areas of the account
application for this feature. Proceeds of $1,000 or
more ($100,000 maximum) may be wired to your
predesignated bank account. Call 800-338-2550 to
give instructions to Stein Roe. There is a $7
charge for wiring redemption proceeds to your bank.

BY ELECTRONIC TRANSFER: Fill out the appropriate areas of the
account application for this feature. To request an
electronic transfer (not less than $50; not more
than $100,000), call 800-338-2550. We will transfer
your sale proceeds electronically to your bank. The
bank must be a member of the Automated Clearing
House.

BY EXCHANGE: Call 800-338-2550 to exchange any portion of your
Fund shares for shares in any other Stein Roe no-
load fund.

BY AUTOMATIC EXCHANGE: Fill out the appropriate areas of the
account application for this feature. Redeem a
fixed amount on a regular basis (not less than $50
per month; not more than $100,000) from a Fund for
investment in another Stein Roe no-load fund.

What You Need to Know When Selling Shares

Once we receive and accept your order to sell shares, you may not
cancel or revoke it. We cannot accept an order to sell that
specifies a particular date or price or any other special
conditions. If you have any questions about the requirements for
selling your shares, please call 800-338-2550 before submitting
your order.

A Fund redeems shares at the NAV next determined after an order
has been accepted. We mail proceeds within seven days after the
sale. The Funds normally pay wire redemption or electronic
transfer proceeds on the next business day.

We will not pay sale proceeds until your shares are paid for. If
you attempt to sell shares purchased by check or electronic
transfer within 15 days of the purchase date, we will delay
sending the sale proceeds until we can verify that those shares
are paid for. You may avoid this delay by purchasing shares by a
federal funds wire.

We use procedures reasonably designed to confirm that telephone
instructions are genuine. These include recording the
conversation, testing the identity of the caller by asking for
account information, and sending prompt written confirmation of
the transaction to the shareholder of record. If these procedures
are followed, the Fund and its service providers will not be
liable for any losses due to unauthorized or fraudulent
instructions.

If the amount you redeem is in excess of the lesser of (1)
$250,000 or (2) 1% of a Fund's net assets, the Fund may pay the
redemption "in kind." This is payment in portfolio securities
rather than cash. If this occurs, you may incur transaction costs
when you sell the securities.

Involuntary Redemption

If your account value falls below $1,000, the Fund may redeem your
shares and send the proceeds to the registered address. You will
receive notice 30 days before this happens. If your account falls
below $10, the Fund may redeem your shares without notice to you.

Low Balance Fee

Due to the expense of maintaining accounts with low balances, if
your account balance falls below $2,000 ($800 for custodial
accounts), you will be charged a low balance fee of $5 per
quarter. The low balance fee does not apply to: (1) shareholders
whose accounts in the Stein Roe Funds total $50,000 or more; (2)
Stein Roe IRAs; (3) other Stein Roe prototype retirement plans;
(4) accounts with automatic investment plans (unless regular
investments have been discontinued); or (5) omnibus or nominee
accounts. A Fund can waive the fee, at its discretion, in the
event of significant market corrections.

EXCHANGING SHARES You may exchange Fund shares for shares of
other Stein Roe no-load funds. Call 800-338-2550 to request a
prospectus and application for the fund you wish to exchange into.
Please be sure to read the prospectus carefully before you
exchange your shares.

The account you exchange into must be registered exactly the same
as the account you exchange from. You must meet all investment
minimum requirements for the fund you wish to exchange into before
we can process your exchange transaction.

An exchange is a redemption and purchase of shares for tax
purposes, and you may realize a gain or a loss when you exchange
Fund shares for shares of another fund.

We may change, suspend or eliminate the exchange service after
notification to you.

Generally, we limit you to four telephone exchanges "roundtrips"
per year. A roundtrip is an exchange out of a Fund into another
Stein Roe no-load fund and then back to that Fund.

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

DIVIDENDS AND DISTRIBUTIONS Each Fund distributes, at least once
a year, virtually all of its net investment income and net
realized capital gains. Growth & Income Fund and Balanced Fund
pay dividends quarterly.

A dividend from net investment income represents the income a Fund
earns from dividends and interest paid on its investments, after
payment of the Fund's expenses.

A capital gain is the increase in value of a security that the
Fund holds. The gain is "unrealized" until the security is sold.
Each realized capital gain is either short term or long term
depending on whether the Fund held the security for one year or
less or more than one year, regardless of how long you have held
your Fund shares.

When a Fund makes a distribution of income or capital gains, the
distribution is automatically invested in additional shares of
that Fund unless you elect on the account application to have
distributions paid by check.

[callout]
OPTIONS FOR RECEIVING DISTRIBUTION AND REDEMPTION PROCEEDS:
* by check
* by electronic transfer into your bank account
* a purchase of shares of another Stein Roe fund
* a purchase of shares in a Stein Roe fund account of another
person
[/callout]

If you elect to receive distributions by check and a distribution
check is returned to a Fund as undeliverable, or if you do not
present a distribution check for payment within six months, we
will change the distribution option on your account and reinvest
the proceeds of the check in additional shares of that Fund. You
will not receive any interest on amounts represented by uncashed
distribution or redemption checks.

Tax Consequences

You are subject to federal income tax on both dividends and
capital gains distributions whether you elect to receive them in
cash or reinvest them in additional Fund shares. If a Fund
declares a distribution in December, but does not pay it until
after December 31, you will be taxed as if the distribution were
paid in December. Stein Roe will process your distributions and
send you a statement for tax purposes each year showing the source
of distributions for the preceding year.

TRANSACTION TAX STATUS
- ----------------------------------------------------------------
Income dividend Ordinary income
Short-term capital gain distribution Ordinary income
Long-term capital gain distribution Capital gain
Sale of shares owned one year or less Gain is ordinary income;
loss is subject to special
rules
Sale of shares owned more than one year Capital gain or loss

In addition to the dividends and capital gains distributions made
by a Fund, you may realize a capital gain or loss when selling and
exchanging Fund shares. Such transactions may be subject to
federal income tax.

This tax information provides only a general overview. It does
not apply if you invest in a tax-deferred retirement account such
as an IRA. Please consult your own tax advisor about the tax
consequences of an investment in a Fund.

<PAGE>

OTHER INVESTMENTS AND RISKS

The first portion of this prospectus describes each Fund's
principal investment strategy and principal investment risks. In
seeking to meet its investment goals, a Fund or Portfolio also may
invest in other securities and use other investment techniques. A
Fund or Portfolio may elect not to buy any of these other
securities or use any of these other investment techniques. A
Fund may not always achieve its investment goal.

This section describes other securities and techniques, and risks
associated with them. The Statement of Additional Information
(SAI) contains additional information about a Fund's securities
and investment techniques (including other securities and
techniques) and the risks associated with them. Such risks could
cause you to lose money by investing in a Fund or could cause a
Fund's total return to decrease. The SAI also contains a Fund's
fundamental and non-fundamental investment policies.

The Board of Trustees can change a Fund's investment objective
without shareholder approval.

FUTURES AND OPTIONS Growth & Income Portfolio, Balanced
Portfolio, and Midcap Growth Fund use futures to gain exposure to
groups of stocks or individual issuers. The Portfolios use
futures to invest cash pending direct investments in stocks and to
enhance their return. Balanced Portfolio also uses futures and
options on futures to decrease equity exposure or to adjust
interest rate duration of the Portfolio's fixed-income security
holdings. Balanced Portfolio uses options on securities to earn
additional income or to hedge against price erosion in the
underlying security for the intermediate term. A future is an
agreement to buy or sell a specific amount of a financial
instrument or physical commodity for an agreed-upon price at a
certain time in the future. Futures and options are efficient
since they typically cost less than direct investments in the
underlying securities. However, the Funds can lose money if the
portfolio manager does not correctly anticipate the market
movements of those underlying securities.

SHORT SALES Small Company Growth Fund and Balanced Portfolio may
make short sales of securities. Short selling involves the sale
of borrowed securities. When the Fund thinks the price of a stock
will decline, it borrows the stock and then sells the borrowed
stock. When the Fund has to return the borrowed stock, it tries
to buy the stock at a lower price. If the Fund is successful, it
has a capital gain. If the Fund is unsuccessful and buys the
stock at a higher price than the price at which it sold the stock,
the Fund has a capital loss. The Fund's capital gains and losses
may result in federal income tax consequences to the Fund's
shareholders. Short selling involves certain risks. The Fund
could have a loss if the borrowed security increases in value and
if the purchased security declines in value.

PORTFOLIO TURNOVER There are no limits on turnover. Turnover
may vary significantly from year to year. Stein Roe does not
expect it to exceed 100% (150% in the case of Small Company Growth
Fund) under normal conditions. The Funds and Portfolios generally
intend to purchase securities for long-term investment although,
to a limited extent, they may purchase securities (including
securities purchased in initial public offerings) in anticipation
of relatively short-term price gains. Portfolio turnover
typically produces capital gains or losses resulting in tax
consequences for Fund investors. It also increases transaction
expenses, which reduce a Fund's return.

TEMPORARY DEFENSIVE POSITIONS When Stein Roe believes that a
temporary defensive position is necessary, a Fund or Portfolio may
invest, without limit, in high-quality debt securities or hold
assets in cash and cash equivalents. Stein Roe is not required to
take a temporary defensive position, and market conditions may
prevent such an action. A Fund may not achieve its investment
objective if it or its Portfolio takes a temporary defensive
position.

INTERFUND LENDING PROGRAM The Funds and Portfolios may lend
money to and borrow money from other funds advised by Stein Roe.
They will do so when Stein Roe believes such lending or borrowing
is necessary and appropriate. Borrowing costs will be the same as
or lower than the costs of a bank loan.

<PAGE>

THE FUNDS' MANAGEMENT

INVESTMENT ADVISER Stein Roe & Farnham Incorporated (Stein Roe),
One South Wacker Drive, Chicago, IL 60606, manages the day-to-day
operations of the Funds and Portfolios. Stein Roe (and its
predecessor) has advised and managed mutual funds since 1949. For
the fiscal year ended September 30, 1999, the Funds paid to Stein
Roe the following aggregate fees (as a percent of average net
assets):

Fund Fee
Balanced Fund 0.70%
Growth & Income Fund 0.75
Disciplined Stock Fund 0.87
Growth Stock Fund 0.71
Growth Investor Fund 0.73
Midcap Growth Fund 0.90
Large Company Focus Fund 0.90
Capital Opportunities Fund 0.89
Small Company Growth Fund 1.00

Stein Roe's mutual funds and institutional investment advisory
businesses are part of a larger business unit known as Liberty
Funds Group (LFG) that includes several separate legal entities.
LFG includes certain affiliates of Stein Roe, including Colonial
Management Associates, Inc. (Colonial). The LFG business unit is
managed by a single management team. Colonial and other LFG
entities also share personnel, facilities, and systems with Stein
Roe that may be used in providing administrative or operational
services to the Funds. Colonial is a registered investment
adviser. Stein Roe also has a wealth management business that is
not part of LFG and is managed by a different team. Stein Roe
and the other entities that make up LFG are subsidiaries of
Liberty Financial Companies, Inc.

Stein Roe may use the services of AlphaTrade Inc., an affiliated
broker-dealer, when buying or selling equity securities for a
portfolio, pursuant to procedures adopted by the Board of
Trustees.

PORTFOLIO MANAGERS

Balanced Fund/Balanced Portfolio-Harvey Hirschhorn, portfolio
manager since 1996; William Garrison, associate portfolio manager
since 1994; Sandra Knight, associate portfolio manager since 1996.

Growth & Income Fund/Growth & Income Portfolio-Daniel Cantor,
portfolio manager since 1995; Jeffrey Kinzel, associate portfolio
manager since 1996.

Disciplined Stock Fund/Disciplined Stock Portfolio-Daniel Cantor,
portfolio manager since May 1999; Jeffrey Kinzel, co-manager since
November 1999.

Growth Stock Fund/Growth Stock Portfolio-Erik Gustafson, portfolio
manager since 1994; David Brady, associate portfolio manager since
1996.

Growth Investor Fund/Growth Invest Portfolio-Erik Gustafson and
David Brady, co-portfolio managers since 1995.

Midcap Growth Fund-Steve Hayward, portfolio manager since November
1999.

Large Company Focus Fund-David Brady, portfolio manager since June
1998.

Capital Opportunities Fund-Erik Gustafson and David Brady, co-
portfolio managers since May 1999; Steve Hayward, co-manager since
November 1999.

Small Company Growth Fund-William Garrison, portfolio manager
since September 1998.

David P. Brady joined Stein Roe in 1993. He was an associate
portfolio manager of Disciplined Stock Fund until 1995, and is
currently a senior vice president. He holds a B.S. degree in
finance, graduating Magna Cum Laude from the University of
Arizona, and an M.B.A. degree from the University of Chicago.

Daniel K. Cantor joined Stein Roe in 1985 as an equity analyst and
served as an advisor to Stein Roe Private Capital Management from
1992 to 1995. Mr. Cantor is a senior vice president. A chartered
financial analyst, he received a B.A. degree from the University
of Rochester and an M.B.A. degree from the Wharton School of the
University of Pennsylvania.

William M. Garrison has been employed by Stein Roe since 1989 as
an equity research analyst and is a vice president. He earned an
A.B. degree from Princeton University and an M.B.A. degree from
the University of Chicago.

Erik P. Gustafson joined Stein Roe in 1992 as a portfolio manager
for privately managed accounts and is a senior vice president. He
holds a B.A. degree from the University of Virginia and M.B.A. and
J.D. degrees from Florida State University.

Steve D. Hayward joined Stein Roe as a portfolio manager in
November 1999. He served as vice president, investments for M & I
Investment Management from 1993 to 1999, where he managed the
Marshall Mid-Cap Fund and Marshall Small-Cap Growth Fund. Mr.
Hayward earned a B.A. degree from North Park College and a M.B.A.
degree in finance from Loyola University.

Harvey B. Hirschhorn joined Stein Roe in 1973 and is executive
vice president and chief economist and investment strategist. He
holds an A.B. degree from Rutgers College and an M.B.A. degree
from the University of Chicago, and is a chartered financial
analyst.

Jeffrey C. Kinzel joined Stein Roe in 1991. He has served as a
senior equity analyst and core portfolio team member for Stein Roe
in addition to his portfolio management responsibilities. He is a
senior vice president of Stein Roe. A certified financial
analyst, he holds a bachelor's degree from Northwestern
University, a law degree from the University of Michigan, and a
master's degree in business administration from the Wharton School
of the University of Pennsylvania.

Sandra Knight is a vice president of Stein Roe, which she joined
in 1991 as a quantitative analyst. She earned a B.S. degree from
Lawrence Technological University and an M.B.A. degree from Loyola
University of Chicago.

MASTER/FEEDER FUND STRUCTURE Unlike mutual funds that directly
acquire and manage their own portfolios of securities, Balanced
Fund, Growth & Income Fund, Growth Stock Fund, Growth Investor
Fund, and Disciplined Stock Fund are "feeder" funds in a
"master/feeder" structure. This means that the Fund invests its
assets in a larger "master" portfolio of securities (the Fund's
corresponding Portfolio) that has investment objectives and
policies substantially identical to those of the Fund. The
investment performance of a Fund depends upon the investment
performance of its Portfolio. If the investment policies of a
Fund and its Portfolio became inconsistent, the Board of Trustees
of the Fund can decide what actions to take. Actions the Board of
Trustees may recommend include withdrawal of the Fund's assets
from the Portfolio. For more information on the master/feeder
fund structure, see the SAI.

<PAGE>

FOR MORE INFORMATION

You can obtain more information about the Funds' investments in
their semiannual and annual reports to investors. These reports
discuss the market conditions and investment strategies that
affected the Funds' performance over the past six months and year.

You may wish to read the Funds' SAI for more information. The SAI
is incorporated into this prospectus by reference, which means
that it is considered to be part of this prospectus and you are
deemed to have been told of its contents.

To obtain free copies of the Funds' semiannual and annual reports,
latest quarterly profile, or the SAI or to request other
information about the Funds, write or call:

Stein Roe Mutual Funds
One Financial Center
Boston, MA 02111
800-338-2550

www.steinroe.com

Information about the Funds (including the SAI) can be reviewed
and copied at the Public Reference Room of the Securities and
Exchange Commission (SEC) in Washington, D.C. Information on the
Public Reference Room may be obtained by calling the SEC at 202-
942-8090. Reports and other information about the Funds are
available on the EDGAR database on the SEC's Internet site at
http://www.sec.gov. Copies of this information may be obtained,
after paying a duplicating fee, by electronic request at the
following E-mail address: [email protected] or by writing the
SEC's Public Reference Section, Washington, D.C. 20549-0102.

Investment Company Act file number of Liberty-Stein Roe Funds
Investment Trust: 811-04978

LIBERTY FUNDS DISTRIBUTOR, INC.

- -----------------------------------------------------------------

<PAGE>

Stein Roe International Fund

Prospectus

February 1, 2000

<PAGE

1 The Fund
Investment Goal
Principal Investment Strategy
Principal Investment Risks
Fund Performance
Your Expenses

8 Financial Highlights

10 Your Account
Purchasing Shares
Opening an Account
Determining Share Price (NAV)
Selling Shares
Exchanging Shares
Reporting to Shareholders
Dividends and Distributions

22 Other Investments and Risks

26 The Fund's Management
Investment Adviser
Portfolio Manager
Master/Feeder Fund Structure

Please keep this prospectus as your reference manual.

<PAGE>

THE FUND

INVESTMENT GOAL Stein Roe International Fund seeks long-term
growth.

PRINCIPAL INVESTMENT STRATEGY The Fund invests all of its assets
in SR&F International Portfolio as part of a master fund/feeder
fund structure. The Portfolio invests primarily in the stocks of
large foreign companies, defined as those companies with market
capitalizations of at least $1 billion. It seeks broad
diversification, both in terms of countries and issuers. To
select stocks, the portfolio manager uses a three-step process.
First, he identifies attractive countries by evaluating their
value compared to other world markets. He also looks at earnings
growth prospects of a particular country's overall stock market.
Next, the portfolio manager reviews currencies in relation to the
U.S. dollar. Finally, he selects stocks within countries and
industry sectors he believes will increase in price as the market
recognizes their value.

PRINCIPAL INVESTMENT RISKS There are two basic risks for all
mutual funds that invest in stocks: management risk and market
risk. These risks tend to be greater when investing overseas.
These risks may cause you to lose money by investing in the Fund.

[Callout]
What are market and management risks? Management risk means that
Stein Roe's stock selections and other investment decisions might
produce losses or cause the Fund to underperform when compared to
other funds with similar goals. Market risk means that security
prices in a market, sector or industry may move down. Downward
movements will reduce the value of your investment. Because of
management and market risk, there is no guarantee that the Fund
will achieve its investment goal or perform favorably compared
with competing funds.
[End callout]

Because the Portfolio invests in stocks, the price of the Fund's
shares-its net asset value per share (NAV)-fluctuates daily in
response to changes in the market value of the securities.

The Portfolio's focus on certain market sectors may increase
volatility in the Fund's NAV. If sectors that the Portfolio
invests in do not perform well, the Fund's NAV could decrease.

Foreign Securities
The Portfolio invests either directly or indirectly (depositary
receipts) in foreign markets. Foreign securities are subject to
special risks. Foreign stock markets, especially in countries
with developing stock markets, can be extremely volatile. The
liquidity of foreign securities may be more limited than domestic
securities, which means that the Portfolio may at times be unable
to sell them at desirable prices. In addition, foreign
governments may impose withholding taxes which would reduce the
amount of income available to distribute to shareholders.

Currency exchange rates will affect the U.S. dollar value of the
Portfolio's foreign stocks. Most of the stocks the Fund owns are
traded and settled in a foreign currency. The Portfolio also
incurs costs when it buys and sells foreign currencies. If the
foreign currency loses value against the dollar, the Fund's
investment may be worth less in dollar terms even if the stock's
value has grown in local terms. In addition, foreign security
transactions may be more costly due to higher brokerage and
custodial costs.

The prices of foreign securities may fluctuate substantially more
than the prices of U.S. securities because the price of a foreign
stock may depend on issues other than the performance of the
particular company. Foreign stocks, especially those of emerging
markets, are subject to political and economic risks such as
possible delays in settlement, the existence of less liquid
markets, the unavailability of reliable information about issuers,
the existence of exchange control regulations, political and
economic instability, immature economic structures, different
legal systems, and the possible seizure, expropriation or
nationalization of a company or its assets. In some foreign
markets, there may not be protection or legal recourse against
failure by other parties to complete transactions.

An investment in the Fund is not a bank deposit and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency. It is not a complete investment program.

For more information on the Portfolio's investment techniques,
please refer to "Other Investments and Risks."

Who Should Invest in International Fund?

You may want to invest in International Fund if you:
* are interested in investing in companies throughout the world
and can tolerate the greater share price volatility that
accompanies international investing
* want an international fund that is broadly diversified among
countries and companies
* are a long-term investor and can afford to potentially lose
money on your investment

International Fund is not appropriate for investors who:
* want to avoid volatility or possible losses
* are saving for a short-term investment
* need regular current income

Year-by-Year Total Returns
Year-by-year calendar total returns show the Fund's volatility
over a period of time. This chart illustrates performance
differences for each calendar year and provides an indication of
the risks of investing in the Fund.

[bar chart]
YEAR-BY-YEAR TOTAL RETURNS
30% 33.71%
25%
20%
15%
10% 11.48%
5% 8.35%
0% 3.89%
- -5% -3.51%
1995 1996 1997 1998 1999
[ ] International Fund
[end of bar chart]

Best quarter: 4th quarter 1999, +18.42%
Worst quarter: 3rd quarter 1998, -16.80%

Average Annual Total Returns
Average annual total returns measure the Fund's performance over
time. We compare the Fund's returns with returns for the MSCI
EAFE Index. We show returns for calendar years to be consistent
with the way other mutual funds report performance in their
prospectuses. This provides an indication of the risks of
investing in the Fund.

AVERAGE ANNUAL TOTAL RETURNS
Periods ending December 31, 1999
1 yr 5 yrs Since Inception
(March 1, 1994)
----------------------------------------------------------
International Fund 33.71% 10.11% 8.78%
MSCI EAFE Index* 26.96 12.83 13.32

*The MSCI EAFE Index is an unmanaged group of stocks that differs
from the Fund's composition; it is not available for direct
investment. Since inception performance for the Index is from
February 28, 1994 to December 31, 1999.

ANNUAL FUND OPERATING EXPENSES(b)
(expenses that are deducted from Fund assets)
Management fees(c) 1.00%
Distribution (12b-1) fees None
Other expenses 0.57%
Total annual fund operating expenses 1.57%

Expense Example

This example compares the cost of investing in the Fund to the
cost of investing in other mutual funds. It uses the same
hypothetical assumptions that other funds use in their
prospectuses:

* $10,000 initial investment
* 5% return each year
* the Fund's operating expenses remain constant as a percent of
net assets
* redemption at the end of each time period

EXPENSE EXAMPLE
1 yr 3 yrs 5 yrs 10 yrs
International Fund $160 $496 $855 $1,867

<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights table explains the Fund's financial
performance. Consistent with other mutual funds, we show
information for the last five fiscal years. The Fund's fiscal
year runs from October 1 to September 30. The total returns in
the table represent the return that investors earned assuming that
they reinvested all dividends and distributions. Certain
information in the table reflects the financial results for a
single Fund share. This information is included in the Fund's
financial statements which, for the year ended September 30, 1999,
have been audited by PricewaterhouseCoopers LLP, independent
accountants, whose report, along with the financial statements,
appears in the Fund's annual report. Arthur Andersen LLP audited
the Fund's financial statements for the years 1995 through 1998.
To request an annual report, please call 800-338-2550.

<TABLE>
<CAPTION>
INTERNATIONAL FUND
PER SHARE DATA
Years ended September 30,
1999 1998 1997 1996 1995
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.16 $11.79 $10.96 $10.25 $10.61
Income from investment operations
Net investment income (c) 0.14 0.07 0.06 0.09 0.12
Net gains (losses) on securities (both
realized and unrealized) 2.87 (2.01) 0.99 0.74 (0.26)
Total from investment operations 3.01 (1.94) 1.05 0.83 (0.14)
Less distributions
Dividends (from net investment income) (0.10) (0.11) (0.08) (0.12) (0.05)
Distributions (from capital gains) - (0.58) (0.14) - (0.17)
Total distributions (0.10) (0.69) (0.22) (0.12) (0.22)
Net asset value, end of period $12.07 $ 9.16 $11.79 $10.96 $10.25
Total return 33.02% (16.67%) 9.84% 8.23% (1.28%)

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000
omitted) $114,926 $114,244 $166,088 $135,545 $83,020
Ratio of net expenses to average
net assets 1.57%(b) 1.53% 1.55% 1.51% 1.59%
Ratio of net investment income to
average net assets 1.16%(b) 0.62% 0.55% 1.01% 1.41%
Portfolio turnover rate (a) 44% 32% 11% 42% 59%
<FN>
(a) Portfolio turnover rate for 1999 and 1998 shows the portfolio
turnover rate of the Portfolio. The Portfolio's turnover rate
from the commencement of operations on February 14, 1997
through September 30, 1997, was 18%. Portfolio turnover rate
for 1997, 1996 and 1995 shows that of the Fund prior to
commencement of operations of the Portfolio.
(b) During the year ended September 30, 1999, the Fund experienced
a one-time reduction in its expenses of 0.12% as a result of
expenses accrued in a prior period. The Fund's ratios
disclosed above reflect the actual rate at which expenses were
incurred throughout the current fiscal year without the
reduction.
(c) Per share data was calculated using average shares outstanding
during the period.
</TABLE>

<PAGE>

YOUR ACCOUNT

PURCHASING SHARES You will not pay a sales charge when you
purchase Fund shares. Your purchases are made at the NAV next
determined after the Fund receives your check, wire transfer or
electronic transfer. If the Fund receives your check, wire
transfer or electronic transfer after the close of regular trading
on the New York Stock Exchange (NYSE)-normally 4 p.m. Eastern
time-your purchase is effective on the next business day.

Purchases through Third Parties
If you purchase Fund shares through certain broker-dealers, banks
or other intermediaries (intermediaries), they may charge a fee
for their services. They may also place limits on your ability to
use services the Fund offers. There are no charges or limitations
if you purchase shares directly from the Fund, except those fees
described in this prospectus.

If an intermediary is an agent or designee of the Fund, orders are
processed at the NAV next calculated after the intermediary
receives the order. The intermediary must segregate any orders it
receives after the close of regular trading on the NYSE and
transmit those orders separately for execution at the NAV next
determined.

Conditions of Purchase

An order to purchase Fund shares is not binding unless and until
an authorized officer, agent or designee of the Fund accepts it.
Once we accept your purchase order, you may not cancel or revoke
it; however, you may redeem your shares. The Fund may reject any
purchase order if it determines that the order is not in the best
interests of the Fund and its shareholders. The Fund may waive or
lower its investment minimums for any reason. If you participate
in the Stein Roe Counselor [service mark] program or are a client
of Stein Roe Private Capital Management, the minimum initial
investment is determined by those programs.

*Maximum $500 contribution per calendar year per child.

Opening an Account

OPENING OR ADDING TO AN ACCOUNT

Opening an Account BY MAIL:
Complete the application.
Make check payable to Stein Roe Mutual Funds.

Mail application and check to:
SteinRoe Services Inc.
P.O. Box 8900
Boston, MA 02205

BY WIRE:
Mail your application to the address listed on
the left, then call 800-338-2550 to obtain an
account number. Include your Social Security
Number. To wire funds, use the instructions
below.

Adding to an Account BY MAIL:
Make check payable to Stein Roe Mutual Funds.
Be sure to write your account number on the
check.

Fill out investment slip (stub from your
statement or confirmation) or include a note
indicating the amount of your purchase, your
account number, and the name in which your
account is registered.

Mail check with investment slip or note to the
address above.

BY WIRE:
Wire funds to:
First National Bank of Boston
ABA: 011000390
Attn: SSI, Account No. 560-99696
Fund No.12; Stein Roe International Fund
Your name (exactly as in the registration).
Fund account number.

OPENING OR ADDING TO AN ACCOUNT

Opening an Account BY ELECTRONIC FUNDS TRANSFER:
You cannot open a new account via electronic
transfer.

BY EXCHANGE:
By mail, phone, automatically (be
sure to elect the Automatic Exchange Privilege
on your application).

THROUGH AN INTERMEDIARY;
Contact your financial professional.

BY EXCHANGE:
By mail, phone, automatically (be
sure to elect the Automatic Exchange Privilege
on your application).

THROUGH AN INTERMEDIARY:
Contact your financial professional.

All checks must be made payable in U.S. dollars and drawn on U.S.
banks. Money orders and third-party checks will not be accepted.

DETERMINING SHARE PRICE (NAV) The Fund's share price is its NAV
next determined. NAV is the difference between the values of the
Fund's assets and liabilities divided by the number of shares
outstanding. We determine NAV at the close of regular trading on
the NYSE-normally 4 p.m. Eastern time. If you place an order
after that time, you receive the share price determined on the
next business day.

In computing the net asset value, the values of portfolio
securities are generally based upon market quotations. Depending
upon local convention or regulation, these market quotations may
be the last sale price, last bid or asked price, or the mean
between the last bid and asked prices as of, in each case, the
close of the appropriate exchange or other designated time.
Trading in securities on European and Far Eastern securities
exchanges and over-the-counter markets is normally completed at
various times before the close of business on each day that the
NYSE is open. Trading of these securities may not take place on
every NYSE business-day. Foreign securities may trade on days
when the NYSE is closed. We will not price shares on days the
NYSE is closed for trading. You will not be able to purchase or
redeem shares until the next NYSE-trading day.

SELLING SHARES You may sell your shares any day the Fund is open
for business. Please follow the instructions below.

BY EXCHANGE: Call 800-338-2550 to exchange any portion of your
Fund shares for shares in any other Stein Roe no-
load fund.

What You Need to Know When Selling Shares
Once we receive and accept your order to sell shares, you may not
cancel or revoke it. We cannot accept an order to sell that
specifies a particular date or price or any other special
conditions. If you have any questions about the requirements for
selling your shares, please call 800-338-2550 before submitting
your order.

The Fund redeems shares at the NAV next determined after an order
has been accepted. We mail the proceeds within seven days after
the sale. The Fund normally pays wire redemption or electronic
transfer proceeds on the next business day.

If the amount you redeem is in excess of the lesser of (1)
$250,000 or (2) 1% of the Fund's net assets, the Fund may pay the
redemption "in kind." This is payment in portfolio securities
rather than cash. If this occurs, you may incur transaction costs
when you sell the securities.

Involuntary Redemption
If your account value falls below $1,000, the Fund may redeem your
shares and send the proceeds to the registered address. You will
receive notice 30 days before this happens. If your account falls
below $10, the Fund may redeem your shares without notice to you.

Low Balance Fee
Due to the expense of maintaining accounts with low balances, if
your account balance falls below $2,000 ($800 for custodial
accounts), you will be charged a low balance fee of $5 per
quarter. The low balance fee does not apply to: (1) shareholders
whose accounts in the Stein Roe Funds total $50,000 or more; (2)
Stein Roe IRAs; (3) other Stein Roe prototype retirement plans;
(4) accounts with automatic investment plans (unless regular
investments have been discontinued); or (5) omnibus or nominee
accounts. The Fund can waive the fee, at its discretion, in the
event of significant market corrections.

An exchange is a redemption and purchase of shares for tax
purposes, and you may realize a gain or a loss when you exchange
Fund shares for shares of another fund.

We may change, suspend or eliminate the exchange service after
notification to you.

Generally, we limit you to four telephone exchanges "roundtrips"
per year. A roundtrip is an exchange out of the Fund into another
Stein Roe no-load fund and then back to that Fund.

DIVIDENDS AND DISTRIBUTIONS The Fund distributes, at least once
a year, virtually all of its net investment income and net
realized capital gains.

A dividend from net investment income represents the income the
Fund earns from dividends and interest paid on its investments,
after payment of the Fund's expenses.

When the Fund makes a distribution of income or capital gains, the
distribution is automatically invested in additional shares of
that Fund unless you elect on the account application to have
distributions paid by check.

[CALLOUT]
OPTIONS FOR RECEIVING DISTRIBUTION AND REDEMPTION PROCEEDS:
* by check
* by electronic transfer into your bank account
* a purchase of shares of another Stein Roe fund
* a purchase of shares in a Stein Roe fund account of another
person
[/CALLOUT]

If you elect to receive distributions by check and a distribution
check is returned to the Fund as undeliverable, or if you do not
present a distribution check for payment within six months, we
will change the distribution option on your account and reinvest
the proceeds of the check in additional shares of that Fund. You
will not receive any interest on amounts represented by uncashed
distribution or redemption checks.

Tax Consequences
You are subject to federal income tax on both dividends and
capital gains distributions whether you elect to receive them in
cash or reinvest them in additional Fund shares. If the Fund
declares a distribution in December, but does not pay it until
after December 31, you will be taxed as if the distribution were
paid in December. Stein Roe will process your distributions and
send you a statement for tax purposes each year showing the source
of distributions for the preceding year.

In addition to the dividends and capital gains distributions made
by the Fund, you may realize a capital gain or loss when selling
and exchanging Fund shares. Such transactions may be subject to
federal income tax.

<PAGE>

OTHER INVESTMENTS AND RISKS

The first portion of this prospectus describes the Fund's
principal investment strategy and principal investment risks. In
seeking to meet its investment goals, the Portfolio also may
invest in other securities and use other investment techniques.
The Portfolio may elect not to buy any of these other securities
or use any of these other investment techniques. The Fund may not
always achieve its investment goal.

This section describes other securities and techniques, and risks
associated with them. The Statement of Additional Information
(SAI) contains additional information about the Fund's securities
and investment techniques (including other securities and
techniques) and the risks associated with them. Such risks could
cause you to lose money by investing in the Fund or could cause
the Fund's total return to decrease. The SAI also contains the
Fund's fundamental and non-fundamental investment policies.

The Board of Trustees can change the Fund's investment objective
without shareholder approval.

COUNTRY ALLOCATION The Portfolio invests across many different
countries. While the Portfolio has no geographic asset
distribution limits, it ordinarily invests in Western European
countries (such as Belgium, France, Germany, Ireland, Italy, The
Netherlands, the countries of Scandinavia, Spain, Switzerland, and
the United Kingdom); countries in the Pacific Basin (such as
Australia, Hong Kong, Japan, Malaysia, the Philippines, Singapore,
and Thailand); and countries in Latin America (such as Argentina,
Brazil, Colombia, and Mexico). In addition, it does not currently
intend to invest more than 2% of its total assets in Russian
securities. As of September 30, 1999, the Portfolio had more than
5% of its total assets in each of the following countries:

Country Allocation
Countries Percentage of
Total Assets
------------------------------------
France 9.6%
Germany 6.3
United Kingdom 21.4
Japan 23.3
The Netherlands 6.9

FOREIGN CURRENCY TRANSACTIONS The Portfolio engages in a variety
of foreign currency transactions. It may buy and sell foreign
currencies in the spot market (commodities market in which goods
are sold for cash and delivered immediately). It may also buy or
sell forward contracts (buy or sell currency on a prespecified
date in the future). It may buy and sell foreign currency futures
contracts. It also may buy and sell options on foreign currencies
and foreign currency futures. The Portfolio uses these
transactions for two primary purposes. First, the Portfolio may
seek to lock in a particular foreign exchange rate for the
settlement of a purchase or sale of a foreign security or for the
receipt of interest, principal or dividend payments on a foreign
security the Portfolio holds. Second, the Portfolio may seek to
hedge against a decline in the value, in U.S. dollars or in
another currency, of a foreign currency in which securities held
by the Portfolio are denominated. These hedging techniques limit
the potential gain to the Portfolio from currency value increases.

PORTFOLIO TURNOVER There are no limits on turnover. Turnover
may vary significantly from year to year. Stein Roe does not
expect it to exceed 100% under normal conditions. The Portfolio
generally intends to purchase securities for long-term investment
although, to a limited extent, it may purchase securities
(including securities purchased in initial public offerings) in
anticipation of relatively short-term price gains. Portfolio
turnover typically produces capital gains or losses resulting in
tax consequences for Fund investors. It also increases
transaction expenses, which reduce the Fund's return.

TEMPORARY DEFENSIVE POSITIONS When Stein Roe believes that a
temporary defensive position is necessary, the Portfolio may hold
cash or invest any portion of its assets in securities of the U.S.
government and equity and debt securities of U.S. companies, as a
temporary defensive strategy. To meet liquidity needs, the
Portfolio may also hold cash in domestic and foreign currencies
and invest in domestic and foreign money market securities
(including repurchase agreements and foreign money market
positions). Stein Roe is not required to take a temporary
defensive position, and market conditions may prevent such an
action. The Fund may not achieve its investment objective if the
Portfolio takes a temporary defensive position.

INTERFUND LENDING PROGRAM The Fund and Portfolio may lend money
to and borrow money from other funds advised by Stein Roe. They
will do so when Stein Roe believes such lending or borrowing is
necessary and appropriate. Borrowing costs will be the same as or
lower than the costs of a bank loan.

<PAGE>

THE FUND'S MANAGEMENT

INVESTMENT ADVISER Stein Roe & Farnham Incorporated (Stein Roe),
One South Wacker Drive, Chicago, IL 60606, manages the day-to-day
operations of the Fund and the Portfolio. Stein Roe (and its
predecessor) has advised and managed mutual funds since 1949. For
the fiscal year ended September 30, 1999, aggregate fees paid by
the Fund to Stein Roe amounted to 1.00% of average net assets.

Stein Roe may use the services of AlphaTrade Inc., an affiliated
broker-dealer, when buying or selling equity securities for the
Portfolio, pursuant to procedures adopted by the Board of
Trustees.

PORTFOLIO MANAGER Nicholas Ghajar has been the portfolio manager
since September 1999. Mr. Ghajar is jointly employed by Stein Roe
and Colonial. He is an assistant vice president of Colonial and
has been either an associate portfolio manager or an equity
analyst of various equity funds at Colonial since 1989. Mr.
Ghajar received his B.S. and M.A. degrees from Northeastern
University.

MASTER/FEEDER FUND STRUCTURE Unlike mutual funds that directly
acquire and manage their own portfolio of securities, the Fund is
a "feeder" fund in a "master/feeder" structure. This means that
the Fund invests its assets in a larger "master" portfolio of
securities (the Portfolio) that has investment objectives and
policies substantially identical to those of the Fund. The
investment performance of the Fund depends upon the investment
performance of the Portfolio. If the investment policies of the
Fund and the Portfolio became inconsistent, the Board of Trustees
of the Fund can decide what actions to take. Actions the Board of
Trustees may recommend include withdrawal of the Fund's assets
from the Portfolio. For more information on the master/feeder
fund structure, see the SAI.

<PAGE>

FOR MORE INFORMATION

You can obtain more information about the Fund's investments in
its semiannual and annual reports to investors. These reports
discuss the market conditions and investment strategies that
affected the Fund's performance over the past six months and year.

You may wish to read the Fund's SAI for more information. The SAI
is incorporated into this prospectus by reference, which means
that it is considered to be part of this prospectus and you are
deemed to have been told of its contents.

To obtain free copies of the Fund's semiannual and annual reports,
latest quarterly profile, or the SAI or to request other
information about the Fund, write or call:

Stein Roe Mutual Funds
One Financial Center
Boston, MA 02111-2621
800-338-2550
www.steinroe.com

Information about the Fund (including the SAI) can be reviewed and
copied at the Public Reference Room of the Securities and Exchange
Commission (SEC) in Washington, D.C. Information on the Public
Reference Room may be obtained by calling the SEC at 202-942-8090.
Reports and other information about the Fund are available on the
EDGAR database on the SEC's Internet site at http://www.sec.gov.
Copies of this information may be obtained, after paying a
duplicating fee, by electronic request at the following E-mail
address: [email protected] or by writing the SEC's Public
Reference Section, Washington, D.C. 20549-0102.

Investment Company Act file number of Liberty-Stein Roe Funds
Investment Trust: 811-04978

LIBERTY FUNDS DISTRIBUTOR, INC.

- -----------------------------------------------------------------

<PAGE>

Stein Roe [service mark] Young Investor [service mark] Fund

Prospectus

February 1, 2000

[PAGE}

1 The Fund
Investment Goal
Principal Investment Strategy
Principal Investment Risks
Fund Performance
Your Expenses

8 Financial Highlights

10 Your Account
Purchasing Shares
Opening an Account
Determining Share Price (NAV)
Selling Shares
Exchanging Shares
Reporting to Shareholders
Dividends and Distributions

23 Other Investments and Risks

25 The Fund's Management
Investment Adviser
Portfolio Managers
Master/Feeder Fund Structure

Please keep this prospectus as your reference manual.

<PAGE>

THE FUND

INVESTMENT GOAL Stein Roe Young Investor Fund seeks long-term
growth.

PRINCIPAL INVESTMENT STRATEGY The Fund invests all its assets in
SR&F Growth Investor Portfolio as part of a master fund/feeder
fund structure. The Portfolio invests primarily in common stocks
believed to have long-term growth potential. Under normal market
conditions, the Portfolio invests at least 65% of its assets in
common stocks of companies that Stein Roe believes affect the
lives of children and teenagers. These companies may produce
products or services that children and teenagers use, are aware
of, or could have an interest in. The Portfolio may invest in
companies of any size including smaller emerging companies. It
emphasizes companies in the technology sector, including computer
software, computer hardware, semiconductors and Internet
infrastructure companies, and various consumer goods sectors,
including personal care products, pharmaceuticals and food
products. The Portfolio may invest up to 25% of its assets in
foreign stocks.

The Fund also has an educational objective. It seeks to teach
children and teenagers information about mutual funds, basic
economic principles and personal finance through a variety of
educational materials paid for by the Fund.

PRINCIPAL INVESTMENT RISKS There are two basic risks for all
mutual funds that invest in stocks: management risk and market
risk. These risks may cause you to lose money by investing in the
Fund.

Because the Portfolio invests in stocks, the price of the Fund's
shares-its net asset value per share (NAV)-fluctuates daily in
response to changes in the market value of the securities.

Foreign Securities

An investment in the Fund is not a bank deposit and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency. It is not a complete investment program.

For more information on the Portfolio's investment techniques,
please refer to "Other Investments and Risks."

Who Should Invest in the Fund?

You may want to invest in the Fund if you:
* are a long-term investor who wants to participate in the stock
market through a Fund that emphasizes growth companies
* can accept more investment risk and volatility than the general
stock market
* are attracted to the Fund's educational objective

The Fund is not appropriate for shareholders who:

* want to avoid volatility or possible losses
* want to save for a short-term investment
* need regular current income

Year-by-Year Total Returns

Year-by-year calendar total returns show the Fund's volatility
since it started. This chart illustrates performance differences
for each calendar year and provides an indication of the risks of
investing in the Fund.

[bar chart]
YEAR-BY-YEAR TOTAL RETURNS
45%
40%
35% 39.79% 35.10%
30% 31.68%
25% 26.28%
20%
15% 17.65%
10%
5%
0%
1995 1996 1997 1998 1999
[ ] Young Investor Fund
[end of bar chart]

Best quarter: 4th quarter 1999, +28.42%.
Worst quarter: 3rd quarter 1998, -16.46%

Average Annual Total Returns

Average annual total returns measure the Fund's performance over
time. We compare the Fund's return with returns for the S&P 500
Index. We show returns for calendar years to be consistent with
the way other mutual funds report performance in their
prospectuses. This provides an indication of the risks of
investing in the Fund.

AVERAGE ANNUAL TOTAL RETURNS
Periods ending December 31, 1999
1 yr 5 yrs Since Inception
(April 29, 1994)
- ------------------------------------------------------------
Young Investor Fund 31.69% 29.87% 27.94%
S&P 500 Index* 21.03 28.54 25.65

ANNUAL FUND OPERATING EXPENSES (b)
(expenses that are deducted from Fund assets)
Management fees (c) 0.76%
Distribution (12b-1) fees None
Other expenses 0.42%
Total annual fund operating expenses 1.18%

(a) There is a $7 charge for wiring redemption proceeds to your
bank. A fee of $5 per quarter may be charged to accounts that
fall below the required minimum balance.
(b) Annual fund operating expenses consist of Fund expenses plus
the Fund's share of the expenses of the Portfolio. Fund
expenses include management fees and administrative costs such
as furnishing the Fund with offices and providing tax and
compliance services. They also include the expenses the Fund
pays for its educational materials.
(c) Management fees includes both the management fee and the
administrative fee charged to the Fund.

Expense Example

This example compares the cost of investing in the Fund to the
cost of investing in other mutual funds. It uses the same
hypothetical assumptions that other funds use in their
prospectuses:

* $10,000 initial investment
* 5% return each year
* the Fund's operating expenses remain constant as a percent of
net assets
* redemption at the end of each time period

Your actual costs may be higher or lower because in reality Fund
returns and operating expenses change. This example reflects
expenses of both the Fund and the Portfolio. Expenses based on
these assumptions are:

EXPENSE EXAMPLE
1 yr 3 yrs 5 yrs 10 yrs
Young Investor Fund $120 $375 $649 $1,432

<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights table explains the Fund's financial
performance. Consistent with other mutual funds, we show
information for the period of the Fund's operations. The Fund's
fiscal year runs from October 1 to September 30. The total
returns in the table represent the return that shareholders earned
assuming that they reinvested all dividends and distributions.
Certain information in the table reflects the financial results
for a single Fund share. This information is included in the
Fund's financial statements which, for the year ended September
30, 1999, have been audited by PricewaterhouseCoopers LLP,
independent accountants, whose report, along with the financial
statements, appears in the Fund's annual report. Arthur Andersen
LLP audited the Fund's financial statements for the years 1995
through 1998. To request the annual report, please call 800-338-
2550.

<TABLE>
<CAPTION>
YOUNG INVESTOR FUND
PER SHARE DATA
Years ended September 30,
1999 1998 1997 1996 1995
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 22.68 $ 22.75 $ 18.64 $ 14.29 $ 10.24
Income from investment operations
Net investment income (loss) (d) (0.10) (0.06) (0.04) 0.05 0.06
Net gains on securities (both realized
and unrealized) 5.44 0.31 4.79 4.86 4.07
Total income from investment operations 5.34 0.25 4.75 4.91 4.13
Less distributions
Dividends (from net investment income) - - (0.02) (0.05) (0.08)
Distributions (from capital gains) (0.60) (0.32) (0.62) (0.51) -
Total distributions (0.60) (0.32) (0.64) (0.56) (0.08)
Net asset value, end of period $ 27.42 $ 22.68 $ 22.75 $ 18.64 $ 14.29
Total return 23.89% 1.14% 26.37% 35.55% 40.58%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $880,574 $686,024 $475,506 $179,089 $31,401
Ratio of net expenses to average net
assets (a) 1.18% 1.31% 1.43% 1.21% 0.99%
Ratio of net investment income (loss)
to average net assets (b) (0.37%) (0.28%) (0.25%) 0.30% 0.47%
Portfolio turnover rate (c) 45% 45% 22% 98% 55%
<FN>
(a) If the Fund had paid all of its expenses and there had been no
reimbursement of expenses by Stein Roe, this ratio would have
been 1.49%. 2.04% and 2.87% for the years and the period ended
September 30, 1997, 1996 and 1995, respectively.
(b) Computed with the effect of Stein Roe's expense limitation
undertaking.
(c) For 1999 and 1998, this represents the portfolio turnover rate
for the Portfolio. For 1995 through 1997, this is the
turnover rate of the Fund prior to commencement of operations
of the Portfolio. For the period from the commencement of
operations of the Portfolio, February 2, 1997 to September 30,
1997, the portfolio turnover rate for the Portfolio was 38%.
(d) Per share data was calculated using average shares outstanding
during the period.
</TABLE>

<PAGE>

YOUR ACCOUNT

PURCHASING SHARES You will not pay a sales charge when you
purchase Fund shares. Your purchases are made at the NAV next
determined after the Fund receives your check, wire transfer or
electronic transfer. If the Fund receives your check, wire
transfer or electronic transfer after the close of regular trading
on the New York Stock Exchange (NYSE)-normally 4 p.m. Eastern
time-your purchase is effective on the next business day.

Purchases through Third Parties

If you purchase shares of the Fund through certain broker-dealers,
banks or other intermediaries (intermediaries), they may charge a
fee for their services. They may also place limits on your
ability to use services the Fund offers. There are no charges or
limitations if you purchase shares directly from the Fund, except
those fees described in this prospectus.

Conditions of Purchase

An order to purchase Fund shares is not binding unless and until
an authorized officer, agent or designee of the Fund accepts it.
Once we accept your purchase order, you may not cancel or revoke
it; however, you may redeem your shares. The Fund may reject any
purchase order if it determines that the order is not in the best
interests of the Fund and its shareholders. The Fund may waive or
lower its investment minimums for any reason. If you participate
in the Stein Roe Counselor [service mark] program or are a client
of Stein Roe Private Capital Management, the minimum initial
investment is determined by those programs.

ACCOUNT MINIMUMS
Minimum to Minimum Minimum
Type of Account Open an Account Addition Balance
- ------------------------------------------------------------
Regular $2,500 $100 $1,000
Custodial (UGMA/UTMA) $1,000 $100 $1,000
Automatic Investment Plan $100* $50 -
Roth and Traditional IRA $500 $50 $500
Educational IRA $500 $50* $500

*Automatic Investment Plan must continue until the account value
reaches $1,000 (for custodial accounts) or $2,500 (for regular
accounts).
**Maximum $500 contribution per calendar year per child.

Opening an Account

OPENING OR ADDING TO AN ACCOUNT

Opening an Account BY MAIL:
Complete the application.
Make check payable to Stein Roe Mutual Funds.

Mail application and check to:
SteinRoe Services Inc.
P.O. Box 8900
Boston, MA 02205

BY WIRE:
Mail your application to the address listed on
the left, then call 800-338-2550 to obtain an
account number. Include your Social Security
Number. To wire funds, use the instructions
below.

Adding to an Account BY MAIL:
Make check payable to Stein Roe Mutual Funds.
Be sure to write your account number on the
check.

Fill out investment slip (stub from your
statement or confirmation) or include a note
indicating the amount of your purchase, your
account number, and the name in which your
account is registered.

Mail check with investment slip or note to the
address above.

BY WIRE:
Wire funds to:
First National Bank of Boston
ABA: 011000390
Attn: SSI, Account No. 560-99696
Fund No.14; Stein Roe Young Investor Fund
Your name (exactly as in the registration).
Fund account number.

OPENING OR ADDING TO AN ACCOUNT

Opening an Account BY ELECTRONIC FUNDS TRANSFER:
You cannot open a new account via electronic
transfer.

BY EXCHANGE:
By mail, phone, automatically (be
sure to elect the Automatic Exchange Privilege
on your application).

THROUGH AN INTERMEDIARY;
Contact your financial professional.

BY EXCHANGE:

By mail, phone, automatically (be
sure to elect the Automatic Exchange Privilege
on your application).

THROUGH AN INTERMEDIARY:
Contact your financial professional.

All checks must be made payable in U.S. dollars and drawn on U.S.
banks. Money orders and third-party checks will not be accepted.

To calculate NAV on a given day, we value each stock listed or
traded on a stock exchange at its latest sale price on that day.
If there are no sales that day, we value the security at the most
recently quoted bid price. We value each over-the-counter
security or National Association of Securities Dealers Automated
Quotation (Nasdaq) security as of the last sale price for that
day. We value all other over-the-counter securities that have
reliable quotes at the latest quoted bid price.

We value long-term debt obligations and securities convertible
into common stock at fair value. Pricing services provide the
Fund with the value of the securities. When the price of a
security is not available, including days when we determine that
the sale or bid price of the security does not reflect that
security's market value, we value the security at a fair value
determined in good faith under procedures established by the Board
of Trustees.

SELLING SHARES You may sell your shares any day the Fund is open
for business. Please follow the instructions below.

BY EXCHANGE: Call 800-338-2550 to exchange any portion of your
Fund shares for shares in any other Stein Roe no-
load fund.

What You Need to Know When Selling Shares

The Fund redeems shares at the NAV next determined after an order
has been accepted. We will mail the proceeds within seven days
after the sale. The Fund normally pays wire redemption or
electronic transfer proceeds on the next business day.

Involuntary Redemption

Low Balance Fee

Due to the expense of maintaining accounts with low balances, if
your account balance falls below $2,000 ($800 for custodial
accounts), you will be charged a low balance fee of $5 per
quarter. The low balance fee does not apply to: (1) shareholders
whose accounts in the Stein Roe Funds total $50,000 or more; (2)
Stein Roe IRAs; (3) other Stein Roe prototype retirement plans;
(4) accounts with automatic investment plans (unless regular
investments have been discontinued); or (5) omnibus or nominee
accounts. The Fund can waive the fee, at its discretion, in the
event of significant market corrections.

An exchange is a redemption and purchase of shares for tax
purposes, and you may realize a gain or a loss when you exchange
Fund shares for shares of another fund.

We may change, suspend or eliminate the exchange service after
notification to you.

Generally, we limit you to four telephone exchanges "roundtrips"
per year. A roundtrip is an exchange out of the Fund into another
Stein Roe no-load fund and then back to the Fund.

DIVIDENDS AND DISTRIBUTIONS The Fund distributes, at least once
a year, virtually all of its net investment income and net
realized capital gains.

A dividend from net investment income represents the income the
Fund earns from dividends and interest paid on its investments,
after payment of the Fund's expenses.

When the Fund makes a distribution of income or capital gains, the
distribution is automatically invested in additional shares of the
Fund unless you elect on the account application to have
distributions paid by check.

If you elect to receive distributions by check and a distribution
check is returned to the Fund as undeliverable, or if you do not
present a distribution check for payment within six months, we
will change the distribution option on your account and reinvest
the proceeds of the check in additional shares of the Fund. You
will not receive any interest on amounts represented by uncashed
distribution or redemption checks.

Tax Consequences

You are subject to federal income tax on both dividends and
capital gains distributions whether you elect to receive them in
cash or reinvest them in additional shares of the Fund. If the
Fund declares a distribution in December, but does not pay it
until after December 31, you will be taxed as if the distribution
were paid in December. Stein Roe will process your distributions
and send you a statement for tax purposes each year showing the
source of distributions for the preceding year.

<PAGE>

OTHER INVESTMENTS AND RISKS

This section describes other securities and techniques, and risks
associated with them. The Statement of Additional Information
(SAI) contains additional information about the Fund's securities
and investment techniques (including other securities and
techniques) and the risks associated with them. Such risks could
cause you to lose money by investing in the Fund or could cause
the Fund's total return to decrease. The SAI also contains the
Fund's fundamental and non-fundamental investment policies.

The Board of Trustees can change the Fund's investment objective
without shareholder approval.

TEMPORARY DEFENSIVE POSITIONS When Stein Roe believes that a
temporary defensive position is necessary, the Portfolio may
invest, without limit, in high-quality debt securities or hold
assets in cash and cash equivalents. Stein Roe is not required to
take a temporary defensive position, and market conditions may
prevent such an action. The Fund may not achieve its investment
objective if the Portfolio takes a temporary defensive position.

INTERFUND LENDING PROGRAM The Fund and the Portfolio may lend
money to and borrow money from other funds advised by Stein Roe.
They will do so when Stein Roe believes such lending or borrowing
is necessary and appropriate. Borrowing costs will be the same as
or lower than the costs of a bank loan.

EDUCATIONAL MATERIALS The Fund provides educational materials
such as a newsletter and an activity book to all Fund
shareholders. The materials are designed to teach children and
teenagers basic investing principles. The Fund also sends
investors an owner's manual. The educational materials are paid
for by the Fund.

<PAGE>

THE FUND'S MANAGEMENT

INVESTMENT ADVISER Stein Roe & Farnham Incorporated, One South
Wacker Drive, Chicago, IL 60606, manages the day-to-day operations
of the Fund and the Portfolio. Stein Roe (and its predecessor)
has advised and managed mutual funds since 1949. For the fiscal
year ended September 30, 1999, aggregate fees paid by the Fund to
Stein Roe amounted to 0.76% of average net assets.

Stein Roe may use the services of AlphaTrade Inc., an affiliated
broker-dealer, when buying or selling equity securities for the
Portfolio, pursuant to procedures adopted by the Board of
Trustees.

PORTFOLIO MANAGERS Erik P. Gustafson and David P. Brady, CFA,
are the portfolio managers.

Mr. Gustafson joined Stein Roe in 1992 as a portfolio manager for
privately managed accounts. Mr. Gustafson is a senior vice
president and has been portfolio manager of the Fund since
February 1995 and portfolio manager of SR&F Growth Stock Portfolio
since May 1994. He holds a B.A. degree from the University of
Virginia and M.B.A. and J.D. degrees from Florida State
University.

Mr. Brady joined Stein Roe in 1993 as an associate portfolio
manager of Stein Roe Special Fund. He currently is a senior vice
president and has been portfolio manager of the Fund since March
1995 and portfolio manager of Stein Roe Large Company Focus Fund
since June 1998. He holds a B.S. degree in finance, graduating
Magna Cum Laude, from the University of Arizona and an M.B.A.
degree from the University of Chicago.

MASTER/FEEDER FUND STRUCTURE Unlike mutual funds that directly
acquire and manage their own portfolio of securities, the Fund is
a "feeder" fund in a "master/feeder" structure. This means that
the Fund invests its assets in a larger "master" portfolio of
securities, the SR&F Growth Investor Portfolio, which has
investment objectives and policies substantially identical to
those of the Fund. The investment performance of the Fund depends
upon the investment performance of the Portfolio. If the
investment policies of the Portfolio and the Fund became
inconsistent, the Board of Trustees of the Fund can decide what
actions to take. Actions the Board of Trustees may recommend
include withdrawal of the Fund's assets from the Portfolio. For
more information on the master/feeder fund structure, see the SAI.

<PAGE>

FOR MORE INFORMATION

You can obtain more information about the Fund's investments in
its semiannual and annual reports to shareholders. These reports
discuss the market conditions and investment strategies that
affected the Fund's performance over the past six months and year.

You may wish to read the Fund's SAI for more information. The SAI
is incorporated into this prospectus by reference, which means it
is part of this prospectus and you are deemed to have been told of
its contents.

To obtain free copies of the Fund's semiannual and annual reports,
latest quarterly profile, or the SAI or to request other
information about the Fund, write or call:

Stein Roe Mutual Funds
One Financial Center
Boston, MA 02111
800-338-2550

www.steinroe.com

Investment Company Act file number of Liberty-Stein Roe Funds
Investment Trust: 811-04978

LIBERTY FUNDS DISTRIBUTOR, INC.

- ------------------------------------------------------------

<PAGE>

[STEIN ROE LOGO]

Stein Roe Growth & Income Fund, Class S

Defined Contribution Plans Prospectus

February 1, 2000

This prospectus relates only to shares of the Fund purchased
through eligible employer-sponsored defined contribution plans.

2 The Fund
Investment Goal
Principal Investment Strategy
Principal Investment Risks
Fund Performance
Your Expenses

6 Financial Highlights

7 Your Account
Purchasing Shares
Determining Share Price (NAV)
Selling Shares
Exchanging Shares
Dividends and Distributions

10 Other Investments and Risks

11 The Fund's Management
Investment Adviser
Portfolio Managers
Master/Feeder Fund Structure

Please keep this prospectus as your reference manual.

<PAGE>

DEFINING CAPITALIZATION
A company's market capitalization is simply its stock price
multiplied by the number of shares of stock it has issued and
outstanding. In the financial markets, companies generally are
sorted into one of three capitalization-based categories: large
capitalization (large cap); medium capitalization (midcap); or
small capitalization (small cap). In defining a company's market
capitalization, we use capitalization-based categories as they are
defined by Lipper, Inc.

THE FUND

STEIN ROE GROWTH & INCOME FUND, CLASS S
This Fund is closed to new investors except for purchases by
eligible investors as described under "Your Account."

INVESTMENT GOAL Stein Roe Growth & Income Fund seeks to provide
both growth of capital and current income.

PRINCIPAL INVESTMENT STRATEGY Growth & Income Fund invests all
of its assets in SR&F Growth & Income Portfolio as part of a
master fund/feeder fund structure. Growth & Income Portfolio
invests primarily in common stocks of well-established companies
having large-market capitalizations. The Portfolio may also
invest in companies having midsized market capitalizations. The
Portfolio may invest up to 25% of its assets in foreign stocks.
To select investments for the Portfolio, the portfolio manager
looks for common stocks that have the potential to appreciate in
value and to pay dividends. The portfolio manager focuses on the
stocks of companies that have experienced management; broad,
highly diversified product lines; deep financial resources; easy
access to credit; and a history of paying dividends.

PRINCIPAL INVESTMENT RISKS There are two basic risks for all
mutual funds that invest in stocks: management risk and market
risk. These risks may cause you to lose money by investing in the
Fund.

What are market and management risks? Management risk means that
Stein Roe's stock selections and other investment decisions might
produce losses or cause the Fund to underperform when compared to
other funds with similar goals. Market risk means that security
prices in a market, sector or industry may move down. Downward
movements will reduce the value of your investment. Because of
management and market risk, there is no guarantee that the Fund
will achieve its investment goal or perform favorably compared
with competing funds.

Because the Portfolio invests in stocks, the price of the Fund's
shares-its net asset value per share (NAV)-fluctuates daily in
response to changes in the market value of the securities.

An investment in the Fund is not a bank deposit and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency. It is not a complete investment program.

For more information on the Portfolio's investment techniques,
please refer to "Other Investments and Risks."

Who Should Invest in the Fund?
You may want to invest in Growth & Income Fund if you:
* want to invest in the stocks of large companies, but prefer to
temper stock price fluctuations by combining growth with the
potential of a steady source of income from dividends
* are a long-term investor looking for steady, not aggressive,
growth potential
* are a first-time investor or want to invest primarily in just
one stock fund

Growth & Income Fund is not appropriate for investors who:
* want to avoid the risk and volatility associated with stock
market investing
* are saving for a short-term investment
* are not interested in generating current income

FUND PERFORMANCE The following charts show the Fund's
performance for the past calendar 10 years through December 31,
1999. The returns include the reinvestment of dividends and
distributions. As with all mutual funds, past performance is no
guarantee of future results.

Best quarter: 4th quarter 1998, +17.91%
Worst quarter: 3rd quarter 1990, -12.06%

Average Annual Total Returns

*The S&P 500 Index is an unmanaged group of stocks that differs
from the Fund's composition; it is not available for direct
investment.

YOUR EXPENSES This table shows fees and expenses you may pay if
you buy and hold shares of the Fund. You do not pay any sales
charge when you purchase or sell your shares. However, you pay
various other indirect expenses because the Fund or the Portfolio
pays fees and other expenses that reduce your investment return.

ANNUAL FUND OPERATING EXPENSES (a)
(expenses that are deducted from Fund assets)
Management fees(b) 0.75%
Distribution (12b-1) fees None
Other expenses 0.31%
Total annual fund operating expenses 1.06%

(a) Annual fund operating expenses consist of Fund expenses plus
the Fund's share of the expenses of the Portfolio. Fund
expenses include management fees and administrative costs such
as furnishing the Fund with offices and providing tax and
compliance services.
(b) Management fees include both the management fee and the
administrative fee charged to the Fund.

Expense Example

This example compares the cost of investing in the Fund to the
cost of investing in other mutual funds. It uses the same
hypothetical assumptions that other funds use in their
prospectuses:

* $10,000 initial investment
* 5% return each year
* the Fund's operating expenses remain constant as a percent of
net assets
* redemption at the end of each time period

EXPENSE EXAMPLE
1 yr 3 yrs 5 yrs 10 yrs
- ------------------------------------------------------------------
Growth & Income Fund, Class S $108 $337 $585 $1,294

<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights table explains the Fund's financial
performance. Consistent with other mutual funds, we show
information for the period of the Fund's operations. The Fund's
fiscal year runs from October 1 to September 30. The total
returns in the table represent the return that investors earned
assuming that they reinvested all dividends and distributions.
Certain information in the table reflects the financial results
for a single Fund share. This information is included in the
Fund's financial statements which, for the year ended September
30, 1999, have been audited by PricewaterhouseCoopers LLP,
independent accountants, whose report, along with the financial
statements, appears in the Fund's annual report. Arthur Andersen
LLP audited the Fund's financial statements for the years 1995
through 1998. To request the Fund's annual report, please call
800-322-1130.

<PAGE>

YOUR ACCOUNT

Class S shares of the Fund are no longer available for purchase by
new investors except for purchases by eligible investors as
described below. Shares outstanding on November 22, 1999, were
redesignated Class S shares. Like the existing shares from which
they were converted, Class S shares are no-load shares carrying no
sales charge or 12b-1 fee. If you own Class S shares, you may
continue to purchase additional Class S shares of the Fund for
your account or you may open another Class S share account. In
addition, you may open a new Class S share account if:

*as of October 31, 1999, you are a shareholder of any other Stein
Roe Fund, having purchased shares directly from Stein Roe, and
you are opening a new account by exchange or by dividend
reinvestment;
*you are a client of Stein Roe;
*you purchase shares (i) under an asset allocation program
sponsored by a financial advisor, broker-dealer, bank, trust
company or other intermediary or (ii) from certain financial
advisors who charge a fee for services and who, as of October 31,
1999, held shares of the Fund for its clients; or
*you purchase shares for an employee benefit plan whose records
are maintained by a trust company or plan administrator under an
investment program that included the Fund on October 31, 1999.

If you have questions about your eligibility to purchase Class S
shares of the Fund, please call 800-800-322-1130.

PURCHASING SHARES You will not pay a sales charge when you
purchase Fund shares. All shares must be purchased through your
employer's defined contribution plan. For more information about
how to purchase Fund shares through your employer or limitations
on the amount that may be purchased, please consult your employer.
Shares are sold to eligible defined contribution plans at the NAV
next determined after the Fund receives your payment. Each
purchase of shares through a broker-dealer, bank or other
intermediary that is an authorized agent or designee of the Trust
for the receipt of orders is made at the NAV next determined after
receipt of the order by the intermediary. The intermediary must
segregate any orders it receives after the close of regular
trading on the New York Stock Exchange (NYSE) and transmit those
orders separately for execution at the NAV next determined.

We value a security at fair value when events have occurred after
the last available market price and before the close of the NYSE
that materially affect the security's price. In the case of
foreign securities, this could include events occurring after the
close of the foreign market and before the close of the NYSE. The
Portfolio's foreign securities may trade on days when the NYSE is
closed. We will not price shares on days that the NYSE is closed
for trading. You will not be able to purchase or redeem shares
until the next NYSE-trading day.

SELLING SHARES Subject to restrictions imposed by your
employer's plan, Fund shares may be redeemed any day the NYSE is
open. For more information about how to redeem your Fund shares
through your employer's plan, including any charges that may be
imposed by the plan, please consult with your employer. The Fund
redeems shares at the NAV next determined after an order has been
accepted.

EXCHANGING SHARES Subject to your plan's restrictions, you may
redeem all or any portion of your Fund shares and use the proceeds
to purchase shares of any other no-load Stein Roe Fund available
through your employer's defined contribution plan. (An exchange
is commonly referred to as a "transfer.") Please be sure to read
the prospectus of the fund you wish to exchange into before using
the Exchange Privilege. Contact your plan administrator for
instructions on how to exchange your shares or to obtain
prospectuses of other no-load Stein Roe Funds available through
your plan. We may change, suspend or eliminate the exchange
service after notification to you. An exchange is a redemption
and purchase of shares for tax purposes, and you may realize a
gain or a loss when you exchange Fund shares for shares of another
fund.

DIVIDENDS AND DISTRIBUTIONS The Fund pays dividends quarterly.
The Fund distributes, at least once a year, virtually all of its
net investment income and net realized capital gains.

A dividend from net investment income represents the income the
Fund earns from dividends and interest paid on its investments,
after payment of the Fund's expenses.

A capital gain is the increase in value of a security that the
Portfolio holds. The gain is "unrealized" until the security is
sold. Each realized capital gain is either short-term or long-
term depending on whether the Portfolio held the security for one
year or less or more than one year, regardless of how long you
have held your Fund shares.

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

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

<PAGE>

OTHER INVESTMENTS AND RISKS

This section describes other securities and techniques, and risks
associated with them. The Statement of Additional Information
(SAI) contains additional information about the Fund's securities
and investment techniques (including other securities and
techniques) and the risks associated with them. Such risks could
cause you to lose money by investing in the Fund or could cause
the Fund's total return to decrease. The SAI also contains the
Fund's fundamental and non-fundamental investment policies.

The Board of Trustees can change the Fund's investment objective
without shareholder approval.

FUTURES The Portfolio uses futures to gain exposure to groups of
stocks or individual issuers. A future is an agreement to buy or
sell a specific amount of a financial instrument or physical
commodity for an agreed-upon price at a certain time in the
future. The Portfolio uses futures to invest cash pending direct
investments in stocks and to enhance its return. These
investments are efficient since they typically cost less than
direct investments in the underlying securities. However, the
Fund can lose money if the portfolio manager does not correctly
anticipate the market movements of those underlying securities.

<PAGE>

THE FUND'S MANAGEMENT

Stein Roe may use the services of AlphaTrade Inc., an affiliated
broker-dealer, when buying or selling equity securities for the
Portfolio, pursuant to procedures adopted by the Board of
Trustees.

PORTFOLIO MANAGERS Daniel K. Cantor has been portfolio manager
of the Portfolio since its inception in 1997 and has been manager
of the Fund since 1995. He joined Stein Roe in 1985 as an equity
analyst and served as an advisor to Stein Roe Private Capital
Management from 1992 to 1995. Mr. Cantor is a senior vice
president. A chartered financial analyst, he received a B.A.
degree from the University of Rochester and an M.B.A. degree from
the Wharton School of the University of Pennsylvania. Jeffrey C.
Kinzel is associate portfolio manager. He is a vice president of
Stein Roe and has been employed as an analyst since 1991. Mr.
Kinzel holds a B.A. degree from Northwestern University, a J.D.
degree from the University of Michigan Law School, and an M.B.A.
degree from the Wharton School of the University of Pennsylvania.

<PAGE>

FOR MORE INFORMATION

You may wish to read the Fund's SAI for more information. The
Statement of Additional Information contains information relating
to other series of Stein Roe Investment Trust that may not be
available as investment vehicles for your defined contribution
plan. The SAI is incorporated into this prospectus by reference,
which means that it is considered to be part of this prospectus
and you are deemed to have been told of its contents.

To obtain free copies of the Fund's semiannual and annual reports,
latest quarterly profile, or the SAI or to request other
information about the Fund, write or call:

Stein Roe Mutual Funds
One Financial Center
Boston, MA 02111
800-322-1130

www.steinroe.com

Investment Company Act file number of Liberty-Stein Roe Funds
Investment Trust: 811-04978

LIBERTY FUNDS DISTRIBUTOR, INC.

- --------------------------------------------------------------

<PAGE>

[STEIN ROE LOGO]

Stein Roe International Fund

Defined Contribution Plans Prospectus
February 1, 2000

This prospectus relates only to shares of the Fund purchased
through eligible employer-sponsored defined contribution plans.

2 The Fund
Investment Goal
Principal Investment Strategy
Principal Investment Risks
Fund Performance
Your Expenses

6 Financial Highlights

7 Your Account
Purchasing Shares
Determining Share Price (NAV)
Selling Shares
Exchanging Shares
Dividends and Distributions

10 Other Investments and Risks

11 The Fund's Management
Investment Adviser
Portfolio Manager
Master/Feeder Fund Structure

Please keep this prospectus as your reference manual.

<PAGE>

THE FUND
STEIN ROE INTERNATIONAL FUND

INVESTMENT GOAL Stein Roe International Fund seeks long-term
growth..

Because the Portfolio invests in stocks, the price of the Fund's
shares-its net asset value per share (NAV)-fluctuates daily in
response to changes in the market value of the securities.

The Portfolio's focus on certain market sectors may increase
volatility in the Fund's NAV. If sectors that the Portfolio
invests in do not perform well, the Fund's NAV could decrease.

An investment in the Fund is not a bank deposit and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency. It is not a complete investment program.

For more information on the Portfolio's investment techniques,
please refer to "Other Investments and Risks."

Who Should Invest in the Fund?

International Fund is not appropriate for investors who:
* want to avoid volatility or possible losses
* are saving for a short-term investment
* need regular current income

[bar chart]
YEAR-BY-YEAR TOTAL RETURNS
30% 33.71%
25%
20%
15%
10% 11.48%
5% 8.35%
0% 3.89%
- -5% -3.51%
1995 1996 1997 1998 1999
[ ] International Fund
[end of bar chart]

Best quarter: 4th quarter 1999, +18.42%
Worst quarter: 3rd quarter 1998, -16.80%

ANNUAL FUND OPERATING EXPENSES (a)
(expenses that are deducted from Fund assets)
Management fees(b) 1.00%
Distribution (12b-1) fees None
Other expenses 0.57%
Total annual fund operating expenses 1.57%

Expense Example
This example compares the cost of investing in the Fund to the
cost of investing in other mutual funds. It uses the same
hypothetical assumptions that other funds use in their
prospectuses:

* $10,000 initial investment
* 5% return each year
* the Fund's operating expenses remain constant as a percent of
net assets
* redemption at the end of each time period

EXPENSE EXAMPLE
1 yr 3 yrs 5 yrs 10 yrs
International Fund $160 $496 $855 $1,867

<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights table explains the Fund's financial
performance. Consistent with other mutual funds, we show
information for the period of the Fund's operations. The Fund's
fiscal year runs from October 1 to September 30. The total
returns in the table represent the return that investors earned
assuming that they reinvested all dividends and distributions.
Certain information in the table reflects the financial results
for a single Fund share. This information is included in the
Fund's financial statements which, for the year ended September
30, 1999, have been audited by PricewaterhouseCoopers LLP,
independent accountants, whose report, along with the financial
statements, appears in the Fund's annual report. Arthur Andersen
LLP audited the Fund's financial statements for the years 1995
through 1998. To request the Fund's annual report, please call
800-322-1130.

<PAGE>

YOUR ACCOUNT

DIVIDENDS AND DISTRIBUTIONS The Fund distributes, at least once
a year, virtually all of its net investment income and net
realized capital gains.

A dividend from net investment income represents the income the
Fund earns from dividends and interest paid on its investments,
after payment of the Fund's expenses.

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

<PAGE>

OTHER INVESTMENTS AND RISKS

This section describes other securities and techniques, and risks
associated with them. The Statement of Additional Information
(SAI) contains additional information about the Fund's securities
and investment techniques (including other securities and
techniques) and the risks associated with them. Such risks could
cause you to lose money by investing in the Fund or could cause
the Fund's total return to decrease. The SAI also contains the
Fund's fundamental and non-fundamental investment policies.

The Board of Trustees can change the Fund's investment objective
without shareholder approval.

Country Allocation
Countries Percentage of
Total Assets
------------------------------------
France 9.6%
Germany 6.3
United Kingdom 21.4
Japan 23.3
The Netherlands 6.9

<PAGE>

THE FUND'S MANAGEMENT

Stein Roe may use the services of AlphaTrade Inc., an affiliated
broker-dealer, when buying or selling equity securities for the
Portfolio, pursuant to procedures adopted by the Board of
Trustees.

<PAGE>

FOR MORE INFORMATION

To obtain free copies of the Fund's semiannual and annual reports,
latest quarterly profile, or the SAI or to request other
information about the Fund, write or call:

Stein Roe Mutual Funds
One Financial Center
Boston, MA 02111
800-322-1130

www.steinroe.com

Investment Company Act file number of Liberty-Stein Roe Funds
Investment Trust: 811-04978

LIBERTY FUNDS DISTRIBUTOR, INC.

- ---------------------------------------------------------------

<PAGE>

[STEIN ROE LOGO]

Stein Roe Young Investor Fund

Defined Contribution Plans Prospectus

February 1, 2000

This prospectus relates only to shares of the Fund purchased
through eligible employer-sponsored defined contribution plans.

2 The Fund
Investment Goal
Principal Investment Strategy
Principal Investment Risks
Fund Performance
Your Expenses

6 Financial Highlights

7 Your Account
Purchasing Shares
Determining Share Price (NAV)
Selling Shares
Exchanging Shares
Dividends and Distributions

9 Other Investments and Risks

10 The Fund's Management
Investment Adviser
Portfolio Managers
Master/Feeder Fund Structure

Please keep this prospectus as your reference manual.

<PAGE>

THE FUND-STEIN ROE YOUNG INVESTOR FUND

INVESTMENT GOAL Stein Roe Young Investor Fund seeks long-term
growth.

PRINCIPAL INVESTMENT RISKS There are two basic risks for all
mutual funds that invest in stocks: management risk and market
risk. These risks may cause you to lose money by investing in the
Fund.

Because the Portfolio invests in stocks, the price of the Fund's
shares-its net asset value per share (NAV)-fluctuates daily in
response to changes in the market value of the securities.

An investment in the Fund is not a bank deposit and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency. It is not a complete investment program.

For more information on the Portfolio's investment techniques,
please refer to "Other Investments and Risks."

Who Should Invest in the Fund?
You may want to invest in the Fund if you:
* are a long-term investor who wants to participate in the stock
market through a Fund that emphasizes growth companies
* can accept more investment risk and volatility than the general
stock market
* are attracted to the Fund's educational objective

The Fund is not appropriate for shareholders who:
* want to avoid volatility or possible losses
* want to save for a short-term investment
* need regular current income

Year-by-Year Total Returns
Year-by-year calendar total returns show the Fund's volatility
since it started. This chart illustrates performance differences
for each calendar year and provides an indication of the risks of
investing in the Fund.

[bar chart]
YEAR-BY-YEAR TOTAL RETURNS
45%
40%
35% 39.79% 35.10%
30% 31.68%
25% 26.28%
20%
15% 17.65%
10%
5%
0%
1995 1996 1997 1998 1999
[ ] Young Investor Fund
[end of bar chart]

Best quarter: 4th quarter 1999, +28.42%.
Worst quarter: 3rd quarter 1998, -16.46%

Average Annual Total Returns

* The S&P 500 Index is an unmanaged group of stocks that differs
from the Fund's composition; it is not available for direct
investment. Since inception performance for the S&P 500 Index is
from April 30, 1994 to December 31, 1999.

ANNUAL FUND OPERATING EXPENSES (a)
(expenses that are deducted from Fund assets)
Management fees (b) 0.76%
Distribution (12b-1) fees None
Other expenses 0.42%
Total annual fund operating expenses 1.18%

(a) Annual fund operating expenses consist of Fund expenses plus
the Fund's share of the expenses of the Portfolio. Fund
expenses include management fees and administrative costs such
as furnishing the Fund with offices and providing tax and
compliance services. They also include the expenses the Fund
pays for its educational materials.
(b) Management fees includes both the management fee and the
administrative fee charged to the Fund.

Expense Example

This example compares the cost of investing in the Fund to the
cost of investing in other mutual funds. It uses the same
hypothetical assumptions that other funds use in their
prospectuses:

* $10,000 initial investment
* 5% return each year
* the Fund's operating expenses remain constant as a percent of
net assets
* redemption at the end of each time period

EXPENSE EXAMPLE
1 yr 3 yrs 5 yrs 10 yrs
- ---------------------------------------------------------------
Young Investor Fund $120 $375 $649 $1,432

<PAGE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
YOUNG INVESTOR FUND
PER SHARE DATA
Years ended September 30,
1999 1998 1997 1996 1995
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 22.68 $ 22.75 $ 18.64 $ 14.29 $ 10.24
Income from investment operations
Net investment income (loss) (d) (0.10) (0.06) (0.04) 0.05 0.06
Net gains on securities (both realized
and unrealized) 5.44 0.31 4.79 4.86 4.07
Total income from investment operations 5.34 0.25 4.75 4.91 4.13
Less distributions
Dividends (from net investment income) - - (0.02) (0.05) (0.08)
Distributions (from capital gains) (0.60) (0.32) (0.62) (0.51) -
Total distributions (0.60) (0.32) (0.64) (0.56) (0.08)
Net asset value, end of period $ 27.42 $ 22.68 $ 22.75 $ 18.64 $ 14.29
Total return 23.89% 1.14% 26.37% 35.55% 40.58%

<PAGE>

YOUR ACCOUNT

We value a security at fair value when events have occurred after
the last available market price and before the close of the NYSE
that materially affect the security's price. In the case of
foreign securities, this could include events occurring after the
close of the foreign market and before the close of the NYSE. The
Portfolio's foreign securities may trade on days when the NYSE is
closed. We will not price shares on days that the NYSE is closed
for trading. You will not be able to purchase or redeem shares
until the next NYSE-trading day.

DIVIDENDS AND DISTRIBUTIONS The Fund distributes, at least once
a year, virtually all of its net investment income and net
realized capital gains.

A dividend from net investment income represents the income the
Fund earns from dividends and interest paid on its investments,
after payment of the Fund's expenses.

A capital gain is the increase in value of a security that the
Portfolio holds. The gain is "unrealized" until the security is
sold. Each realized capital gain is either short term or long
term depending on whether the Portfolio held the security for one
year or less or more than one year, regardless of how long you
have held your Fund shares.

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

<PAGE>

OTHER INVESTMENTS AND RISKS

This section describes other securities and techniques, and risks
associated with them. The Statement of Additional Information
(SAI) contains additional information about the Fund's securities
and investment techniques (including other securities and
techniques) and the risks associated with them. Such risks could
cause you to lose money by investing in the Fund or could cause
the Fund's total return to decrease. The SAI also contains the
Fund's fundamental and non-fundamental investment policies.

The Board of Trustees can change the Fund's investment objective
without shareholder approval.

<PAGE>

THE FUND'S MANAGEMENT

Stein Roe may use the services of AlphaTrade Inc., an affiliated
broker-dealer, when buying or selling equity securities for the
Portfolio, pursuant to procedures adopted by the Board of
Trustees.

PORTFOLIO MANAGERS Erik P. Gustafson and David P. Brady, CFA,
are the portfolio managers.

Mr. Brady joined Stein Roe in 1993 as an associate portfolio
manager of Stein Roe Special Fund. He currently is a senior vice
president and has been portfolio manager of the Fund since March
1995 and portfolio manager of Stein Roe Large Company Focus Fund
since June 1998. He holds a B.S. in finance, graduating Magna Cum
Laude, from the University of Arizona and an M.B.A. degree from
the University of Chicago.

MASTER/FEEDER FUND STRUCTURE Unlike mutual funds that directly
acquire and manage their own portfolio of securities, the Fund is
a "feeder" fund in a "master/feeder" structure. This means that
the Fund invests its assets in a larger "master" portfolio of
securities, the SR&F Growth Investor Portfolio, which has
investment objectives and policies substantially identical to
those of the Fund. The investment performance of the Fund depends
upon the investment performance of the Portfolio. If the
investment policies of the Portfolio and the Fund became
inconsistent, the Board of Trustees of the Fund can decide what
actions to take. Actions the Board of Trustees may recommend
include withdrawal of the Fund's assets from the Portfolio. For
more information on the master/feeder fund structure, see the SAI.

<PAGE>

FOR MORE INFORMATION

To obtain free copies of the Fund's semiannual and annual reports,
latest quarterly profile, or the SAI or to request other
information about the Fund, write or call:

Stein Roe Mutual Funds
One Financial Center
Boston, MA 02111
800-322-1130

www.steinroe.com

Investment Company Act file number of Liberty-Stein Roe Funds
Investment Trust: 811-04978

LIBERTY FUNDS DISTRIBUTOR, INC.

- ----------------------------------------------------------------

<PAGE>

[STEIN ROE LOGO]

Stein Roe Midcap Growth Fund

Defined Contribution Plans Prospectus

February 1, 2000

This prospectus relates only to shares of the Fund purchased
through eligible employer-sponsored defined contribution plans.

2 The Fund
Investment Goal
Principal Investment Strategy
Principal Investment Risks
Fund Performance
Your Expenses

6 Financial Highlights

7 Your Account
Purchasing Shares
Determining Share Price (NAV)
Selling Shares
Exchanging Shares
Dividends and Distributions

9 Other Investments and Risks

10 The Fund's Management
Investment Adviser
Portfolio Manager
Master/Feeder Fund Structure

Please keep this prospectus as your reference manual.

<PAGE>

THE FUND-STEIN ROE MIDCAP GROWTH FUND

INVESTMENT GOAL Stein Roe Midcap Growth Fund seeks long-term
growth.

PRINCIPAL INVESTMENT RISKS There are two basic risks for all
mutual funds that invest in stocks: management risk and market
risk. These risks may cause you to lose money by investing in the
Fund.

Because the Fund invests in stocks, the price of its shares-its
net asset value per share (NAV)-fluctuates daily in response to
changes in the market value of the securities.

Investments in stocks of midsized companies can be riskier than
investments in larger companies. Midsized companies often have
limited product lines, operating histories, markets, or financial
resources. They may depend heavily on a small management group.
Midsized companies may trade less frequently, in smaller volumes,
and fluctuate more sharply in price than larger companies. In
addition, they may not be widely followed by the investment
community, which can lower the demand for their stock.

Foreign securities are subject to special risks. Foreign stock
markets, especially in countries with developing stock markets,
can be extremely volatile. The liquidity of foreign securities
may be more limited than domestic securities, which means that the
Fund may at times be unable to sell them at desirable prices.
Fluctuations in currency exchange rates impact the value of
foreign securities. Brokerage commissions, custodial fees, and
other fees are generally higher for foreign investments. In
addition, foreign governments may impose withholding taxes which
would reduce the amount of income available to distribute to
shareholders. Other risks include: possible delays in settlement
of transactions; less publicly available information about
companies; the impact of political, social or diplomatic events;
and possible seizure, expropriation or nationalization of the
company or its assets.

An investment in the Fund is not a bank deposit and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency. It is not a complete investment program.

For more information on the Fund's investment techniques, please
refer to "Other Investments and Risks."

Who Should Invest in the Fund?

You may want to invest in Midcap Growth Fund if you:
* want a fund that emphasizes midcap companies
* are a long-term investor

[bar chart]
YEAR-BY-YEAR TOTAL RETURNS
45%
40% 42.73%
30%
25%
20%
15% 15.24%
10%
5%
0%
- -5%
1998 1999
[ ] Midcap Growth Fund
[end of bar chart]

Best quarter: 4th quarter 1999, +44.10%
Worst quarter: 3rd quarter 1998, -18.35%

Average Annual Total Returns

*The S&P 500 Index is an group of stocks that differs from the
Fund's composition; it is not available for direct investment.

YOUR EXPENSES This table shows fees and expenses you may pay if
you buy and hold shares of the Fund. You do not pay any sales
charge when you purchase or sell your shares. However, you pay
various other indirect expenses because the Fund pays fees and
other expenses that reduce your investment return.

Expense Example

This example compares the cost of investing in the Fund to the
cost of investing in other mutual funds. It uses the same
hypothetical assumptions that other funds use in their
prospectuses:

* $10,000 initial investment
* 5% return each year
* the Fund's operating expenses remain constant as a percent of
net assets
* redemption at the end of each time period

EXPENSE EXAMPLE
1 yr 3 yrs 5 yrs 10 yrs
- ------------------------------------------------------------
Midcap Growth Fund $127 $458 $812 $1,810

<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights table explains the Fund's financial
performance. Consistent with other mutual funds, we show
information for the period of the Fund's operations. The Fund's
fiscal year runs from October 1 to September 30. The total
returns in the table represent the return that investors earned
assuming that they reinvested all dividends and distributions.
Certain information in the table reflects the financial results
for a single Fund share. This information is included in the
Fund's financial statements which, for the year ended September
30, 1999, have been audited by PricewaterhouseCoopers LLP,
independent accountants, whose report, along with the financial
statements, appears in the Fund's annual report. Arthur Andersen
LLP audited the Fund's financial statements for the years 1997 and
1998. To request the Fund's annual report, please call 800-322-
1130.

<PAGE>

YOUR ACCOUNT

We value a security at fair value when events have occurred after
the last available market price and before the close of the NYSE
that materially affect the security's price. In the case of
foreign securities, this could include events occurring after the
close of the foreign market and before the close of the NYSE. The
Fund's foreign securities may trade on days when the NYSE is
closed. We will not price shares on days that the NYSE is closed
for trading. You will not be able to purchase or redeem shares
until the next NYSE-trading day.

Dividends and Distributions
The Fund distributes, at least once a year, virtually all of its
net investment income and net realized capital gains.

A dividend from net investment income represents the income the
Fund earns from dividends and interest paid on its investments,
after payment of the Fund's expenses.

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

<PAGE>

OTHER INVESTMENTS AND RISKS

The first portion of this prospectus describes the Fund's
principal investment strategy and principal investment risks. In
seeking to meet its investment goals, the Fund also may invest in
other securities and use other investment techniques. The Fund
may elect not to buy any of these other securities or use any of
these other investment techniques. The Fund may not always
achieve its investment goal.

This section describes other securities and techniques, and risks
associated with them. The Statement of Additional Information
(SAI) contains additional information about the Fund's securities
and investment techniques (including other securities and
techniques) and the risks associated with them. Such risks could
cause you to lose money by investing in the Fund or could cause
the Fund's total return to decrease. The SAI also contains the
Fund's fundamental and non-fundamental investment policies.

The Board of Trustees can change the Fund's investment objective
without shareholder approval.

FUTURES The Fund uses futures to gain exposure to groups of
stocks or individual issuers. It uses futures to invest cash
pending direct investments in stocks and to enhance their return.
A future is an agreement to buy or sell a specific amount of a
financial instrument or physical commodity for an agreed-upon
price at a certain time in the future. Futures and options are
efficient since they typically cost less than direct investments
in the underlying securities. However, the Fund can lose money if
the portfolio manager does not correctly anticipate the market
movements of those underlying securities.

PORTFOLIO TURNOVER There are no limits on turnover. Turnover
may vary significantly from year to year. Stein Roe does not
expect it to exceed 100% under normal conditions. The Fund
generally intends to purchase securities for long-term investment
although, to a limited extent, it may purchase securities
(including securities purchased in initial public offerings) in
anticipation of relatively short-term price gains. Portfolio
turnover typically produces capital gains or losses resulting in
tax consequences for Fund investors. It also increases
transaction expenses, which reduce the Fund's return.

TEMPORARY DEFENSIVE POSITIONS When Stein Roe believes that a
temporary defensive position is necessary, the Fund may invest,
without limit, in high-quality debt securities or hold assets in
cash and cash equivalents. Stein Roe is not required to take a
temporary defensive position, and market conditions may prevent
such an action. The Fund may not achieve its investment objective
if it takes a temporary defensive position.

INTERFUND LENDING PROGRAM The Fund may lend money to and borrow
money from other funds advised by Stein Roe. It will do so when
Stein Roe believes such lending or borrowing is necessary and
appropriate. Borrowing costs will be the same as or lower than
the costs of a bank loan.

<PAGE>

THE FUND'S MANAGEMENT

INVESTMENT ADVISER Stein Roe & Farnham Incorporated, One South
Wacker Drive, Chicago, IL 60606, manages the day-to-day operations
of the Fund. Stein Roe (and its predecessor) has advised and
managed mutual funds since 1949. For the fiscal year ended
September 30, 1999, aggregate fees paid by the Fund to Stein Roe
amounted to 0.90% of average net assets.

Stein Roe may use the services of AlphaTrade Inc., an affiliated
broker-dealer, when buying or selling equity securities for the
Fund, pursuant to procedures adopted by the Board of Trustees.

PORTFOLIO MANAGER Steve D. Hayward has been the Fund's portfolio
manager since November 1999. Mr. Hayward joined Stein Roe as a
portfolio manager in November 1999. He served as vice president,
investments for M & I Investment Management from 1993 to 1999,
where he managed the Marshall Mid-Cap Fund and Marshall Small-Cap
Growth Fund. Mr. Hayward earned a B.A. degree from North Park
College and a M.B.A. degree in finance from Loyola University.

MASTER/FEEDER FUND STRUCTURE The Fund could convert into a
"feeder" fund in a "master/feeder" structure at some future date.
This means that all of the Fund's assets would be invested in a
larger "master" portfolio of securities that has investment
objectives and policies substantially identical to those of the
Fund.

<PAGE>

FOR MORE INFORMATION

To obtain free copies of the Fund's semiannual and annual reports,
latest quarterly profile, or the SAI or to request other
information about the Fund, write or call:

Stein Roe Mutual Funds
One Financial Center
Boston, MA 02111
800-322-1130

www.steinroe.com

Investment Company Act file number of Liberty-Stein Roe Funds
Investment Trust: 811-04978

LIBERTY FUNDS DISTRIBUTOR, INC.

- -------------------------------------------------------------

<PAGE>

[STEIN ROE LOGO]

Stein Roe Large Company Focus Fund

Defined Contribution Plans Prospectus

February 1, 2000

This prospectus relates only to shares of the Fund purchased
through eligible employer-sponsored defined contribution plans.

2 The Fund
Investment Goal
Principal Investment Strategy
Principal Investment Risks
Fund Performance
Your Expenses

6 Financial Highlights

7 Your Account
Purchasing Shares
Determining Share Price (NAV)
Selling Shares
Exchanging Shares
Dividends and Distributions

9 Other Investments and Risks

10 The Fund's Management
Investment Adviser
Portfolio Manager
Master/Feeder Fund Structure

Please keep this prospectus as your reference manual.

<PAGE>

DEFINING CAPITALIZATION

THE FUND-STEIN ROE LARGE COMPANY FOCUS FUND

INVESTMENT GOAL Stein Roe Large Company Focus Fund seeks long-
term growth.

PRINCIPAL INVESTMENT RISKS There are two basic risks for all
mutual funds that invest in stocks: management risk and market
risk. These risks may cause you to lose money by investing in the
Fund.

Because the Fund invests in stocks, the price of its shares-its
net asset value per share (NAV)-fluctuates daily in response to
changes in the market value of the securities.

Foreign securities are subject to special risks. Foreign stock
markets, especially in countries with developing stock markets,
can be extremely volatile. The liquidity of foreign securities
may be more limited than domestic securities, which means that the
Fund may at times be unable to sell them at desirable prices.
Fluctuations in currency exchange rates impact the value of
foreign securities. Brokerage commissions, custodial fees, and
other fees are generally higher for foreign investments. In
addition, foreign governments may impose withholding taxes which
would reduce the amount of income available to distribute to
shareholders. Other risks include: possible delays in settlement
of transactions; less publicly available information about
companies; the impact of political, social or diplomatic events;
and possible seizure, expropriation or nationalization of the
company or its assets.

An investment in the Fund is not a bank deposit and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency. It is not a complete investment program.

For more information on the Fund's investment techniques, please
refer to "Other Investments and Risks."

Who Should Invest in the Fund?

Large Company Focus Fund is not appropriate for investors who:

* want to avoid the greater price volatility associated with a
fund that invests in a limited number of stocks
* are saving for a short-term investment
* need regular current income

Year-by-Year Total Returns

This chart illustrates performance for the one-year period ended
Dec. 31, 1999 and provides an indication of the risks of investing
in the Fund.

[bar chart]
ANNUAL TOTAL RETURNS
40%
35% 37.99%
30%
25%
20%
15%
10%
5%
0%
- -5%
1999
[ ] Large Company Focus Fund
[end of bar chart]

Best quarter: 4th quarter 1999, +20.90%
Worst quarter: 3rd quarter 1998, -12.87%

Average Annual Total Returns

YOUR EXPENSES This table shows fees and expenses you may pay if
you buy and hold shares of the Fund. You do not pay any sales
charge when you purchase or sell your shares.(a) However, you pay
various other indirect expenses because the Fund pays fees and
other expenses that reduce your investment return.

(a) There is a $7 charge for wiring redemption proceeds to your
bank. A fee of $5 per quarter may be charged to accounts that
fall below the required minimum balance.
(b) Fund expenses include management fees and administrative costs
such as furnishing the Fund with offices and providing tax and
compliance services.
(c) Management fees include both the management fee and the
administrative fee charged to the Fund.
(d) Stein Roe will reimburse the Fund if its ordinary operating
expenses exceed 1.50% of annual average net assets. The
expense undertaking expires on January 31, 2001. After
reimbursement, management fees will be 0.79%. A reimbursement
lowers the expense ratio and increases overall return to
investors.

Expense Example

This example compares the cost of investing in the Fund to the
cost of investing in other mutual funds. It uses the same
hypothetical assumptions that other funds use in their
prospectuses:

* $10,000 initial investment
* 5% return each year
* the Fund's operating expenses remain constant as a percent of
net assets
* redemption at the end of each time period

EXPENSE EXAMPLE
1 yr 3 yrs 5 yrs 10 yrs
- -----------------------------------------------------------------
Large Company Focus Fund $153 $497 $866 $1,902

<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights table explains the Fund's financial
performance. Consistent with other mutual funds, we show
information for the period of the Fund's operations. The Fund's
fiscal year runs from October 1 to September 30. The total
returns in the table represent the return that investors earned
assuming that they reinvested all dividends and distributions.
Certain information in the table reflects the financial results
for a single Fund share. This information is included in the
Fund's financial statements which, for the year ended September
30, 1999, have been audited by PricewaterhouseCoopers LLP,
independent accountants, whose report, along with the financial
statements, appears in the Fund's annual report. Arthur Andersen
LLP audited the Fund's financial statements for 1998. To request
the Fund's annual report, please call 800-322-1130.

<PAGE>

YOUR ACCOUNT

We value a security at fair value when events have occurred after
the last available market price and before the close of the NYSE
that materially affect the security's price. In the case of
foreign securities, this could include events occurring after the
close of the foreign market and before the close of the NYSE. The
Fund's foreign securities may trade on days when the NYSE is
closed. We will not price shares on days that the NYSE is closed
for trading. You will not be able to purchase or redeem shares
until the next NYSE-trading day.

DIVIDENDS AND DISTRIBUTIONS The Fund distributes, at least once
a year, virtually all of its net investment income and net
realized capital gains.

A dividend from net investment income represents the income the
Fund earns from dividends and interest paid on its investments,
after payment of the Fund's expenses.

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

<PAGE>

OTHER INVESTMENTS AND RISKS

This section describes other securities and techniques, and risks
associated with them. The Statement of Additional Information
(SAI) contains additional information about the Fund's securities
and investment techniques (including other securities and
techniques) and the risks associated with them. Such risks could
cause you to lose money by investing in the Fund or could cause
the Fund's total return to decrease. The SAI also contains the
Fund's fundamental and non-fundamental investment policies.

The Board of Trustees can change the Fund's investment objective
without shareholder approval.

<PAGE>

THE FUND'S MANAGEMENT

Stein Roe may use the services of AlphaTrade Inc., an affiliated
broker-dealer, when buying or selling equity securities for the
Fund's portfolio, pursuant to procedures adopted by the Board of
Trustees.

PORTFOLIO MANAGER David P. Brady has been portfolio manager of
the Fund since its inception in 1998. Mr. Brady has been
portfolio manager of Stein Roe Young Investor Fund since 1995 and
associate portfolio manager of Growth Stock Fund since 1996. Mr.
Brady joined Stein Roe in 1993 and was employed as an associate
portfolio manager of Stein Roe Special Fund until 1995, and is
currently a senior vice president. He holds a B.S. degree in
finance, graduating Magna Cum Laude from the University of
Arizona, and an M.B.A. degree from the University of Chicago.

<PAGE>

FOR MORE INFORMATION

To obtain free copies of the Fund's semiannual and annual reports,
latest quarterly profile, or the SAI or to request other
information about the Fund, write or call:

Stein Roe Mutual Funds
One Financial Center
Boston, MA 02111
800-322-1130

www.steinroe.com

Investment Company Act file number of Liberty-Stein Roe Funds
Investment Trust: 811-04978

LIBERTY FUNDS DISTRIBUTOR, INC.

- ---------------------------------------------------------------

<PAGE>

[STEIN ROE LOGO]

Stein Roe Small Company Growth Fund

Defined Contribution Plans Prospectus

February 1, 2000

This prospectus relates only to shares of the Fund purchased
through eligible employer-sponsored defined contribution plans.

2 The Fund
Investment Goal
Principal Investment Strategy
Principal Investment Risks
Fund Performance
Your Expenses

6 Financial Highlights

7 Your Account
Purchasing Shares
Determining Share Price (NAV)
Selling Shares
Exchanging Shares
Dividends and Distributions

9 Other Investments and Risks

10 The Fund's Management
Investment Adviser
Portfolio Manager
Master/Feeder Fund Structure

Please keep this prospectus as your reference manual.

<PAGE>

DEFINING CAPITALIZATION

THE FUND-STEIN ROE SMALL COMPANY GROWTH FUND

INVESTMENT GOAL Stein Roe Small Company Growth Fund seeks long-
term growth.

PRINCIPAL INVESTMENT STRATEGY Under normal market conditions,
the Fund invests at least 65% of its assets in common stocks of
small-cap companies. The Fund may invest in new issuers during
periods when new issues are being brought to market. The Fund may
also invest in midcap companies. The Fund invests in companies
that compete within large and growing markets and that have the
ability to grow their market share. To find companies with these
growth characteristics, the portfolio managers seek out companies
that are-or, in the portfolio managers' judgment, have the
potential to be-a market share leader within their respective
industry. They also look for companies with strong management
teams that participate in the ownership of the companies.

What are market and management risks? Management risk means that
stock selections and other investment decisions might produce
losses or cause the Fund to underperform when compared to other
funds with similar goals. Market risk means that security prices
in a market, sector or industry may move down. Downward movements
will reduce the value of your investment. Because of management
and market risk, there is no guarantee that the Fund will achieve
its investment goal or perform favorably compared with competing
funds.

The price of the Fund's shares-its net asset value (NAV)-may
fluctuate daily in response to changes in the market value of the
securities.

Small- and Medium-Cap Companies
The securities the Fund purchases may involve certain special
risks. Small- and medium-sized companies and new issuers often
have limited product lines, operating histories, markets, or
financial resources. They also may depend heavily on a small
management group. Small-cap companies in particular are more
likely to fail or prove unable to grow. Their securities may
trade less frequently, in smaller volumes, and fluctuate more
sharply in price than securities of larger companies. In addition,
these risks could negatively impact the Fund's performance or
yield.

An investment in the Fund is not a bank deposit and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency. It is not a complete investment program.

For more information on the Fund's investment techniques, please
refer to "Other Investments and Risks."

Who Should Invest in the Fund?

You may want to invest in the Fund if you:
* are a long-term investor who seeks the potentially greater
growth opportunities of small-cap stocks and can tolerate their
greater risks
* can tolerate fluctuations in the Fund's NAV due to greater
volatility of small-cap companies

The Fund is not appropriate for investors who:
* already have significant holdings in small-cap stocks or mutual
funds
* want to avoid volatility or possible losses
* are saving for a short-term investment
* need regular current income

[bar chart]
YEAR-BY-YEAR TOTAL RETURNS*
50% 50.91%
40%
30%
20%
10% 19.93%
0% 7.85%
- -5%
1997 1998 1999
[ ] Small Company Growth Fund
[end of bar chart]

Best quarter: 4th quarter 1999, +36.33%
Worst quarter: 3rd quarter 1998, -19.32%

Average Annual Total Returns

*On February 2, 1999, the Colonial Aggressive Growth Fund
(Predecessor Fund) was reorganized into the Fund. The
Predecessor Fund had multiple classes of shares, consisting of
Class A, Class B, and Class C shares. The performance
information contained in the table prior to February 2, 1999, is
based on the historical returns of the Predecessor Fund's Class
A shares, which, unlike the Fund, had a 0.25% 12b-1 fee. The
table does not reflect the sales load of the Predecessor Fund's
Class A shares.
**The S&P Small-Cap 600 Index is an unmanaged group of stocks that
differs from the Fund's composition; it is not available for
direct investment. Since inception performance for the S&P
Small-Cap 600 Index is from March 31, 1996 to December 31, 1999.

YOUR EXPENSES This table shows fees and expenses you may pay if
you buy and hold shares of the Fund. You do not pay any sales
charge when you purchase or sell your shares. However, you pay
various other indirect expenses because the Fund pays fees and
other expenses that reduce your investment return.

ANNUAL FUND OPERATING EXPENSES (a)
(expenses that are deducted from Fund assets)
Management fees (b) 1.00%
Distribution (12b-1) fees None
Other expenses 2.73%
Total annual fund operating expenses(c) 3.73%
Less expense reimbursement 2.23%
Net expenses 1.50%

(a) Management fees reflect increases effective February 1999. In
addition, the Fund's 12b-1 fee of 0.25% and load of 5.75% were
eliminated effective February 1999. Fund expenses include
management fees and administrative costs such as furnishing
the Fund with offices and providing tax and compliance
services.
(b) Management fees include both the management fee and the
administrative fee charged to the Fund.
(c) Stein Roe will reimburse the Fund if its annual ordinary
operating expenses exceed 1.50% of average daily net assets.
This commitment expires on January 31, 2001. After
reimbursement, management fees will be 0.0% and other expenses
will be 1.50%. A reimbursement lowers the expense ratio and
increases overall return to investors.

Expense Example

This example compares the cost of investing in the Fund to the
cost of investing in other mutual funds. It uses the same
hypothetical assumptions that other funds use in their
prospectuses:

* $10,000 initial investment
* 5% return each year
* the Fund's operating expenses remain constant as a percent of
net assets
* redemption at the end of each time period

EXPENSE EXAMPLE
1 yr 3 yrs 5 yrs 10 yrs
- -----------------------------------------------------------------
Small Company Growth Fund $153 $935 $1,737 $3,832

<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights table explains the Fund's financial
performance. Consistent with other mutual funds, we show
information for the period of a Fund's operations. The Fund's
fiscal year ran from July 1 to June 30 through June 30, 1999, when
it was changed to September 30. The total returns in the table
represent the return that investors earned assuming that they
reinvested all dividends and distributions. Information Fund
through June 30, 1998, has been derived from the financial
statements of Colonial Aggressive Growth Fund (Predecessor Fund).
Certain information in the table reflects the financial results
for a single Fund share, and certain information reflects the
financial results for a single share of Class A of the Predecessor
Fund outstanding throughout the period from March 31, 1996 through
June 30, 1998. PricewaterhouseCoopers LLP, independent
accountants, has audited the information for all periods
presented. To request an annual report, please call 800-338-2550.

<PAGE>

YOUR ACCOUNT

We value a security at fair value when events have occurred after
the last available market price and before the close of the NYSE
that materially affect the security's price.

Dividends and Distributions
The Fund distributes, at least once a year, virtually all of its
net investment income and net realized capital gains.

A dividend from net investment income represents the income the
Fund earns from dividends and interest paid on its investments,
after payment of the Fund's expenses.

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

<PAGE>

OTHER INVESTMENTS AND RISKS

This section describes other securities and techniques, and risks
associated with them. The Statement of Additional Information
(SAI) contains additional information about the Fund's securities
and investment techniques (including other securities and
techniques) and the risks associated with them. Such risks could
cause you to lose money by investing in the Fund or could cause
the Fund's total return to decrease. The SAI also contains the
Fund's fundamental and non-fundamental investment policies.

The Board of Trustees can change the Fund's investment objective
without shareholder approval.

SHORT SALES The Fund may make short sales of securities. Short
selling involves the sale of borrowed securities. When the Fund
thinks the price of a stock will decline, it borrows the stock and
then sells the borrowed stock. When the Fund has to return the
borrowed stock, it tries to buy the stock at a lower price. If
the Fund is successful, it has a capital gain. If the Fund is
unsuccessful and buys the stock at a higher price than the price
at which it sold the stock, the Fund has a capital loss. The
Fund's capital gains and losses may result in federal income tax
consequences to the Fund's shareholders. Short selling involves
certain risks. The Fund could have a loss if the borrowed
security increases in value and if the purchased security declines
in value.

PORTFOLIO TURNOVER There are no limits on turnover. Turnover
may vary significantly from year to year. Stein Roe does not
expect it to exceed 150% under normal conditions. The Fund
generally intends to purchase securities for long-term investment
although, to a limited extent, it may purchase securities
(including securities purchased in initial public offerings) in
anticipation of relatively short-term price gains. Portfolio
turnover typically produces capital gains or losses for Fund
shareholders resulting in tax consequences for Fund investors. It
also increases transaction expenses, which reduce the Fund's
return.

INTERFUND LENDING PROGRAM The Fund may lend money to and borrow
money from other funds advised by Stein Roe. The Fund will do so
when Stein Roe believes such lending or borrowing is necessary and
appropriate. Borrowing costs will be the same as or lower than
the costs of a bank loan.

<PAGE>

THE FUND'S MANAGEMENT

Stein Roe may use the services of AlphaTrade Inc., an affiliated
broker-dealer, when buying or selling equity securities for the
Fund, pursuant to procedures adopted by the Board of Trustees.

PORTFOLIO MANAGER William M. Garrison has been the portfolio
manager for the Fund since September 1998. Mr. Garrison has been
employed by Stein Roe since 1989 as an equity research analyst and
is a vice president. In addition, Mr. Garrison has served as
associate portfolio manager for SR&F Balanced Portfolio since
1995. He earned an A.B. degree from Princeton University and an
M.B.A. degree from the University of Chicago.

<PAGE>

FOR MORE INFORMATION

You may wish to read the Fund's SAI for more information. The SAI
is incorporated into this prospectus by reference, which means
that it is legally considered to be part of this prospectus and
you are deemed to have been told of its contents.

To obtain free copies of the Fund's semiannual and annual reports,
latest quarterly profile, or the SAI or to request other
information about the Fund, write or call:

Stein Roe Mutual Funds
One Financial Center
Boston, MA 02111
800-322-1130

www.steinroe.com

Investment Company Act file number of Liberty-Stein Roe Funds
Investment Trust: 811-04978

LIBERTY FUNDS DISTRIBUTOR, INC.

- -----------------------------------------------------------------

<PAGE>

[STEIN ROE LOGO]

Stein Roe Balanced Fund

Defined Contribution Plans Prospectus

February 1, 2000

This prospectus relates only to shares of the Fund purchased
through eligible employer-sponsored defined contribution plans.

2 The Fund
Investment Goal
Principal Investment Strategy
Principal Investment Risks
Fund Performance
Your Expenses

6 Financial Highlights

7 Your Account
Purchasing Shares
Determining Share Price (NAV)
Selling Shares
Exchanging Shares
Dividends and Distributions

9 Other Investments and Risks

10 The Fund's Management
Investment Adviser
Portfolio Managers
Master/Feeder Fund Structure

Please keep this prospectus as your reference manual.

<PAGE>

DEFINING CAPITALIZATION

THE FUND-STEIN ROE BALANCED FUND

INVESTMENT GOAL Stein Roe Balanced Fund seeks long-term growth
of capital and current income consistent with reasonable
investment risk.

PRINCIPAL INVESTMENT STRATEGY Balanced Fund invests all of its
assets in SR&F Balanced Portfolio as part of a master fund/feeder
fund structure. Balanced Portfolio allocates its investments
among common stocks and securities convertible into common stocks,
bonds and cash. The Portfolio invests primarily in well-
established companies that have large market capitalizations. The
portfolio managers may invest in a company because it has a
history of steady to improving sales or earnings growth that they
believe can be sustained. They also may invest in a company
because they believe its stock is priced attractively compared to
the value of its assets. The Portfolio may invest up to 25% of
its assets in foreign stocks.

The Portfolio also invests at least 25% of its assets in bonds.
The Portfolio purchases bonds that are "investment grade"-that is,
within the four highest investment grades assigned by a nationally
recognized statistical rating organization. The Portfolio may
invest in unrated bonds if the portfolio managers believe that the
securities are investment-grade quality. To select debt
securities for the Portfolio, the portfolio managers consider a
bond's expected income together with its potential for price gains
or losses.

What are market and management risks? Management risk means that
Stein Roe's stock and bond selections and other investment
decisions might produce losses or cause the Fund to underperform
when compared to other funds with similar goals. Market risk
means that security prices in a market, sector or industry may
move down. Downward movements will reduce the value of your
investment. Because of management and market risk, there is no
guarantee that the Fund will achieve its investment goal or
perform favorably compared with competing funds.

Debt securities. The Portfolio's investments in debt securities,
generally bonds, expose the Fund to interest rate risk. Interest
rate risk is the risk of a decline in the price of a bond when
interest rates increase or decrease. In general, if interest
rates rise, bond prices fall; and if interest rates fall, bond
prices rise. Changes in the value of bonds will not affect the
amount of income the Fund receives from them but will affect the
value of the Fund's shares. Interest rate risk is generally
greater for bonds having longer maturities.

An investment in the Fund is not a bank deposit and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency. It is not a complete investment program.

For more information on the Portfolio's investment techniques,
please refer to "Other Investments and Risks."

Who Should Invest in the Fund?

Balanced Fund is not appropriate for investors who:
* want to avoid volatility or possible losses
* are saving for a short-term investment
* are not interested in generating current income

Best quarter: 4th quarter 1998, +12.53%
Worst quarter: 3rd quarter 1998, -9.49%

Average Annual Total Returns

AVERAGE ANNUAL TOTAL RETURNS
Periods ending December 31, 1999
1 yr 5 yr 10 yr
Balanced Fund 47.95% 16.26% 12.13%
S&P 500 Index* 21.03% 28.54% 18.19%

*The S&P 500 Index is an unmanaged group of stocks that differs
from the Fund's composition; it is not available for direct
investment.

ANNUAL FUND OPERATING EXPENSES (a)
(expenses that are deducted from Fund assets)
Management fees(b) 0.70%
Distribution (12b-1) fees None
Other expenses 0.44%
Total annual fund operating expenses 1.14%

Expense Example

This example compares the cost of investing in the Fund to the
cost of investing in other mutual funds. It uses the same
hypothetical assumptions that other funds use in their
prospectuses:

* $10,000 initial investment
* 5% return each year
* the Fund's operating expenses remain constant as a percent of
net assets
* redemption at the end of each time period

EXPENSE EXAMPLE
1 yr 3 yrs 5 yrs 10 yrs
- ---------------------------------------------------------------
Balanced Fund $116 $362 $628 $1,386

<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights table explains the Fund's financial
performance. Consistent with other mutual funds, we show
information for the period of the Fund's operations. The Fund's
fiscal year runs from October 1 to September 30. The total
returns in the table represent the return that investors earned
assuming that they reinvested all dividends and distributions.
Certain information in the table reflects the financial results
for a single Fund share. This information is included in the
Fund's financial statements which, for the year ended September
30, 1999, have been audited by PricewaterhouseCoopers LLP,
independent accountants, whose report, along with the financial
statements, appears in the Fund's annual report. Arthur Andersen
LLP audited the Fund's financial statements for the years 1995
through 1998. To request the Fund's annual report, please call
800-322-1130.

<PAGE>

YOUR ACCOUNT

PURCHASING SHARES You will not pay a sales charge when you
purchase Fund shares. All shares must be purchased through your
employer's defined contribution plan. For more information about
how to purchase Fund shares through your employer or limitations
on the amount that may be purchased, please consult your employer.
Shares are sold to eligible defined contribution plans at the NAV
next determined after receipt of the Fund receives your payment.
Each purchase of shares through a broker-dealer, bank or other
intermediary that is an authorized agent or designee of the Trust
for the receipt of orders is made at the NAV next determined after
receipt of the order by the intermediary. The intermediary must
segregate any orders it receives after the close of regular
trading on the New York Stock Exchange (NYSE) and transmit those
orders separately for execution at the NAV next determined.

We value a security at fair value when events have occurred after
the last available market price and before the close of the NYSE
that materially affect the security's price. In the case of
foreign securities, this could include events occurring after the
close of the foreign market and before the close of the NYSE. The
Portfolio's foreign securities may trade on days when the NYSE is
closed. We will not price shares on days that the NYSE is closed
for trading. You will not be able to purchase or redeem shares
until the next NYSE-trading day.

Dividends and Distributions
The Fund pays dividends quarterly. It distributes, at least once
a year, virtually all of its net realized capital gains.

A dividend from net investment income represents the income the
Fund earns from dividends and interest paid on its investments,
after payment of the Fund's expenses.

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

<PAGE>

OTHER INVESTMENTS AND RISKS

This section describes other securities and techniques, and risks
associated with them. The Statement of Additional Information
(SAI) contains additional information about the Fund's securities
and investment techniques (including other securities and
techniques) and the risks associated with them. Such risks could
cause you to lose money by investing in the Fund or could cause
the Fund's total return to decrease. The SAI also contains the
Fund's fundamental and non-fundamental investment policies.

The Board of Trustees can change the Fund's investment objective
without shareholder approval.

FUTURES AND OPTIONS The Portfolio uses futures to gain exposure
to groups of stocks or individual issuers. It uses futures to
invest cash pending direct investments in stocks and to enhance
their return. It also uses futures and options on futures to
decrease equity exposure or to adjust interest rate duration of
its fixed-income security holdings. The Portfolio uses options on
securities to earn additional income or to hedge against price
erosion in the underlying security for the intermediate term. A
future is an agreement to buy or sell a specific amount of a
financial instrument or physical commodity for an agreed-upon
price at a certain time in the future. Futures and options are
efficient since they typically cost less than direct investments
in the underlying securities. However, the Fund can lose money if
the portfolio manager does not correctly anticipate the market
movements of those underlying securities.

SHORT SALES The Portfolio may make short sales of securities.
Short selling involves the sale of borrowed securities. When the
Fund thinks the price of a stock will decline, it borrows the
stock and then sells the borrowed stock. When the Fund has to
return the borrowed stock, it tries to buy the stock at a lower
price. If the Fund is successful, it has a capital gain. If the
Fund is unsuccessful and buys the stock at a higher price than the
price at which it sold the stock, the Fund has a capital loss.
The Fund's capital gains and losses may result in federal income
tax consequences to the Fund's shareholders. Short selling
involves certain risks. The Fund could have a loss if the
borrowed security increases in value and if the purchased security
declines in value.

<PAGE>

THE FUND'S MANAGEMENT

Stein Roe may use the services of AlphaTrade Inc., an affiliated
broker-dealer, when buying or selling equity securities for the
Portfolio, pursuant to procedures adopted by the Board of
Trustees.

PORTFOLIO MANAGERS Harvey B. Hirschhorn has been portfolio
manager of the Portfolio since its inception in 1997 and has
managed the Fund since 1996. He joined Stein Roe in 1973 and is
executive vice president and chief economist and investment
strategist. He holds an A.B. degree from Rutgers College and an
M.B.A. degree from the University of Chicago, and is a chartered
financial analyst.

William Garrison and Sandra Knight have been associate portfolio
managers since 1995. Mr. Garrison joined Stein Roe in 1989 as an
equity research analyst and is a vice president. He received his
A.B. degree from Princeton University and an M.B.A. degree from
the University of Chicago. Ms. Knight is a vice president of
Stein Roe, which she joined in 1991 as a quantitative analyst.
She earned a B.S. degree from Lawrence Technological University
and an M.B.A. degree from Loyola University of Chicago.

<PAGE>

FOR MORE INFORMATION

To obtain free copies of the Fund's semiannual and annual reports,
latest quarterly profile, or the SAI or to request other
information about the Fund, write or call:

Stein Roe Mutual Funds
One Financial Center
Boston, MA 02111
800-322-1130

www.steinroe.com

Investment Company Act file number of Liberty-Stein Roe Funds
Investment Trust: 811-04978

LIBERTY FUNDS DISTRIBUTOR, INC.

- --------------------------------------------------------------

<PAGE>

[STEIN ROE LOGO]

Stein Roe Growth Stock Fund

Defined Contribution Plans Prospectus

February 1, 2000

This prospectus relates only to shares of the Fund purchased
through eligible employer-sponsored defined contribution plans.

2 The Fund
Investment Goal
Principal Investment Strategy
Principal Investment Risks
Fund Performance
Your Expenses

6 Financial Highlights

7 Your Account
Purchasing Shares
Determining Share Price (NAV)
Selling Shares
Exchanging Shares
Dividends and Distributions

10 Other Investments and Risks

11 The Fund's Management
Investment Adviser
Portfolio Manager
Master/Feeder Fund Structure

Please keep this prospectus as your reference manual.

<PAGE>

DEFINING CAPITALIZATION

THE FUND-STEIN ROE GROWTH STOCK FUND

This Fund is closed to new investors except for purchases by
eligible investors as described under "Your Account."

INVESTMENT GOAL Stein Roe Growth Stock Fund seeks long-term
growth.

PRINCIPAL INVESTMENT RISKS There are two basic risks for all
mutual funds that invest in stocks: management risk and market
risk. These risks may cause you to lose money by investing in the
Fund.

Because the Portfolio invests in stocks, the price of the Fund's
shares-its net asset value per share (NAV)-fluctuates daily in
response to changes in the market value of the securities.

The Portfolio's emphasis on certain market sectors may increase
volatility in the Fund's NAV. If sectors that the Portfolio
invests in do not perform well, the Fund's NAV could decrease.

An investment in the Fund is not a bank deposit and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency. It is not a complete investment program.

For more information on the Portfolio's investment techniques,
please refer to "Other Investments and Risks."

Who Should Invest in the Fund?

Growth Stock Fund is not appropriate for investors who:
* want to avoid the risk and volatility associated with stock
market investing
* are saving for a short-term investment
* want regular current income

Best quarter: 4th quarter 1999, +25.35%
Worst quarter: 3rd quarter 1990, -16.61%

Average Annual Total Returns

*The S&P 500 Index is an unmanaged group of stocks that differs
from the Fund's composition; it is not available for direct
investment.

ANNUAL FUND OPERATING EXPENSES (a)
(expenses that are deducted from Fund assets)
Management fees(b) 0.71%
Distribution (12b-1) fees None
Other expenses 0.26%
Total annual fund operating expenses 0.97%

Expense Example

This example compares the cost of investing in the Fund to the
cost of investing in other mutual funds. It uses the same
hypothetical assumptions that other funds use in their
prospectuses:

* $10,000 initial investment
* 5% return each year
* the Fund's operating expenses remain constant as a percent of
net assets
* redemption at the end of each time period

EXPENSE EXAMPLE
1 yr 3 yrs 5 yrs 10 yrs
- -------------------------------------------------------------
Growth Stock Fund $99 $309 $536 $1,190

<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights table explains the Fund's financial
performance. Consistent with other mutual funds, we show
information for the period of the Fund's operations. The Fund's
fiscal year runs from October 1 to September 30. The total
returns in the table represent the return that investors earned
assuming that they reinvested all dividends and distributions.
Certain information in the table reflects the financial results
for a single Fund share. This information is included in the
Fund's financial statements which, for the year ended September
30, 1999, have been audited by PricewaterhouseCoopers LLP,
independent accountants, whose report, along with the financial
statements, appears in the Fund's annual report. Arthur Andersen
LLP audited the Fund's financial statements for the years 1995
through 1998. To request the Fund's annual report, please call
800-322-1130.

<TABLE>
<CAPTION>
GROWTH STOCK FUND
PER SHARE DATA
Years ended September 30,
1999 1998 1997 1996 1995
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 34.71 $ 35.29 $ 28.79 $ 26.13 $ 23.58
Income from investment operations
Net investment income (loss) (c) (0.08) (0.04) 0.01 0.08 0.12
Net gains on securities (both
realized and unrealized) 12.57 1.61 8.79 5.01 5.60
Total income from investment operations 12.49 1.57 8.80 5.09 5.72
Less distributions
Dividends (from net investment income) - - (0.07) (0.10) (0.15)
Distributions (from capital gains) - (2.15) (2.23) (2.33) (3.02)
Total distributions - (2.15) (2.30) (2.43) (3.17)
Net asset value, end of period $ 47.20 $ 34.71 $ 35.29 $ 28.79 $ 26.13
Total return 35.98% 4.69% 33.10% 21.04% 28.18%

<PAGE>

YOUR ACCOUNT

The Fund is closed to purchases (including exchanges) by new
investors except for purchases by eligible investors as described
below. If you are already a shareholder of the Fund, you may
continue to add to your account or open another account with the
Fund in your name. In addition, you may open a new account if:

*you are a shareholder of any other Stein Roe Fund, having
purchased shares directly from Stein Roe, as of Oct. 15, 1997,
and you are opening a new account by exchange or by dividend
reinvestment;
*you are a client of Stein Roe;
*you are a trustee of the Trust; an employee of Stein Roe, or any
of its affiliated companies; or a member of the immediate family
of any trustee or employee;
*you purchase shares (i) under an asset allocation program
sponsored by a financial advisor, broker-dealer, bank, trust
company or other intermediary or (ii) from certain financial
advisors who charge a fee for services and who, as of Oct. 15,
1997, had one or more clients who were the Fund shareholders; or
*you purchase shares for an employee benefit plan, the records for
which are maintained by a trust company or third-party
administrator under an investment program with the Fund.

The Board of Trustees concluded that permitting the additional
investments described above would not adversely affect the ability
of Stein Roe to manage the Fund effectively. If you have
questions about your eligibility to purchase shares of Growth
Stock Fund, please call 800-322-1130.

We value a security at fair value when events have occurred after
the last available market price and before the close of the NYSE
that materially affect the security's price. In the case of
foreign securities, this could include events occurring after the
close of the foreign market and before the close of the NYSE. The
Portfolio's foreign securities may trade on days when the NYSE is
closed. We will not price shares on days that the NYSE is closed
for trading. You will not be able to purchase or redeem shares
until the next NYSE-trading day.

DIVIDENDS AND DISTRIBUTIONS The Fund distributes, at least once
a year, virtually all of its net investment income and net
realized capital gains.

A dividend from net investment income represents the income the
Fund earns from dividends and interest paid on its investments,
after payment of the Fund's expenses.

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

<PAGE>

OTHER INVESTMENTS AND RISKS

This section describes other securities and techniques, and risks
associated with them. The Statement of Additional Information
(SAI) contains additional information about the Fund's securities
and investment techniques (including other securities and
techniques) and the risks associated with them. Such risks could
cause you to lose money by investing in the Fund or could cause
the Fund's total return to decrease. The SAI also contains the
Fund's fundamental and non-fundamental investment policies.

The Board of Trustees can change the Fund's investment objective
without shareholder approval.

<PAGE>

THE FUND'S MANAGEMENT

Stein Roe may use the services of AlphaTrade Inc., an affiliated
broker-dealer, when buying or selling equity securities for the
Portfolio, pursuant to procedures adopted by the Board of
Trustees.

PORTFOLIO MANAGER Erik P. Gustafson has been portfolio manager
of the Portfolio since its inception in 1997 and has managed the
Fund since 1994. Mr. Gustafson joined Stein Roe in 1992 as a
portfolio manager for privately managed accounts and is a senior
vice president. He holds a B.A. degree from the University of
Virginia and M.B.A. and J.D. degrees from Florida State
University.

<PAGE>

FOR MORE INFORMATION

To obtain free copies of the Fund's semiannual and annual reports,
latest quarterly profile, or the SAI or to request other
information about the Fund, write or call:

Stein Roe Mutual Funds
One Financial Center
Boston, MA 02111
800-322-1130

www.steinroe.com

Investment Company Act file number of Liberty-Stein Roe Funds
Investment Trust: 811-04978

LIBERTY FUNDS DISTRIBUTOR, INC.

- -----------------------------------------------------------------

<PAGE>

[STEIN ROE LOGO]

Stein Roe Capital Opportunities Fund

Defined Contribution Plans Prospectus

February 1, 2000

This prospectus relates only to shares of the Fund purchased
through eligible employer-sponsored defined contribution plans.

2 The Fund
Investment Goal
Principal Investment Strategy
Principal Investment Risks
Fund Performance
Your Expenses

6 Financial Highlights

7 Your Account
Purchasing Shares
Determining Share Price (NAV)
Selling Shares
Exchanging Shares
Dividends and Distributions

9 Other Investments and Risks

10 The Fund's Management
Investment Adviser
Portfolio Managers
Master/Feeder Fund Structure

Please keep this prospectus as your reference manual.

<PAGE>

DEFINING CAPITALIZATION

THE FUND-STEIN ROE CAPITAL OPPORTUNITIES FUND

INVESTMENT GOAL Stein Roe Capital Opportunities Fund seeks long-
term growth.

PRINCIPAL INVESTMENT RISKS There are two basic risks for all
mutual funds that invest in stocks: management risk and market
risk. These risks may cause you to lose money by investing in the
Fund.

Because the Fund invests in stocks, the price of its shares-its
net asset value per share (NAV)-fluctuates daily in response to
changes in the market value of the securities.

Foreign securities are subject to special risks. Foreign stock
markets, especially in countries with developing stock markets,
can be extremely volatile. The liquidity of foreign securities
may be more limited than domestic securities, which means that the
Fund may at times be unable to sell them at desirable prices.
Fluctuations in currency exchange rates impact the value of
foreign securities. Brokerage commissions, custodial fees, and
other fees are generally higher for foreign investments. In
addition, foreign governments may impose withholding taxes which
would reduce the amount of income available to distribute to
shareholders. Other risks include: possible delays in settlement
of transactions; less publicly available information about
companies; the impact of political, social or diplomatic events;
and possible seizure, expropriation or nationalization of the
company or its assets.

An investment in the Fund is not a bank deposit and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency. It is not a complete investment program.

For more information on the Fund's investment techniques, please
refer to "Other Investments and Risks."

Who Should Invest in the Fund?

Capital Opportunities Fund is not appropriate for investors who:
* want to avoid the increased price volatility and risks
associated with aggressive growth investing
* are saving for a short-term investment
* need regular current income

Best quarter: 4th quarter 1999, +43.85%
Worst quarter: 3rd quarter 1990, -33.14%

Average Annual Total Returns

*The S&P MidCap 400 Index is an unmanaged group of stocks that
differs from the Fund's composition; it is not available for
direct investment.

YOUR EXPENSES This table shows fees and expenses you may pay if
you buy and hold shares of the Fund. You do not pay any sales
charge when you purchase or sell your shares. However, you pay
various other indirect expenses because the Fund pays fees and
other expenses that reduce your investment return.

ANNUAL FUND OPERATING EXPENSES (a)
(expenses that are deducted from Fund assets)
Management fees (b) 0.89%
Distribution (12b-1) fees None
Other expenses 0.30%
Total annual fund operating expenses 1.19%

(a) Fund expenses include management fees and administrative costs
such as furnishing the Fund with offices and providing tax and
compliance services.
(b) Management fees include both the management fee and the
administrative fee charged to the Fund.

Expense Example

This example compares the cost of investing in the Fund to the
cost of investing in other mutual funds. It uses the same
hypothetical assumptions that other funds use in their
prospectuses:

* $10,000 initial investment
* 5% return each year
* the Fund's operating expenses remain constant as a percent of
net assets
* redemption at the end of each time period

Your actual costs may be higher or lower because in reality fund
returns and operating expenses change. Expenses based on these
assumptions are:

EXPENSE EXAMPLE
1 yr 3 yrs 5 yrs 10 yrs
Capital Opportunities Fund $121 $378 $654 $1,443

<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights table explains the Fund's financial
performance. Consistent with other mutual funds, we show
information for the period of the Fund's operations. The Fund's
fiscal year runs from October 1 to September 30. The total
returns in the table represent the return that investors earned
assuming that they reinvested all dividends and distributions.
Certain information in the table reflects the financial results
for a single Fund share. This information is included in the
Fund's financial statements which, for the year ended September
30, 1999, have been audited by PricewaterhouseCoopers LLP,
independent accountants, whose report, along with the financial
statements, appears in the Fund's annual report. Arthur Andersen
LLP audited the Fund's financial statements for the years 1995
through 1998. To request the Fund's annual report, please call
800-322-1130.

<TABLE>
<CAPTION>
CAPITAL OPPORTUNITIES FUND
PER SHARE DATA
Years ended September 30,
1999 1998 1997 1996 1995
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 25.25 $ 29.10 $ 31.04 $ 21.69 $ 15.79
Income from investment operations
Net investment income (loss) (c) (0.17) (0.25) (0.17) (0.06) 0.01
Net gains (losses) on securities
(both realized and unrealized) 3.56 (3.60) (1.77) 10.41 5.91
Total income from investment operations 3.39 (3.85) (1.94) 10.35 5.92
Less distributions
Dividends (from net investment income) - - - (0.01) (0.02)
Distributions (from capital gains) - - - (0.99) -
Total distributions - - - (1.00) (0.02)
Net asset value, end of period $ 28.64 $ 25.25 $ 29.10 31.04 $ 21.69
Total return 13.43% (13.23%) (6.25%) 49.55% 37.46%

<PAGE>

YOUR ACCOUNT

We value a security at fair value when events have occurred after
the last available market price and before the close of the NYSE
that materially affect the security's price. In the case of
foreign securities, this could include events occurring after the
close of the foreign market and before the close of the NYSE. The
Fund's foreign securities may trade on days when the NYSE is
closed. We will not price shares on days that the NYSE is closed
for trading. You will not be able to purchase or redeem shares
until the next NYSE-trading day.

DIVIDENDS AND DISTRIBUTIONS The Fund distributes, at least once
a year, virtually all of its net investment income and net
realized capital gains.

A dividend from net investment income represents the income the
Fund earns from dividends and interest paid on its investments,
after payment of the Fund's expenses.

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

<PAGE>

OTHER INVESTMENTS AND RISKS

This section describes other securities and techniques, and risks
associated with them. The Statement of Additional Information
(SAI) contains additional information about the Fund's securities
and investment techniques (including other securities and
techniques) and the risks associated with them. Such risks could
cause you to lose money by investing in the Fund or could cause
the Fund's total return to decrease. The SAI also contains the
Fund's fundamental and non-fundamental investment policies.

The Board of Trustees can change the Fund's investment objective
without shareholder approval.

PORTFOLIO TURNOVER There are no limits on turnover. Turnover
may vary significantly from year to year. Stein Roe does not
expect it to exceed 100% under normal conditions. The Fund uses
futures to invest cash pending direct investments in stocks and to
enhance its return. Portfolio turnover typically produces capital
gains or losses resulting in tax consequences for Fund investors.
It also increases transaction expenses, which reduce the Fund's
return.

<PAGE>

THE FUND'S MANAGEMENT

PORTFOLIO MANAGERS Erik Gustafson and David Brady have been co-
portfolio managers of the Fund since May 1999, and Steve Hayward
has been co-manager since November 1999.

<PAGE>

FOR MORE INFORMATION

To obtain free copies of the Fund's semiannual and annual reports,
latest quarterly profile, or the SAI or to request other
information about the Fund, write or call:

Stein Roe Mutual Funds
One Financial Center
Boston, MA 02111
800-322-1130

www.steinroe.com

Investment Company Act file number of Liberty-Stein Roe Funds
Investment Trust: 811-04978

LIBERTY FUNDS DISTRIBUTOR, INC.

- -----------------------------------------------------------------
<PAGE>

[STEIN ROE LOGO]

Stein Roe Disciplined Stock Fund

Defined Contribution Plans Prospectus

February 1, 2000

This prospectus relates only to shares of the Fund purchased
through eligible employer-sponsored defined contribution plans.

2 The Fund
Investment Goal
Principal Investment Strategy
Principal Investment Risks
Fund Performance
Your Expenses

6 Financial Highlights

7 Your Account
Purchasing Shares
Determining Share Price (NAV)
Selling Shares
Exchanging Shares
Dividends and Distributions

9 Other Investments and Risks

10 The Fund's Management
Investment Adviser
Portfolio Managers
Master/Feeder Fund Structure

Please keep this prospectus as your reference manual.

<PAGE>

DEFINING CAPITALIZATION

THE FUND-STEIN ROE DISCIPLINED STOCK FUND

INVESTMENT GOAL Stein Roe Disciplined Stock Fund seeks long-term
growth.

PRINCIPAL INVESTMENT RISKS There are two basic risks for all
mutual funds that invest in stocks: management risk and market
risk. These risks may cause you to lose money by investing in the
Fund.

Because the Portfolio invests in stocks, the price of the Fund's
shares-its net asset value per share (NAV)-fluctuates daily in
response to changes in the market value of the securities.

An investment in the Fund is not a bank deposit and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency. It is not a complete investment program.

For more information on the Portfolio's investment techniques,
please refer to "Other Investments and Risks."

Who Should Invest in the Fund?

You may want to invest in Disciplined Stock Fund if you:
* want a fund that typically will blend both growth and value
characteristics
* are a long-term investor

Disciplined Stock Fund is not appropriate for investors who:
* want to avoid the volatility and risks of stock market investing
* are saving for a short-term investment
* need regular current income

Best quarter: 2nd quarter 1999, +20.87%
Worst quarter: 3rd quarter 1998, -18.13%

Average Annual Total Returns

*The S&P MidCap 400 Index is an unmanaged group of stocks that
differs from the Fund's composition; it is not available for
direct investment.

ANNUAL FUND OPERATING EXPENSES (a)
(expenses that are deducted from Fund assets)
Management fees(b) 0.87%
Distribution (12b-1) fees None
Other expenses 0.29%
Total annual fund operating expenses 1.16%

Expense Example

This example compares the cost of investing in the Fund to the
cost of investing in other mutual funds. It uses the same
hypothetical assumptions that other funds use in their
prospectuses:

* $10,000 initial investment
* 5% return each year
* the Fund's operating expenses remain constant as a percent of
net assets
* redemption at the end of each time period

EXPENSE EXAMPLE
1 yr 3 yrs 5 yrs 10 yrs
- --------------------------------------------------------------
Disciplined Stock Fund $118 $368 $638 $1,409

<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights table explains the Fund's financial
performance. Consistent with other mutual funds, we show
information for the period of the Fund's operations. The Fund's
fiscal year runs from October 1 to September 30. The total
returns in the table represent the return that investors earned
assuming that they reinvested all dividends and distributions.
Certain information in the table reflects the financial results
for a single Fund share. This information is included in the
Fund's financial statements which, for the year ended September
30, 1999, have been audited by PricewaterhouseCoopers LLP,
independent accountants, whose report, along with the financial
statements, appears in the Fund's annual report. Arthur Andersen
LLP audited the Fund's financial statements for the years 1995
through 1998. To request the Fund's annual report, please call
800-322-1130.

<PAGE>

YOUR ACCOUNT

We value a security at fair value when events have occurred after
the last available market price and before the close of the NYSE
that materially affect the security's price. In the case of
foreign securities, this could include events occurring after the
close of the foreign market and before the close of the NYSE. The
Portfolio's foreign securities may trade on days when the NYSE is
closed. We will not price shares on days that the NYSE is closed
for trading. You will not be able to purchase or redeem shares
until the next NYSE-trading day.

DIVIDENDS AND DISTRIBUTIONS The Fund distributes, at least once
a year, virtually all of its net investment income and net
realized capital gains.

A dividend from net investment income represents the income the
Fund earns from dividends and interest paid on its investments,
after payment of the Fund's expenses.

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

<PAGE>

OTHER INVESTMENTS AND RISKS

This section describes other securities and techniques, and risks
associated with them. The Statement of Additional Information
(SAI) contains additional information about the Fund's securities
and investment techniques (including other securities and
techniques) and the risks associated with them. Such risks could
cause you to lose money by investing in the Fund or could cause
the Fund's total return to decrease. The SAI also contains the
Fund's fundamental and non-fundamental investment policies.

The Board of Trustees can change the Fund's investment objective
without shareholder approval.

<PAGE>

THE FUND'S MANAGEMENT

Stein Roe may use the services of AlphaTrade Inc., an affiliated
broker-dealer, when buying or selling equity securities for the
Portfolio, pursuant to procedures adopted by the Board of
Trustees.

PORTFOLIO MANAGERS Daniel Cantor has been portfolio manager
since May 1999 and Jeffrey Kinzel has been co-manager since
November 1999.

<PAGE>

FOR MORE INFORMATION

To obtain free copies of the Fund's semiannual and annual reports,
latest quarterly profile, or the SAI or to request other
information about the Fund, write or call:

Stein Roe Mutual Funds
One Financial Center
Boston, MA 02111
800-322-1130

www.steinroe.com

Investment Company Act file number of Liberty-Stein Roe Funds
Investment Trust: 811-04978

LIBERTY FUNDS DISTRIBUTOR, INC.

- ------------------------------------------------------------------

<PAGE>

Statement of Additional Information Dated February 1, 2000

LIBERTY-STEIN ROE FUNDS INVESTMENT TRUST
One Financial Plaza, Boston, MA 02111
800-338-2550

Balanced
--------
Stein Roe Balanced Fund

Growth and Income
-----------------
Stein Roe Growth & Income Fund, Class S

Growth
------
Stein Roe Disciplined Stock Fund
Stein Roe Midcap Growth Fund
Stein Roe Growth Stock Fund
Stein Roe Large Company Focus Fund
Stein Roe Growth Investor Fund, Class S
Stein Roe Capital Opportunities Fund
Stein Roe Small Company Growth Fund

This Statement of Additional Information ("SAI") is not a
prospectus, but provides additional information that should be
read in conjunction with the Funds' prospectuses dated February 1,
2000 and any supplements thereto ("Prospectuses"). Financial
statements, which are contained in the Funds' September 30, 1999,
Annual Reports, are incorporated by reference into this SAI. The
Prospectuses and Annual Reports may be obtained at no charge by
telephoning 800-338-2550.

TABLE OF CONTENTS
Page

General Information and History.........................2
Investment Policies.....................................4
Portfolio Investments and Strategies....................4
Investment Restrictions................................21
Additional Investment Considerations...................23
Purchases and Redemptions..............................24
Management.............................................29
Financial Statements...................................32
Principal Shareholders.................................32
Investment Advisory and Other Services.................33
Distributor............................................36
Transfer Agent.........................................36
Custodian..............................................37
Independent Accountants................................37
Portfolio Transactions.................................38
Additional Income Tax Considerations...................44
Investment Performance.................................44
Master Fund/Feeder Fund: Structure and Risk Factors....49
Appendix-Ratings.......................................51

<PAGE>

GENERAL INFORMATION AND HISTORY

The mutual funds described in this SAI (referred to
collectively as the "Funds") are separate series of Liberty-Stein
Roe Funds Investment Trust (the "Trust"). The Funds and the dates
they commenced operations are:

Fund Commencement
Date
- ------------------------------------------------------------------
Stein Roe Balanced Fund ("Balanced Fund") 10/04/49
Stein Roe Growth & Income Fund, Class S
("Growth & Income Fund") 03/24/87
Stein Roe Disciplined Stock Fund ("Disciplined
Stock Fund") 05/22/68
Stein Roe Growth Stock Fund ("Growth Stock Fund") 07/01/58
Stein Roe Growth Investor Fund, Class S ("Growth
Investor Fund") 03/31/99
Stein Roe Midcap Growth Fund ("Midcap Growth Fund") 06/30/97
SteinRoe Large Company Focus Fund ("Large Company
Focus Fund") 06/26/98
Stein Roe Capital Opportunities Fund ("Capital
Opportunities Fund") 06/10/63
Stein Roe Small Company Growth Fund ("Small Company
Focus Fund") 02/02/99

On February 1, 1996, the names of the Trust and of each then-
existing Fund were changed to separate "SteinRoe" into two words.
The name of the Trust was changed on October 18, 1999, from "Stein
Roe Investment Trust to "Liberty-Stein Roe Funds Investment
Trust." Prior to February 1, 1995, the name of Growth Stock Fund
was SteinRoe Stock Fund; prior to February 1, 1996, Growth &
Income Fund was named SteinRoe Prime Equities; prior to April 17,
1996, the name of Balanced Fund was Stein Roe Total Return Fund;
and prior to May 6, 1999, the name of Midcap Growth Fund was Stein
Roe Growth Opportunities Fund and the name of Disciplined Stock
Fund was Stein Roe Special Fund.

Stein Roe Growth & Income Fund, Class S, is a separate class
of Stein Roe Advisor Select Growth & Income Fund; and Stein Roe
Growth Investor Fund, Class S, is a separate class of Stein Roe
Advisor Growth Investor Fund.

The 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 the
Trust's shareholders or its trustees. The Trust may issue an
unlimited number of shares, in one or more series, each with one
or more classes of shares, as the Board may authorize. Currently,
12 series are authorized and outstanding. Each series invests in
a separate portfolio of securities and other assets, with its own
objectives and policies.

Under Massachusetts law, shareholders of a Massachusetts
business trust such as the 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 the Trust or any
particular series shall look only to the assets of the Trust or of
the respective series for payment under such credit, contract or
claim, and that the shareholders, trustees and officers shall have
no personal liability therefor. The Declaration of Trust requires
that notice of such disclaimer of liability be given in each
contract, instrument or undertaking executed or made on behalf of
the 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 the 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 the
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.

Each share of a series (or class thereof) is entitled to
participate pro rata in any dividends and other distributions
declared by the Board on shares of that series (or class thereof),
and all shares of a series have equal rights in the event of
liquidation of that series (or class thereof). Each whole share
(or fractional share) outstanding on the record date established
in accordance with the By-Laws shall be entitled to a number of
votes on any matter on which it is entitled to vote equal to the
net asset value of the share (or fractional share) in United
States dollars determined at the close of business on the record
date (for example, a share having a net asset value of $10.50
would be entitled to 10.5 votes). As a business trust, the Trust
is not required to hold annual shareholder meetings. However,
special meetings may be called for purposes such as electing or
removing trustees, changing fundamental policies, or approving an
investment advisory contract. If requested to do so by the
holders of at least 10% of its outstanding shares, the Trust will
call a special meeting for the purpose of voting upon the question
of removal of a trustee or trustees and will assist in the
communications with other shareholders as if the Trust were
subject to Section 16(c) of the Investment Company Act of 1940.
All shares of all series of the Trust are voted together in the
election of trustees. On any other matter submitted to a vote of
shareholders, shares are voted in the aggregate and not by
individual series, except that shares are voted by individual
series when required by the Investment Company Act of 1940 or
other applicable law, or when the Board of Trustees determines
that the matter affects only the interests of one or more series,
in which case shareholders of the unaffected series are not
entitled to vote on such matters.

Special Considerations Regarding Master Fund/Feeder Fund Structure

Rather than invest in securities directly, certain Funds seek
to achieve their objectives by pooling their assets with those of
other investment companies for investment in a master fund having
the identical investment objective and substantially the same
investment policies as its feeder funds. The purpose of such an
arrangement is to achieve greater operational efficiencies and
reduce costs. Each feeder Fund has invested all of its assets in
a separate master fund that is a series of SR&F Base Trust since
February 3, 1997, except for Growth Investor Fund, which commenced
operations on March 31, 1999:

Feeder Fund Master Fund
- -----------------------------------------------------------------
Balanced Fund SR&F Balanced Portfolio ("Balanced
Portfolio")
Growth & Income Fund SR&F Growth & Income Portfolio ("Growth
& Income Portfolio")
Disciplined Stock Fund SR&F Disciplined Stock Portfolio
("Disciplined Stock Portfolio")
Growth Stock Fund SR&F Growth Stock Portfolio ("Growth
Stock Portfolio")
Growth Investor Fund SR&F Growth Investor Portfolio ("Growth
Investor Portfolio")

The master funds are referred to collectively as the
"Portfolios." For more information, please refer to Master
Fund/Feeder Fund: Structure and Risk Factors. Midcap Growth Fund,
Large Company Focus Fund, Capital Opportunities Fund, and Small
Company Growth Fund may convert into feeder funds at some time in
the future.

Stein Roe & Farnham Incorporated ("Stein Roe") provides
administrative and accounting and recordkeeping services to the
Funds and Portfolios and provides investment management services
to each Portfolio, Midcap Growth Fund, Large Company Focus Fund,
Capital Opportunities Fund, and Small Company Growth Fund.

INVESTMENT POLICIES

The Trust and SR&F Base Trust are open-end management
investment companies. The Funds and the Portfolios are
diversified, as that term is defined in the Investment Company Act
of 1940, except for Large Company Focus Fund, which is non-
diversified.

The investment objectives and policies are described in the
prospectuses under The Funds. In pursuing its respective
objective, each Fund or Portfolio may employ the investment
techniques described in its Prospectus and Portfolio Investments
and Strategies in this SAI. Each investment objective is a non-
fundamental policy and may be changed by the Board of Trustees
without the approval of a "majority of the outstanding voting
securities."/1/

- -----------
/1/ A "majority of the outstanding voting securities" means the
approval of the lesser of (i) 67% or more of the shares at a
meeting if the holders of more than 50% of the outstanding shares
are present or represented by proxy or (ii) more than 50% of the
outstanding shares.
- -----------

PORTFOLIO INVESTMENTS AND STRATEGIES

Unless otherwise noted, for purposes of discussion under
Portfolio Investments and Strategies, the term "Fund" refers to
each Fund and each Portfolio.

Debt Securities

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

Investments in debt securities by Growth & Income Portfolio,
Balanced Portfolio, and Growth Stock Portfolio are limited to
those that are within the four highest grades (generally referred
to as "investment grade") assigned by a nationally recognized
statistical rating organization or, if unrated, deemed to be of
comparable quality by Stein Roe. Midcap Growth Fund, Disciplined
Stock Portfolio, Large Company Focus Fund, Growth Investor Fund,
and Small Company Growth Fund may invest up to 35% of their assets
in debt securities, but do not expect to invest more than 5% of
their assets in debt securities that are rated below investment
grade.

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

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

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

Derivatives

Consistent with its objective, a 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.

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

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

No Fund currently intends to invest more than 5% of its net
assets in any type of Derivative except for options, futures
contracts, and futures options. (See Options and Futures below.)

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

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

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

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

Convertible Securities

By investing in convertible securities, a 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, Stein Roe will consider substantially the same
criteria that would be considered in purchasing the underlying
stock. While convertible securities purchased by a Fund are
frequently rated investment grade, a Fund may purchase unrated
securities or securities rated below investment grade if the
securities meet Stein Roe's other investment criteria.
Convertible securities rated below investment grade (a) tend to be
more sensitive to interest rate and economic changes, (b) may be
obligations of issuers who are less creditworthy than issuers of
higher quality convertible securities, and (c) may be more thinly
traded due to such securities being less well known to investors
than investment grade convertible securities, common stock or
conventional debt securities. As a result, Stein Roe's own
investment research and analysis tend to be more important in the
purchase of such securities than other factors.

Foreign Securities

Each Fund may invest up to 25% of its total assets in foreign
securities, which may entail a greater degree of risk (including
risks relating to exchange rate fluctuations, tax provisions, or
expropriation of assets) than investment in securities of domestic
issuers. For this purpose, foreign securities do not include
American Depositary Receipts (ADRs) or securities guaranteed by a
United States person. ADRs are receipts typically issued by an
American bank or trust company evidencing ownership of the
underlying securities. A Fund may invest in sponsored or
unsponsored ADRs. In the case of an unsponsored ADR, a Fund is
likely to bear its proportionate share of the expenses of the
depositary and it may have greater difficulty in receiving
shareholder communications than it would have with a sponsored
ADR. No Fund intends to invest, nor during the past fiscal year
has any Fund invested, more than 5% of its net assets in
unsponsored ADRs.

As of September 30, 1999, holdings of foreign companies, as a
percentage of net assets, were as follows: Balanced Portfolio,
7.5% (2.9% in foreign securities and 4.6% in ADRs); Growth &
Income Portfolio, 4.2% (0.0% in foreign securities and 4.2% in
ADRs); Disciplined Stock Portfolio, 3.7% (0.0% in foreign
securities and 3.7% in ADRs and ADSs); Growth Stock Portfolio,
none; Growth Investor Portfolio, none; Midcap Growth Fund, 2.2%
(0.0% in foreign securities and 2.2% in ADRs); Large Company Focus
Fund, 5.3% (0.0% in foreign securities and 5.3% in ADRs); Capital
Opportunities Fund, 1.4% (0.0% in foreign securities and 1.4% in
ADRs); and Small Company Growth Fund, 1.2% (0.0% in foreign
securities and 1.2% in ADRs).

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

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

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

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

The Funds' foreign currency exchange transactions are limited
to transaction and portfolio hedging involving either specific
transactions or portfolio positions. Transaction hedging is the
purchase or sale of forward contracts with respect to specific
receivables or payables of a Fund arising in connection with the
purchase and sale of its portfolio securities. Portfolio hedging
is the use of forward contracts with respect to portfolio security
positions denominated or quoted in a particular foreign currency.
Portfolio hedging allows the Fund to limit or reduce its exposure
in a foreign currency by entering into a forward contract to sell
such foreign currency (or another foreign currency that acts as a
proxy for that currency) at a future date for a price payable in
U.S. dollars so that the value of the foreign-denominated
portfolio securities can be approximately matched by a foreign-
denominated liability. A Fund may not engage in portfolio hedging
with respect to the currency of a particular country to an extent
greater than the aggregate market value (at the time of making
such sale) of the securities held in its portfolio denominated or
quoted in that particular currency, except that a Fund may hedge
all or part of its foreign currency exposure through the use of a
basket of currencies or a proxy currency where such currencies or
currency act as an effective proxy for other currencies. In such
a case, a Fund may enter into a forward contract where the amount
of the foreign currency to be sold exceeds the value of the
securities denominated in such currency. The use of this basket
hedging technique may be more efficient and economical than
entering into separate forward contracts for each currency held in
a Fund. No Fund may engage in "speculative" currency exchange
transactions.

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

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

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

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

Structured Notes

Structured Notes are Derivatives on which the amount of
principal repayment and or interest payments is based upon the
movement of one or more factors. These factors include, but are
not limited to, currency exchange rates, interest rates (such as
the prime lending rate and the London Interbank Offered Rate
("LIBOR")), stock indices such as the S&P 500 Index and the price
fluctuations of a particular security. In some cases, the impact
of the movements of these factors may increase or decrease through
the use of multipliers or deflators. The use of Structured Notes
allows a Fund to tailor its investments to the specific risks and
returns Stein Roe wishes to accept while avoiding or reducing
certain other risks.

Swaps, Caps, Floors and Collars

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

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

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

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

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

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

Lending of Portfolio Securities

Subject to restriction (5) under Investment Restrictions in
this SAI, a Fund may lend its portfolio securities to broker-
dealers and banks. Any such loan must be continuously secured by
collateral in cash or cash equivalents maintained on a current
basis in an amount at least equal to the market value of the
securities loaned by the Fund. The Fund would continue to receive
the equivalent of the interest or dividends paid by the issuer on
the securities loaned, and would also receive an additional return
that may be in the form of a fixed fee or a percentage of the
collateral. The Fund would have the right to call the loan and
obtain the securities loaned at any time on notice of not more
than five business days. The Fund would not have the right to
vote the securities during the existence of the loan but would
call the loan to permit voting of the securities if, in Stein
Roe's judgment, a material event requiring a shareholder vote
would otherwise occur before the loan was repaid. In the event of
bankruptcy or other default of the borrower, the Fund could
experience both delays in liquidating the loan collateral or
recovering the loaned securities and losses, including (a)
possible decline in the value of the collateral or in the value of
the securities loaned during the period while the Fund seeks to
enforce its rights thereto, (b) possible subnormal levels of
income and lack of access to income during this period, and (c)
expenses of enforcing its rights. No Fund loaned portfolio
securities during the fiscal year ended September 30, 1999 nor
does it currently intend to loan more than 5% of its net assets.

Repurchase Agreements

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

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

A Fund may purchase securities on a when-issued or delayed-
delivery basis. Although the payment and interest terms of these
securities are established at the time a 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. A Fund make such commitments only with the intention of
actually acquiring the securities, but may sell the securities
before settlement date if Stein Roe deems it advisable for
investment reasons. No Fund had during its last fiscal year, nor
does any Fund currently intend to have, commitments to purchase
when-issued securities in excess of 5% of its net assets.

A Fund may enter into reverse repurchase agreements with
banks and securities dealers. A reverse repurchase agreement is a
repurchase agreement in which a Fund is the seller of, rather than
the investor in, securities and agrees to repurchase them at an
agreed-upon time and price. Use of a reverse repurchase agreement
may be preferable to a regular sale and later repurchase of
securities because it avoids certain market risks and transaction
costs. No Fund entered into reverse repurchase agreements during
the fiscal year ended September 30, 1999.

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

Short Sales "Against the Box"

A Fund may sell securities short against the box; that is,
enter into short sales of securities that it currently owns or has
the right to acquire through the conversion or exchange of other
securities that it owns at no additional cost. Other than Small
Company Growth Fund, a Fund 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.

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

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

Short sale transactions involve certain risks. If the price
of the security sold short increases between the time of the short
sale and the time a Fund replaces the borrowed security, the Fund
will incur a loss and if the price declines during this period,
the Fund will realize a short-term capital gain. Any realized
short-term capital gain will be decreased, and any incurred loss
increased, by the amount of transaction costs and any premium,
dividend or interest which the Fund may have to pay in connection
with such short sale. Certain provisions of the Internal Revenue
Code may limit the degree to which a Fund is able to enter into
short sales. There is no limitation on the amount of a Fund's
assets that, in the aggregate, may be deposited as collateral for
the obligation to replace securities borrowed to effect short
sales and allocated to segregated accounts in connection with
short sales. Up to 20% of the assets of Balanced Portfolio may be
involved in short sales against the box, but no other Fund
currently expects that more than 5% of its total assets would be
involved in short sales against the box.

Rule 144A Securities

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

Line of Credit

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

Interfund Borrowing and Lending Program

Pursuant to an exemptive order issued by the Securities and
Exchange Commission, a Fund may lend money to and borrow money
from other mutual funds advised by Stein Roe. A Fund will borrow
through the program when borrowing is necessary and appropriate
and the costs are equal to or lower than the costs of bank loans.

Portfolio Turnover

Although the Funds do not purchase securities with a view to
rapid turnover, there are no limitations on the length of time
that portfolio securities must be held. At times, Disciplined
Stock Portfolio and Capital Opportunities Fund may invest for
short-term capital appreciation. Portfolio turnover can occur for
a number of reasons such as general conditions in the securities
markets, more favorable investment opportunities in other
securities, or other factors relating to the desirability of
holding or changing a portfolio investment. Because of the Funds'
flexibility of investment and emphasis on growth of capital, they
may have greater portfolio turnover than that of mutual funds that
have primary objectives of income or maintenance of a balanced
investment position. The future turnover rate may vary greatly
from year to year. A high rate of portfolio turnover in a Fund,
if it should occur, would result in increased transaction
expenses, which must be borne by that Fund. High portfolio
turnover may also result in the realization of capital gains or
losses and, to the extent net short-term capital gains are
realized, any distributions resulting from such gains will be
considered ordinary income for federal income tax purposes.

Options on Securities and Indexes

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

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

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

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

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

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

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

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

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

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

Futures Contracts and Options on Futures Contracts

A Fund may use interest rate futures contracts, index futures
contracts, and foreign currency futures contracts. An interest
rate, index or foreign currency futures contract provides for the
future sale by one party and purchase by another party of a
specified quantity of a financial instrument or the cash value of
an index/2/ at a specified price and time. A public market exists
in futures contracts covering a number of indexes (including, but
not limited to: the Standard & Poor's 500 Index, the Value Line
Composite Index, and the New York Stock Exchange Composite Index)
as well as financial instruments (including, but not limited to:
U.S. Treasury bonds, U.S. Treasury notes, Eurodollar certificates
of deposit, and foreign currencies). Other index and financial
instrument futures contracts are available and it is expected that
additional futures contracts will be developed and traded.
- ----------
/2/ A futures contract on an index is an agreement pursuant to
which two parties agree to take or make delivery of an amount of
cash equal to the difference between the value of the index at the
close of the last trading day of the contract and the price at
which the index contract was originally written. Although the
value of a securities index is a function of the value of certain
specified securities, no physical delivery of those securities is
made.
- ----------
A Fund may purchase and write call and put futures options.
Futures options possess many of the same characteristics as
options on securities, indexes and foreign currencies (discussed
above). A futures option gives the holder the right, in return
for the premium paid, to assume a long position (call) or short
position (put) in a futures contract at a specified exercise price
at any time during the period of the option. Upon exercise of a
call option, the holder acquires a long position in the futures
contract and the writer is assigned the opposite short position.
In the case of a put option, the opposite is true. A Fund might,
for example, use futures contracts to hedge against or gain
exposure to fluctuations in the general level of stock prices,
anticipated changes in interest rates or currency fluctuations
that might adversely affect either the value of the Fund's
securities or the price of the securities that the Fund intends to
purchase. Although other techniques could be used to reduce or
increase that Fund's exposure to stock price, interest rate and
currency fluctuations, the Fund may be able to achieve its
exposure more effectively and perhaps at a lower cost by using
futures contracts and futures options.

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

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

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

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

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

Risks Associated with Futures

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

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

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

Limitations on Options and Futures

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

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

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

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

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

Taxation of Options and Futures

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

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

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

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

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

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

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

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

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

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

INVESTMENT RESTRICTIONS

The Funds and the Portfolios operate under the following
investment restrictions. No Fund or Portfolio may:

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

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

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

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

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

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

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

The above restrictions (other than bracketed portions thereof
and, in the case of Disciplined Stock Fund and Disciplined Stock
Portfolio, other than 1 and 2) are fundamental policies and may
not be changed without the approval of a "majority of the
outstanding voting securities" as defined above. Each Fund and,
in the case of Disciplined Stock Fund and Disciplined Stock
Portfolio, together with restrictions 1 and 2 above, is also
subject to the following non-fundamental restrictions and
policies, which may be changed by the Board of Trustees. None of
the following restrictions shall prevent a Fund from investing all
or substantially all of its assets in another investment company
having the same investment objective and substantially the same
investment policies as the Fund. No Fund or Portfolio may:

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

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

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

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

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

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

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

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

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

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

ADDITIONAL INVESTMENT CONSIDERATIONS

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

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

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

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

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

PURCHASES AND REDEMPTIONS

Closed Funds

Growth Stock Fund is closed to purchases (including
exchanges) by new investors except for purchases by eligible
investors as described below. If you are already a shareholder of
Growth Stock Fund, you may continue to add to your account or open
another account with the Fund in your name. In addition, you may
open a new Growth Stock Fund account if:

*you are a shareholder of any other Stein Roe Fund, having
purchased shares directly from Stein Roe, as of October 15, 1997,
and you are opening a new Growth Stock Fund account by exchange
or by dividend reinvestment;
*you are a client of Stein Roe;
*you are a trustee of the Trust; an employee of Stein Roe, or any
of its affiliated companies; or a member of the immediate family
of any trustee or employee;
*you purchase shares (i) under an asset allocation program
sponsored by a financial advisor, broker-dealer, bank, trust
company or other intermediary or (ii) from certain financial
advisors who charge a fee for services and who, as of October 15,
1997, had one or more clients who were Growth Stock Fund
shareholders; or
*you purchase shares for an employee benefit plan, the records for
which are maintained by a trust company or third-party
administrator under an investment program with Growth Stock Fund.

Class S shares of Growth & Income Fund and Growth Investor
Fund are no longer available for purchase by new investors except
for purchases by eligible investors as described below. Shares of
those Funds outstanding on November 22, 1999, were redesignated
Class S shares. Like the existing shares from which were
converted, Class S shares are no-load shares carrying no sales
charge or 12b-1 fee. If you own Class S shares of Growth & Income
Fund or Growth Investor Fund, you may continue to purchase
additional Class S shares of that Fund for your account or you may
open another Class S share account with that Fund. In addition,
you may open a new Class S share account if:

*as of October 31, 1999, you are a shareholder of any other Stein
Roe Fund, having purchased shares directly from Stein Roe, and
you are opening a new account by exchange or by dividend
reinvestment;
*you are a client of Stein Roe;
*you purchase shares (i) under an asset allocation program
sponsored by a financial advisor, broker-dealer, bank, trust
company or other intermediary or (ii) from certain financial
advisors who charge a fee for services and who, as of October 31,
1999, held shares of Growth & Income Fund or Growth Investor Fund
for its clients; or
*you purchase shares for an employee benefit plan whose records
are maintained by a trust company or plan administrator under an
investment program that included Growth & Income Fund or Growth
Investor Fund on October 31, 1999.

If you have questions about your eligibility to purchase
shares of Growth Stock Fund or Class S shares of Growth & Income
Fund or Growth Investor Fund, please call 800-338-2550.

Purchases Through Third Parties

You may purchase (or redeem) shares through certain broker-
dealers, banks, or other intermediaries ("Intermediaries"). The
state of Texas has asked that investment companies disclose in
their SAIs, as a reminder to any such bank or institution, that it
must be registered as a securities dealer in Texas.
Intermediaries may charge for their services or place limitations
on the extent to which you may use the services offered by the
Trust. It is the responsibility of any such Intermediary to
establish procedures insuring the prompt transmission to the Trust
of any such purchase order. 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
authorized agent or 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 that business day.

Some Intermediaries that maintain nominee accounts with the
Funds for their clients for whom they hold Fund shares charge an
annual fee of up to 0.35% of the average net assets held in such
accounts for accounting, servicing, and distribution services they
provide with respect to the underlying Fund shares. Stein Roe and
the Funds' transfer agent share in the expense of these fees, and
Stein Roe pays all sales and promotional expenses.

Net Asset Value

The net asset value of each Fund is determined on days on
which the New York Stock Exchange (the "NYSE") is open for regular
session trading. The NYSE is regularly closed on Saturdays and
Sundays and on New Year's Day, the third Monday in January, the
third Monday in February, Good Friday, the last Monday in May,
Independence Day, Labor Day, Thanksgiving, and Christmas. If one
of these holidays falls on a Saturday or Sunday, the NYSE will be
closed on the preceding Friday or the following Monday,
respectively. Net asset value will not be determined on days when
the NYSE is closed unless, in the judgment of the Board of
Trustees, net asset value of a Fund should be determined on any
such day, in which case the determination will be made at 4 p.m.,
Eastern time. Please refer to Your Account-Determining Share
Price in the Prospectuses for additional information on how the
purchase and redemption price of Fund shares is determined.

General Redemption Policies

The Trust intends to pay all redemptions in cash. The Trust
retains the right, subject to the Rule 18f-1 notice described
below, to alter this policy to provide for redemptions in whole or
in part by a distribution in kind of securities held by a Fund or
Portfolio in lieu of cash. If redemptions were made in kind, the
redeeming shareholders might incur transaction costs in selling
the securities received in the redemptions. The Trust filed a
Notification of Election pursuant to Rule 18f-1 under the
Investment Company Act of 1940 with the Securities and Exchange
Commission which commits the Funds to pay in cash all requests for
redemptions by any shareholder, limited in amount with respect to
each shareholder during any 90-day period to the lesser of
$250,000 or 1% of the net asset value of a Fund at the beginning
of such period.

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

You may not cancel or revoke your redemption order once
instructions have been received and accepted. The 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. The Trust reserves the
right to require a properly completed application before making
payment for shares redeemed.

The Trust will generally mail payment for shares redeemed
within seven days after proper instructions are received.
However, the 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, the 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, the 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. The Trust reserves the right at any time
without prior notice to suspend, limit, modify, or terminate any
Privilege or its use in any manner by any person or class.

Neither the 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. The Funds employ
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 the Funds and
their 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
the Fund immediately if there is a problem. If the Funds do 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.

Shares in any account you maintain with a 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).

The 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. The Trust believes
that use of the Telephone Exchange Privilege by investors
utilizing market-timing strategies adversely affects the Funds.
Therefore, regardless of the number of telephone exchange round-
trips made by an investor, the Trust generally will not honor
requests for Telephone Exchanges by shareholders identified by the
Trust as "market-timers" if the officers of the Trust determine
the order not to be in the best interests of the Trust or its
shareholders. The Trust generally identifies as a "market-timer"
an investor whose investment decisions appear to be based on
actual or anticipated near-term changes in the securities markets
other than for investment considerations. Moreover, the 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
the Funds, the 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 the
Funds. If the 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. During periods of volatile economic and market
conditions, you may have difficulty placing your exchange by
telephone.

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. A
signature guarantee may be required to establish a Privilege after
you open your account. If you establish both the Telephone
Redemption by Wire Privilege and the Electronic Transfer
Privilege, the bank account that you designate for both Privileges
must be the same. The Telephone Redemption by Check Privilege,
Telephone Redemption by Wire Privilege, and Special Electronic
Transfer Redemptions may not be used to redeem shares held by a
tax-sheltered retirement plan sponsored by Stein Roe.

Redemption Privileges

Exchange Privilege. You may redeem all or any portion of
your 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 the
prospectus for the no-load Stein Roe Fund in which you wish to
invest and read it carefully. The registration of the account to
which you are making an exchange must be exactly the same as that
of the Fund account from which the exchange is made and the amount
you exchange must meet any applicable minimum investment of the
no-load Stein Roe Fund being purchased.

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 the Funds may refuse
requests for Telephone Exchanges in excess of four round-trips (a
round-trip being the exchange out of a Fund into another no-load
Stein Roe Fund, and then back to that Fund). In addition, the
Trust's general redemption policies apply to redemptions of shares
by Telephone Exchange.

Automatic Exchanges. You may use the Automatic Exchange
Privilege to automatically redeem a fixed amount from your Fund
account for investment in another no-load Stein Roe Fund account
on a regular basis ($50 minimum; $100,000 maximum).

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

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

Electronic Transfer Privilege. You may redeem shares by
calling 800-338-2550 and requesting an electronic transfer
("Special Redemption") of the proceeds to a bank account
previously designated by you at a bank that is a member of the
Automated Clearing House. You may also request electronic
transfers at scheduled intervals ("Automatic Redemptions"). A
Special Redemption request received by telephone after 4 p.m.,
Eastern time, is deemed received on the next business day. You
may purchase Fund shares directly from your bank account either at
regular intervals ("Regular Investments") or upon your request
("Special Investments"). Electronic transfers are subject to a
$50 minimum and a $100,000 maximum. You may also have income
dividends and capital gains distributions deposited directly into
your bank account ("Automatic Dividend Deposits").

Systematic Withdrawals. You may 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.

Dividend Purchase Option. You may have distributions from
one Fund account automatically invested in another no-load Stein
Roe Fund account. Before establishing this option, you should
obtain and read the prospectus of the Stein Roe Fund into which
you wish to have your distributions invested. The account from
which distributions are made must be of sufficient size to allow
each distribution to usually be at least $25.

MANAGEMENT

The Board of Trustees of the Trust has overall management
responsibility for the Trust and the Fund. The following table
sets forth certain information with respect to the trustees and
officers of the Trust:

Name, Age at February 1, 2000;
Address
Position(s) held with the Trust
Principal occupation(s) during past five years

William D. Andrews, 52;
One South Wacker Drive, Chicago, IL 60606 (4)
Executive Vice-President
Executive vice president of Stein Roe

John A. Bacon Jr., 72;
4N640 Honey Hill Road, Box 296, Wayne, IL 60184 (3)(4)
Trustee
Private investor

Christine Balzano, 34;
245 Summer Street, Boston, MA 02210
Vice-President
Senior vice president of Liberty Funds Services, Inc.; formerly
vice president and assistant vice president

William W. Boyd, 73;
2900 Golf Road, Rolling Meadows, IL 60008 (2)(3)(4)
Trustee
Chairman and director of Sterling Plumbing (manufacturer of
plumbing products)

David P. Brady, 35;
One South Wacker Drive, Chicago, IL 60606 (4)
Vice-President
Senior vice president of Stein Roe since March 1998; vice
president of Stein Roe from Nov. 1995 to March 1998; portfolio
manager for Stein Roe since 1993

Daniel K. Cantor, 40;
1330 Avenue of the Americas, New York, NY 10019 (4)
Vice-President
Senior vice president of Stein Roe

Kevin M. Carome, 43;
One Financial Center, Boston, MA 02111 (4)
Executive Vice-President; Secretary
Senior vice president, legal, Liberty Funds Group LLC (an
affiliate of Stein Roe) since Jan. 1999; general counsel and
secretary of Stein Roe since Jan. 1998; associate general counsel
and vice president of Liberty Financial Companies, Inc. (the
indirect parent of Stein Roe) through Jan. 1999

Denise E. Chasmer, 30;
12100 East Iliff Avenue, Aurora, CO 80014 (4)
Vice-President
Employee of Liberty Funds Services, Inc. and assistant vice
president of Stein Roe since Nov. 1999; manager with Scudder
Kemper Investments from Oct. 1995 to Nov. 1999; assistant manager
with Scudder Kemper prior thereto

J. Kevin Connaughton, 35;
245 Summer Street, Boston, MA 02210 (4)
Vice-President; Treasurer
Vice president of Colonial Management Associates, Inc. ("CMA"),
since February 1998; senior tax manager, Coopers & Lybrand, LLP
from April 1996 to January 1998; vice president, 440 Financial
Group/First Data Investor Services Group prior thereto

Lindsay Cook, 47;
600 Atlantic Avenue, Boston, MA 02210 (1)(2)(4)
Trustee
Executive vice president of Liberty Financial Companies, Inc.
since March 1997; senior vice president prior thereto

Michael G. Fisher, 30;
245 Summer Street, Boston, MA 02210 (4)
Vice-President
Tax manager with Liberty Funds Group since Oct. 1998; tax manager
with PricewaterhouseCoopers LLP prior thereto

William M. Garrison, 34;
One South Wacker Drive, Chicago, IL 60606
Vice-President
Vice president of Stein Roe since Feb. 1998; associate portfolio
manager for Stein Roe since August 1994

Stephen E. Gibson, 46;
One Financial Center, Boston, MA 02111 (4)
President
Vice chairman of Stein Roe since Aug. 1998; chairman, CEO,
president and director of Liberty Funds Group since Dec. 1998;
chairman of the Colonial Group from July 1998 to Dec. 1998;
president of the Colonial Group from Dec. 1996 to Dec. 1998;
chairman of Colonial Management Associates, Inc. since Dec. 1998;
CEO, president and director of Colonial Management Associates
since July 1996; managing director of Putnam Financial Services
prior thereto

Erik P. Gustafson, 36;
One South Wacker Drive, Chicago, IL 60606 (4)
Vice-President
Senior portfolio manager of Stein Roe; senior vice president of
Stein Roe since April 1996; vice president of Stein Roe prior
thereto

Douglas A. Hacker, 44;
P.O. Box 66100, Chicago, IL 60666 (3) (4)
Trustee
Executive vice president and chief financial officer of UAL, Inc.
(airline) since July 1999; senior vice president and chief
financial officer of UAL, Inc. prior thereto

Loren A. Hansen, 51;
One South Wacker Drive, Chicago, IL 60606 (4)
Executive Vice-President
Chief investment officer/equity of CMA since 1997; executive vice
president of Stein Roe since Dec. 1995; vice president of The
Northern Trust (bank) prior thereto

Harvey B. Hirschhorn, 50;
One South Wacker Drive, Chicago, IL 60606 (4)
Vice-President
Executive vice president, senior portfolio manager, and chief
economist and investment strategist of Stein Roe; director of
research of Stein Roe, 1991 to 1995

Timothy J. Jacoby, 47;
One Financial Center, Boston, MA 02111 (4)
Senior Vice-President
Fund treasurer for Liberty Funds Group LLC since Sept. 1996 and
chief financial officer since Aug. 1997; senior vice president of
Fidelity Investments prior thereto

Janet Langford Kelly, 42;
One Kellogg Square, Battle Creek, MI 49016 (3)(4)
Trustee
Executive vice president-corporate development, general counsel
and secretary of Kellogg Company since Sept. 1999; senior vice
president, secretary and general counsel of Sara Lee Corporation
(branded, packaged, consumer-products manufacturer) from 1995 to
Aug. 1999; partner of Sidley & Austin (law firm) prior thereto

Gail D. Knudsen, 37;
245 Summer Street, Boston, MA 02210 (4)
Vice-President; Controller
Vice president and assistant controller of CMA

Mary Dillon McKenzie, 45;
One Financial Center, Boston, MA 02111 (4)
Vice-President
President of Liberty Funds Services, Inc.

Charles R. Nelson, 57;
Department of Economics, University of Washington, Seattle, WA
98195 (3)(4)
Trustee
Van Voorhis Professor of Political Economy, Department of
Economics of the University of Washington

Nicholas S. Norton, 40;
12100 East Iliff Avenue, Aurora, CO 80014 (4)
Vice-President
Senior vice president of Liberty Funds Services, Inc. since Aug.
1999; vice president of Scudder Kemper, Inc. prior thereto

Nicolette D. Parrish, 50;
One South Wacker Drive, Chicago, IL 60606 (4)
Vice-President; Assistant Secretary
Senior legal assistant and assistant secretary of Stein Roe

Thomas C. Theobald, 62;
Suite 1300, 222 West Adams Street, Chicago, IL 60606 (3)(4)
Trustee
Managing director, William Blair Capital Partners (private equity
fund)

_______________________
(1) Trustee who is an "interested person" of the Trust and of
Stein Roe, as defined in the Investment Company Act of 1940.
(2) Member of the Executive Committee of the Board of Trustees,
which is authorized to exercise all powers of the Board with
certain statutory exceptions.
(3) Member of the Audit Committee of the Board, which makes
recommendations to the Board regarding the selection of
auditors and confers with the auditors regarding the scope and
results of the audit.
(4) This person holds the corresponding officer or trustee
position with SR&F Base Trust.

Certain of the trustees and officers of the Trust are
trustees or officers of other investment companies managed by
Stein Roe; and some of the officers are also officers of Liberty
Funds Distributor, Inc., the Fund's distributor.

Officers and trustees affiliated with Stein Roe serve without
any compensation from the Trust. In compensation for their
services to the Trust, trustees who are not "interested persons"
of the Trust or Stein Roe are paid an annual retainer plus an
attendance fee for each meeting of the Board or standing committee
thereof attended. The Trust has no retirement or pension plan.
The following table sets forth compensation paid during the fiscal
year ended September 30, 1999, to each of the trustees:

Compensation from the
Stein Roe Fund Complex*
-----------------------
Aggregate Compensation Total Average
Name of Trustee from the Trust Compensation Per Series
- ------------------- -------------------- ------------ ----------
Thomas W. Butch** -0- -0- -0-
Lindsay Cook -0- -0- -0-
John A. Bacon Jr.** $25,500 $117,850 $2,562
William W. Boyd 22,450 104,100 2,263
Douglas A. Hacker 20,650 93,900 2,041
Janet Langford Kelly 22,450 103,400 2,248
Charles R. Nelson 22,450 103,900 2,259
Thomas C. Theobald 22,450 103,400 2,248
_______________
* At September 30, 1999, the Stein Roe Fund Complex consisted of
12 series of the Trust, one series of Liberty-Stein Roe Funds
Trust, four series of Liberty-Stein Roe Funds Municipal Trust,
four series of Liberty-Stein Roe Funds Income Trust, five series
of Liberty-Stein Roe Advisor Trust, five series of SteinRoe
Variable Investment Trust, 12 portfolios of SR&F Base Trust,
Liberty-Stein Roe Advisor Floating Rate Fund, Liberty-Stein Roe
Institutional Floating Rate Income Fund, and Stein Roe Floating
Rate Limited Liability Company.
**Mr. Butch served as a trustee until November 3, 1998; Mr. Bacon
was elected a trustee effective November 3, 1998.

FINANCIAL STATEMENTS

Please refer to the September 30, 1999 Financial Statements
(statement of assets and liabilities and schedule of investments
as of September 30, 1999 and the statement of operations, changes
in net assets, financial highlights, and notes thereto) and the
report of independent accountants contained in the Funds'
September 30, 1999 Annual Reports. The Financial Statements and
the report of independent accountants are incorporated herein by
reference. An Annual Report may be obtained at no charge by
telephoning 800-338-2550.

PRINCIPAL SHAREHOLDERS

As of December 31, 1999, the only persons known by the Trust
to own of record or "beneficially" 5% or more of the outstanding
shares of a Fund within the definition of that term as contained
in Rule 13d-3 under the Securities Exchange Act of 1934 were as
follows:
Approximate
Percentage of
Outstanding
Name and Address Fund Shares Held
Charles Schwab & Co. Inc. Growth & Income Fund,
Special Custody Account for Class S 31%
the Exclusive Benefit of Midcap Growth Fund 28
Customers (1) Large Company Focus Fund 30
Attn Mutual Funds Small Company Growth Fund 13
101 Montgomery Street Balanced Fund 9
San Francisco., CA 94104 Growth Stock Fund 10
Capital Opportunities Fund 26
Disciplined Stock Fund 19

National Financial Services Capital Opportunities Fund 5
Corp. for the Exclusive
Benefit of our Customers,
Attn: Mutual Funds (1)
P.O. Box 3908
Church Street Station
New York, NY 10008

Keyport Life Insurance
Company
c/o Michelle Cote
125 High Street
Boston, MA 02101 Small Company Growth Fund 40
__________
(1) Shares held for accounts of customers.

As of December 31, 1999, trustees and officers of the Trust
owned less than 1% of the outstanding shares of any Fund. The
following table shows the percentage of each Fund's outstanding
shares held by clients of Stein Roe in their client accounts as of
December 31, 1999. Stein Roe may have discretionary authority
over such shares and, accordingly, they could be deemed to be
owned "beneficially" by Stein Roe under Rule 13d-3. However,
Stein Roe disclaims actual beneficial ownership of such shares.

Balanced Fund 6%
Growth & Income Fund 16
Disciplined Stock Fund 4
Growth Stock Fund 9
Growth Investor Fund 3
Midcap Growth Fund 20
Large Company Focus Fund 10
Capital Opportunities Fund 4

INVESTMENT ADVISORY AND OTHER SERVICES

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

The sole director of Stein Roe is C. Allen Merritt, Jr. Mr.
Merritt is Chief Operating Officer of Liberty Financial. His
business address is Federal Reserve Plaza, 600 Atlantic Avenue,
Boston, MA 02210.

Stein Roe Counselor [service mark] is a professional
investment advisory service offered by Stein Roe to Fund
shareholders. Stein Roe Counselor [service mark] is designed to
help shareholders construct Fund investment portfolios to suit
their individual needs. Based on information shareholders provide
about their financial goals and objectives in response to a
questionnaire, Stein Roe's investment professionals create
customized portfolio recommendations. Shareholders participating
in Stein Roe Counselor [service mark] are free to self direct
their investments while considering Stein Roe's recommendations.
In addition to reviewing shareholders' goals and objectives
periodically and updating portfolio recommendations to reflect any
changes, Stein Roe provides shareholders participating in these
programs with dedicated representatives. Other distinctive
services include specially designed account statements with
portfolio performance and transaction data, asset allocation
planning tools, newsletters, customized website content, and
regular investment, economic and market updates. A $50,000
minimum investment is required to participate in the program.

In return for its services, Stein Roe is entitled to receive
a monthly administrative fee from each Fund and a monthly
management fee from each non-feeder Fund and each Portfolio. The
table below shows the annual rates of such fees as a percentage of
average net assets (shown in millions), gross fees paid for the
three most recent fiscal years, and any expense reimbursements by
Stein Roe:

<TABLE>
<CAPTION>
Current Rates Year Ended Year Ended Year Ended
Fund/Portfolio Type (dollars shown in millions) 9/30/99 9/30/98 9/30/97
- -------------------- ------------- --------------------------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Growth & Income Fund Management N/A N/A N/A $ 484,689
Administrative .15% up to $500, .125%
next $500, .10% thereafter $ 616,797 $ 545,089 422,974
Growth & Income
Portfolio Management .60% up to $500, .55%
next $500, .50% thereafter 2,497,760 2,187,961 1,191,730
Balanced Fund Management N/A N/A N/A 493,328
Administrative .15% up to $500, .125% next
$500, .10% thereafter 393,529 416,764 399,157
Balanced Portfolio Management .55% up to $500, .50%
next $500, .45% thereafter 1,444,813 1,530,467 971,102
Growth Stock Fund Management N/A N/A N/A 933,019
Administrative .15% up to $500, .125%
next $500, .10% thereafter 1,131,958 946,539 757,086
Growth Stock
Portfolio Management .60% up to $500, .55% next
$500, .50% thereafter 6,076,221 4,251,833 2,119,802
Disciplined Stock
Fund Management N/A N/A N/A 2,638,251
Administrative .15% up to $500, .125%
next $500, .10% next $500,
.075% thereafter 1,077,094 1,605,953 1,537,601
Disciplined Stock
Portfolio Management .75% up to $500, .70% next
$500, .65% next $500,
.60% thereafter 5,581,396 8,771,718 5,249,467
Large Company
Focus Fund Management .75% up to $500, .70%
next $500, .65% next $500,
.60% thereafter 397,850 88,815 N/A
Administrative .15% up to $500, .125% next
$500, .10% next $500,
.075% thereafter 79,514 17,763 N/A
Reimbursement Expenses exceeding 1.50% -0- 13,361 N/A
Midcap Growth Fund Management .75% up to $500, .70%
next $500, .65% next $500,
.60% thereafter 382,996 406,935 86,304
Administrative .15% up to $500, .125%
next $500, .10% next $500,
.075% thereafter 76,658 81,387 17,260
Reimbursement Expenses exceeding 1.25% (94,290) 103,242 55,876
Growth Investor Fund Administrative .15% up to $500, .125% next
$500, .10% thereafter 5,752 N/A N/A
Reimbursement Expenses exceeding 1.10% (47,629) N/A N/A
Growth Investor
Portfolio Management .60% up to $500, .55% next
$500, .50% thereafter 5,415,558 3,758,114 1,567,638
Capital
Opportunities Fund Management .75% up to $500, .70% next
$500, .65% next $500,
.60% thereafter 4,331,186 6,827,994 9,097,549
Administrative .15% up to $500, .125%
next $500, .10% next $500,
.075% thereafter 853,783 1,298,073 1,655,427
Small Company Growth Management .85% 20,436 N/A N/A
Fund Administrative .15% 3,606 N/A N/A
Reimbursement Expenses exceeding 1.50% (53,535) N/A N/A
</TABLE>

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

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

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

Any expenses that are attributable solely to the
organization, operation, or business of a series of the Trust are
paid solely out of the assets of that series. Any expenses
incurred by the Trust that are not solely attributable to a
particular series are apportioned in such manner as Stein Roe
determines is fair and appropriate, unless otherwise specified by
the Board of Trustees.

Bookkeeping and Accounting Agreement

Pursuant to a separate agreement with the Trust, Stein Roe
receives a fee for performing certain bookkeeping and accounting
services. For such services, Stein Roe receives an annual fee of
$25,000 per series plus .0025 of 1% of average net assets over $50
million. During the fiscal years ended September 30, 1997, 1998
and 1999, Stein Roe received aggregate fees of $315,067, $358,936
and $354,273, respectively, from the Trust for services performed
under this Agreement.

DISTRIBUTOR

Shares of each Fund are distributed by Liberty Funds
Distributor, Inc. ("Distributor"), One Financial Center, Boston,
MA 02111, under a Distribution Agreement. The Distributor is a
subsidiary of Colonial Management Associates, Inc., which is an
indirect subsidiary of Liberty Financial. The Distribution
Agreement continues in effect from year to year, provided such
continuance is approved annually (i) by a majority of the trustees
or by a majority of the outstanding voting securities of the
Trust, and (ii) by a majority of the trustees who are not parties
to the Agreement or interested persons of any such party. The
Trust has agreed to pay all expenses in connection with
registration of its shares with the Securities and Exchange
Commission and auditing and filing fees in connection with
registration of its shares under the various state blue sky laws
and assumes the cost of preparation of prospectuses and other
expenses.

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

TRANSFER AGENT

SteinRoe Services Inc. ("SSI"), One South Wacker Drive,
Chicago, IL 60606, is the agent of the Trust for the transfer of
shares, disbursement of dividends, and maintenance of shareholder
accounting records. For performing these services, SSI receives
from each Fund a fee based on an annual rate of .22 of 1% of the
Fund's average net assets. The Trust believes the charges by SSI
to the Funds are comparable to those of other companies performing
similar services. (See Investment Advisory and Other Services.)
Under a separate agreement, SSI also provides certain investor
accounting services to the Portfolios.

CUSTODIAN

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

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

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

The Funds and the Portfolios may invest in obligations of the
Bank and may purchase or sell securities from or to the Bank.

INDEPENDENT ACCOUNTANTS

The independent accountants for the Funds and the Portfolios
are PricewaterhouseCoopers LLP, 160 Federal Street, Boston, MA
02110. The independent accountants audit and report on the annual
financial statements and provide tax return preparation services
and assistance and consultation in connection with the review of
various SEC filings.

PORTFOLIO TRANSACTIONS

Stein Roe places the orders for the purchase and sale of
portfolio securities and options and futures contracts for its
clients, including private clients and mutual fund clients
("Clients"). Stein Roe and its affiliate Colonial Management
Associates, Inc. ("Colonial") maintain a single, unified trading
operation for trading equity securities. Stein Roe's overriding
objective in selecting brokers and dealers to effect portfolio
transactions is to seek the best combination of net price and
execution. The best net price, giving effect to brokerage
commissions, if any, is an important factor in this decision;
however, a number of other judgmental factors may also enter into
the decision. These factors include Stein Roe's knowledge of
negotiated commission rates currently available and other current
transaction costs; the nature of the security being purchased or
sold; the size of the transaction; the desired timing of the
transaction; the activity existing and expected in the market for
the particular security; confidentiality; the execution, clearance
and settlement capabilities of the broker or dealer selected and
others considered; Stein Roe's knowledge of the financial
condition of the broker or dealer selected and such other brokers
and dealers; and Stein Roe's knowledge of actual or apparent
operation problems of any broker or dealer.

Recognizing the value of these factors, Stein Roe may cause a
Client to pay a brokerage commission in excess of that which
another broker may have charged for effecting the same
transaction. Stein Roe has established internal policies for the
guidance of its trading personnel, specifying minimum and maximum
commissions to be paid for various types and sizes of transactions
and effected for Clients in those cases where Stein Roe has
discretion to select the broker or dealer by which the transaction
is to be executed. Stein Roe has discretion for all trades of the
Funds. Transactions which vary from the guidelines are subject to
periodic supervisory review. These guidelines are reviewed and
periodically adjusted, and the general level of brokerage
commissions paid is periodically reviewed by Stein Roe.
Evaluations of the reasonableness of brokerage commissions, based
on the factors described in the preceding paragraph, are made by
Stein Roe's trading personnel while effecting portfolio
transactions. The general level of brokerage commissions paid is
reviewed by Stein Roe, and reports are made annually to the Board
of Trustees.

Stein Roe maintains and periodically updates a list of
approved brokers and dealers which, in Stein Roe's judgment, are
generally capable of providing best price and execution and are
financially stable. Stein Roe's traders are directed to use only
brokers and dealers on the approved list, except in the case of
Client designations of brokers or dealers to effect transactions
for such Clients' accounts. Stein Roe generally posts certain
Client information on the "Alert" broker database system as a
means of facilitating the trade affirmation and settlement
process.

It is Stein Roe's practice, when feasible, to aggregate for
execution as a single transaction orders for the purchase or sale
of a particular security for the accounts of several Clients (and,
when feasible, Colonial clients), in order to seek a lower
commission or more advantageous net price. The benefit, if any,
obtained as a result of such aggregation generally is allocated
pro rata among the accounts of Clients which participated in the
aggregated transaction. In some instances, this may involve the
use of an "average price" execution wherein a broker or dealer to
which the aggregated order has been given will execute the order
in several separate transactions during the course of a day at
differing prices and, in such case, each Client participating in
the aggregated order will pay or receive the same price and
commission, which will be an average of the prices and commissions
for the several separate transactions executed by the broker or
dealer.

Stein Roe sometimes makes use of an indirect electronic
access to the New York Stock Exchange's "SuperDOT" automated
execution system, provided through a NYSE member floor broker, W&D
Securities, Inc., a subsidiary of Jeffries & Co., Inc.,
particularly for the efficient execution of smaller orders in NYSE
listed equities. Stein Roe sometimes uses similar arrangements
through Billings & Co., Inc. and Driscoll & Co., Inc., floor
broker members of the Chicago Stock Exchange, for transactions to
be executed on that exchange. In using these arrangements, Stein
Roe must instruct the floor broker to refer the executed
transaction to another brokerage firm for clearance and
settlement, as the floor brokers do not deal with the public.
Transactions of this type sometimes are referred to as "step-in"
or "step-out" transactions. The brokerage firm to which the
executed transaction is referred may include, in the case of
transactions effected through W&D Securities, brokerage firms
which provide Stein Roe investment research or related services.

Stein Roe places certain trades for the Funds through its
affiliate AlphaTrade, Inc. ("ATI"). ATI is a wholly owned
subsidiary of Colonial Management Associates, Inc. ATI is a fully
disclosed introducing broker that limits its activities to
electronic execution of transactions in listed equity securities.
The Funds pay ATI a commission for these transactions. The Funds
have adopted procedures consistent with Investment Company Act
Rule 17e-1 governing such transactions. Certain of Stein Roe's
officers also serve as officers, directors and/or employees of
ATI.

Consistent with the Rules of Fair Practice of National
Association of Securities Dealers, Inc. and subject to seeking
best executing and such other policies as the trustees of the
Funds may determine, Stein Roe may consider sales of shares of
each of the Funds as a factor in the selection of broker-dealers
to execute such mutual fund securities transactions.

Investment Research Products and Services Furnished by Brokers and
Dealers

Stein Roe engages in the long-standing practice in the money
management industry of acquiring research and brokerage products
and services ("research products") from broker-dealer firms in
return directing trades for Client accounts to those firms. In
effect, Stein Roe is using the commission dollars generated from
these Client accounts to pay for these research products. The
money management industry uses the term "soft dollars" to refer to
this industry practice. Stein Roe may engage in soft dollar
transactions on trades for those Client accounts for which Stein
Roe has the discretion to select the broker-dealers.

The ability to direct brokerage for a Client account belongs
to the Client and not to Stein Roe. When a Client grants Stein
Roe the discretion to select broker-dealers for Client trades,
Stein Roe has a duty to seek the best combination of net price and
execution. Stein Roe faces a potential conflict of interest with
this duty when it uses Client trades to obtain soft dollar
products. This conflict exists because Stein Roe is able to use
the soft dollar products in managing its Client accounts without
paying cash ("hard dollars") for the product. This reduces Stein
Roe's expenses.

Moreover, under a provision of the federal securities laws
applicable to soft dollars, Stein Roe is not required to use the
soft dollar product in managing those accounts that generate the
trade. Thus, the Client accounts that generate the brokerage
commission used to acquire the soft dollar product may not benefit
directly from that product. In effect, those accounts are cross
subsidizing Stein Roe's management of the other accounts that do
benefit directly from the product. This practice is explicitly
sanctioned by a provision of the Securities Exchange Act of 1934,
which creates a "safe harbor" for soft dollar transactions
conducted in a specified manner. Although it is inherently
difficult, if not impossible, to document, Stein Roe believes that
over time most, if not all, Clients benefit from soft dollar
products such that cross subsidizations even out.

Stein Roe attempts to reduce or eliminate this conflict by
directing Client trades for soft dollar products only if Stein Roe
concludes that the broker-dealer supplying the product is capable
of providing a combination of the best net price and execution on
the trade. As noted above, the best net price, while significant,
is one of a number of judgmental factors Stein Roe considers in
determining whether a particular broker is capable of providing
the best net price and execution. Stein Roe may cause a Client
account to pay a brokerage commission in a soft dollar trade in
excess of that which another broker-dealer might have charged for
the same transaction.

Stein Roe acquires two types of soft dollar research
products: (i) proprietary research created by the broker-dealer
firm executing the trade and (ii) other products created by third
parties that are supplied to Stein Roe through the broker-dealer
firm executing the trade.

Proprietary research consists primarily of traditional
research reports, recommendations and similar materials produced
by the in house research staffs of broker-dealer firms. This
research includes evaluations and recommendations of specific
companies or industry groups, as well as analyses of general
economic and market conditions and trends, market data, contacts
and other related information and assistance. Stein Roe's
research analysts periodically rate the quality of proprietary
research produced by various broker-dealer firms. Based on these
evaluations, Stein Roe develops target levels of commission
dollars on a firm-by-firm basis. Stein Roe attempts to direct
trades to each firm to meet these targets.

Stein Roe also uses soft dollars to acquire products created
by third parties that are supplied to Stein Roe through broker-
dealers executing the trade (or other broker-dealers who "step in"
to a transaction and receive a portion of the brokerage commission
for the trade). These products include the following:

* Database Services-comprehensive databases containing current
and/or historical information on companies and industries.
Examples include historical securities prices, earnings
estimates, and SEC filings. These services may include software
tools that allow the user to search the database or to prepare
value-added analyses related to the investment process (such as
forecasts and models used in the portfolio management process).
* Quotation/Trading/News Systems-products that provide real time
market data information, such as pricing of individual
securities and information on current trading, as well as a
variety of news services.
* Economic Data/Forecasting Tools-various macro economic
forecasting tools, such as economic data and economic and
political forecasts for various countries or regions.
* Quantitative/Technical Analysis-software tools that assist in
quantitative and technical analysis of investment data.
* Fundamental Industry Analysis-industry-specific fundamental
investment research.
* Fixed Income Security Analysis-data and analytical tools that
pertain specifically to fixed income securities. These tools
assist in creating financial models, such as cash flow
projections and interest rate sensitivity analyses, that are
relevant to fixed income securities.
* Other Specialized Tools-other specialized products, such as
specialized economic consulting analyses and attendance at
investment oriented conferences.

Many third-party products include computer software or on-
line data feeds. Certain products also include computer hardware
necessary to use the product.

Certain of these third party services may be available
directly from the vendor on a hard dollar basis. Others are
available only through broker-dealer firms for soft dollars.
Stein Roe evaluates each product to determine a cash ("hard
dollars") value of the product to Stein Roe. Stein Roe then on a
product-by-product basis targets commission dollars in an amount
equal to a specified multiple of the hard dollar value to the
broker-dealer that supplies the product to Stein Roe. In general,
these multiples range from 1.25 to 1.85 times the hard dollar
value. Stein Roe attempts to direct trades to each firm to meet
these targets. (For example, if the multiple is 1.5:1.0, assuming
a hard dollar value of $10,000, Stein Roe will target to the
broker-dealer providing the product trades generating $15,000 in
total commissions.)

The targets that Stein Roe establishes for both proprietary
and for third party research products typically will reflect
discussions that Stein Roe has with the broker-dealer providing
the product regarding the level of commissions it expects to
receive for the product. However, these targets are not binding
commitments, and Stein Roe does not agree to direct a minimum
amount of commissions to any broker-dealer for soft dollar
products. In setting these targets, Stein Roe makes a
determination that the value of the product is reasonably
commensurate with the cost of acquiring it. These targets are
established on a calendar year basis. Stein Roe will receive the
product whether or not commissions directed to the applicable
broker-dealer are less than, equal to or in excess of the target.
Stein Roe generally will carry over target shortages and excesses
to the next year's target. Stein Roe believes that this practice
reduces the conflicts of interest associated with soft dollar
transactions, since Stein Roe can meet the non-binding
expectations of broker-dealers providing soft dollar products over
flexible time periods. In the case of third party products, the
third party is paid by the broker-dealer and not by Stein Roe.
Stein Roe may enter into a contract with the third party vendor to
use the product. (For example, if the product includes software,
Stein Roe will enter into a license to use the software from the
vendor.)

In certain cases, Stein Roe uses soft dollars to obtain
products that have both research and non-research purposes.
Examples of non-research uses are administrative and marketing
functions. These are referred to as "mixed use" products. As of
the date of this SAI, Stein Roe acquires two mixed use products.
These are (i) a fixed income security data service and (ii) a
mutual fund performance ranking service. In each case, Stein Roe
makes a good faith evaluation of the research and non-research
uses of these services. These evaluations are based upon the time
spent by Firm personnel for research and non-research uses. Stein
Roe pays the provider in cash ("hard dollars") for the non-
research portion of its use of these products.

Stein Roe may use research obtained from soft dollar trades
in the management of any of its discretionary accounts. Thus,
consistent with industry practice, Stein Roe does not require that
the Client account that generates the trade receive any benefit
from the soft dollar product obtained through the trade. As noted
above, this may result in cross subsidization of soft dollar
products among Client accounts. As so noted, this practice is
explicitly sanctioned by a provision of the Securities Exchange
Act of 1934, which creates a "safe harbor" for soft dollar
transactions conducted in a specified manner.

In certain cases, Stein Roe will direct a trade to one
broker-dealer with the instruction that it execute the trade and
pay over a portion of the commission from the trade to another
broker-dealer who provides Stein Roe with a soft dollar research
product. The broker-dealer executing the trade "steps out" of a
portion of the commission in favor of the other broker-dealer
providing the soft dollar product. Stein Roe may engage in step
out transactions in order to direct soft dollar commissions to a
broker-dealer which provides research but may not be able to
provide best execution. Brokers who receive step out commissions
typically are brokers providing a third party soft dollar product
that is not available on a hard dollars basis. Stein Roe has not
engaged in step out transactions as a manner of compensating
broker-dealers that sell shares of investment companies managed by
Stein Roe.

The table below shows information on brokerage commissions
paid by the Funds and the Portfolios (in the case of a feeder
fund, brokerage commissions were paid by the Fund prior to
February 3, 1997 and by its related Portfolio since that date):

Growth & Balanced Growth Disciplined
Income Portfolio Stock Stock
Portfolio Portfolio Portfolio
- ------------------------------------------------------------------
Total amount of
brokerage commissions
paid during fiscal
year ended 9/30/99 $84,072 $203,114 $957,840 $1,692,241
Amount of commissions
paid to brokers or
dealers who supplied
research services to
Stein Roe 36,956 160,135 666,815 1,012,153
Total dollar amount
involved in such
transactions (000
omitted) 165,807 137,915 2,157,116 5,927,255
Total amount of
brokerage commissions
paid during fiscal
year ended 9/30/98 100,196 312,627 562,354 2,301,286
Total amount of
brokerage commissions
paid during fiscal
year ended 9/30/97 120,469 144,101 240,427 766,278

Large Capital Small
Midcap Company Growth Oppor- Company
Growth Focus Investor tunities Growth
Fund Fund Portfolio Fund Fund
- ------------------------------------------------------------------
Total amount of
brokerage commissions
paid during fiscal
year ended 9/30/99 $116,715 $51,496 $2,204,246 867,578 $15,944
Amount of commissions
paid to brokers or
dealers who supplied
research services to
Stein Roe 77,167 31,435 437,146 609,016 7,694
Total dollar amount
involved in such
transactions (000
omitted) 72,988 178,047 1,334,432 1,591,956 8,360
Total amount of
brokerage commissions
paid during fiscal
year ended 9/30/98 67,521 43,465 807,008 732,013 -
Total amount of brokerage
commissions paid
during fiscal year
ended 9/30/97 38,375 - 512,584 543,951 -

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

During the last fiscal year, certain Funds and Portfolios
held securities issued by one or more of their regular broker-
dealers or the parent of such broker-dealers that derive more than
15% of gross revenue from securities-related activities. Such
holdings were as follows at September 30, 1999:

Fund/Portfolio Broker-Dealer Value of
Securities Held
(in thousands)
- ------------------------------------------------------------------
Balanced Portfolio Bank America Corp. $5,454
Household Financial
Corp., 5.875%, 11/1/02 1,945
Associates Corp. of North
America, 6.95%, 11/1/18 1,794
Banc One 627
Goldman Sachs Group 470

ADDITIONAL INCOME TAX CONSIDERATIONS

Each Fund and Portfolio intends to qualify under Subchapter M
of the Internal Revenue Code and to comply with the special
provisions of the Internal Revenue Code that relieve it of federal
income tax to the extent of its net investment income and capital
gains currently distributed to shareholders.

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

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

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

INVESTMENT PERFORMANCE

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

n
Average Annual Total Return is computed as follows: ERV = P(1+T)

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

Total return performance as of September 30, 1999, was as
follows:

1 Year 5 Years 10 Years or
Life of Fund
(if shorter)
- -----------------------------------------------------------------
Balanced Fund 15.74% 13.50% 11.26%
Growth & Income
Fund, Class S 19.39 19.14 14.73
Disciplined Stock Fund 13.57 10.64 10.96
Growth Stock Fund 35.98 24.07 16.80
Growth Investor Fund 24.25 24.79 23.20*
Midcap Growth Fund 20.17 N/A 10.47*
Large Company Focus Fund 35.05 N/A 13.93*
Capital Opportunities Fund 13.43 13.66 10.21
Small Company Growth Fund 33.06 N/A 15.37*
__________
*Life of Fund is from date of public offering of Fund or its
predecessor: April 29, 1994 for predecessor of Growth Investor
Fund; June 30, 1997 for Midcap Growth Fund; June 26, 1998 for
Large Company Focus Fund; and March 25, 1996 for predecessor of
Small Company Growth Fund.

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

A Fund may note its mention or recognition in newspapers,
magazines, or other media from time to time. However, the Funds
assume no responsibility for the accuracy of such data.
Newspapers and magazines which might mention the Funds include,
but are not limited to, the following:

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

In advertising and sales literature, a Fund may compare its
performance with that of other mutual funds, indexes or averages
of other mutual funds, indexes of related financial assets or
data, and other competing investment and deposit products
available from or through other financial institutions. The
composition of these indexes or averages differs from that of the
Funds. Comparison of a Fund to an alternative investment should
be made with consideration of differences in features and expected
performance. All of the indexes and averages noted below will be
obtained from the indicated sources or reporting services, which
the Funds believe to be generally accurate. All of the Funds may
compare their performance to the Consumer Price Index (All Urban),
a widely recognized measure of inflation. Each Fund's performance
may be compared to the following indexes or averages:

Dow-Jones Industrial Average New York Stock Exchange Composite
Index
Standard & Poor's 500 Stock American Stock Exchange Composite
Index Index
Standard & Poor's 400 Nasdaq Composite
Industrials Nasdaq Industrials
Russell 2000 Index
Wilshire 5000

(These indexes are widely (These indexes generally reflect
recognized indicators of the performance of stocks traded
general U.S. stock market in the indicated markets.)
results.)

In addition, the Funds may compare performance to the
indicated benchmarks:

Benchmark Fund(s)
Lipper Balanced Fund Average Balanced Fund
Lipper Balanced Fund Index Balanced Fund
Lipper Capital Appreciation Fund
Average Capital Opportunities Fund,
Midcap Growth Fund, Large
Company Focus Fund
Lipper Capital Appreciation Fund
Index Capital Opportunities Fund,
Midcap Growth Fund, Large
Company Focus Fund
Lipper Equity Fund Average All Funds
Lipper General Equity Fund All Funds
Lipper Growth & Income Fund Average Growth & Income Fund
Lipper Growth & Income Fund Index Growth & Income Fund
Lipper Growth Fund Average Growth Stock Fund,
Disciplined Stock Fund,
Growth Investor Fund, Small
Company Growth Fund
Lipper Growth Fund Index Growth Stock Fund,
Disciplined Stock Fund,
Growth Investor Fund, Small
Company Growth Fund
Morningstar Aggressive Growth Fund
Average Capital Opportunities Fund,
Midcap Growth Fund, Large
Company Focus Fund
Morningstar All Equity Funds Average All Funds
Morningstar Advisor Balanced Fund
Average Balanced Fund
Morningstar Domestic Stock Average All Funds
Morningstar Equity Fund Average All Funds
Morningstar General Equity Average* All Funds
Morningstar Growth & Income Fund
Average Growth & Income Fund
Morningstar Growth Fund Average Growth Stock Fund,
Disciplined Stock Fund,
Growth Investor Fund, Small
Company Growth Fund
Morningstar Hybrid Fund Average Balanced Fund, Growth
Investor Fund, Small Company
Growth Fund
Morningstar Total Fund Average All Funds
Morningstar U.S. Diversified Average Growth Investor Fund, Small
Company Growth Fund
Value Line Index (Widely
recognized indicator of the
performance of small- and medium-
sized company stocks) Capital Opportunities Fund,
Disciplined Stock Fund,
Midcap Growth Fund, Large
Company Focus Fund

*Includes Morningstar Aggressive Growth, Growth, Balanced, Equity
Income, and Growth and Income Averages.

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

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

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

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

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

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

TAX-DEFERRED INVESTMENT VS. TAXABLE INVESTMENT

Interest
Rate 3% 5% 7% 9%
- --------------------------------------------
Compound-
ing
Years Tax-Deferred Investment
- ---- ------------------------------------
30 $82,955 $108,031 $145,856 $203,239
25 65,164 80,337 101,553 131,327
20 49,273 57,781 68,829 83,204
15 35,022 39,250 44,361 50,540
10 22,184 23,874 25,779 27,925
5 10,565 10,969 11,393 11,840
1 2,036 2,060 2,085 2,109

Interest
Rate 3% 5% 7% 9%
- -------------------------------------------
Compound-
ing
Years Taxable Investment
- ---- ----------------------------------
30 $80,217 $98,343 $121,466 $151,057
25 63,678 75,318 89,528 106,909
20 48,560 55,476 63,563 73,028
15 34,739 38,377 42,455 47,025
10 22,106 23,642 25,294 27,069
5 10,557 10,943 11,342 11,754
1 2,036 2,060 2,085 2,109

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

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

MASTER FUND/FEEDER FUND: STRUCTURE AND RISK FACTORS

Each of Growth & Income Fund, Balanced Fund, Disciplined
Stock Fund, Growth Stock Fund, and Growth Investor Fund (which are
series of the Trust, an open-end management investment company)
seeks to achieve its objective by investing all of its assets in
another mutual fund having an investment objective identical to
that of the Fund. The shareholders of each Fund approved this
policy of permitting a Fund to act as a feeder fund by investing
in a Portfolio. Please refer to Investment Policies, Portfolio
Investments and Strategies, and Investment Restrictions for a
description of the investment objectives, policies, and
restrictions of the Funds and the Portfolios. The management fees
and expenses of the Funds and the Portfolios are described under
Investment Advisory and Other Services. Each feeder Fund bears
its proportionate share of the expenses of its master Portfolio.

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

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

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

The common investment objectives of the Funds and the
Portfolios are nonfundamental and may be changed without
shareholder approval, subject, however, to at least 30 days'
advance written notice to a Fund's shareholders.

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

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

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

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

Information regarding other investors in a Portfolio may be
obtained by writing to SR&F Base Trust at One Financial Center,
Boston, MA 02111, or by calling 800-338-2550. Stein Roe may
provide administrative or other services to one or more of such
investors.

APPENDIX-RATINGS

RATINGS IN GENERAL

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

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

RATINGS BY MOODY'S

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

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

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

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

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

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

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

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

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

RATINGS BY S&P

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

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

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

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

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

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

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

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

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

Statement of Additional Information Dated February 1, 2000

LIBERTY-STEIN ROE FUNDS INVESTMENT TRUST
One Financial Center, Boston, MA 02111-2621
800-338-2550

STEIN ROE INTERNATIONAL FUND

This Statement of Additional Information ("SAI") is not a
prospectus, but provides additional information that should be
read in conjunction with the Fund's prospectus dated February 1,
2000, and any supplements thereto ("Prospectus"). Financial
statements, which are contained in the Fund's September 30, 1999,
Annual Report, are incorporated by reference into this SAI. The
Prospectus and Annual Report may be obtained at no charge by
telephoning 800-338-2550.

TABLE OF CONTENTS
Page

General Information and History ................... 2
Investment Policies....................................3
Portfolio Investments and Strategies...................3
Investment Restrictions...............................20
Additional Investment Considerations..................23
Purchases and Redemptions.............................24
Management............................................28
Financial Statements..................................31
Principal Shareholders................................31
Investment Advisory and Other Services................32
Distributor...........................................33
Transfer Agent........................................34
Custodian.............................................34
Independent Accountants...............................35
Portfolio Transactions................................35
Additional Income Tax Considerations..................40
Investment Performance................................41
Master Fund/Feeder Fund: Structure and Risk Factors...45
Appendix-Ratings......................................47

<PAGE>

GENERAL INFORMATION AND HISTORY

Stein Roe International Fund (the "Fund"), the mutual fund
described in this SAI, is a separate series of Liberty-Stein Roe
Funds Investment Trust (the "Trust"). The Fund commenced
operations on March 1, 1994.

On February 1, 1996, the names of the Trust and the Fund were
changed to separate "SteinRoe" into two words. The name of the
Trust was changed on October 18, 1999 from "Stein Roe Investment
Trust" to "Liberty-Stein Roe Funds Investment Trust."

The 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 the
Trust's shareholders or its trustees. The Trust may issue an
unlimited number of shares, in one or more series each with one or
more classes of shares, as the Board may authorize. Currently, 12
series are authorized and outstanding. Each series invests in a
separate portfolio of securities and other assets, with its own
objectives and policies.

Special Considerations Regarding Master Fund/Feeder Fund Structure

Rather than invest in securities directly, the Fund seeks to
achieve its objective by pooling its assets with those of other
investment companies for investment in a master fund having the
identical investment objective and substantially the same
investment policies as its feeder funds. The purpose of such an
arrangement is to achieve greater operational efficiencies and
reduce costs. The Fund has invested all of its assets in SR&F
International Portfolio (the "Portfolio"), a separate master fund
that is a series of SR&F Base Trust since February 3, 1997. For
more information, please refer to Master Fund/Feeder Fund:
Structure and Risk Factors.

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

INVESTMENT POLICIES

The Trust and SR&F Base Trust are open-end management
investment companies. The Fund and the Portfolio are diversified,
as that term is defined in the Investment Company Act of 1940.

The investment objectives and policies are described in the
Prospectus under The Fund. In pursuing its objective, the
Portfolio may employ the investment techniques described in
Portfolio Investments and Strategies in this SAI. The investment
objective is a non-fundamental policy and may be changed by the
Board of Trustees without the approval of a "majority of the
outstanding voting securities."/1/

- ------------------
/1/ A "majority of the outstanding voting securities" means the
approval of the lesser of (i) 67% or more of the shares at a
meeting if the holders of more than 50% of the outstanding shares
are present or represented by proxy or (ii) more than 50% of the
outstanding shares.
- ------------------

PORTFOLIO INVESTMENTS AND STRATEGIES

Debt Securities

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

Investments in debt securities are limited to those that are
within the four highest grades (generally referred to as
"investment grade") assigned by a nationally recognized
statistical rating organization or, if unrated, deemed to be of
comparable quality by Stein Roe.

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 the
Portfolio is lost or reduced below investment grade, the Portfolio
is not required to dispose of the security, but Stein Roe will
consider that fact in determining whether the Portfolio should
continue to hold the security.

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

Derivatives

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

The Portfolio currently intends to invest no more than 5% of
its net assets in any type of Derivative other than options,
futures contracts, futures options, and forward contracts. (See
Options and Futures below.)

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

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

Convertible Securities

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

Foreign Securities

The Portfolio invests primarily in foreign securities.
Investment in foreign securities may entail a greater degree of
risk (including risks relating to exchange rate fluctuations, tax
provisions, or expropriation of assets) than investment in
securities of domestic issuers. For this purpose, foreign
securities do not include American Depositary Receipts (ADRs) or
securities guaranteed by a United States person. ADRs are
receipts typically issued by an American bank or trust company
evidencing ownership of the underlying securities. The Portfolio
may invest in sponsored or unsponsored ADRs. In the case of an
unsponsored ADR, the Portfolio is likely to bear its proportionate
share of the expenses of the depositary and it may have greater
difficulty in receiving shareholder communications than it would
have with a sponsored ADR. The Portfolio may also purchase
foreign securities in the form of European Depositary Receipts
(EDRs) or other securities representing underlying shares of
foreign issuers. Positions in these securities are not
necessarily denominated in the same currency as the common stocks
into which they may be converted. EDRs are European receipts
evidencing a similar arrangement. Generally, ADRs, in registered
form, are designed for the U.S. securities markets and EDRs, in
bearer form, are designed for use in European securities markets.

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

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

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

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

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

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

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

Synthetic Foreign Money Market Positions. The Portfolio may
invest in money market instruments denominated in foreign
currencies. In addition to, or in lieu of, such direct
investment, the Portfolio may construct a synthetic foreign money
market position by (a) purchasing a money market 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.
For example, a synthetic money market position in Japanese yen
could be constructed by purchasing a U.S. dollar money market
instrument, and entering concurrently into a forward contract to
deliver a corresponding amount of U.S. dollars in exchange for
Japanese yen on a specified date and at a specified rate of
exchange. Because of the availability of a variety of highly
liquid short-term U.S. dollar money market instruments, a
synthetic money market position utilizing such U.S. dollar
instruments may offer greater liquidity than direct investment in
foreign currency money market instruments. The result of a direct
investment in a foreign currency and a concurrent construction of
a synthetic position in such foreign currency, in terms of both
income yield and gain or loss from changes in currency exchange
rates, in general should be similar, but would not be identical
because the components of the alternative investments would not be
identical. Except to the extent a synthetic foreign money market
position consists of a money market instrument denominated in a
foreign currency, the synthetic foreign money market position
shall not be deemed a "foreign security" for purposes of the
policy that, under normal conditions, the Portfolio will invest at
least 65% of total assets in foreign securities.

Eurodollar Instruments

The Portfolio may make investments in Eurodollar instruments.
Eurodollar instruments are U.S. dollar-denominated futures
contracts or options thereon which are linked to LIBOR, although
foreign currency-denominated instruments are available from time
to time. Eurodollar future contracts enable purchasers to obtain
a fixed rate for the lending of funds and sellers to obtain a
fixed rate for borrowings. The Portfolio might use Eurodollar
futures contracts and options thereon to hedge against changes in
LIBOR, to which many interest rate swaps and fixed income
instruments are linked.

Structured Notes

Structured Notes are Derivatives on which the amount of
principal repayment and or interest payments is based upon the
movement of one or more factors. These factors include, but are
not limited to, currency exchange rates, interest rates (such as
the prime lending rate and the London Interbank Offered Rate
("LIBOR")), stock indices such as the S&P 500 Index and the price
fluctuations of a particular security. In some cases, the impact
of the movements of these factors may increase or decrease through
the use of multipliers or deflators. The use of Structured Notes
allows the Portfolio to tailor its investments to the specific
risks and returns Stein Roe wishes to accept while avoiding or
reducing certain other risks.

Swaps, Caps, Floors and Collars

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

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

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

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

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

Lending of Portfolio Securities

Subject to restriction (5) under Investment Restrictions in
this SAI, the Portfolio may lend its portfolio securities to
broker-dealers and banks. Any such loan must be continuously
secured by collateral in cash or cash equivalents maintained on a
current basis in an amount at least equal to the market value of
the securities loaned by the Portfolio. The Portfolio would
continue to receive the equivalent of the interest or dividends
paid by the issuer on the securities loaned, and would also
receive an additional return that may be in the form of a fixed
fee or a percentage of the collateral. The Portfolio would have
the right to call the loan and obtain the securities loaned at any
time on notice of not more than five business days. The Portfolio
would not have the right to vote the securities during the
existence of the loan but would call the loan to permit voting of
the securities if, in Stein Roe's judgment, a material event
requiring a shareholder vote would otherwise occur before the loan
was repaid. In the event of bankruptcy or other default of the
borrower, the Portfolio could experience both delays in
liquidating the loan collateral or recovering the loaned
securities and losses, including (a) possible decline in the value
of the collateral or in the value of the securities loaned during
the period while the Portfolio seeks to enforce its rights
thereto, (b) possible subnormal levels of income and lack of
access to income during this period, and (c) expenses of enforcing
its rights. The Portfolio did not lend portfolio securities
during the fiscal year ended September 30, 1999 nor does it
currently intend to loan more than 5% of its net assets.

Repurchase Agreements

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

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

The Portfolio may purchase securities on a when-issued or
delayed-delivery basis. Although the payment and interest terms
of these securities are established at the time the Portfolio
enters into the commitment, the securities may be delivered and
paid for a month or more after the date of purchase, when their
value may have changed. The Portfolio makes such commitments only
with the intention of actually acquiring the securities, but may
sell the securities before settlement date if Stein Roe deems it
advisable for investment reasons. During its last fiscal year, the
Portfolio had no commitments to purchase when-issued securities in
excess of 5% of its net assets. The Portfolio may utilize spot
and forward foreign currency exchange transactions to reduce the
risk inherent in fluctuations in the exchange rate between one
currency and another when securities are purchased or sold on a
when-issued or delayed-delivery basis.

The Portfolio may enter into reverse repurchase agreements
with banks and securities dealers. A reverse repurchase agreement
is a repurchase agreement in which the Portfolio is the seller of,
rather than the investor in, securities and agrees to repurchase
them at an agreed-upon time and price. Use of a reverse
repurchase agreement may be preferable to a regular sale and later
repurchase of securities because it avoids certain market risks
and transaction costs. The Portfolio did not enter into reverse
repurchase agreements during the fiscal year ended September 30,
1999.

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

Short Sales "Against the Box"

The Portfolio may sell securities short against the box; that
is, enter into short sales of securities that it currently owns or
has the right to acquire through the conversion or exchange of
other securities that it owns at no additional cost. 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.

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

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

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

Rule 144A Securities

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

Line of Credit

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

Interfund Borrowing and Lending Program

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

Portfolio Turnover

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

Options on Securities and Indexes

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

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

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

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

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

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

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

Futures Contracts and Options on Futures Contracts

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

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

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

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

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

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

Risks Associated with Futures

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

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

Limitations on Options and Futures

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

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

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

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

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

Taxation of Options and Futures

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

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

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

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

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

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

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

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

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

INVESTMENT RESTRICTIONS

The Fund and the Portfolio operate under the following
investment restrictions. The Fund or Portfolio may not:

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

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

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

(7) invest in a security if more than 25% of its total assets
(taken at market value at the time of a particular purchase) would
be invested in the securities of issuers in any particular
industry,/5/ except that this restriction does not apply to
securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities, and [Fund only] except that all or
substantially all of the assets of the Fund may be invested in
another registered investment company having the same investment
objective and substantially similar investment policies as the
Fund; or
- ------------
/5/ For purposes of this investment restriction, International
Portfolio uses industry classifications contained in Morgan
Stanley Capital International Perspective, which is published by
Morgan Stanley, an international investment banking and brokerage
firm.
- ------------

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

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

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

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

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

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

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

(h) invest more than 10% of its total assets (taken at market
value at the time of a particular investment) in restricted
securities, other than securities eligible for resale pursuant to
Rule 144A under the Securities Act of 1933;

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

Notwithstanding the foregoing investment restrictions, the
Portfolio may purchase securities pursuant to the exercise of
subscription rights, subject to the condition that such purchase
will not result in its ceasing to be a diversified investment
company. Far Eastern and European corporations frequently issue
additional capital stock by means of subscription rights offerings
to existing shareholders at a price substantially below the market
price of the shares. The failure to exercise such rights would
result in the interest of the Portfolio in the issuing company
being diluted. The market for such rights is not well developed
in all cases and, accordingly, the Portfolio may not always
realize full value on the sale of rights. The exception applies
in cases where the limits set forth in the investment restrictions
would otherwise be exceeded by exercising rights or would have
already been exceeded as a result of fluctuations in the market
value of the portfolio securities with the result that it would be
forced either to sell securities at a time when it might not
otherwise have done so, to forego exercising the rights.

ADDITIONAL INVESTMENT CONSIDERATIONS

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

PURCHASES AND REDEMPTIONS

Purchases Through Third Parties

Some Intermediaries that maintain nominee accounts with the
Fund for their clients for whom they hold Fund shares charge an
annual fee of up to 0.35% of the average net assets held in such
accounts for accounting, servicing, and distribution services they
provide with respect to the underlying Fund shares. Stein Roe and
the Fund's transfer agent share in the expense of these fees, and
Stein Roe pays all sales and promotional expenses.

Net Asset Value

The net asset value of the Fund is determined on days on
which the New York Stock Exchange (the "NYSE") is open for regular
session trading. The NYSE is regularly closed on Saturdays and
Sundays and on New Year's Day, the third Monday in January, the
third Monday in February, Good Friday, the last Monday in May,
Independence Day, Labor Day, Thanksgiving, and Christmas. If one
of these holidays falls on a Saturday or Sunday, the NYSE will be
closed on the preceding Friday or the following Monday,
respectively. Net asset value will not be determined on days when
the NYSE is closed unless, in the judgment of the Board of
Trustees, the net asset value should be determined on any such
day, in which case the determination will be made at 4 p.m.,
Eastern time. Please refer to Your Account-Determining Share
Price in the Prospectus for additional information on how the
purchase and redemption price of Fund shares is determined.

General Redemption Policies

The Trust intends to pay all redemptions in cash. The Trust
retains the right, subject to the Rule 18f-1 notice described
below, to alter this policy to provide for redemptions in whole or
in part by a distribution in kind of securities held by the Fund
in lieu of cash. If redemptions were made in kind, the redeeming
shareholders might incur transaction costs in selling the
securities received in the redemptions. The Trust filed a
Notification of Election pursuant to Rule 18f-1 under the
Investment Company Act of 1940 with the Securities and Exchange
Commission which commits the Fund to pay in cash all requests for
redemptions by any shareholder, limited in amount with respect to
each shareholder during any 90-day period to the lesser of
$250,000 or 1% of the net asset value of the Fund at the beginning
of such period.

Neither the 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. The 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 the 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
the Fund immediately if there is a problem. If the 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.

Shares in any account you maintain with the 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).

The 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. The Trust believes
that use of the Telephone Exchange Privilege by investors
utilizing market-timing strategies adversely affects the Fund.
Therefore, regardless of the number of telephone exchange round-
trips made by an investor, the Trust generally will not honor
requests for Telephone Exchanges by shareholders identified by the
Trust as "market-timers" if the officers of the Trust determine
the order not to be in the best interests of the Trust or its
shareholders. The Trust generally identifies as a "market-timer"
an investor whose investment decisions appear to be based on
actual or anticipated near-term changes in the securities markets
other than for investment considerations. Moreover, the 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
the Fund, the 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 the
Fund. If the 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. During periods of volatile economic and market
conditions, you may have difficulty placing your exchange by
telephone.

Redemption Privileges

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 the Fund may refuse
requests for Telephone Exchanges in excess of four round-trips (a
round-trip being the exchange out of the Fund into another no-load
Stein Roe Fund, and then back to the Fund). In addition, the
Trust's general redemption policies apply to redemptions of shares
by Telephone Exchange.