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                                    1940 Act File No. 811-7996

               SECURITIES AND EXCHANGE COMMISSION
                  Washington, D. C.  20549

                        FORM N-1A

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

                         and/or          

                  REGISTRATION STATEMENT UNDER          
                  THE INVESTMENT COMPANY ACT OF 1940       [X]
                  Amendment No. 8                          [X]
                  (check appropriate box or boxes)          

                       SR&F BASE TRUST
(Exact Name of Registrant as Specified in Declaration of Trust)

         One South Wacker Drive, Chicago, Illinois  60606
          (Address of Registrant's Principal Offices)

                        (312) 368-5612
     (Registrant's Telephone Number, Including Area Code)

   Jilaine Hummel Bauer           Cameron S. Avery
   Executive Vice-President       Bell, Boyd & Lloyd
     and Secretary                Three First National Plaza
   SR&F Base Trust                70 W. Madison Street, Suite 3300
   One South Wacker Drive         Chicago, Illinois  60602
   Chicago, Illinois  60606
                         (Agents for Service)

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EXPLANATORY NOTE

This Registration Statement has been filed by the Registrant 
pursuant to Section 8(b) of the Investment Company Act of 1940.  
However, beneficial interests in the Registrant are not being 
registered under the Securities Act of 1933 (the "1933 Act") 
because such interests will be issued solely in private placement 
transactions that do not involve any "public offering" within the 
meaning of Section 4(2) of the 1933 Act.  Investments in the 
Registrant may only be made by investment companies, insurance 
company separate accounts, common or commingled trust funds, or 
similar organizations or entities that are "accredited investors" 
within the meaning of Regulation D under the 1933 Act.  This 
Registration Statement does not constitute an offer to sell or the 
solicitation of an offer to buy any beneficial interests in the 
Registrant.

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PART A

Responses to Items 1 through 3 have been omitted pursuant to 
paragraph 4 of Instruction F of the General Instructions to Form 
N-1A.

Item 4.  General Description of Registrant.

Introduction
SR&F Base Trust ("Base Trust") is a no-load, diversified, open-end 
management investment company which was organized as a trust under 
the laws of the Commonwealth of Massachusetts on August 23, 1993.  
Beneficial interests in Base Trust (the "Interest" or "Interests") 
are issued solely in private placement transactions that do not 
involve any "public offering" within the meaning of Section 4(2) 
of the Securities Act of 1933, as amended (the "1933 Act").  
Investments in Base Trust may be made only by investment 
companies, insurance company separate accounts, common or 
commingled trust funds, or similar organizations or entities that 
are "accredited investors" within the meaning of Regulation D 
under the 1933 Act.  This registration statement does not 
constitute an offer to sell or the solicitation of an offer to buy 
any "security" within the meaning of the 1933 Act.  Currently, 
nine series of Base Trust are authorized and outstanding, as 
follows:

SR&F Municipal Money Market Portfolio
SR&F High Yield Portfolio
SR&F Balanced Portfolio
SR&F Growth & Income Portfolio
SR&F Growth Stock Portfolio
SR&F Growth Investor Portfolio
SR&F Special Portfolio
SR&F Special Venture Portfolio
SR&F International Portfolio

The series of Base Trust are referred to collectively as the 
"Portfolios."  Balanced Portfolio, Growth & Income Portfolio, 
Growth Stock Portfolio, Growth Investor Portfolio, Special 
Portfolio, Special Venture Portfolio, and International Portfolio 
are also referred to collectively as the "Equity Portfolios."  

Objective and Basic Investment Strategy
The investment objectives and basic investment strategy of each 
Portfolio follow.  Each Portfolio may also employ the indicated 
strategies and techniques listed under Other Investment 
Strategies.

SR&F Municipal Money Market Portfolio ("Municipal Money 
Portfolio")
Municipal Money Portfolio seeks maximum current income exempt from 
federal income tax by investing principally in a diversified 
portfolio of "short-term" Municipal Securities.  

In pursuing its objective, the Municipal Money Portfolio attempts 
to maintain relative stability of principal and liquidity.  
Municipal Money Portfolio invests principally in a diversified 
portfolio of short-term Municipal Securities (as defined below).  
"Short-term" 

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means a remaining maturity of no more than thirteen months (or 
comparable period) as defined in the Glossary.

It is a fundamental policy that normally at least 80% of Municipal 
Money Portfolio's investments will produce income that is exempt 
from federal income tax, except for periods in which Stein Roe & 
Farnham Incorporated (the "Adviser") believes a defensive position 
is required for the protection of shareholders.

As a fundamental policy, Municipal Money Portfolio invests in 
Municipal Securities that, at the time of purchase, are:  (1) 
variable rate demand securities (as defined in the Glossary) whose 
demand feature is rated within the two highest ratings assigned by 
Moody's Investors Service, Inc. ("Moody's"), VMIG 1 or VMIG 2/1/; 
(2) notes rated within the two highest short-term municipal 
ratings assigned by Moody's, MIG 1 or MIG 2, or within the highest 
rating assigned by Standard & Poor's Corporation ("S&P"),/2/ SP-
l+; (3) municipal commercial paper (short-term promissory notes) 
rated Prime-1 by Moody's, or A-l by S&P; (4) municipal bonds, 
including industrial development bonds, rated within the two 
highest ratings assigned to municipal bonds by S&P, AAA or AA, or 
by Moody's, Aaa or Aa; (5) securities not rated as described in 
(1) through (4) but determined by the Board of Trustees to be at 
least equal in quality to one or more of the foregoing ratings, 
although other types of obligations of the same issuer might not 
be within the foregoing ratings; (vi) securities backed by the 
full faith and credit of the U.S. Government; or (vii) securities 
as to which the payment of principal and interest is 
collateralized by securities issued or guaranteed by the U.S. 
Government or by its agencies or instrumentalities ["U.S. 
Government Securities"] deposited in an escrow for the benefit of 
holders of the securities.  In accordance with SEC Rule 2a-7 under 
the Investment Company Act, each security in which Municipal Money 
Portfolio invests will be U.S. dollar denominated and (a) rated 
(or be issued by an issuer that is rated with respect to its 
short-term debt) within the two highest rating categories for 
short-term debt by at least two nationally recognized statistical 
rating organizations ("NRSRO") or, if rated by only one NRSRO, 
rated within the two highest rating categories by that NRSRO, or, 
if unrated, determined by or under the direction of the Board of 
Trustees to be of comparable quality, and (b) determined by or 
under the direction of the Board of Trustees to present minimal 
credit risks.

Municipal Securities.  Municipal Securities are debt obligations 
issued by or on behalf of the governments of states, territories 
or possessions of the United States, the District 

   
- ---------------
1 The Board of Trustees has determined that the demand feature of 
a variable rate demand security rated SP-1+, A-1+ or A-1 by S&P or 
MIG 1, MIG 2 or Prime-1 by Moody's is at least equal in quality to 
the demand feature of a variable rate demand security rated VMIG 2 
by Moody's.  As a non-fundamental policy, the Portfolio will not 
invest in a variable rate security whose demand feature is 
conditional unless the Board of Trustees determines that the 
security is at least the economic equivalent of a variable rate 
security with an unconditional demand feature or (a) the demand 
feature is rated within the two highest ratings assigned by 
Moody's or within the equivalent ratings assigned by S&P and (b) 
the underlying security is rated within the two highest ratings 
assigned by Moody's or S&P.  The Board of Trustees has determined 
that a variable rate security where the demand feature is 
suspended only after a default followed by an acceleration of 
maturity is the economic equivalent of a variable rate security 
with an unconditional demand feature.
2  For a description of Moody's and S&P quality ratings, see the 
Appendix.  All references to ratings apply to ratings adopted in 
the future by Moody's or S&P that are determined by the Board of 
Trustees to be equivalent to current ratings.
- --------------------
    

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of Columbia and their political subdivisions, agencies and 
instrumentalities, the interest on which is generally exempt from 
the regular federal income tax.

The two principal classifications of Municipal Securities are 
"general obligation" and "revenue" bonds.  "General obligation" 
bonds are secured by the issuer's pledge of its faith, credit, and 
taxing power for the payment of principal and interest.  "Revenue" 
bonds are usually payable only from the revenues derived from a 
particular facility or class of facilities or, in some cases, from 
the proceeds of a special excise tax or other specific revenue 
source.  Industrial development bonds are usually revenue bonds, 
the credit quality of which is normally directly related to the 
credit standing of the industrial user involved.  Municipal 
Securities may bear either fixed or variable rates of interest.  
Variable rate securities bear rates of interest that are adjusted 
periodically according to formulae intended to minimize 
fluctuation in values of the instruments.  

Within the principal classifications of Municipal Securities, 
there are various types of instruments, including municipal bonds, 
municipal notes, municipal leases, custodial receipts, and 
participation certificates.  Municipal notes include tax, revenue, 
and bond anticipation notes of short maturity, generally less than 
three years, which are issued to obtain temporary funds for 
various public purposes.  Municipal lease securities, and 
participation certificates therein, evidence certain types of 
interests in lease or installment purchases contract obligations 
of a municipal authority or other entity.  Custodial receipts 
represent ownership in future interest or principal payments (or 
both) on certain Municipal Securities and are underwritten by 
securities dealers or banks.  Some Municipal Securities may not be 
backed by the faith, credit, and taxing power of the issuer and 
may involve "non-appropriation" clauses which provide that the 
municipal authority is not obligated to make lease or other 
contractual payments, unless specific annual appropriations are 
made by the municipality.  Municipal Money Portfolio may invest 
more than 5% of its net assets in municipal bonds and notes, but 
does not expect to invest more than 5% of its net assets in the 
other Municipal Securities described in this paragraph.  The Board 
is responsible for determining the credit quality of unrated 
municipal leases on an ongoing basis, including an assessment of 
the likelihood that such leases will not be cancelled.

Municipal Money Portfolio may also purchase Municipal Securities 
that are insured as to the timely payment of interest and 
principal.  Such insured Municipal Securities may already be 
insured when purchased by the Portfolio, or the Portfolio may 
purchase insurance in order to turn an uninsured Municipal 
Security into an insured Municipal Security.

Some Municipal Securities are backed by (1) the full faith and 
credit of the U.S. Government, (2) agencies or instrumentalities 
of the U.S. Government, or (3) U.S. Government Securities.

Except with respect to Municipal Securities with a demand feature 

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acquired by Municipal Money Portfolio (see the definition of 
"short-term" in the Glossary to Part B), if, after purchase by the 
Portfolio, an issue of Municipal Securities ceases to meet the 
required rating standards, if any, the Portfolio is not required 
to sell such security, but the Adviser would consider such an 
event in deciding whether the Portfolio should retain the security 
in its portfolio.  In the case of Municipal Securities with a 
demand feature acquired by Municipal Money Portfolio, if the 
quality of such a security falls below the minimum level 
applicable at the time of acquisition, the Portfolio must dispose 
of the security, unless the Board of Trustees determines that it 
is in the best interests of the Portfolio and its shareholders to 
retain the security.

SR&F High Yield Portfolio ("High Yield Portfolio")
High Yield Portfolio seeks total return by investing for a high 
level of current income and capital growth.  High Yield Portfolio 
invests principally in high-yield, high-risk medium- and lower-
quality debt securities.  The medium- and lower-quality debt 
securities in which High Yield Portfolio will invest normally 
offer a current yield or yield to maturity that is significantly 
higher than the yield from securities rated in the three highest 
categories assigned by rating services such as S&P or Moody's.  

   
Under normal circumstances, at least 65% of High Yield Portfolio's 
assets will be invested in high-yield, high-risk medium- and 
lower-quality debt securities rated lower than Baa by Moody's and 
lower than BBB by S&P, or equivalent ratings as determined by 
other rating agencies or unrated securities that the Adviser 
determines to be of comparable quality.  Medium-quality debt 
securities, although considered investment grade, have some 
speculative characteristics.  Lower-quality debt securities are 
obligations of issuers that are considered predominantly 
speculative with respect to the issuer's capacity to pay interest 
and repay principal according to the terms of the obligation and, 
therefore, carry greater investment risk, including the 
possibility of issuer default and bankruptcy, and are commonly 
referred to as "junk bonds."  The lowest rating assigned by 
Moody's is for bonds that can be regarded as having extremely poor 
prospects of ever attaining any real investment standing.  Some 
issuers of debt securities choose not to have their securities 
rated by a rating service, and High Yield Portfolio may invest in 
unrated securities that the Adviser has researched thoroughly and 
believes are suitable for investment.  High Yield Portfolio may 
invest in debt obligations that are in default, but such 
obligations are not expected to exceed 10% of High Yield 
Portfolio's assets.  
    

High Yield Portfolio may invest up to 35% of its total assets in 
other securities including, but not limited to, pay-in-kind bonds, 
securities issued in private placements, bank loans, zero coupon 
bonds, foreign securities, convertible securities, futures, and 
options.  High Yield Portfolio may also invest in higher-quality 
debt securities.  Under normal market conditions, however, High 
Yield Portfolio is unlikely to emphasize 

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higher-quality debt securities since generally they offer lower 
yields than medium- and lower-quality debt securities with similar 
maturities.  High Yield Portfolio may also invest in common stocks 
and securities that are convertible into common stocks, such as 
warrants.

Investment in medium- or lower-quality debt securities involves 
greater investment risk, including the possibility of issuer 
default or bankruptcy.  High Yield Portfolio seeks to reduce 
investment risk through diversification, credit analysis, and 
evaluation of developments in both the economy and financial 
markets.  

An economic downturn could severely disrupt the high-yield market 
and adversely affect the value of outstanding bonds and the 
ability of the issuers to repay principal and interest.  In 
addition, lower-quality bonds are less sensitive to interest rate 
changes than higher-quality instruments and generally are more 
sensitive to adverse economic changes or individual corporate 
developments.  During a period of adverse economic changes, 
including a period of rising interest rates, issuers of such bonds 
may experience difficulty in servicing their principal and 
interest payment obligations.

Achievement of the investment objective will be more dependent on 
the Adviser's credit analysis than would be the case if High Yield 
Portfolio were investing in higher-quality debt securities.  Since 
the ratings of rating services (which evaluate the safety of 
principal and interest payments, not market risks) are used only 
as preliminary indicators of investment quality, the Adviser 
employs its own credit research and analysis, from which it has 
developed a proprietary credit rating system based upon 
comparative credit analyses of issuers within the same industry.  
These analyses may take into consideration such quantitative 
factors as an issuer's present and potential liquidity, 
profitability, internal capability to generate funds, debt/equity 
ratio and debt servicing capabilities, and such qualitative 
factors as an assessment of management, industry characteristics, 
accounting methodology, and foreign business exposure.

   
Medium- and lower-quality debt securities tend to be less 
marketable than higher-quality debt securities because the market 
for them is less broad.  The market for unrated debt securities is 
even narrower.  During periods of thin trading in these markets, 
the spread between bid and asked prices is likely to increase 
significantly, and High Yield Portfolio may have greater 
difficulty selling its portfolio securities.  The market value of 
these securities and their liquidity may be affected by adverse 
publicity and investor perceptions.
    

SR&F Balanced Portfolio ("Balanced Portfolio")
The investment objective of Balanced Portfolio is to seek long-
term growth of capital and current income, consistent with 
reasonable investment risk.  Balanced Portfolio allocates its 
assets among equities, debt securities and cash.  The portfolio 
manager determines those allocations based on the views of the 
Adviser's investment strategists regarding economic, market and 
other factors relative to investment opportunities.  The equity 
portion of the portfolio of Balanced Portfolio is invested 
primarily in well-established companies having market 
capitalizations in excess of $1 billion.  Fixed-income senior 
securities will make up at least 25% of Balanced Portfolio's total 
assets.  Investments in debt securities are limited to those that 
are within the four highest grades (generally referred to as 
"investment grade") assigned by a nationally recognized 
statistical rating organization or, if unrated, determined by the 
Adviser to be of comparable quality.

SR&F Growth & Income Portfolio ("Growth & Income Portfolio")
The investment objective of Growth & Income Portfolio is to 
provide both growth of capital and current income.  It is designed 
for investors seeking a diversified portfolio of securities that 
offers the opportunity for long-term growth of capital while also 
providing a steady stream of income.  In seeking to meet this 
objective, Growth & Income Portfolio invests primarily in well-
established companies whose common stocks are believed to have 
both the potential to appreciate in value and to pay dividends to 
shareholders.  Although it may invest in a broad range of 
securities (including common stocks, preferred stocks, securities 
convertible into or exchangeable for common stocks, and warrants 
or rights to purchase common stocks), normally Growth & Income 
Portfolio 

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emphasizes investments in equity securities of companies having 
market capitalizations in excess of $1 billion.  Securities of 
these well-established companies are believed to be generally less 
volatile than those of companies with smaller capitalizations 
because companies with larger capitalizations tend to have 
experienced management; broad, highly diversified product lines; 
deep resources; and easy access to credit.

SR&F Growth Stock Portfolio ("Growth Stock Portfolio")
The investment objective of Growth Stock Portfolio is long-term 
capital appreciation.  Growth Stock Portfolio attempts to achieve 
this objective by normally investing at least 65% of its total 
assets in common stocks and other equity-type securities (such as 
preferred stocks, securities convertible into or exchangeable for 
common stocks, and warrants or rights to purchase common stocks) 
that, in the opinion of the Adviser, have long-term appreciation 
possibilities.

SR&F Growth Investor Portfolio ("Growth Investor Portfolio")
The investment objective of Growth Investor Portfolio is long-term 
capital appreciation.  Growth Investor Portfolio invests primarily 
in common stocks and other equity-type securities that, in the 
opinion of the Adviser, have long-term appreciation potential.  
Under normal circumstances, at least 65% of the total assets of 
Growth Investor Portfolio will be invested in securities of 
companies that, in the opinion of the Adviser, directly or through 
one or more subsidiaries, affect the lives of young people.  Such 
companies may include companies that produce products or services 
that young people use, are aware of, or could potentially have an 
interest in.  Although Growth Investor Portfolio invests primarily 
in common stocks and other equity-type securities (such as 
preferred stocks, securities convertible into or exchangeable for 
common stocks, and warrants or rights to purchase common stocks), 
it may invest up to 35% of its total assets in debt securities.  

   
SR&F Special Portfolio ("Special Portfolio")
The investment objective of Special Portfolio is to invest in 
securities selected for possible capital appreciation.  Particular 
emphasis is placed on securities that are considered to have 
limited downside risk relative to their potential for above-
average growth, including securities of undervalued, underfollowed 
or out-of-favor companies, and companies that are low-cost 
producers of goods or services, financially strong or run by well-
respected managers.  Special Portfolio may invest in securities of 
seasoned, established companies that appear to have appreciation 
potential, as well as securities of relatively small, new 
companies.  In addition, it may invest in securities with limited 
marketability, new issues of securities, securities of companies 
that, in the Adviser's opinion, will benefit from management 
change, new technology, new product or service development or 
change in demand, and other securities that the Adviser believes 
have capital appreciation possibilities; however, Special 
Portfolio does not currently intend to invest more than 5% of its 
net assets in any of these types of securities.  Securities of 
smaller, newer companies may be subject to greater price 
volatility than securities of larger more well-established 
companies.  In addition, many smaller companies are less well 
known to the investing public and may not be as widely followed by 
the investment community.  Although Special Portfolio invests 
primarily in common stocks, it may also invest in other equity-
type securities, including preferred stocks and securities 
convertible into equity securities.
<.R>

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SR&F Special Venture Portfolio ("Special Venture Portfolio")
The investment objective of Special Venture Portfolio is to seek 
long-term capital appreciation.  Special Venture Portfolio invests 
primarily in a diversified portfolio of common stocks and other 
equity-type securities (such as preferred stocks, securities 
convertible or exchangeable for common stocks, and warrants or 
rights to purchase common stocks) of entrepreneurially managed 
companies that the Adviser believes represent special 
opportunities.  Special Venture Portfolio emphasizes investments 
in financially strong small and medium-sized companies based 
principally on appraisal of their management and stock valuations.  
The Adviser considers "small" and "medium-sized" companies to be 
those with market capitalizations of less than $1 billion and $1 
to $3 billion, respectively.  In both its initial and ongoing 
appraisals of a company's management, the Adviser seeks to know 
both the principal owners and senior management and to assess 
their business judgment and strategies through personal visits.  
The Adviser favors companies whose management has an 
owner/operator, risk-averse orientation and a demonstrated ability 
to create wealth for investors.  Attractive company 
characteristics include unit growth, favorable cost structures or 
competitive positions, and financial strength that enables 
management to execute business strategies under difficult 
conditions.  A company is attractively valued when its stock can 
be purchased at a meaningful discount to the value of the 
underlying business.

SR&F International Portfolio ("International Portfolio")
The investment objective of International Portfolio is to seek 
long-term growth of capital.  International Portfolio seeks to 
achieve this objective by investing primarily in a diversified 
portfolio of foreign securities.  Current income is not a primary 
factor in the selection of portfolio securities.  International 
Portfolio invests primarily in common stocks and other equity-type 
securities (such as preferred stocks, securities convertible or 
exchangeable for common stocks, and warrants or rights to purchase 
common stocks).  International Portfolio may invest in securities 
of smaller emerging companies as well as securities of well-
seasoned companies of any size.  Smaller companies, however, 
involve higher risks in that they typically have limited product 
lines, markets, and financial or management resources.  In 
addition, the securities of smaller companies may trade less 
frequently and have greater price fluctuation than larger 
companies, particularly those operating in countries with 
developing markets.

International Portfolio diversifies its investments among several 
countries and does not concentrate investments in any particular 
industry.  In pursuing its objective, International Portfolio 
varies the geographic allocation and types of securities in which 
it invests based on the Adviser's continuing evaluation of 
economic, market, and political trends throughout the world.  
While International Portfolio has not established limits on 
geographic asset distribution, it ordinarily invests in the 
securities markets of at least three countries outside the United 
States, including but not limited to Western European countries 
(such as Belgium, France, Germany, Ireland, Italy, The 
Netherlands, the countries of Scandinavia, Spain, Switzerland, and 
the United Kingdom); countries in the Pacific Basin (such as 
Australia, Hong Kong, Japan, Malaysia, the Philippines, Singapore, 
and Thailand); and countries in the Americas (such as Argentina, 
Brazil, Colombia, and Mexico).  In addition, it does not currently 
intend to invest more than 2% of its total assets in Russian 
securities.

<PAGE> 10


    
   
Under normal market conditions, International Portfolio invests at 
least 65% of its total assets (taken at market value) in foreign 
securities.  If, however, investments in foreign securities appear 
to be relatively unattractive in the judgment of the Adviser 
because of current or anticipated adverse political or economic 
conditions, International Portfolio may hold cash or invest any 
portion of its assets in securities of the U.S. Government and 
equity and debt securities of U.S. companies, as a temporary 
defensive strategy.  To meet liquidity needs, International 
Portfolio may also hold cash in domestic and foreign currencies 
and invest in domestic and foreign money market securities 
(including repurchase agreements and "synthetic" foreign money 
market positions).
    

In the past, the U.S. Government has from time to time imposed 
restrictions, through taxation and otherwise, on foreign 
investments by U.S. investors such as International Portfolio.  If 
such restrictions should be reinstated, it might become necessary 
for International Portfolio to invest all or substantially all of 
its assets in U.S. securities.  In such an event, International 
Portfolio would review its investment objective and policies to 
determine whether changes are appropriate.

Other Investment Practices 
Each Portfolio may also engage to a limited extent in the 
following investment practices, as indicated, each of which may 
involve certain special risks.

When-Issued and Delayed-Delivery Securities.  Each Portfolio's 
assets may include securities purchased on a when-issued or 
delayed-delivery basis.  Although the payment and interest terms 
of these securities are established at the time the purchaser 
enters into the commitment, the securities may be delivered and 
paid for a month or more after the date of purchase, when their 
value may have changed.  A Portfolio makes such commitments only 
with the intention of actually acquiring the securities, but may 
sell the securities before settlement date if the Adviser deems it 
advisable for investment reasons.  Securities purchased in this 
manner involve a risk of loss if the value of the security 
purchased declines before settlement date.

In the case of High Yield Portfolio, when-issued or delayed-
delivery securities may sometimes be purchased on a "dollar roll" 
basis, meaning that the Portfolio will sell securities with a 
commitment to purchase similar, but not identical, securities at a 
future date.  Generally, the securities are repurchased at a price 
lower than the sales price.  Dollar roll transactions involve the 
risk of restrictions on the Portfolio's ability to repurchase the 
security if the counterparty becomes insolvent; an adverse change 
in the price of the security during the period of the roll or that 
the value the security repurchased will be less than the security 
sold; and transaction costs exceeding the return earned by the 
Portfolio on the sales proceeds of the dollar roll. 

Standby Commitments.  To facilitate portfolio liquidity, Municipal 
Money Portfolio may obtain standby commitments when it purchases 
Municipal Securities.  A standby commitment gives the holder the 
right to sell the underlying security to the seller at an agreed-
upon price on certain dates or within a specified period.  High 
Yield Portfolio may also invest in securities purchased on a 
standby commitment basis.

Participation Interests.  Municipal Money Portfolio may also 
purchase participation interests or certificates of participation 
in all or part of specific holdings of Municipal Securities, 

<PAGE> 11

including municipal obligations.  Some participation interests, 
certificates of participation, and municipal lease obligations are 
illiquid and, as such, will be subject to the Portfolio's 10% 
limit on investments in illiquid securities.

   
Debt Securities.  In pursuing its investment objective, High Yield 
Portfolio invests in debt securities and each Equity Portfolio may 
invest in debt securities.  A debt security is an obligation of a 
borrower to make payments of principal and interest to the holder 
of the security.  To the extent a Portfolio invests in debt 
securities, such holdings will be subject to interest rate risk 
and credit risk.  Interest rate risk is the risk that the value of 
a portfolio will fluctuate in response to changes in interest 
rates.  Generally, the debt component of a portfolio will tend to 
decrease in value when interest rates rise and increase in value 
when interest rates fall.  Credit risk is the risk that an issuer 
will be unable to make principal and interest payments when due.  
Investments in debt securities by Growth & Income Portfolio, 
Balanced Portfolio, Growth Stock Portfolio, and International 
Portfolio are limited to those that are within the four highest 
grades (generally referred to as "investment grade") assigned by a 
nationally recognized statistical rating organization or, if 
unrated, deemed to be of comparable quality by the Adviser.  Each 
of Special Venture Portfolio, Growth Investor Portfolio, and 
Special Portfolio may invest up to 35% of its net assets in debt 
securities, but does not expect to invest more than 5% of net 
assets in debt securities that are rated below investment grade.  
Securities rated within the fourth highest grade may possess 
speculative characteristics.  If the rating of a security held by 
a Portfolio is lost or reduced below investment grade, the 
Portfolio is not required to dispose of the security--the Adviser 
will, however, consider that fact in determining whether the 
Portfolio should continue to hold the security.  When the Adviser 
considers a temporary defensive position advisable, a Portfolio 
may invest without limitation in high-quality fixed income 
securities, or hold assets in cash or cash equivalents.
    

Convertible Securities.  By investing in convertible securities, 
High Yield Portfolio or an Equity Portfolio obtains the right to 
benefit from the capital appreciation potential in the underlying 
stock upon exercise of the conversion right, while earning higher 
current income than would be available if the stock were purchased 
directly.  In determining whether to purchase a convertible, the 
Adviser will consider substantially the same criteria that would 
be considered in purchasing the underlying stock.  Although 
convertible securities purchased by a Fund are frequently rated 
investment grade, an Equity Portfolio also may purchase unrated 
securities or securities rated below investment grade if the 
securities meet the Adviser's other investment criteria.  
Convertible securities rated below investment grade: 

- - Tend to be more sensitive to interest rate and economic changes; 
- - May be obligations of issuers who are less creditworthy than 
  issuers of higher quality convertible securities;
- - May be more thinly traded due to the fact that such securities 
  are less well known to investors than either common stock or 
  conventional debt securities.  

   
As a result, the Adviser's own investment research and analysis 
tend to be more important than other factors in the purchase of 
such securities.
    

<PAGE> 12

Short Sales Against the Box.  High Yield Portfolio and each Equity 
Portfolio may sell short securities it owns or has the right to 
acquire without further consideration, a technique called selling 
short "against the box."  Short sales against the box may protect 
a Portfolio against the risk of losses in the value of its 
portfolio securities because any unrealized losses with respect to 
such securities should be wholly or partly offset by a 
corresponding gain in the short position.  However, any potential 
gains in such securities should be wholly or partially offset by a 
corresponding loss in the short position.  Short sales against the 
box may be used to lock in a profit on a security when, for tax 
reasons or otherwise, the Adviser does not want to sell the 
security.  For a more complete explanation, please refer to Part 
B, the Statement of Additional Information.

Tender Option Bonds.   Municipal Money Portfolio may purchase 
tender option bonds.  A tender option bond is a Municipal Security 
(generally held pursuant to a custodial arrangement) having a 
relatively long maturity and bearing interest at a fixed rate 
substantially higher than prevailing short-term tax-exempt rates, 
that has been coupled with the agreement of a third party, such as 
a bank, broker-dealer or other financial institution, pursuant to 
which such institution grants the security holders the option, at 
periodic intervals, to tender their securities to the institution 
and receive the face value thereof.  As consideration for 
providing the option, the financial institution receives periodic 
fees equal to the difference between the Municipal Security's 
fixed coupon rate and the rate, as determined by a remarketing or 
similar agent at or near the commencement of such period, that 
would cause the securities, coupled with the tender option, to 
trade at par on the date of such determination.  Thus, after 
payment of this fee, the security holder effectively holds a 
demand obligation that bears interest at the prevailing short-term 
tax-exempt rate.  The Adviser will consider on an ongoing basis 
the creditworthiness of the issuer of the underlying Municipal 
Securities, of any custodian, and of the third-party provider of 
the tender option.  In certain instances and for certain tender 
option bonds, the option may be terminable in the event of a 
default in payment of principal or interest on the underlying 
Municipal Securities and for other reasons.  Municipal Money 
Portfolio does not intend to invest more than 10% of net assets in 
tender option bonds.

Foreign Securities.  International Portfolio invests primarily in 
foreign securities and High Yield Portfolio and each other Equity 
Portfolio may invest up to 25% of its total assets in foreign 
securities excluding American Depositary Receipts (ADRs), foreign 
debt securities denominated in U.S. dollars, and securities 
guaranteed by a U.S. person.  A Portfolio may invest in sponsored 
or unsponsored ADRs.  In addition to, or in lieu of, such direct 
investment, a Portfolio may construct a synthetic foreign debt 
position by (a) purchasing a debt instrument denominated in one 
currency, generally U.S. dollars; and (b) concurrently entering 
into a forward contract to deliver a corresponding amount of that 
currency in exchange for a different currency on a future date and 
at a specified rate of exchange.  Because of the availability of a 
variety of highly liquid U.S. dollar debt instruments, a synthetic 
foreign debt position utilizing such U.S. dollar instruments may 
offer greater liquidity than direct investment in foreign currency 
debt instruments.  In connection with the purchase of foreign 
securities, a Portfolio may contract to purchase an amount of 
foreign currency sufficient to pay the purchase price of the 
securities at the settlement date.  Such a contract involves the 
risk that the value of the foreign currency may decline relative 
to the value of the dollar prior to the settlement date--this risk 
is in addition to the risk that the value of the foreign security 
purchased may 

<PAGE> 13

decline.  A Portfolio also may enter into foreign currency 
contracts as a hedging technique to limit or reduce its exposure 
to currency fluctuations.  In addition, a Portfolio may use 
options and futures contracts, as described below, to limit or 
reduce exposure to currency fluctuations. 

Settlement Transactions.   When International Portfolio enters 
into a contract for the purchase or sale of a foreign portfolio 
security, it usually is required to settle the purchase 
transaction in the relevant foreign currency or receive the 
proceeds of the sale in that currency.  In either event, 
International Portfolio is obliged to acquire or dispose of an 
appropriate amount of foreign currency by selling or buying an 
equivalent amount of U.S. dollars.  At or near the time of the 
purchase or sale of the foreign portfolio security, International 
Portfolio may wish to lock in the U.S. dollar value of a 
transaction at the exchange rate or rates then prevailing between 
the U.S. dollar and the currency in which the security is 
denominated.  Known as "transaction hedging," this may be 
accomplished by purchasing or selling such foreign securities on a 
"spot," or cash, basis.  Transaction hedging also may be 
accomplished on a forward basis, whereby International Portfolio 
purchases or sells a specific amount of foreign currency, at a 
price set at the time of the contract, for receipt or delivery at 
either a specified date or at any time within a specified time 
period.  In so doing, International Portfolio will attempt to 
insulate itself against possible losses and gains resulting from a 
change in the relationship between the U.S. dollar and the foreign 
currency during the period between the date the security is 
purchased or sold and the date on which payment is made or 
received.  Similar transactions may be entered into by using other 
currencies if International Portfolio seeks to move investments 
denominated in one currency to investments denominated in another.

Currency Hedging.   Most of International Portfolio's assets will 
be invested in foreign securities.  As a result, in addition to 
the risk of change in the market value of portfolio securities, 
the value of the portfolio in U.S. dollars is subject to 
fluctuations in the exchange rate between the foreign currencies 
and the U.S. dollar.  When, in the opinion of the Adviser, it is 
desirable to limit or reduce exposure in a foreign currency to 
moderate potential changes in the U.S. dollar value of the 
portfolio, International Portfolio may enter into a forward 
currency exchange contract to sell or buy such foreign currency 
(or another foreign currency that acts as a proxy for that 
currency)--through the contract, the U.S. dollar value of certain 
underlying foreign portfolio securities can be approximately 
matched by an equivalent U.S. dollar liability.  This technique is 
known as "currency hedging."  By locking in a rate of exchange, 
currency hedging is intended to moderate or reduce the risk of 
change in the U.S. dollar value of International Portfolio's 
portfolio only during the period of the forward contract.  Forward 
contracts usually are entered into with banks and broker-dealers; 
are not exchange traded; and although they are usually less than 
one year, may be renewed.  A default on the contract would deprive 
International Portfolio of unrealized profits or force 
International Portfolio to cover its commitments for purchase or 
sale of currency, if any, at the current market price.

Neither type of foreign currency transaction will eliminate 
fluctuations in the prices of International Portfolio's portfolio 
securities or prevent loss if the price of such securities should 
decline.  In addition, such forward currency exchange contracts 
will diminish the benefit of the appreciation in the U.S. dollar 
value of that foreign currency.  (For 

<PAGE> 14

further information on forward foreign currency exchange 
transactions, see the Statement of Additional Information.)

International Portfolio may utilize spot and forward foreign 
exchange transactions to reduce the risk caused by exchange rate 
fluctuations between one currency and another when securities are 
purchased or sold on a when-issued basis.  It may also invest in 
synthetic money market instruments.  International Portfolio may 
invest in repurchase agreements, provided that it will not invest 
more than 15% of its net assets in repurchase agreements maturing 
in more than seven days and any other illiquid securities.  (See 
the Statement of Additional Information.)

Lending Portfolio Securities.  Subject to certain restrictions, 
High Yield Portfolio and each Equity Portfolio may lend portfolio 
securities to broker-dealers and banks.  Any such loan must be 
continuously secured by collateral in cash or cash equivalents 
maintained on a current basis in an amount at least equal to the 
market value of the securities loaned by a Portfolio.  The 
Portfolio would continue to receive the equivalent of the interest 
or dividends paid by the issuer on the securities loaned, and 
would also receive an additional return that may be in the form of 
a fixed fee or a percentage of the collateral.  The Portfolio 
would have the right to call the loan and obtain the securities 
loaned at any time on notice of not more than five business days.  
In the event of bankruptcy or other default of the borrower, the 
Portfolio could experience both delays in liquidating the loan 
collateral or recovering the loaned securities and losses 
including (a) possible decline in the value of the collateral or 
in the value of the securities loaned during the period while the 
Portfolio seeks to enforce its rights thereto; (b) possible 
subnormal levels of income and lack of access to income during 
this period; and (c) expenses of enforcing its rights.  Each 
Portfolio may participate in an interfund lending program, subject 
to certain restrictions described in Part B.

Derivatives.  Consistent with its objective, High Yield Portfolio 
and each Equity Portfolio may invest in a broad array of financial 
instruments and securities, including conventional, exchange-
traded and non-exchange-traded options, futures contracts, futures 
options, forward contracts, securities collateralized by 
underlying pools of mortgages or other receivables, floating rate 
instruments, and other instruments that securitize assets of 
various types ("Derivatives").  In each case, the value of the 
instrument or security is "derived" from the performance of an 
underlying asset or a "benchmark" such as a security index, or an 
interest rate.  No Portfolio expects to invest more than 5% of its 
net assets in any type of Derivative except for options, futures 
contracts, futures options and, in the case of International 
Portfolio, forward contracts.

Derivatives are most often used to manage investment risk or to 
create an investment position indirectly because they are more 
efficient or less costly than direct investment.  They also may be 
used in an effort to enhance portfolio returns.

The successful use of Derivatives depends on the Adviser's ability 
to correctly predict changes in the levels and directions of 
movements in security prices, interest rates and other market 
factors affecting the Derivative itself or the value of the 
underlying asset or benchmark.  In addition, correlations in the 
performance of an underlying asset to a Derivative may not be well 
established.  Finally, privately negotiated and over-the-counter 
Derivatives may not be as well regulated and may be less 
marketable than exchange-

<PAGE> 15

traded Derivatives.  For additional information on Derivatives, 
please refer to Part B.

Options and Futures.  In seeking to achieve its desired investment 
objective, provide additional revenue, or to hedge against changes 
in security prices, interest rates or currency fluctuations, High 
Yield Portfolio and each Equity Portfolio may: (1) purchase and 
write both call options and put options on securities, indexes and 
foreign currencies; (2) enter into interest rate, index and 
foreign currency futures contracts; (3) write options on such 
futures contracts; and (4) purchase other types of forward or 
investment contracts linked to individual securities, indexes, or 
other benchmarks.  A Portfolio may write a call or put option only 
if the option is covered.  As the writer of a covered call option, 
a Portfolio foregoes, during the option's life, the opportunity to 
profit from increases in market value of the security covering the 
call option above the sum of the premium and the exercise price of 
the call.  There can be no assurance that a liquid market will 
exist when a Portfolio seeks to close out a position.  In 
addition, because futures positions may require low margin 
deposits, the use of futures contracts involves a high degree of 
leverage and may result in losses in excess of the amount of the 
margin deposit.

Mortgage and Other Asset-Backed Debt Securities.  High Yield 
Portfolio may invest in securities secured by mortgages or other 
assets such as automobile or home improvement loans and credit 
card receivables.  These instruments may be issued or guaranteed 
by the U.S. Government or by its agencies or instrumentalities or 
by private entities such as commercial, mortgage and investment 
banks and financial companies or financial subsidiaries of 
industrial companies.  Securities issued by GNMA represent an 
interest in a pool of mortgages insured by the Federal Housing 
Administration or the Farmers Home Administration, or guaranteed 
by the Veterans Administration.  Securities issued by FNMA and 
FHLMC, U.S. Government-sponsored corporations, also represent an 
interest in a pool of mortgages.  The timely payment of principal 
and interest on GNMA securities is guaranteed by GNMA and backed 
by the full faith and credit of the U.S. Treasury.  FNMA 
guarantees full and timely payment of interest and principal on 
FNMA securities.  FHLMC guarantees timely payment of interest and 
ultimate collection of principal on FHLMC securities.  FNMA and 
FHLMC securities are not backed by the full faith and credit of 
the U.S. Treasury.

   
Mortgage-backed debt securities, such as those issued by GNMA, 
FNMA, and FHLMC, are of the "modified pass-through type," which 
means the interest and principal payments on mortgages in the pool 
are "passed through" to investors.  Mortgage-backed securities 
provide either a pro rata interest in underlying mortgages or an 
interest in collateralized mortgage obligations ("CMOs"), which 
represent a right to interest and/or principal payments from an 
underlying mortgage pool.  CMOs are not guaranteed by either the 
U.S. Government or by its agencies or instrumentalities and are 
usually issued in multiple classes, each of which has different 
payment rights, prepayment risks, and yield characteristics.  
Mortgage-backed securities involve the risk of prepayment of the 
underlying mortgages at a faster or slower rate than the 
established schedule.  Prepayments generally increase with falling 
interest rates and decrease with rising rates, but they also are 
influenced by economic, social, and market factors.  If mortgages 
are prepaid during periods of declining interest rates, there 
would be a resulting loss of the full-term benefit of any premium 
paid by High Yield Portfolio on purchase of the securities, 

<PAGE> 16

and the proceeds of prepayment would likely be invested at lower 
interest rates.  High Yield Portfolio tends to invest in CMOs of 
classes known as planned amortization classes ("PACs") which have 
prepayment protection features tending to make them less 
susceptible to price volatility.
    

Non-mortgage asset-backed securities usually have less prepayment 
risk than mortgage-backed securities, but have the risk that the 
collateral will not be available to support payments on the 
underlying loans which finance payments on the securities 
themselves.  Therefore, greater emphasis is placed on the credit 
quality of the security issuer and the guarantor, if any.  Asset-
backed securities tend to experience greater price volatility than 
straight debt securities.

   
REMICs.  High Yield Portfolio may invest in real estate mortgage 
investment conduits ("REMICs").  REMICs, which were authorized 
under the Tax Reform Act of 1986, are private entities formed for 
the purpose of holding a fixed pool of mortgages secured by an 
interest in real property.  REMICs are similar to CMOs in that 
they issue multiple classes of securities.  A REMIC is a CMO that 
qualifies for special tax treatment under the Internal Revenue 
Code and invests in certain mortgages principally secured by 
interests in real property.  Investors may purchase beneficial 
interests in REMICs, which are known as "regular" interests, or 
"residual" interests.  Guaranteed REMIC pass-through certificates 
("REMIC Certificates") issued by FNMA or FHLMC represent 
beneficial ownership interests in a REMIC trust consisting 
principally of mortgage loans or FNMA-, FHLMC- or GNMA-guaranteed 
mortgage pass-through certificates.  For FHLMC REMIC Certificates, 
FHLMC guarantees the timely payment of interest and also 
guarantees the payment of principal as payments are required to be 
made on the underlying mortgage participation certificates. FNMA 
REMIC Certificates are issued and guaranteed as to timely 
distribution and principal and interest by FNMA.
    

Floating Rate Instruments.  High Yield Portfolio may also invest 
in floating rate instruments which provide for periodic 
adjustments in coupon interest rates that are automatically reset 
based on changes in amount and direction of specified market 
interest rates.  In addition, the adjusted duration of some of 
these instruments may be materially shorter than their stated 
maturities.  To the extent such instruments are subject to 
lifetime or periodic interest rate caps or floors, such 
instruments may experience greater price volatility than debt 
instruments without such features.  Adjusted duration is an 
inverse relationship between market price and interest rates and 
refers to the approximate percentage change in price for a 100 
basis point change in yield.  For example, if interest rates 
decrease by 100 basis points, a market price of a security with an 
adjusted duration of 2 would increase by approximately 2%.  High 
Yield Portfolio does not intend to invest more than 5% of its net 
assets in floating rate instruments.

PIK and Zero Coupon Bonds.  High Yield Portfolio may invest up to 
20% of its total assets in zero coupon bonds and bonds the 
interest on which is payable in kind ("PIK bonds").  A zero coupon 
bond is a bond that does not pay interest for its entire life.  A 
PIK bond pays interest in the form of additional securities.  The 
market prices of both zero coupon and PIK bonds are affected to a 
greater extent by changes in prevailing levels of interest rates 
and thereby tend to be more volatile in price than securities that 
pay interest periodically and in cash.  In addition, because High 
Yield Portfolio accrues income with respect to these securities 
prior to the receipt of such interest in cash, it may have to 
dispose 

<PAGE> 17

of portfolio securities under disadvantageous circumstances in 
order to obtain cash needed to pay income dividends in amounts 
necessary to avoid unfavorable tax consequences.  

   
Portfolio Turnover
In seeking to attain its objective, each of Municipal Money 
Portfolio and High Yield Portfolio may sell portfolio securities 
without regard to the period of time they have been held.  
Further, the Adviser may purchase and sell securities for the 
investment portfolio with a view to maximizing current return, 
even if portfolio changes would cause the realization of capital 
gains.  Although the average stated maturity of High Yield 
Portfolio will be from five to ten years, the Adviser may adjust 
the average effective maturity of High Yield Portfolio's portfolio 
from time to time, depending on its assessment of the relative 
yields available on securities of different maturities and its 
expectations of future changes in interest rates.  
    

Although an Equity Portfolio does not purchase securities with a 
view to rapid turnover, there are no limitations on the length of 
time portfolio securities must be held.  Flexibility of investment 
and emphasis on capital appreciation may involve greater portfolio 
turnover than that of mutual funds that have the objectives of 
income or maintenance of a balanced investment position.  

As a result, the turnover rate may vary from year to year.  It may 
exceed 100%, but is not expected to exceed 200% under normal 
market conditions.  A high rate of portfolio turnover may result 
in increased transaction expenses and the realization of capital 
gains (which may be taxable) or losses. 

Risk Factors
Municipal Money Portfolio and High Yield Portfolio.  These 
Portfolios seek to reduce risk by investing in a diversified 
portfolio, but this does not eliminate all risk.  The risks 
inherent in each depend primarily upon the maturity and quality of 
the obligations in which it invests, as well as on market 
conditions.  A decline in prevailing levels of interest rates 
generally increases the value of securities in which the Portfolio 
invests, while an increase in rates usually reduces the value of 
those securities.  There can be no assurance that it will achieve 
its objective, nor can it assure that payments of interest and 
principal on portfolio obligations will be made when due.  
Generally, high-quality short-term obligations offer lower yields 
and less fluctuation in value than long-term low-quality 
obligations.  Consequently, Municipal Money Portfolio is designed 
for investors who seek little or no fluctuation in portfolio 
value.  Although Municipal Money Portfolio currently limits its 
investments in Municipal Securities to those the interest on which 
is exempt from the regular federal income tax, it may invest up to 
100% of its total assets in Municipal Securities the interest on 
which is subject to the federal alternative minimum tax.  
Municipal Money Portfolio may invest 25% or more of its assets in 
Municipal Securities that are related in such a way that an 
economic, business, or political development affecting one such 
security could also affect the other securities.  For example, 
Municipal Securities the interest upon which is paid from revenues 
of similar-type projects, such as hospitals, utilities, or 
housing, would be so related.  Municipal Money Portfolio may 
invest 25% or more of its assets in industrial development bonds 
(subject to the concentration restrictions described in this Part 
A under Investment Restrictions and 

<PAGE> 18

in Part B).  Assets of Municipal Money Portfolio that are not 
invested in Municipal Securities may be held in cash or invested 
in short-term taxable investments./3/

High Yield Fund is designed for investors who can accept the 
heightened level of risk and principal fluctuation which might 
result from a portfolio that invests at least 65% of its assets in 
medium- and lower-quality debt securities.  As a result, interest 
rate fluctuations will affect net asset value.  In addition, if 
the bonds in the investment portfolio contain call, prepayment or 
redemption provisions, during a period of declining interest 
rates, these securities are likely to be redeemed, and High Yield 
Portfolio will probably be unable to replace them with securities 
having as great a yield.

Equity Portfolios.  While an Equity Portfolio seeks to reduce risk 
by investing in a diversified portfolio, diversification does not 
eliminate all risk.  An Equity Portfolio will not, however, invest 
more than 25% of the total value of its assets (at the time of 
investment) in the securities of companies in any one industry.  

Balanced Portfolio is designed for long-term investors who can 
accept the fluctuations in portfolio value and other risks 
associated with seeking long-term capital appreciation through 
investments in securities.  Growth & Income Portfolio is designed 
for long-term investors who desire to participate in the stock 
market with moderate investment risk while seeking to limit market 
volatility.  Growth Stock Portfolio and Special Portfolio are 
designed for long-term investors who desire to participate in the 
stock market with more investment risk and volatility than the 
stock market in general, but with less investment risk and 
volatility than aggressive capital appreciation Portfolios.  
Growth Investor Portfolio is designed for long-term investors who 
desire to participate in the stock market and places an emphasis 
on companies that appeal to young investors.  These investors can 
accept more investment risk and volatility than the stock market 
in general but want less investment risk and volatility than 
aggressive capital appreciation funds; by investing in companies 
whose products or services appeal to young investors, the 
Portfolio emphasizes various consumer goods sectors.  Special 
Venture Portfolio is designed for long-term investors who want 
greater return potential than is available from the stock market 
in general, and who are willing to tolerate the greater investment 
risk and market volatility associated with investments in small 
and medium-sized companies.  International Portfolio is intended 
for long-term investors who can accept the risks entailed in 
investing in foreign securities.  Of course, there can be no 
guarantee that a Portfolio will achieve its objective.  

Debt securities rated in the fourth highest grade may have some 
speculative characteristics, and changes in economic conditions or 
other circumstances may lead to a weakened capacity of the issuers 
of such securities to make principal and interest payments.  
Securities rated below investment grade may possess speculative 
characteristics, and changes in economic conditions are more 
likely to affect the issuer's capacity to pay interest or repay 
principal.

Foreign Investing.  Non-U.S. investments may be attractive because 
they increase diversification, as compared to a portfolio 
comprised solely of U.S. investments.  In addition, many foreign 
economies have, from time to time, grown faster than the U.S. 
economy, 
- --------------
3   The policy expressed in this sentence is a fundamental policy 
of Municipal Money Portfolio.
- --------------

<PAGE> 19

and the returns on investments in these countries have exceeded 
those of similar U.S. investments--there can be no assurance, 
however, that these conditions will continue.  International 
diversification also allows International Portfolio and an 
investor to take advantage of changes in foreign economies and 
market conditions.

Investors should understand and consider carefully the greater 
risks involved in foreign investing.  Investing in foreign 
securities--positions which are generally denominated in foreign 
currencies--and utilization of forward foreign currency exchange 
contracts involve certain considerations comprising both risks and 
opportunities not typically associated with investing in U.S. 
securities.  These considerations include: fluctuations in 
exchange rates of foreign currencies; possible imposition of 
exchange control regulations or currency restrictions that would 
prevent cash from being brought back to the United States; less 
public information with respect to issuers of securities; less 
governmental supervision of stock exchanges, securities brokers, 
and issuers of securities; lack of uniform accounting, auditing, 
and financial reporting standards; lack of uniform settlement 
periods and trading practices; less liquidity and frequently 
greater price volatility in foreign markets than in the United 
States; possible imposition of foreign taxes; possible investment 
in the securities of companies in developing as well as developed 
countries; and sometimes less advantageous legal, operational, and 
financial protections applicable to foreign sub-custodial 
arrangements.  These risks are greater for emerging market 
countries.

Although a Portfolio will try to invest in companies and 
governments of countries having stable political environments, 
there is the possibility of expropriation or confiscatory 
taxation, seizure or nationalization of foreign bank deposits or 
other assets, establishment of exchange controls, the adoption of 
foreign government restrictions, and other adverse political, 
social or diplomatic developments that could adversely affect 
investment in these nations.  The price of securities of small, 
rapidly growing companies is expected to fluctuate more widely 
than the general market due to the difficulty in assessing 
financial prospects of companies developing new products or 
operating in countries with developing markets.

The strategy for selecting investments will be based on various 
criteria.  A company proposed for investment should have a good 
market position in a fast-growing segment of the economy, strong 
management, preferably a leading position in its business, 
prospects of superior financial returns, ability to self-finance, 
and securities available for purchase at a reasonable market 
valuation.  Because of the foreign domicile of such companies, 
however, information on some of the above factors may be 
difficult, if not impossible, to obtain.

To the extent portfolio securities are issued by foreign issuers 
or denominated in foreign currencies, investment performance is 
affected by the strength or weakness of the U.S. dollar against 
these currencies.  If the dollar falls relative to the Japanese 
yen, for example, the dollar value of a yen-denominated stock held 
in the portfolio will rise even though the price of the stock 
remains unchanged.  Conversely, if the dollar rises in value 
relative to the yen, the dollar value of the yen-denominated stock 
will fall.  

<PAGE> 20

Investment Restrictions
Municipal Money Portfolio may not with respect to 75% of its 
assets, invest more than 5% of its total assets in the securities 
of any one issuer, except for obligations issued or guaranteed by 
the U.S. Government or by its agencies or instrumentalities or 
repurchase agreements /4/; for such securities (guarantees or 
letters of credit of a single guarantor may exceed this limit).  
High Yield Portfolio and each Equity Portfolio may not invest more 
than 5% of its assets in the securities of any one issuer (this 
restriction applies only to 75% of its investment portfolio, but 
does not apply to securities of the U.S. Government or repurchase 
agreements for such securities).

No Portfolio may (1) invest 25% or more of its total assets in the 
securities of non-governmental issuers whose principal business 
activities are in the same industry; (2) acquire more than 10% of 
the outstanding voting securities of any one issuer; or (3) make 
loans, except that it may (a) purchase money market instruments 
and enter into repurchase agreements; (b) acquire publicly 
distributed or privately placed debt securities; (c) participate 
in an interfund lending program with other Stein Roe Funds; and 
(d) in the case of High Yield Portfolio and each Equity Portfolio, 
lend its portfolio securities under certain conditions.  No 
Portfolio may borrow money, except for nonleveraging, temporary, 
or emergency purposes or in connection with participation in the 
interfund lending program.  Neither a Portfolio's aggregate 
borrowings (including reverse repurchase agreements) nor its 
aggregate loans at any one time may exceed 33 1/3% of the value of 
its total assets.  Additional securities may not be purchased when 
borrowings, less proceeds receivable from sales of portfolio 
securities, exceed 5% of total assets.

   
The policies summarized in this section are fundamental policies 
of each Portfolio and, as such, can be changed only with the 
approval of a "majority of the outstanding voting securities" as 
defined in the Investment Company Act of 1940.  Each Portfolio's 
objective is nonfundamental and, as such, may be changed by the 
Board of Trustees without shareholder approval.  Investors will be 
notified of any material change in such policies.  All of the 
investment restrictions are set forth in Part B, the Statement of 
Additional Information.
    

Nothing in the investment restrictions outlined here shall be 
deemed to prohibit International Portfolio from purchasing the 
securities of any issuer pursuant to the exercise of subscription 
rights distributed to International Portfolio by the issuer.  No 
such purchase may be made if, as a result, International Portfolio 
will no longer be a diversified investment company as defined in 
the Investment Company Act of 1940 or if International Portfolio 
will fail to meet the diversification requirements of the Internal 
Revenue Code of 1986, as amended (the "Code").

       
- -----------
4 A repurchase agreement involves a sale of securities to the 
Portfolio in which the seller agrees to repurchase the securities 
at a higher price, which includes an amount representing interest 
on the purchase price, within a specified time.  In the event of 
bankruptcy of the seller, the Portfolio could experience both 
losses and delays in liquidating its collateral.

<PAGE> 21

Item 5.  Management of Base Trust.

Trustees
The Board of Trustees of Base Trust has overall management 
responsibility for the Trust and each Portfolio.  See Part B for 
the names of and other information about the trustees and 
officers. 

Adviser
Base Trust has retained the services of Stein Roe & Farnham 
Incorporated (the "Adviser"), One South Wacker Drive, Chicago, 
Illinois 60606, as investment adviser and administrator of each 
Portfolio.  The Adviser is responsible for the investment 
management and administration of each Portfolio, subject to the 
direction of the Board.  The Adviser is registered as an 
investment adviser under the Investment Advisers Act of 1940.  The 
Adviser was organized in 1986 to succeed to the business of Stein 
Roe & Farnham, a partnership that had advised and managed mutual 
funds since 1949.  The Adviser is a wholly owned indirect 
subsidiary of Liberty Mutual Insurance Company ("Liberty Mutual").

Investor Services
SteinRoe Services Inc. ("SSI"), One South Wacker Drive, Chicago, 
Illinois 60606, a wholly owned indirect subsidiary of Liberty 
Mutual, pursuant to a separate service agreement, also provides 
certain investor accounting and recordkeeping services for each 
Portfolio.

Portfolio Managers
Veronica M. Wallace has been portfolio manager of Municipal Money 
Portfolio since September 1995.  Ms. Wallace was formerly a trader 
in taxable money market instruments for the Adviser.

   
Stephen F. Lockman has been portfolio manager of High Yield 
Portfolio since March 1997, and previously had been associate 
manager of High Yield Portfolio since its inception in 1996.  Mr. 
Lockman is a senior vice president of the Adviser and has been 
employed by the Adviser since January 1994.  He served as a 
portfolio manager for the Illinois State Board of Investment from 
1987 to 1994.  Michael T. Kennedy has been associate portfolio 
manager of High Yield Portfolio since May, 1997.  He is a senior 
vice president of the Adviser, which he joined in 1987. 

Erik P. Gustafson and David P. Brady have been co-portfolio 
managers of Growth Investor Portfolio since its inception in 1997.  
Mr. Gustafson is a senior vice president of the Adviser and Mr. 
Brady is a vice president of the Adviser.  Mr. Brady, who joined 
Stein Roe in 1993, was an equity investment analyst with State 
Farm Mutual Automobile Insurance Company from 1986 to 1993.   

Growth Stock Portfolio has been managed by Mr. Gustafson since its 
inception in 1997.  Mr. Brady is its associate portfolio manager.  

Daniel K. Cantor has been portfolio manager of Growth & Income 
Portfolio since its inception in 1997.  He is a senior vice 
president of the Adviser.  Jeffrey C. Kinzel is associate manager 
of Growth & Income Portfolio.  Mr. Kinzel is a vice president and 
intermediate research analyst with the Adviser.

<PAGE> 22

Harvey B. Hirschhorn has been portfolio manager of Balanced 
Portfolio since its inception in 1997.  He is executive vice 
president and chief economist and investment strategist of the 
Adviser.  William Garrison and Sandra Knight are associate 
portfolio managers of Balanced Portfolio.  Ms. Knight is a vice 
president and senior quantitative research analyst with the 
Adviser.  

Richard B. Peterson has been co-portfolio manager of Special 
Venture Portfolio since its inception in 1997.  He is a senior 
vice president of the Adviser.  John S. McLandsborough has been 
has co-portfolio manager since July 1997.  Prior to joining the 
Adviser in April 1996, Mr. McLandsborough was an equity research 
analyst with CS First Boston from June 1994 until January 1996 and 
with National City Bank of Cleveland prior thereto. 

M. Gerard Sandel has been portfolio manager of Special Portfolio 
and senior vice president of the Adviser since July 1997.  Prior 
to joining the Adviser, Mr. Sandel was portfolio manager of the 
Marshall Mid-Cap Value Fund and its predecessor fund and vice 
president of M&I Investment Management Corporation since October 
1993.  Prior thereto, Mr. Sandel was vice president of Acorn Asset 
Management Corporation. 

Bruno Bertocci and David P. Harris have been co-portfolio managers 
of International Portfolio since its inception in 1997.  They 
joined the Adviser in 1995 as senior vice president and vice 
president, respectively.  Messrs. Bertocci and Harris are also 
employed by Colonial Management Associates, Inc., a subsidiary of 
Liberty Financial, as vice presidents, effective January, 1996.  
Prior to joining the Adviser, Messrs. Bertocci and Harris were  
senior global equity portfolio manager and portfolio manager, 
respectively, with Rockefeller & Co.
    

Fees and Expenses
In return for its services, the Adviser receives a monthly fee 
from each Portfolio, computed and accrued daily.  The annualized 
rates of fees are as follows:

                                  Annual Management Fee    
     Portfolio             (as a percentage of average net assets)
- -------------------------   --------------------------------------
Municipal Money Portfolio   0.25%
High Yield Portfolio        0.50% up to $500 million, 
                            0.475% thereafter
Balanced Portfolio          0.55% up to $500 million, 
                            0.50% next $500 million, 
                            0.45% thereafter
Growth & Income Portfolio   0.60% up to $500 million, 
                            0.55% next $500 million, 
                            0.50% thereafter
Growth Stock Portfolio      0.60% up to $500 million, 
                            0.55% next $500 million, 
                            0.50% thereafter
Growth Investor Portfolio   0.60% up to $500 million, 
                            0.55% next $500 million, 
                            0.50% thereafter
Special Portfolio           0.75% up to $500 million, 
                            0.70% next $500 million, 
                            0.65% next $500 million, 
                            0.60% thereafter
Special Venture Portfolio   0.75%
International Portfolio     0.85%

<PAGE> 23

   
Under a separate agreement with Base Trust, the Adviser provides 
certain accounting and bookkeeping services to each Portfolio, 
including computation of net asset value and calculation of net 
income and capital gains and losses on disposition of assets.
    

Portfolio Transactions
The Adviser places the orders for the purchase and sale of 
portfolio securities and any options and futures transactions.  In 
doing so, the Adviser seeks to obtain the best combination of 
price and execution, which involves a number of judgmental 
factors.

   
Custodian
State Street Bank and Trust Company, 225 Franklin Street, Boston, 
Massachusetts 02101, is the custodian for each Portfolio.
    

Item 5A.  Management's Discussion of Fund Performance.

A response to Item 5A has been omitted pursuant to paragraph 4 of 
Instruction F of the General Instructions to Form N-1A.

Item 6.  Capital Stock and Other Securities.

Investments in Base Trust have no preemptive or conversion rights 
and are fully paid and nonassessable, except as set forth below.  
Base Trust is not required to hold annual meetings of investors, 
and has no current intention to do so, but Base Trust will hold 
special meetings of investors when, in the judgment of the 
trustees, it is necessary or desirable to submit matters for an 
investor vote.  Changes in fundamental policies will be submitted 
to investors for approval.  An investors' meeting will be held 
upon the written, specific request to the trustees of investors 
holding in the aggregate not less than 10% of the Interests in a 
series.  Investors have under certain circumstances (e.g., upon 
application and submission of certain specified documents to the 
trustees by a specified number of shareholders) the right to 
communicate with other investors in connection with requesting a 
meeting of investors for the purpose of removing one or more 
trustees.  Investors also have the right to remove one or more 
trustees without a meeting by a declaration in writing by a 
specified number of investors.  Upon liquidation of Base Trust or 
a series thereof, investors would be entitled to share pro rata in 
the net assets available for distribution to investors (unless 
another sharing method is required for federal income tax reasons, 
in accordance with the sharing method adopted by the trustees).

Base Trust reserves the right to create and issue a number of 
series, in which case investors in each series would participate 
solely in the earnings, dividends, and assets of the particular 
series.  Interests in any series of Base Trust may be divided into 
two or more classes of Interests having such preferences or 
special or relative rights or privileges as the trustees of Base 
Trust may determine.  Currently, Base Trust has nine series, each 
with only one class.

Base Trust is organized as a common law trust under the laws of 
the Commonwealth of Massachusetts.  Under the Declaration of 
Trust, the trustees are authorized to issue Interests in Base 
Trust.  Each investor in a series is entitled to vote in 
proportion to the amount of its investment in the series.  
Investments in Base Trust may not be transferred, 

<PAGE> 24

but an investor may withdraw all or a portion of his investment at 
any time at net asset value.  Investors in any series of Base 
Trust (e.g., investment companies, insurance company separate 
accounts, and common and commingled trust funds or similar 
organizations or entities that are "accredited investors" within 
the meaning of Regulation D under the 1933 Act) may be held 
personally, jointly and severally liable for all obligations of 
that series of Base Trust.  However, the risk of an investor in a 
series incurring financial loss on account of such liability is 
limited to circumstances in which both inadequate insurance exists 
and Base Trust itself is unable to meet its obligations.

It is intended that the assets, income, and distributions will be 
managed in such a way that an investor in a series will be able to 
satisfy the requirements of Subchapter M of the Code for 
qualification as a regulated investment company, assuming that the 
investor invested all of its assets in the series.

The net income of a series of Base Trust shall consist of (1) all 
income accrued less the amortization of any premium, on the assets 
of the series, less (2) all actual and any accrued expenses of the 
series determined in accordance with generally accepted accounting 
principles.  Income includes discount earned (including both 
original issue and, by election, market discount) on discount 
paper accrued ratably to the date of maturity and any net realized 
gains or losses on the assets of the series.  All of the net 
income of a series is allocated among the investors in the series 
in accordance with their Interests (unless another sharing method 
is required for federal income tax reasons, in accordance with the 
sharing method adopted by the trustees).

Under the anticipated method of operation of Base Trust, the Trust 
will not be subject to any federal income tax.  However, each 
investor in a series of Base Trust will be taxed on its share (as 
determined in accordance with the governing instruments of Base 
Trust) of the series' ordinary income and capital gain in 
determining its income tax liability.  The determination of such 
share will be made in accordance with an allocation method 
designed to satisfy the Code and regulations promulgated 
thereunder.  Distributions of net income and capital gain are to 
be made pro rata to investors in accordance with their investment 
in a Portfolio.  For federal income tax purposes, however, income, 
gain, or loss may be allocated in a manner other than pro rata, if 
necessary to reflect gains or losses properly allocable to fewer 
than all investors as a result of contributions of securities to a 
series or redemptions of portions of an investor's unrealized gain 
or loss in series assets.

Item 7.  Purchase of Securities.

   
Interests in a Portfolio are issued solely in private placement 
transactions that do not involve any "public offering" within the 
meaning of Section 4(2) of the 1933 Act.  Investments in a 
Portfolio may be made only by investment companies, insurance 
company separate accounts, common or commingled trust funds, or 
similar organizations or entities that are "accredited investors" 
within the meaning of Regulation D under the 1933 Act.  This 
Registration Statement does not constitute an offer to sell or the 
solicitation of any offer to buy any "security" within the meaning 
of the 1933 Act.
    

An investment in a Portfolio may be made without a sales load.  
All investments are made at net asset value next determined if an 
order is received by SteinRoe Services 

<PAGE> 25

Inc., the Portfolios' investor accounting and recordkeeping agent, 
by the designated cutoff time.  The net asset value of each 
Portfolio is determined as of the close of trading on the New York 
Stock Exchange ("NYSE") (currently 3:00 p.m., central time) every 
day the NYSE is open for trading ("business day") by dividing the 
difference between the values of the Portfolio's assets and 
liabilities by the number of shares outstanding.  Net asset value 
will not be determined on days when the NYSE is closed unless, in 
the judgment of the Board of Trustees, the net asset value should 
be determined on any such day, in which case the determination 
will be made at 3:00 p.m., central time.

The valuation of Municipal Money Portfolio's portfolio securities 
is based on their amortized cost, which does not take into account 
unrealized gains or losses, in an attempt to maintain its net 
asset value at $1.00 per share.  The extent of any deviation 
between the Portfolio's net asset value based upon market 
quotations or equivalents and $1.00 per share based on amortized 
cost will be examined by the Board of Trustees.  If such deviation 
were to exceed 1/2 of 1%, the Board would consider what action, if 
any, should be taken, including selling portfolio instruments, 
increasing, reducing or suspending distributions, or redeeming 
shares in kind.  Other assets and securities of the Portfolio for 
which this valuation method does not produce a fair value are 
valued at a fair value determined by the Board.

For High Yield Portfolio, securities for which market quotations 
are readily available at the time of valuation are valued on that 
basis.  Long-term straight-debt securities for which market 
quotations are not readily available are valued at a fair value 
based on valuations provided by pricing services approved by the 
Board, which may employ electronic data processing techniques, 
including a matrix system, to determine valuations.  Short-term 
debt securities with remaining maturities of 60 days or less are 
valued at their amortized cost, which does not take into account 
unrealized gains or losses.  The Board believes that the amortized 
cost represents a fair value for such securities.  Short-term debt 
securities with remaining maturities of more than 60 days for 
which market quotations are not readily available are valued by 
use of a matrix prepared by the Adviser based on quotations for 
comparable securities.  Other assets and securities held by High 
Yield Portfolio for which these valuation methods do not produce a 
fair value are valued by a method that the Board believes will 
determine a fair value.

For each Equity Portfolio other than International Portfolio, each 
security traded on a national stock exchange is valued at its last 
sale price on that exchange on the day of valuation or, if there 
are no sales that day, at the latest bid quotation.  Each over-
the-counter security for which the last sale price on the day of 
valuation is available from Nasdaq is valued at that price.  All 
other over-the-counter securities for which reliable quotations 
are available are valued at the latest bid quotation.

In computing the net asset value of International Portfolio, the 
values of portfolio securities are generally based upon market 
quotations. Depending upon local convention or regulation, these 
market quotations may be the last sale price, last bid or asked 
price, or the mean between the last bid and asked prices as of, in 
each case, the close of the appropriate exchange or other 
designated time.  Trading in securities on European and Far 
Eastern securities exchanges and over-the-counter markets is 
normally completed at various times before the close of business 
on each day on which the NYSE is open.  Trading of these 
securities may not take place on every NYSE business day.  In 
addition, 

<PAGE> 26

trading may take place in various foreign markets on Saturdays or 
on other days when the NYSE is not open and on which International 
Portfolio's net asset value is not calculated.  Therefore, such 
calculation does not take place contemporaneously with the 
determination of the prices of many of the portfolio securities 
used in such calculation and the value of International 
Portfolio's portfolio may be significantly affected on days when 
shares of International Portfolio may not be purchased or 
redeemed.

Each investor in a Portfolio may add to or reduce its investment 
in the Portfolio on each business day.  The investor's percentage 
of the aggregate Interests in the Portfolio will be computed as 
the percentage equal to the fraction (1) the numerator of which is 
the beginning of the day value of such investor's investment in 
the Portfolio, on such day plus or minus, as the case may be, the 
amount of any additions to or withdrawals from the investor's 
investment in the Portfolio effected on such day, and (2) the 
denominator of which is the aggregate beginning of the day net 
asset value of the Portfolio on such day plus or minus, as the 
case may be, the amount of the net additions to or withdrawals 
from the aggregate investments in the Portfolio by all investors 
in the Portfolio.  The percentage so determined will then be 
applied to determine the value of the investor's Interest in the 
Portfolio as of the close of business.

There is no minimum initial or subsequent investment in a 
Portfolio.

Each Portfolio and SteinRoe Services Inc. reserve the right to 
cease accepting investments at any time or to reject any 
investment order.

Item 8.  Redemption or Repurchase.

An investor in a Portfolio may redeem all or any portion of its 
investment at the next determined net asset value if a withdrawal 
request in proper form is furnished by the investor to SteinRoe 
Services Inc., the Portfolios' investor accounting agent, by the 
designated cutoff time.  The proceeds of a withdrawal will be paid 
by the Portfolio in federal funds normally on the business day the 
withdrawal is effected, but in any event within seven days.  
Investments in a Portfolio may not be transferred.

The right of any investor to receive payment with respect to any 
withdrawal may be suspended or the payment of the withdrawal 
proceeds postponed during any period in which the NYSE is closed 
(other than weekends or holidays) or trading on the NYSE is 
restricted, or, to the extent otherwise permitted by the 
Investment Company Act of 1940 if an emergency exists.

Item 9.  Pending Legal Proceedings.

Not applicable.

<PAGE> 27

PART B

Item 10.  Cover Page.

                         SR&F BASE TRUST
Suite 3200, One South Wacker Drive, Chicago, Illinois 60606
                         800-338-2550

   
  Statement of Additional Information Dated September 26, 1997
    

This Statement of Additional Information is not a prospectus but 
provides additional information that should be read in conjunction 
with the prospectus contained in Part A of this Registration 
Statement, which may be obtained at no charge by telephoning 800-
338-2550.

Item 11.  Table of Contents.

   
Item 12.  General Information and History.....................27
Item 13.  Investment Objective and Policies...................27
Item 14.  Management of Base Trust............................53
Item 15.  Control Persons and Principal Holders of Securities.56
Item 16.  Investment Management and Administrative Services...56
Item 17.  Brokerage Allocation and Other Practices............58
Item 18.  Capital Stock and Other Securities..................61
Item 19.  Purchase, Redemption, and Pricing of Securities.....62
Item 20.  Tax Status..........................................64
Item 21.  Underwriters........................................67
Item 22.  Calculation of Performance Data.....................67
Item 23.  Financial Statements................................67
Glossary......................................................68
Appendix......................................................69
    

Item 12.  General Information and History.

Not applicable.

Item 13.  Investment Objectives and Policies.

The basic investment policies and strategies of each Portfolio are 
described in Part A, Item 4.  The following supplements the 
information contained in Part A regarding certain miscellaneous 
investment practices in which a Portfolio may engage and the risks 
associated therewith.

AMT Securities.  Although Municipal Money Portfolio currently 
limits its investments in Municipal Securities to those the 
interest on which is exempt from the regular federal income tax, 
it may invest 100% of its total assets in Municipal Securities the 
interest on which is subject to the federal alternative minimum 
tax ("AMT").

   
Convertible Securities.  By investing in convertible securities, 
High Yield Portfolio or an Equity Portfolio obtains the right to 
benefit from the capital appreciation potential in the 

<PAGE> 

underlying stock upon exercise of the conversion right, while 
earning higher current income than would be available if the stock 
were purchased directly.  In determining whether to purchase a 
convertible, the Adviser will consider substantially the same 
criteria that would be considered in purchasing the underlying 
stock.  While convertible securities purchased by a Portfolio are 
frequently rated investment grade, a Portfolio may purchase 
unrated securities or securities rated below investment grade if 
the securities meet the Adviser's other investment criteria.  
Convertible securities rated below investment grade (a) tend to be 
more sensitive to interest rate and economic changes, (b) may be 
obligations of issuers who are less creditworthy than issuers of 
higher quality convertible securities, and (c) may be more thinly 
traded due to such securities being less well known to investors 
than either common stock or conventional debt securities.  As a 
result, the Adviser's own investment research and analysis tend to 
be more important in the purchase of such securities than other 
factors.
    

Debt Securities.  In pursuing its investment objective, High Yield 
Portfolio does and each Equity Portfolio may invest in debt 
securities of corporate and governmental issuers.  The risks 
inherent in debt securities depend primarily on the term and 
quality of the obligations in the investment portfolio as well as 
on market conditions.  A decline in the prevailing levels of 
interest rates generally increases the value of debt securities, 
while an increase in rates usually reduces the value of those 
securities.

   
Investments in debt securities by Growth & Income Portfolio, 
Balanced Portfolio, Growth Stock Portfolio, and International 
Portfolio are limited to those that are within the four highest 
grades (generally referred to as "investment grade") assigned by a 
nationally recognized statistical rating organization or, if 
unrated, deemed to be of comparable quality by the Adviser.  Each 
of Special Venture Portfolio, Growth Investor Portfolio, and 
Special Portfolio may invest up to 35% of its net assets in debt 
securities, but does not expect to invest more than 5% of net 
assets in debt securities that are rated below investment grade.
    

Securities in the fourth highest grade may possess speculative 
characteristics, and changes in economic conditions are more 
likely to affect the issuer's capacity to pay interest and repay 
principal.  If the rating of a security held by a Portfolio is 
lost or reduced below investment grade, the Portfolio is not 
required to dispose of the security, but the Adviser will consider 
that fact in determining whether that Portfolio should continue to 
hold the security.

Securities that are rated below investment grade are considered 
predominantly speculative with respect to the issuer's capacity to 
pay interest and repay principal according to the terms of the 
obligation and therefore carry greater investment risk, including 
the possibility of issuer default and bankruptcy.

Defensive Investments.  When the Adviser considers a temporary 
defensive position advisable, High Yield Portfolio and each Equity 
Portfolio may invest, without limitation, in high-quality fixed 
income securities or hold assets in cash or cash equivalents.

Derivatives.  Consistent with its objective, High Yield Portfolio 
and each Equity Portfolio may invest in a broad array of financial 
instruments and securities, including conventional exchange-traded 
and non-exchange-traded options, futures contracts, futures 
options, 

<PAGE> 29

securities collateralized by underlying pools of mortgages or 
other receivables, floating rate instruments, and other 
instruments that securitize assets of various types 
("Derivatives").  In each case, the value of the instrument or 
security is "derived" from the performance of an underlying asset 
or a "benchmark" such as a security index, an interest rate, or a 
currency.

Derivatives are most often used to manage investment risk or to 
create an investment position indirectly because it is more 
efficient or less costly than direct investment that cannot be 
readily established directly due to portfolio size, cash 
availability, or other factors.  They also may be used in an 
effort to enhance portfolio returns.

The successful use of Derivatives depends on the Adviser's ability 
to correctly predict changes in the levels and directions of 
movements in security prices, interest rates and other market 
factors affecting the Derivative itself or the value of the 
underlying asset or benchmark.  In addition, correlations in the 
performance of an underlying asset to a Derivative may not be well 
established.  Finally, privately negotiated and over-the-counter 
Derivatives may not be as well regulated and may be less 
marketable than exchange-traded Derivatives.

High Yield Portfolio does not intend to invest more than 5% of its 
assets in any type of Derivative.  No Equity Portfolio currently 
intends to invest more than 5% of its net assets in any type of 
Derivative, except for options, futures contracts, futures 
options, and, in the case of International Portfolio, forward 
contracts.  (See Options and Futures below.)

Some mortgage-backed debt securities are of the "modified pass-
through type," which means the interest and principal payments on 
mortgages in the pool are "passed through" to investors.  During 
periods of declining interest rates, there is increased likelihood 
that mortgages will be prepaid, with a resulting loss of the full-
term benefit of any premium paid by a Portfolio on purchase of 
such securities; in addition, the proceeds of prepayment would 
likely be invested at lower interest rates.

Mortgage-backed securities provide either a pro rata interest in 
underlying mortgages or an interest in collateralized mortgage 
obligations ("CMOs") that represent a right to interest and/or 
principal payments from an underlying mortgage pool.  CMOs are not 
guaranteed by either the U.S. Government or by its agencies or 
instrumentalities, and are usually issued in multiple classes each 
of which has different payment rights, prepayment risks, and yield 
characteristics.  Mortgage-backed securities involve the risk of 
prepayment on the underlying mortgages at a faster or slower rate 
than the established schedule.  Prepayments generally increase 
with falling interest rates and decrease with rising rates but 
they also are influenced by economic, social, and market factors.  
If mortgages are prepaid during periods of declining interest 
rates, there would be a resulting loss of the full-term benefit of 
any premium paid by a Portfolio on purchase of the CMO, and the 
proceeds of prepayment would likely be invested at lower interest 
rates.

Non-mortgage asset-backed securities usually have less prepayment 
risk than mortgage-backed securities, but have the risk that the 
collateral will not be available to support payments on the 
underlying loans that finance payments on the securities 
themselves.

<PAGE> 30

Floating rate instruments provide for periodic adjustments in 
coupon interest rates that are automatically reset based on 
changes in amount and direction of specified market interest 
rates.  In addition, the adjusted duration of some of these 
instruments may be materially shorter than their stated 
maturities.  To the extent such instruments are subject to 
lifetime or periodic interest rate caps or floors, such 
instruments may experience greater price volatility than debt 
instruments without such features.  Adjusted duration is an 
inverse relationship between market price and interest rates and 
refers to the approximate percentage change in price for a 100 
basis point change in yield.  For example, if interest rates 
decrease by 100 basis points, a market price of a security with an 
adjusted duration of 2 would increase by approximately 2%.

Interfund Borrowing and Lending Program.  Pursuant to an exemptive 
order issued by the Securities and Exchange Commission, each 
Portfolio has received permission to lend money to, and borrow 
money from, other mutual funds advised by the Adviser.  A 
Portfolio will borrow through the program when borrowing is 
necessary and appropriate and the costs are equal to or lower than 
the costs of bank loans.

Lending of Portfolio Securities.  Subject to the restriction on 
lending under Investment Restrictions in this Part B, High Yield 
Portfolio and each Equity Portfolio may lend its portfolio 
securities to broker-dealers and banks.  Any such loan must be 
continuously secured by collateral in cash or cash equivalents 
maintained on a current basis in an amount at least equal to the 
market value of the securities loaned by a Portfolio.  Cash 
collateral for securities loaned will be invested in liquid high-
grade debt securities.  A Portfolio would continue to receive the 
equivalent of the interest or dividends paid by the issuer on the 
securities loaned, and would also receive an additional return 
that may be in the form of a fixed fee or a percentage of the 
collateral.  A Portfolio would have the right to call the loan and 
obtain the securities loaned at any time on notice of not more 
than five business days.  A Portfolio would not have the right to 
vote the securities during the existence of the loan but would 
call the loan to permit voting of the securities if, in the 
Adviser's judgment, a material event requiring a shareholder vote 
would otherwise occur before the loan was repaid.  In the event of 
bankruptcy or other default of the borrower, a Portfolio could 
experience both delays in liquidating the loan collateral or 
recovering the loaned securities and losses, including (a) 
possible decline in the value of the collateral or in the value of 
the securities loaned during the period while the Portfolio seeks 
to enforce its rights thereto, (b) possible subnormal levels of 
income and lack of access to income during this period, and (c) 
expenses of enforcing its rights.

Line of Credit.  Subject to its restriction on borrowing under 
Investment Restrictions, each Portfolio may establish and maintain 
a line of credit with a major bank in order to permit borrowing on 
a temporary basis to meet share redemption requests in 
circumstances in which temporary borrowing may be preferable to 
liquidation of portfolio securities.

Participation Interests.  Municipal Money Portfolio may purchase 
participation interests or certificates of participation in all or 
part of specific holdings of Municipal Securities, but does not 
intend to do so unless the tax-exempt status of those 
participation interests or certificates of participation is 
confirmed to the satisfaction of the Board of Trustees, which may 
include consideration of an opinion of counsel as to the tax-
exempt status.  

<PAGE> 31

Each participation interest would meet the prescribed quality 
standards of the Portfolio or be backed by an irrevocable letter 
of credit or guarantee of a bank that meets the prescribed quality 
standards of the Portfolio.  Some participation interests are 
illiquid securities.

Municipal Money Portfolio may also purchase participations in 
lease obligations or installment purchase contract obligations 
(hereinafter collectively called "lease obligations") of municipal 
authorities or entities.  Although lease obligations do not 
constitute general obligations of the municipality for which the 
municipality's taxing power is pledged, a lease obligation is 
ordinarily backed by the municipality's covenant to budget for, 
appropriate, and make the payments due under the lease obligation.  
However, certain lease obligations contain "non-appropriation" 
clauses which provide that the municipality has no obligation to 
make lease or installment purchase payments in future years unless 
money is appropriated for such purpose on a yearly basis.  In 
addition to the "non-appropriation" risk, these securities 
represent a relatively new type of financing that has not yet 
developed the depth of marketability associated with more 
conventional bonds.  Although "non-appropriation" lease 
obligations are secured by leased property, disposition of the 
property in the event of foreclosure might prove difficult.  The 
Portfolio will seek to minimize these risks by investing primarily 
in those "non-appropriation" lease obligations where (1) the 
nature of the leased equipment or property is such that its 
ownership or use is essential to a governmental function of the 
municipality, (2) the lease obligor has maintained good market 
acceptability in the past, (3) the investment is of a size that 
will be attractive to institutional investors, and (4) the 
underlying leased equipment has elements of portability and/or use 
that enhance its marketability in the event foreclosure on the 
underlying equipment were ever required.

The Board of Trustees has delegated to the Adviser the 
responsibility to determine the credit quality of participation 
interests.  The determinations concerning the liquidity and 
appropriate valuation of a municipal lease obligation, as with any 
other municipal security, are made based on all relevant factors.  
These factors may include, among others: (1) the frequency of 
trades and quotes for the obligation; (2) the number of dealers 
willing to purchase or sell the security and the number of other 
potential buyers; (3) the willingness of dealers to undertake to 
make a market in the security; and (4) the nature of the 
marketplace trades, including the time needed to dispose of the 
security, the method of soliciting offers, and the mechanics of 
transfer.

PIK and Zero Coupon Bonds.  High Yield Portfolio may invest up to 
20% of its assets in zero coupon bonds and bonds the interest on 
which is payable in kind ("PIK bonds").  A zero coupon bond is a 
bond that does not pay interest for its entire life.  A PIK bond 
pays interest in the form of additional securities.  The market 
prices of both zero coupon and PIK bonds are affected to a greater 
extent by changes in prevailing levels of interest rates and 
thereby tend to be more volatile in price than securities that pay 
interest periodically and in cash.  In addition, because High 
Yield Portfolio accrues income with respect to these securities 
prior to the receipt of such interest in cash, it may have to 
dispose of portfolio securities under disadvantageous 
circumstances in order to obtain cash needed to pay income 
dividends in amounts necessary to avoid unfavorable tax 
consequences.  

<PAGE> 32

Rated Securities.  For a description of the ratings applied by 
rating services to Municipal Securities and other debt securities, 
please refer to the Appendix.  Except with respect to debt 
securities with a demand feature (see the definition of "short-
term" in the Glossary) acquired by Municipal Money Portfolio, the 
fact that the rating of a debt security held by Municipal Money 
Portfolio or High Yield Portfolio may be lost or reduced below the 
minimum level applicable to its original purchase by the Portfolio 
does not require that obligation to be sold, but the Adviser will 
consider such fact in determining whether the Portfolio should 
continue to hold the obligation.  In the case of Municipal 
Securities with a demand feature acquired by Municipal Money 
Portfolio, if the quality of such a security falls below the 
minimum level applicable at the time of acquisition, the Portfolio 
must dispose of the security within a reasonable period of time 
either by exercising the demand feature or by selling the security 
in the secondary market, unless the Board of Trustees determines 
that it is in the best interests of the Portfolio and its 
shareholders to retain the security.

   
To the extent that the ratings accorded by Moody's,  S&P, or Fitch 
Investors Service for debt securities may change as a result of 
changes in such organizations, or changes in their rating systems, 
Municipal Money Portfolio or High Yield Portfolio will attempt to 
use comparable ratings as standards for its investments in 
accordance with its investment policies.  The Board of Trustees is 
required to review such ratings with respect to Municipal Money 
Portfolio.

Repurchase Agreements.  Each Portfolio may invest in repurchase 
agreements, provided that an Equity Portfolio may not invest more 
than 15% and Municipal Money Portfolio and High Yield Portfolio 
may not invest more than 10% of net assets in repurchase 
agreements maturing in more than seven days and any other illiquid 
securities.  A repurchase agreement is a sale of securities to a 
Portfolio in which the seller agrees to repurchase the securities 
at a higher price, which includes an amount representing interest 
on the purchase price, within a specified time.  In the event of 
bankruptcy of the seller, a Portfolio could experience both losses 
and delays in liquidating its collateral.
    

Reverse Repurchase Agreements.  Each Portfolio may enter into 
reverse repurchase agreements with banks and securities dealers.  
A reverse repurchase agreement is a repurchase agreement in which 
a Portfolio is the seller of, rather than the investor in, 
securities and agrees to repurchase them at an agreed-upon time 
and price.  Use of a reverse repurchase agreement may be 
preferable to a regular sale and later repurchase of the 
securities because it avoids certain market risks and transaction 
costs.

   
At the time a Portfolio enters into a reverse repurchase 
agreement, liquid assets (cash, U.S. Government securities or 
other "high-grade" debt obligations) of the Portfolio having a 
value at least as great as the purchase price of the securities to 
be purchased will be segregated on the books of the Portfolio and 
held by the custodian throughout the period of the obligation.  
The use of this investment strategy may increase net asset value 
fluctuation.

Rule 144A Securities.  High Yield Portfolio and each Equity 
Portfolio may purchase securities that have been privately placed 
but that are eligible for purchase and sale under Rule 144A under 
the 1933 Act.  That Rule permits certain qualified institutional 
buyers, such as the Portfolios, to trade in privately placed 
securities that have not been registered 

<PAGE> 33

for sale under the 1933 Act.  The Adviser, under the supervision 
of the Board of Trustees, will consider whether securities 
purchased under Rule 144A are illiquid and thus subject to the 
restriction of investing no more than 15% (Equity Portfolios) or 
10% (Municipal Money Portfolio and High Yield Portfolio) of net 
assets in illiquid securities.  A determination of whether a Rule 
144A security is liquid or not is a question of fact.  In making 
this determination, the Adviser will consider the trading markets 
for the specific security, taking into account the unregistered 
nature of a Rule 144A security.  In addition, the Adviser could 
consider the (1) frequency of trades and quotes, (2) number of 
dealers and potential purchasers, (3) dealer undertakings to make 
a market, and (4) nature of the security and of marketplace trades 
(e.g., the time needed to dispose of the security, the method of 
soliciting offers, and the mechanics of transfer).  The liquidity 
of Rule 144A securities would be monitored and if, as a result of 
changed conditions, it is determined that a Rule 144A security is 
no longer liquid, the Portfolios' holdings of illiquid securities 
would be reviewed to determine what, if any, steps are required to 
assure that the Portfolio does not invest more than 5% of its 
assets in illiquid securities.  Investing in Rule 144A securities 
could have the effect of increasing the amount of a Portfolio's 
assets invested in illiquid securities if qualified institutional 
buyers are unwilling to purchase such securities.  The Portfolios 
do not expect to invest as much as 5% of its total assets in Rule 
144A securities that have not been deemed liquid by the Adviser.  
(See Investment Restrictions.)
    

Short Sales "Against the Box."  Each Portfolio may sell securities 
short against the box; that is, enter into short sales of 
securities that it currently owns or has the right to acquire 
through the conversion or exchange of other securities that it 
owns at no additional cost.  A Portfolio may make short sales of 
securities only if at all times when a short position is open the 
Portfolio owns at least an equal amount of such securities or 
securities convertible into or exchangeable for securities of the 
same issue as, and equal in amount to, the securities sold short, 
at no additional cost.

In a short sale against the box, a Portfolio does not deliver from 
its portfolio the securities sold.   Instead, the Portfolio 
borrows the securities sold short from a broker-dealer through 
which the short sale is executed, and the broker-dealer delivers 
such securities, on behalf of the Portfolio, to the purchaser of 
such securities.  The Portfolio is required to pay to the broker-
dealer the amount of any dividends paid on shares sold short.  
Finally, to secure its obligation to deliver to such broker-dealer 
the securities sold short, the Portfolio must deposit and 
continuously maintain in a separate account with the Portfolio's 
custodian an equivalent amount of the securities sold short or 
securities convertible into or exchangeable for such securities at 
no additional cost.  A Portfolio is said to have a short position 
in the securities sold until it delivers to the broker-dealer the 
securities sold.  A Portfolio may close out a short position by 
purchasing on the open market and delivering to the broker-dealer 
an equal amount of the securities sold short, rather than by 
delivering portfolio securities.

Short sales may protect a Portfolio against the risk of losses in 
the value of its portfolio securities because any unrealized 
losses with respect to such portfolio securities should be wholly 
or partially offset by a corresponding gain in the short position.  
However, any potential gains in such portfolio securities should 
be wholly or partially offset by a corresponding loss in the short 
position.  The extent to which such gains or losses are offset 
will depend upon the amount of securities sold short relative to 
the amount the 

<PAGE> 34

Portfolio owns, either directly or indirectly, and, in the case 
where the Portfolio owns convertible securities, changes in the 
conversion premium.

Short sale transactions involve certain risks.  If the price of 
the security sold short increases between the time of the short 
sale and the time a Portfolio replaces the borrowed security, the 
Portfolio will incur a loss and if the price declines during this 
period, the Portfolio will realize a short-term capital gain.  Any 
realized short-term capital gain will be decreased, and any 
incurred loss increased, by the amount of transaction costs and 
any premium, dividend or interest which the Portfolio may have to 
pay in connection with such short sale.  Certain provisions of the 
Code may limit the degree to which a Portfolio is able to enter 
into short sales.  There is no limitation on the amount of each 
Portfolio's assets that, in the aggregate, may be deposited as 
collateral for the obligation to replace securities borrowed to 
effect short sales and allocated to segregated accounts in 
connection with short sales.  Balanced Portfolio may invest up to 
20% of its total assets in short sales against the box; no other 
Portfolio will invest more than 5% of its total assets in short 
sales against the box.

Standby Commitments.  Municipal Money Portfolio and High Yield 
Portfolio may obtain standby commitments when purchasing 
securities.  A standby commitment gives the holder the right to 
sell the underlying security to the seller at an agreed-upon price 
on certain dates or within a specified period.  Municipal Money 
Portfolio will acquire standby commitments solely to facilitate 
portfolio liquidity and not with a view to exercising them at a 
time when the exercise price may exceed the current value of the 
underlying securities.  If the exercise price of a standby 
commitment held by Municipal Money Portfolio should exceed the 
current value of the underlying securities, Municipal Money 
Portfolio may refrain from exercising the standby commitment in 
order to avoid causing the issuer of the standby commitment to 
sustain a loss and thereby jeopardizing the Portfolio's business 
relationship with the issuer.  Municipal Money Portfolio will 
enter into standby commitments only with banks and securities 
dealers that, in the opinion of the Adviser, present minimal 
credit risks.  However, if a securities dealer or bank is unable 
to meet its obligation to repurchase the security when Municipal 
Money Portfolio exercises a standby commitment, the Portfolio 
might be unable to recover all or a portion of any loss sustained 
from having to sell the security elsewhere.  Standby commitments 
will be valued at zero in determining Municipal Money Portfolio's 
net asset value.

Standby commitment agreements create an additional risk for High 
Yield Portfolio because the other party to the standby agreement 
generally will not be obligated to deliver the security, but High 
Yield Portfolio will be obligated to accept it if delivered.  
Depending on market conditions, High Yield Portfolio may receive a 
commitment fee for assuming this obligation.  If prevailing market 
interest rates increase during the period between the date of the 
agreement and the settlement date, the other party can be expected 
to deliver the security and, in effect, pass any decline in value 
to High Yield Portfolio.  If the value of the security increases 
after the agreement is made, however, the other party is unlikely 
to deliver the security.  In other words, a decrease in the value 
of the securities to be purchased under the terms of a standby 
commitment agreement will likely result in the delivery of the 
security, and, 

<PAGE> 35

therefore, such decrease will be reflected in High Yield 
Portfolio's net asset value.  However, any increase in the value 
of the securities to be purchased will likely result in the non-
delivery of the security and, therefore, such increase will not 
affect the net asset value unless and until High Yield Portfolio 
actually obtains the security.

Taxable Securities.  Assets of Municipal Money Portfolio that are 
not invested in Municipal Securities may be held in cash or 
invested in short-term taxable investments /5/ such as:  (1) U.S. 
Government bills, notes and bonds; (2) obligations of agencies and 
instrumentalities of the U.S. Government (including obligations 
not backed by the full faith and credit of the U.S. Government); 
(3) other money market instruments such as certificates of deposit 
and bankers' acceptances of domestic banks having total assets in 
excess of $1 billion, and corporate commercial paper rated Prime-1 
by Moody's or A-1 by S&P at the time of purchase, or, if unrated, 
issued or guaranteed by an issuer with outstanding debt rated Aa 
or better by Moody's or AA or better by S&P; and (4) repurchase 
agreements with banks and securities dealers.  Municipal Money 
Portfolio limits repurchase agreements to those that are short-
term, subject to its restriction (g) under Investment Restrictions 
(although the underlying securities may not be short-term).

Tender Option Bonds.   Municipal Money Portfolio may purchase 
tender option bonds.  A tender option bond is a Municipal Security 
(generally held pursuant to a custodial arrangement) having a 
relatively long maturity and bearing interest at a fixed rate 
substantially higher than prevailing short-term tax-exempt rates, 
that has been coupled with the agreement of a third party, such as 
a bank, broker-dealer or other financial institution, pursuant to 
which such institution grants the security holders the option, at 
periodic intervals, to tender their securities to the institution 
and receive the face value thereof.  As consideration for 
providing the option, the financial institution receives periodic 
fees equal to the difference between the Municipal Security's 
fixed coupon rate and the rate, as determined by a remarketing or 
similar agent at or near the commencement of such period, that 
would cause the securities, coupled with the tender option, to 
trade at par on the date of such determination.  Thus, after 
payment of this fee, the security holder effectively holds a 
demand obligation that bears interest at the prevailing short-term 
tax-exempt rate.  The Adviser will consider on an ongoing basis 
the creditworthiness of the issuer of the underlying Municipal 
Securities, of any custodian, and of the third-party provider of 
the tender option.  In certain instances and for certain tender 
option bonds, the option may be terminable in the event of a 
default in payment of principal or interest on the underlying 
Municipal Securities and for other reasons.  Municipal Money 
Portfolio does not intend to invest more than 10% of net assets in 
tender option bonds.

When-Issued and Delayed-Delivery Securities.  Each Portfolio may 
purchase securities on a when-issued or delayed-delivery basis.  
Although the payment and interest terms of these securities are 
established at the time a Portfolio enters into the commitment, 
the securities may be delivered and paid for a month or more after 
the date of purchase, when their value may have changed.  The 
Portfolios make such commitments only with the intention of 
actually acquiring the securities, but may sell the securities 
before settlement date if the Adviser deems it advisable for 
investment reasons.  No Portfolio currently intends to make 
commitments to purchase when-issued securities in excess of 5% of 
its net assets.  International Portfolio may utilize spot and 
forward foreign currency exchange transactions to reduce the risk 
inherent in fluctuations in the exchange rate 
- -----------
5  The policies described in this paragraph are fundamental for 
Municipal Money Portfolio.
- -----------

<PAGE> 36

between one currency and another when securities are purchased or 
sold on a when-issued or delayed-delivery basis.

Securities purchased by High Yield Portfolio on a when-issued or 
delayed-delivery basis are sometimes done on a "dollar roll" 
basis.  Dollar roll transactions consist of the sale by the 
Portfolio of securities with a commitment to purchase similar but 
not identical securities, generally at a lower price at a future 
date.  A dollar roll may be renewed after cash settlement and 
initially may involve only a firm commitment agreement by the 
Portfolio to buy a security.  A dollar roll transaction involves 
the following risks: if the broker-dealer to whom the Portfolio 
sells the security becomes insolvent, the Portfolio's right to 
purchase or repurchase the security may be restricted; the value 
of the security may change adversely over the term of the dollar 
roll; the security which the Portfolio is required to repurchase 
may be worth less than a security which the Portfolio originally 
held; and the return earned by the Portfolio with the proceeds of 
a dollar roll may not exceed transaction costs.

At the time Municipal Money Portfolio or High Yield Portfolio 
enters into a binding obligation to purchase securities on a when-
issued basis, liquid assets (cash, U.S. Government or other "high 
grade" debt obligations) of the Portfolio having a value of at 
least as great as the purchase price of the securities to be 
purchased will be segregated on the books of the Portfolio and 
held by the custodian throughout the period of the obligation.  

Foreign Securities.  International Portfolio invests primarily in 
foreign securities and High Yield Portfolio and each Equity 
Portfolio may invest up to 25% of its total assets in foreign 
securities, which may entail a greater degree of risk (including 
risks relating to exchange rate fluctuations, tax provisions, or 
expropriation of assets) than does investment in securities of 
domestic issuers.  For this purpose, foreign securities do not 
include American Depositary Receipts (ADRs) or securities 
guaranteed by a United States person.  ADRs are receipts typically 
issued by an American bank or trust company evidencing ownership 
of the underlying securities.  A Portfolio may invest in sponsored 
or unsponsored ADRs.  In the case of an unsponsored ADR, a 
Portfolio is likely to bear its proportionate share of the 
expenses of the depository and it may have greater difficulty in 
receiving shareholder communications than it would have with a 
sponsored ADR.  

International Portfolio may also purchase foreign securities in 
the form of European Depositary Receipts (EDRs) or other 
securities representing underlying shares of foreign issuers.  
Positions in these securities are not necessarily denominated in 
the same currency as the common stocks into which they may be 
converted.  ADRs are receipts typically issued by an American bank 
or trust company evidencing ownership of the underlying 
securities.  EDRs are European receipts evidencing a similar 
arrangement.  Generally, ADRs, in registered form, are designed 
for the U.S. securities markets and EDRs, in bearer form, are 
designed for use in European securities markets.

With respect to portfolio securities that are issued by foreign 
issuers or denominated in foreign currencies, a Portfolio's 
investment performance is affected by the strength or weakness of 
the U.S. dollar against these currencies.  For example, if the 
dollar falls in value relative to the Japanese yen, the dollar 
value of a yen-denominated stock held in a Portfolio will rise 
even though the price of the stock remains unchanged.  Conversely, 
if 

<PAGE> 37

the dollar rises in value relative to the yen, the dollar value of 
the yen-denominated stock will fall.  (See discussion of 
transaction hedging and portfolio hedging under Currency Exchange 
Transactions.)

Investors should understand and consider carefully the risks 
involved in foreign investing.  Investing in foreign securities, 
positions in which are generally denominated in foreign 
currencies, and utilization of forward foreign currency exchange 
contracts involve certain considerations comprising both risks and 
opportunities not typically associated with investing in U.S. 
securities.  These considerations include: fluctuations in 
exchange rates of foreign currencies; possible imposition of 
exchange control regulation or currency restrictions that would 
prevent cash from being brought back to the United States; less 
public information with respect to issuers of securities; less 
governmental supervision of stock exchanges, securities brokers, 
and issuers of securities; lack of uniform accounting, auditing, 
and financial reporting standards; lack of uniform settlement 
periods and trading practices; less liquidity and frequently 
greater price volatility in foreign markets than in the United 
States; possible imposition of foreign taxes; possible investment 
in securities of companies in developing as well as developed 
countries; and sometimes less advantageous legal, operational, and 
financial protections applicable to foreign sub-custodial 
arrangements.

Although a Portfolio will try to invest in companies and 
governments of countries having stable political environments, 
there is the possibility of expropriation or confiscatory 
taxation, seizure or nationalization of foreign bank deposits or 
other assets, establishment of exchange controls, the adoption of 
foreign government restrictions, or other adverse political, 
social or diplomatic developments that could affect investment in 
these nations.

Currency Exchange Transactions.  Currency exchange transactions 
may be conducted either on a spot (i.e., cash) basis at the spot 
rate for purchasing or selling currency prevailing in the foreign 
exchange market or through forward currency exchange contracts 
("forward contracts").  Forward contracts are contractual 
agreements to purchase or sell a specified currency at a specified 
future date (or within a specified time period) and price set at 
the time of the contract.  Forward contracts are usually entered 
into with banks and broker-dealers, are not exchange traded, and 
are usually for less than one year, but may be renewed.

A Portfolio's foreign currency exchange transactions are limited 
to transaction and portfolio hedging involving either specific 
transactions or portfolio positions.  Transaction hedging is the 
purchase or sale of forward contracts with respect to specific 
receivables or payables of a Portfolio arising in connection with 
the purchase and sale of its portfolio securities.  Portfolio 
hedging is the use of forward contracts with respect to portfolio 
security positions denominated or quoted in a particular foreign 
currency.  Portfolio hedging allows a Portfolio to limit or reduce 
its exposure in a foreign currency by entering into a forward 
contract to sell such foreign currency (or another foreign 
currency that acts as a proxy for that currency) at a future date 
for a price payable in U.S. dollars so that the value of the 
foreign-denominated portfolio securities can be approximately 
matched by a foreign-denominated liability.  A Portfolio may not 
engage in portfolio hedging with respect to the currency of a 
particular country to an extent greater than the aggregate market 
value (at the time of making such sale) of the securities held in 
its 

<PAGE> 38

portfolio denominated or quoted in that particular currency, 
except that a Portfolio may hedge all or part of its foreign 
currency exposure through the use of a basket of currencies or a 
proxy currency where such currencies or currency act as an 
effective proxy for other currencies.  In such a case, a Portfolio 
may enter into a forward contract where the amount of the foreign 
currency to be sold exceeds the value of the securities 
denominated in such currency.  The use of this basket hedging 
technique may be more efficient and economical than entering into 
separate forward contracts for each currency held in a Portfolio.  
A Portfolio may not engage in "speculative" currency exchange 
transactions.

   
At the maturity of a forward contract to deliver a particular 
currency, a Portfolio may either sell the security related to such 
contract and make delivery of the currency, or it may retain the 
security and either acquire the currency on the spot market or 
terminate its contractual obligation to deliver the currency by 
purchasing an offsetting contract with the same currency trader 
obligating it to purchase on the same maturity date the same 
amount of the currency.
    

It is impossible to forecast with absolute precision the market 
value of portfolio securities at the expiration of a forward 
contract.  Accordingly, it may be necessary for a Portfolio to 
purchase additional currency on the spot market (and bear the 
expense of such purchase) if the market value of the security is 
less than the amount of currency a Portfolio is obligated to 
deliver and if a decision is made to sell the security and make 
delivery of the currency.  Conversely, it may be necessary to sell 
on the spot market some of the currency received upon the sale of 
a Portfolio security if its market value exceeds the amount of 
currency a Portfolio is obligated to deliver.

If a Portfolio retains the portfolio security and engages in an 
offsetting transaction, the Portfolio will incur a gain or a loss 
to the extent that there has been movement in forward contract 
prices.  If a Portfolio engages in an offsetting transaction, it 
may subsequently enter into a new forward contract to sell the 
currency.  Should forward prices decline during the period between 
a Portfolio's entering into a forward contract for the sale of a 
currency and the date it enters into an offsetting contract for 
the purchase of the currency, the Portfolio will realize a gain to 
the extent the price of the currency it has agreed to sell exceeds 
the price of the currency it has agreed to purchase.  Should 
forward prices increase, a Portfolio will suffer a loss to the 
extent the price of the currency it has agreed to purchase exceeds 
the price of the currency it has agreed to sell.  A default on the 
contract would deprive a Portfolio of unrealized profits or force 
the Portfolio to cover its commitments for purchase or sale of 
currency, if any, at the current market price.

Hedging against a decline in the value of a currency does not 
eliminate fluctuations in the prices of portfolio securities or 
prevent losses if the prices of such securities decline.  Such 
transactions also preclude the opportunity for gain if the value 
of the hedged currency should rise.  Moreover, it may not be 
possible for a Portfolio to hedge against a devaluation that is so 
generally anticipated that a Portfolio is not able to contract to 
sell the currency at a price above the devaluation level it 
anticipates.  The cost to a Portfolio of engaging in currency 
exchange transactions varies with such factors as the currency 
involved, the length of the contract period, and prevailing market 
conditions.  Since 

<PAGE> 39

currency exchange transactions are usually conducted on a 
principal basis, no fees or commissions are involved.

Synthetic Foreign Money Market Positions.  High Yield Portfolio 
and International Portfolio may invest in money market instruments 
denominated in foreign currencies.  In addition to, or in lieu of, 
such direct investment, such Portfolio may construct a synthetic 
foreign money market position by (a) purchasing a money market 
instrument denominated in one currency, generally U.S. dollars, 
and (b) concurrently entering into a forward contract to deliver a 
corresponding amount of that currency in exchange for a different 
currency on a future date and at a specified rate of exchange.  
For example, a synthetic money market position in Japanese yen 
could be constructed by purchasing a U.S. dollar money market 
instrument, and entering concurrently into a forward contract to 
deliver a corresponding amount of U.S. dollars in exchange for 
Japanese yen on a specified date and at a specified rate of 
exchange.  Because of the availability of a variety of highly 
liquid short-term U.S. dollar money market instruments, a 
synthetic money market position utilizing such U.S. dollar 
instruments may offer greater liquidity than direct investment in 
foreign currency money market instruments.  The result of a direct 
investment in a foreign currency and a concurrent construction of 
a synthetic position in such foreign currency, in terms of both 
income yield and gain or loss from changes in currency exchange 
rates, in general should be similar, but would not be identical 
because the components of the alternative investments would not be 
identical.  Except to the extent a synthetic foreign money market 
position consists of a money market instrument denominated in a 
foreign currency, the synthetic foreign money market position 
shall not be deemed a "foreign security" for purposes of the 
policy that, under normal conditions, International Portfolio will 
invest at least 65% of its total assets in foreign securities.

High Yield Portfolio may also construct a synthetic foreign 
position by entering into a swap arrangement.  A swap is a 
contractual agreement between two parties to exchange cash flows--
at the time of the swap agreement and again at maturity, and, with 
some swaps, at various intervals through the period of the 
agreement.  The use of swaps to construct a synthetic foreign 
position would generally entail the swap of interest rates and 
currencies.  A currency swap is a contractual arrangement between 
two parties to exchange principal amounts in different currencies 
at a predetermined foreign exchange rate.  An interest rate swap 
is a contractual agreement between two parties to exchange 
interest payments on identical principal amounts.  An interest 
rate swap may be between a floating and a fixed rate instrument, a 
domestic and a foreign instrument, or any other type of cash flow 
exchange.  A currency swap generally has the same risk 
characteristics as a forward currency contract, and all types of 
swaps have counter-party risk.  Depending on the facts and 
circumstances, swaps may be considered illiquid.  Illiquid 
securities usually have greater investment risk and are subject to 
greater price volatility.  The net amount of the excess, if any, 
of High Yield Portfolio's obligations over which it is entitled to 
receive with respect to an interest rate or currency swap will be 
accrued daily and liquid assets (cash, U.S. Government securities, 
or other "high grade" debt obligations) of High Yield Portfolio 
having a value at least equal to such accrued excess will be 
segregated on the books of High Yield Portfolio and held by the 
Custodian for the duration of the swap.  High Yield Portfolio may 
also construct a synthetic foreign position by purchasing an 
instrument whose return is tied to the return of the desired 
foreign position.  An investment in these "principal exchange rate 
linked securities" 

<PAGE> 40

(often called PERLS) can produce a return similar to a direct 
investment in a foreign security.

Options on Securities and Indexes.  High Yield Portfolio and each 
Equity Portfolio may purchase and sell put options and call 
options on securities, indexes or foreign currencies in 
standardized contracts traded on recognized securities exchanges, 
boards of trade, or similar entities, or quoted on Nasdaq.  A 
Portfolio may purchase agreements, sometimes called cash puts, 
that may accompany the purchase of a new issue of bonds from a 
dealer.

An option on a security (or index) is a contract that gives the 
purchaser (holder) of the option, in return for a premium, the 
right to buy from (call) or sell to (put) the seller (writer) of 
the option the security underlying the option (or the cash value 
of the index) at a specified exercise price at any time during the 
term of the option (normally not exceeding nine months).  The 
writer of an option on an individual security or on a foreign 
currency has the obligation upon exercise of the option to deliver 
the underlying security or foreign currency upon payment of the 
exercise price or to pay the exercise price upon delivery of the 
underlying security or foreign currency.  Upon exercise, the 
writer of an option on an index is obligated to pay the difference 
between the cash value of the index and the exercise price 
multiplied by the specified multiplier for the index option.  (An 
index is designed to reflect specified facets of a particular 
financial or securities market, a specific group of financial 
instruments or securities, or certain economic indicators.)

A Portfolio will write call options and put options only if they 
are "covered."  For example, in the case of a call option on a 
security, the option is "covered" if a Portfolio owns the security 
underlying the call or has an absolute and immediate right to 
acquire that security without additional cash consideration (or, 
if additional cash consideration is required, cash or cash 
equivalents in such amount are held in a segregated account by its 
custodian) upon conversion or exchange of other securities held in 
its portfolio.

If an option written by a Portfolio expires, the Portfolio 
realizes a capital gain equal to the premium received at the time 
the option was written.  If an option purchased by a Portfolio 
expires, the Portfolio realizes a capital loss equal to the 
premium paid.

Prior to the earlier of exercise or expiration, an option may be 
closed out by an offsetting purchase or sale of an option of the 
same series (type, exchange, underlying security or index, 
exercise price, and expiration).  There can be no assurance, 
however, that a closing purchase or sale transaction can be 
effected when a Portfolio desires.

A Portfolio will realize a capital gain from a closing purchase 
transaction if the cost of the closing option is less than the 
premium received from writing the option, or, if it is more, the 
Portfolio will realize a capital loss.  If the premium received 
from a closing sale transaction is more than the premium paid to 
purchase the option, the Portfolio will realize a capital gain or, 
if it is less, the Portfolio will realize a capital loss.  The 
principal factors affecting the market value of a put or a call 
option include supply and demand, interest rates, the current 
market price of the underlying security or index in relation to 
the exercise price of the option, the volatility of the underlying 
security or index, and the time remaining until the expiration 
date.

<PAGE> 41

A put or call option purchased by a Portfolio is an asset of the 
Portfolio, valued initially at the premium paid for the option.  
The premium received for an option written by a Portfolio is 
recorded as a deferred credit.  The value of an option purchased 
or written is marked-to-market daily and is valued at the closing 
price on the exchange on which it is traded or, if not traded on 
an exchange or no closing price is available, at the mean between 
the last bid and asked prices.

Risks Associated with Options.  There are several risks associated 
with transactions in options.  For example, there are significant 
differences between the securities markets, the currency markets, 
and the options markets that could result in an imperfect 
correlation between these markets, causing a given transaction not 
to achieve its objectives.  A decision as to whether, when and how 
to use options involves the exercise of skill and judgment, and 
even a well-conceived transaction may be unsuccessful to some 
degree because of market behavior or unexpected events.

There can be no assurance that a liquid market will exist when a 
Portfolio seeks to close out an option position.  If a Portfolio 
were unable to close out an option that it had purchased on a 
security, it would have to exercise the option in order to realize 
any profit or the option would expire and become worthless.  If a 
Portfolio were unable to close out a covered call option that it 
had written on a security, it would not be able to sell the 
underlying security until the option expired.  As the writer of a 
covered call option on a security, a Portfolio foregoes, during 
the option's life, the opportunity to profit from increases in the 
market value of the security covering the call option above the 
sum of the premium and the exercise price of the call.  

If trading were suspended in an option purchased or written by a 
Portfolio, the Portfolio would not be able to close out the 
option.  If restrictions on exercise were imposed, the Portfolio 
might be unable to exercise an option it has purchased.

Futures Contracts and Options on Futures Contracts.  High Yield 
Portfolio and each Equity Portfolio may use interest rate futures 
contracts, index futures contracts, and foreign currency futures 
contracts.  An interest rate, index or foreign currency futures 
contract provides for the future sale by one party and purchase by 
another party of a specified quantity of a financial instrument or 
the cash value of an index /6/ at a specified price and time.  A 
public market exists in futures contracts covering a number of 
indexes (including, but not limited to: the Standard & Poor's 500 
Index; the Value Line Composite Index; and the New York Stock 
Exchange Composite Index) as well as financial instruments 
(including, but not limited to: U.S. Treasury bonds; U.S. Treasury 
notes; Eurodollar certificates of deposit; and foreign 
currencies).  Other index and financial instrument futures 
contracts are available and it is expected that additional futures 
contracts will be developed and traded.
- ------------
6 A futures contract on an index is an agreement pursuant to which 
two parties agree to take or make delivery of an amount of cash 
equal to the difference between the value of the index at the 
close of the last trading day of the contract and the price at 
which the index contract was originally written.  Although the 
value of a securities index is a function of the value of certain 
specified securities no physical delivery of those securities is 
made.
- -----------

<PAGE> 42

A Portfolio may purchase and write call and put futures options.  
Futures options possess many of the same characteristics as 
options on securities, indexes and foreign currencies (discussed 
above).  A futures option gives the holder the right, in return 
for the premium paid, to assume a long position (call) or short 
position (put) in a futures contract at a specified exercise price 
at any time during the period of the option.  Upon exercise of a 
call option, the holder acquires a long position in the futures 
contract and the writer is assigned the opposite short position.  
In the case of a put option, the opposite is true.  A Portfolio 
might, for example, use futures contracts to hedge against or gain 
exposure to fluctuations in the general level of stock prices, 
anticipated changes in interest rates or currency fluctuations 
that might adversely affect either the value of a Portfolio's 
securities or the price of the securities that the Portfolio 
intends to purchase.  Although other techniques could be used to 
reduce or increase a Portfolio's exposure to stock price, interest 
rate, and currency fluctuations, the Portfolio may be able to 
achieve its exposure more effectively and perhaps at a lower cost 
by using futures contracts and futures options.

A Portfolio will only enter into futures contracts and futures 
options that are standardized and traded on an exchange, board of 
trade, or similar entity, or quoted on an automated quotation 
system.

The success of any futures transaction depends on the Adviser 
correctly predicting changes in the level and direction of stock 
prices, interest rates, currency exchange rates and other factors.  
Should those predictions be incorrect, a Portfolio's return might 
have been better had the transaction not been attempted; however, 
in the absence of the ability to use futures contracts, the 
Adviser might have taken portfolio actions in anticipation of the 
same market movements with similar investment results but, 
presumably, at greater transaction costs.

When a purchase or sale of a futures contract is made by a 
Portfolio, the Portfolio is required to deposit with its custodian 
(or broker, if legally permitted) a specified amount of cash or 
U.S. Government securities or other securities acceptable to the 
broker ("initial margin").  The margin required for a futures 
contract is set by the exchange on which the contract is traded 
and may be modified during the term of the contract.  The initial 
margin is in the nature of a performance bond or good faith 
deposit on the futures contract, which is returned to a Portfolio 
upon termination of the contract, assuming all contractual 
obligations have been satisfied.  A Portfolio expects to earn 
interest income on its initial margin deposits.  A futures 
contract held by a Portfolio is valued daily at the official 
settlement price of the exchange on which it is traded.  Each day 
a Portfolio pays or receives cash, called "variation margin," 
equal to the daily change in value of the futures contract.  This 
process is known as "marking-to-market."  Variation margin paid or 
received by a Portfolio does not represent a borrowing or loan by 
the Portfolio but is instead settlement between the Portfolio and 
the broker of the amount one would owe the other if the futures 
contract had expired at the close of the previous day.  In 
computing daily net asset value, a Portfolio will mark-to-market 
its open futures positions.

A Portfolio is also required to deposit and maintain margin with 
respect to put and call options on futures contracts written by 
it.  Such margin deposits will vary depending on the nature of the 
underlying futures contract (and the related initial margin 
requirements), 

<PAGE> 43

the current market value of the option, and other futures 
positions held by a Portfolio.

Although some futures contracts call for making or taking delivery 
of the underlying securities, usually these obligations are closed 
out prior to delivery by offsetting purchases or sales of matching 
futures contracts (same exchange, underlying security or index, 
and delivery month).  If an offsetting purchase price is less than 
the original sale price, a Portfolio realizes a capital gain, or 
if it is more, the Portfolio realizes a capital loss.  Conversely, 
if an offsetting sale price is more than the original purchase 
price, a Portfolio realizes a capital gain, or if it is less, the 
Portfolio realizes a capital loss.  The transaction costs must 
also be included in these calculations.

Risks Associated with Futures.  There are several risks associated 
with the use of futures contracts and futures options.  A purchase 
or sale of a futures contract may result in losses in excess of 
the amount invested in the futures contract.  In trying to 
increase or reduce market exposure, there can be no guarantee that 
there will be a correlation between price movements in the futures 
contract and in a Portfolio exposure sought.  In addition, there 
are significant differences between the securities and futures 
markets that could result in an imperfect correlation between the 
markets, causing a given transaction not to achieve its 
objectives.  The degree of imperfection of correlation depends on 
circumstances such as: variations in speculative market demand for 
futures, futures options and the related securities, including 
technical influences in futures and futures options trading and 
differences between the securities market and the securities 
underlying the standard contracts available for trading.  For 
example, in the case of index futures contracts, the composition 
of the index, including the issuers and the weighting of each 
issue, may differ from the composition of a Portfolio's portfolio, 
and, in the case of interest rate futures contracts, the interest 
rate levels, maturities, and creditworthiness of the issues 
underlying the futures contract may differ from the financial 
instruments held in the Portfolio's portfolio.  A decision as to 
whether, when and how to use futures contracts involves the 
exercise of skill and judgment, and even a well-conceived 
transaction may be unsuccessful to some degree because of market 
behavior or unexpected stock price or interest rate trends.

Futures exchanges may limit the amount of fluctuation permitted in 
certain futures contract prices during a single trading day.  The 
daily limit establishes the maximum amount that the price of a 
futures contract may vary either up or down from the previous 
day's settlement price at the end of the current trading session.  
Once the daily limit has been reached in a futures contract 
subject to the limit, no more trades may be made on that day at a 
price beyond that limit.  The daily limit governs only price 
movements during a particular trading day and therefore does not 
limit potential losses because the limit may work to prevent the 
liquidation of unfavorable positions.  For example, futures prices 
have occasionally moved to the daily limit for several consecutive 
trading days with little or no trading, thereby preventing prompt 
liquidation of positions and subjecting some holders of futures 
contracts to substantial losses.  Stock index futures contracts 
are not normally subject to such daily price change limitations.

There can be no assurance that a liquid market will exist at a 
time when a Portfolio seeks to close out a futures or futures 
option position.  A Portfolio would be exposed to possible loss on 
the position during the interval of inability to close, and would 
continue 

<PAGE> 44

to be required to meet margin requirements until the position is 
closed.  In addition, many of the contracts discussed above are 
relatively new instruments without a significant trading history.  
As a result, there can be no assurance that an active secondary 
market will develop or continue to exist.

Limitations on Options and Futures.  If other options, futures 
contracts, or futures options of types other than those described 
herein are traded in the future, High Yield Portfolio and each 
Equity Portfolio may also use those investment vehicles, provided 
the Board of Trustees determines that their use is consistent with 
the Portfolio's investment objective.

A Portfolio will not enter into a futures contract or purchase an 
option thereon if, immediately thereafter, the initial margin 
deposits for futures contracts held by the Portfolio plus premiums 
paid by it for open futures option positions, less the amount by 
which any such positions are "in-the-money," /7/ would exceed 5% 
of a Portfolio's total assets.

When purchasing a futures contract or writing a put option on a 
futures contract, a Portfolio must maintain with its custodian (or 
broker, if legally permitted) cash or cash equivalents (including 
any margin) equal to the market value of such contract.  When 
writing a call option on a futures contract, a Portfolio similarly 
will maintain with its custodian cash or cash equivalents 
(including any margin) equal to the amount by which such option is 
in-the-money until the option expires or is closed out by the 
Portfolio.

A Portfolio may not maintain open short positions in futures 
contracts, call options written on futures contracts or call 
options written on indexes if, in the aggregate, the market value 
of all such open positions exceeds the current value of the 
securities in its portfolio, plus or minus unrealized gains and 
losses on the open positions, adjusted for the historical relative 
volatility of the relationship between a Portfolio and the 
positions.  For this purpose, to the extent a Portfolio has 
written call options on specific securities in its portfolio, the 
value of those securities will be deducted from the current market 
value of the securities portfolio.

In order to comply with Commodity Futures Trading Commission 
Regulation 4.5 and thereby avoid being deemed a "commodity pool 
operator," a Portfolio will use commodity futures or commodity 
options contracts solely for bona fide hedging purposes within the 
meaning and intent of Regulation 1.3(z), or, with respect to 
positions in commodity futures and commodity options contracts 
that do not come within the meaning and intent of 1.3(z), the 
aggregate initial margin and premiums required to establish such 
positions will not exceed 5% of the fair market value of the 
assets of a Portfolio, after taking into account unrealized 
profits and unrealized losses on any such contracts it has entered 
into [in the case of an option that is in-the-money at the time of 
purchase, the in-the-money amount (as defined in Section 190.01(x) 
of the Commission Regulations) may be excluded in computing such 
5%].
- -------------
7 A call option is "in-the-money" if the value of the futures 
contract that is the subject of the option exceeds the exercise 
price.  A put option is "in-the-money" if the exercise price 
exceeds the value of the futures contract that is the subject of 
the option.
- --------------

<PAGE> 45

Taxation of Options and Futures.  If a Portfolio exercises a call 
or put option that it holds, the premium paid for the option is 
added to the cost basis of the security purchased (call) or 
deducted from the proceeds of the security sold (put).  For cash 
settlement options and futures options exercised by a Portfolio, 
the difference between the cash received at exercise and the 
premium paid is a capital gain or loss.

If a call or put option written by a Portfolio is exercised, the 
premium is included in the proceeds of the sale of the underlying 
security (call) or reduces the cost basis of the security 
purchased (put).  For cash settlement options and futures options 
written by a Portfolio, the difference between the cash paid at 
exercise and the premium received is a capital gain or loss.

Entry into a closing purchase transaction will result in capital 
gain or loss.  If an option written by a Portfolio was in-the-
money at the time it was written and the security covering the 
option was held for more than the long-term holding period prior 
to the writing of the option, any loss realized as a result of a 
closing purchase transaction will be long-term.  The holding 
period of the securities covering an in-the-money option will not 
include the period of time the option is outstanding.

If a Portfolio writes an equity call option /8/ other than a 
"qualified covered call option," as defined in the Code, any loss 
on such option transaction, to the extent it does not exceed the 
unrealized gains on the securities covering the option, may be 
subject to deferral until the securities covering the option have 
been sold.

A futures contract held until delivery results in capital gain or 
loss equal to the difference between the price at which the 
futures contract was entered into and the settlement price on the 
earlier of delivery notice date or expiration date.  If a 
Portfolio delivers securities under a futures contract, the 
Portfolio also realizes a capital gain or loss on those 
securities.

For federal income tax purposes, a Portfolio generally is required 
to recognize as income for each taxable year its net unrealized 
gains and losses as of the end of the year on futures, futures 
options and non-equity options positions ("year-end mark-to-
market").  Generally, any gain or loss recognized with respect to 
such positions (either by year-end mark-to-market or by actual 
closing of the positions) is considered to be 60% long-term and 
40% short-term, without regard to the holding periods of the 
contracts.  However, in the case of positions classified as part 
of a "mixed straddle," the recognition of losses on certain 
positions (including options, futures and futures options 
positions, the related securities and certain successor positions 
thereto) may be deferred to a later taxable year.  Sale of futures 
contracts or writing of call options (or futures call options) or 
buying put options (or futures put options) that are intended to 
hedge against a change in the value of securities held by a 
Portfolio: (1) will affect the holding period of the 
- -----------
8 An equity option is defined to mean any option to buy or sell 
stock, and any other option the value of which is determined by 
reference to an index of stocks of the type that is ineligible to 
be traded on a commodity futures exchange (e.g., an option 
contract on a sub-index based on the price of nine hotel-casino 
stocks).  The definition of equity option excludes options on 
broad-based stock indexes (such as the Standard & Poor's 500 
index).
- -----------

<PAGE> 46

hedged securities; and (2) may cause unrealized gain or loss on 
such securities to be recognized upon entry into the hedge.

If a Portfolio were to enter into a short index future, short 
index futures option or short index option position and a 
Portfolio's portfolio were deemed to "mimic" the performance of 
the index underlying such contract, the option or futures contract 
position and the Portfolio's stock positions would be deemed to be 
positions in a mixed straddle, subject to the above-mentioned loss 
deferral rules.

   
In order for a Portfolio to continue to qualify for federal income 
tax treatment as a regulated investment company, at least 90% of 
its gross income for a taxable year must be derived from 
qualifying income; i.e., dividends, interest, income derived from 
loans of securities, and gains from the sale of securities or 
foreign currencies, or other income (including but not limited to 
gains from options, futures, or forward contracts).  Any net gain 
realized from futures (or futures options) contracts will be 
considered gain from the sale of securities and therefore be 
qualifying income for purposes of the 90% requirement.  

Each Portfolio distributes to investors annually any net capital 
gains that have been recognized for federal income tax purposes 
(including year-end mark-to-market gains) on options and futures 
transactions.  Such distributions are combined with distributions 
of capital gains realized on other investments, and investors are 
advised of the nature of the payments.
    

The Taxpayer Relief Act of 1997 (the "Act") imposed constructive 
sale treatment for federal income tax purposes on certain hedging 
strategies with respect to appreciated securities.  Under these 
rules, taxpayers will recognize gain, but not loss, with respect 
to securities if they enter into short sales of "offsetting 
notional principal contracts" (as defined by the Act) or futures 
or "forward contracts" (as defined by the Act) with respect to the 
same or substantially identical property, or if they enter into 
such transactions and then acquire the same or substantially 
identical property.  These changes generally apply to constructive 
sales after June 8, 1997.  Furthermore, the Secretary of the 
Treasury is authorized to promulgate regulations that will treat 
as constructive sales certain transactions that have substantially 
the same effect as short sales, offsetting notional principal 
contracts, and futures or forward contracts to deliver the same or 
substantially similar property.

Investment Risks--Municipal Money Portfolio
The federal bankruptcy statutes relating to the debts of political 
subdivisions and authorities of states of the United States 
provide that, in certain circumstances, such subdivisions or 
authorities may be authorized to initiate bankruptcy proceedings 
without prior notice to or consent of creditors, which proceedings 
could result in material and adverse changes in the rights of 
holders of their obligations.

<PAGE> 47

Lawsuits challenging the validity under state constitutions of 
present systems of financing public education have been initiated 
or adjudicated in a number of states, and legislation has been 
introduced to effect changes in public school financing in some 
states.  In other instances there have been lawsuits challenging 
the issuance of pollution control revenue bonds or the validity of 
their issuance under state or federal law which could ultimately 
affect the validity of those Municipal Securities or the tax-free 
nature of the interest thereon.  In addition, from time to time 
proposals have been introduced in Congress to restrict or 
eliminate the federal income tax exemption for interest on 
Municipal Securities, and similar proposals may be introduced in 
the future.  Some of the past proposals would have applied to 
interest on Municipal Securities issued before the date of 
enactment, which would have adversely affected their value to a 
material degree.  If such proposals are enacted, the availability 
of Municipal Securities for investment by Municipal Money 
Portfolio and the value of its portfolio would be affected and, in 
such an event, the Portfolio would reevaluate its investment 
objectives and policies.

Because Municipal Money Portfolio may invest in industrial 
development bonds, its shares may not be an appropriate investment 
for "substantial users" of facilities financed by industrial 
development bonds or for "related persons of substantial users."

In addition, Municipal Money Portfolio may invest in Municipal 
Securities issued after the effective date of the Tax Reform Act 
of 1986 (the "1986 Act"), which may be subject to retroactive 
taxation if they fail to continue to comply after issuance with 
certain requirements imposed by the 1986 Act.

Although the banks and securities dealers from which Municipal 
Money Portfolio may acquire repurchase agreements and standby 
commitments, and the entities from which it may purchase 
participation interests in Municipal Securities, will be those 
that the Adviser believes to be financially sound, there can be no 
assurance that they will be able to honor their obligations to the 
Portfolio.

Investment Restrictions
   
Fundamental policies may be changed only with the approval of a 
"majority of the outstanding voting securities" of a Portfolio, as 
defined in the Investment Company Act of 1940.  Nonfundamental 
investment restrictions, which may be required by various laws and 
administrative positions, may be changed by the Board of Trustees 
without a vote of shareholders. 
    

The following investment restrictions (other than material within 
brackets) are fundamental policies of Municipal Money Portfolio.  
Municipal Money Portfolio may not:

(1) invest in a security if, with respect to 75% of its assets, as 
a result of such investment, more than 5% of its total assets 
(taken at market value at the time of investment) would be 
invested in the securities of any one issuer (for this purpose, 
the issuer(s) of a security being deemed to be only the entity or 
entities whose assets or revenues are subject to the principal and 
interest obligations of the security), other than obligations 
issued or guaranteed by the U.S. Government or by its agencies or 
instrumentalities or repurchase agreements for such securities 
[however, in the case of a guarantor of securities (including an 
issuer of a letter of credit), the value 

<PAGE> 48

of the guarantee (or letter of credit) may be excluded from this 
computation if the aggregate value of securities owned by the 
Portfolio and guaranteed by such guarantor (plus any other 
investments of the Portfolio in securities issued by the 
guarantor) does not exceed 10% of the Portfolio's total assets]; 
/9/ /10/

(2) purchase any securities on margin, except for use of short-
term credit necessary for clearance of purchases and sales of 
portfolio securities (this restriction does not apply to 
securities purchased on a when-issued or delayed-delivery basis or 
to reverse repurchase agreements);

(3) make loans, although it may (a) participate in an interfund 
lending program with other Stein Roe Funds and Portfolios provided 
that no such loan may be made if, as a result, the aggregate of 
such loans would exceed 33 1/3% of the value of its total assets; 
(b) purchase money market instruments and enter into repurchase 
agreements; and (c) acquire publicly distributed or privately 
placed debt securities;

(4) borrow except that it may (a) borrow for nonleveraging, 
temporary or emergency purposes and (b) engage in reverse 
repurchase agreements and make other borrowings, provided that the 
combination of (a) and (b) shall not exceed 33 1/3% of the value 
of its total assets (including the amount borrowed) less 
liabilities (other than borrowings) or such other percentage 
permitted by law; it may borrow from banks, other Stein Roe Funds 
and Portfolios, and other persons to the extent permitted by 
applicable law;

(5) mortgage, pledge, hypothecate or in any manner transfer, as 
security for indebtedness, any securities owned or held by the 
Portfolio except as may be necessary in connection with borrowings 
mentioned in (4) above;

(6) invest more than 25% of its total assets (taken at market 
value at the time of each investment) in securities of non-
governmental issuers whose principal business activities are in 
the same industry;

(7) purchase portfolio securities for the Portfolio from, or sell 
portfolio securities to, any of the officers, directors, or 
trustees of the Trust or of its investment adviser;

(8) purchase or sell commodities or commodities contracts or oil, 
gas, or mineral programs;

(9) purchase any securities other than those described in Part A 
under Objectives and Basic Investment Strategy and Other 
Investment Practices;

(10) issue any senior security except to the extent permitted 
under the Investment Company Act of 1940.

Following are the nonfundamental investment restrictions of 
Municipal Money Portfolio.   Municipal Money Portfolio may not:

(a) own more than 10% of the outstanding voting securities of an 
issuer;

(b) invest in companies for the purpose of exercising control or 
management;

(c) make investments in the securities of other investment 
companies, except in connection with a merger, consolidation, or 
reorganization;
- -----------
9 In the case of a security that is insured as to payment of 
principal and interest, the related insurance policy is not deemed 
a security, nor is it subject to this investment restriction.
10 Notwithstanding the foregoing, and in accordance with Rule 2a-7 
of the Investment Company Act of 1940 (the "Rule"), Municipal 
Money Portfolio will not, immediately after the acquisition of any 
security (other than a Government Security or certain other 
securities as permitted under the Rule), invest more than 5% of 
its total assets in the securities of any one issuer; provided, 
however, that it may invest up to 25% of its total assets in First 
Tier Securities (as that term is defined in the Rule) of a single 
issuer for a period of up to three business days after the 
purchase thereof.
- -----------

<PAGE> 49

(d) purchase or sell real estate (other than Municipal Securities 
or money market securities secured by real estate or interests 
therein or such securities issued by companies which invest in 
real estate or interests therein);

(e) act as an underwriter of securities, except that it may 
participate as part of a group in bidding, or bid alone, for the 
purchase of Municipal Securities directly from an issuer for the 
its own portfolio;

(f) sell securities short unless (1) the Portfolio owns or has the 
right to obtain securities equivalent in kind and amount to those 
sold short at no added cost or (2) the securities sold are "when 
issued" or "when distributed" securities which the Portfolio 
expects to receive in a recapitalization, reorganization, or other 
exchange for securities the Portfolio contemporaneously owns or 
has the right to obtain and provided that it may purchase standby 
commitments and securities subject to a demand feature entitling 
the Portfolio to require sellers of securities to the Portfolio to 
repurchase them upon demand by the Portfolio;

(g) invest more than 10% of its net assets (taken at market value 
at the time of a particular investment) in illiquid securities, 
including repurchase agreements maturing in more than seven days.

(h) purchase shares of other open-end investment companies, except 
in connection with a merger, consolidation, acquisition, or 
reorganization; or

(i) invest more than 5% of its net assets (valued at time of 
investment) in warrants, nor more than 2% of its net assets in 
warrants that are not listed on the New York or American stock 
exchange.  

Following are the fundamental investment restrictions of High 
Yield Portfolio.  High Yield Portfolio may not:

(1) invest in a security if, as a result of such investment, more 
than 25% of its total assets (taken at market value at the time of 
such investment) would be invested in the securities of issuers in 
any particular industry, except that this restriction does not 
apply to U.S. Government Securities;

(2) invest in a security if, with respect to 75% of its assets, as 
a result of such investment, more than 5% of its total assets 
(taken at market value at the time of such investment) would be 
invested in the securities of any one issuer, except that this 
restriction does not apply to U.S. Government Securities or 
repurchase agreements for such securities;

(3) invest in a security if, as a result of such investment, it 
would hold more than 10% (taken at the time of such investment) of 
the outstanding voting securities of any one issuer;

(4) purchase or sell real estate (although it may purchase 
securities secured by real estate or interests therein, or 
securities issued by companies which invest in real estate, or 
interests therein);

(5) purchase or sell commodities or commodities contracts or oil, 
gas or mineral programs, except that it may enter into (a) futures 
and options on futures and (b) forward contracts;

(6) purchase securities on margin, except for use of short-term 
credit necessary for clearance of purchases and sales of portfolio 
securities, but it may make margin deposits in connection with 
transactions in options, futures, and options on futures;

<PAGE> 50

(7) make loans, although it may (a) lend portfolio securities and 
participate in an interfund lending program with other Stein Roe 
Funds and Portfolios, provided that no such loan may be made if, 
as a result, the aggregate of such loans would exceed 33 1/3% of 
the value of its total assets (taken at market value at the time 
of such loans); (b) purchase money market instruments and enter 
into repurchase agreements; and (c) acquire publicly distributed 
or privately placed debt securities;

(8) borrow except that it may (a) borrow for nonleveraging, 
temporary or emergency purposes, (b) engage in reverse repurchase 
agreements and make other borrowings, provided that the 
combination of (a) and (b) shall not exceed 33 1/3% of the value 
of its total assets (including the amount borrowed) less 
liabilities (other than borrowings) or such other percentage 
permitted by law, and (c) enter into futures and options 
transactions; it may borrow from banks, other Stein Roe Funds and 
Portfolios, and other persons to the extent permitted by 
applicable law;

(9) act as an underwriter of securities, except insofar as it may 
be deemed to be an "underwriter" for purposes of the Securities 
Act of 1933 on disposition of securities acquired subject to legal 
or contractual restrictions on resale;

(10) issue any senior security except to the extent permitted 
under the Investment Company Act of 1940.

Following are the nonfundamental investment restrictions of High 
Yield Portfolio.  High Yield Portfolio may not:

(a) invest for the purpose of exercising control or management;

(b) purchase more than 3% of the stock of another investment 
company or purchase stock of other investment companies equal to 
more than 5% of its total assets (valued at time of purchase) in 
the case of any one other investment company and 10% of such 
assets (valued at time of purchase) in the case of all other 
investment companies in the aggregate; any such purchases are to 
be made in the open market where no profit to a sponsor or dealer 
results from the purchase, other than the customary broker's 
commission, except for securities acquired as part of a merger, 
consolidation or acquisition of assets; /11/

(c) purchase portfolio securities from, or sell portfolio 
securities to, any of the officers and directors or trustees of 
the Trust or of its investment adviser;

(d) purchase shares of other open-end investment companies, except 
in connection with a merger, consolidation, acquisition, or 
reorganization;

(e) invest more than 5% of its net assets (valued at time of 
investment) in warrants, nor more than 2% of its net assets in 
warrants which are not listed on the New York or American Stock 
Exchange;

(f) purchase a put or call option if the aggregate premiums paid 
for all put and call options exceed 20% of its net assets (less 
the amount by which any such positions are in-the-money), 
excluding put and call options purchased as closing transactions;
- ---------
   
11 Stein Roe Funds have been informed that the staff of the 
Securities and Exchange Commission takes the position that the 
issuers of certain CMOs and certain other collateralized assets 
are investment companies and that subsidiaries of foreign banks 
may be investment companies for purposes of Section 12(d)(1) of 
the Investment Company Act of 1940, which limits the ability of 
one investment company to invest in another investment company.  
Accordingly, the Portfolios intend to operate within the 
applicable limitations under Section 12(d)(1)(A) of that Act.
    
- ---------

<PAGE> 51

(g) write an option on a security unless the option is issued by 
the Options Clearing Corporation, an exchange, or similar entity; 

   
(h) invest in limited partnerships in real estate unless they are 
readily marketable;

(i) sell securities short unless (1) it owns or has the right to 
obtain securities equivalent in kind and amount to those sold 
short at no added cost or (2) the securities sold are "when 
issued" or "when distributed" securities which it expects to 
receive in a recapitalization, reorganization, or other exchange 
for securities it contemporaneously owns or has the right to 
obtain and provided that transactions in options, futures, and 
options on futures are not treated as short sales;

(j) invest more than 15% of its total assets (taken at market 
value at the time of a particular investment) in restricted 
securities, other than securities eligible for resale pursuant to 
Rule 144A under the Securities Act of 1933;

(k) invest more than 10% of its net assets (taken at market value 
at the time of a particular investment) in illiquid securities 
/12/, including repurchase agreements maturing in more than seven 
days.
    

Following are the fundamental investment restrictions of each 
Equity Portfolio (except that (1) and (2) are nonfundamental 
restrictions for Special Portfolio).  An Equity Portfolio may not:

(1) with respect to 75% of its total assets, invest more than 5% 
of its total assets, taken at market value at the time of a 
particular purchase, in the securities of a single issuer, except 
for securities issued or guaranteed by the U.S. Government or any 
of its agencies or instrumentalities or repurchase agreements for 
such securities;

(2) acquire more than 10%, taken at the time of a particular 
purchase, of the outstanding voting securities of any one issuer;

(3) act as an underwriter of securities, except insofar as it may 
be deemed an underwriter for purposes of the Securities Act of 
1933 on disposition of securities acquired subject to legal or 
contractual restrictions on resale;

(4) purchase or sell real estate (although it may purchase 
securities secured by real estate or interests therein, or 
securities issued by companies which invest in real estate or 
interests therein), commodities, or commodity contracts, except 
that it may enter into (a) futures and options on futures and (b) 
forward contracts;

(5) make loans, although it may (a) lend portfolio securities and 
participate in an interfund lending program with other Stein Roe 
Funds and Portfolios provided that no such loan may be made if, as 
a result, the aggregate of such loans would exceed 33 1/3% of the 
value of its total assets (taken at market value at the time of 
such loans); (b) purchase money market instruments and enter into 
repurchase agreements; and (c) acquire publicly distributed or 
privately placed debt securities;

(6) borrow except that it may (a) borrow for nonleveraging, 
temporary or emergency purposes, (b) engage in reverse repurchase 
agreements and make other borrowings, provided that the 
combination of (a) and (b) shall not exceed 33 1/3% of the value 
of its total assets (including the amount borrowed) less 
liabilities (other than borrowings) or such other percentage 
permitted by law, and (c) enter into futures 
- ------------
12 In the judgment of the Adviser, Private Placement Notes, which 
are issued pursuant to Section 4(2) of the Securities Act of 1933, 
generally are readily marketable even though they are subject to 
certain legal restrictions on resale.  As such, they are not 
treated as being subject to the limitation on illiquid securities.
- ------------

<PAGE> 52

and options transactions; it may borrow from banks, other Stein 
Roe Funds and Portfolios, and other persons to the extent 
permitted by applicable law;

(7) invest in a security if more than 25% of its total assets 
(taken at market value at the time of a particular purchase) would 
be invested in the securities of issuers in any particular 
industry,/13/ except that this restriction does not apply to 
securities issued or guaranteed by the U.S. Government or its 
agencies or instrumentalities; or

(8) issue any senior security except to the extent permitted under 
the Investment Company Act of 1940.

Following are the nonfundamental investment objectives of each 
Equity Portfolio.  An Equity Portfolio may not:

(a) invest in any of the following: (1) interests in oil, gas, or 
other mineral leases or exploration or development programs 
(except readily marketable securities, including but not limited 
to master limited partnership interests, that may represent 
indirect interests in oil, gas, or other mineral exploration or 
development programs); (2) puts, calls, straddles, spreads, or any 
combination thereof (except that it may enter into transactions in 
options, futures, and options on futures); (3) shares of other 
open-end investment companies, except in connection with a merger, 
consolidation, acquisition, or reorganization; and (4) limited 
partnerships in real estate unless they are readily marketable;

(b) invest in companies for the purpose of exercising control or 
management;

(c) purchase more than 3% of the stock of another investment 
company or purchase stock of other investment companies equal to 
more than 5% of its total assets (valued at time of purchase) in 
the case of any one other investment company and 10% of such 
assets (valued at time of purchase) in the case of all other 
investment companies in the aggregate; any such purchases are to 
be made in the open market where no profit to a sponsor or dealer 
results from the purchase, other than the customary broker's 
commission, except for securities acquired as part of a merger, 
consolidation or acquisition of assets;

   
(d) invest more than 5% of its net assets (valued at time of 
purchase) in warrants, nor more than 2% of its net assets in 
warrants that are not listed on the New York or American Stock 
Exchange or [International Portfolio only] a recognized foreign 
exchange;

(e) write an option on a security unless the option is issued by 
the Options Clearing Corporation, an exchange, or similar entity;

(f) [all except International Portfolio] invest more than 25% of 
its total assets (valued at time of purchase) in securities of 
foreign issuers (other than securities represented by American 
Depositary Receipts (ADRs) or securities guaranteed by a U.S. 
person);

(g) purchase a put or call option if the aggregate premiums paid 
for all put and call options exceed 20% of its net assets (less 
the amount by which any such positions are in-the-money), 
excluding put and call options purchased as closing transactions;
- ------------
13 For purposes of this investment restriction, International 
Portfolio uses industry classifications contained in Morgan 
Stanley Capital International Perspective, which is published by 
Morgan Stanley, an international investment banking and brokerage 
firm.
- ------------

<PAGE> 53

(h) purchase securities on margin (except for use of short-term 
credits as are necessary for the clearance of transactions), or 
sell securities short unless (1) it owns or has the right to 
obtain securities equivalent in kind and amount to those sold 
short at no added cost or (2) the securities sold are "when 
issued" or "when distributed" securities which it expects to 
receive in a recapitalization, reorganization, or other exchange 
for securities it contemporaneously owns or has the right to 
obtain and provided that transactions in options, futures, and 
options on futures are not treated as short sales;

(i) [all except International Portfolio] invest more than 5% of 
its total assets (taken at market value at the time of a 
particular investment) in restricted securities, other than 
securities eligible for resale pursuant to Rule 144A under the 
Securities Act of 1933; [International Portfolio only] invest more 
than 10% of its total assets (taken at market value at the time of 
a particular investment) in restricted securities, other than 
securities eligible for resale pursuant to Rule 144A under the 
Securities Act of 1933;

(j) invest more than 15% of its net assets (taken at market value 
at the time of a particular investment) in illiquid securities, 
including repurchase agreements maturing in more than seven days.
    

Notwithstanding the foregoing investment restrictions, 
International Portfolio may purchase securities pursuant to the 
exercise of subscription rights, subject to the condition that 
such purchase will not result in International Portfolio's ceasing 
to be a diversified investment company.  Far Eastern and European 
corporations frequently issue additional capital stock by means of 
subscription rights offerings to existing shareholders at a price 
substantially below the market price of the shares.  The failure 
to exercise such rights would result in International Portfolio's 
interest in the issuing company being diluted.  The market for 
such rights is not well developed in all cases and, accordingly, 
International Portfolio may not always realize full value on the 
sale of rights.  The exception applies in cases where the limits 
set forth in the investment restrictions would otherwise be 
exceeded by exercising rights or would have already been exceeded 
as a result of fluctuations in the market value of International 
Portfolio's portfolio securities with the result that 
International Portfolio would be forced either to sell securities 
at a time when it might not otherwise have done so, to forego 
exercising the rights.

Item 14.  Management of Base Trust.

The officers and trustees of Base Trust are listed below.

<TABLE>
<CAPTION>
                            POSITION(S) HELD              PRINCIPAL OCCUPATION(S)
NAME                 AGE    WITH BASE TRUST               DURING PAST FIVE YEARS
<S>                  <C> <C>                       <C>

   
Gary A. Anetsberger  41  Senior Vice-President;    Chief financial officer of the Mutual Funds division of 
                         Treasurer                 Stein Roe & Farnham Incorporated (the "Adviser"); senior 
                                                   vice president of  the Adviser since April, 1996; vice 
                                                   president of the Adviser prior thereto

Timothy K. Armour    48  President; Trustee        President of the Mutual Fund division of the Adviser and 
  (1) (2)                                          director of the Adviser

Jilaine Hummel Bauer 42  Executive Vice-President; General counsel and secretary (since November, 1995) and 
                         Secretary                 senior vice president of the Adviser

<PAGE> 54

Kenneth L. Block (3) 77  Trustee                   Chairman emeritus of A. T. Kearney, Inc. (international 
                                                   management consultants)

William W. Boyd (3)  70  Trustee                   Chairman and director of Sterling Plumbing Group, Inc. 
                                                   (manufacturer of plumbing products)

Thomas W. Butch      40  Executive Vice-President  Senior vice president of the Adviser since September, 
                                                   1994; first vice president, corporate communications, of 
                                                   Mellon Bank Corporation prior thereto

Lindsay Cook (1)     45  Trustee                   Executive vice president of Liberty Financial Companies, 
                                                   Inc. (the indirect parent of the Adviser) since March, 
                                                   1997; senior vice president prior thereto

Douglas A. Hacker(3) 41  Trustee                   Senior vice president and chief financial officer of 
                                                   United Airlines since July, 1994; senior vice president 
                                                   - finance of United Airlines, February, 1993 to July, 
                                                   1994; vice president of American Airlines prior thereto

Janet Langford Kelly 39  Trustee                   Senior vice president, secretary and general counsel of 
  (3)                                              Sara Lee Corporation (branded, packaged, consumer-
                                                   products manufacturer), since 1995; partner of Sidley & 
                                                   Austin (law firm) prior thereto

Francis W. Morley    77  Trustee                   Chairman of Employer Plan Administrators and Consultants 
  (2) (3)                                          Co. (designer, administrator, and communicator of 
                                                   employee benefit plans)

Charles R. Nelson(3) 55  Trustee                   Van Voorhis Professor of Political Economy of the 
                                                   University of Washington

Nicolette D. Parrish 47  Vice-President;           Senior compliance administrator for the Adviser since 
                         Assistant Secretary       November, 1995; senior legal assistant prior thereto

Sharon R. Robertson  35  Controller                Accounting manager for the Adviser's Mutual Funds 
                                                   division

Janet B. Rysz        41  Assistant Secretary       Senior compliance administrator and assistant secretary 
                                                   of the Adviser

Thomas C. Theobald   60  Trustee                   Managing director of William Blair Capital Partners 
  (3)                                              (private equity fund) since 1994; chief executive 
                                                   officer and chairman of the Board of Directors of 
                                                   Continental Bank Corporation prior thereto

Heidi J. Walter      30  Vice-President            Legal counsel for the Adviser since March, 1995; 
                                                   associate with Beeler Schad & Diamond PC (law firm), 
                                                   prior thereto

Stacy H. Winick      32  Vice-President            Senior legal counsel for the Adviser since October, 
                                                   1996; associate of Bell, Boyd & Lloyd (law firm) from 
                                                   June, 1993 to September, 1996; associate of Debevoise & 
                                                   Plimpton (law firm) prior thereto

Hans P. Ziegler      56  Executive Vice-President  Chief executive officer of the Adviser since May, 1994; 
                                                   president of the Investment Counsel division of the 
                                                   Adviser from July, 1993 to June, 1994; president and 
                                                   chief executive officer of Pitcairn Financial Management 
                                                   Group prior thereto

<PAGE> 55


Margaret O. Zwick    31  Assistant Treasurer       Project manager for the Adviser since April 1997; 
                                                   compliance manager, August 1995 to April 1997; 
                                                   compliance accountant, January 1995 to July 1995; 
                                                   section manager, January 1994 to January 1995; 
                                                   supervisor prior thereto
    
<FN>
____________________________________
(1) Trustee who is an "interested person" of Base Trust and of the 
    Adviser, as defined in the Investment Company Act of 1940.
(2) Member of the Executive Committee of the Board of Trustees, 
    which is authorized to exercise all powers of the Board with 
    certain statutory exceptions.
(3) Member of the Audit Committee of the Board, which makes 
    recommendations to the Board regarding the selection of 
    auditors and confers with the auditors regarding the scope and 
    results of the audit.
</TABLE>

Each trustee and officer of Base Trust holds the same position 
with Stein Roe Municipal Trust, Stein Roe Investment Trust, Stein 
Roe Income Trust, Stein Roe Advisor Trust, Stein Roe Institutional 
Trust and Stein Roe Trust, other investment companies managed by 
the Adviser.  The address of Mr. Block is 11 Woodley Road, 
Winnetka, Illinois 60093; that of Mr. Boyd is 2900 Golf Road, 
Rolling Meadows, Illinois 60008; that of Mr. Cook is 600 Atlantic 
Avenue, Boston, Massachusetts 02210; that of Mr. Hacker is P.O. 
Box 66100, Chicago, IL 60666; that of Ms. Kelly is Three First 
National Plaza, Chicago, IL 60602; that of Mr. Morley is 20 North 
Wacker Drive, Suite 2275, Chicago, Illinois 60606; that of Mr. 
Nelson is Department of Economics, University of Washington, 
Seattle, Washington 98195; that of Mr. Theobald is Suite 3300, 222 
West Adams Street, Chicago, IL 60606; and that of the officers is 
One South Wacker Drive, Chicago, Illinois 60606.

   
Officers and trustees affiliated with the Adviser serve without 
any compensation from Base Trust.  In compensation for their 
services to Base Trust, trustees who are not "interested persons" 
of Base Trust or the Adviser are paid an attendance fee from each 
series of Base Trust for each meeting of the Board or standing 
committee thereof attended at which business for that series is 
conducted and, effective August 1996, are paid an annual retainer 
of $8,000 (divided equally among the Portfolios).  The attendance 
fees (other than for a Nominating Committee or Compensation 
Committee meeting) are based on each series' net assets as of the 
preceding December 31.  For a series with net assets of less than 
$50 million, the fee is $50 per meeting; with $51 to $250 million, 
the fee is $200 per meeting; with $251 million to $500 million, 
$350; with $501 million to $750 million, $500; with $751 million 
to $1 billion, $650; and with over $1 billion in net assets, $800.  
Each non-interested trustee also receives an aggregate of $500 for 
attending each meeting of the Nominating Committee and 
Compensation Committee.  Base Trust has no retirement or pension 
plan.  The following table sets forth compensation paid during the 
fiscal year ended June 30, 1997 to the trustees:

<PAGE> 56
                                                Total Compensation
                       Aggregate Compensation   from the Stein Roe
Name of Trustee          from Base Trust           Fund Complex*
- -------------------    -----------------------  ------------------
Timothy K. Armour                0                      0
Lindsay Cook                     0                      0
Kenneth L. Block             $10,450                $70,693
William W. Boyd               14,150                 80,593
Douglas A. Hacker             13,150                 76,593
Janet Langford Kelly          12,350                 51,600
Francis W. Morley             13,150                 76,943
Charles R. Nelson             14,150                 80,593
Thomas C. Theobald            13,150                 76,593
____________________
*At June 30, 1997, the Stein Roe Fund Complex consisted of nine 
series of Base Trust, four series of Stein Roe Municipal Trust, 
six series of Stein Roe Income Trust, ten series of Stein Roe 
Investment Trust, seven series of Stein Roe Advisor Trust, one 
series of Stein Roe Institutional Trust, and one series of Stein 
Roe Trust.
    

Item 15.  Control Persons and Principal Holders of Securities.

   
As of September 15, 1997, the only persons known by Base Trust to 
own of record or "beneficially" 5% or more of the outstanding 
interests of a Portfolio within the definition of that term as 
contained in Rule 13d-3 under the Securities Exchange Act of 1934 
were as follows:
                                                                Percentage of
                                                                 Outstanding 
Name                                    Portfolio               Interests Held
- ------------------------------------   ------------------------ --------------
Colonial Municipal Money Market Fund   Municipal Money Portfolio    14.2%
Stein Roe Municipal Money Market Fund  Municipal Money Portfolio    85.8
Stein Roe Institutional Client 
      High Yield Fund                  High Yield Portfolio         64.5
Stein Roe High Yield Fund              High Yield Portfolio         35.2
Stein Roe Growth & Income Fund         Growth & Income Portfolio    99.9
Stein Roe International Fund           International Portfolio      99.9
Stein Roe Young Investor Fund          Growth Investor Portfolio    99.9
Stein Roe Special Venture Fund         Special Venture Portfolio    99.9
Stein Roe Balanced Fund                Balanced Portfolio           99.9
Stein Roe Growth Stock Fund            Growth Stock Portfolio       99.9
Stein Roe Special Fund                 Special Portfolio            99.9

The address of Colonial Municipal Money Market Fund is One 
Financial Center, Boston, Massachusetts 02111, and the address of 
the other entities is One South Wacker Drive, Chicago, Illinois 
60606.
    

Item 16.  Investment Management and Administrative Services.

Base Trust has retained the services of Stein Roe & Farnham 
Incorporated (the "Adviser") as investment adviser and 
administrator for each Portfolio.  The Adviser is a wholly owned 
subsidiary of SteinRoe Services Inc. ("SSI"), which is a wholly 
owned subsidiary of Liberty Financial Companies, Inc. ("Liberty 
Financial"), which is a majority owned subsidiary of LFC Holdings, 
Inc., which is a wholly owned subsidiary of Liberty Mutual Equity 
Corporation, which is a wholly owned subsidiary of Liberty Mutual 
Insurance 

<PAGE> 57

Company.  Liberty Mutual Insurance Company is a mutual insurance 
company, principally in the property/casualty insurance field, 
organized under the laws of Massachusetts in 1912.

   
The directors of the Adviser are Kenneth R. Leibler, Harold W. 
Cogger, C. Allen Merritt, Jr., Timothy K. Armour, and Hans P. 
Ziegler.  Mr. Leibler is President and Chief Executive Officer of 
Liberty Financial; Mr. Cogger is Executive Vice President of 
Liberty Financial; Mr. Merritt is Executive Vice President and 
Treasurer of Liberty Financial; Mr. Armour is President of the 
Adviser's Mutual Funds division; and Mr. Ziegler is Chief 
Executive Officer of the Adviser.  The business address of Messrs. 
Leibler, Cogger, and Merritt is Federal Reserve Plaza, Boston, 
Massachusetts 02210; and that of Messrs. Armour, and Ziegler is 
One South Wacker Drive, Chicago, Illinois 60606.

Please refer to the description of the Adviser, management 
agreement and fees in Part A, Item 5.  The Adviser provides office 
space and executive and other personnel to Base Trust.  Each 
Portfolio pays all expenses other than those paid by the Adviser, 
including but not limited to printing and postage charges and 
securities registration and custodian fees and expenses incidental 
to its organization.   For the fiscal year ended June 30, 1995, 
Base Trust did not pay the Adviser any fees.  The table below 
shows fees paid by the Portfolios for the years ended June 30, 
1996 and 1997:

Portfolio                  Year Ended 6/30/97   Year Ended 6/30/96
- -------------------------  ------------------   ------------------
Municipal Money Portfolio        $351,742          $290,904
High Yield Portfolio               52,997                 0
Balanced Portfolio                582,089                 0
Growth & Income Portfolio         701,599                 0
Growth Stock Portfolio          1,227,348                 0
Growth Investor Portfolio         882,935                 0
Special Portfolio               2,980,804                 0
Special Venture Portfolio         532,325                 0
International Portfolio           498,602                 0

The management agreement also provides that neither the Adviser 
nor any of its directors, officers, stockholders (or partners of 
stockholders), agents, or employees shall have any liability to 
Base Trust or any shareholder for any error of judgment, mistake 
of law or any loss arising out of any investment, or for any other 
act or omission in the performance by the Adviser of its duties 
under the management agreement, except for liability resulting 
from willful misfeasance, bad faith or gross negligence on the 
Adviser's part in the performance of its duties or from reckless 
disregard by the Adviser of the Adviser's obligations and duties 
under that agreement.
    

Any expenses that are attributable solely to the organization, 
operation, or business of a Portfolio shall be paid solely out of 
that Portfolio's assets.  Any expenses incurred by Base Trust that 
are not solely attributable to a particular series of Base Trust 
are apportioned in such manner as the Adviser determines is fair 
and appropriate, unless otherwise specified by the Board of 
Trustees.

<PAGE> 58

   
Bookkeeping and Accounting Agreement
Pursuant to a separate agreement with Base Trust, the Adviser 
receives a fee for performing certain bookkeeping and accounting 
services for each Portfolio.  For these services, the Adviser 
receives an annual fee of $25,000 plus .0025 of 1% of average net 
assets over $50 million.  For the fiscal years ended June 30, 1997 
and 1996, the Adviser received fees of $88,266 and $20,746, 
respectively, from Base Trust for these services.

Custodian
State Street Bank and Trust Company (the "Bank"), 225 Franklin 
Street, Boston, Massachusetts 02101, is the custodian for Base 
Trust.  It is responsible for holding all securities and cash of 
each Portfolio, receiving and paying for securities purchased, 
delivering against payment securities sold, receiving and 
collecting income from investments, making all payments covering 
expenses of each Portfolio, and performing other administrative 
duties, all as directed by authorized persons.  The Bank does not 
exercise any supervisory function in such matters as purchase and 
sale of portfolio securities, payment of dividends, or payment of 
expenses of a Portfolio.  A Portfolio may invest in obligations of 
the Bank and may purchase or sell securities from or to the Bank.
    

Independent Auditors
The independent auditors for Municipal Money Portfolio and High 
Yield Portfolio are Ernst & Young LLP, 233 South Wacker Drive, 
Chicago, Illinois 60606; the independent public accountants for 
each Equity Portfolio are Arthur Andersen LLP, 33 West Monroe 
Street, Chicago, Illinois 60603.  The auditors audit and report on 
the Portfolios' annual financial statements, review certain 
regulatory reports and the Portfolios' federal income tax returns, 
and perform other professional accounting, auditing, tax and 
advisory services when engaged to do so by Base Trust.

Item 17.  Brokerage Allocation and Other Practices.

The Adviser places the orders for the purchase and sale of 
portfolio securities for each Portfolio, including options and 
futures transactions for High Yield Portfolio and each Equity 
Portfolio.

Municipal Money Portfolio purchases portfolio securities both in 
underwritings and in the over-the-counter market.  Included in the 
price paid to an underwriter of a portfolio security is the spread 
between the price paid by the underwriter to the issuer and the 
price paid by the purchaser.  The Portfolio's purchases and sales 
of portfolio securities in the over-the-counter market usually are 
transacted with a broker or dealer on a net basis, without any 
brokerage commission being paid by the Portfolio, but do reflect 
the spread between the bid and asked prices.  The Adviser may also 
transact purchases of portfolio securities directly with the 
issuers.

   
The Adviser's overriding objective in effecting portfolio 
transactions is to seek to obtain the best combination of price 
and execution.  The best net price, giving effect to transaction 
charges, if any, and other costs, normally is an important factor 
in this decision, but a number of other judgmental factors may 
also enter into the decision.  These include: the Adviser's 
knowledge of current transaction costs; the nature of the security 
being traded; the size of the transaction; the desired timing of 
the trade; the activity existing and expected in the market for 
the particular security; confidentiality; the execution, 

<PAGE> 59

clearance and settlement capabilities of the broker or dealer 
selected and others that are considered; the Adviser's knowledge 
of the financial stability of the broker or dealer selected and 
such other brokers or dealers; and the Adviser's knowledge of 
actual or apparent operational problems of any broker or dealer.  
Recognizing the value of these factors, a Portfolio may incur a 
transaction charge in excess of that which another broker or 
dealer may have charged for effecting the same transaction.  
Evaluations of the reasonableness of the costs of portfolio 
transactions, based on the foregoing factors, are made on an 
ongoing basis by the Adviser's staff and reports are made annually 
to the Board of Trustees.

With respect to issues of securities involving brokerage 
commissions, when more than one broker or dealer is believed to be 
capable of providing the best combination of price and execution 
with respect to a particular portfolio transaction for a 
Portfolio, the Adviser often selects a broker or dealer that has 
furnished it with research products or services such as research 
reports, subscriptions to financial publications and research 
compilations, compilations of securities prices, earnings, 
dividends and similar data, and computer data bases, quotation 
equipment and services, research-oriented computer software and 
services, and services of economic and other consultants.  
Selection of brokers or dealers is not made pursuant to an 
agreement or understanding with any of the brokers or dealers; 
however, the Adviser uses an internal allocation procedure to 
identify those brokers or dealers who provide it with research 
products or services and the amount of research products or 
services they provide, and endeavors to direct sufficient 
commissions generated by its clients' accounts in the aggregate, 
including the Portfolios, to such brokers or dealers to ensure the 
continued receipt of research products or services the Adviser 
feels are useful.  In certain instances, the Adviser receives from 
brokers and dealers products or services which are used both as 
investment research and for administrative, marketing, or other 
non-research purposes.  In such instances, the Adviser makes a 
good faith effort to determine the relative proportions of such 
products or services which may be considered as investment 
research.  The portion of the costs of such products or services 
attributable to research usage may be defrayed by the Adviser 
(without prior agreement or understanding, as noted above) through 
brokerage commissions generated by transactions of clients 
(including the Portfolios), while the portion of the costs 
attributable to non-research usage of such products or services is 
paid by the Adviser in cash.  No person acting on behalf of a 
Portfolio is authorized, in recognition of the value of research 
products or services, to pay a price in excess of that which 
another broker or dealer might have charged for effecting the same 
transaction.  The Adviser may also receive research in connection 
with selling concessions and designations in fixed price offerings 
in which the Portfolios participate.  Research products or 
services furnished by brokers and dealers through whom 
transactions are effected may be used in servicing any or all of 
the clients of the Adviser and not all such research products or 
services are used in connection with the management of the 
Portfolios.
    

With respect to each Equity Portfolio's purchases and sales of 
portfolio securities transacted with a broker or dealer on a net 
basis, the Adviser may also consider the part, if any, played by 
the broker or dealer in bringing the security involved to the 
Adviser's attention, including investment research related to the 
security and provided to the Portfolio.

<PAGE> 60

The Board has reviewed the legal developments pertaining to and 
the practicability of attempting to recapture underwriting 
discounts or selling concessions when portfolio securities are 
purchased in underwritten offerings.  The Board has been advised 
by counsel that recapture by a mutual fund currently is not 
permitted under the Rules of Fair Practice of the National 
Association of Securities Dealers ("NASD").  Therefore, except 
with respect to purchases of Municipal Securities which are not 
subject to NASD Rules, Municipal Money Portfolio will not attempt 
to recapture underwriting discounts or selling concessions.  
Municipal Money Portfolio attempts to recapture selling 
concessions on purchases during underwritten offerings; however, 
the Adviser will not be able to negotiate discounts from the fixed 
offering price for those issues for which there is a strong 
demand, and will not allow the failure to obtain a discount to 
prejudice its ability to purchase an issue for the Portfolio.  The 
Board periodically reviews Municipal Money Portfolio's efforts to 
recapture concessions and whether it is in the best interests of 
the Portfolio to continue to attempt to recapture underwriting 
discounts or selling concessions.

   
The table below shows information on any brokerage commissions 
paid by the Portfolios: 

<TABLE>
<CAPTION>
                      Growth & Income  Balanced  Growth Stock  Growth Investor  Special   Special Venture International 
                        Portfolio      Portfolio Portfolio     Portfolio        Portfolio  Portfolio        Portfolio
                      ---------------  --------- ------------  ---------------  --------- --------------- ------------
<S>                   <C>              <C>       <C>           <C>              <C>       <C>             <C>           
Total amount of 
 brokerage commissions 
 paid during period 
 ended 6/30/97*          $104,940      $130,479   $180,197      $469,032        $783,622     $370,946       $283,245
Amount of commissions 
 paid to brokers or 
 dealers who supplied 
 research services to 
 the Adviser               94,895       129,989    137,912       443,198         730,859      339,897        262,105
Total dollar amount 
 involved in such 
 transactions (000 
 omitted)                  71,054        89,288    171,657       299,245         363,542      155,725        622,206
Amount of commissions 
 paid to brokers or 
 dealers that were 
 allocated to such 
 brokers or dealers by 
 the portfolio manager 
 because of research 
 services provided to 
 the Portfolio             62,550        95,860     38,700       174,405         571,353      225,328        123,157
Total dollar amount 
 involved in such 
 transactions (000 
 omitted)                  77,674        89,798    144,290       316,366         395,981      169,219         66,155
<FN>
- -------------
*These Portfolios commenced operations on February 3, 1997 and 
have a fiscal year end of September 30.
    
</TABLE>

Base Trust has arranged for its custodian to act as a soliciting 
dealer to accept any fees available to the custodian as a 
soliciting dealer in connection with any tender offer for 
portfolio securities.  The custodian will credit any such fees 
received against its custodial fees.  In addition, the Board of 
Trustees has reviewed the legal developments pertaining to and the 
practicability of attempting to recapture underwriting discounts 
or selling concessions when portfolio securities are purchased in 
underwritten offerings.  However, the Board has been advised by 
counsel that recapture by a mutual fund currently is not permitted 
under the Rules of Fair Practice of the National Association of 
Securities Dealers.

<PAGE> 61

Item 18.  Capital Stock and Other Securities.

Under the Declaration of Trust, the trustees are authorized to 
issue Interests in Base Trust.  Investors are entitled to 
participate pro rata in distributions of taxable income, loss, 
gain, and credit of Base Trust (unless another sharing method is 
required for federal income tax reasons in accordance with the 
sharing method adopted by the trustees).  Upon liquidation or 
dissolution of Base Trust, investors are entitled to share pro 
rata in the net assets available for distribution to its investors 
(unless another sharing method is required for federal income tax 
reasons, in accordance with the sharing method adopted by the 
trustees).  Investments in Base Trust have no preferences, 
preemptive, conversion, or similar rights and are fully paid and 
nonassessable, except as set forth below.  Investments in Base 
Trust may not be transferred.  No certificates representing an 
investor's Interest in Base Trust will be issued.

   
Each whole Interest (or fractional Interest) outstanding on the 
record date established in accordance with the By-Laws shall be 
entitled to a number of votes on any matter on which it is 
entitled to vote equal to the net asset value of the Interest (or 
fractional Interest) in United States dollars determined at the 
close of business on the record date (for example, an Interest 
having a net asset value of $10.50 would be entitled to 10.5 
votes).  As a common law trust, Base Trust is not required to hold 
annual shareholder meetings.  However, special meetings may be 
called for purposes such as electing or removing trustees, 
changing fundamental policies, or approving an investment advisory 
contract.  If requested to do so by the holders of at least 10% of 
its outstanding Interests, Base Trust will call a special meeting 
for the purpose of voting upon the question of removal of a 
trustee or trustees and will assist in the communications with 
other holders as required by Section 16(c) of the Investment 
Company Act of 1940.  All Interests of Base Trust are voted 
together in the election of trustees.  On any other matter 
submitted to a vote of holders, Interests are voted by individual 
series and not in the aggregate, except that Interests are voted 
in the aggregate when required by the Investment Company Act of 
1940 or other applicable law.  When the Board of Trustees 
determines that the matter affects only the interests of one or 
more series, holders of the unaffected series are not entitled to 
vote on such matters.
    

Base Trust may enter into a merger or consolidation or sell all or 
substantially all of its assets if approved by the vote of two-
thirds of its investors (with the vote of each being in proportion 
to the respective percentages of the Interests in Base Trust), 
except that if the trustees recommend such sale of assets, the 
approval by vote of a majority of the investors (with the votes of 
each being in proportion to their respective percentages of the 
Interests of Base Trust) will be sufficient.  Base Trust, or a 
series thereof, will dissolve upon the complete withdrawal, 
resignation, retirement, or bankruptcy of any investor and will 
terminate unless reconstituted and continued with the consent of 
all remaining investors.  Base Trust, or a series thereof, may 
also be terminated (1) if approved by the vote of two-thirds of 
its investors (with the votes of each being in proportion to the 
amount of their investment), or (2) by the trustees by written 
notice to its investors.  The Declaration of Trust contains a 
provision limiting the life of Base Trust to a term of years; 
consequently, Base Trust will terminate on December 31, 2080.

<PAGE> 62

   
Base Trust is organized as a common law trust under the laws of 
the Commonwealth of Massachusetts.  Investors in any series of 
Base Trust may be held personally liable, jointly and severally, 
for the obligations and liabilities of that series, subject, 
however, to indemnification by that series in the event that there 
is imposed upon an investor a greater portion of the liabilities 
and obligations of the series than its proportionate Interest in 
the series.  The Declaration of Trust also provides that Base 
Trust shall maintain appropriate insurance (for example, fidelity 
bonding and errors and omissions insurance) for the protection of 
Base Trust, its investors, trustees, officers, employees, and 
agents covering possible tort and other liabilities.  Thus, the 
risk of an investor incurring financial loss on account of 
investor liability is limited to circumstances in which both 
inadequate insurance exists and Base Trust itself is unable to 
meet its obligations.
    

The Declaration of Trust further provides that obligations of Base 
Trust are not binding upon the trustees individually but only upon 
the property of Base Trust and that the trustees will not be 
liable for any action or failure to act, but nothing in the 
Declaration of Trust protects a trustee against any liability to 
which he would otherwise be subject by reason of willful 
misfeasance, bad faith, gross negligence, or reckless disregard of 
the duties involved in the conduct of his office.

Base Trust reserves the right to create and issue any number of 
series, in which case investors in each series would participate 
only in the earnings and assets of the particular series.  
Investors in each series would be entitled to vote separately to 
approve advisory agreements or changes in investment policy, but 
investors of all series may vote together in election or selection 
of trustees, principal underwriters, and accountants for Base 
Trust.  Upon liquidation or dissolution of Base Trust, the 
investors in each series would be entitled to share pro rata in 
the net assets of their respective series available for 
distribution to investors (unless another sharing method is 
required for federal income tax reasons, in accordance with the 
sharing method adopted by the trustees).  Interests of any series 
of Base Trust may be divided into two or more classes of Interests 
having such preferences or special or relative privileges as the 
trustees of Base Trust may determine.

Base Trust will in no case have more than 500 investors in order 
to satisfy certain tax requirements.  This number may be increased 
or decreased should such requirements change.  Similarly, if 
Congress enacts certain proposed amendments to the Code, it may be 
desirable for Base Trust to elect the status of a regulated 
investment company ("RIC") as that term is defined in Subchapter M 
of the Code, which would require that Base Trust first change its 
organizational status from that of a Massachusetts trust to that 
of a Massachusetts business trust ("MBT") or other entity treated 
as a corporation under the Code.  Base Trust's Declaration of 
Trust empowers the trustees, on behalf of the Trust, to change 
Base Trust's organizational form to that of a MBT or otherwise 
reorganize as an entity treated as a corporation under the Code 
and to elect RIC status without a vote of the investors.  Any such 
action on the part of the trustees on behalf of Base Trust would 
be contingent upon there being no adverse tax consequences to such 
action.

Item 19.  Purchase, Redemption, and Pricing of Securities.

Interests in a Portfolio will be issued solely in private 
placement transactions that do not involve any "public offering" 
within the meaning of Section 4(2) of the 1933 Act.  

<PAGE> 63

Investments in a Portfolio may only be made by investment 
companies, insurance company separate accounts, common or 
commingled trust funds, or similar organizations or entities that 
are "accredited investors" within the meaning of Regulation D 
under the 1933 Act.  This Registration Statement does not 
constitute an offer to sell or the solicitation of an offer to buy 
any "security" within the meaning of the 1933 Act.

The net asset value per share of each Portfolio is determined by 
dividing its total assets (i.e., the total current market value of 
its investment in the Portfolio) less its liabilities (including 
accrued expenses and dividends payable), by the total number of 
shares of the Portfolio outstanding at the time of the 
determination.  Each Portfolio's net asset value per share is 
calculated as of 3:00 p.m. (central time) on each day the New York 
Stock Exchange is open for trading. 

The value of each investor's investment in a Portfolio will be 
based on its pro rata share of the total net asset value of the 
Portfolio (i.e., the value of its portfolio securities and other 
assets less its liabilities) as of the same date and time. 

Please refer to Purchase of Securities in Part A, which is 
incorporated herein by reference.  Municipal Money Portfolio 
values its portfolio by the "amortized cost method" by which it 
attempts to maintain its net asset value at $1.00 per share.  This 
involves valuing an instrument at its cost and thereafter assuming 
a constant amortization to maturity of any discount or premium, 
regardless of the impact of fluctuating interest rates on the 
market value of the instrument.  Although this method provides 
certainty in valuation, it may result in periods during which 
value as determined by amortized cost is higher or lower than the 
price the Portfolio would receive if it sold the instrument.  
Other assets are valued at a fair value determined in good faith 
by the Board of Trustees.

In connection with Municipal Money Portfolio's use of amortized 
cost and the maintenance of its per share net asset value of 
$1.00, Base Trust has agreed, with respect to Municipal Money 
Portfolio: (1) to seek to maintain a dollar-weighted average 
portfolio maturity appropriate to its objective of maintaining 
relative stability of principal and not in excess of 90 days; (2) 
not to purchase a portfolio instrument with a remaining maturity 
of greater than thirteen months (for this purpose Municipal Money 
Portfolio considers that an instrument has a maturity of thirteen 
months or less if it is a "short-term" obligation as defined in 
the Glossary); and (3) to limit its purchase of portfolio 
instruments to those instruments that are denominated in U.S. 
dollars which the Board of Trustees determines present minimal 
credit risks and that are of eligible quality as determined by any 
major rating service as defined under SEC Rule 2a-7 or, in the 
case of any instrument that is not rated, of comparable quality as 
determined by the Board.

Municipal Money Portfolio has also agreed to establish procedures 
reasonably designed to stabilize its price per share as computed 
for the purpose of sales and redemptions at $1.00.  Such 
procedures include review of its portfolio holdings by the Board 
of Trustees, at such intervals as it deems appropriate, to 
determine whether its net asset value calculated by using 
available market quotations or market equivalents deviates from 
$1.00 per share based on amortized cost.  Calculations are made to 
compare the value of its investments valued at amortized cost with 
market value.  Market values are obtained by using actual 
quotations provided by market makers, estimates of market 

<PAGE> 64

value, values from yield data obtained from reputable sources for 
the instruments, values obtained from the Adviser's matrix, or 
values obtained from an independent pricing service.  Any such 
service might value Municipal Money Portfolio's investments based 
on methods which include consideration of: yields or prices of 
Municipal Securities of comparable quality, coupon, maturity and 
type; indications as to values from dealers; and general market 
conditions.  The service may also employ electronic data 
processing techniques, a matrix system, or both to determine 
valuations.

In connection with Municipal Money Portfolio's use of the 
amortized cost method of portfolio valuation to maintain its net 
asset value at $1.00 per share, the Portfolio might incur or 
anticipate an unusual expense, loss, depreciation, gain or 
appreciation that would affect its net asset value per share or 
income for a particular period.  The extent of any deviation 
between the net asset value based upon available market quotations 
or market equivalents and $1.00 per share based on amortized cost 
will be examined by the Board of Trustees as it deems appropriate.  
If such deviation exceeds 1/2 of 1%, the Board of Trustees will 
promptly consider what action, if any, should be initiated.  In 
the event the Board of Trustees determines that a deviation exists 
that may result in material dilution or other unfair results to 
investors or existing shareholders, it will take such action as it 
considers appropriate to eliminate or reduce to the extent 
reasonably practicable such dilution or unfair results.  Actions 
which the Board might take include:  selling portfolio instruments 
prior to maturity to realize capital gains or losses or to shorten 
average portfolio maturity; increasing, reducing, or suspending 
dividends or distributions from capital or capital gains; or 
redeeming shares in kind.  The Board might also establish a net 
asset value per share by using market values, as a result of which 
the net asset value might deviate from $1.00 per share.

Item 20.  Tax Status.

   
Base Trust is organized as a common law trust under the laws of 
the Commonwealth of Massachusetts.  Under the anticipated method 
of operation of Base Trust, Base Trust will not be subject to any 
federal income tax, nor is it expected to have any Massachusetts 
income tax liability.  Base Trust has received a private letter 
ruling from the Internal Revenue Service to confirm its federal 
tax treatment in certain respects.  Each investor in a Portfolio 
will be taxed on its share (as determined in accordance with the 
governing instruments of Base Trust) of the Portfolio's ordinary 
income and capital gain in determining its income tax liability.  
The determination of such share will be made in accordance with a 
method designed to satisfy the Code and regulations promulgated 
thereunder.  There can be no assurance, however, that the Internal 
Revenue Service will agree with such a method of allocation.
    

The fiscal year end of Municipal Money Portfolio and High Yield 
Portfolio is June 30, and that of each Equity Portfolio is 
September 30.  Although, as described above, the Portfolios will 
not be subject to federal income tax, they will file appropriate 
income tax returns.

It is intended that each Portfolio's assets, income, and 
distributions will be managed in such a way that an investor in 
the Portfolio will be able to satisfy the requirements of 
Subchapter M of the Code for qualification as a RIC, assuming that 
the investor invests all of its assets in the Portfolio.

<PAGE> 65

There are certain tax issues that will be relevant to only certain 
of the investors, specifically investors that are segregated asset 
accounts and investors who contribute assets rather than cash to a 
Portfolio.  It is intended that such segregated asset accounts 
will be able to satisfy diversification requirements applicable to 
them and that such contributions of assets will not be taxable 
provided certain requirements are met.  Such investors are advised 
to consult their own tax advisors as to the tax consequences of an 
investment in a Portfolio.

   
Additional Income Tax Considerations
In order for an investment company investing in a Portfolio to 
qualify for federal income tax treatment as a regulated investment 
company, at least 90% of its gross income for a taxable year must 
be derived from qualifying income; i.e., dividends, interest, 
income derived from loans of securities, gains from the sale of 
stock or securities or foreign currencies, or other income 
(including but not limited to gains from options, futures, or 
forward contracts) derived with respect to its business of 
investing in stock, securities, or currencies.  For certain 
Portfolios with fiscal years beginning before August 5, 1997, 
gains realized on the sale or other disposition of any of the 
following held for less than three months must be limited to less 
than 30% of its annual gross income: (1) stock or securities, (2) 
options, futures, or forward contracts (other than on foreign 
currencies), and (3) foreign currencies and currency forward 
contracts that are not directly related to its principal business 
of investing in stocks, securities, and options and futures with 
respect to stocks or securities.  Each such investment company 
will also be required to distribute each year at least 90% of its 
investment company taxable income (in order to escape federal 
income tax on distributed amounts) and to meet certain tax 
diversification requirements.  Because such investment companies 
may invest all of their assets in a Portfolio, the Portfolio must 
satisfy all of these tax requirements in order for such other 
investment company to satisfy them.  In order to avoid realizing 
excessive gains on securities held less than three months, a 
Portfolio may be required to defer the closing out of certain 
positions beyond the time when it would otherwise be advantageous 
to do so.  For certain Portfolios with fiscal years beginning 
before August 5, 1997,  year-end mark-to-market gains on positions 
open for less than three months as of the end of a Portfolio's 
fiscal year are not considered gains on securities held for less 
than three months for purposes of the 30% test.  The 30% test is 
no longer applicable to Portfolios with fiscal years beginning 
after August 5, 1997.
    

Each Portfolio will allocate at least annually to its shareholders 
its distributive share of any net investment income and net 
capital gains which have been recognized for federal income tax 
purposes (including unrealized gains at the end of the Portfolio's 
taxable year on certain options and futures transactions that are 
required to be marked-to-market).

Each Portfolio intends to distribute substantially all of its 
income, tax-exempt and taxable, including any net realized capital 
gains, and thereby be relieved of any federal income tax liability 
to the extent of such distributions.  Municipal Money Portfolio 
intends to retain for its shareholders the tax-exempt status with 
respect to tax-exempt income received by the Portfolio.  The 
distributions will be designated as "exempt-interest dividends," 
taxable ordinary income, and capital gains.  Municipal Money 
Portfolio may also invest in Municipal Securities the interest on 
which is subject to the federal alternative 

<PAGE> 66

minimum tax.  The source of exempt-interest dividends on a state-
by-state basis and the federal income tax status of all 
distributions will be reported to shareholders annually.  Such 
report will allocate income dividends between tax-exempt, taxable 
income, and alternative minimum taxable income in approximately 
the same proportions as the Portfolio's total income during the 
year.  Accordingly, income derived from each of these sources by 
the Portfolio may vary substantially in any particular 
distribution period from the allocation reported to shareholders 
annually.  The proportion of such dividends that constitutes 
taxable income will depend on the relative amounts of assets 
invested in taxable securities, the yield relationships between 
taxable and tax-exempt securities, and the period of time for 
which such securities are held.  The Portfolio may, under certain 
circumstances, temporarily invest its assets so that less than 80% 
of gross income during such temporary period will be exempt from 
federal income taxes. 

   
Because capital gain distributions reduce net asset value, if a 
shareholder purchases shares shortly before a record date he will, 
in effect, receive a return of a portion of his investment in such 
distribution.  The distribution would nonetheless be taxable to 
him, even if the net asset value of shares were reduced below his 
cost.  However, for federal income tax purposes the shareholder's 
original cost would continue as his tax basis.
    

Because the taxable portion of Municipal Money Portfolio's 
investment income consists primarily of interest, none of its 
dividends, whether or not treated as "exempt-interest dividends," 
will qualify under the Code for the dividends received deduction 
available to corporations.

Interest on indebtedness incurred or continued by shareholders to 
purchase or carry shares of a Portfolio is not deductible for 
federal income tax purposes.  Under rules applied by the Internal 
Revenue Service to determine whether borrowed funds are used for 
the purpose of purchasing or carrying particular assets, the 
purchase of shares may, depending upon the circumstances, be 
considered to have been made with borrowed funds even though the 
borrowed funds are not directly traceable to the purchase of 
shares.

   
If you redeem at a loss shares of Municipal Money Portfolio held 
for six months or less, that loss will not be recognized for 
federal income tax purposes to the extent of exempt-interest 
dividends you have received with respect to those shares.  If any 
such loss exceeds the amount of the exempt-interest dividends you 
received, that excess loss will be treated as a long-term capital 
loss to the extent you receive any long-term capital gain 
distribution with respect to those shares.

High Yield Portfolio and each Equity Portfolio expect that less 
than 100% of dividends will qualify for the deduction for 
dividends received by corporate shareholders.
    

To the extent a Portfolio invests in foreign securities, it may be 
subject to withholding and other taxes imposed by foreign 
countries.  Tax treaties between certain countries and the United 
States may reduce or eliminate such taxes.  Investors may be 
entitled to claim U.S. foreign tax credits with respect to such 
taxes, subject to certain provisions and limitations contained in 
the Code.  Specifically, if more than 50% of a Portfolio's total 
assets at the close of any fiscal year consist of stock or 
securities of foreign corporations, a Portfolio may file an 
election with the Internal Revenue Service pursuant to 

<PAGE> 67

which shareholders of a Portfolio will be required to (1) include 
in ordinary gross income (in addition to taxable dividends 
actually received) their pro rata shares of foreign income taxes 
paid by a Portfolio even though not actually received, (2) treat 
such respective pro rata shares as foreign income taxes paid by 
them, and (3) deduct such pro rata shares in computing their 
taxable incomes, or, alternatively, use them as foreign tax 
credits, subject to applicable limitations, against their United 
States income taxes.  Shareholders who do not itemize deductions 
for federal income tax purposes will not, however, be able to 
deduct their pro rata portion of foreign taxes paid by a 
Portfolio, although such shareholders will be required to include 
their share of such taxes in gross income.  Shareholders who claim 
a foreign tax credit may be required to treat a portion of 
dividends received from a Portfolio as separate category income 
for purposes of computing the limitations on the foreign tax 
credit available to such shareholders.  Tax-exempt shareholders 
will not ordinarily benefit from this election relating to foreign 
taxes.  Each year, a Portfolio will notify shareholders of the 
amount of (1) each shareholder's pro rata share of foreign income 
taxes paid by the Portfolio and (2) the portion of dividends which 
represents income from each foreign country, if the Portfolio 
qualifies to pass along such credit.

Passive Foreign Investment Companies.  International Portfolio may 
purchase the securities of certain foreign investment funds or 
trusts called passive foreign investment companies ("PFICs").  In 
addition to bearing their proportionate share of International 
Portfolio's expenses (management fees and operating expenses), 
shareholders will also indirectly bear similar expenses of PFICs.  
Capital gains on the sale of PFIC holdings will be deemed to be 
ordinary income regardless of how long International Portfolio 
holds its investment.  In addition, International Portfolio may be 
subject to corporate income tax and an interest charge on certain 
dividends and capital gains earned from PFICs, regardless of 
whether such income and gains are distributed to shareholders.

Item 21.  Underwriters.

Inapplicable.

Item 22.  Calculation of Performance Data.

Inapplicable.

Item 23.  Financial Statements  

   
Please refer to the Financial Statements (investments as of June 
30, 1997, balance sheet as of June 30, 1997, statement of 
operations and statement of changes in net assets for the period 
ended June 30, 1997, and notes thereto) and reports of independent 
auditors of SR&F Municipal Money Market Portfolio and SR&F High 
Yield Portfolio included in the June 30, 1997 annual report of 
Stein Roe Municipal Trust and the June 30, 1997 annual report of 
the Bond Funds of Stein Roe Income Trust, respectively; and the 
Financial Statements (investments as of March 31, 1997, balance 
sheet as of March 31, 1997, statement of operations and statement 
of changes in net assets for the period ended March 31, 1997, and 
notes thereto) for each of the Equity Portfolios included in the 
March 31, 1997 semiannual reports of Stein Roe Investment Trust.  
The Financial Statements (but 

<PAGE> 68

no other material from the reports) are incorporated herein by 
reference.  The reports may be obtained at no charge by 
telephoning 800-338-2550.
    

Glossary

Issuer.  For purposes of diversification under the Investment 
Company Act of 1940, identification of the issuer (or issuers) of 
a Municipal Security depends on the terms and conditions of the 
obligation.  If the assets and revenues of an agency, authority, 
instrumentality or other political subdivision are separate from 
those of the government creating the subdivision and the 
obligation is backed only by the assets and revenues of the 
subdivision, such subdivision would be regarded as the sole 
issuer.  Similarly, if the obligation is backed only by the assets 
and revenues of the non-governmental user, the non-governmental 
user would be deemed to be the sole issuer.  In addition, if the 
bond is backed by the full faith and credit of the U.S. 
Government, agencies or instrumentalities of the U.S. Government 
or U.S. Government Securities, the U.S. Government or the 
appropriate agency or instrumentality would be deemed to be the 
sole issuer, and would not be subject to the 5% limitation 
applicable to investments in a single issuer as described under 
Investment Restrictions in Part A and restriction number (1) under 
Investment Restrictions in this Part B.  If, in any case, the 
creating municipal government or another entity guarantees an 
obligation or issues a letter of credit to secure the obligation, 
the guarantee (or letter of credit) would be considered a separate 
security issued by such government or entity and would be 
separately valued and included in the issuer limitation.  In the 
case of Municipal Money Portfolio, guarantees and letters of 
credit described in this paragraph from banks whose credit is 
acceptable to the Portfolio are not restricted in amount by the 
restriction against investing more than 25% of their total assets 
in securities of non-governmental issuers whose principal business 
activities are in the same industry.

Short-term.  This term, as used with respect to Municipal Money 
Portfolio, refers to an obligation of one of the following types, 
measured from the date of an investment by the Portfolio in the 
obligation (regardless of the duration of the obligation from the 
date of original issuance):

1. An obligation of the issuer to pay the entire principal and 
accrued interest in no more than thirteen months;

2. An obligation (regardless of the duration before its maturity) 
issued or guaranteed by the U.S. Government or by its agencies or 
instrumentalities, bearing a variable rate of interest providing 
for automatic establishment, no less frequently than annually, of 
a new rate or successive new rates of interest by a formula, that 
can reasonably be expected to have a market value approximating 
its principal amount (a) whenever a new interest rate is 
established, in the case of an obligation having a variable rate 
of interest, or (b) at any time, in the case of an obligation 
having a "floating rate of interest" that changes concurrently 
with any change in an identified market interest rate to which it 
is pegged;

3. Any other obligation (regardless of the duration before its 
maturity) that:  (a) has a demand feature entitling the holder to 
receive from an issuer the entire principal [or, under the 
circumstances described under Basic Investment Strategy in Part A 
for Municipal Money Portfolio, the issuer of a guarantee or a 
letter of credit with respect 

<PAGE> 69

to a participation interest in the obligation (acquired from such 
issuer)], (i) at any time upon no more than thirty days' notice or 
(ii) at specified intervals not exceeding thirteen months and upon 
no more than thirty days' notice, (b)(i) has a variable rate of 
interest that changes on set dates or (ii) has a floating rate of 
interest (as defined in 2 above), and (c) can reasonably be 
expected to have a market value approximating its principal amount 
(i) whenever a new rate of interest is established, in the case of 
an obligation having a variable rate of interest, or (ii) at any 
time, in the case of an obligation having a floating rate of 
interest; provided that, with respect to each such obligation that 
is not rated eligible quality by Moody's or S&P, the Board of 
Trustees has determined that the obligation is of eligible 
quality; or

4. A repurchase agreement that is to be fully performed (or that 
the Portfolio may require be performed) in not more than thirteen 
months (regardless of the maturity of the obligation to which the 
repurchase agreement relates).

Variable Rate Demand Security.  This type of security is a 
Variable Rate Security (as defined in Part A under Municipal 
Securities) which has a demand feature entitling the purchaser to 
resell the security to the issuer of the demand feature at an 
amount approximately equal to amortized cost or the principal 
amount thereof, which may be more or less than the price the 
Portfolio paid for it.  The interest rate on a Variable Rate 
Demand Security also varies either according to some objective 
standard, such as an index of short-term tax-exempt rates, or 
according to rates set by or on behalf of the issuer.

Appendix--Ratings

   
Ratings In General
A rating of a rating service represents the service's opinion as 
to the credit quality of the security being rated.  However, the 
ratings are general and are not absolute standards of quality or 
guarantees as to the creditworthiness of an issuer.  Consequently, 
the Adviser believes that the quality of debt securities should be 
continuously reviewed and that individual analysts give different 
weightings to the various factors involved in credit analysis.  A 
rating is not a recommendation to purchase, sell or hold a 
security, because it does not take into account market value or 
suitability for a particular investor.  When a security has 
received a rating from more than one service, each rating should 
be evaluated independently.  Ratings are based on current 
information furnished by the issuer or obtained by the rating 
services from other sources that they consider reliable.  Ratings 
may be changed, suspended or withdrawn as a result of changes in 
or unavailability of such information, or for other reasons.  The 
Adviser, through independent analysis, attempts to discern 
variations in credit ratings of the published services, and to 
anticipate changes in credit ratings.  The following is a 
description of the characteristics of certain ratings used by 
Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's 
Corporation ("S&P"), and Fitch Investors Service, L.P. ("Fitch").
    

Ratings By Moody's
Corporate and Municipal Bonds:
Aaa.  Bonds rated Aaa are judged to be of the best quality.  They 
carry the smallest degree of investment risk and are generally 
referred to as "gilt edge."  Interest payments 

<PAGE> 70

are protected by a large or by an exceptionally stable margin and 
principal is secure.  Although the various protective elements are 
likely to change, such changes as can be visualized are most 
unlikely to impair the fundamentally strong position of such 
bonds.

Aa.  Bonds rated Aa are judged to be of high quality by all 
standards.  Together with the Aaa group they comprise what are 
generally known as high grade bonds.  They are rated lower than 
the best bonds because margins of protection may not be as large 
as in Aaa bonds or fluctuation of protective elements may be of 
greater amplitude or there may be other elements present which 
make the long term risks appear somewhat larger than in Aaa bonds.

A.  Bonds rated A possess many favorable investment attributes and 
are to be considered as upper medium grade obligations.  Factors 
giving security to principal and interest are considered adequate, 
but elements may be present which suggest a susceptibility to 
impairment sometime in the future.

Baa.  Bonds rated Baa are considered medium grade obligations; 
i.e., they are neither highly protected nor poorly secured.  
Interest payments and principal security appear adequate for the 
present but certain protective elements may be lacking or may be 
characteristically unreliable over any great length of time.  Such 
bonds lack outstanding investment characteristics and in fact have 
speculative characteristics as well.

Ba.  Bonds which are rated Ba are judged to have speculative 
elements; their future cannot be considered as well assured.  
Often the protection of interest and principal payments may be 
very moderate, and thereby not well safeguarded during both good 
and bad times over the future.  Uncertainty of position 
characterizes bonds in this class.

B.  Bonds which are rated B generally lack characteristics of the 
desirable investment.  Assurance of interest and principal 
payments or of maintenance of other terms of the contract over any 
long period of time may be small.

Caa.  Bonds which are rated Caa are of poor standing.  Such issues 
may be in default or there may be present elements of danger with 
respect to principal or interest.

Ca.  Bonds which are rated Ca represent obligations which are 
speculative in a high degree.  Such issues are often in default or 
have other marked shortcomings.

C.  Bonds which are rated C are the lowest rated class of bonds, 
and issues so rated can be regarded as having extremely poor 
prospects of ever attaining any real investment standing.

Conditional Ratings.  Bonds for which the security depends upon 
the completion of some act or the fulfillment of some condition 
are rated conditionally.  These are bonds secured by (a) earnings 
of projects under construction, (b) earnings of projects 
unseasoned in operating experience, (c) rentals which begin when 
facilities are completed, or (d) payments to which some other 
limiting condition attaches.  Parenthetical rating denotes 
probable credit stature upon completion of construction or 
elimination of basis of condition.

<PAGE> 71

Notes:  Those bonds in the Aa, A, Baa, Ba, and B groups which 
Moody's believes possess the strongest investment attributes are 
designated by the symbols Aa 1, A 1, Baa 1, Ba 1, and B 1.

Moody's applies numerical modifiers 1, 2, and 3 in each generic 
rating classification from Aa through B in its corporate bond 
rating system.  The modifier 1 indicates that the security ranks 
in the higher end of its generic rating category; the modifier 2 
indicates a mid-range ranking; and the modifier 3 indicates that 
the issue ranks in the lower end of its generic rating category.

Municipal Notes:
MIG 1.  This designation denotes best quality.  There is present 
strong protection by established cash flows, superior liquidity 
support or demonstrated broad-based access to the market for 
refinancing.

MIG 2.  This designation denotes high quality.  Margins of 
protection are ample although not so large as in the preceding 
group.

MIG 3.  This designation denotes favorable quality.  All security 
elements are accounted for but there is lacking the undeniable 
strength of the preceding grades.  Liquidity and cash flow 
protection may be narrow and market access for refinancing is 
likely to be less well established.

Demand Feature of Variable Rate Demand Securities:
Moody's may assign a separate rating to the demand feature of a 
variable rate demand security.  Such a rating may include:

VMIG 1.  This designation denotes best quality.  There is present 
strong protection by established cash flows, superior liquidity 
support or demonstrated broad-based access to the market for 
refinancing.

VMIG 2.  This designation denotes high quality.  Margins of 
protection are ample although not so large as in the preceding 
group.

VMIG 3.  This designation denotes favorable quality.  All security 
elements are accounted for but there is lacking the undeniable 
strength of the preceding grades.  Liquidity and cash flow 
protection may be narrow and market access for refinancing is 
likely to be less well established.

Commercial Paper:
Moody's employs the following three designations, all judged to be 
investment grade, to indicate the relative repayment capacity of 
rated issuers:

Prime-1       Highest Quality
Prime-2       Higher Quality
Prime-3       High Quality

If an issuer represents to Moody's that its commercial paper 
obligations are supported by the credit of another entity or 
entities, Moody's, in assigning ratings to such issuers, evaluates 
the financial strength of the indicated affiliated corporations, 
commercial 

<PAGE> 72

banks, insurance companies, foreign governments, or other 
entities, but only as one factor in the total rating assessment.

RATINGS BY S&P:
Corporate and Municipal Bonds:
AAA.  Debt rated AAA has the highest rating.  Capacity to pay 
interest and repay principal is extremely strong.

AA.  Debt rated AA has a very strong capacity to pay interest and 
repay principal and differ from the higher rated issues only in 
small degree.

A.  Debt rated A has a strong capacity to pay interest and repay 
principal although it is somewhat more susceptible to the adverse 
effects of changes in circumstances and economic conditions than 
debt in higher-rated categories.

BBB.  Debt rated BBB is regarded as having an adequate capacity to 
pay interest and repay principal.  Whereas it normally exhibits 
adequate protection parameters, adverse economic conditions or 
changing circumstances are more likely to lead to a weakened 
capacity to pay principal and interest for debt in this category 
than for debt in higher-rated categories.

BB, B, CCC, CC, and C.  Debt rated BB, B, CCC, CC, or C is 
regarded, on balance, as predominantly speculative with respect to 
capacity to pay interest and repay principal in accordance with 
the terms of the obligation.  BB indicates the lowest degree of 
speculation and C the highest degree of speculation.  While such 
debt will likely have some quality and protective characteristics, 
these are outweighed by large uncertainties or major risk 
exposures to adverse conditions.

C1.  The rating C1 is reserved for income bonds on which no 
interest is being paid.

D.  Debt rated D is in default, and payment of interest and/or 
repayment of principal is in arrears.  The D rating also is issued 
upon the filing of a bankruptcy petition if debt service payments 
are jeopardized.

NOTES:  The ratings from AA to CCC may be modified by the addition 
of a plus (+) or minus (-) sign to show relative standing within 
the major rating categories.  Foreign debt is rated on the same 
basis as domestic debt measuring the creditworthiness of the 
issuer; ratings of foreign debt do not take into account currency 
exchange and related uncertainties.

The "r" is attached to highlight derivative, hybrid, and certain 
other obligations that S&P believes may experience high volatility 
or high variability in expected returns due to non-credit risks.  
Examples of such obligations are: securities whose principal or 
interest return is indexed to equities, commodities, or 
currencies; certain swaps and options; and interest only and 
principal only mortgage securities.  The absence of an "r" symbol 
should not be taken as an indication that an obligation will 
exhibit no volatility or variability in total return.

Provisional Ratings.  The letter "p" indicates that the rating is 
provisional.  A provisional rating assumes the successful 
completion of the project being financed by the 

<PAGE> 73

debt being rated and indicates that payment of debt service 
requirements is largely or entirely dependent upon the successful 
and timely completion of the project.  This rating, however, 
although addressing credit quality subsequent to completion of the 
project, makes no comment on the likelihood of, or the risk of 
default upon failure of, such completion.  The investor should 
exercise his own judgment with respect to such likelihood and 
risk.

Municipal Notes:
SP-1.  Notes rated SP-1 have very strong or strong capacity to pay 
principal and interest.  Those issues determined to possess 
overwhelming safety characteristics are designated as SP-1+.

SP-2.  Notes rated SP-2 have satisfactory capacity to pay 
principal and interest.

Notes due in three years or less normally receive a note rating.  
Notes maturing beyond three years normally receive a bond rating, 
although the following criteria are used in making that 
assessment:

- - Amortization schedule (the larger the final maturity relative to 
other maturities, the more likely the issue will be rated as a 
note).

- - Source of payment (the more dependent the issue is on the market 
for its refinancing, the more likely it will be rated as a note).

Demand Feature of Variable Rate Demand Securities:
S&P assigns dual ratings to all long-term debt issues that have as 
part of their provisions a demand feature.  The first rating 
addresses the likelihood of repayment of principal and interest as 
due, and the second rating addresses only the demand feature.  The 
long-term debt rating symbols are used for bonds to denote the 
long-term maturity and the commercial paper rating symbols are 
usually used to denote the put (demand) option (for example, 
AAA/A-1+).  Normally, demand notes receive note rating symbols 
combined with commercial paper symbols (for example, SP-1+/A-1+).

Commercial Paper:
A.  Issues assigned this highest rating are regarded as having the 
greatest capacity for timely payment.  Issues in this category are 
further refined with the designations 1, 2, and 3 to indicate the 
relative degree to safety.

A-1.  This designation indicates that the degree of safety 
regarding timely payment is either overwhelming or very strong.  
Those issues determined to possess overwhelming safety 
characteristics are designed A-1+.


   
RATINGS BY FITCH
Investment Grade Bond and Preferred Stock Ratings
Fitch investment grade bond and preferred stock ratings provide a 
guide to investors in determining the credit risk associated with 
a particular security.  The ratings represent Fitch's assessment 
of the issuer's ability to meet the obligations of a specific debt 
or preferred issue in a timely manner.  The rating takes into 
consideration special features of the issue, its relationship to 
other obligations of the issuer, the current and prospective 

<PAGE> 74

financial condition and operating performance of the issuer and 
any guarantor, as well as the economic and political environment 
that might affect the issuer's future financial strength and 
credit quality.

Fitch ratings do not reflect any credit enhancement that may be 
provided by insurance policies or financial guaranties unless 
otherwise indicated.  Bonds and preferred stock carrying the same 
rating are of similar but not necessarily identical credit quality 
since the rating categories do not fully reflect small differences 
in the degrees of credit risk.

Fitch ratings are not recommendations to buy, sell, or hold any 
security.  Ratings do not comment on the adequacy of market price, 
the suitability of any security for a particular investor, or the 
tax-exempt nature or taxability of payments made in respect of any 
security.  Fitch ratings are based on information obtained from 
issuers, other obligors, underwriters, their experts, and other 
sources Fitch believes to be reliable  Fitch does not audit or 
verify the truth or accuracy of such information.  Ratings may be 
changed, suspended, or withdrawn as a result of changes in, or the 
unavailability of, information or for other reasons.

AAA.  Bonds and preferred stock considered to be investment grade 
and of the highest credit quality.  The obligor has an 
exceptionally strong ability to pay interest and/or dividends and 
repay principal, which is unlikely to be affected by reasonably 
foreseeable events.

AA.  Bonds and preferred stock considered to be investment grade 
and of very high credit quality.  The obligor's ability to pay 
interest and/or dividends and repay principal is very strong, 
although not quite as strong as bonds rated AAA.  Because bond and 
preferred rated in the AAA and AA categories are not significantly 
vulnerable to foreseeable future developments, short-term debt of 
these issuers is generally rated F-1+.

A.  Bonds and preferred stock considered to be investment grade 
and of high quality.  The obligor's ability to pay interest and/or 
dividends and repay principal is considered to be strong, but may 
be more vulnerable to adverse changes in economic conditions and 
circumstances than debt or preferred securities with higher 
ratings.

BBB.  Bonds and preferred stock considered to be investment grade 
and of satisfactory credit quality.  The obligor's ability to pay 
interest or dividends and repay principal is considered to be 
adequate.  Adverse changes in economic conditions and 
circumstances, however, are more likely to have adverse impact on 
these securities and, therefore, impair timely payment.  The 
likelihood that the ratings of these bonds or preferred will fall 
below investment grade is higher than for securities with higher 
ratings.

Plus (+) or Minus (-).  Plus and minus signs are used with a 
rating symbol to indicate the relative position of a credit within 
the rating category.  Plus and minus signs, however, are not used 
in the AAA category.

NR.  Indicates that Fitch does not rate the specific issue.

Conditional.  A conditional rating is premised on the successful 
completion of a project or the occurrence of a specific event.

<PAGE> 75

Suspended.  A rating is suspended when Fitch deems the amount of 
information available from the issuer to be inadequate for rating 
purposes.

Withdrawn.  A rating will be withdrawn when an issue matures or is 
called or refinanced, and, at Fitch's discretion, when an issuer 
fails to furnish proper and timely information.

FitchAlert.  Ratings are placed on FitchAlert to notify investors 
of an occurrence that is likely to result in a rating change and 
the likely direction of such change.  These are designated as 
"Positive," indicating a potential upgrade, "Negative," for 
potential downgrade, or "Evolving," where ratings may be raised or 
lowered.  FitchAlert is relatively short-term and should be 
resolved within 12 months.

Ratings Outlook.  An outlook is used to describe the most likely 
direction of any rating change over the intermediate term.  It is 
described as "Positive" or "Negative."  The absence of a 
designation indicates a stable outlook.
    

<PAGE> 76

                                 PART C
                            OTHER INFORMATION

Item 24.  Financial Statements and Exhibits.

(a) Financial Statements
    1.  Financial statements included in Part A:  None.
    2.  Financial statements included in Part B:  Audited 
        financial statements (investments as of 6/30/97, balance 
        sheet as of 6/30/97, statement of operations for the 
        periods ended 6/30/97, statement of changes in net assets 
        and financial highlights for the period ended 6/30/97 
        [periods ended 6/30/97 and 6/30/96 for SR&F Municipal 
        Money Market Portfolio], and notes thereto) of SR&F 
        Municipal Money Market Portfolio and SR&F High Yield 
        Portfolio are incorporated by reference to those portions 
        of the 6/30/97 annual report of Stein Roe Municipal Trust 
        and the 6/30/97 annual report of the Bond Funds of Stein 
        Roe Income Trust, respectively.  Unaudited financial 
        statements (investments as of 3/31/97, balance sheet as of 
        3/31/97, statement of operations and statement of changes 
        in net assets for the period ended 3/31/97, and notes 
        thereto) for each of the Equity Portfolios are 
        incorporated by reference to those portions of the 3/31/97 
        semiannual reports of Stein Roe Investment Trust.

(b) Exhibits  [Note:  As used herein, the term "Registration 
    Statement" refers to the Registration Statement of the 
    Registrant on Form N-1A filed under the Investment Company Act 
    of 1940, File No. 811-7996.]
    1.  Declaration of Trust of Registrant as amended through 
        August 1, 1995.  (Exhibit 1 to Amendment No. 2 to 
        Registration Statement.)*
    2.  By-Laws of Registrant.  (Exhibit 2 to Amendment No. 2 to 
        Registration Statement.)*
    3.  Inapplicable.
    4.  Inapplicable.
    5.  Management Agreement between Registrant and Stein Roe & 
        Farnham Incorporated as amended through 11/1/96.  (Exhibit 
        5 to Amendment No. 5 to Registration Statement.)*
    6.  Inapplicable pursuant to Instruction F.4 to Form N-1A.
    7.  Inapplicable.
    8.  Custodian Agreement between Registrant and State Street 
        Bank and Trust Company.  (Exhibit 8 to Amendment No. 2 to 
        Registration Statement.)*
    9.  (a)  Investor Service Agreement between Registrant and 
             SteinRoe Services Inc. as amended through 11/1/96.  
             (Exhibit 9(a) to Amendment No. 5 to Registration 
             Statement.)*
        (b)  Bookkeeping and Accounting Agreement between 
             Registrant and Stein Roe & Farnham Incorporated as 
             amended through 11/1/96.  (Exhibit 9(b) to Amendment 
             No. 6 to Registration Statement.)*
   10.  Inapplicable pursuant to Instruction F.4 of Form N-1A.  
        (Exhibit 9(b) to Amendment No. 5 to Registration 
        Statement.)*
   11.  Consent of Ernst & Young LLP.
   12.  Inapplicable pursuant to Instruction F.4 of Form N-1A.
   13.  Inapplicable.
   14.  Inapplicable.
   15.  Inapplicable.
   16.  Inapplicable.
   17.  (a)  Financial data schedule--SR&F Municipal Money Market 
             Portfolio.
        (b)  Financial data schedule--SR&F High Yield Portfolio.
        (c)  Financial data schedule--SR&F Growth & Income 
             Portfolio.
        (d)  Financial data schedule--SR&F International 
             Portfolio.
        (e)  Financial data schedule--SR&F Growth Investor 
             Portfolio.
        (f)  Financial data schedule--SR&F Special Venture 
             Portfolio.
        (g)  Financial data schedule--SR&F Balanced Portfolio.
        (h)  Financial data schedule--SR&F Growth Stock Portfolio.
        (i)  Financial data schedule--SR&F Special Portfolio.
   18.  Inapplicable
     ________________________________
     *Incorporated by reference.

Item 25.  Persons Controlled by or Under Common Control with 
Registrant.

The Registrant does not consider that it is directly or indirectly 
controlled by, or under common control with, other persons within 
the meaning of this Item.  

Item 26.  Number of Holders of Securities.


Title of Class                       Number of Record Holders as 
                                        of September 15, 1997
SR&F Municipal Money Market Portfolio               2
SR&F High Yield Portfolio                           3
SR&F Balanced Portfolio                             2
SR&F Growth & Income Portfolio                      2
SR&F Growth Stock Portfolio                         2
SR&F Growth Investor Portfolio                      2
SR&F Special Portfolio                              2
SR&F Special Venture Portfolio                      2
SR&F International Portfolio                        2

Item 27.  Indemnification.

Reference is made to Article X of the Registrant's Declaration of 
Trust (Exhibit 1) with respect to indemnification of the trustees 
and officers of Registrant against liabilities which may be 
incurred by them in such capacities.

Registrant, its trustees and officers, its investment adviser, the 
other investment companies advised by the adviser, and persons 
affiliated with them are insured against certain expenses in 
connection with the defense of actions, suits, or proceedings, and 
certain liabilities that might be imposed as a result of such 
actions, suits, or proceedings.  Registrant will not pay any 
portion of the premiums for coverage under such insurance that 
would (1) protect any trustee or officer against any liability to 
Registrant or its shareholders to which he would otherwise be 
subject by reason of willful misfeasance, bad faith, gross 
negligence, or reckless disregard of the duties involved in the 
conduct of his office or (2) protect its investment adviser or 
principal underwriter, if any, against any liability to Registrant 
or its shareholders to which such person would otherwise be 
subject by reason of willful misfeasance, bad faith, or gross 
negligence, in the performance of its duties, or by reason of its 
reckless disregard of its duties and obligations under its 
contract or agreement with the Registrant; for this purpose the 
Registrant will rely on an allocation of premiums determined by 
the insurance company.

Colonial Tax-Exempt Money Market Fund ("Colonial Fund"), a series 
of Colonial Trust IV ("Colonial Trust") invests substantially all 
of its assets in Municipal Money Portfolio.  In that connection, 
trustees and officers of Registrant have signed the registration 
statement of Colonial Trust ("Colonial Registration Statement") on 
behalf of Registrant insofar as the Colonial Registration 
Statement relates to Colonial Fund, and Colonial Trust, on behalf 
of Colonial Fund, has agreed to indemnify Registrant and its 
trustees and officers against certain liabilities which may be 
incurred by them.

Item 28.  Business and Other Connections of Investment Adviser.

Stein Roe & Farnham Incorporated (the "Adviser") is a wholly owned 
subsidiary of SteinRoe Services Inc. ("SSI"), which is a wholly 
owned subsidiary of Liberty Financial Companies, Inc. ("Liberty 
Financial"), which is a majority owned subsidiary of LFC Holdings, 
Inc., which is a wholly owned subsidiary of Liberty Mutual Equity 
Corporation, which is a wholly owned subsidiary of Liberty Mutual 
Insurance Company.  The Adviser acts as investment adviser to 
individuals, trustees, pension and profit-sharing plans, 
charitable organizations, and other investors.  In addition to 
Registrant, it also acts as investment adviser to other investment 
companies having different investment policies.

For a two-year business history of officers and directors of the 
Adviser, please refer to the Form ADV of Stein Roe & Farnham 
Incorporated and to the section of the statement of additional 
information (part B) entitled "Investment Advisory Services."

Certain directors and officers of the Adviser also serve and have 
during the past two years served in various capacities as 
officers, directors, or trustees of SSI and of the Registrant, 
Stein Roe Income Trust, Stein Roe Investment Trust, Stein Roe 
Municipal Trust, Stein Roe Advisor Trust, Stein Roe Institutional 
Trust, SteinRoe Trust, SteinRoe Variable Investment Trust, Keyport 
Variable investment Trust and LFC Utilities Trust, investment 
companies managed by the Adviser.  A list of such capacities is 
given below.  (The listed entities are located at South Wacker 
Drive, Chicago, Illinois 60606, except for SteinRoe Variable 
Investment Trust which is located at 600 Atlantic Avenue, Boston, 
Massachusetts  02210, and LFC Utilities Trust which is located at 
One Financial Center, Boston, Massachusetts 02111.)
 

                                                    POSITION FORMERLY
                                                    HELD WITHIN
                      CURRENT POSITION              PAST TWO YEARS
                      -------------------           --------------
SteinRoe Services Inc.      
Gary A. Anetsberger   Vice President   
Timothy K. Armour     Vice President   
Jilaine Hummel Bauer  Vice President; Secretary   
Kenneth J. Kozanda    Vice President; Treasurer   
Kenneth R. Leibler    Director    
C. Allen Merritt, Jr. Director   
Hans P. Ziegler       Director, President, Chairman  Vice Chairman
      
SR&F Base Trust      
Gary A. Anetsberger   Senior Vice-President; Treasurer
Timothy K. Armour     President; Trustee   
Jilaine Hummel Bauer  Executive Vice-President;
                      Secretary   
Thomas W. Butch       Executive Vice-President   
Michael T. Kennedy                                   Vice-President
Lynn C. Maddox                                       Vice-President
Jane M. Naeseth                                      Vice-President
Thomas P. Sorbo                                      Vice-President
Hans P. Ziegler       Executive Vice-President 
      
Stein Roe Income Trust;
Stein Roe Institutional Trust; 
Stein Roe Trust    
Gary A. Anetsberger  Senior Vice-President; Treasurer
Timothy K. Armour    President; Trustee   
Jilaine Hummel Bauer Executive Vice-President;
                     Secretary   
Thomas W. Butch      Executive Vice-President        Vice-President
Philip J. Crosley    Vice President   
Michael T. Kennedy   Vice-President   
Stephen F .Lockman   Vice-President   
Steven P. Luetger                                    Vice-President
Lynn C. Maddox       Vice-President   
Anne E. Marcel       Vice President   
Jane M. Naeseth      Vice-President   
Thomas P. Sorbo      Vice-President   
Hans P. Ziegler      Executive Vice-President   
      
Stein Roe Investment Trust;
 Stein Roe Advisor Trust      
Gary A. Anetsberger  Senior Vice-President; Treasurer 
Timothy K. Armour    President; Trustee   
Jilaine Hummel Bauer Executive Vice-President;
                     Secretary   
Bruno Bertocci       Vice-President   
David P. Brady       Vice-President   
Thomas W. Butch      Executive Vice-President       Vice-President
Daniel K. Cantor     Vice-President   
E. Bruce Dunn                                       Vice-President
Erik P. Gustafson    Vice-President   
David P. Harris      Vice-President   
Harvey B. Hirschhorn Vice-President   
Eric S. Maddix       Vice-President   
Lynn C. Maddox       Vice-President   
Anne E. Marcel       Vice President   
Arthur J. McQueen    Vice-President   
Richard B. Peterson  Vice-President   
M. Gerry Sandel      Vice-President   
Gloria J. Santella   Vice-President   
Thomas P. Sorbo      Vice-President   
Hans P. Ziegler      Executive Vice-President   
      
Stein Roe Municipal Trust       
Gary A. Anetsberger  Senior Vice-President; Treasurer   
Timothy K. Armour    President; Trustee   
Jilaine Hummel Bauer Executive Vice-President; Secretary   
Thomas W. Butch      Executive Vice-President         Vice-President
Joanne T. Costopoulos Vice-President   
Lynn C. Maddox       Vice-President   
Anne E. Marcel       Vice President   
M. Jane McCart       Vice-President   
Thomas P. Sorbo      Vice-President   
Hans P. Ziegler      Executive Vice-President   
      
SteinRoe Variable Investment Trust      
Gary A. Anetsberger  Treasurer   
Timothy K. Armour    Vice President   
Jilaine Hummel Bauer Vice President   
Erik P. Gustafson    Vice President   
Harvey B. Hirschhorn Vice President   
Michael T. Kennedy   Vice President   
Jane M. Naeseth      Vice President   
Richard B. Peterson  Vice President   
      
LFC Utilities Trust      
Gary A. Anetsberger  Vice President   
Ophelia L. Barsketis Vice President   
Deborah A. Jansen    Vice President   
      
Keyport Variable Investment Trust      
Ophelia L. Barsketis Vice President   
Deborah A. Jansen    Vice President   

Item 29.  Principal Underwriters.

Inapplicable.

Item 30.  Location of Accounts and Records.

Jilaine Hummel Bauer
Executive Vice-President and Secretary
SR&F Base Trust
One South Wacker Drive
Chicago, Illinois  60606

Item 31.  Management Services.

None.

Item 32.  Undertakings.

Inapplicable.

<PAGE> 
                                SIGNATURES

     Pursuant to the requirements of the Investment Company Act of 
1940, the Registrant has duly caused this Registration Statement 
to be signed on its behalf by the undersigned, thereunto duly 
authorized, in the City of Chicago and State of Illinois on the 
26th day of September, 1997.

                                SR&F BASE TRUST

                                By     TIMOTHY K. ARMOUR
                                       Timothy K. Armour
                                       Trustee and President

<PAGE> 

                         SR&F BASE TRUST
       INDEX TO EXHIBITS FILED WITH THIS REGISTRATION STATEMENT

Exhibit
Number   Description 

11       Consent of Ernst & Young LLP

17(a)    Financial data schedule--SR&F Municipal Money Market 
Portfolio
  (b)    Financial data schedule--SR&F High Yield Portfolio
  (c)    Financial data schedule--SR&F Growth & Income Portfolio
  (d)    Financial data schedule--SR&F International Portfolio
  (e)    Financial data schedule--SR&F Growth Investor Portfolio
  (f)    Financial data schedule--SR&F Special Venture Portfolio
  (g)    Financial data schedule--SR&F Balanced Portfolio
  (h)    Financial data schedule--SR&F Growth Stock Portfolio
  (i)    Financial data schedule--SR&F Special Portfolio





EXHIBIT 11


            CONSENT OF INDEPENDENT AUDITORS


We consent to the reference to our firm under the caption 
"Independent Auditors" and to the use of our reports dated 
August 11, 1997 with respect to SR&F High Yield Portfolio and 
August 12, 1997 with respect to SR&F Municipal Money Market 
Portfolio in the Registration Statement (Form N-1A) of SR&F 
Base Trust, filed with the Securities and Exchange Commission 
in this Amendment No. 8 to the Registration Statement under 
the Investment Company Act of 1940 (Registration No. 811-
7996).

                                      ERNST & YOUNG LLP


Chicago, Illinois
September 24, 1997





<TABLE> <S> <C>

<ARTICLE> 6
<SERIES>
   <NUMBER> 2
   <NAME> SR&F MUNICIPAL MONEY MARKET PORTFOLIO
       
<S>                             <C>
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          JUN-30-1997
<PERIOD-START>                             JUL-01-1996
<PERIOD-END>                               JUN-30-1997
<INVESTMENTS-AT-COST>                          144,151
<INVESTMENTS-AT-VALUE>                         144,151
<RECEIVABLES>                                    4,077
<ASSETS-OTHER>                                      22
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<TOTAL-ASSETS>                                 148,250
<PAYABLE-FOR-SECURITIES>                         9,274
<SENIOR-LONG-TERM-DEBT>                              0
<OTHER-ITEMS-LIABILITIES>                           48
<TOTAL-LIABILITIES>                              9,322
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<OTHER-INCOME>                                       0
<EXPENSES-NET>                                     454
<NET-INVESTMENT-INCOME>                          4,728
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<EQUALIZATION>                                       0
<DISTRIBUTIONS-OF-INCOME>                            0
<DISTRIBUTIONS-OF-GAINS>                             0
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<NUMBER-OF-SHARES-SOLD>                        118,114
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<OVERDISTRIB-NII-PRIOR>                              0
<OVERDIST-NET-GAINS-PRIOR>                           0
<GROSS-ADVISORY-FEES>                              352
<INTEREST-EXPENSE>                                   0
<GROSS-EXPENSE>                                    454
<AVERAGE-NET-ASSETS>                           140,697
<PER-SHARE-NAV-BEGIN>                                0
<PER-SHARE-NII>                                      0
<PER-SHARE-GAIN-APPREC>                              0
<PER-SHARE-DIVIDEND>                                 0
<PER-SHARE-DISTRIBUTIONS>                            0
<RETURNS-OF-CAPITAL>                                 0
<PER-SHARE-NAV-END>                                  0
<EXPENSE-RATIO>                                   0.32
<AVG-DEBT-OUTSTANDING>                               0
<AVG-DEBT-PER-SHARE>                                 0
        

</TABLE>

<TABLE> <S> <C>

<ARTICLE> 6
<SERIES>
   <NUMBER> 3
   <NAME> SR&F HIGH YIELD PORTFOLIO
       
<S>                             <C>
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          JUN-30-1997
<PERIOD-START>                             NOV-01-1996
<PERIOD-END>                               JUN-30-1997
<INVESTMENTS-AT-COST>                           37,733
<INVESTMENTS-AT-VALUE>                          38,282
<RECEIVABLES>                                    2,018
<ASSETS-OTHER>                                       9
<OTHER-ITEMS-ASSETS>                                 0
<TOTAL-ASSETS>                                  40,309
<PAYABLE-FOR-SECURITIES>                           997
<SENIOR-LONG-TERM-DEBT>                              0
<OTHER-ITEMS-LIABILITIES>                           39
<TOTAL-LIABILITIES>                              1,036
<SENIOR-EQUITY>                                      0
<PAID-IN-CAPITAL-COMMON>                             0
<SHARES-COMMON-STOCK>                                0
<SHARES-COMMON-PRIOR>                                0
<ACCUMULATED-NII-CURRENT>                            0
<OVERDISTRIBUTION-NII>                               0
<ACCUMULATED-NET-GAINS>                              0
<OVERDISTRIBUTION-GAINS>                             0
<ACCUM-APPREC-OR-DEPREC>                             0
<NET-ASSETS>                                    39,273
<DIVIDEND-INCOME>                                    0
<INTEREST-INCOME>                                  969
<OTHER-INCOME>                                       0
<EXPENSES-NET>                                      95
<NET-INVESTMENT-INCOME>                            874
<REALIZED-GAINS-CURRENT>                           336
<APPREC-INCREASE-CURRENT>                          549
<NET-CHANGE-FROM-OPS>                            1,759
<EQUALIZATION>                                       0
<DISTRIBUTIONS-OF-INCOME>                            0
<DISTRIBUTIONS-OF-GAINS>                             0
<DISTRIBUTIONS-OTHER>                                0
<NUMBER-OF-SHARES-SOLD>                         38,807
<NUMBER-OF-SHARES-REDEEMED>                    (1,293)
<SHARES-REINVESTED>                                  0
<NET-CHANGE-IN-ASSETS>                          39,273
<ACCUMULATED-NII-PRIOR>                              0
<ACCUMULATED-GAINS-PRIOR>                            0
<OVERDISTRIB-NII-PRIOR>                              0
<OVERDIST-NET-GAINS-PRIOR>                           0
<GROSS-ADVISORY-FEES>                               53
<INTEREST-EXPENSE>                                   0
<GROSS-EXPENSE>                                     95
<AVERAGE-NET-ASSETS>                            16,053
<PER-SHARE-NAV-BEGIN>                                0
<PER-SHARE-NII>                                      0
<PER-SHARE-GAIN-APPREC>                              0
<PER-SHARE-DIVIDEND>                                 0
<PER-SHARE-DISTRIBUTIONS>                            0
<RETURNS-OF-CAPITAL>                                 0
<PER-SHARE-NAV-END>                                  0
<EXPENSE-RATIO>                                   0.89
<AVG-DEBT-OUTSTANDING>                               0
<AVG-DEBT-PER-SHARE>                                 0
        

</TABLE>

<TABLE> <S> <C>

<ARTICLE> 6
<SERIES>
   <NUMBER> 4
   <NAME> SR&F GROWTH & INCOME PORTFOLIO
       
<S>                             <C>
<PERIOD-TYPE>                   6-MOS
<FISCAL-YEAR-END>                          SEP-30-1997
<PERIOD-START>                             FEB-03-1997
<PERIOD-END>                               MAR-31-1997
<INVESTMENTS-AT-COST>                          210,355
<INVESTMENTS-AT-VALUE>                         273,470
<RECEIVABLES>                                      382
<ASSETS-OTHER>                                       4
<OTHER-ITEMS-ASSETS>                                 0
<TOTAL-ASSETS>                                 273,856
<PAYABLE-FOR-SECURITIES>                             0
<SENIOR-LONG-TERM-DEBT>                              0
<OTHER-ITEMS-LIABILITIES>                          669
<TOTAL-LIABILITIES>                                669
<SENIOR-EQUITY>                                      0
<PAID-IN-CAPITAL-COMMON>                             0
<SHARES-COMMON-STOCK>                                0
<SHARES-COMMON-PRIOR>                                0
<ACCUMULATED-NII-CURRENT>                            0
<OVERDISTRIBUTION-NII>                               0
<ACCUMULATED-NET-GAINS>                              0
<OVERDISTRIBUTION-GAINS>                             0
<ACCUM-APPREC-OR-DEPREC>                             0
<NET-ASSETS>                                   273,187
<DIVIDEND-INCOME>                                  748
<INTEREST-INCOME>                                  544
<OTHER-INCOME>                                       0
<EXPENSES-NET>                                     276
<NET-INVESTMENT-INCOME>                          1,016
<REALIZED-GAINS-CURRENT>                         2,150
<APPREC-INCREASE-CURRENT>                     (12,342)
<NET-CHANGE-FROM-OPS>                          (9,176)
<EQUALIZATION>                                       0
<DISTRIBUTIONS-OF-INCOME>                            0
<DISTRIBUTIONS-OF-GAINS>                             0
<DISTRIBUTIONS-OTHER>                                0
<NUMBER-OF-SHARES-SOLD>                        286,229
<NUMBER-OF-SHARES-REDEEMED>                    (3,866)
<SHARES-REINVESTED>                                  0
<NET-CHANGE-IN-ASSETS>                         273,187
<ACCUMULATED-NII-PRIOR>                              0
<ACCUMULATED-GAINS-PRIOR>                            0
<OVERDISTRIB-NII-PRIOR>                              0
<OVERDIST-NET-GAINS-PRIOR>                           0
<GROSS-ADVISORY-FEES>                              258
<INTEREST-EXPENSE>                                   0
<GROSS-EXPENSE>                                    276
<AVERAGE-NET-ASSETS>                           280,773
<PER-SHARE-NAV-BEGIN>                                0
<PER-SHARE-NII>                                      0
<PER-SHARE-GAIN-APPREC>                              0
<PER-SHARE-DIVIDEND>                                 0
<PER-SHARE-DISTRIBUTIONS>                            0
<RETURNS-OF-CAPITAL>                                 0
<PER-SHARE-NAV-END>                                  0
<EXPENSE-RATIO>                                   0.64
<AVG-DEBT-OUTSTANDING>                               0
<AVG-DEBT-PER-SHARE>                                 0
        

</TABLE>

<TABLE> <S> <C>

<ARTICLE> 6
<SERIES>
   <NUMBER> 5
   <NAME> SR&F INTERNATIONAL PORTFOLIO
       
<S>                             <C>
<PERIOD-TYPE>                   6-MOS
<FISCAL-YEAR-END>                          SEP-30-1997
<PERIOD-START>                             FEB-03-1997
<PERIOD-END>                               MAR-31-1997
<INVESTMENTS-AT-COST>                          139,163
<INVESTMENTS-AT-VALUE>                         139,164
<RECEIVABLES>                                      279
<ASSETS-OTHER>                                     848
<OTHER-ITEMS-ASSETS>                                 0
<TOTAL-ASSETS>                                 140,291
<PAYABLE-FOR-SECURITIES>                             0
<SENIOR-LONG-TERM-DEBT>                              0
<OTHER-ITEMS-LIABILITIES>                          128
<TOTAL-LIABILITIES>                                128
<SENIOR-EQUITY>                                      0
<PAID-IN-CAPITAL-COMMON>                             0
<SHARES-COMMON-STOCK>                                0
<SHARES-COMMON-PRIOR>                                0
<ACCUMULATED-NII-CURRENT>                            0
<OVERDISTRIBUTION-NII>                               0
<ACCUMULATED-NET-GAINS>                              0
<OVERDISTRIBUTION-GAINS>                             0
<ACCUM-APPREC-OR-DEPREC>                             0
<NET-ASSETS>                                   140,163
<DIVIDEND-INCOME>                                  541
<INTEREST-INCOME>                                   46
<OTHER-INCOME>                                    (62)
<EXPENSES-NET>                                     196
<NET-INVESTMENT-INCOME>                            329
<REALIZED-GAINS-CURRENT>                         2,024
<APPREC-INCREASE-CURRENT>                        6,540
<NET-CHANGE-FROM-OPS>                            8,803
<EQUALIZATION>                                       0
<DISTRIBUTIONS-OF-INCOME>                            0
<DISTRIBUTIONS-OF-GAINS>                             0
<DISTRIBUTIONS-OTHER>                                0
<NUMBER-OF-SHARES-SOLD>                        139,079
<NUMBER-OF-SHARES-REDEEMED>                    (7,719)
<SHARES-REINVESTED>                                  0
<NET-CHANGE-IN-ASSETS>                         140,163
<ACCUMULATED-NII-PRIOR>                              0
<ACCUMULATED-GAINS-PRIOR>                            0
<OVERDISTRIB-NII-PRIOR>                              0
<OVERDIST-NET-GAINS-PRIOR>                           0
<GROSS-ADVISORY-FEES>                              187
<INTEREST-EXPENSE>                                   0
<GROSS-EXPENSE>                                    196
<AVERAGE-NET-ASSETS>                           143,108
<PER-SHARE-NAV-BEGIN>                                0
<PER-SHARE-NII>                                      0
<PER-SHARE-GAIN-APPREC>                              0
<PER-SHARE-DIVIDEND>                                 0
<PER-SHARE-DISTRIBUTIONS>                            0
<RETURNS-OF-CAPITAL>                                 0
<PER-SHARE-NAV-END>                                  0
<EXPENSE-RATIO>                                   0.89
<AVG-DEBT-OUTSTANDING>                               0
<AVG-DEBT-PER-SHARE>                                 0
        

</TABLE>

<TABLE> <S> <C>

<ARTICLE> 6
<SERIES>
   <NUMBER> 6
   <NAME> SR&F GROWTH INVESTOR PORTFOLIO
       
<S>                             <C>
<PERIOD-TYPE>                   6-MOS
<FISCAL-YEAR-END>                          SEP-30-1997
<PERIOD-START>                             FEB-03-1997
<PERIOD-END>                               MAR-31-1997
<INVESTMENTS-AT-COST>                          324,889
<INVESTMENTS-AT-VALUE>                         334,234
<RECEIVABLES>                                      244
<ASSETS-OTHER>                                       3
<OTHER-ITEMS-ASSETS>                                 0
<TOTAL-ASSETS>                                 334,481
<PAYABLE-FOR-SECURITIES>                         3,984
<SENIOR-LONG-TERM-DEBT>                              0
<OTHER-ITEMS-LIABILITIES>                          180
<TOTAL-LIABILITIES>                              4,164
<SENIOR-EQUITY>                                      0
<PAID-IN-CAPITAL-COMMON>                             0
<SHARES-COMMON-STOCK>                                0
<SHARES-COMMON-PRIOR>                                0
<ACCUMULATED-NII-CURRENT>                            0
<OVERDISTRIBUTION-NII>                               0
<ACCUMULATED-NET-GAINS>                              0
<OVERDISTRIBUTION-GAINS>                             0
<ACCUM-APPREC-OR-DEPREC>                             0
<NET-ASSETS>                                   330,317
<DIVIDEND-INCOME>                                  361
<INTEREST-INCOME>                                  318
<OTHER-INCOME>                                       0
<EXPENSES-NET>                                     342
<NET-INVESTMENT-INCOME>                            337
<REALIZED-GAINS-CURRENT>                           472
<APPREC-INCREASE-CURRENT>                        9,345
<NET-CHANGE-FROM-OPS>                           10,154
<EQUALIZATION>                                       0
<DISTRIBUTIONS-OF-INCOME>                            0
<DISTRIBUTIONS-OF-GAINS>                             0
<DISTRIBUTIONS-OTHER>                                0
<NUMBER-OF-SHARES-SOLD>                        339,630
<NUMBER-OF-SHARES-REDEEMED>                   (19,467)
<SHARES-REINVESTED>                                  0
<NET-CHANGE-IN-ASSETS>                         330,317
<ACCUMULATED-NII-PRIOR>                              0
<ACCUMULATED-GAINS-PRIOR>                            0
<OVERDISTRIB-NII-PRIOR>                              0
<OVERDIST-NET-GAINS-PRIOR>                           0
<GROSS-ADVISORY-FEES>                              320
<INTEREST-EXPENSE>                                   0
<GROSS-EXPENSE>                                    337
<AVERAGE-NET-ASSETS>                           347,120
<PER-SHARE-NAV-BEGIN>                                0
<PER-SHARE-NII>                                      0
<PER-SHARE-GAIN-APPREC>                              0
<PER-SHARE-DIVIDEND>                                00
<PER-SHARE-DISTRIBUTIONS>                            0
<RETURNS-OF-CAPITAL>                                 0
<PER-SHARE-NAV-END>                                  0
<EXPENSE-RATIO>                                   0.63
<AVG-DEBT-OUTSTANDING>                               0
<AVG-DEBT-PER-SHARE>                                 0
        

</TABLE>

<TABLE> <S> <C>

<ARTICLE> 6
<SERIES>
   <NUMBER> 7
   <NAME> SR&F SPECIAL VENTURE PORTFOLIO
       
<S>                             <C>
<PERIOD-TYPE>                   6-MOS
<FISCAL-YEAR-END>                          SEP-30-1997
<PERIOD-START>                             FEB-03-1997
<PERIOD-END>                               MAR-31-1997
<INVESTMENTS-AT-COST>                          170,872
<INVESTMENTS-AT-VALUE>                         171,932
<RECEIVABLES>                                      158
<ASSETS-OTHER>                                       3
<OTHER-ITEMS-ASSETS>                                 0
<TOTAL-ASSETS>                                 172,093
<PAYABLE-FOR-SECURITIES>                         5,671
<SENIOR-LONG-TERM-DEBT>                              0
<OTHER-ITEMS-LIABILITIES>                          108
<TOTAL-LIABILITIES>                              5,779
<SENIOR-EQUITY>                                      0
<PAID-IN-CAPITAL-COMMON>                             0
<SHARES-COMMON-STOCK>                                0
<SHARES-COMMON-PRIOR>                                0
<ACCUMULATED-NII-CURRENT>                            0
<OVERDISTRIBUTION-NII>                               0
<ACCUMULATED-NET-GAINS>                              0
<OVERDISTRIBUTION-GAINS>                             0
<ACCUM-APPREC-OR-DEPREC>                             0
<NET-ASSETS>                                   166,314
<DIVIDEND-INCOME>                                  271
<INTEREST-INCOME>                                  142
<OTHER-INCOME>                                       0
<EXPENSES-NET>                                     212
<NET-INVESTMENT-INCOME>                            201
<REALIZED-GAINS-CURRENT>                         (855)
<APPREC-INCREASE-CURRENT>                     (14,273)
<NET-CHANGE-FROM-OPS>                         (14,927)
<EQUALIZATION>                                       0
<DISTRIBUTIONS-OF-INCOME>                            0
<DISTRIBUTIONS-OF-GAINS>                             0
<DISTRIBUTIONS-OTHER>                                0
<NUMBER-OF-SHARES-SOLD>                        186,411
<NUMBER-OF-SHARES-REDEEMED>                    (5,170)
<SHARES-REINVESTED>                                  0
<NET-CHANGE-IN-ASSETS>                         166,314
<ACCUMULATED-NII-PRIOR>                              0
<ACCUMULATED-GAINS-PRIOR>                            0
<OVERDISTRIB-NII-PRIOR>                              0
<OVERDIST-NET-GAINS-PRIOR>                           0
<GROSS-ADVISORY-FEES>                              200
<INTEREST-EXPENSE>                                   0
<GROSS-EXPENSE>                                    212
<AVERAGE-NET-ASSETS>                           174,311
<PER-SHARE-NAV-BEGIN>                                0
<PER-SHARE-NII>                                      0
<PER-SHARE-GAIN-APPREC>                              0
<PER-SHARE-DIVIDEND>                                 0
<PER-SHARE-DISTRIBUTIONS>                            0
<RETURNS-OF-CAPITAL>                                 0
<PER-SHARE-NAV-END>                                  0
<EXPENSE-RATIO>                                   0.79
<AVG-DEBT-OUTSTANDING>                               0
<AVG-DEBT-PER-SHARE>                                 0
        

</TABLE>

<TABLE> <S> <C>

<ARTICLE> 6
<SERIES>
   <NUMBER> 8
   <NAME> SR&F BALANCED PORTFOLIO
       
<S>                             <C>
<PERIOD-TYPE>                   6-MOS
<FISCAL-YEAR-END>                          SEP-30-1997
<PERIOD-START>                             FEB-03-1997
<PERIOD-END>                               MAR-31-1997
<INVESTMENTS-AT-COST>                          216,889
<INVESTMENTS-AT-VALUE>                         266,478
<RECEIVABLES>                                    8,984
<ASSETS-OTHER>                                       4
<OTHER-ITEMS-ASSETS>                                 0
<TOTAL-ASSETS>                                 275,466
<PAYABLE-FOR-SECURITIES>                        21,029
<SENIOR-LONG-TERM-DEBT>                              0
<OTHER-ITEMS-LIABILITIES>                          154
<TOTAL-LIABILITIES>                             21,183
<SENIOR-EQUITY>                                      0
<PAID-IN-CAPITAL-COMMON>                             0
<SHARES-COMMON-STOCK>                                0
<SHARES-COMMON-PRIOR>                                0
<ACCUMULATED-NII-CURRENT>                            0
<OVERDISTRIBUTION-NII>                               0
<ACCUMULATED-NET-GAINS>                              0
<OVERDISTRIBUTION-GAINS>                             0
<ACCUM-APPREC-OR-DEPREC>                             0
<NET-ASSETS>                                   254,283
<DIVIDEND-INCOME>                                  530
<INTEREST-INCOME>                                1,427
<OTHER-INCOME>                                       0
<EXPENSES-NET>                                     250
<NET-INVESTMENT-INCOME>                          1,707
<REALIZED-GAINS-CURRENT>                         1,786
<APPREC-INCREASE-CURRENT>                     (11,530)
<NET-CHANGE-FROM-OPS>                          (8,037)
<EQUALIZATION>                                       0
<DISTRIBUTIONS-OF-INCOME>                            0
<DISTRIBUTIONS-OF-GAINS>                             0
<DISTRIBUTIONS-OTHER>                                0
<NUMBER-OF-SHARES-SOLD>                        267,417
<NUMBER-OF-SHARES-REDEEMED>                    (5,097)
<SHARES-REINVESTED>                                  0
<NET-CHANGE-IN-ASSETS>                         254,283
<ACCUMULATED-NII-PRIOR>                              0
<ACCUMULATED-GAINS-PRIOR>                            0
<OVERDISTRIB-NII-PRIOR>                              0
<OVERDIST-NET-GAINS-PRIOR>                           0
<GROSS-ADVISORY-FEES>                              221
<INTEREST-EXPENSE>                                   0
<GROSS-EXPENSE>                                    250
<AVERAGE-NET-ASSETS>                           261,823
<PER-SHARE-NAV-BEGIN>                                0
<PER-SHARE-NII>                                      0
<PER-SHARE-GAIN-APPREC>                              0
<PER-SHARE-DIVIDEND>                                 0
<PER-SHARE-DISTRIBUTIONS>                            0
<RETURNS-OF-CAPITAL>                                 0
<PER-SHARE-NAV-END>                                  0
<EXPENSE-RATIO>                                   0.59
<AVG-DEBT-OUTSTANDING>                               0
<AVG-DEBT-PER-SHARE>                                 0
        

</TABLE>

<TABLE> <S> <C>

<ARTICLE> 6
<SERIES>
   <NUMBER> 9
   <NAME> SR&F GROWTH STOCK PORTFOLIO
       
<S>                             <C>
<PERIOD-TYPE>                   6-MOS
<FISCAL-YEAR-END>                          SEP-30-1997
<PERIOD-START>                             FEB-03-1997
<PERIOD-END>                               MAR-31-1997
<INVESTMENTS-AT-COST>                          303,993
<INVESTMENTS-AT-VALUE>                         466,223
<RECEIVABLES>                                      467
<ASSETS-OTHER>                                       2
<OTHER-ITEMS-ASSETS>                                 0
<TOTAL-ASSETS>                                 466,692
<PAYABLE-FOR-SECURITIES>                         4,905
<SENIOR-LONG-TERM-DEBT>                              0
<OTHER-ITEMS-LIABILITIES>                          263
<TOTAL-LIABILITIES>                              5,168
<SENIOR-EQUITY>                                      0
<PAID-IN-CAPITAL-COMMON>                             0
<SHARES-COMMON-STOCK>                                0
<SHARES-COMMON-PRIOR>                                0
<ACCUMULATED-NII-CURRENT>                            0
<OVERDISTRIBUTION-NII>                               0
<ACCUMULATED-NET-GAINS>                              0
<OVERDISTRIBUTION-GAINS>                             0
<ACCUM-APPREC-OR-DEPREC>                             0
<NET-ASSETS>                                   461,524
<DIVIDEND-INCOME>                                  622
<INTEREST-INCOME>                                  264
<OTHER-INCOME>                                       0
<EXPENSES-NET>                                     498
<NET-INVESTMENT-INCOME>                            388
<REALIZED-GAINS-CURRENT>                         6,988
<APPREC-INCREASE-CURRENT>                     (49,574)
<NET-CHANGE-FROM-OPS>                         (42,198)
<EQUALIZATION>                                       0
<DISTRIBUTIONS-OF-INCOME>                            0
<DISTRIBUTIONS-OF-GAINS>                             0
<DISTRIBUTIONS-OTHER>                                0
<NUMBER-OF-SHARES-SOLD>                        524,541
<NUMBER-OF-SHARES-REDEEMED>                   (20,819)
<SHARES-REINVESTED>                                  0
<NET-CHANGE-IN-ASSETS>                         461,524
<ACCUMULATED-NII-PRIOR>                              0
<ACCUMULATED-GAINS-PRIOR>                            0
<OVERDISTRIB-NII-PRIOR>                              0
<OVERDIST-NET-GAINS-PRIOR>                           0
<GROSS-ADVISORY-FEES>                              466
<INTEREST-EXPENSE>                                   0
<GROSS-EXPENSE>                                    498
<AVERAGE-NET-ASSETS>                           508,183
<PER-SHARE-NAV-BEGIN>                                0
<PER-SHARE-NII>                                      0
<PER-SHARE-GAIN-APPREC>                              0
<PER-SHARE-DIVIDEND>                                 0
<PER-SHARE-DISTRIBUTIONS>                            0
<RETURNS-OF-CAPITAL>                                 0
<PER-SHARE-NAV-END>                                  0
<EXPENSE-RATIO>                                   0.64
<AVG-DEBT-OUTSTANDING>                               0
<AVG-DEBT-PER-SHARE>                                 0
        

</TABLE>

<TABLE> <S> <C>

<ARTICLE> 6
<SERIES>
   <NUMBER> 10
   <NAME> SR&F SPECIAL PORTFOLIO
       
<S>                             <C>
<PERIOD-TYPE>                   6-MOS
<FISCAL-YEAR-END>                          SEP-30-1997
<PERIOD-START>                             FEB-03-1997
<PERIOD-END>                               MAR-31-1997
<INVESTMENTS-AT-COST>                          728,978
<INVESTMENTS-AT-VALUE>                       1,051,452
<RECEIVABLES>                                   29,214
<ASSETS-OTHER>                                       4
<OTHER-ITEMS-ASSETS>                                 0
<TOTAL-ASSETS>                               1,080,670
<PAYABLE-FOR-SECURITIES>                        28,222
<SENIOR-LONG-TERM-DEBT>                              0
<OTHER-ITEMS-LIABILITIES>                          652
<TOTAL-LIABILITIES>                             28,874
<SENIOR-EQUITY>                                      0
<PAID-IN-CAPITAL-COMMON>                             0
<SHARES-COMMON-STOCK>                                0
<SHARES-COMMON-PRIOR>                                0
<ACCUMULATED-NII-CURRENT>                            0
<OVERDISTRIBUTION-NII>                               0
<ACCUMULATED-NET-GAINS>                              0
<OVERDISTRIBUTION-GAINS>                             0
<ACCUM-APPREC-OR-DEPREC>                             0
<NET-ASSETS>                                 1,051,796
<DIVIDEND-INCOME>                                1,271
<INTEREST-INCOME>                                  574
<OTHER-INCOME>                                       0
<EXPENSES-NET>                                   1,224
<NET-INVESTMENT-INCOME>                            621
<REALIZED-GAINS-CURRENT>                        10,687
<APPREC-INCREASE-CURRENT>                     (85,583)
<NET-CHANGE-FROM-OPS>                         (74,275)
<EQUALIZATION>                                       0
<DISTRIBUTIONS-OF-INCOME>                            0
<DISTRIBUTIONS-OF-GAINS>                             0
<DISTRIBUTIONS-OTHER>                                0
<NUMBER-OF-SHARES-SOLD>                      1,167,598
<NUMBER-OF-SHARES-REDEEMED>                   (41,527)
<SHARES-REINVESTED>                                  0
<NET-CHANGE-IN-ASSETS>                       1,051,796
<ACCUMULATED-NII-PRIOR>                              0
<ACCUMULATED-GAINS-PRIOR>                            0
<OVERDISTRIB-NII-PRIOR>                              0
<OVERDIST-NET-GAINS-PRIOR>                           0
<GROSS-ADVISORY-FEES>                            1,153
<INTEREST-EXPENSE>                                   0
<GROSS-EXPENSE>                                  1,224
<AVERAGE-NET-ASSETS>                         1,123,527
<PER-SHARE-NAV-BEGIN>                                0
<PER-SHARE-NII>                                      0
<PER-SHARE-GAIN-APPREC>                              0
<PER-SHARE-DIVIDEND>                                 0
<PER-SHARE-DISTRIBUTIONS>                            0
<RETURNS-OF-CAPITAL>                                 0
<PER-SHARE-NAV-END>                                  0
<EXPENSE-RATIO>                                   0.71
<AVG-DEBT-OUTSTANDING>                               0
<AVG-DEBT-PER-SHARE>                                 0
        

</TABLE>



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