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, 1997
<PAGE>
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TABLE OF CONTENTS
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PORTFOLIO MANAGER'S DISCUSSION:
Capital Appreciation Fund ..........................................1
Managed Growth Stock Fund ..........................................3
Managed Assets Fund ................................................4
Mortgage Securities Income Fund ....................................5
Cash Income Fund ...................................................6
FINANCIAL STATEMENTS:
Capital Appreciation Fund ..........................................7
Managed Growth Stock Fund .........................................12
Managed Assets Fund ...............................................17
Mortgage Securities Income Fund ...................................23
Cash Income Fund ..................................................28
NOTES TO FINANCIAL STATEMENTS ........................................32
<PAGE>
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PORTFOLIO MANAGER'S DISCUSSION
SteinRoe Variable Investment Trust Capital Appreciation Fund
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DEAR CONTRACT OWNER:
Following a relatively weak first quarter, the Fund's performance rebounded in
the second quarter ended June 30, 1997, with the Fund gaining 15.6 percent, only
slightly behind the Russell 2000 return of 16.2 percent. This led to a total
return for the six months ended June 30, 1997, of 7.2 percent for the Fund
versus a 10.2 percent return for the Russell 2000. The Fund's performance
continued to strengthen in the latter part of the second quarter, gaining 6.6
percent for the month of June versus 4.3 percent for the Russell 2000.
We maintain between 30 percent and 40 percent of our total equity assets in
the Fund's 10 largest equity positions. Such concentration has enhanced the
Fund's overall return in the past. Past experience suggests that the stocks that
perform best for us are those we know most thoroughly. During the reporting
period, we added to our 10 largest holdings, increasing the concentration of the
Fund's equity assets in its top holdings to 37 percent. We believe this strategy
helped the Fund's overall performance, as our top 10 equity holdings accounted
for approximately 74 percent of the Fund's total return in the first six months.
For example, four of the Fund's top 10 holdings -- Alternative Resources (3.2
percent of total net assets), AVX Corporation (3.6 percent of total net assets),
CB Commercial Real Estate (3.8 percent of total net assets), and 20th Century
Industries (3.9 percent of total net assets) -- appreciated 17.3 percent, 25.6
percent, 53.4 percent and 24.4 percent, respectively, during the first six
months of the year.
In terms of sector performance, the Capital Appreciation Fund's best
performers in the first half of the year were in the financial, technology and
industrial sectors. Financial stocks that contributed meaningfully to the strong
performance included our specialty insurance holdings -- 20th Century
Industries, Mutual Risk Management and Meadowbrook Insurance (3.9 percent, 2.9
percent, and 3.4 percent of total net assets) -- as well as the real estate
manager and broker CB Commercial Real Estate (3.8 percent of total net assets).
Among the strongest performers in the technology sector were FiServ (3.6 percent
of total net assets), which provides data processing services to financial
companies, and Alternative Resources (3.2 percent of total net assets), which
provides human resource solutions for technology assignments. AVX Corporation
(3.6 percent of total net assets), a leading manufacturer of passive electronic
components also fared well, as demand for its products has begun to increase
following a cyclical slowdown in business volume. Strong industrial stocks
include Kent Electronics (2.8 percent of total net assets), an electronics
distributor and contract manufacturer, and Ballantyne of Omaha (1.9 percent of
total net assets), the leading producer of motion picture projectors. Finally,
Grupo Radio Centro (1.8 percent of total net assets) also did well; this owner
and operator of radio stations in Mexico benefited from improving economic
conditions.
Offsetting a portion of these gains, the Fund's energy holdings continued to
underperform in the second quarter reflecting declining oil and gas prices.
Barrett Resources (2.3 percent of total net assets) was particularly weak based
on disappointing recent exploration results. While the Fund's three domestic
exploration and production companies have been disappointing investments in the
short term, they have been very successful long-term investments because their
management teams have succeeded in growing oil and gas reserves rapidly at a low
cost per barrel. Central European Television (3.2 percent of total net assets),
an owner and operator of television stations based in Europe, was negatively
affected by regulatory uncertainty -- subsequently resolved in way that is
favorable to the company -- and currency depreciation in the Czech Republic.
Recent new holdings include CoreStaff, a provider of information technology
staffing solutions; SPSS, a leader in statistical software; and Henry Schein, a
distributor of dental and medical products (2.3 percent, 1.8 percent, and 1.2
percent of total net assets). We also purchased shares in Helen of Troy (1.6
percent of total net assets), a designer and marketer of hair care and personal
appliances. The Fund sold CFC International, National Processing and Storm
Technology after disappointing operating results, and we eliminated Dr.
Solomon's Group after signs of more vigorous competition in the anti-virus
software market.
The Capital Appreciation Fund attempts to create wealth for its shareholders
by investing in well-selected small-cap growth companies that are
entrepreneurially managed and which trade at reasonable valuation levels. During
the reporting period we maintained an equity ratio of roughly 90 percent of
total net assets -- this is approximately the midpoint of our normal equity
ratio range of 85 percent to 95 percent. We believe the growth prospects for the
companies in the portfolio are considerably higher than for the typical company
in today's market. At the same time, the portfolio's price-earnings ratio is
only a modest premium to that of the market. In our opinion today's small-cap
investor should benefit from higher growth, without having to overpay for it.
John McLandsborough and Dick Peterson,
Portfolio Managers
SteinRoe Variable Investment Trust
Capital Appreciation Fund, S&P 500 and Russell 2000
Performance of a hypothetical $10,000 investment January 1, 1989, to
June 30, 1997
Average Annual Total Return
at June 30, 1997
1-Year 5-Year Inception
16.7% 20.4% 17.4%
Line Chart:
Capital Appreciation Fund S&P 500 Index Russell 2000 Index
1/89 10000 10000 10000
12/89 13084 13163 11626
12/90 11918 12754 9361
12/91 16357 16631 13672
12/92 18725 17896 16189
12/93 25406 19697 19245
12/94 25708 19955 18894
12/95 28729 27444 24270
12/96 36469 33756 28274
6/97 39077 40335 31158
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. Total
return performance includes changes in share price and reinvestment of income
and capital gains distributions. Life of Fund is from Fund inception on Jan. 1,
1989, benchmark performance is from Dec. 31, 1988, to June 30, 1997. The Russell
2000 is an unmanaged group of stocks that differs from the Fund's composition;
it is not available for direct investment. According to Lipper Analytical
Services, Inc., an independent monitor of mutual fund performance, the median
total returns for the Fund's small-cap fund peer group for the one-year,
five-year and Life of Fund periods ended June 30, 1997, were 16.68 percent,
16.55 percent and 16.42 percent, respectively.
<PAGE>
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PORTFOLIO MANAGER'S DISCUSSION
SteinRoe Variable Investment Trust Managed Growth Stock Fund
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DEAR CONTRACT OWNER:
For the six months ended June 30, 1997, Managed Growth Stock Fund's return of
19.57 percent outpaced the 14.35 percent median return of its Lipper VA growth
fund peer group as well as the S&P 500 return of 19.49.
During the first half of the reporting period, growing concern about a
possible earnings slowdown prompted many investors to flee small- and mid-cap
stocks in search of the liquidity and predictability of large-cap, high-quality
growth stocks. The Fund clearly benefited from this trend, which continued into
the second half of the reporting period. Large-cap, high-quality growth stocks
have experienced a powerful market rally as their multinational focus continues
to attract investors' dollars. That's because investors have increasingly
emphasized earnings, and large-cap, high-quality stocks with a multinational
focus have, in general, reported much better earnings than their small- and
mid-cap brethren.
The pharmaceutical sector was one of our top performers, due in large part to
a string of successful new product introductions and the continued enthusiastic
support of investors who favor the noncyclical -- and relatively stable --
nature of drug company earnings. The portfolio's telecommunications equipment
providers also boosted performance, particularly companies like Motorola,
Tellabs and LMEriccson (3.5 percent, 2.6 percent and 3.0 percent of total net
assets, respectively) that continue to provide innovative products to help solve
the need among telephone companies to upgrade systems and handle greater voice
and data capacity. Finally, global consumer franchises like Coca-Cola, Gillette
and Procter & Gamble (3.4 percent, 3.6 percent and 3.2 percent of total net
assets, respectively) continue to do well as their earnings consistently meet or
exceed expectations.
Purchases during the last six months have ranged from Motorola, a
telecommunications equipment company, and Nokia Corp., a leading international
telecommunications group; to Paychex, Inc., a provider of payroll processing
services, and Wells Fargo & Co., one of the largest bank holding companies (3.5
percent, 1.9 percent, 0.7 percent and 1.3 percent of total net assets,
respectively). We believe these companies should experience strong earnings
growth over the next few years.
We remain positive about the Fund's long-term prospects, especially since
we think that increased global competition has created a new breed of large-cap
company-- one that boasts worldwide dominance, superefficient production and an
outspoken commitment to shareholder value. In our opinion, these kinds of
companies should do well regardless of how the U.S. economy is performing.
Erik Gustafson, 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. Total
return performance includes changes in share price and reinvestment of income
and capital gains distributions. Life of Fund is from Fund inception on Jan. 1,
1989; benchmark performance is from Dec. 31, 1988, to June 30, 1997. The S&P 500
is an unmanaged group of stocks that differs from the Fund's composition; it is
not available for direct investment. According to Lipper Analytical Services,
Inc., an independent monitor of mutual fund performance, the median total
returns for the Fund's VA growth fund peer group for the one-year, five-year and
Life of Fund periods ended June 30, 1997, were 16.68 percent, 16.55 percent and
16.42 percent, respectively.
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, 1997
Average Annual Total Return
at June 30, 1997
1-Year 5-Year Inception
29.7% 17.6% 17.7%
Line Chart
Managed Growth Stock Fund S&P 500 Index
1/89 10000 10000
12/89 13130 13163
12/90 12913 12754
12/91 19115 16631
12/92 20382 17896
12/93 21395 19697
12/94 20036 19955
12/95 27596 27444
12/96 33468 33756
6/97 40018 40335
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PORTFOLIO MANAGER'S DISCUSSION
SteinRoe Variable Investment Trust Managed Assets Fund
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DEAR CONTRACT OWNER:
For the six months ended June 30, 1997, Managed Assets Fund's return of 9.17
percent lagged the 10.14 percent median return of its Lipper VA flexible
portfolio peer group, and the 19.49 percent return of the S&P 500.
Solid performances by our financial services, health care, electrical
equipment and retail holdings fueled performance. Many of our international
holdings also contributed. Our equity gains, however, were offset somewhat by
the flatter returns of our REIT and energy holdings. Our fixed income holdings
- -- dampened in the first quarter of 1997 when the rate increase caused the long
bond to more than retrace earlier gains -- rallied later in the reporting period
on the news of a possible budget deal and strong foreign demand.
To help enhance diversification, we added several new holdings, including
United HealthCare, a health care management firm; Fujitsu, a Japanese
telecommunications equipment firm; Siemens, a German electronics firm; and Santa
Fe International, an oil services firm (0.7 percent, 0.5 percent, 0.5 percent
and 0.5 percent of total net assets, respectively). We shifted out of GM and
into Honda (0.7 percent of total net assets) during the last six months, as we
think a stronger dollar could hamper U.S. automakers' ability to compete against
Japanese and German competitors.
Going forward, we believe inflation will remain moderate and economic growth
will eventually slow, which could lead to further positive returns for our bond
investments. While we think attractive equity opportunities exist overseas,
we're less positive about the domestic stock market, as we think either slowing
corporate revenues or increasing wage pressures could lead to some erosion in
profit margins. Nonetheless, we think a good bond market and strong economic
conditions should ward off any major dislocations.
Harvey Hirschhorn, 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. Total
return performance includes changes in share price and reinvestment of income
and capital gains distributions. Life of Fund is from Fund inception of Jan. 1,
1989; benchmark performance is from Dec. 31, 1988, to June 30, 1997. The S&P 500
is an unmanaged group of stocks that differs from the Fund's composition; it is
not available for direct investment. According to Lipper Analytical Services,
Inc., an independent monitor of mutual fund performance, the median total
returns for the Fund's VA flexible portfolio fund peer group for the one-year,
five-year and Life of Fund periods ended June 30, 1997, were 19.49 percent,
13.11 percent and 13.10 per cent, respectively.
SteinRoe Variable Investment Trust
Managed Assets Fund and S&P 500
Performance of a hypothetical $10,000 investment January 1, 1989,
to June 30, 1997
Average Annual Total Return
at June 30, 1997
1-Year 5-Year Inception
18.5% 12.4% 12.9%
Line Chart
Managed Assets Fund S&P 500 Index
1/89 10000 10000
12/89 12238 13163
12/90 12154 12754
12/91 15549 16631
12/92 16720 17896
12/93 18273 19697
12/94 17690 19955
12/95 22189 27444
12/96 25657 33756
6/97 28010 40335
<PAGE>
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PORTFOLIO MANAGER'S DISCUSSION
SteinRoe Variable Investment Trust Mortgage Securities Income Fund
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DEAR CONTRACT OWNER:
For the six months ended June 30, 1997, Mortgage Securities Income Fund's
return of 3.35 percent outpaced the 3.24 percent median return of its Lipper
U.S. government fund peer group, but trailed the 3.92 percent return of the
Lehman Mortgage-Backed Securities Index.
We gradually have reduced the Fund's mortgage-backed holdings throughout the
reporting period as they have become less attractive. We are now near the lower
end of our historical allocation range for mortgages. That's because we believe
mortgages are generally overvalued as a result of both strong investor demand
for these securities and low volatility in the bond market. We sold current
coupon and premium coupon mortgages because we think these are the most likely
to underperform if interest rates decline and prepayment risk increases. We
have, however, held onto lower- and higher-coupon mortgage securities that we
think are the most attractive in the current environment.
We view asset-backed securities collateralized by home equity loans and
manufactured housing loans as very attractive. These securities have less
prepayment risk than most mortgage-backed securities and, on a risk-adjusted
basis, have attractive yields relative to mortgage-backed securities. We
currently have 9.6 percent of the Fund invested in asset-backed securities.
Going forward, we believe Treasury securities will outperform mortgages over
the next three to six months. Currently, mortgages do not offer enough yield to
compensate for the prepayment risk inherent in these securities. Within the
mortgage market, we think discount and premium coupons are attractive relative
to current coupons. Given our favorable outlook for the economy, we believe
corporate bonds may outperform both Treasuries and mortgages.
Michael Kennedy, 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.
Portfolio holdings as of June 30, 1997; portfolio data 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. Life of Fund is from Fund inception on Jan. 1, 1989;
benchmark performance is from Dec. 31, 1988, to June 30, 1997. The Lehman
Mortgage-Backed Securities Index represents an unmanaged group of
mortgage-backed securities that differs from the composition of the Fund; it is
not available for direct investment. According to Lipper Analytical Services,
Inc., an independent monitor of mutual fund performance, the median returns for
the Fund's U.S. government fund peer group for the one-year, five-year and Life
of Fund periods ended June 30, 1997, were 7.49 percent, 6.23 percent and 8.75
percent, respectively.
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, 1997
Average Annual Total Return
at June 30, 1997
1-Year 5-Year Inception
8.3% 6.2% 8.2%
Line Chart
Mortgage Securities Lehman Mortgage-Backed
Income Fund Securities Index
1/98 10000 10000
12/89 11284 11535
12/90 12311 12772
12/91 14094 14779
12/92 14933 15809
12/93 15868 16890
12/94 15619 16618
12/95 18077 19411
12/96 18924 20449
6/97 19561 21251
<PAGE>
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PORTFOLIO MANAGER'S DISCUSSION
SteinRoe Variable Investment Trust Cash Income Fund
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DEAR CONTRACT OWNER:
Cash Income Fund finished the six-month reporting period with a 2.49 percent
total return, just ahead of the 2.48 percent median return for its money market
fund peer group.
The Fund's yield reflects the see-saw environment of interest rates that has
been in effect throughout much of the last year. One year ago, the Federal
Reserve had just shifted from an easing to a neutral mode, as its series of rate
cuts designed to bring the economy to a soft landing appeared successful.
Throughout this year, the economy's mixed signals sent money market rates up and
down, but in a fairly tight range. In late March 1997, economic signposts
pointed to an economy that was growing too quickly, and the Federal Reserve
tightened rates by a quarter of a percentage point. Since then, however,
economic growth appears to have slowed to a more sustainable rate and the
Federal Reserve has stood firm on interest rates.
During times of economic uncertainty, we look for pockets of opportunity to
potentially enhance the Fund's yield. While the Federal Reserve was in its
easing-to-neutral mode, we added to our holdings of Federal agency securities to
lock in higher yields on longer-term securities. The middle two quarters of the
fiscal year brought mixed economic signals. As a result, we increased our
allocation of shorter-term commercial paper. This benefited the Fund because
many investors expected a tightening move.
As we approached fiscal year end, investors began to anticipate further rate
hikes and we looked to add corporate "floaters" to the Fund at attractive
spreads. We like these variable-rate corporate notes because they have one-year
maturities and their coupons adjust or "float" quarterly with market rates. Not
only do they offer high current yield potential, they also offer additional
yield potential because their coupons will float up to at least market rate
yields should the Federal Reserve raise interest rates. We are very selective in
the floaters we purchase. Of course we consider them for their defensive
characteristics in a rising-rate environment, but we also look for an attractive
current coupon. In this way, even if the Federal Reserve goes into a neutral
mode we can continue to capture additional yield potential.
Going forward, we plan to keep the Fund's average maturity shorter because
there is still a slim chance that the Federal Reserve may raise interest rates
at one of its next meetings. By maintaining a neutral maturity range, The Fund
is positioned to respond accordingly to the outcome of those meetings or other
significant economic events. As always, we'll look for opportunities to add
longer-maturity securities at attractive rates.
Jane 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. Total
return performance includes changes in share price and reinvestment of income
and capital gains distributions. 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. Life of
Fund is from fund inception on January 1, 1989. According to Lipper Analytical
Services, Inc., an independent monitor of mutual fund performance, the median
total returns for the Fund's money market fund peer group for the one-year,
five-year and Life of Fund periods ended June 30, 1997, were 5.04 percent, 4.21
percent and 5.30 per cent, respectively.
<PAGE>
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SCHEDULE OF INVESTMENTS
SteinRoe Variable Investment Trust Capital Appreciation Fund /
June 30, 1997 (Unaudited)
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MARKET
SHARES VALUE
--------- -----------
COMMON STOCKS--(92.2%)
AUTO ACCESSORIES--(2.2%)
Superior Industries International, Inc. 168,000 $ 4,452,000
-----------
BANKS/SAVINGS AND LOANS--(2.0%)
Grupo Financiero Inbursa 670,000 2,804,827
Rancho Santa Fe National Bank (a) 111,900 1,188,938
-----------
3,993,765
-----------
BROADCASTING/MEDIA--(9.8%)
Central European Media Enterprises
Ltd. (a) 243,900 6,341,400
Grupo Radio Centro ADSs (a) 311,000 3,654,250
Hollinger International, Inc. 350,000 3,915,625
Metro Networks, Inc. (a) 237,900 5,769,075
-----------
19,680,350
-----------
BUSINESS SERVICES--(17.2%)
Alternative Resources Corporation (a) 310,600 6,328,475
CORESTAFF, Inc. (a) 168,000 4,536,000
Covance, Inc. (a) 252,400 4,874,475
Danka Business Systems Plc ADRs 89,000 3,637,875
G & K Services Cl. A 211,000 7,859,750
Interim Services Inc. (a) 140,400 6,247,800
Investors Financial Services Corporation 25,000 1,187,500
-----------
34,671,875
-----------
COMPUTER HARDWARE AND SOFTWARE--(4.9%)
Microware Systems Corporation (a) 125,600 1,114,700
SPSS, Inc. (a) 125,000 3,625,000
Zebra Technologies Corporation (a) 180,100 5,020,287
-----------
9,759,987
-----------
COMPUTER SERVICES--(3.6%)
Fiserv Inc. (a) 161,600 7,211,400
-----------
CONSUMER ELECTRONICS/APPLIANCES--(1.6%)
Helen of Troy Ltd. (a) 124,500 3,190,312
-----------
DIVERSIFIED OPERATIONS--(0.1%)
Fischer Companies, Inc. 800 104,000
-----------
DRUGS--(0.9%)
Ligand Pharmaceuticals, Inc. (a) 140,000 1,802,500
-----------
EDUCATIONAL SERVICES--(1.7%)
Firearms Training Systems, Inc. (a) 255,800 3,517,250
-----------
ELECTRICAL POWER GENERATION--(1.0%)
AES Corporation (a) 27,000 1,910,250
-----------
<PAGE>
MARKET
SHARES VALUE
--------- ----------
ELECTRICAL EQUIPMENT--(8.3%)
AVX Corp. 265,300 $ 7,163,100
Ballantyne of Omaha, Inc. (a) 215,000 3,870,000
Kent Electronics Corporation (a) 155,000 5,686,563
-----------
16,719,663
-----------
ELECTRONIC COMPONENTS--(0.1%)
Zytec Corporation (a) 7,600 142,500
-----------
EQUIPMENT RENTAL & LEASING--(2.1%)
U.S. Rentals, Inc. (a) 168,100 4,255,031
-----------
FOOD DISTRIBUTOR--(2.2%)
Richfood Holdings, Inc. 169,000 4,394,000
-----------
INSURANCE--(10.2%)
Meadowbrook Insurance Group, Inc. 271,400 6,768,037
Mutual Risk Management Ltd. 126,666 5,810,803
20th Century Industries, Inc. 373,100 7,835,100
-----------
20,413,940
-----------
MEDICAL EQUIPMENT--(4.6%)
National Dentex Corporation (a) 15,800 300,200
Urologix, Inc. (a) 171,900 2,922,300
Uroquest Medical Corporation (a) 255,000 1,657,500
Xomed Surgical Products Inc. (a) 215,400 4,308,000
-----------
9,188,000
-----------
OIL/GAS--(6.2%)
Barrett Resources Corp. (a) 153,800 4,604,387
Cross Timbers Oil Company 133,500 2,569,875
Devon Energy Corporation 144,300 5,303,025
-----------
12,477,287
-----------
REAL ESTATE DEVELOPMENT/MANAGEMENT--(3.8%)
Beacon Properties Corporation 4,600 153,525
CB Commercial Real Estate Services
Group, Inc. (a) 248,100 7,536,038
-----------
7,689,563
-----------
RETAIL--(3.0%)
Garden Botanika, Inc. (a) 135,000 810,000
Video Update, Inc. (a) 557,000 2,471,687
Whole Foods Market, Inc. (a) 82,500 2,732,813
-----------
6,014,500
-----------
SPECIALTY CHEMICALS--(2.7%)
ChemFirst, Inc. 197,900 5,368,038
-----------
<PAGE>
SCHEDULE OF INVESTMENTS MARKET
(CONTINUED) SHARES VALUE
--------- -----------
COMMON STOCKS (CONTINUED)
TELECOMMUNICATIONS--(2.1%)
Western Wireless Corporation (a) 270,200 $ 4,289,425
------------
WHOLESALE DISTRIBUTION--(1.9%)
AmeriSource Distribution
Corporation (a) 30,000 1,496,250
Henry Schein, Inc. (a) 75,500 2,359,375
------------
3,855,625
------------
TOTAL COMMON STOCKS (Cost $158,432,119) 185,101,261
------------
MARKET
PAR VALUE
--------- -----------
SHORT-TERM INVESTMENTS--(7.7%)
Associates Corp. of North America
6.200% 7/01/97 $8,350,000 $ 8,350,000
Louisiana Land & Exploration
5.820% 7/01/97 7,000,000 7,000,000
------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $15,350,000) 15,350,000
------------
TOTAL INVESTMENTS--(99.9%)
(Cost $173,782,119) (b) 200,451,261
OTHER ASSETS, LESS LIABILITIES--(0.1%) 166,536
------------
NET ASSETS (100%) $200,617,797
============
(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, 1997 is
as follows:
Gross unrealized appreciation: $30,891,072
Gross unrealized depreciation: (4,221,930)
-----------
$26,669,142
============
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
SteinRoe Variable Investment Trust Capital Appreciation Fund /
June 30, 1997 (Unaudited)
- -------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investments, at market value (identified cost $173,782,119).................................. $200,451,261
Cash (including foreign currencies).......................................................... 51,868
Receivable for investments sold.............................................................. 1,000,892
Receivable for fund shares sold.............................................................. 291,460
Dividends and interest receivable............................................................ 55,792
Other assets................................................................................. 14,988
------------
TOTAL ASSETS............................................................................ 201,866,261
------------
LIABILITIES:
Payable for investments purchased............................................................ 823,875
Payable for fund shares repurchased.......................................................... 282,967
Payable to adviser........................................................................... 101,086
Accrued expenses payable..................................................................... 40,536
------------
TOTAL LIABILITIES....................................................................... 1,248,464
------------
NET ASSETS................................................................................... $200,617,797
============
NET ASSETS REPRESENTED BY:
Paid-in capital........................................................................... $171,307,315
Accumulated undistributed net investment income........................................... 173,347
Accumulated net realized gains on investments and foreign currency transactions........... 2,471,047
Net unrealized appreciation on investments and foreign currencies......................... 26,666,088
------------
TOTAL NET ASSETS APPLICABLE TO OUTSTANDING SHARES OF BENEFICIAL INTEREST..................... $200,617,797
============
SHARES OF BENEFICIAL INTEREST OUTSTANDING.................................................... 11,216,330
============
NET ASSET VALUE PER SHARE.................................................................... $17.89
=======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
Six Months Ended June 30, 1997 (Unaudited)
- -------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld).................................................. $ 502,255
Interest income............................................................................ 381,169
-------------
Total investment income.................................................................. 883,424
-------------
EXPENSES:
Management fee............................................................................. 468,624
Administrative fee......................................................................... 140,587
Custodian fee.............................................................................. 25,340
Accounting fee............................................................................. 14,234
Printing expense........................................................................... 16,860
Audit and legal fees....................................................................... 9,050
Trustees' fees............................................................................. 7,512
Transfer agent fee......................................................................... 3,620
Miscellaneous expense...................................................................... 3,024
-------------
Total expenses........................................................................... 688,851
-------------
Net investment income......................................................................... 194,573
REALIZED AND UNREALIZED GAINS ON INVESTMENTS:
Net realized gains on investments.......................................................... 2,492,277
Net realized gains on foreign currency transactions........................................ 2,606
Change in unrealized appreciation or depreciation of investments........................... 10,384,294
-------------
Net increase in net assets resulting from operations.......................................... $ 13,073,750
============
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
SteinRoe Variable Investment Trust Capital Appreciation Fund
- -------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED
JUNE 30, 1997 DECEMBER 31,
(UNAUDITED) 1996
------------ -------------
<S> <C> <C>
OPERATIONS:
Net investment income......................................................... $ 194,573 $ 340,782
Net realized gains on investments............................................. 2,492,277 37,125,858
Net realized gains (losses) on foreign currency transactions.................. 2,606 (19,291)
Change in unrealized appreciation or depreciation of investments.............. 10,384,294 1,982,076
------------ ------------
Net increase in net assets resulting from operations............................. 13,073,750 39,429,425
------------ ------------
DISTRIBUTIONS DECLARED FROM:
Net investment income......................................................... (265,000) --
Net realized gains on investments............................................. (36,940,000) --
------------ ------------
Total distributions (37,205,000) --
------------ ------------
FUND SHARE TRANSACTIONS:
Proceeds from fund shares sold................................................ 27,403,142 59,130,137
Cost of fund shares repurchased............................................... (36,078,115) (45,588,671)
Distributions reinvested...................................................... 37,205,000 --
------------ ------------
Net increase in net assets resulting from fund share transactions................ 28,530,027 13,541,466
------------ ------------
Total increase in net assets..................................................... 4,398,777 52,970,891
NET ASSETS:
Beginning of period........................................................... 196,219,020 143,248,129
------------ ------------
End of period................................................................. $200,617,797 $196,219,020
============ ============
Accumulated undistributed net investment income included in ending net assets.... $ 173,347 $ 243,774
============ ============
ANALYSIS OF CHANGES IN SHARES OF BENEFICIAL INTEREST:
Shares sold................................................................... 1,561,687 3,135,974
Shares repurchased............................................................ (2,065,204) (2,445,679)
Distributions reinvested...................................................... 2,256,218 --
------------ ------------
Net increase..................................................................... 1,752,701 690,295
============ ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SteinRoe Variable Investment Trust Capital Appreciation Fund
- -------------------------------------------------------------------------------
SIX MONTHS ENDED
JUNE 30, 1997 YEAR ENDED DECEMBER 31,
----------------------------------------------------------
(UNAUDITED) 1996 1995 1994 1993 1992
------------ --------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year............. $ 20.73 $ 16.33 $ 14.74 $ 16.53 $ 15.34 $ 15.32
--------- --------- --------- --------- -------- --------
Net investment income.......................... 0.02 0.04 0.04 0.06 0.03 --
Net realized and unrealized gains
on investments and foreign currency
transactions................................ 1.13 4.36 1.69 0.09 5.22 2.17
--------- --------- --------- --------- -------- --------
Total from investment operations............... 1.15 4.40 1.73 0.15 5.25 2.17
--------- --------- --------- --------- -------- --------
Less distributions:
Dividends from net investment income........ (0.03) -- (0.04) (0.07) (0.02) --
Distributions from net realized gains
on investments............................ (3.96) -- (0.10) (1.87) (4.04) (2.15)
--------- --------- --------- --------- -------- --------
Total distributions............................ (3.99) -- (0.14) (1.94) (4.06) (2.15)
--------- --------- --------- --------- -------- --------
Net asset value, end of year................... $ 17.89 $ 20.73 $ 16.33 $ 14.74 $ 16.53 $ 15.34
======== ======== ======== ======== ======= =======
TOTAL RETURN:
Total investment return........................ 7.15% 26.94% 11.75% 1.19%(b) 35.68%(b) 14.48%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's).............. $200,618 $196,219 $143,248 $134,078 $96,544 $52,135
Ratio of expenses to average net assets........ 0.74%(c) 0.75% 0.76% 0.80%(a) 0.84%(a) 1.01%
Ratio of net investment income to average
net assets.................................. 0.21%(c) 0.20% 0.26% 0.44%(b) 0.13%(b) (0.01)%
Portfolio turnover ratio....................... 38% 100% 132% 144% 112% 85%
Average commissions (per share)................ $ 0.0353 $ 0.0251 -- -- -- --
<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.
</FN>
</TABLE>
See Notes to Financial Statements.
<PAGE>
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
SteinRoe Variable Investment Trust Managed Growth Stock Fund /
June 30, 1997 (Unaudited)
- -------------------------------------------------------------------------------
MARKET
SHARES VALUE
--------- -----------
COMMON STOCKS--(96.1%)
BANKS--(6.1%)
Citicorp 40,000 $ 4,822,500
MBNA Corp. 123,750 4,532,344
Wells Fargo & Company 10,000 2,695,000
-----------
12,049,844
-----------
BUSINESS SERVICES--(2.9%)
First Data Corporation 100,000 4,393,750
Paychex, Inc. 35,000 1,330,000
-----------
5,723,750
-----------
COMPUTERS AND COMPUTER SOFTWARE--(8.0%)
Cisco Systems, Inc. (a) 65,000 4,363,125
Intel Corporation 35,000 4,963,437
Microsoft Corp. (a) 50,000 6,318,750
-----------
15,645,312
-----------
CONSUMER RELATED--(9.0%)
CUC International, Inc. (a) 165,000 4,259,063
The Gillette Company 75,000 7,106,250
The Proctor & Gamble Co. 45,000 6,356,250
-----------
17,721,563
-----------
DRUGS--(7.5%)
Eli Lilly & Co. 50,000 5,465,625
Merck & Co. 55,000 5,692,500
SmithKline Beecham Plc ADRs 40,000 3,665,000
-----------
14,823,125
-----------
ELECTRICAL EQUIPMENT--(3.3%)
General Electric Company 100,000 6,537,500
-----------
ENERGY--(4.0%)
Schlumberger Ltd. 40,000 5,000,000
Renaissance Energy Ltd. (a) 100,000 2,783,617
-----------
7,783,617
-----------
FINANCIAL SERVICES--(3.1%)
Federal National Mortgage
Association 140,000 6,107,500
-----------
FOOD/BEVERAGE/TOBACCO--(5.8%)
The Coca Cola Company 100,000 6,750,000
Phillip Morris Companies, Inc. 105,000 4,659,375
-----------
11,409,375
-----------
HEALTH CARE--(4.5%)
Johnson & Johnson 80,000 5,150,000
United Healthcare Corp. 70,000 3,640,000
-----------
8,790,000
-----------
<PAGE>
MARKET
SHARES VALUE
--------- -----------
HOTEL--(3.6%)
HFS, Inc. 70,000 $ 4,060,000
Sun International Hotels Ltd. (a) 80,000 2,955,000
-----------
7,015,000
-----------
INSURANCE--(6.6%)
American International Group, Inc. 37,500 5,601,562
The Travelers, Inc. 115,000 7,252,188
-----------
12,853,750
-----------
LEISURE & ENTERTAINMENT--(2.0%)
Disney (Walt) Co. 50,000 4,012,500
-----------
MEDICAL SUPPLIES--(4.2%)
Baxter International Inc. 65,000 3,396,250
Medtronic, Inc. 60,000 4,860,000
-----------
8,256,250
-----------
RETAIL--(4.6%)
The Home Depot, Inc. 70,000 4,825,625
Kohl's Corp. (a) 80,000 4,235,000
-----------
9,060,625
-----------
RESTAURANTS--(1.7%)
McDonald's Corporation 70,000 3,381,875
-----------
RUBBER, PLASTIC & RELATED--(2.6%)
Illinois Tool Works Inc. 100,000 4,993,750
---------
TECHNOLOGY SERVICES--(4.4%)
Tellabs Inc. (a) 90,000 5,028,750
Thermo Electron Corp. (a) 105,000 3,570,000
-----------
8,598,750
-----------
TELECOMMUNICATIONS--(12.2%)
LM Ericcson Telecommunications
ADRs Class B 150,000 5,906,250
Lucent Technologies Inc. 55,000 3,963,438
Motorola, Inc. 90,000 6,840,000
Nokia Corporation ADRs Class A 50,000 3,687,500
WorldCom Inc. (a) 110,000 3,520,000
-----------
23,917,188
-----------
TOTAL COMMON STOCKS
(Cost $100,201,164) 188,681,274
-----------
<PAGE>
SCHEDULE OF INVESTMENTS MARKET
(CONTINUED) PAR VALUE
--------- -----------
SHORT-TERM INVESTMENTS--(5.9%)
Associates Corp. of North America
6.200% 7/01/97 $8,570,000 $ 8,570,000
Louisiana Land & Exploration
5.820% 7/01/97 3,000,000 3,000,000
----------
TOTAL SHORT-TERM INVESTMENTS
(Cost $11,570,000) 11,570,000
----------
TOTAL INVESTMENTS--(102%)
(Cost $111,771,164) (b) 200,251,274
OTHER ASSETS, LESS LIABILITIES--(-2%) (4,083,789)
----------
NET ASSETS (100%) $196,167,485
============
(a) Non-income producing security.
(b) The cost of investments for federal income tax purposes is $111,772,404.
Gross unrealized appreciation and depreciation at June 30, 1997, is as follows:
Gross unrealized appreciation: $89,125,263
Gross unrealized depreciation: (646,393)
---------
Net unrealized appreciation: $88,478,870
=========
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
SteinRoe Variable Investment Trust Managed Growth Stock Fund /
June 30, 1997 (Unaudited)
- -------------------------------------------------------------------------------
ASSETS:
<S> <C>
Investments, at market value (identified cost $111,771,164).......................................... $200,251,274
Cash ................................................................................................ 53,657
Receivable for investments sold...................................................................... 814,728
Receivable for fund shares sold...................................................................... 111,044
Dividends receivable................................................................................. 166,700
Other assets......................................................................................... 14,752
-------------
TOTAL ASSETS...................................................................................... 201,412,155
-------------
LIABILITIES:
Payable for investments purchased.................................................................... 4,821,035
Payable for fund shares repurchased.................................................................. 299,647
Management fee payable............................................................................... 64,641
Administrative fee payable........................................................................... 19,409
Accrued expenses payable............................................................................. 38,720
Other liabilities.................................................................................... 1,218
-------------
TOTAL LIABILITIES................................................................................. 5,244,670
-------------
NET ASSETS........................................................................................... $196,167,485
=============
NET ASSETS REPRESENTED BY:
Paid-in capital................................................................................... $105,092,952
Accumulated undistributed net investment income................................................... 339,549
Accumulated net realized gains on investments..................................................... 2,254,613
Net unrealized appreciation on investments and foreign currencies................................. 88,480,371
-------------
TOTAL NET ASSETS APPLICABLE TO OUTSTANDING SHARES OF BENEFICIAL INTEREST............................. $196,167,485
=============
SHARES OF BENEFICIAL INTEREST OUTSTANDING............................................................ 6,005,671
=============
NET ASSET VALUE PER SHARE............................................................................ $32.66
=============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
Six Months Ended June 30, 1997 (Unaudited)
- -------------------------------------------------------------------------------
INVESTMENT INCOME:
<S> <C>
Dividends (net of foreign taxes withheld)......................................................... $749,994
Interest income................................................................................... 239,100
-------------
Total investment income........................................................................... 989,094
-------------
EXPENSES:
Management fee.................................................................................... 441,492
Administrative fee................................................................................ 132,448
Accounting fee.................................................................................... 14,380
Custodian fee..................................................................................... 9,955
Audit and legal fees.............................................................................. 8,145
Trustees' fees.................................................................................... 6,774
Printing expense.................................................................................. 5,430
Transfer agent fee................................................................................ 3,620
SEC & State registration fees..................................................................... 1,810
Miscellaneous expense............................................................................. 4,185
-------------
Total expenses.................................................................................. 628,239
-------------
Net investment income................................................................................ 360,855
REALIZED AND UNREALIZED GAINS ON INVESTMENTS:
Net realized gains on investments................................................................. 2,278,824
Change in unrealized appreciation or depreciation of investments.................................. 29,219,646
-------------
Net increase in net assets resulting from operations................................................. $31,859,325
=============
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
SteinRoe Variable Investment Trust Managed Growth Stock Fund
- -------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31,
(UNAUDITED) 1996
------------- ------------
OPERATIONS:
<S> <C> <C>
Net investment income........................................................ $ 360,855 $ 728,925
Net realized gains on investments............................................ 2,278,824 7,580,182
Change in unrealized appreciation or depreciation of investments............. 29,219,646 20,202,757
------------ ------------
Net increase in net assets resulting from operations......................... 31,859,325 28,511,864
------------ ------------
DISTRIBUTIONS DECLARED FROM:
Net investment income........................................................ (710,000) --
Net realized gains on investments............................................ (7,500,000) --
------------ ------------
Total distributions........................................................ (8,210,000) --
------------ ------------
FUND SHARE TRANSACTIONS:
Proceeds from fund shares sold............................................... 18,414,418 22,263,141
Cost of fund shares repurchased.............................................. (15,985,232) (25,729,831)
Distributions reinvested..................................................... 8,210,000 --
------------ ------------
Net increase (decrease) in net assets resulting from fund share transactions.... 10,639,186 (3,466,690)
------------ ------------
Total increase in net assets.................................................... 34,288,511 25,045,174
NET ASSETS:
Beginning of period.......................................................... 161,878,974 136,833,810
------------ ------------
End of period................................................................ $196,167,485 $161,878,984
============ ============
Accumulated undistributed net investment income
included in ending net assets................................................ $ 339,549 $ 688,694
============ ============
ANALYSIS OF CHANGES IN SHARES OF BENEFICIAL INTEREST:
Shares sold.................................................................. 611,998 854,357
Shares repurchased........................................................... (539,013) (997,588)
Distributions reinvested..................................................... 274,215 --
------------ ------------
Net increase (decrease)......................................................... 347,200 (143,231)
============ ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SteinRoe Variable Investment Trust Managed Growth Stock Fund
- -------------------------------------------------------------------------------
SIX MONTHS ENDED
JUNE 30, 1997 YEAR ENDED DECEMBER 31,
-------------------------------------------------------------
(UNAUDITED) 1996 1995 1994 1993 1992
------------ --------- -------- -------- -------- --------
PER SHARE OPERATING PERFORMANCE:
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period......... $ 28.61 $ 23.59 $ 18.11 $ 20.65 $ 20.10 $ 19.47
--------- --------- --------- -------- --------- --------
Net investment income........................ 0.06 0.13 0.15 0.15 0.13 0.11
Net realized and unrealized gains (losses)
on investments ........................... 5.41 4.89 6.68 (1.46) 0.86 1.18
--------- --------- --------- -------- --------- --------
Total from investment operations............. 5.47 5.02 6.83 (1.31) 0.99 1.29
--------- --------- --------- -------- --------- --------
Less distributions:
Dividends from and in excess of net
investment income....................... (0.12) -- (0.15) (0.17) (0.12) (0.10)
Distributions from and in excess of net
realized gains on investments........... (1.30) -- (1.20) (1.06) (0.32) (0.56)
--------- --------- --------- -------- --------- --------
Total distributions.......................... (1.42) -- (1.35) (1.23) (0.44) (0.66)
--------- --------- --------- -------- --------- --------
Net asset value, end of period............... $ 32.66 $ 28.61 $ 23.59 $ 18.11 $ 20.65 $ 20.10
========= ========= ========= ======== ========= ========
TOTAL RETURN:
Total investment return..................... 19.57% 21.28% 37.73% (6.35)% 4.97% 6.63%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's)........... $196,167 $161,879 $136,834 $98,733 $111,561 $64,402
Ratio of expenses to average net assets..... 0.70%(a) 0.73% 0.74% 0.77% 0.83% 0.97%
Ratio of net investment income to average
net assets............................... 0.41%(a) 0.49% 0.72% 0.75% 0.77% 0.63%
Portfolio turnover ratio.................... 11% 35% 41% 72% 77% 20%
Average commissions (per share)............. $0.0590 $0.0534 -- -- -- --
(a) Annualized.
See Notes to Financial Statements.
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
SteinRoe Variable Investment Trust Managed Asset Fund /
June 30, 1997 (Unaudited)
- -------------------------------------------------------------------------------
MARKET
SHARES VALUE
--------- -----------
COMMON STOCKS--(56.7%)
AUTOMOTIVE--(0.7%)
Honda Motor Company, Ltd. ADRs 35,000 $ 2,106,562
-----------
BANKS--(5.2%)
BankAmerica Corporation 56,000 3,615,500
Bank One Corporation 58,295 2,823,664
Citicorp 26,000 3,134,625
Royal Bank of Scotland Group Plc 297,263 2,780,656
Wells Fargo & Company 6,000 1,617,000
Westpac Banking Corporation Ltd. 415,000 2,477,937
-----------
16,449,382
-----------
BUILDING AND CONSTRUCTION--(0.5%)
Fluor Corporation 30,000 1,655,625
-----------
CHEMICALS--(1.0%)
Praxair, Inc. 55,000 3,080,000
-----------
COMPUTERS--(0.7%)
International Business Machines 26,000 2,344,875
-----------
COMPUTER SOFTWARE AND SERVICES--(1.0%)
Electronic Data Systems Corporation 40,000 1,640,000
Fujitsu Ltd. 110,000 1,528,445
-----------
3,168,445
-----------
DATA PRODUCTS & REPRODUCTION--(1.0%)
Canon, Inc. 120,000 3,271,869
-----------
DRUGS/HEALTH CARE--(6.3%)
American Home Products Corp. 38,000 2,907,000
Elan Corporation Plc ADRs (a) 70,000 3,167,500
Eli Lilly & Company 35,000 3,825,938
Novartis ADRs 50,000 4,002,465
SmithKline Beecham Plc ADRs 41,000 3,756,625
United Healthcare Corporation 42,000 2,184,000
-----------
19,843,528
-----------
ELECTRICAL EQUIPMENT--(3.7%)
Emerson Electric Co. 62,000 3,413,875
General Electric Company 50,000 3,268,750
Hubbell Inc., Class B 80,000 3,520,000
Siemens AG 25,000 1,498,565
-----------
11,701,190
-----------
<PAGE>
MARKET
SHARES VALUE
--------- -----------
ELECTRONICS--(4.6%)
Analog Devices, Inc. 75,000 $ 1,992,187
Harris Corp. 35,000 2,940,000
Intel Corporation 21,000 2,978,062
Motorola, Inc. 53,000 4,028,000
Sony Corporation Sponsored ADRs 29,000 2,552,000
-----------
14,490,249
-----------
ENVIRONMENTAL SERVICES--(0.5%)
WMX Technologies Inc. 50,000 1,606,250
-----------
FABRICATED METAL PRODUCTS--(1.0%)
Crown Cork & Seal, Inc. 59,000 3,152,813
-----------
FERTILIZERS--(0.8%)
Potash Corp. of Saskatchewan Inc. 36,000 2,702,250
-----------
FINANCIAL SERVICES--(0.9%)
Federal National Mortgage Association 67,000 2,922,875
-----------
FOOD/BEVERAGE/TOBACCO--(2.7%)
PepsiCo, Inc. 70,000 2,629,375
Philip Morris Companies, Inc. 75,000 3,328,125
Sara Lee Corporation 60,000 2,497,500
-----------
8,455,000
-----------
HOLDING--(0.8%)
Swire Pacific Ltd. Class A (a) 300,000 2,700,976
-----------
HOTELS--(0.7%)
HFS Inc. (a) 41,000 2,378,000
-----------
HOUSEWARES--(1.1%)
Newell Co. 85,000 3,368,125
-----------
INSURANCE--(1.2%)
American States Financial Corporation 85,000 3,910,000
-----------
MEDICAL SUPPLIES--(1.1%)
Baxter International Inc. 68,000 3,553,000
-----------
MULTI-INDUSTRY--(0.8%)
Honeywell, Inc. 32,000 2,428,000
-----------
<PAGE>
SCHEDULE OF INVESTMENTS MARKET
(CONTINUED) SHARES VALUE
--------- ---------
OIL/GAS--(6.7%)
Baker Hughes Inc. 75,000 $ 2,901,563
ELF Aquitaine Sponsored ADRs 40,000 2,177,500
El Paso Natural Gas Company 45,800 2,519,000
Enron Corp. 50,000 2,040,625
Mobil Corporation 44,000 3,074,500
Santa Fe International Corporation (a) 45,400 1,543,600
Schlumberger Ltd. 14,000 1,750,000
Tosco Corporation 90,000 2,694,375
United Meridian Corporation (a) 78,000 2,340,000
-----------
21,041,163
-----------
PAPER & FOREST PRODUCTS--(1.0%)
Plum Creek Timber Company 94,000 3,019,750
-----------
PUBLISHING & BROADCASTING--(0.7%)
World Color Press, Inc. (a) 90,000 2,137,500
-----------
REAL ESTATE--(2.8%)
Avalon Properties, Inc. 76,000 2,175,500
Reckson Associates Realty
Corporation 103,800 2,387,400
The Rouse Company 70,587 2,082,317
Security Capital Industrial Trust 100,000 2,150,000
-----------
8,795,217
-----------
RETAIL--(3.0%)
Home Depot, Inc. 50,000 3,446,875
Jusco Co. 80,000 2,705,584
Wal-Mart Stores, Inc. 100,000 3,381,250
-----------
9,533,709
-----------
TELECOMMUNICATIONS--(3.7%)
Airtouch Communications, Inc. (a) 90,000 2,463,750
GTE Corporation 62,000 2,720,250
LM Ericsson Telecommunications Co.
ADRs Class B 90,000 3,543,750
Telefonica de Argentina S.A. ADRs 85,000 2,943,125
-----------
11,670,875
-----------
TRANSPORTATION--(1.0%)
Canadian National Railway 70,000 3,062,500
-----------
UTILITIES--(0.8%)
Empresa Nacional De Electricidad
ADRs 30,000 2,551,875
-----------
WATER TREATMENT SYSTEMS--(0.7%)
U.S. Filter Corporation (a) 75,000 2,043,750
-----------
TOTAL COMMON STOCKS
(Cost $129,105,675) 179,145,353
-----------
<PAGE>
MARKET
PAR VALUE
--------- -----------
LONG-TERM OBLIGATIONS--(40.1%)
AIR TRANSPORTATION--(0.8%)
Federal Express Corporation 1994
Pass-Through Certificates Series
A310-A1 7.530% 9/23/06 $1,906,583 $ 1,920,272
United Airlines Corporation Series
1991-A-1 9.200% 3/22/08 669,937 736,079
-----------
2,656,351
-----------
ASSET-BACKED SECURITIES--(1.5%)
ALPS Pass-Through Trust Series 1994-1
Class C2 9.350% 9/15/04 1,989,855 2,024,657
American Mortgage Trust Series 1993-3
Class 3B 8.190% 9/27/22 2,130,207 1,998,241
Greentree Home Improvement Loan
Trust Series 1994-A Class A
7.050% 3/15/14 866,513 865,880
-----------
4,888,778
-----------
BANKS--(2.1%)
Den Danske Bank 6.550% 9/15/03 2,250,000 2,190,893
Deutsche Ausbank 7.000% 9/24/01 2,250,000 2,287,463
First Chicago NBD 6.125% 2/15/06 2,250,000 2,100,015
-----------
6,578,371
-----------
CONSTRUCTION & HOUSING (0.8%)
Hanson Overseas 6.750% 9/15/05 2,500,000 2,436,800
-----------
DRUGS/HEALTHCARE--(1.8%)
Glaxo Wellcome Plc 6.125% 1/25/06 2,500,000 2,368,800
Nationwide Health Property Inc.
Conv. Deb. 6.250% 1/01/99 3,400,000 3,463,750
-----------
5,832,550
-----------
EXTRACTIVE-ENERGY--(0.9%)
BOC Group Plc 5.875% 1/29/01 2,750,000 2,678,390
-----------
FOREIGN GOVERNMENT REGIONAL BOND--(0.9%)
Corporacion Andina de Fomento
6.625% 10/14/98 (c) 2,900,000 2,913,224
-----------
FINANCIAL--(1.3%)
Associates Corporation of North America
7.500% 4/15/02 4,000,000 4,110,400
-----------
INSURANCE (0.8%)
Prudential Insurance Co.
7.650% 7/1/07 (c) 2,500,000 2,537,500
-----------
<PAGE>
SCHEDULE OF INVESTMENTS MARKET
(CONTINUED) PAR VALUE
--------- -----------
MORTGAGE-BACKED SECURITIES--(0.1%)
Lennar Central Partners Limited
Partnership Series 1994-1 Class C
8.120% 9/15/02 (c) $ 155 $ 155
MDC Mortgage Funding Corporation
Series Q Class 5 8.850% 3/20/18 207,846 211,442
------------
211,597
------------
OIL/GAS--(0.5%)
SFP Pipeline Holdings, Inc. Conv. Deb.
11.160% 8/15/10 1,400,000 1,722,000
------------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS--(28.6%)
Federal Home Loan Mortgage
Corporation
6.500% 12/01/10 Gold 951,646 935,858
6.500% 5/01/11 Gold 867,247 852,859
6.500% 6/01/11 Gold 5,651,717 5,557,955
12.000% 7/01/20 Gold 1,383,790 1,577,950
6.500% 3/01/26 Gold 3,847,896 3,695,981
6.500% 6/01/26 Gold 2,442,088 2,345,674
6.500% 2/01/27 Gold 989,262 948,148
6.500% 3/01/27 Gold 2,968,497 2,845,126
6.500% 4/01/27 Gold 989,265 948,151
Federal National Mortgage Association
8.000% 4/13/05 1,500,000 1,518,150
Government National Mortgage
Association
7.125% 7/20/25 ARM 1,153,413 1,183,425
8.000% 3/15/26 4,760,651 4,876,716
U.S. Treasury Bonds
7.875% 8/15/01 1,500,000 1,581,195
7.250% 5/15/16 7,000,000 7,301,140
7.875% 2/15/21 4,500,000 5,017,860
7.125% 2/15/23 4,500,000 4,635,270
U.S. Treasury Notes
6.375% 1/15/99 7,500,000 7,544,850
6.875% 8/31/99 5,500,000 5,582,720
6.750% 4/30/00 3,500,000 3,546,900
6.250% 2/15/03 6,500,000 6,447,805
5.750% 8/15/03 6,000,000 5,792,820
7.500% 2/15/05 3,500,000 3,703,175
6.500% 5/15/05 3,500,000 3,494,085
6.500% 8/15/05 6,750,000 6,732,406
6.875% 5/15/06 1,500,000 1,531,155
------------
90,197,374
------------
TOTAL LONG-TERM OBLIGATIONS
(Cost $126,261,515) 126,763,335
------------
<PAGE>
MARKET
PAR VALUE
--------- -----------
SHORT-TERM INVESTMENTS--(2.6%)
Associates Corp of N.A. 6.200% 7/01/97
(Cost $8,255,000) $ 8,255,000 $ 8,255,000
------------
TOTAL INVESTMENTS (99.4%)
(Cost $263,622,190) (b) 138,738,711 314,163,688
OTHER ASSETS, LESS LIABILITIES--(0.6%) 1,752,986
------------
NET ASSETS (100%) $315,916,583
===========
(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, 1997 is as follows:
Gross unrealized appreciation: $53,523,558
Gross unrealized depreciation: (2,982,059)
-----------
Net unrealized appreciation: $50,541,498
===========
(c)Restricted securities. 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. At June 30, 1997, the aggregate value of the Fund's
restricted securities was $5,403,811, which represented 1.7% of net assets. None
of these are deemed to be illiquid securities.
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
SteinRoe Variable Investment Trust Managed Assets Fund /
June 30, 1997 (Unaudited)
- -------------------------------------------------------------------------------
ASSETS:
<S> <C>
Investments, at market value (identified cost $263,622,190)................................. $314,163,688
Cash ....................................................................................... 53,492
Receivable for fund shares sold............................................................. 175,832
Dividends and interest receivable........................................................... 2,716,512
Other assets................................................................................ 29,910
------------
TOTAL ASSETS........................................................................... 317,139,434
------------
LIABILITIES:
Payable for investments purchased........................................................... 532,423
Payable for fund shares repurchased......................................................... 508,805
Management fee payable...................................................................... 109,634
Administrative fee payable.................................................................. 36,582
Accrued expenses payable.................................................................... 34,525
Other liabilities........................................................................... 882
------------
TOTAL LIABILITIES...................................................................... 1,222,851
------------
NET ASSETS.................................................................................. $315,916,583
============
NET ASSETS REPRESENTED BY:
Paid-in capital.......................................................................... $248,754,862
Accumulated undistributed net investment income.......................................... 5,159,288
Accumulated net realized gains on investments............................................ 11,460,844
Net unrealized appreciation on investments and foreign currencies........................ 50,541,589
------------
TOTAL NET ASSETS APPLICABLE TO OUTSTANDING SHARES OF BENEFICIAL INTEREST.................... $315,916,583
============
SHARES OF BENEFICIAL INTEREST OUTSTANDING................................................... 20,114,040
============
NET ASSET VALUE PER SHARE................................................................... $15.71
======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1997 (Unaudited)
- -------------------------------------------------------------------------------
INVESTMENT INCOME:
<S> <C>
Interest income.......................................................................... $ 4,521,783
Dividends (net of foreign taxes withheld)................................................ 1,536,074
------------
Total investment income................................................................ 6,057,857
------------
EXPENSES:
Management fee........................................................................... 678,475
Administrative fee....................................................................... 226,158
Custodian fee............................................................................ 21,385
Accounting fee........................................................................... 15,660
Audit and legal fees..................................................................... 14,480
Trustees' fees........................................................................... 10,664
Printing expense......................................................................... 9,955
Transfer agent fee....................................................................... 3,620
Miscellaneous expense.................................................................... 14,736
------------
Total expenses......................................................................... 995,133
------------
Net investment income....................................................................... 5,062,724
REALIZED AND UNREALIZED GAINS ON INVESTMENTS
Net realized gains on investments and foreign currency................................... 11,720,095
Change in unrealized appreciation or depreciation of investments......................... 10,097,435
------------
Net increase in net assets resulting from operations........................................ $26,880,254
============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
SteinRoe Variable Investment Trust Managed Assets Fund
- ----------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31,
(UNAUDITED) 1996
------------ -------------
<S> <C> <C>
OPERATIONS:
Net investment income....................................................... $ 5,062,724 $ 10,512,405
Net realized gains on investments and foreign currency...................... 11,720,095 25,179,094
Change in unrealized appreciation or depreciation of investments............ 10,097,435 5,972,813
------------ ------------
Net increase in net assets resulting from operations........................ 26,880,254 41,664,312
------------ ------------
DISTRIBUTIONS DECLARED FROM:
Net investment income....................................................... (10,262,000) --
Net realized gains on investments........................................... (25,340,000) --
------------ ------------
Total distributions......................................................... (35,602,000) --
------------ ------------
FUND SHARE TRANSACTIONS:
Proceeds from fund shares sold.............................................. 15,002,875 23,322,625
Cost of fund shares repurchased............................................. (25,150,766) (42,816,350)
Distributions reinvested.................................................... 35,602,000 --
------------ ------------
Net increase (decrease) in net assets resulting from fund share transactions... 25,454,109 (19,493,725)
------------ ------------
Total increase in net assets................................................... 16,732,363 22,170,587
NET ASSETS:
Beginning of period......................................................... 299,184,220 277,013,633
------------ ------------
End of period............................................................... $315,916,583 $299,184,220
============ ============
Accumulated undistributed net investment income
included in ending net assets............................................... $ 5,159,288 $ 10,358,564
============ ============
ANALYSIS OF CHANGES IN SHARES OF BENEFICIAL INTEREST:
Shares sold................................................................. 976,510 1,550,496
Shares repurchased.......................................................... (1,629,641) (2,845,909)
Distributions reinvested.................................................... 2,387,735 --
------------ ------------
Net increase (decrease)........................................................ 1,734,604 (1,295,413)
============ =============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SteinRoe Variable Investment Trust Managed Assets Fund
- -------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1997 -------------------------------------------------------------
(UNAUDITED) 1996 1995 1994 1993 1992
------------- -------- -------- -------- -------- --------
PER SHARE OPERATING PERFORMANCE:
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period............ $ 16.28 $ 14.08 $ 12.18 $ 13.11 $ 12.54 $ 12.54
--------- --------- --------- --------- --------- ---------
Net investment income........................... 0.27 0.57 0.48 0.51 0.38 0.45
Net realized and unrealized gains (losses)
on investments............................... 1.12 1.63 2.61 (0.93) 0.78 0.49
--------- --------- --------- --------- --------- ---------
Total from investment operations................ 1.39 2.20 3.09 (0.42) 1.16 0.94
--------- --------- --------- --------- --------- ---------
Less distributions:
Dividends from and in excess of
net investment income...................... (0.56) -- (0.48) (0.51) (0.36) (0.46)
Distributions from and in excess of net
realized gains on investments.............. (1.40) -- (0.71) -- (0.23) (0.48)
--------- --------- --------- --------- --------- ---------
Total distributions............................. (1.96) -- (1.19) (0.51) (0.59) (0.94)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period.................. $ 15.71 $ 16.28 $ 14.08 $ 12.18 $ 13.11 $ 12.54
========= ======== ======== ======== ======== ========
TOTAL RETURN:
Total investment return......................... 9.17% 15.63% 25.43% (3.19)% 9.29% 7.53%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's)............... $315,917 $299,184 $277,014 $196,278 $197,132 $113,572
Ratio of expenses to average net assets......... 0.66%(a) 0.67% 0.66% 0.68% 0.69% 0.66%
Ratio of net investment income to
average net assets........................... 3.37%(a) 3.68% 3.12% 4.01% 3.55% 3.98%
Portfolio turnover ratio (b).................... 19% 76% 66% 71% 47% 70%
Average Commissions (per share)................. $0.0567 $0.0547 -- -- -- --
<FN>
(a) Annualized.
(b) The portfolio turnover ratio includes dollar roll transactions.
</FN>
</TABLE>
See Notes to Financial Statements.
<PAGE>
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
SteinRoe Variable Investment Trust Mortgage Securities Income Fund /
June 30, 1997 (Unaudited)
- -------------------------------------------------------------------------------
MARKET
PAR VALUE
--------- -----------
ASSET-BACKED SECURITIES--(9.6%)
ALPS Pass-Through Trust Series 1994-1
Class C2 9.350% 9/15/04 $ 994,927 $1,012,329
ContiMortgage Home Equity Loan
Trust Series 1997-1 Class M1
7.420% 2/15/15 1,250,000 1,257,763
First Boston Home Equity Loan Pass-
Through Certificates Series 1993-H1,
Class A-IO (effective yield 12.820%)
9/28/13 5,675,304 220,032
Greentree Home Improvement Loan
Trust Series 1994-A Class A
7.050% 3/15/14 649,884 649,410
Green Tree Financial Corporation
Series 1996-9 Class B1
7.650% 1/15/28 1,350,000 1,372,802
IMC Home Equity Loan Trust Series
1997-3 Class M2 7.550% 5/20/10 1,000,000 999,220
Mego Mortgage Title I Loan Trust
Series 1997-3 Class M1
7.500% 8/25/23 1,500,000 1,491,000
----------
TOTAL ASSET-BACKED SECURITIES
(Cost $6,955,436) 7,002,556
----------
MORTGAGE-BACKED SECURITIES--(11.3%)
American Mortgage Trust Series 1993-3
Class 3B 8.190% 9/27/22 804,745 754,891
Citicorp Mortgage Securities, Inc.
Series 1987-10 10.000% 7/01/17 158,603 172,779
Comfed Savings Bank Adjustable Rate
Mortgage Series 1987-1A
7.598% 1/01/18 155,738 132,378
Glendale Federal Savings & Loan
Series 1978-A 9.125% 1/25/08 28,530 29,614
Imperial Savings & Loan Adjustable
Rate Mortgage Series 1987-4A
8.826% 7/25/17 27,873 29,802
Kidder Peabody Acceptance Corp
Series 1987-1 Class A
8.750% 7/25/17 39,778 41,581
Merrill Lynch Mortgage Investments Inc.
8.000% 12/20/18 Series 20-D 1,417,325 1,427,884
7.088% 12/26/25 Series 1995-C3
Class A3 ARM 2,000,000 1,999,520
5.890% 11/15/26 Series 1987-A ARM 95,963 94,849
Nomura Asset Securities Corporation
MBS Series 1996-MD5 Class A1B
7.120% 4/13/36 1,000,000 1,006,340
PS CMO Trust Series 1994-C1-A2
7.920% 8/15/02 722,486 737,340
<PAGE>
MARKET
PAR VALUE
--------- -----------
MORTGAGE-BACKED SECURITIES (CONTINUED)
Republic Federal Savings & Loan
Association Series 1987-1
7.500% 2/28/17 $ 7,591 $ 7,451
Sears Mortgage Securities Corp.
Series 1987-A 6.500% 3/25/17 19,313 18,717
Structured Asset Securities Corporation
Series 1996-CFL Class X1-IO
(effective yield 12.960%) 2/25/28 11,721,217 605,752
Series 1996-CFL Class C
6.525% 2/25/28 1,242,500 1,219,688
-----------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $8,290,396) 8,278,586
-----------
UTILITY SECURITIES--(2.0%)
National Power Co. Plc 7.125% 7/11/01
(Cost $1,497,945) 1,500,000 1,509,990
-----------
INSURANCE COMPANIES--(2.0%)
Zurich Capital Trust I 8.376% 6/01/37
(Cost $1,450,000) 1,450,000 1,497,792
-----------
FEDERAL HOME LOAN MORTGAGE
CORPORATION CERTIFICATES--(18.4%)
8.500% 5/01/06 Gold 137,617 142,348
6.500% 6/01/08 26,771 26,269
6.500% various due dates to
6/01/09 Gold 1,834,446 1,800,050
10.750% 11/01/09 238,770 258,617
12.000% 7/01/13 79,116 89,896
11.250% various due dates to 11/01/15 73,143 81,600
10.500% various due dates to 2/01/19 420,143 459,401
12.000% 7/01/20 Gold 996,329 1,136,124
7.500% various due dates to
5/01/24 Gold 7,326,915 7,394,846
7.000% 1/01/26 2,140,534 2,102,797
-----------
TOTAL FEDERAL HOME LOAN MORTGAGE
CORPORATION CERTIFICATES
(Cost $13,316,042) 13,491,948
-----------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION CERTIFICATES--(31.5%)
10.500% 2/01/01 103,891 109,669
12.250% 9/01/12 FHA/VA
Guaranteed 84,258 96,476
10.250% 2/01/16 159,811 175,419
10.000% various due dates to 3/01/16 353,045 382,053
8.500% 3/01/17 178,462 186,828
9.000% various due dates to 5/01/20 258,566 274,802
<PAGE>
SCHEDULE OF INVESTMENTS MARKET
(CONTINUED) PAR VALUE
--------- -----------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION CERTIFICATES (CONTINUED)
6.000% various due dates to 2/01/25 $12,941,138 $12,402,016
7.000% various due dates to 8/01/25 5,469,527 5,446,263
6.500% various due dates to 1/01/26 4,193,937 4,013,044
-----------
TOTAL FEDERAL NATIONAL MORTGAGE
ASSOCIATION CERTIFICATES
(Cost $23,034,432) 23,086,570
-----------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION CERTIFICATES--(16.0%)
8.000% various due dates to 7/15/08 1,834,190 1,897,818
11.500% various due dates to 5/15/13 506,396 574,284
8.500% 2/15/17 210,658 222,640
10.000% various due dates to 11/15/19 696,886 764,177
9.000% various due dates to 1/15/20 1,993,840 2,139,447
9.500% various due dates to 8/15/22 2,201,297 2,385,807
7.000% 4/15/23 523,563 517,019
6.500% various due dates to 7/15/24 881,438 848,657
7.125% 7/20/25 ARM 2,306,826 2,366,850
-----------
TOTAL GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION CERTIFICATES
(Cost $11,607,515) 11,716,699
-----------
REAL ESTATE MORTGAGE INVESTMENT
CONDUITS--(1.9%)
Federal Home Loan Mortgage
Corporation Series 11-C
9.500% 4/15/19 76,253 78,831
Federal National Mortgage Association
Trust Series 1988-4Z
9.250% 3/25/18 1,218,000 1,261,056
Federal National Mortgage Association
Trust Series 1991-91SA-IO
(effective yield 14.400%) 7/25/98 884,809 35,082
-----------
TOTAL REAL ESTATE MORTGAGE
INVESTMENT CONDUITS
(Cost $1,401,384) 1,374,969
-----------
MARKET
PAR VALUE
--------- -----------
U.S. GOVERNMENT SECURITIES--(3.3%)
U.S. Treasury Bonds
6.500% 8/15/05 350,000 349,083
6.750% 8/15/26 800,000 791,872
U.S. Treasury Note 7.000% 7/15/06 750,000 771,743
-----------
TOTAL U.S. GOVERNMENT SECURITIES
(Cost $1,931,695) 1,912,698
-----------
SHORT-TERM INVESTMENTS--(5.3%)
Associate Corp. of N.A. 6.200% 7/01/97 2,865,000 2,865,000
Houston P&L 5.830% 7/01/97 1,000,000 1,000,000
-----------
TOTAL SHORT-TERM INVESTMENTS
(Cost $3,865,000) 3,865,000
-----------
TOTAL INVESTMENTS--(101.3%)
(Cost $73,349,845) 73,736,870
OTHER ASSETS, LESS LIABILITIES--(-1.3%) (450,896)
-----------
NET ASSETS (100%) $73,285,974
===========
(a) The cost of investments for federal income tax purposes is identical. Gross
unrealized appreciation and depreciation at June 30, 1997 is as follows:
Gross unrealized appreciation: $879,535
Gross unrealized depreciation: (492,510)
----------
Net unrealized appreciation: $387,025
==========
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
SteinRoe Variable Investment Trust Mortgage Securities Income Fund /
June 30, 1997 (Unaudited)
- -------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investments, at market value (identified cost $73,349,845)...................... $73,736,870
Cash ........................................................................... 585,144
Receivable for fund shares sold................................................. 24,592
Interest receivable............................................................. 634,914
Other assets.................................................................... 30,036
-----------
TOTAL ASSETS............................................................... 75,011,556
-----------
LIABILITIES:
Payable for investments purchased............................................... 1,505,156
Payable for fund shares repurchased............................................. 128,426
Management fee payable.......................................................... 42,622
Administrative fee payable...................................................... 8,407
Accrued expenses payable........................................................ 40,971
-----------
TOTAL LIABILITIES.......................................................... 1,725,582
-----------
NET ASSETS...................................................................... $73,285,974
===========
NET ASSETS REPRESENTED BY:
Paid-in capital.............................................................. $73,789,981
Accumulated undistributed net investment income.............................. 2,184,352
Accumulated net realized losses on investments............................... (3,075,384)
Net unrealized appreciation on investments................................... 387,025
-----------
TOTAL NET ASSETS APPLICABLE TO OUTSTANDING SHARES OF BENEFICIAL INTEREST........ $73,285,974
===========
SHARES OF BENEFICIAL INTEREST OUTSTANDING....................................... 7,203,656
===========
NET ASSET VALUE PER SHARE....................................................... $10.17
======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Period Ended June 30, 1997 (Unaudited)
- -------------------------------------------------------------------------------
<S> <C>
INTEREST INCOME................................................................. $ 2,739,792
------------
EXPENSES:
Management fee............................................................... 146,530
Administrative fee........................................................... 54,949
Custodian fee................................................................ 15,385
Audit and legal fees......................................................... 13,575
Accounting fee............................................................... 12,806
Trustees' fees............................................................... 4,175
Transfer agent fee........................................................... 3,620
Printing expense............................................................. 3,620
Miscellaneous expense........................................................ 1,768
------------
Total expenses............................................................. 256,428
------------
Net investment income........................................................... 2,483,364
REALIZED AND UNREALIZED LOSSES ON INVESTMENTS:
Net realized losses on investments........................................... (33,639)
Change in unrealized appreciation or depreciation of investments............. (3,712)
------------
Net increase in net assets resulting from operations............................ $ 2,446,013
============
See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
SteinRoe Variable Investment Trust Mortgage Securities Income Fund
- -------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31,
(UNAUDITED) 1996
------------ -------------
<S> <C> <C>
OPERATIONS:
Net investment income........................................................ $ 2,483,364 $ 5,616,747
Net realized losses on investments........................................... (33,639) (196,495)
Change in unrealized appreciation or depreciation of investments............. (3,712) (1,957,496)
------------ ------------
Net increase in net assets resulting from operations......................... 2,446,013 3,462,756
------------ ------------
DISTRIBUTIONS DECLARED FROM:
Net investment income........................................................ -- (5,616,747)
Distributions in excess of net investment income............................. -- (83,288)
------------ ------------
Total distributions.......................................................... -- (5,700,035)
------------ ------------
FUND SHARE TRANSACTIONS:
Proceeds from fund shares sold............................................... 2,883,692 4,581,249
Cost of fund shares repurchased.............................................. (8,052,882) (33,813,119)
Distributions reinvested .................................................... -- 5,700,035
------------ ------------
Net decrease in net assets resulting from fund share transactions............... (5,169,190) (23,531,835)
------------ ------------
Total decrease in net assets.................................................... (2,723,177) (25,769,114)
NET ASSETS:
Beginning of period.......................................................... 76,009,151 101,778,266
------------ ------------
End of period................................................................ $ 73,285,974 $ 76,009,152
============ ============
Accumulated undistributed (overdistributed) net investment income
included in ending net assets................................................ $ 2,184,352 $ (299,012)
============ ============
ANALYSIS OF CHANGES IN SHARES OF BENEFICIAL INTEREST:
Shares sold.................................................................. 289,247 447,078
Shares redeemed.............................................................. (809,682) (3,321,354)
Distributions reinvested..................................................... -- 579,272
------------ ------------
Net decrease.................................................................... (520,435) (2,295,004)
============ ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SteinRoe Variable Investment Trust Mortgage Securities Income Fund
- -------------------------------------------------------------------------------
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31,
JUNE 30, 1997 -------------------------------------------------------------
(UNAUDITED) 1996 1995 1994 1993 1992
------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.............. $ 9.84 $ 10.16 $ 9.28 $ 10.17 $ 10.26 $ 10.42
-------- -------- -------- -------- -------- --------
Net investment income............................. 0.35 0.78 0.57 0.73 0.65 0.63
Net realized and unrealized gains (losses)
on investments................................. (0.02) (0.30) 0.89 (0.89) (0.01) (0.01)
-------- -------- -------- -------- -------- --------
Total from investment operations.................. 0.33 0.48 1.46 (0.16) 0.64 0.62
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from and in excess of net
investment income............................ -- (0.80) (0.58) (0.73) (0.65) (0.62)
Distributions from and in excess of net
realized gains on investments................ -- -- -- -- (0.08) (0.16)
-------- -------- -------- -------- -------- --------
Total distributions............................... -- (0.80) (0.58) (0.73) (0.73) (0.78)
-------- -------- -------- -------- -------- --------
Net asset value, end of period.................... $ 10.17 $ 9.84 $ 10.16 $ 9.28 $ 10.17 $ 10.26
======== ======== ======== ======== ======== ========
TOTAL RETURN:
Total investment return........................... 3.35% 4.70% 15.74% (1.57)%(b) 6.26%(b) 5.95%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's)................. $73,286 $76,009 $101,778 $72,420 $91,195 $67,353
Ratio of expenses to average net assets........... 0.70%(d) 0.70%(a) 0.69% 0.70%(a) 0.76%(a) 0.90%
Ratio of net investment income to average
net assets..................................... 6.78%(d) 6.71%(b) 6.76% 6.71%(b) 6.64%(b) 6.72%
Portfolio turnover ratio (c)...................... 17% 72% 112% 241% 187% 169%
(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 0.72%, 0.71%, and 0.76% for the years ended
December 31, 1996, 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.
See Notes to Financial Statements.
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
SteinRoe Variable Investment Trust Cash Income Fund / June 30, 1997 (Unaudited)
- -------------------------------------------------------------------------------
MARKET
PAR VALUE
--------- -----------
COMMERCIAL PAPER--(73.8%)
BANKING--(4.3%)
Sumitomo Bank Capital Markets Inc.
(gtd. by Sumitomo Bank Ltd.)
5.776% 7/15/97 (b) $3,000,000 $ 2,993,327
-----------
BEVERAGES--(4.3%)
Coca-Cola Enterprises, Inc.
5.613% 7/08/97 3,025,000 3,021,706
-----------
BUSINESS CREDIT INSTITUTION--(4.3%)
Finova Capital Corp. 5.642% 7/09/97 3,000,000 2,996,267
-----------
CONSULTING SERVICES--(4.2%)
CSC Enterprises (gtd. by Computer
Services Corp.) 5.603% 7/16/97 3,000,000 2,993,025
-----------
ELECTRONICS--(4.3%)
Casio Phonemate, Inc.
(L.O.C. BOT/Mitsubishi Bank Ltd.)
5.676% 7/09/97 (b) 3,000,000 2,996,233
-----------
HEALTH CARE--(4.3%)
Columbia HCA Healthcare Corp.
5.739% 7/10/97 (b) 3,000,000 2,995,725
-----------
LENDING INSTITUTIONS--(12.8%)
Oak Funding Corp.
5.627% 7/11/97 3,000,000 2,995,333
Old Line Funding Corp.
5.605% 7/08/97 (b) 3,000,000 2,996,745
Windmill Funding Corp.
5.578% 7/02/97 (b) 3,000,000 2,999,536
-----------
8,991,614
-----------
OTHER FINANCIAL--(31.1%)
Associates Corp. of North America
6.201% 7/01/97 1,730,000 1,730,000
Beta Finance Corp. 5.731% 8/07/97 3,000,000 2,982,579
Countrywide Home Loan (gtd. by
Countrywide Credit Industries)
5.592% 7/14/97 3,000,000 2,993,966
Falcon Asset Securitization
5.577% 7/17/97 (b) 2,225,000 2,219,512
McKenna Triangle National Corp.
5.558% 7/03/97 (b) 3,000,000 2,999,075
Thames Asset Global Securitization
5.636% 7/15/97 (b) 3,000,000 2,993,443
Tri-Lateral Capital USA
5.804% 9/11/97 (b) 3,000,000 2,965,680
-----------
<PAGE>
MARKET
PAR VALUE
--------- -----------
OTHER FINANCIAL--(CONTINUED)
Working Capital Management
5.656% 7/01/97 (b) $3,000,000 $ 3,000,000
-----------
21,884,255
-----------
TELECOMMUNICATIONS--(4.3%)
GTE Corp. 5.600% 7/07/97 3,000,000 2,997,205
-----------
TOTAL COMMERCIAL PAPER
(Cost $51,869,357) 51,869,357
-----------
U.S. GOVERNMENT AGENCY OBLIGATION--(5.0%)
Federal Home Loan Bank Callable Note
5.750% 1/09/98
(Cost $3,500,000) 3,500,000 3,500,000
-----------
VARIABLE RATE NOTES--(8.5%)
American Honda Finance Corp.
(gtd. by Honda Motor Co. Inc.)
5.842% 4/06/98 (b) 3,000,000 2,999,558
Korea Development Bank
5.843% 6/16/98 3,000,000 3,000,000
-----------
TOTAL VARIABLE RATE NOTES
(Cost $5,999,558) 5,999,558
-----------
YANKEE CERTIFICATES OF DEPOSIT--(12.8%)
Canadian Imperial Bank
5.820% 3/03/98 3,000,000 3,000,000
Fuji Bank Chicago Ltd.
5.790% 7/18/97 3,000,000 3,000,014
Sanwa Bank Ltd. 6.008% 7/08/97 3,000,000 2,996,500
-----------
TOTAL YANKEE CERTIFICATES OF DEPOSIT
(Cost $8,996,514) 8,996,514
-----------
TOTAL INVESTMENTS--(100.1%)
(Cost $70,365,429) (a) 70,365,429
OTHER ASSETS, LESS LIABILITIES--(-0.1%) (92,934)
-----------
NET ASSETS (100%) $70,272,495
===========
*The interest rate is the effective rate at the date of purchase.
(a) The cost of investments for federal income tax purposes is identical.
There is no unrealized appreciation or depreciation at June 30, 1997.
(b) Represents private placement securities exempt from registration by Section
4(2) of the Securities Act of 1933. These securities generally are issued to
investors 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. At June
30, 1997, the aggregate value of the Fund's private placement securities was
$32,158,833, which represented 45.8% of net assets. None of these are deemed
to be illiquid securities.
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
SteinRoe Variable Investment Trust Cash Income Fund / June 30, 1997 (Unaudited)
- -------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investments, at market value (identified cost $70,365,429)...................... $70,365,429
Cash ........................................................................... 54,775
Receivable for fund shares sold................................................. 168,774
Dividends and interest receivable............................................... 224,633
Other assets.................................................................... 18,367
-----------
TOTAL ASSETS............................................................... 70,831,978
-----------
LIABILITIES:
Payable for fund shares repurchased............................................. 493,895
Management fee payable.......................................................... 19,401
Administrative fee payable...................................................... 8,603
Accrued expenses payable........................................................ 36,729
-----------
TOTAL LIABILITIES.......................................................... 559,483
-----------
NET ASSETS...................................................................... $70,272,495
===========
NET ASSETS REPRESENTED BY:
Paid-in capital.............................................................. $70,272,495
-----------
TOTAL NET ASSETS APPLICABLE TO OUTSTANDING SHARES OF BENEFICIAL INTEREST........ $70,272,495
===========
SHARES OF BENEFICIAL INTEREST OUTSTANDING....................................... 70,272,495
===========
NET ASSET VALUE PER SHARE....................................................... $1.00
=====
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<S> <C>
INTEREST INCOME................................................................. $1,891,121
----------
EXPENSES:
Management fee............................................................... 117,275
Administrative fee........................................................... 50,261
Accounting fee............................................................... 12,520
Custodian fee................................................................ 10,860
Audit and legal fees......................................................... 9,050
Trustees' fees............................................................... 3,674
Transfer agent fee........................................................... 3,620
Printing expense............................................................. 2,715
Miscellaneous expense........................................................ 6,431
----------
Total expenses............................................................. 216,406
----------
Net investment income........................................................... 1,674,715
----------
Net increase in net assets resulting from operations............................ $1,674,715
==========
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
SteinRoe Variable Investment Trust Cash Income Fund
- --------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31,
(UNAUDITED) 1996
------------ ------------
OPERATIONS:
<S> <C> <C>
Net investment income........................................................ $ 1,674,715 $ 3,214,365
------------ ------------
Net increase in net assets resulting from operations............................ 1,674,715 3,214,365
------------ ------------
DISTRIBUTIONS DECLARED FROM:
Net investment income........................................................ (1,674,715) (3,214,365)
------------ ------------
FUND SHARE TRANSACTIONS:
Proceeds from fund shares sold............................................... 33,050,836 57,327,084
Cost of fund shares repurchased.............................................. (29,914,448) (60,072,108)
Distributions reinvested..................................................... 1,674,715 3,214,365
------------ ------------
Net increase in net assets resulting from fund share transactions............... 4,811,103 469,341
------------ ------------
Total increase (in net assets).................................................. 4,811,103 469,341
NET ASSETS:
Beginning of period.......................................................... 65,461,392 64,992,051
------------ ------------
End of period................................................................ $ 70,272,495 $ 65,461,392
============ ============
ANALYSIS OF CHANGES IN SHARES OF BENEFICIAL INTEREST:
Shares sold.................................................................. 33,050,836 57,327,084
Shares repurchased........................................................... (29,914,448) (60,072,108)
Distributions reinvested..................................................... 1,674,715 3,214,365
------------ ------------
Net increase.................................................................... 4,811,103 469,341
============ ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SteinRoe Variable Investment Trust Cash Income Fund
- --------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1997 -------------------------------------------------------------
(UNAUDITED) 1996 1995 1994 1993 1992
------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- --------
Net investment income.............................. 0.025 0.049 0.055 0.037 0.027 0.034
-------- -------- -------- -------- -------- --------
Less distributions:
Distributions from net investment income........ (0.025) (0.049) (0.055) (0.037) (0.027) (0.034)
-------- -------- -------- -------- -------- --------
Net asset value, end of period..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ========
TOTAL RETURN:
Total investment return............................ 2.49% 5.01% 5.62% 3.81% 2.70% 3.48%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000).................... $70,272 $65,461 $64,992 $78,698 $83,049 $70,821
Ratio of expenses to average net assets............ 0.65%(a) 0.65% 0.63% 0.62% 0.65% 0.67%
Ratio of net investment income to
average net assets.............................. 5.01%(a) 4.90% 5.48% 3.73% 2.68% 3.42%
(a) Annualized.
</TABLE>
See Notes to Financial Statements.
<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, 1997, 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 capital growth by investing in equity
securities.
MANAGED GROWTH STOCK FUND--seeks long-term growth of capital by investing 65
percent of total assets in growth companies.
MANAGED ASSETS FUND--seeks high total investment return by investing in equity
and debt securities.
MORTGAGE SECURITIES INCOME FUND--seeks highest possible level of current income
by investing at least 65 percent of total assets in mortgage pass-through
certificates.
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 insurance
companies and, in the case of Capital Appreciation Fund, also of Transamerica
Life Companies, Great-West Life & Annuity Insurance Company and Providian Life &
Health Insurance Company. Stein Roe and Farnham, Inc. (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., a 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, 1997, various affiliated insurance companies of
Liberty Financial Companies Inc. owned 100 percent of the outstanding shares of
all Funds, except for Capital Appreciation Fund, of which Liberty Financial
Companies Inc. affiliates owned 93.3 percent, Transamerica Life Companies owned
2.7 percent, Great-West Life & Annuity Insurance Company owned 3.9 percent, and
Providian Life & Health Insurance Company owned 0.1 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.
<PAGE>
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.
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.
<PAGE>
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. Managed Assets
Fund and Mortgage Securities Income Fund also may 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 days to 60 days, substantially similar securities at an
agreed-upon price and date. 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.
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 investment from the fluctuations arising from
changes in market prices of securities held. Such fluctuations are included with
the net realized and unrealized gain or loss 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
nonassessable. Shareholders would be entitled to share proportionally in the net
assets of a Fund available for distribution to shareholders upon liquidation of
a Fund.
<PAGE>
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, 1996,
Mortgage Securities Income Fund had a capital loss carryforward of $3,041,745,
which will expire between 2002 and 2004, if not utilized. The cost of
investments purchased and proceeds from investments sold, excluding short-term
investments, for the six months ended June 30, 1997, for the Funds, excluding
Cash Income Fund, were as follows:
MORTGAGE
CAPITAL MANAGED MANAGED SECURITIES
APPRECIATION GROWTH ASSETS INCOME
FUND STOCK FUND FUND FUND
------------ ----------- ---------- ---------------
Cost of investments
purchased.......... $67,635,846 $18,783,042 $68,324,869 $14,888,245
Proceeds from
investments sold... 74,660,798 23,423,495 122,426,982 12,005,496
NOTE 4. DISTRIBUTIONS TO SHAREHOLDERS
The Funds, with the exception of the Cash Income Fund, intend to distribute as
dividends or capital gains 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 gains 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 principal paydowns.
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, 1997:
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, 1997, 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.
<PAGE>
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, 1997, Capital Appreciation Fund,
Managed Growth Stock Fund, Managed Assets Fund, Mortgage Securities Income Fund
and Cash Income Fund incurred charges of $14,234, $14,380, $15,660, $12,806, and
$12,520, 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, 1998.
NOTE 6. INVESTMENT IN REPURCHASE AGREEMENTS
Each Fund may enter into repurchase agreements with banks, broker-dealer firms
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.
<PAGE>
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, Independence Life
Insurance Company, or Liberty Life Assurance Company of Boston.
12/96 NIM 30m
<PAGE>
