STEINROE VARIABLE INVESTMENT TRUST, N-30D, 1996-08-29

STEINROE VARIABLE INVESTMENT TRUST
N-30D, 1996-08-29

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STEINROE VARIABLE INVESTMENT TRUST

Capital Appreciation Fund
Managed Growth Stock Fund
Managed Assets Fund
Mortgage Securities Income Fund
Cash Income Fund

Semiannual Report
June 30, 1996

<PAGE>

- ------------------------------------------------------------------------------
TABLE OF CONTENTS
- ------------------------------------------------------------------------------
PRESIDENT'S LETTER ........................................................1
PORTFOLIO MANAGER'S DISCUSSION:
Capital Appreciation Fund ..............................................3
Managed Growth Stock Fund ..............................................4
Managed Assets Fund ....................................................5
Mortgage Securities Income Fund ........................................6
Cash Income Fund .......................................................7
FINANCIAL STATEMENTS:
Capital Appreciation Fund ..............................................8
Managed Growth Stock Fund .............................................13
Managed Assets Fund ...................................................18
Mortgage Securities Income Fund .......................................24
Cash Income Fund ......................................................29
NOTES TO FINANCIAL STATEMENTS ............................................33
<PAGE>

PRESIDENT'S LETTER
SteinRoe Variable Investment Trust
- ------------------------------------------------------------------------------

Dear Fellow Contract Owner:

We are pleased to present this semiannual report for the SteinRoe Variable
Investment Trust -- Capital Appreciation Fund, Managed Growth Stock Fund,
Managed Assets Fund, Mortgage Securities Income Fund and Cash Income Fund.

This report provides us with the opportunity to reflect on the
investment environment of the past six months. At the end of December, we
reported on mixed investor sentiment -- some investors were calling for a
major market correction, while others heralded 1996 as the beginning of a new
economic era. As we predicted, neither extreme has come to pass, but
conditions remained volatile, to say the least.

WHERE WE'VE BEEN

It was a good period for the stock market, as many companies' earnings
continued to meet -- or exceed -- expectations, despite the threat higher
interest rates posed to corporate profitability. Although the stock market as
a whole performed well, growth-oriented small-cap stocks, in particular,
gained momentum this period, reversing the pattern of 1995 and early 1996,
when large-cap stocks raced ahead of the broader market. Large-cap stocks,
however, suffered much less than smaller stocks in the late June selloff, as
many investors scrambled to find stocks that might provide some protection if
the overall market continues to slide.

It was a much tougher time for fixed income investors. In fact,
according to Lipper Analytical Services, Inc., taxable bonds funds managed to
eke out an average gain of only 0.28 percent for the six months ended June 30,
as an astonishing payroll report set off inflation alarms and propelled
long-term interest rates higher. The bond market ended an otherwise dismal
first half on a positive note, however. The yield on the benchmark 30-year
Treasury bond, which had reached a mid-June peak of 7.2 percent, eased by
month's end, indicating the bond market finally may have brushed off the
effects of stronger-than-expected economic reports -- at least for the time
being.

WHERE ARE WE GOING?

The markets remain volatile, as a mixed bag of economic data has left many
investors confused about which direction the economy and interest rates are
headed. And many believe the stock market's recent ups and downs could be a
sign that the bull market is finally winding down, as volatility tends to
increase late in a market cycle.

Although we expect some continued volatility in the near term, we
think the markets could stabilize by year end. That's because, despite some
conflicting reports, several key economic indicators are sending encouraging
signals to investors. For example, inflation worries -- sparked in large part
by rising grain, copper and oil prices -- have started to ebb. In addition,
new and existing home sales have slowed, exports are weak and both business
and consumer spending have leveled off -- all events that tend to foreshadow a
possible slowdown in economic activity. This combination of moderate economic
growth and mild inflation could prove beneficial to both the stock and bond
markets. Moreover, few investors seem willing to dwell on dire scenarios.
Inflows into equity funds, for example, continue at near-record pace; in fact,
more money poured into stock funds in the first six months of 1996 than in all
of 1995, when investors put a record $128 billion into equity funds. And while
we are starting to see net outflows from certain sectors, we believe it's a
fairly safe bet that investors will continue to put money into stock and bond
funds, as they focus on achieving their long-term financial goals.
<PAGE>
THE BASICS

While no one can predict what might happen to the markets in the future, we
believe it's important that investors understand the factors that move the
markets -- not just to profit from them, but to gain the patience to ride out
short-term volatility in their investments. No matter what direction you think
the economy is heading, it's important to remember the basics: Think long term
and periodically re-evaluate your portfolio to make sure it continues to match
your goals, risk tolerance and time horizon.

As always, we thank you for investing in the SteinRoe Variable
Investment Trust, and we look forward to serving your investment needs.

Sincerely,

Richard R. Christensen
President
SteinRoe Variable Investment Trust

<PAGE>

PORTFOLIO MANAGER'S DISCUSSION
SteinRoe Variable Investment Trust Capital Appreciation Fund
- ------------------------------------------------------------------------------

DEAR CONTRACT OWNER:

At 16.60 percent for the six months ended June 30, 1996, Capital Appreciation
Fund outpaced the 10.09 percent return of the S&P 500 as well as the 11.32
percent median return of its Lipper capital appreciation fund peer group.

Because the Fund's median market capitalization classifies Capital
Appreciation as a smaller-cap fund, we also compare the Fund to the Russell
2000, an index that measures small-cap performance. For the six-month period,
the Fund outperformed the 10.36 percent return of the Russell 2000.

The Fund's strongest performers during the last six months proved to be its
health care, consumer cyclical and business services holdings. The Fund's
consumer cyclical stocks have been led by cable television holdings, which
benefited from the passage of a telecommunications bill. In addition, the
Fund's non-U.S. holdings, which represented 12 percent of total net assets on
June 30, began to rebound after underperforming in 1995.

While overall performance was very strong, Danka Business Systems (2.0
percent of net assets) reduced portfolio performance somewhat during the
second quarter. After strong performance during the first quarter of the year,
Danka reduced expectations for earnings growth over the near term following
productivity problems with a rapidly expanding sales force. We continue to
believe Danka's long-term prospects are promising.

In Control (1.3 percent of net assets), a medical device manufacturer,
under performed the overall stock market. This reflected general price
weakness for many medical device companies.

We added a number of companies to the portfolio during the six months,
including Mutual Risk Management, a manager of fee-based insurance programs
for businesses; Microware, a software applications company specializing in the
wireless communications and digital television industries; Western Wireless, a
cellular and PCS communications systems company; and Urologix, a developer of
less invasive medical procedures for treating prostate cancer (1.9, 1.3, 1.9
and 0.3 percent of net assets, respectively).

We continue to believe the prospects for well-selected small-cap stocks are
better than those for large-cap stocks--small-caps offer higher earnings
growth at comparable valuation rates.

E. Bruce Dunn, Richard B. Peterson, Portfolio Managers

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT
RETURN WILL VARY, SO YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL SHARES. Total
return performance includes share price and reinvestment of income and capital
gains distributions. The S&P 500 and Russell 2000 are unmanaged groups of
stocks that differ from the Fund's composition; they are not available for
direct investment. Lipper Analytical Services, Inc., is an independent monitor
of mutual fund performance. For the six-month, one- and five-year periods
ended June 30, 1996, the median average annual returns for this variable
annuity capital appreciation fund category were 11.3 percent, 22.8 percent and
15.5 percent, respectively. Performance numbers reflect all Fund expenses, but
do not include any insurance charges imposed by your insurance company's
separate accounts. If performance information included the effect of these
additional amounts, it would be lower.

STEINROE VARIABLE INVESTMENT TRUST
CAPITAL APPRECIATION FUND AND S&P 500

Performance of a Hypothetical $10,000 Investment January 1, 1989 to
June 30, 1996

Average Annual Total Return
at June 30, 1996

1-Year 5-Year Inception
16.6% 18.5% 17.5%

GRAPH:
YEAR ENDED: CAPITAL APPRECIATION FUND S & P 500 INDEX
1/1/89 10000 10000
12/31/89 13084 13163
12/31/90 11918 12754
12/31/91 16357 16631
12/31/92 18725 17896
12/31/93 25406 19697
12/31/94 25708 19955
12/31/95 28729 27444
06/30/96 33498 30213
<PAGE>

PORTFOLIO MANAGER'S DISCUSSION
SteinRoe Variable Investment Trust Managed Growth Stock Fund
- ------------------------------------------------------------------------------
DEAR CONTRACT OWNER:

For the six-month period ended June 30, 1996, Managed Growth Stock Fund's
return of 11.83 percent outpaced both the 10.09 percent return of the S&P 500
and the 10.17 percent median return of the Lipper VA growth fund peer group.
This performance ranked the Fund 35th out of 100 funds, placing it well above
the peer group median.

The Fund outperformed for two reasons. First, the consumer nondurable
sector--a dominant theme in the portfolio--dramatically outperformed the
market, as investors showed continued interest in companies like Gillette,
Coca-Cola and Johnson & Johnson (3.4 percent, 3.4 percent and 2.9 percent of
total net assets, respectively).

Second, our technology holdings also performed well, as most continued to
meet--or exceed--their earnings expectations. Our strongest technology
holdings for the six-month period included Tellabs, Microsoft and Thermo
Electron (2.1 percent, 2.6 percent and 2.4 percent of total net assets,
respectively). Despite some recent volatility, we believe technology remains a
compelling long-term investment, as companies continue to upgrade and expand
their communication and information processing infrastructure.

On a less positive note, the Fund's health care holdings underperformed the
market. Nonetheless, in light of the aging demographic trends in this country,
we think health care remains an attractive long-term investment. As a result,
we purchased several new health care holdings during the period, including
Baxter International, Merck and SmithKline Beecham (1.6 percent, 1.4 percent
and 1.6 percent of total net assets).

Finally, we believe there has been an unusual amount of fixation on
economic data recently. Following the release of several
stronger-than-anticipated economic reports, investors are overly focused on
economic minutiae. While the most recent data seems to indicate that the
economy is somewhat stronger than expected, we simply do not believe the
economy is growing as rapidly as some would suggest. As a result, we believe
we have positioned the portfolio to perform well in the slow growth, low
inflation environ ment that we see going forward.

Erik P. Gustafson, Portfolio Manager

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT
RETURN WILL VARY AND YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL SHARES.
Portfolio holdings are as of June 30, 1996, and are subject to change. Total
return performance includes changes in share price and reinvestment of income
and capital gains distributions. The S&P 500 is an unmanaged group of stocks
that differs from the composition of Managed Growth Stock Fund; it is not
available for direct investment. Lipper Analytical Services, Inc., is an
independent monitor of mutual fund performance. For the six-month, one-year
and five-year periods ended June 30, 1996, the median average annual returns
for the Fund's variable annuity growth fund category were 10.2 percent, 30.5
percent and 14.9 percent, respectively. Performance numbers reflect all Fund
expenses, but do not include any insurance charges imposed by your insurance
company's separate accounts. If performance information included the effect of
these additional amounts, it would be lower.

STEINROE VARIABLE INVESTMENT TRUST
MANAGED GROWTH STOCK FUND AND S&P 500

Performance of a Hypothetical $10,000 Investment January 1, 1989 to
June 30, 1996

Average Annual Total Return
at June 30, 1996

1-Year 5-Year Inception
11.8% 14.9% 16.2%

GRAPH:
YEAR ENDED: MANAGED GROWTH S & P 500 INDEX
STOCK FUND
1/1/89 10000 10000
12/31/89 13130 13163
12/31/90 12913 12754
12/31/91 19115 16631
12/31/92 20382 17896
12/31/93 21395 19697
12/31/94 20036 19955
12/31/95 27596 27444
06/30/96 30861 30213
<PAGE>
PORTFOLIO MANAGER'S DISCUSSION
SteinRoe Variable Investment Trust Managed Assets Fund
- ------------------------------------------------------------------------------
DEAR CONTRACT OWNER:

For the six-month period ended June 30, 1996, Managed Assets Fund posted a
return of 6.53 percent, outpacing the 5.10 percent median return of its Lipper
VA Flexible Portfolio Fund peer group, but trailing the 10.09 percent return
of the S&P 500. This performance ranked the Fund 16th out of 70 funds in its
peer group for the six-month period, placing it the top quartile. Although the
Fund's performance was aided by the overall strength of the kind of large-cap,
high-quality stocks we own, it was led in particular by the strong
performances of its financial services, energy and capital investment stocks.

Going forward, the Fund now will employ a balanced investment strategy, in
contrast to our previous low P/E value orientation. As a result, we eliminated
a number of holdings that we believe no longer fit our new objective. We also
made numerous new purchases, including the addition of nine foreign stocks. We
are enthusiastic about the long-term opportunities for international equities,
particularly in light of current equity valuations as U.S. economic growth
slows. New investments included Baxter International, Home Depot, Philip
Morris, Canon, Swire Pacific (1.1 percent, 1.0 percent, 0.9 percent, 0.9
percent and 0.9 percent of total net assets, respectively).

Our decision to underweight the Fund's electric utilities exposure worked
to our advantage, particularly since our peer group tends to be overweighted
in this sector. We also underweighted our exposure to paper and telephone
utilities stocks, since we believe their fundamentals remain weak and we
expect only modest growth near term.

Offsetting these underweightings, we remain over weighted is REITs, as we
continue to think their fundamentals are quite exciting. First, the real
estate recovery is still in a relatively early stage--developers are building
once again, and apartment and office-building landlords are no longer
desperate for tenants. Plus, we think REITs look undervalued since, in many,
the liquidation value of the properties in the pool exceeds the total market
value of the stock, and price-to-cash-flow multiples look attractive.

The U.S. stock market has enjoyed a quite favorable environment for the
past 18 months. We believe economic growth will slow noticeably later in 1996
and through the middle of 1997, however. In a period of slow economic growth
and continued firm wages, corporate profit margins could be squeezed leading
to increased uncertainty in the stock market. Conversely, slower growth will
spur lower long-term interest rates. As a result, we believe fixed income and
international equity investments represent a safe refuge in these uncertain
times.

Harvey B. Hirschhorn, Portfolio Manager

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT
RETURN WILL VARY AND YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL SHARES.
Portfolio holdings are as of June 30, 1996, and are subject to change. Total
return performance includes changes in share price and reinvestment of income
and capital gains distributions. The S&P 500 is an unmanaged group of stocks
that differs from the composition of Managed Assets Fund; it is not available
for direct investment. Lipper Analytical Services, Inc., is an independent
monitor of mutual fund performance. For the six-month, one-year and five-year
periods ended June 30, 1996, the median average annual returns for the Fund's
variable annuity flexible portfolio fund category were 5.1 percent, 17.1
percent and 11.5 percent, respectively. Performance numbers reflect all Fund
expenses, but do not include any insurance charges imposed by your insurance
company's separate accounts. If performance information included the effect of
these additional amounts, it would be lower.

STEINROE VARIABLE INVESTMENT TRUST
MANAGED ASSETS FUND AND S&P 500

Performance of a Hypothetical $10,000 Investment January 1, 1989 to
June 30, 1996

Average Annual Total Return
at June 30, 1996

1-Year 5-Year Inception
6.5% 11.8% 12.2%

GRAPH:
YEAR ENDED: MANAGED ASSETS FUND S &P 500 INDEX
1/1/89 10000 10000
12/31/89 12238 13163
12/31/90 12154 12754
12/31/91 15549 16631
12/31/92 16720 17896
12/31/93 18273 19697
12/31/94 17690 19955
12/31/95 22189 27444
06/30/96 23638 30213
<PAGE>
PORTFOLIO MANAGER'S DISCUSSION
SteinRoe Variable Investment Trust Mortgage Securities Income Fund
- ------------------------------------------------------------------------------
DEAR CONTRACT OWNER:

For the six-month period ended June 30, 1996, Mortgage Securities Income
Fund's negative 0.1 percent return was slightly better than the negative 0.2
percent median return posted by its Lipper U.S. Mortgage Fund peer group, but
trailed the 0.4 percent total return of the Lehman Mortgage-Backed Securities
Index. The better per formance of the Index can be attributed to the fact that
it is composed entirely of mortgage-backed securities, while the Fund has the
discretion to invest in other security types. Mortgage-backed securities were
strong performers in what was generally a dismal six months, as inflationary
threats, stronger-than-expected economic activity and rising interest rates
cast a bearish shadow over the bond market.

Mortgage-backed securities performed well due to a dramatic slowdown in
refinancing activity in the face of rising interest rates. Consequently, the
heavy weighting in mortgage-backed securities that we maintained throughout
the first half of the year boosted to the Fund's performance. Our holdings of
mortgage securities with slight premium coupons were particularly strong
performers, as these were the most susceptible to prepayment risks associated
with refinancing activity.

While we continue to believe that mortgage-backed securities are attractive
on a long-term basis, the Fund's current weighting of mortgage securities is
at the high end of our historical range. As a result, we will begin shifting
assets, on a strategic basis, from mortgage-backed securities to Treasuries.
We also may pare back on mortgage securities with premium coupons in the 8
percent to 8.5 percent range. While these have performed well for the Fund, we
believe more attractive oppor tunities exist in other segments of the mortgage
market. For example, we will add discount coupon mortgage-backed securities to
the portfolio if interest rates remain steady or begin to decline.

We will also begin to roll out of some of the mortgage-backed securities
and into Treasuries to take advantage of the seasonal pattern known as the
"fourth quarter effect." During this period, Treasury securities tend to
outperform mortgage-backed securities. By taking advantage of the yield spread
changes that accompany this, we believe we should be able to enhance the total
return of the Fund.

Michael T. Kennedy, Portfolio Manager

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT
RETURN WILL VARY AND YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL SHARES.
Portfolio holdings are as of June 30, 1996, and are subject to change. Total
return performance includes changes in share price and reinvestment of income
and capital gains distributions. The Fund is neither insured nor guaranteed by
the U.S. government. Up to 20 percent of the Fund's assets may be invested in
other types of securities. The Lehman Mortgage-Backed Securities Index
represents an unmanaged group of government securities that differs from the
composition of Mortgage Securities Income Fund; it is not available for direct
investment. Lipper Analytical Services, Inc., is an independent monitor of
mutual fund performance. For the six-month, one-year and five-year periods
ended June 30, 1996, the median average annual returns for the Fund's variable
annuity U.S. mortgage fund category were -0.2 percent, 5.2 percent and 7.1
percent, respectively. Performance numbers reflect all Fund expenses, but do
not include any insurance charges imposed by your insurance company's separate
accounts. If performance information included the effect of these additional
amounts, it would be lower.

STEINROE VARIABLE INVESTMENT TRUST
MORTGAGE SECURITIES INCOME FUND AND LEHMAN MORTGAGE-BACKED SECURITIES INDEX

Performance of a Hypothetical $10,000 Investment January 1, 1989 to
June 30, 1996

Average Annual Total Return
at June 30, 1996

1-Year 5-Year Inception
-0.1% 7.1% 8.2%

GRAPH:
YEAR ENDED: MORTGAGE SECURITIES LEHMAN MORTGAGE-BACKED
INCOME FUND SECURITIES INDEX
1/1/89 10000 10000
12/31/89 11284 11535
12/31/90 12311 12772
12/31/91 14094 14779
12/31/92 14933 15808
12/31/93 15868 16889
12/31/94 15619 16617
12/31/95 18077 19409
06/30/96 18059 19477
<PAGE>
PORTFOLIO MANAGER'S DISCUSSION
SteinRoe Variable Investment Trust Cash Income Fund
- ------------------------------------------------------------------------------
DEAR CONTRACT OWNER:

For the six-month period ended June 30, 1996, Cash Income Fund's total return
of 2.45 percent almost equaled the 2.46 percent median return of its Lipper
variable annuity money market fund peer group. This performance ranked the
Fund 49th out of 93 funds in the peer group, placing it slightly below the
peer group median.

Early in the first quarter of 1996, it appeared as though the Federal
Reserve, through a series of interest rate cuts, had successfully engineered a
"soft landing" for the economy. But then, conflicting economic reports
suggested that the economy was starting to heat up again. Most notable was a
March report that showed an astonishing 705,000 jobs created in February. As
the market sorted through the reports, we kept the Fund's average maturity in
a fairly narrow range. The second quarter was fairly quiet, and as it came to
a close the market held strong expectations of an interest rate tightening
move by the Federal Reserve. Consequently, the Fund's 1-day gross yield
remained relatively stable throughout the first half of the year, increasing
slightly from 5.33 percent on December 31, 1995, to 5.43 percent on June 30.

The Japanese year end, which occurs on March 31, tends to create a yield
advantage for letter of credit commercial paper backed by Japanese banks
during the first quarter of each year. We try to capture that yield advantage
for shareholders by building a position in these securities prior to year end.
That yield advantage typically disappears sometime in the second quarter. This
time around, however, we found that several of the Japanese credits offered a
better relative value than other money market instruments, so we maintained a
position in these securities throughout the first half of the year. We also
increased slightly our holdings of Yankee certificates of deposits as some of
these offered attractive yield spreads as well.

We expect to see a tightening move by the Federal Reserve at some point in
the third quarter. In anticipation of such a move, we will maintain a
relatively shorter average maturity in the Fund. We think this strategy
positions the Fund well for a rising interest rate environment. Regardless of
whether or not there is a tightening move, however, we will continue to seek
the best relative values across all security types.

Jane M. Naeseth, Portfolio Manager

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT
RETURN WILL VARY, SO YOU MAY HAVE A GAIN OR A LOSS WHEN YOU SELL SHARES.
Performance numbers reflect all Fund net expenses, but do not include any
insurance charges imposed by your insurance company's separate accounts. If
performance information included the effect of these additional amounts, it
would be lower. Total return performance includes changes in share price and
reinvestment of income and capital gains distributions. According to Lipper
Analytical Services, Inc., an independent monitor of mutual fund performance,
there were 93 funds in this money market variable annuity peer group for the
six months ended June 30, 1996. An investment in the Fund is neither insured
nor guaranteed by the U.S. government, and there is no assurance that the Fund
will be able to maintain its stable net asset value of $1 per share. The
Treasury yield curve does not represent any particular Stein Roe fund; you can
find it in the Wall Street Journal.
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS
SteinRoe Variable Investment Trust Capital Appreciation Fund /
June 30, 1996 (Unaudited)
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMMON STOCKS--(88.9%)
BANKS/SAVINGS AND LOANS--(2.3%)
Rancho Santa Fe National Bank (a) .......................................... 110,000 $ 522,500
Southern National Corporation .............................................. 110,000 3,492,500
-----------
4,015,000
-----------
BROADCASTING--(3.6%)
Central European Media Enterprises (a) ..................................... 166,900 4,172,500
Grupo Radio Centro ADS ..................................................... 211,000 2,083,625
-----------
6,256,125
-----------
BUSINESS SERVICES--(18.0%)
Caribiner International, Inc. (a) .......................................... 76,600 2,460,775
Danka Business Systems Plc ADR ............................................. 116,000 3,393,000
Fiserv Inc. (a) ............................................................ 99,000 2,970,000
G & K Services Cl. A ....................................................... 256,000 7,296,000
Keane, Inc. (a) ............................................................ 246,200 9,078,625
Unitog Company ............................................................. 213,000 6,017,250
-----------
31,215,650
-----------
CHEMICALS--(1.6%)
CFC International, Inc. (a) ................................................ 175,000 2,843,750
-----------
COMPUTER AND COMPUTER SOFTWARE--(2.2%)
Microware Systems Corporation (a) .......................................... 120,600 2,170,800
USCS International, Inc. (a) ............................................... 88,800 1,709,400
-----------
3,880,200
-----------
COMPUTER SERVICES--(0.3%)
FactSet Research Systems, Inc. (a) ......................................... 30,200 604,000
-----------
CONSUMER PRODUCTS--(0.8%)
Polymer Group, Inc. (a) .................................................... 75,000 1,312,500
-----------
ELECTRONICS--(5.1%)
AVX Corp. (a) .............................................................. 107,400 1,986,900
C.P. Clare Corporation (a) ................................................. 130,000 3,347,500
Kent Electronics Corporation (a) ........................................... 81,000 2,531,250
Littelfuse, Inc. (a) ....................................................... 28,000 1,050,000
-----------
8,915,650
-----------
ENERGY SERVICES--(2.3%)
Weatherford Enterra Inc. (a) ............................................... 135,000 4,050,000
-----------
<PAGE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
FINANCIAL--(1.4%)
Grupo Financiero Inbursa ................................................... 565,000 $ 2,351,775
-----------
HEALTH CARE--(7.0%)
AmeriSource Distribution
Corporation (a) ......................................................... 223,700 7,438,025
Apache Medical Systems, Inc. (a) ........................................... 61,700 755,825
Henry Schein (a) ........................................................... 24,200 925,650
Housecall Medical Resources, Inc. (a) ...................................... 86,900 1,661,963
QIAGEN N.V. (a) ............................................................ 92,400 1,397,550
-----------
12,179,013
-----------
INSURANCE--(12.9%)
Meadowbrook Insurance Group, Inc. .......................................... 79,200 2,435,400
Mutual Risk Management Ltd. ................................................ 106,667 3,333,333
National Mutual of Asia .................................................... 4,493,000 3,947,084
Protective Life Corporation ................................................ 100,000 3,512,500
Triad Guaranty, Inc. (a) ................................................... 128,800 4,733,400
20th Century Industries, Inc. (a) .......................................... 264,000 4,389,000
-----------
22,350,717
-----------
MEDIA/BROADCASTING--(1.6%)
Valuevision International, Inc. (a) ........................................ 388,000 2,691,750
-----------

MEDICAL EQUIPMENT--(5.0%)
Electroscope, Inc. (a) ..................................................... 47,800 478,000
InControl, Inc. (a) ........................................................ 190,500 2,238,375
Respironics, Inc. (a) ...................................................... 105,800 1,957,300
Stryker Corporation (a) .................................................... 146,800 3,339,700
Urologix, Inc. (a) ......................................................... 44,900 606,150
-----------
8,619,525
-----------
PACKAGING--(1.7%)
Crown Cork & Seal, Inc. .................................................... 65,000 2,925,000
-----------

OIL/GAS--(6.5%)
Alexander Energy Corp. (a) ................................................. 355,000 1,775,000
Barrett Resources Corp. (a) ................................................ 149,000 4,432,750
Diamond Offshore Drilling, Inc. (a) ........................................ 35,000 2,003,750
Renaissance Energy Ltd. (a) ................................................ 116,400 3,068,541
-----------
11,280,041
-----------
RETAIL--(4.4%)
Proffitts, Inc. (a) ........................................................ 59,000 2,094,500
Quality Food Centers, Inc. (a) ............................................. 130,000 3,347,500
Video Update, Inc. (a) ..................................................... 236,000 2,124,000
-----------
7,566,000
-----------
<PAGE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMMON STOCKS (CONTINUED)
SEMI-CONDUCTORS--(1.4%)
DuPont Photomasks, Inc. (a) ................................................ 115,900 $ 2,375,950
-------------
SPECIALTY CHEMICALS--(4.0%)
OM Group, Inc. ............................................................. 177,500 6,966,875
-------------

TELECOMMUNICATIONS--(4.7%)
Plantronics, Inc. (a) ...................................................... 130,000 4,777,500
Western Wireless Corporation (a) ........................................... 155,200 3,317,400
-------------
8,094,900
-------------
WATER FILTRATION--(1.5%)
Culligan (a) ............................................................... 67,400 2,561,200
-------------

WHOLESALE DISTRIBUTION--(0.6%)
Thompson PBE, Inc. (a) ..................................................... 91,000 1,092,000
-------------
TOTAL COMMON STOCKS (Cost $128,292,754) .................................. 154,147,621
-------------
<PAGE>
<CAPTION>
MARKET
PAR VALUE
<S> <C> <C>
SHORT-TERM INVESTMENTS--(12.7%)
Federal Home Loan Mortgage
Corporation, 5.280%, due 7/15/96 ............................................ $ 6,000,000 $ 5,985,920
Federal National Mortgage
Association, 5.280%, due 7/15/96 ............................................ 9,000,000 8,978,880
Lehman Brothers Holdings Inc.,
5.700%, due 7/01/96 ......................................................... 7,145,000 7,142,737
-------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $22,107,537) ......................................................... 22,107,537
-------------
TOTAL INVESTMENTS--(101.6%)
(Cost $150,400,292) (b) .................................................... 176,255,158
OTHER ASSETS, LESS LIABILITIES--NET--(-1.6%) .................................. (2,796,980)
-------------
NET ASSETS (100%) .............................................................. $ 173,458,178
=============
<FN>
(a) Non-income producing security.
(b) The cost of investments for federal income tax purposes is identical.
Gross unrealized appreciation and depreciation on investments at June 30,
1996, is as follows:
Gross unrealized appreciation: $31,379,153
Gross unrealized depreciation: (5,524,287)
-----------
Net unrealized appreciation: $25,854,866
============
See Notes to Financial Statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
SteinRoe Variable Investment Trust Capital Appreciation Fund /
June 30, 1996 (Unaudited)
- ------------------------------------------------------------------------------
<CAPTION>
<S> <C>
ASSETS:
Investments, at market value (identified cost $150,400,292) ................... $176,255,158
Cash (including foreign currencies) ........................................... 452,552
Receivable for investments sold ............................................... 341,892
Receivable for fund shares sold ............................................... 291,345
Dividends and interest receivable ............................................. 49,761
Other assets .................................................................. 14,956
------------
TOTAL ASSETS ............................................................. 177,405,664
------------
LIABILITIES:
Payable for investments purchased ............................................. 3,643,479
Payable for fund shares repurchased ........................................... 204,215
Management fee payable ........................................................ 66,769
Adminstrative fee payable ..................................................... 20,048
Accrued expenses payable ...................................................... 12,975
------------
TOTAL LIABILITIES ........................................................ 3,947,486
------------
NET ASSETS .................................................................... $173,458,178
============
NET ASSETS REPRESENTED BY:
Paid-in capital ............................................................ $135,501,529
Accumulated undistributed net investment income ............................ 110,955
Accumulated net realized gains on investments .............................. 11,990,932
Net unrealized appreciation on investments and foreign currencies .......... 25,854,762
------------
TOTAL NET ASSETS APPLICABLE TO OUTSTANDING SHARES OF BENEFICIAL INTEREST ...... $173,458,178
============
SHARES OF BENEFICIAL INTEREST OUTSTANDING ..................................... 9,109,444
============
NET ASSET VALUE PER SHARE ..................................................... $ 19.04
============
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
Six Months Ended June 30, 1996 (Unaudited)
- ------------------------------------------------------------------------------
<CAPTION>
<S> <C>
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld) ................................... $ 426,135
Interest income ............................................................. 366,380
------------
Total investment income ................................................... 792,515
------------
EXPENSES:
Management fee .............................................................. 393,719
Administrative fee .......................................................... 118,116
Custodian fee ............................................................... 20,932
Accounting fee .............................................................. 14,203
Audit and legal fees ........................................................ 9,656
Printing expense ............................................................ 8,745
Trustees' expense ........................................................... 5,514
Transfer agent fee .......................................................... 3,832
Miscellaneous expense ....................................................... 10,477
------------
Total expenses ............................................................ 585,194
------------
Net investment income .......................................................... 207,321
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS:
Net realized gains on investments ........................................... 12,200,627
Net realized losses on foreign currency transactions ........................ (18,649)
Change in unrealized appreciation or depreciation on investments ............ 11,555,044
------------
Net increase in net assets resulting from operations ........................... $ 23,944,343
============
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
SteinRoe Variable Investment Trust Capital Appreciation Fund
- ------------------------------------------------------------------------------
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1996 DECEMBER 31,
(UNAUDITED) 1995
<S> <C> <C>
OPERATIONS:
Net investment income ....................................................... $ 207,321 $ 367,197
Net realized gains on investments ........................................... 12,200,627 1,051,804
Net realized losses on foreign currency transactions ........................ (18,649) (20,399)
Change in unrealized appreciation or depreciation on investments ............ 11,555,044 13,894,884
------------- -------------
Net increase in net assets resulting from operations ........................... 23,944,343 15,293,486
------------- -------------
DISTRIBUTIONS DECLARED FROM:
Net investment income ....................................................... -- (346,798)
Distributions in excess of net investment income ............................ -- (28,200)
Net realized gains on investments ........................................... -- (849,985)
Distributions in excess of net realized gains on investments ................ -- --
------------- -------------
Total distributions ......................................................... --
(1,224,983)
------------- -------------
FUND SHARE TRANSACTIONS:
Proceeds from fund shares sold .............................................. 26,750,302 43,757,834
Cost of fund shares repurchased ............................................. (20,484,596) (49,881,536)
Distributions reinvested .................................................... -- 1,224,983
------------- -------------
Net increase (decrease) in net assets resulting from fund
share transactions .......................................................... 6,265,706 (4,898,719)
------------- -------------
Total increase in net assets ................................................... 30,210,049 9,169,784
NET ASSETS:
Beginning of year ........................................................... 143,248,129 134,078,345
------------- -------------
End of year ................................................................. $ 173,458,178 $ 143,248,129
============= =============
Accumulated undistributed (overdistributed) net investment income
included in ending net assets ............................................... $ 110,955 $ (77,716)
============= =============
ANALYSIS OF CHANGES IN SHARES OF BENEFICIAL INTEREST:
Shares sold ................................................................. 1,488,671 2,916,477
Shares repurchased .......................................................... (1,152,561) (3,317,111)
Distributions reinvested .................................................... -- 75,757
------------- -------------
Net increase (decrease) ........................................................ 336,110 (324,877)
============= =============
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
SteinRoe Variable Investment Trust Capital Appreciation Fund
- ------------------------------------------------------------------------------
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1996 YEAR ENDED DECEMBER 31,
(UNAUDITED) 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year ...... $ 16.33 $ 14.74 $ 16.53 $ 15.34 $ 15.32 $ 12.07
-------- -------- -------- ------- -------- -------
Net investment income ................... 0.02 0.04 0.06 0.03 -- 0.21
Net realized and unrealized gains
on investments ....................... 2.69 1.69 0.09 5.22 2.17 4.19
-------- -------- -------- ------- -------- -------
Total from investment operations ........ 2.71 1.73 0.15 5.25 2.17 4.40
-------- -------- -------- ------- -------- -------
Less distributions:
Dividends from net investment income . -- (0.04) (0.07) (0.02) -- (0.15)
Distributions from net realized gains
on investments ..................... -- (0.10) (1.87) (4.04) (2.15) (1.00)
-------- -------- -------- ------- -------- -------
Total distributions ..................... -- (0.14) (1.94) (4.06) (2.15) (1.15)
-------- -------- -------- ------- -------- -------
Net asset value, end of year ............ $ 19.04 $ 16.33 $ 14.74 $ 16.53 $ 15.34 $ 15.32
======== ======== ======== ======= ======== =======
TOTAL RETURN:
Total investment return ................. 16.60% 11.75% 1.19%(b) 35.68%(b) 14.48% 37.25%
RATIOS/SUPPLEMENTAL DATA:

Net assets, end of period (000's) ....... $173,458 $143,248 $134,078 $96,544 $ 52,135 $41,179
Ratio of expenses to average net assets . 0.75%(c) 0.76% 0.80%(a) 0.84%(a) 1.01% 1.03%
Ratio of net investment income to average
net assets ........................... 0.27%(c) 0.26% 0.44%(b) 0.13%(b) (0.01)% 1.35%
Portfolio turnover ratio ................ 37%(d) 132% 144% 112% 85% 36%

<FN>
(a) These ratios were not materially affected by the reimbursement of certain
expenses by the Adviser and Administrator.
(b) Computed giving effect to the Investment Adviser's and the Administrator's
expense limitation undertaking.
(c) Annualized.
(d) Not annualized.

See Notes to Financial Statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS
SteinRoe Variable Investment Trust Managed Growth Stock Fund /
June 30, 1996 (Unaudited)
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMMON STOCKS--(94.5%)
BANKS--(5.2%)
Citicorp ................................................................... 50,000 $ 4,131,250
MBNA Corp. ................................................................. 82,500 2,351,250
Royal Bank of Scotland Plc ................................................. 182,000 1,394,343
-----------
7,876,843
-----------
BUSINESS SERVICES--(5.8%)
Electronic Data Systems Corp. .............................................. 60,000 3,225,000
First Data Corporation ..................................................... 50,000 3,981,250
Medaphis Corp. (a) ......................................................... 40,000 1,590,000
-----------
8,796,250
-----------
CHEMICALS--(1.5%)
Hercules ................................................................... 40,000 2,210,000
-----------

COMPUTERS AND COMPUTER SOFTWARE--(3.6%)
Microsoft Corp. (a) ........................................................ 30,000 3,603,750
Parametric Technology (a) .................................................. 40,000 1,735,000
-----------
5,338,750
-----------
CONSTRUCTION--(1.7%)
Fluor Inc. ................................................................. 40,000 2,615,000
-----------
CONSUMER-RELATED--(8.5%)
CUC International, Inc. (a) ................................................ 100,000 3,550,000
The Gillette Company ....................................................... 75,000 4,678,125
The Proctor & Gamble Co. ................................................... 50,000 4,531,250
-----------
12,759,375
-----------
DRUGS--(7.5%)
Eli Lilly & Co. ............................................................ 50,000 3,250,000
Johnson & Johnson .......................................................... 80,000 3,960,000
Merck ...................................................................... 30,000 1,938,750
Smithkline Beecham ADRs .................................................... 40,000 2,175,000
-----------
11,323,750
-----------
ELECTRICAL EQUIPMENT--(2.9%)
General Electric Company ................................................... 50,000 4,325,000
-----------
ELECTRONICS--(3.7%)
Bay Networks (a) ........................................................... 85,000 2,188,750
Tellabs (a) ................................................................ 50,000 3,343,750
-----------
5,532,500
-----------
ENERGY--(3.6%)
Renaissance Energy Ltd. (a) ................................................ 75,000 1,977,153
Schlumberger Ltd. .......................................................... 40,000 3,370,000
-----------
5,347,153
-----------
<PAGE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
FINANCIAL SERVICES--(3.1%)
Federal National Mortgage
Association ........................................................... 140,000 $ 4,690,000
-----------
FOOD/BEVERAGE/TOBACCO--(5.6%)
The Coca Cola Company .................................................... 100,000 4,887,500
Nabisco Holdings Corp. ................................................... 100,000 3,537,500
-----------
8,425,000
-----------
HEALTH CARE--(3.3%)
Baxter International, Inc. ............................................... 50,000 2,362,500
United Healthcare ........................................................ 50,000 2,525,000
-----------
4,887,500
-----------
HOTEL--(6.6%)
HFS, Inc. (a) ............................................................ 100,000 7,000,000
Sun International Hotel (a) .............................................. 60,000 2,910,000
-----------
9,910,000
-----------
INSURANCE--(5.2%)
American International Group, Inc. ....................................... 37,500 3,698,438
The Travelers, Inc. ...................................................... 90,000 4,106,250
-----------
7,804,688
-----------
LEISURE & ENTERTAINMENT--(2.1%)
Disney (Walt) Co. ........................................................ 50,000 3,143,750
-----------
MEDIA--(1.0%)
Viacom International Incorporated,
Class B (a) ........................................................... 40,000 1,555,000
-----------

MEDICAL SUPPLIES--(1.9%)
Medtronic, Inc. .......................................................... 50,000 2,800,000
-----------

RETAIL--(7.1%)
Corporate Express (a) .................................................... 75,000 3,000,000
The Home Depot, Inc. ..................................................... 75,000 4,050,000
Kohl's Corp. (a) ......................................................... 100,000 3,662,500
-----------
10,712,500
-----------
RESTAURANTS--(2.5%)
McDonald's Corporation ................................................... 80,000 3,740,000
-----------

RUBBER, PLASTIC & RELATED--(2.3%)
Illinois Tool Works Inc. ................................................. 50,000 3,381,250
-----------

TECHNOLOGY SERVICES--(2.5%)
Thermo Electron Corp (a) ................................................. 90,000 3,746,250
-----------
<PAGE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
TELECOMMUNICATIONS--(7.3%)
Airtouch Communications (a) ................................................ 85,000 $ 2,401,250
Clear Channel Communications Inc. (a) ...................................... 9,700 799,037
LM Ericsson Telecommunications
ADRs Class B ............................................................ 150,000 3,225,000
Motorola, Inc. ............................................................. 40,000 2,515,000
Telefonica De Argentina ADRs ............................................... 70,000 2,073,750
-----------
11,014,037
-----------
TOTAL COMMON STOCKS
(Cost $96,197,747) .................................................. 141,934,596
-----------
<CAPTION>
PAR
<S> <C> <C>
SHORT-TERM INVESTMENTS--(5.4%)
Federal Home Loan Mortgage Corp.,
5.280% 7/15/96 ............................................................ $ 2,000,000 1,995,307
Lehman Brothers Holdings, Inc.,
5.700% 7/01/96 ............................................................ 6,065,000 6,063,079
------------
(Cost $8,058,386) ..................................................... 8,058,386
TOTAL INVESTMENTS--(99.9%)
(Cost $104,256,133) ................................................... 149,992,982
OTHER ASSETS, LESS LIABILITIES--NET--(0.1%) .................................. 130,902
------------
NET ASSETS (100%) ............................................................ $150,123,884
============
<FN>
(a) Non-income producing security.
(b) The cost of investments for federal income tax purposes is identical.
Gross unrealized appreciation and depreciation at June 30, 1996, is as
follows:
Gross unrealized appreciation: $47,047,753
Gross unrealized depreciation: (1,310,904)
-----------
Net unrealized appreciation: $45,736,849
===========

See Notes to Financial Statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
SteinRoe Variable Investment Trust Managed Growth Stock Fund /
June 30, 1996 (Unaudited)
- ------------------------------------------------------------------------------
<CAPTION>
<S> <C>
ASSETS:
Investments, at market value (identified cost $104,256,133) .................... $149,992,982
Cash (including foreign currencies) ............................................ 67,659
Receivable for fund shares sold ................................................ 143,890
Dividends receivable ........................................................... 133,614
Other assets ................................................................... 14,491
------------
TOTAL ASSETS .............................................................. 150,352,636
------------
LIABILITIES:
Payable for fund shares repurchased ............................................ 145,004
Management fee payable ......................................................... 57,142
Administrative fee payable ..................................................... 17,160
Accrued expenses payable ....................................................... 6,663
Other liabilities .............................................................. 2,783
------------
TOTAL LIABILITIES ......................................................... 228,752
------------
NET ASSETS ..................................................................... $150,123,884
============
NET ASSETS REPRESENTED BY:
Paid-in capital ............................................................. $ 95,130,237
Accumulated undistributed net investment income ............................. 398,918
Accumulated net realized gains on investments ............................... 8,857,410
Net unrealized appreciation on investments and foreign currencies ........... 45,737,319
------------
TOTAL NET ASSETS APPLICABLE TO OUTSTANDING SHARES OF BENEFICIAL INTEREST ....... $150,123,884
============
SHARES OF BENEFICIAL INTEREST OUTSTANDING ...................................... 5,690,395
============
NET ASSET VALUE PER SHARE ...................................................... $ 26.38
============
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
Six months ended June 30, 1996 (Unaudited)
- ------------------------------------------------------------------------------
<CAPTION>
<S> <C>
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld) ................................... $ 696,493
Interest income ............................................................. 255,746
-----------
Total investment income ................................................... 952,241
-----------
EXPENSES:
Management fee .............................................................. 355,454
Administrative fee .......................................................... 106,636
Accounting fee .............................................................. 13,733
Audit fee ................................................................... 7,563
Custodian fee ............................................................... 7,246
Trustees' expense ........................................................... 5,239
Printing expense ............................................................ 5,220
Transfer agent fee .......................................................... 3,666
Miscellaneous expense ....................................................... 8,333
-----------
Total expenses ............................................................ 513,090
-----------
Net investment income .......................................................... 439,149
REALIZED AND UNREALIZED GAINS ON INVESTMENTS:
Net realized gains on investments ........................................... 8,961,795
Change in unrealized appreciation or depreciation on investments ............ 6,679,350
-----------
Net increase in net assets resulting from operations ........................... $16,080,294
===========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
SteinRoe Variable Investment Trust Managed Growth Stock Fund
- ------------------------------------------------------------------------------
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1996 DECEMBER 31,
(UNAUDITED) 1995
<S> <C> <C>
OPERATIONS:
Net investment income ........................................ $ 439,149 $ 848,442
Net realized gains on investments ............................ 8,961,795 6,765,437
Change in unrealized appreciation or depreciation
on investments ............................................ 6,679,350 29,815,844
------------- -------------
Net increase in net assets resulting from operations ......... 16,080,294 37,429,723
------------- -------------
DISTRIBUTIONS DECLARED FROM:
Net investment income ........................................ -- (799,977)
Net realized gains on investments ............................ -- (6,557,064)
Distributions in excess of net realized gains
on investments ............................................. -- (42,937)
------------- -------------
Total distributions .......................................... -- (7,399,978)
------------- -------------
FUND SHARE TRANSACTIONS:
Proceeds from fund shares sold ............................... 9,772,487 23,896,709
Cost of fund shares repurchased .............................. (12,562,707) (23,225,761)
Distributions reinvested ..................................... -- 7,399,978
------------- -------------
Net increase (decrease) in net assets resulting from fund
share transactions ........................................... (2,790,220) 8,070,926
------------- -------------
Total increase in net assets .................................... 13,290,074 38,100,671
NET ASSETS:
Beginning of year ............................................ 136,833,810 98,733,139
------------- -------------
End of year .................................................. $ 150,123,884 $ 136,833,810
============= =============
Accumulated undistributed (overdistributed) net investment
income included in ending net assets ......................... $ 398,918 $ (40,231)
============= =============
ANALYSIS OF CHANGES IN SHARES OF BENEFICIAL INTEREST:
Shares sold .................................................. 394,588 1,121,091
Shares repurchased ........................................... (505,895) (1,086,399)
Distributions reinvested ..................................... -- 314,893
------------- -------------
Net increase (decrease) ......................................... (111,307) 349,585
============= =============
See Notes to Financial Statements.

</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
SteinRoe Variable Investment Trust Managed Growth Stock Fund
- ------------------------------------------------------------------------------
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1996 YEAR ENDED DECEMBER 31,
(UNAUDITED) 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year ....... $ 23.59 $ 18.11 $ 20.65 $ 20.10 $ 19.47 $ 13.44
----------- ----------- ---------- --------- -------- -------
Net investment income .................... 0.08 0.15 0.15 0.13 0.11 0.17
Net realized and unrealized gains (losses)
on investments ........................ 2.71 6.68 (1.46) 0.86 1.18 6.25
----------- ----------- ---------- --------- -------- -------
Total from investment operations ......... 2.89 6.83 (1.31) 0.99 1.29 6.42
----------- ----------- ---------- --------- -------- -------
Less distributions:
Dividends from net investment income .. -- (0.15) (0.17) (0.12) (0.10) (0.18)
Distributions from net realized gains
on investments ...................... -- (1.20) (1.06) (0.32) (0.56) (0.21)
----------- ----------- ---------- --------- -------- -------
Total distributions ...................... -- (1.35) (1.23) (0.44) (0.66) (0.39)
----------- ----------- ---------- --------- -------- -------
Net asset value, end of year ............. $ 26.38 $ 23.59 $ 18.11 $ 20.65 $ 20.10 $ 19.47
=========== =========== ========== ========= ======== =======
TOTAL RETURN:
Total investment return .................. 11.83% 37.73% (6.35)% 4.97% 6.63% 48.03%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........ $ 150,124 $ 136,834 $ 98,733 $ 111,561 $ 64,402 $38,481
Ratio of expenses to average net assets .. 0.73%(a) 0.74% 0.77% 0.83% 0.97% 1.15%
Ratio of net investment income to average
net assets ............................ 0.62%(a) 0.72% 0.75% 0.77% 0.63% 1.15%
Portfolio turnover ratio ................. 45%(b) 41% 72% 77% 20% 40%
<FN>
(a) Annualized.
(b) Not annualized.

See Notes to Financial Statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS
SteinRoe Variable Investment Trust Managed Assets Fund /
June 30, 1996 (Unaudited)
- ------------------------------------------------------------------------------
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMMON STOCKS--(52.4%)
BANKS--(4.3%)
BankAmerica Corporation .................................................... 41,000 $ 3,105,750
Bank of Boston Corp. ....................................................... 40,000 1,980,000
Citicorp ................................................................... 41,000 3,387,625
NationsBank Corp. .......................................................... 32,000 2,644,000
Westpac Banking Corporation Ltd. ........................................... 275,000 1,218,615
-----------
12,335,990
-----------
BUILDING AND CONSTRUCTION--(0.4%)
Fluor Corporation .......................................................... 20,000 1,307,500
-----------

CHEMICALS--(1.1%)
Praxair, Inc. .............................................................. 78,000 3,295,500
-----------

COMPUTERS--(1.1%)
International Business Machines ............................................ 33,000 3,267,000
-----------

COMPUTER SOFTWARE AND SERVICES--(0.8%)
Electronic Data Systems Corporation ........................................ 40,000 2,150,000
-----------

CONSUMER PRODUCTS--(0.9%)
First Brands Corp. ......................................................... 98,000 2,646,000
-----------

DATA PRODUCTS & REPRODUCTION--(2.0%)
Canon, Inc. ................................................................ 120,000 2,494,498
Xerox ...................................................................... 60,000 3,210,000
-----------
5,704,498
-----------

DRUGS/HEALTH CARE--(5.7%)
American Home Products Corp. ............................................... 54,000 3,246,750
Elan Corporation Plc ADRs (a) .............................................. 54,000 3,084,750
Eli Lilly & Company ........................................................ 56,000 3,640,000
Sandoz ADRs ................................................................ 55,000 3,144,069
SmithKline Beecham Plc ADRs ................................................ 57,000 3,099,375
-----------
16,214,944
-----------
ELECTRICAL EQUIPMENT--(3.4%)
Emerson Electric Co. ....................................................... 35,000 3,163,125
General Electric Company ................................................... 40,000 3,460,000
Hubbell Inc., Class B ...................................................... 48,000 3,180,000
-----------
9,803,125
-----------
ELECTRONICS--(2.4%)
Harris Corp. ............................................................... 55,000 3,355,000
Intel Corporation .......................................................... 47,000 3,451,562
-----------
6,806,562
-----------
<PAGE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
ENVIRONMENTAL SERVICES--(1.1%)
WMX Technologies ........................................................... 100,000 $ 3,275,000
-----------

FABRICATED METAL PRODUCTS--(0.9%)
Crown Cork & Seal, Inc. .................................................... 54,000 2,430,000
-----------

FINANCIAL SERVICES--(1.5%)
Federal National Mortgage Association ...................................... 108,000 3,618,000
Greentree Financial Inc. ................................................... 22,000 687,500
-----------
4,305,500
-----------
FOOD/BEVERAGE/TOBACCO--(2.8%)
PepsiCo, Inc. .............................................................. 96,000 3,396,000
Philip Morris Companies, Inc. .............................................. 25,000 2,600,000
Sara Lee Corporation ....................................................... 60,000 1,942,500
-----------
7,938,500
-----------
HOLDING--(0.9%)
Swire Pacific Ltd. Class A ................................................. 300,000 2,567,664
-----------

HOUSEWARES--(1.0%)
Newell ..................................................................... 95,000 2,909,375
-----------

INSURANCE--(1.7%)
American States Financial Corporation ...................................... 110,000 2,365,000
TIG Holdings ............................................................... 83,000 2,407,000
-----------
4,772,000
-----------
MEDICAL SUPPLIES--(1.1%)
Baxter International Inc. .................................................. 68,000 3,213,000
-----------

MISCELLANEOUS--(1.1%)
World Equity Benchmark
Share-Japan (a) ......................................................... 190,000 3,016,250
-----------

OIL/GAS--(5.3%)
Baker Hughes Inc. .......................................................... 105,000 3,451,875
British Petroleum Company Plc ADRs ......................................... 20,000 2,137,500
Enron Corp. ................................................................ 77,000 3,147,375
Mobil Corporation .......................................................... 24,000 2,691,000
Schlumberger, Ltd. ......................................................... 27,000 2,274,750
Sonat, Inc. ................................................................ 32,000 1,440,000
-----------
15,142,500
-----------
PAPER & FOREST PRODUCTS--(0.5%)
Plum Creek Timber Company .................................................. 54,000 1,289,250
-----------
<PAGE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMMON STOCKS (CONTINUED)
PUBLISHING & BROADCASTING--(1.3%)
World Color Press, Inc. (a) .................................................... 150,000 $ 3,806,250
------------

REAL ESTATE--(1.9%)
Avalon Properties, Inc. ........................................................ 86,000 1,870,500
Security Capital Industrial Trust .............................................. 156,000 2,749,500
South West Property Trust ...................................................... 60,000 802,500
------------
5,422,500
------------
RETAIL--(2.7%)
Home Depot, Inc. ............................................................... 55,000 2,970,000
Jusco Co. ...................................................................... 80,000 2,618,493
Nine West Group, Inc. (a) ...................................................... 40,000 2,045,000
------------
7,633,493
------------
TELECOMMUNICATIONS--(3.0%)
Airtouch Communications, Inc. (a) .............................................. 77,000 2,175,250
Frontier Corp. ................................................................. 90,000 2,756,250
LM Ericsson Telecommunications
ADRs Class B ................................................................ 60,000 1,290,000
Telefonica de Argentina S.A. ADRs .............................................. 75,000 2,221,875
------------
8,443,375
------------
TRANSPORTATION--(1.3%)
CSX Corp. ...................................................................... 37,000 1,785,250
Canadian National Railway ...................................................... 100,000 1,837,500
------------
3,622,750
------------
UTILITIES--(2.2%)
Empressa Nacional De Electricidad
ADRs ........................................................................ 54,000 3,381,750
Enron Global Power & Pipelines ................................................. 120,000 2,910,000
------------
6,291,750
------------
TOTAL COMMON STOCKS (Cost $116,996,503) ..................................... 149,610,276
------------

PREFERRED STOCKS--(0.6%)
REAL ESTATE MANAGEMENT--(0.6%)
Rouse $3.250 Cv
(Cost $1,841,250) ........................................................... 30,000 1,740,000
------------
<CAPTION>
PAR
<S> <C> <C>
LONG-TERM OBLIGATIONS--(40.7%)
AIR TRANSPORTATION--(1.0%)
Federal Express Corporation 1994
Pass-Through Certificates Series
A310-A1 7.530% 9/23/06 ...................................................... $ 2,214,540 2,222,534
United Airline Corporation Series
1991-A-1 9.200% 3/22/08 ..................................................... 691,474 739,836
------------
2,962,370
------------
<PAGE>
<CAPTION>
MARKET
PAR VALUE
<S> <C> <C>
LONG-TERM OBLIGATIONS (CONTINUED)
ASSET-BACKED SECURITIES--(2.1%)
ALPS Pass-Through Trust Series 1994-1
Class C2 9.350% 9/15/04 ................................................... $1,989,855 $2,023,503
American Mortgage Trust Series
1993-3 Class 3B 8.190% 9/27/22 ........................................... 2,205,796 2,055,052
Greentree Home Improvement Loan
Trust Series 1994-A Class A
7.050% 3/15/14 ............................................................ 1,172,848 1,154,270
Greentree Financial Securitized Net
Interest Margin Series 1994-A
6.900% 2/15/04 ............................................................ 832,737 822,628
----------
6,055,453
----------
BANKS--(2.9%)
Banco Bilbao Vizcaya International
Financial 6.875% 10/27/05 ................................................. 2,250,000 2,146,815
Den Danske Bank 6.550% 9/15/03 ............................................... 2,250,000 2,156,063
Santander Financial Issuances
7.750% 5/15/05 ............................................................ 4,000,000 4,069,000
----------
8,371,878
----------
DRUGS/HEALTHCARE--(1.2%)
Nationwide Health Property Inc.
Conv. Deb., 6.250% 1/01/99 ................................................ 3,400,000 3,438,250
----------

FOREIGN GOVERNMENT REGIONAL BOND--(1.0%)
Corporacion Andina de Fomento
6.625% 10/14/98 (c) ....................................................... 2,900,000 2,876,858
----------

FINANCIAL--(1.4%)
Associates Corporation of North
America 7.500% 4/15/02 .................................................... 4,000,000 4,095,320
----------

HOTELS--(0.8%)
Renaissance Hotel Group
8.875% 10/01/05 ........................................................... 2,100,000 2,173,899
----------

INSURANCE--(2.2%)
American International Group
Zero Coupon (Effective Yield
6.442%) 8/15/04 ........................................................... 4,000,000 2,271,840
Prudential Insurance Surplus Notes
7.650% 7/01/07 (c) ........................................................ 4,000,000 3,965,360
----------
6,237,200
----------
MAJOR CHEMICALS--(1.2%)
Hanson Overseas 7.375% 1/15/03 ............................................... 3,500,000 3,526,215
----------
<PAGE>
<CAPTION>
MARKET
PAR VALUE
<S> <C> <C>
LONG-TERM OBLIGATIONS (CONTINUED)
MORTGAGE-BACKED SECURITIES--(1.0%)
Lennar Central Partners Limited
Partnership Series 1994-1 Class C
8.120% 9/15/02 (c) ........................................................ $ 2,500,000 $ 2,492,250
MDC Mortgage Funding Corporation
Series Q Class 5, 8.850% 3/20/18 .......................................... 263,452 271,242
------------
2,763,492
------------
OIL/GAS--(1.5%)
Consolidated Natural Gas Conv. Deb
7.250% 12/15/15 ........................................................... 2,500,000 2,671,875
SFP Pipeline Holdings, Inc. Conv. Deb
10.410% 8/15/10 ........................................................... 1,400,000 1,708,000
------------
4,379,875
------------
UTILITIES--(0.8%)
Niagara Mohawk Power Corp.
8.000% 6/01/04 ............................................................ 2,500,000 2,271,950
------------

U.S. GOVERNMENT AND AGENCY OBLIGATIONS--(23.5%)
Federal Home Loan Mortgage
Corporation
6.500% 6/01/11 Gold (d) ................................................... 8,000,000 7,740,000
12.000% 7/01/20 Gold ...................................................... 1,791,710 2,020,152
6.500% 3/01/26 Gold ....................................................... 4,039,998 3,782,449
6.500% 6/01/26 Gold ....................................................... 2,525,000 2,364,031
Federal National Mortgage
Association 8.000% 4/13/05 ................................................ 1,500,000 1,505,415
Government National Mortgage
Association
6.500% 7/20/25 ARM ........................................................ 1,430,104 1,443,504
8.000% 3/15/26 ............................................................ 5,089,131 5,137,478
U.S. Treasury Bonds
7.250 % 5/15/16 ........................................................... 6,000,000 6,144,660
7.875% 2/15/21 ............................................................ 4,500,000 4,930,830
7.125% 2/15/23 ............................................................ 3,000,000 3,032,070
U.S. Treasury Note
6.375% 1/15/99 ............................................................ 7,500,000 7,524,675
6.875% 8/31/99 ............................................................ 7,500,000 7,609,500
7.875% 8/15/01 ............................................................ 2,000,000 2,119,200
6.250% 2/15/03 ............................................................ 4,250,000 4,181,490
7.500% 2/15/05 ............................................................ 4,000,000 4,208,400
6.500% 5/15/05 ............................................................ 3,500,000 3,453,870
------------
67,197,724
------------
TOTAL LONG-TERM OBLIGATIONS
(Cost $118,133,993) ..................................................... 116,350,484
------------
<PAGE>
<CAPTION>
MARKET
PAR VALUE
<S> <C> <C>
SHORT-TERM INVESTMENTS--(8.0%)
Lehman Brothers Holding, Inc.
5.700% 7/01/96 ........................................................ $ 8,690,000 $ 8,687,248
Southwestern Bell Telephone
5.370% 7/02/96 ........................................................ 14,000,000 13,993,735
------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $22,680,983) .................................................. 22,680,983
------------
TOTAL INVESTMENTS--(101.7%)
(Cost $259,652,729) ................................................. 290,381,743
OTHER ASSETS, LESS LIABILITIES--(-1.7%) .................................. (4,807,125)
------------
NET ASSETS (100%) ........................................................ $285,572,618
============
<FN>
(a) Non-income producing security.
(b) The cost of investments for federal income tax purposes is identical Gross
unrealized appreciation and depreciation at June 30, 1996 is as follows:
Gross unrealized appreciation: $34,117,627
Gross unrealized depreciation: (3,388,613)
-----------
Net unrealized appreciation: $30,729,014
===========
(c) Private placement security. These securities generally are issued to
institutional investors, such as the Fund who agree that they are
purchasing the securities for investment and not with a view to public
distribution. Any resale by the Fund must be in an exempt transaction,
normally to other institutional investors.
(d) Security purchased on a delay delivery basis; see notes to the financial
statements.

See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
SteinRoe Variable Investment Trust Managed Assets Fund
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1996 DECEMBER 31,
(UNAUDITED) 1995
<S> <C> <C>
OPERATIONS:
Net investment income ....................................................... $ 5,285,090 $ 8,566,666
Net realized gains on investments ........................................... 16,190,961 12,779,937
Change in unrealized appreciation or depreciation on investments ............ (3,731,516) 28,886,194
------------- -------------
Net increase in net assets resulting from operations ........................ 17,744,535 50,232,797
------------- -------------
DISTRIBUTIONS DECLARED FROM:
Net investment income ....................................................... -- (8,589,529)
Distributions in excess of net investment income ............................ -- (192,094)
Net realized gains on investments ........................................... -- (12,796,378)
Distributions in excess of net realized gains on investments ................ -- (135,229)
------------- -------------
Total distributions ......................................................... -- (21,713,230)
------------- -------------
FUND SHARE TRANSACTIONS:
Proceeds from fund shares sold .............................................. 12,316,212 21,591,908
Cost of fund shares repurchased ............................................. (21,501,762) (40,012,684)
Distributions reinvested .................................................... -- 21,713,230
Strategic Managed Assets Fund Substitution .................................. -- 48,923,531
------------- -------------
Net increase (decrease) in net assets resulting from fund
share transactions ........................................................... (9,185,550) 52,215,985
------------- -------------
Total increase in net assets ................................................... 8,558,985 80,735,552
NET ASSETS:
Beginning of year ........................................................... 277,013,633 196,278,081
------------- -------------
End of year ................................................................. 285,572,618 277,013,633
============= =============
Accumulated undistributed (overdistributed) net investment income
included in ending net assets ............................................... $ 5,092,996 $ (192,094)
============= =============
ANALYSIS OF CHANGES IN SHARES OF BENEFICIAL INTEREST:
Shares sold ................................................................. 844,471 1,590,395
Shares repurchased .......................................................... (1,475,020) (2,911,681)
Distributions reinvested .................................................... -- 1,549,182
Strategic Managed Assets Fund Substitution .................................. -- 3,333,520
-------------
-------------
Net increase (decrease) ........................................................ (630,549) 3,561,416
============= =============

See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
- -----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SteinRoe Variable Investment Trust Managed Assets Fund
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1996 YEAR ENDED DECEMBER 31,
(UNAUDITED) 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year ....... $ 14.08 $ 12.18 $ 13.11 $ 12.54 $ 12.54 $ 10.26
----------- --------- ----------- --------- --------- --------
Net investment income .................... 0.28 0.48 0.51 0.38 0.45 0.52
Net realized and unrealized gains (losses)
on investments ........................ 0.64 2.61 (0.93) 0.78 0.49 2.31
----------- --------- ----------- --------- --------- --------
Total from investment operations ......... 0.92 3.09 (0.42) 1.16 0.94 2.83
----------- --------- ----------- --------- --------- --------
Less distributions:
Dividends from net investment income .. -- (0.48) (0.51) (0.36) (0.46) (0.44)
Distributions from net realized gains
on investments ...................... -- (0.71) -- (0.23) (0.48) (0.11)
----------- --------- ----------- --------- --------- --------
Total distributions ...................... -- (1.19) (0.51) (0.59) (0.94) (0.55)
----------- --------- ----------- --------- --------- --------
Net asset value, end of year ............. $ 15.00 $ 14.08 $ 12.18 $ 13.11 $ 12.54 $ 12.54
=========== ========= =========== ========= ========= ========
TOTAL RETURN:
Total investment return .................. 6.53% 25.43% (3.19)% 9.29% 7.53% 27.93%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........ $ 285,573 $ 277,014 $ 196,278 $ 197,132 $ 113,572 $ 82,710
Ratio of expenses to average net assets .. 0.66%(a) 0.66% 0.68% 0.69% 0.66% 0.71%
Ratio of net investment income to average
net assets ............................ 3.82%(a) 3.12% 4.01% 3.55% 3.98% 4.57%
Portfolio turnover ratio ................. 62%(b) 66% 71% 47% 70% 82%
<FN>
(a) Annualized.
(b) Not annualized.

See Notes to Financial Statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS

SteinRoe Variable Investment Trust Mortgage Securities Income Fund /
June 30, 1996 (Unaudited)
<CAPTION>
MARKET
PAR VALUE
<S> <C> <C>
ASSET-BACKED SECURITIES--(3.6%)
ALPS Pass-Through Trust Series 1994-1
Class C2 9.350% 9/15/04 ....................................... $ 994,927 $1,011,752
First Boston Home Equity Loan Pass-
Through Certificates Series 1993-H1,
Class A-IO (effective yield 12.820%)
9/28/13 ....................................................... 7,871,466 305,177
Greentree Home Improvement Loan
Trust Series 1994-A Class A
7.050% 3/15/14 ................................................ 879,636 865,702
Green Tree Securitized Net Interest
Margin Series 1994-A
6.900% 2/15/04 ................................................ 624,553 616,971
----------
TOTAL ASSET-BACKED SECURITIES
(Cost $5,035,899) ........................................... 2,799,602
----------
MORTGAGE-BACKED SECURITIES--(13.8%)
American Mortgage Trust Series 1993-3
Class 3B 8.190% 9/27/22 ....................................... 833,301 776,352
Bank of America, N.A. Series 1979-3
9.500% 11/01/08 ............................................... 79,101 79,249
Citicorp Mortgage Securities, Inc.
Series 1987-10 10.000% 7/01/17 ................................ 183,575 189,011
Comfed Savings Bank Adjustable Rate
Mortgage Series 1987-1A
9.245% 1/01/08 ................................................ 177,739 151,078
Countrywide Mortgage Backed
Securities Inc. Series 1994-F Class A4
6.000% 4/25/09 ................................................ 2,000,000 1,887,300
Glendale Federal Savings & Loan
Series 1978-A 9.125% 1/25/08 ................................. 35,356 36,656
Imperial Savings & Loan Adjustable
Rate Mortgage Series 1987-4A
9.800% 7/25/17 ................................................ 37,368 39,903
Kidder Peabody Acceptance Corp.
Series 1993-C1 6.800% 7/25/17 ................................. 53,419 52,342
MDC Mortgage Funding Corporation
Series Q Class 5 8.850% 3/20/18 ............................... 395,178 406,863
Merrill Lynch
8.000% 12/20/18 Series 20-D ................................... 1,757,199 1,762,400
8.227% 4/25/23 Series 1994-M1
Class C ..................................................... 421,000 424,229
7.090% 12/26/25 Series 1995-C3
Class A3 .................................................... 2,000,000 1,935,000
4.870% 11/15/26 Series 1987-A ................................ 108,297 105,361
Nomura Asset Securities Corporation
Series 1996-MD5 Class A1B
7.120% 4/13/36 ................................................ 1,000,000 973,750
PS CMO Trust Series 1994-C1-A2
7.920% 8/15/02 ................................................ 722,486 736,705
Republic Federal Savings & Loan
Association Series 1987-1
7.500% 2/28/17 ................................................ 7,774 7,595
<PAGE>
<CAPTION>
MARKET
PAR VALUE
<S> <C> <C>
MORTGAGE-BACKED SECURITIES (CONTINUED)
Sears Mortgage Securities Corp. Series
1987-A 6.500% 3/25/17 ................................................... $ 34,951 $ 33,445
Structured Asset Securities Corporation
Series 1996-CFL Class C
6.525% 2/25/28 .......................................................... 1,242,500 1,181,927
-----------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $8,670,245) ..................................................... 10,779,166
-----------
FEDERAL HOME LOAN MORTGAGE
CORPORATE CERTIFICATES--(20.9%)
8.500% 5/01/06 ............................................................. 186,979 193,172
6.500% various due dates to 6/01/09 ........................................ 2,087,857 2,027,487
10.750% 11/01/09 ........................................................... 295,591 315,313
10.500% 6/01/13 ............................................................ 327,376 356,431
11.250% various due dates to 1/01/16 ....................................... 162,300 177,086
10.500% 2/01/19 ............................................................ 137,094 149,261
12.000% various due dates to 7/01/20 ....................................... 1,397,248 1,571,880
7.500% various due dates to 5/01/24 ........................................ 9,144,882 9,112,121
7.000% 1/01/26 ............................................................. 2,538,412 2,443,222
-----------
TOTAL FEDERAL HOME LOAN MORTGAGE
CORPORATE CERTIFICATES
(Cost $16,326,576) .................................................... 16,345,973
-----------

FEDERAL NATIONAL MORTGAGE
ASSOCIATION CERTIFICATES--(34.2%)
10.500% 2/01/01 ............................................................ 152,187 157,146
7.000% 6/01/11 (b) ......................................................... 4,650,000 4,586,062
12.250% 9/01/12 FHA/VA
Guaranteed .............................................................. 86,633 98,463
10.250% 2/01/16 ............................................................ 248,615 271,652
10.000% various due dates to 3/01/16 ....................................... 480,627 510,617
9.000% various due dates to 5/01/20 ........................................ 514,506 339,368
8.500% various due dates to 12/01/24 ....................................... 1,903,519 1,961,441
6.000% various due dates to 2/01/25 ........................................ 14,309,017 13,503,398
7.000% 8/01/25 ............................................................. 1,227,719 1,182,060
6.500% various due dates to 1/01/26 ........................................ 4,385,781 4,110,324
-----------
TOTAL FEDERAL NATIONAL MORTGAGE
ASSOCIATION CERTIFICATES
(Cost $22,462,412) .................................................... 26,720,531
-----------
<PAGE>
<CAPTION>
SCHEDULE OF INVESTMENTS
(CONTINUED)
<CAPTION>
MARKET
PAR VALUE
<S> <C> <C>
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION CERTIFICATES--(19.4%)
11.500% various due dates to 5/15/13 ....................................... $ 539,647 $ 609,466
8.500% 2/15/17 ............................................................. 234,836 243,788
10.000% various due dates to 11/15/19 ...................................... 839,659 910,769
9.000% various due dates to 1/15/20 ........................................ 2,299,303 2,429,756
9.500% various due dates to 8/15/22 ........................................ 2,678,608 2,886,756
8.000% various due dates to 8/15/22 ........................................ 3,655,311 3,730,686
7.000% 4/15/23 ............................................................. 563,715 542,717
6.500% various due dates to 7/15/24 ........................................ 955,355 891,755
6.500% 7/20/25 ARM ......................................................... 2,860,208 2,887,009
-----------
TOTAL GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION CERTIFICATES
(Cost $15,226,801) .................................................... 15,132,702
-----------

REAL ESTATE MORTGAGE INVESTMENT
CONDUITS--(4.7%)
Federal Home Loan Mortgage
Corporation Series 11-C
9.500% 4/15/19 .......................................................... 105,328 109,296
Federal National Mortgage Association
REMIC Trust Series 1988-4Z
9.250% 3/25/18 .......................................................... 1,510,965 1,559,150
Federal National Mortgage Association
REMIC Trust Series 1991-91SA
(effective yield 14.400%) 7/25/98 ....................................... 1,229,658 82,731
Prudential Home Mortgage REMIC
Trust Series 1992-A-B2-2
7.900% 11/25/22 ......................................................... 2,000,000 1,934,360
-----------
TOTAL REAL ESTATE MORTGAGE
INVESTMENT CONDUITS
(Cost $8,324,053) ..................................................... 3,685,537
-----------
<CAPTION>
MARKET
PAR VALUE
<S> <C> <C>
U.S. GOVERNMENT SECURITIES AND
AGENCY OBLIGATIONS--(1.6%)
U.S. Treasury Bond 7.125% 2/15/23

(Cost $1,258,789) ....................................... $ 1,250,000 $ 1,263,363
------------

SHORT-TERM INVESTMENTS--(7.1%)
Finova Capital Corp. 5.500% 7/17/96 .......................... 3,000,000 2,991,750
Lehman Brothers Holdings Inc.
5.700% 7/01/96 ............................................ 2,555,000 2,554,191
------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $5,545,941) ....................................... 5,545,941
------------
TOTAL INVESTMENTS--(105.3%)
(Cost $82,850,716) ...................................... 82,272,815
OTHER ASSETS, LESS LIABILITIES--(-5.3%) ...................... (4,114,128)
------------
NET ASSETS (100%) ............................................ $ 78,158,687
============

<FN>
(a) The cost of investments for federal income tax purposes is identical Gross
unrealized appreciation and depreciation at June 30, 1996, is as follows:
Gross unrealized appreciation: $ 755,332
Gross unrealized depreciation: (1,333,233)
------------
Net unrealized depreciation: $ (577,901)
============
(b) Security purchased on a delay delivery basis; see notes to the financial
statements.

See Notes to Financial Statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
SteinRoe Variable Investment Trust Mortgage Securities Income Fund /
June 30, 1996 (Unaudited)
<CAPTION>
<S> <C>
ASSETS:
Investments, at market value (identified cost $82,850,716) ..................... $ 82,272,815
Cash ........................................................................... 56,051
Receivable for investments sold ................................................ 16,532
Receivable for fund shares sold ................................................ 3,097
Interest receivable ............................................................ 483,877
Other assets ................................................................... 14,824
------------
TOTAL ASSETS .............................................................. 82,847,196
------------
LIABILITIES:
Payable for investments purchased .............................................. 4,564,873
Payable for fund shares repurchased ............................................ 89,897
Management fee payable ......................................................... 23,876
Administrative fee payable ..................................................... 8,949
Accrued expenses payable ....................................................... 914
------------
TOTAL LIABILITIES ......................................................... 4,688,509
------------
NET ASSETS ..................................................................... $ 78,158,687
============
NET ASSETS REPRESENTED BY:
Paid-in capital ............................................................. $ 79,000,728
Accumulated undistributed net investment income ............................. 2,853,901
Accumulated net realized losses on investments .............................. (3,118,041)
Net unrealized depreciation on investments .................................. (577,901)
------------
TOTAL NET ASSETS APPLICABLE TO OUTSTANDING SHARES OF BENEFICIAL INTEREST ....... $ 78,158,687
============
SHARES OF BENEFICIAL INTEREST OUTSTANDING ...................................... 7,696,660
============
NET ASSET VALUE PER SHARE ...................................................... $ 10.15
============
</TABLE>
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
Six Months Ended June 30, 1996 (Unaudited)
<CAPTION>
<S> <C>
INTEREST INCOME ............................................................ $ 3,279,833
-----------
EXPENSES:
Management fee .......................................................... 177,217
Administrative fee ...................................................... 66,726
Accounting fee .......................................................... 13,061
Custodian fee ........................................................... 12,170
Audit and legal fees .................................................... 9,829
Transfer agent fee ...................................................... 3,640
Printing expense ........................................................ 3,680
Trustees' expense ....................................................... 4,145
Miscellaneous expense ................................................... 6,180
-----------
Net expenses ............................................................... 296,648
-----------
Net investment income ...................................................... 2,983,185
REALIZED AND UNREALIZED LOSSES ON INVESTMENTS:
Net realized losses on investments ...................................... (186,352)
Change in unrealized appreciation or depreciation on investments ........ (2,926,133)
-----------
Net decrease in net assets resulting from operations ....................... $ (129,300)
===========
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
SteinRoe Variable Investment Trust Mortgage Securities Income Fund
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1996 DECEMBER 31,
(UNAUDITED) 1995
<S> <C> <C>
OPERATIONS:
Net investment income .................................................. $ 2,983,185 $ 5,354,601
Net realized gains (losses) on investments ............................. (186,352) 653,056
Change in unrealized appreciation or depreciation on investments ....... (2,926,133) 5,388,182
------------- -------------
Net increase (decrease) in net assets resulting from operations ........ (129,300) 11,395,839
------------- -------------
DISTRIBUTIONS DECLARED FROM:
Net investment income .................................................. -- (5,354,601)
Distributions in excess of net investment income ....................... -- (145,396)
------------- -------------
Total distributions .................................................... -- (5,499,997)
------------- -------------
FUND SHARE TRANSACTIONS:
Proceeds from fund shares sold ......................................... 2,774,411 6,851,307
Cost of fund shares repurchased ........................................ (26,264,690) (14,865,209)
Distributions reinvested ............................................... -- 5,499,997
Colonial-Keyport Government Fund Substitution .......................... -- 25,976,819
------------- -------------
Net increase (decrease) in net assets resulting from fund
share transactions ..................................................... (23,490,279) 23,462,914
------------- -------------
Total increase (decrease) in net assets ................................... (23,619,579) 29,358,756
NET ASSETS:
Beginning of period .................................................... 101,778,266 72,419,510
------------- -------------
End of period .......................................................... 78,158,687 101,778,266
============= =============
Accumulated undistributed (overdistributed) net investment income
included in ending net assets .......................................... $ 2,853,901 $ (129,284)
============= =============
ANALYSIS OF CHANGES IN SHARES OF BENEFICIAL INTEREST:
Shares sold ............................................................ 273,985 680,330
Shares redeemed ........................................................ (2,596,420) (1,486,896)
Distributions reinvested ............................................... -- 542,406
Colonial-Keyport Government Fund Substitution .......................... -- 2,477,593
------------- -------------
Net increase (decrease) ................................................... (2,322,435) 2,213,433
============= =============

See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SteinRoe Variable Investment Trust Mortgage Securities Income Fund
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1996 YEAR ENDED DECEMBER 31,
(UNAUDITED) 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year ....... $ 10.16 $ 9.28 $ 10.17 $ 10.26 $ 10.42 $ 9.74
---------- --------- -------- ------- -------- --------
Net investment income .................... 0.38 0.57 0.73 0.65 0.63 0.67
Net realized and unrealized gains (losses)
on investments ........................ (0.39) 0.89 (0.89) (0.01) (0.01) 0.73
---------- --------- -------- ------- -------- --------
Total from investment operations ......... (0.01) 1.46 (0.16) 0.64 0.62 1.40
---------- --------- -------- ------- -------- --------
Less distributions:
Dividends from net investment income .. -- (0.58) (0.73) (0.65) (0.62) (0.66)
Distributions from net realized gains
on investments ...................... -- -- - (0.08) (0.16) (0.06)
---------- --------- -------- ------- -------- --------
Total distributions ...................... -- (0.58) (0.73) (0.73) (0.78) (0.72)
---------- --------- -------- ------- -------- --------
Net asset value, end of year ............. $ 10.15 $ 10.16 $ 9.28 $ 10.17 $ 10.26 $ 10.42
========== ========= ======== ======= ======== ========
TOTAL RETURN:
Total investment return .................. -0.10% 15.74% (1.57)%(b) 6.26%(b) 5.95% 14.48%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........ $ 78,159 101,778 $ 72,420 $91,195 $ 67,353 $ 48,559
Ratio of expenses to average net assets .. 0.67%(d) 0.69% 0.70%(a) 0.76%(a) 0.90% 0.99%
Ratio of net investment income to average
net assets ............................ 6.78%(d) 6.76% 6.71%(b) 6.64%(b) 6.72% 7.26%
Portfolio turnover ratio (c) ............. 48%(e) 112% 241% 187% 169% 133%
<FN>

(a) If the Fund had paid all of its expenses and there had been no
reimbursement from the Investment Adviser and the Administrator, as
described in Note 5, this ratio would have been 0.71%, and 0.76% for the
years ended December 31, 1994, and 1993, respectively.
(b) Computed giving effect to the Investment Adviser's and the Administrator's
expense limitation undertaking.
(c) The Portfolio turnover ratio includes dollar roll transactions.
(d) Annualized.
(e) Not annualized.
</FN>
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS
SteinRoe Variable Investment Trust Cash Income Fund /
June 30, 1996 (Unaudited)
- ------------------------------------------------------------------------------
<CAPTION>
MARKET
PAR VALUE
<S> <C> <C>
COMMERCIAL PAPER-- (83.0%)
BUSINESS CREDIT INSTITUTION--(9.0%)
Finova Capital Corp. 5.443% 8/14/96 .......................... $3,000,000 $2,980,273
General Motors Acceptance Corp.
5.740% 12/02/96 ........................................... 3,000,000 2,928,133
----------
5,908,406
----------
BANKING--(4.6%)
Orix America Inc. (L.O.C. Sanwa Bank
Ltd.) 5.441% 7/01/96 ...................................... 3,000,000 3,000,000
----------

BEVERAGES--(4.5%)
Coca Cola Enterprises, Inc.
5.393% 7/17/96 ........................................... 3,000,000 2,992,840
----------

BROKERAGE SERVICES--(7.1%)
Lehman Brothers Holdings Inc.
5.446 - 5.703% 7/01 - 7/02/96 ............................. 4,655,000 4,654,548
----------

DRUGS--(4.5%)
American Home Food Products, Inc.
(gtd. by American Home Products
Corp.) 5.405% 7/22/96 ..................................... 3,000,000 2,990,585
----------

ELECTRONICS--(4.9%)
General Signal Corp. 5.406% 7/19/96 .......................... 3,200,000 3,191,408
----------

LENDING INSTITUTIONS--(13.6%)
Oak Funding Corp. 5.520% 7/19/96 ............................. 3,000,000 2,991,750
Old Line Funding Corp.
5.382% 7/15/96 ............................................ 3,000,000 2,993,758
Windmill Funding Corp.
5.368% 7/03/96 ............................................ 3,000,000 2,999,108
----------
8,984,616
----------
OTHER FINANCIAL--(21.2%)
International Securitization
5.276 - 5.404% 7/02 - 7/19/96 ............................. 5,000,000 4,991,945
Thames Asset Global Securitization
5.436% 7/15/96 ............................................ 3,000,000 2,993,677
Tri-Lateral Capital USA
5.443% 7/15/96 ............................................ 3,000,000 2,993,677
Working Capital Management
5.452% 7/11/96 ............................................ 3,000,000 2,995,500
----------
13,974,799
----------
PAPER PRODUCTS--(4.5%)
Temple Inland, Inc. 5.393% 7/18/96 .......................... 3,000,000 2,992,393
----------
<PAGE>
<CAPTION>
MARKET
PAR VALUE
<S> <C> <C>
PHOTOGRAPHY--(4.5%)
Seiko Corp. of America
5.501% 7/30/96 ................................................ $ 3,000,000 $ 2,986,877
-----------

RUBBER--(4.6%)
Bridgestone/Firestone, Inc. (L.O.C. Fuji
Bank Ltd.) 5.529% 7/08/96 .................................... 3,000,000 2,996,792
-----------
TOTAL COMMERCIAL PAPER
(Cost $54,673,264) .......................................... 54,673,264
-----------

U.S. GOVERNMENT AGENCY OBLIGATION--(7.6%)
Federal Home Loan Bank 5.560% 3/18/97
(Cost $5,000,000) ............................................. 5,000,000 5,000,000
-----------

YANKEE CERTIFICATES OF DEPOSIT--(9.1%)
FINANCIAL SERVICES
Sanwa Bank Ltd. 5.433% 7/16/96 ................................... 3,000,000 2,993,250
Sumitomo Bank Ltd 5.590% 9/13/96 ................................. 3,000,000 2,966,022
-----------
TOTAL YANKEE CERTIFICATES OF DEPOSIT
(Cost $5,959,272) ........................................... 5,959,272
-----------
TOTAL INVESTMENTS--(99.7%)
(Cost $65,632,536) (a) ........................................ 65,632,536
OTHER ASSETS, LESS LIABILITIES--NET--(0.3%) ...................... 218,430
-----------
NET ASSETS (100%) ................................................ $65,850,966
===========
<FN>

(a) The cost of investments for federal income tax purposes is identical.
There is no unrealized appreciation or depreciation at June 30, 1996.

See Notes to Financial Statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
SteinRoe Variable Investment Trust Cash Income Fund /
June 30, 1996 (Unaudited)
- ------------------------------------------------------------------------------
<CAPTION>
<S> <C>
ASSETS:
Investments, at market value (identified cost $65,632,536) .................... $65,632,536
Cash .......................................................................... 234,077
Receivable for fund shares sold ............................................... 105,724
Interest receivable ........................................................... 79,320
Other assets .................................................................. 9,431
-----------
TOTAL ASSETS ............................................................. 66,061,088
-----------
LIABILITIES:
Payable for fund shares repurchased ........................................... 145,813
Management fee payable ........................................................ 18,739
Administrative fee payable .................................................... 8,019
Dividends payable ............................................................. 18,418
Accrued expenses payable ...................................................... 19,133
-----------
TOTAL LIABILITIES ........................................................ 210,122
-----------
NET ASSETS .................................................................... $65,850,966
===========
NET ASSETS REPRESENTED BY:
Paid-in capital ............................................................ $65,850,966
-----------
TOTAL NET ASSETS APPLICABLE TO OUTSTANDING SHARES OF BENEFICIAL INTEREST ...... $65,850,966
===========
SHARES OF BENEFICIAL INTEREST OUTSTANDING ..................................... 65,850,966
===========
NET ASSET VALUE PER SHARE ..................................................... $ 1.00
===========
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
Six Months Ended June 30, 1996 (Unaudited)
- ------------------------------------------------------------------------------
<CAPTION>
<S> <C>
INTEREST INCOME ............................................................... $1,787,278
----------
EXPENSES:
Management fee ............................................................. 114,059
Administrative fee ......................................................... 48,882
Accounting fee ............................................................. 12,766
Custodian fee .............................................................. 9,524
Audit fee .................................................................. 8,356
Transfer agent fee ......................................................... 3,665
Trustees' expense .......................................................... 3,401
Printing expense ........................................................... 2,684
Miscellaneous expense ...................................................... 9,738
----------
Total expenses ........................................................... 213,075
----------
Net investment income ......................................................... $1,574,203
----------
Net increase in net assets resulting from operations .......................... $1,574,203
==========

See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
SteinRoe Variable Investment Trust Cash Income Fund
- ------------------------------------------------------------------------------
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1996 DECEMBER 31,
(UNAUDITED) 1995
<S> <C> <C>
OPERATIONS:
Net investment income ........................................... $ 1,574,203 $ 3,775,313
------------ ------------
Net increase in net assets resulting from operations ............... 1,574,203 3,775,313
------------ ------------
DISTRIBUTIONS DECLARED FROM:
Net investment income ........................................... (1,574,203) (3,775,313)
------------ ------------
FUND SHARE TRANSACTIONS:
Proceeds from fund shares sold .................................. 27,750,069 56,499,769
Cost of fund shares repurchased ................................. (28,465,357) (73,981,455)
Distributions reinvested ........................................ 1,574,203 3,775,313
------------ ------------
Net increase (decrease) in net assets resulting from fund
share transaction ............................................... 858,915 (13,706,373)
------------ ------------
Total increase (decrease) in net assets ............................ 858,915 (13,706,373)
NET ASSETS:
Beginning of period ............................................. 64,992,051 78,698,424
------------ ------------
End of period ................................................... $ 65,850,966 $ 64,992,051
============ ============
ANALYSIS OF CHANGES IN SHARES OF BENEFICIAL INTEREST:
Shares sold ..................................................... 27,750,069 56,499,769
Shares redeemed ................................................. (28,465,357) (73,981,455)
Distributions reinvested ........................................ 1,574,203 3,775,313
------------ ------------
Net increase (decrease) ............................................ 858,915 (13,706,373)
============ ============

See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
SteinRoe Variable Investment Trust Cash Income Fund
- ------------------------------------------------------------------------------
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1996 YEAR ENDED DECEMBER 31,
(UNAUDITED) 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year ........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- --------- ---------
Net investment income ..................... 0.020 0.030 0.037 0.027 0.034 0.056
--------- --------- --------- --------- --------- ---------
Less distributions:
Dividends from net investment income ... (0.020) -- -- -- -- --
Distributions from net investment income -- (0.030) (0.037) (0.027) (0.034) (0.056)
--------- --------- --------- --------- --------- ---------
Net asset value, end of year .............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ========= ========= =========
TOTAL RETURN:
Total investment return ................... 2.45% 5.62% 3.81% 2.70% 3.48% 5.79%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ......... $ 65,851 $ 64,992 $ 78,698 $ 83,049 $ 70,821 $ 77,676
Ratio of expenses to average net assets ... 0.65%(a) 0.63% 0.62% 0.65% 0.67% 0.67%
Ratio of net investment income to average
net assets ............................. 4.82%(a) 5.48% 3.73% 2.68% 3.42% 5.67%
Portfolio turnover ratio .................. N/A N/A N/A N/A N/A N/A
<FN>
(a) Annualized.
</FN>
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOTE 1. ORGANIZATION AND ACCOUNTING POLICIES
SteinRoe Variable Investment Trust (the "Trust"), an open-end management
investment company, was organized as a Massachusetts business trust on June 9,
1987. At June 30, 1996, the Trust consisted of five diversified Funds with
differing investment objectives, policies, and restrictions (individually
referred to as a "Fund", or collectively referred to as the "Funds"):

Capital Appreciation Fund--seeks to achieve capital growth by investing
in equity securities;

Managed Growth Stock Fund--seeks to achieve long-term growth of capital by
investing 65 percent of total assets in growth companies;

Managed Assets Fund--seeks to achieve high total investment return by
investing in equity and debt securities;

Mortgage Securities Income Fund--seeks to achieve highest possible level of
current income by investing at least 65 percent of total assets in mortgage
pass-through certificates; and

Cash Income Fund--seeks high current income while emphasizing capital
preservation from investment in short-term money market instruments.

Shares of the Trust are available and are being marketed exclusively as a
pooled funding vehicle for variable annuity contracts ("VA contracts") and
Variable Life Insurance Policies ("VLI policies") of various affiliated and
nonaffiliated insurance companies and, in the case of Capital Appreciation
Fund, also of Transamerica Occidental Life Insurance Company and First
Transamerica Life Insurance Company. Stein Roe and Farnham Incorporated (the
"Adviser") provides investment advisory services to the Funds as well as
management, and administrative services. SteinRoe Services, Inc. provides
transfer agent services. Keyport Financial Services Corp., subsidiary of
Keyport Life Insurance Company ("Keyport"), serves as the underwriter of the
Trust. Keyport, the Adviser and the Transfer Agent are direct subsidiaries of
Liberty Financial Companies, Inc. At June 30, 1996, various affiliated
insurance companies of Liberty Financial Company owned 100 percent of the
outstanding shares of all Funds, except for Capital Appreciation Fund, of
which Liberty Financial Company affiliates owned 95.2 percent and Transamerica
Life Companies owned 4.8 percent.

The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements. The policies are in
conformity with generally accepted accounting principles. The preparation of
financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the
reported amounts of increases and decreases in net assets from operations
during the reporting period. Actual results could differ from those estimates.

VALUATION OF INVESTMENTS--Portfolio securities listed on domestic exchanges
and over-the-counter securities quoted on the NASDAQ system are valued on the
basis of the last sale on the date as of which the valuation is made, or,
lacking any sales, at the current bid prices. Over-the-counter securities not
quoted on the NASDAQ system are valued at the latest bid quotation. Foreign
security valuations are generally based upon market quotations which,
depending upon local convention or regulation, may be last sale price, last
bid or asked price, or the mean between last bid and asked prices as of, in
each case, the close of the appropriate exchange or other designated time.
Long-term debt securities are valued on the basis of dealer-supplied
quotations or valuations furnished by a pricing service. Securities for which
reliable quotations are not readily available are valued at fair value, as
determined in good faith and pursuant to procedures established by the
Trustees. Short-term securities with remaining maturities of 60 days or less
are valued at amortized cost unless the Trustees determine this does not
represent fair value. Cash Income Fund values investments utilizing the
amortized cost valuation technique permitted in accordance with Rule 2a-7
under the Investment Company Act of 1940, which requires the Fund to comply
with certain conditions. This technique involves valuing a portfolio security
initially at its cost and thereafter assuming a constant amortization to
maturity of any discount or premium.

FEDERAL INCOME TAXES--The Funds now qualify and intend to continue
qualifying as "regulated investment companies" and as such (and by complying
with the applicable provisions of the Internal Revenue Code) will not be
subject to federal income tax on taxable income (including realized capital
gains) distributed to shareholders. By making the distributions required under
the Internal Revenue Code, the Funds intend to avoid excise tax liability.

FOREIGN CURRENCY TRANSACTIONS--Certain of the Funds have entered into
foreign exchange contracts for the settlement of purchases and sales of
securities denominated in a foreign currency to reduce the risk to the Funds
from adverse changes in the relationship between the U.S. dollar and the
foreign currency. The face or contract amount in U.S. dollars reflects the
total exposure the Fund has in that particular currency contract. In the event
that the counterparty in the foreign exchange contract fails to meet the terms
of the contract, the Fund could be exposed to the effects of changes in the
relationship between the U.S. dollar and the foreign currency.

INVESTMENT TRANSACTIONS--The Funds may purchase or sell securities on a
when-issued, delayed delivery or forward commitment basis. Payment and
delivery may take place a month or more after the date of the transaction. The
price of the underlying securities and the date when the securities will be
delivered and paid for are fixed at the time the transaction is negotiated.
Mortgage Securities Income Fund may also enter into dollar roll transactions.
In a dollar roll transaction, the Fund sells securities for delivery in the
current month and simultaneously contracts to repurchase, typically in 30 to
60 days, substantially similar securities at an agreed upon price and date.

<PAGE>

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

These transactions may increase the risk if the other party to the
transaction fails to deliver and causes the Fund to subsequently invest at
less advantageous yields. The Funds identify securities as segregated in their
custodial records with a value at least equal to the amount of the purchase
commitment.

RECLASSIFICATION--Certain of the Funds have changed the classification of
distributions to shareholders to better disclose the differences between
financial statement amounts and distributions to shareholders in accordance
with federal income tax regulations. Accordingly, amounts as of December 31,
1995, have been reclassified as follows:

<TABLE>
<CAPTION>
MORTGAGE
CAPITAL MANAGED SECURITIES
APPRECIATION ASSETS INCOME
FUND FUND FUND
<S> <C> <C> <C>
Paid-in capital ...... $ -- $(75,138) $ --
Accumulated net
investment income.. (20,399) 38,253 32,561
Accumulated net
realized gains
(losses) on
investments........ 20,399 36,885 (32,561)
</TABLE>
There were no reclassifications of distributions for Managed Growth Stock Fund
or Cash Income Fund. In all cases, net investment income, net realized gains
(losses) on investments, and net assets were not affected by this change.
OTHER--Security transactions are accounted for on trade date. Interest
income is recorded on the accrual basis. Discounts on debt securities are
amortized in accordance with Internal Revenue Code requirements. Dividend
income and distributions to shareholders are recorded on the ex-dividend date.
Net realized and unrealized gains (losses) on foreign currency transactions
include the fluctuation in exchange rates on gains and losses between trade
and settlement dates on security transactions, gains and losses arising from
the disposition of foreign currency, and currency gains and losses between the
accrual and payment dates on dividend and interest income and foreign
withholding taxes. The Funds do not isolate that portion of the results of
operations resulting from changes in foreign exchange rates on investments
from the fluctuations arising from changes in market prices of securities
held. Such fluctuations are included with the net realized and unrealized
gains or losses from investments. Unrealized appreciation and depreciation and
realized gains and losses differ between financial statements and tax earnings
due to deferred losses from wash sales.

NOTE 2. FUND SHARE TRANSACTIONS
Each Fund's capitalization consists of an unlimited number of shares of
beneficial interest without par value that represent a separate series of the
Trust. Each share of a Fund represents an equal proportionate beneficial
interest in that Fund and, when issued and outstanding, is fully paid and
non-assessable. Shareholders would be entitled to share proportionally in the
net assets of a Fund available for distribution to shareholders upon
liquidation of a Fund.

NOTE 3. SECURITY TRANSACTIONS
Realized gains and losses are computed on the identified cost basis for both
financial reporting and federal income tax purposes. At December 31, 1995, the
Mortgage Securities Income Fund had a capital loss carryover of $2,928,158,
which will expire in 2002, if not utilized. The cost of investments purchased
and proceeds from investments sold excluding short-term investments for the
year ended June 30, 1996, for the Funds, excluding Cash Income Fund, were as
follows:
<TABLE>
<CAPTION>
MORTGAGE
CAPITAL MANAGED MANAGED SECURITIES
APPRECIATION GROWTH ASSETS INCOME
FUND STOCK FUND FUND FUND
<S> <C> <C> <C> <C>
Cost of investments
purchased....... $54,203,763 $29,390,739 $120,267,001 $41,489,257
Proceeds from.....
investments sold 58,079,299 34,821,632 152,276,480 56,400,583
</TABLE>

NOTE 4. DISTRIBUTIONS TO SHAREHOLDERS
The Funds, with the exception of Cash Income Fund, intend to distribute as
dividends or capital gain distributions, at least annually, substantially all
of their net investment income and net gains realized from the sale of
portfolio securities. All dividends and distributions are reinvested in
additional shares of the Funds. Cash Income Fund declares dividends daily and
reinvests all dividends declared monthly in additional shares at net asset
value. Income and capital gain distributions are determined in accordance with
federal income tax regulations, which may differ from generally accepted
accounting principles primarily relating to gains and losses on foreign
currency and wash sale transactions.

NOTE 5. MANAGEMENT AND ADMINISTRATIVE FEES
The Funds have advisory and administrative agreements with the Adviser. The
following investment advisory fee rates were in effect as of June 30, 1996:

ANNUAL RATE(S) AS A
PERCENT OF
FUND(S) AVERAGE DAILY NET ASSETS
Capital Appreciation Fund .50 of 1%
Managed Growth Stock Fund .50 of 1%
Managed Assets Fund .45 of 1%
Mortgage Securities Income Fund .40 of 1%
Cash Income Fund .35 of 1%

As of June 30, 1996, for all the Funds, the administrative fee was .15 of 1
percent of average annual net assets. Both the investment advisory fees and
the administrative fees are computed daily and paid monthly.

The Adviser also provides the Funds with certain Fund accounting services. The
fee is $25,000 annually plus .0025 of 1 percent of assets in excess of $50
million. For the six months ended June 30, 1996, Capital Appreciation Fund,
Managed Growth Stock Fund, Managed Assets Fund, Mortgage Securities
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Income Fund, and Cash Income Fund incurred charges of $14,203, $13,733,
$15,463, $13,061 and $12,766, respectively.

The Funds pay SteinRoe Services, Inc. for transfer agent services
rendered at an annual rate of $7,500 computed on the basis of $625 per month.

The Adviser has agreed to reimburse all expenses, including management fees,
incurred by the Funds as follows:

FUND(S) EXPENSES EXCEEDING
Capital Appreciation Fund .80 of 1% of average daily net assets
Managed Growth Stock Fund .80 of 1% of average daily net assets
Managed Assets Fund .75 of 1% of average daily net assets
Mortgage Securities Income Fund .70 of 1% of average daily net assets
Cash Income Fund .65 of 1% of average daily net assets

The expense limitations expire April 30, 1997.

NOTE 6. INVESTMENT IN REPURCHASE AGREEMENTS
Each Fund may enter into repurchase agreements with banks, broker-dealers and
other recognized financial institutions whereby such institutions sell an
instrument in which a Fund may invest to that Fund, and the seller agrees, at
the time of the sale, to repurchase that instrument at a specified time and
price. The Funds require the seller of the instrument to maintain on deposit
with the Funds' custodian bank or in the Federal Reserve Book-Entry System
securities in an amount at all times equal to or in excess of the value of the
repurchase agreement plus accrued interest. In the event the seller of the
instrument defaults on the repurchase obligation, a Fund could receive less
than the repurchase price on the sale of the securities to another party or
could be subject to delays in selling the securities.

NOTE 7. SUBSTITUTIONS
In October, 1995, Keyport and Liberty Life, the Funds' only shareholders at
that time, received an order from the Securities and Exchange Commission
approving the substitution of (i) shares of Managed Assets Fund ("MAF") for
shares of Strategic Managed Assets Fund ("SMAF"), (ii) shares of the
Colonial-Keyport Strategic Income Fund ("CKSIF") for the shares of Managed
Income Fund ("MIF") and (iii) shares of Mortgage Securities Income Fund
("MSIF") for shares of Colonial-Keyport Government Fund ("CKGF"). CKSIF and
CKGF are series of the Keyport Variable Investment Trust ("KVIT"). KVIT also
is a funding vehicle for VA contracts and VLI policies of affiliated
participating insurance companies. The substitution occurred on October 13,
1995 at the net asset value of shares totaling $48,923,531 of MAF which were
substituted for shares of SMAF, $37,216,837 CKSIF which were substituted for
shares of MIF, and $25,976,819 of MSIF which were substituted for shares of
CKGF.
<PAGE>
INVESTMENT ADVISER
ADMINISTRATOR
Stein Roe & Farnham Incorporated
One South Wacker Drive
Chicago, Illinois 60606

TRANSFER AGENT
SteinRoe Services, Inc.
One South Wacker Drive
Chicago, Illinois 60606

DISTRIBUTOR
Keyport Financial Services Corp.
125 High Street
Boston, Massachusetts 02110

CLIENT SERVICES
Keyport Life Insurance Company
125 High Street
Boston, Massachusetts 02110
800-367-3653 (Press 3)

CUSTODIAN
State Street Bank & Trust Company
P.O. Box 366
Boston, Massachusetts 02101

INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
Peat Marwick Plaza
303 East Wacker Drive
Chicago, Illinois 60601

LEGAL COUNSEL
Bingham, Dana & Gould
150 Federal Street
Boston, Massachusetts 02110

THE TRUSTEES
John A. Bacon Jr.
Richard R. Christensen
Salvatore Macera
Dr. Thomas E. Stitzel

This report is authorized for use as sales literature only when
accompanied by a current prospectus of the Trust and a current prospectus for
a variable insurance product offered by Keyport Life Insurance Company,
Keyport America Life Insurance Company, or Liberty Life Assurance Company
of Boston.
6/96 NIM 30m