Liberty Stein Roe Advisor Trust – ‘497’ on 2/12/01

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 1: 497         Definitive Material                                  126    599K 

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LIBERTY GROWTH STOCK FUND          PROSPECTUS, FEBRUARY 1, 2001                 

CLASS A, B, AND C SHARES                                                        

Advised by Stein Roe & Farnham Incorporated                                     

Although these securities have been registered with the Securities and Exchange 
Commission, the Commission has not approved or disapproved any shares offered in
this prospectus or determined whether this prospectus is truthful or complete.  
Any representation to the contrary is a criminal offense.                       

----------------------------                                                    
NOT FDIC   MAY LOSE VALUE                                                       
INSURED    NO BANK GUARANTEE                                                    
----------------------------                                                    

------------------------------------------                                      
TABLE OF CONTENTS                                                               

THE FUND                                2                                       
------------------------------------------                                      
Investment Goal.........................2                                       
Principal Investment Strategies.........2                                       
Principal Investment Risks..............3                                       
Performance History.....................5                                       
Your Expenses...........................6                                       

YOUR ACCOUNT                            7                                       
------------------------------------------                                      
How to Buy Shares.......................7                                       
Sales Charges...........................8                                       
Distribution and Service Fees..........12                                       
How to Exchange Shares.................12                                       
How to Sell Shares.....................12                                       
Fund Policy on Trading of Fund Shares..14                                       
Other Information About Your Account...14                                       

MANAGING THE FUND                      17                                       
------------------------------------------                                      
Investment Advisor.....................17                                       
Portfolio Manager......................17                                       

OTHER INVESTMENT                                                                
STRATEGIES AND RISKS                   18                                       
------------------------------------------                                      

FINANCIAL HIGHLIGHTS                   19                                       
------------------------------------------                                      

APPENDIX A                             22                                       
------------------------------------------                                      

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THE Fund  Liberty Growth Stock Fund                                             
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INVESTMENT GOAL                                                                 
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The Fund seeks long-term growth.                                                

PRINCIPAL INVESTMENT STRATEGIES                                                 
--------------------------------------------------------------------------------
Growth Stock Fund invests all of its assets in SR&F Growth Stock Portfolio (the 
"Portfolio") as part of a master fund/feeder fund structure. Growth Stock       
Portfolio invests primarily in the common stocks of companies with large-market 
capitalizations.                                                                

The Portfolio may invest in any market sector but emphasizes the technology,    
financial services, health care, and global consumer franchise sectors. The     
Portfolio may invest up to 25% of its assets in foreign stocks. To select       
investments for the Portfolio, the portfolio manager considers companies that he
believes will generate earnings growth over the long term regardless of the     
economic environment.                                                           

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

The Fund compares its performance to other similarly managed mutual funds as    
determined by Morningstar, Inc. ("Morningstar"). For performance comparison     
purposes, Morningstar places an equity fund in one of nine "categories" based   
upon guidelines established by Morningstar that examines both a fund's          
investment methodology and the size of the companies in which the fund invests. 
The portfolio manager generally manages the Fund in accordance with the         
Morningstar guidelines for a "Large Growth" fund. See Appendix A for a          
description of the Morningstar categories.                                      

Additional strategies that are not principal investment strategies and the risks
associated with them are described later in this prospectus under "Other        
Investment Strategies and Risks."                                               

Defining Capitalization. A company's market capitalization is simply its stock  
price multiplied by the number of shares of stock it has issued and outstanding.
In the financial markets, companies generally are sorted into one of three      
capitalization-based categories: large capitalization (large-cap); medium       
capitalization (mid-cap); or small capitalization (small-cap). In defining a    
company's market capitalization, we use capitalization-based categories that are
based in part on Standard & Poor's Index Services.                              

Large capitalization stocks are stocks with market capitalizations greater than 
$5 billion. In addition, any stock that is a member of the S&P 500 Index is     
considered a large capitalization stock.                                        

Middle capitalization stocks are stocks with market capitalizations between $1  
billion and the largest stock in the S&P MidCap 400 Index ($9.9 billion as of   
December 31, 2000). In addition, any stock that is a member of the S&P MidCap   
400 Index is considered a middle capitalization stock.                          

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YOUR ACCOUNT                                                                    

Small capitalization stocks are stocks with market capitalizations equal to or  
less than the largest stock in the S&P SmallCap 600 Index ($2.6 billion as of   
December 31, 2000).                                                             

PRINCIPAL INVESTMENT RISKS                                                      
--------------------------------------------------------------------------------
The principal risks of investing in the Fund are described below. There are many
circumstances (including additional risks that are not described here) which    
could prevent the Fund from achieving its investment goal. You may lose money by
investing in the Fund.                                                          

Since it purchases equity securities, the Portfolio is subject to equity risk.  
This is the risk that stock prices will fall over short or extended periods of  
time. Although the stock market has historically outperformed other asset       
classes over the long term, the equity market tends to move in cycles and       
individual stock prices may fluctuate drastically from day-to-day and may       
underperform other asset classes over an extended period of time. Individual    
companies may report poor results or be negatively affected by industry and/or  
economic trends and developments. The prices of securities issued by such       
companies may suffer a decline in response. These price movements may result    
from factors affecting individual companies, industries or the securities market
as a whole.                                                                     

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

Growth stock prices may be more sensitive to changes in current or expected     
earnings than the prices of other stocks. Growth stocks may not perform as well 
as value stocks or the stock market in general.                                 

Sector risk is inherent in the Fund's investment strategy. Companies that are in
different but closely related industries are sometimes described as being in the
same broad economic sector. The values of stocks of many different companies in 
a market sector may be similarly affected by particular economic or market      
events. Although the Portfolio does not intend to focus on any particular       
sector, at times, the Portfolio may have a large portion of its assets invested 
in particular sectors. An example of a sector in which the Portfolio may        
sometimes have a large portion of its assets invested is technology. Technology 
companies may be significantly affected by falling prices and profits, and      
intense competition. In addition, the rate of technological change for          
technology companies is generally higher than for other companies, often        
requiring extensive and sustained investment in research and development, and   
exposing such companies to the risk of rapid product obsolescence. The price of 
many technology stocks has risen based on projections of future earnings and    
company growth. If a                                                            

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YOUR ACCOUNT                                                                    

company does not perform as expected, the price of the stock could decline      
significantly. Many technology companies are currently operating at a loss and  
may never be profitable.                                                        

Foreign securities are subject to special risks. Foreign stock markets can be   
extremely volatile. Fluctuations in currency exchange rates may impact the value
of foreign securities without a change in the intrinsic value of those          
securities. The liquidity of foreign securities may be more limited than        
domestic securities, which means that the Fund may, at times, be unable to sell 
foreign securities at desirable prices. Brokerage commissions, custodial fees   
and other fees are generally higher for foreign investments. In addition,       
foreign governments may impose withholding taxes which would reduce the amount  
of income and capital gains available to distribute to shareholders. Other risks
include the following: possible delays in the settlement of transactions or in  
the notification of income; less publicly available information about companies;
the impact of political, social or diplomatic events; and possible seizure,     
expropriation or nationalization of the company or its assets or imposition of  
currency exchange controls.                                                     

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YOUR ACCOUNT                                                                    

UNDERSTANDING PERFORMANCE                                                       

CALENDAR-YEAR TOTAL RETURN shows the Portfolio's and the Fund's performance for 
the past 10 calendar years.                                                     

AVERAGE ANNUAL TOTAL RETURNS are a measure of the Fund's performance over the   
past one, five, and ten year periods. The Fund (Class K shares) commenced       
operations on February 14, 1997; Classes, A, B, and C commenced operations on   
October 15, 1997. The Fund's historical performance for all periods prior to    
February 14, 1997 is the performance of the Portfolio and has not been restated 
to reflect the higher gross annual operating expenses of the Fund. The table    
shows each class's returns with sales charges.                                  

The Fund's returns are compared to the S&P 500 Index, an unmanaged broad-based  
measure of market performance. Sales charges are not reflected in the           
Morningstar Average. Unlike the Fund, indices are not investments, do not incur 
fees or expenses and are not professionally managed. It is not possible to      
invest directly in indices.                                                     
================================================================================

PERFORMANCE HISTORY                                                             
--------------------------------------------------------------------------------
The bar chart below shows the historical performance for the Fund, and for the  
Portfolio prior to the Fund's inception, for the past 10 calendar years. The    
performance table following the bar chart shows how the average annual total    
returns of the Fund and the Portfolio compare with those of a broad measure of  
market performance for the past one, five and ten years. Performance for the    
Portfolio prior to the Fund's inception has not been restated to reflect the    
higher gross annual operating expenses of the Fund. If those gross annual       
operating expenses were reflected, performance of the Fund would be lower. The  
chart and table are intended to illustrate some of the risks of investing in the
Fund by showing the changes in performance. All returns include the reinvestment
of dividends and distributions. Performance results include the effect of       
expense reduction arrangements, if any. If these arrangements were not in place,
then the performance results would have been lower. Any expense reduction       
arrangements may be discontinued at any time. As with all mutual funds, past    
performance does not predict the future performance of the Fund.                

--------------------------------------------------------------------------------
Calendar-Year Total Returns (Class A)(1)                                        
--------------------------------------------------------------------------------

[BAR GRAPH]                                                                     

1991      45.53%                                                                
1992       8.02%                                                                
1993       2.52%                                                                
1994      -4.15%                                                                
1995      35.29%                                                                
1996      20.56%                                                                
1997      33.30%                                                                
1998      24.47%                                                                
1999      35.85%                                                                
2000     -11.77%                                                                

For period shown on the chart above:    Best quarter: 4th quarter 1999, +24.97% 
                                        Worst quarter: 4th quarter 2000, -17.67%

--------------------------------------------------------------------------------
Average Annual Total Returns -- For Periods Ended December 31, 2000 (1)         
--------------------------------------------------------------------------------

                                                                [Download Table]

                        INCEPTION                                               
                          DATE          1 YEAR        5 YEARS       10 YEARS    
                                                                                
Class A (%)             10/15/97        -16.85         17.70          16.80     
--------------------- -------------- -------------- ------------- --------------
Class B (%)             10/15/97        -16.79         18.06          16.65     
--------------------- -------------- -------------- ------------- --------------
Class C (%)             10/15/97        -13.25         18.24          16.63     
--------------------- -------------- -------------- ------------- --------------
S&P Index (%)              N/A           -9.10         18.33          17.44     

(1)  The total return for calendar year 1997 is comprised of the Portfolio's    
    performance through February 13, 1997, the performance of the Fund's Class
K shares from February 14, 1997 through October 14, 1997, and the     
performance of the Fund's Class A shares from October 15, 1997 through
   December 31, 1997. The performance for calendar years 1998, 1999 and 2000
   shows the performance of Class A, B and C shares, respectively. For years
prior to 1997, performance is that of the Portfolio.                  

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YOUR ACCOUNT                                                                    

UNDERSTANDING EXPENSES                                                          

SHAREHOLDER FEES are paid directly by shareholders to the Fund's distributor.   

ANNUAL FUND OPERATING EXPENSES are deducted from the Fund. They include         
management and administration fees, 12b-1 fees, brokerage costs, and            
administrative costs including pricing and custody services.                    

EXAMPLE EXPENSES helps you compare the cost of investing in the Fund to the cost
of investing in other mutual funds. This example reflects the expenses of both  
the Fund and the Portfolio. Expense reimbursements are in effect for the first  
year in the periods. It uses the following hypothetical conditions:             

-    $10,000 initial investment                                                 

-   5% return for each year                                                     

-    Fund operating expenses remain the same                                    

-    Assumes reinvestment of all dividends and distributions.                   

-    Assumes Class B shares convert to Class A shares after eight years         
================================================================================

YOUR EXPENSES                                                                   
--------------------------------------------------------------------------------
The tables below describe the fees and expenses you may pay when you buy, hold  
and sell shares of the Fund. Expenses are one of several factors to consider    
before you invest in a mutual fund.                                             

--------------------------------------------------------------------------------
Shareholder Fees (paid directly from your investment)(2)                        
--------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

                                                     CLASS A     CLASS B     CLASS C   
                                                                                       
Maximum sales charge (load) imposed on purchases                                       
(as a percentage of the offering price)                5.75        0.00        0.00    
--------------------------------------------------- ----------- ----------- -----------
Maximum deferred sales charge (load) (as a                                             
percentage of the lower of the offering price or                                       
sale price)                                            1.00(4)     5.00        1.00    
--------------------------------------------------- ----------- ----------- -----------
Redemption fee (as a percentage of amount              (4)         (4)         (4)     
redeemed, if applicable)                                                               

--------------------------------------------------------------------------------
Annual Fund Operating Expenses(3) (deducted directly from Fund assets)          
--------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

                                                     CLASS A     CLASS B     CLASS C   
                                                                                       
Management fee (%)(5)                                  0.68        0.68        0.68    
--------------------------------------------------- ----------- ----------- -----------
Distribution and service (12b-1) fees (%)              0.35(6)     1.00        1.00    
--------------------------------------------------- ----------- ----------- -----------
Other expenses (%)                                     0.33        0.33        0.33    
--------------------------------------------------- ----------- ----------- -----------
Total annual fund operating expenses (%)               1.36        2.01        2.01    

--------------------------------------------------------------------------------
Example Expenses (your actual costs may be higher or lower)                     
--------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

CLASS                                     1 YEAR     3 YEARS     5 YEARS     10 YEARS  
                                                                                       
Class A                                    $705       $980       $1,275      $2,112    
---------------------------------------- ---------- ----------- ----------- -----------
Class B: did not sell your shares           204        629        1,081       2,166    

         sold all your shares at                                                       
         the end of the period              704        929        1,281       2,166    
---------------------------------------- ---------- ----------- ----------- -----------
Class C: did not sell your shares           204        629        1,081       2,333    

         sold all your shares at                                                       
         the end of the period              304        629        1,081       2,333    

(2)  A $10 annual fee is deducted from accounts of less than $1,000 and paid to 
the transfer agent.                                                   

(3)  A 1.00% contingent deferred sales charge applies to purchases of $1 million
to $25 million redeemed within approximately 18 months after purchase.

(4)  There is a $7.50 charge for wiring sale proceeds to your bank.             

(5)  The Portfolio pays a management fee of 0.54% and the Fund pays an          
administrative fee of 0.14%.                                          

(6)  The Fund's distributor has voluntarily agreed to waive a portion of the    
     12b-1 fee for Class A shares. As a result, the actual 12b-1 fee for Class A
shares would be 0.30% and the total annual fund operating expenses for
  Class A shares would be 1.31%. This arrangement may be terminated by the
distributor at any time.                                              

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Your Account                                                                    
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INVESTMENT MINIMUMS                                                             

Initial Investment.............$1,000                                           
Subsequent Investments............$50                                           
Automatic Investment Plan*........$50                                           
Retirement Plans*.................$25                                           
* The initial investment minimum of $1,000 is waived on this plan.              

The Fund reserves the right to change these investment minimums. The Fund also  
reserves the right to refuse a purchase order for any reason, including if it   
believes that doing so would be in the best interest of the Fund and its        
shareholders.                                                                   
================================================================================

HOW TO BUY SHARES                                                               
--------------------------------------------------------------------------------
Your financial advisor can help you establish an appropriate investment         
portfolio, buy shares and monitor your investments. When the Fund receives your 
purchase request in "good form," your shares will be bought at the next         
calculated public offering price. Good form" means that you placed your order   
with your brokerage firm or your payment has been received and your application 
is complete, including all necessary signatures.                                

--------------------------------------------------------------------------------
Outlined below are various options for buying shares:                           
--------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

METHOD               INSTRUCTIONS                                                       
                                                                                        
Through your         Your financial advisor can help you establish your account and     
financial advisor    buy Fund shares on your behalf.                                    
----------------------------------------------------------------------------------------
By check             For new accounts, send a completed application and check made      
(new account)        payable to the Fund to the transfer agent, Liberty Funds           
                     Services, Inc., P.O. Box 1722, Boston, MA 02105-1722.              
----------------------------------------------------------------------------------------
By check             For existing accounts, fill out and return the additional          
(existing account)   investment stub included in your quarterly statement, or send a    
                     letter of instruction including your Fund name and account         
                     number with a check made payable to the Fund to Liberty Funds      
                     Services, Inc., P.O. Box 1722, Boston, MA 02105-1722.              
----------------------------------------------------------------------------------------
By exchange          You or your financial advisor may acquire shares by exchanging     
                     shares you own in one fund for shares of the same class of the     
                     Fund at no additional cost. To exchange by telephone, call         
                     1-800-422-3737.                                                    
----------------------------------------------------------------------------------------
By wire              You may purchase shares by wiring money from your bank account     
                     to your fund account. To wire funds to your fund account, call     
                     1-800-422-3737 to obtain a control number and the wiring           
                     instructions.                                                      
----------------------------------------------------------------------------------------
By electronic        You may purchase shares by electronically transferring money       
funds transfer       from your bank account to your fund account by calling             
                     1-800-422-3737.  Your money may take up to two business days to    
                     be invested.  You must set up this feature prior to your           
                     telephone request.  Be sure to complete the appropriate section    
                     of the application.                                                
----------------------------------------------------------------------------------------
Automatic            You can make monthly or quarterly investments automatically        
investment plan      from your bank account to your fund account.  You can select a     
                     pre-authorized amount to be sent via electronic funds              
                     transfer. Be sure to complete the appropriate section of           
                     the application for this feature.                                  
----------------------------------------------------------------------------------------
By dividend          You may automatically invest dividends distributed by one fund     
diversification      into the same class of shares of another fund at no additional     
                     sales charge.  To invest your dividends in another fund, call      
                     1-800-345-6611.                                                    

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YOUR ACCOUNT                                                                    

CHOOSING A SHARE CLASS                                                          

The Fund offers three classes of shares in this prospectus--Class A, B and C.   
Each share class has its own sales charge and expense structure. Determining    
which share class is best for you depends on the dollar amount you are investing
and the number of years for which you are willing to invest. If your financial  
advisor firm does not participate in the Class B discount program purchases of  
$250,000 or more but less than $1 million can be made only in Class A or Class C
shares. Purchases of $1 million or more can be made only in Class A shares.     
Based on your personal situation, your investment advisor can help you decide   
which class of shares makes the most sense for you.                             

The Fund also offers Class K shares, which are available only to other investors
through a separate prospectus.                                                  
================================================================================

SALES CHARGES                                                                   
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You may be subject to an initial sales charge when you purchase, or a contingent
deferred sales charge (CDSC) when you sell, shares of the Fund. These sales     
charges are described below. In some circumstances these sales charges are      
waived, as described below and in the Statement of Additional Information.      

CLASS A SHARES Your purchases of Class A shares generally are at the public     
offering price. This price includes a sales charge that is based on the amount  
of your investment. A portion of the sales charge is the commission paid to the 
financial advisor firm on the sale of Class A shares. The sales charge you pay  
on additional investments is based on the total amount of your purchase and the 
current value of your account. The amount of the sales charge differs depending 
on the amount you invest as shown in the table below.                           

--------------------------------------------------------------------------------
Class A Sales Charges                                                           
--------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

                                                                          % OF PUBLIC  
                                                                           OFFERING    
                                              AS A % OF       AS A %         PRICE     
                                             THE PUBLIC       OF NET      RETAINED BY  
                                              OFFERING        AMOUNT       FINANCIAL   
AMOUNT OF PURCHASE                              PRICE        INVESTED    ADVISOR FIRM  
                                                                                       
Less than $50,000                               5.75           6.10          5.00      
---------------------------------------------------------------------------------------
$50,000 to less than $100,000                   4.50           4.71          3.75      
---------------------------------------------------------------------------------------
$100,000 to less than $250,000                  3.50           3.63          2.75      
---------------------------------------------------------------------------------------
$250,000 to less than $500,000                  2.50           2.56          2.00      
---------------------------------------------------------------------------------------
$500,000 to less than $1,000,000                2.00           2.04          1.75      
---------------------------------------------------------------------------------------
$1,000,000 or more                              0.00           0.00          0.00      

Class A shares bought without an initial sales charge in accounts aggregating $1
million to $25 million at the time of purchase are subject to a 1.00% CDSC if   
the shares are sold within 18 months of the time of purchase. Subsequent Class A
share purchases that bring your account value above $1 million are subject to a 
CDSC if redeemed within 18 months of the date of purchase. The 18-month period  
begins on the first day of the month following each purchase. The CDSC does not 
apply to retirement plan purchases through a fee-based program.                 

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YOUR ACCOUNT                                                                    

UNDERSTANDING CONTINGENT DEFERRED SALES CHARGES                                 

Certain investments in Class A, B and C shares are subject to a CDSC, a sales   
charge applied at the time you sell your shares. You will pay the CDSC only on  
shares you sell within a certain amount of time after purchase. The CDSC        
generally declines each year until there is no charge for selling shares. The   
CDSC is applied to the net asset value at the time of purchase or sale,         
whichever is lower. For purposes of calculating the CDSC, the start of the      
holding period is the month-end of the month in which the purchase is made.     
Shares you purchase with reinvested dividends or capital gains are not subject  
to a CDSC. When you place an order to sell shares, the Fund will automatically  
sell first those shares not subject to a CDSC and then those you have held the  
longest. This policy helps reduce and possibly eliminate the potential impact of
the CDSC.                                                                       
================================================================================

For Class A share purchases of $1 million or more, financial advisors receive a 
cumulative commission from Liberty Funds Distributor, Inc. (Distributor) as     
follows:                                                                        

--------------------------------------------------------------------------------
Purchases Over $1 Million                                                       
--------------------------------------------------------------------------------

                                                                [Download Table]

AMOUNT PURCHASED                                       COMMISSION %             
                                                                                
First $3 million                                           1.00                 
--------------------------------------------------------------------------------
$3 million to less than $5 million                         0.80                 
--------------------------------------------------------------------------------
$5 million to less than $25 million                        0.50                 
--------------------------------------------------------------------------------
Over $25 million                                           0.25                 
--------------------------------------------------------------------------------

The commission to financial advisors for Class A share purchases of $25 million 
or more is paid over 12 months but only to the extent the shares remain         
outstanding.                                                                    

For Class A share purchases by participants in certain group retirement plans   
offered through a fee-based program, financial advisors receive a 1% commission 
from the distributor on all purchases of less than $3 million.                  

REDUCED SALES CHARGES FOR LARGER INVESTMENTS There are two ways for you to pay a
lower sales charge when purchasing Class A shares. The first is through Rights  
of Accumulation. If the combined value of the Fund accounts maintained by you,  
your spouse or your minor children reaches a discount level (according to the   
chart on the previous page), your next purchase will receive the lower sales    
charge. The second is by signing a Statement of Intent within 90 days of your   
purchase. By doing so, you would be able to pay the lower sales charge on all   
purchases by agreeing to invest a total of at least $50,000 within 13 months. If
your Statement of Intent purchases are not completed within 13 months, you will 
be charged the applicable sales charge on the amount you had invested to that   
date. In addition, certain investors may purchase shares at a reduced sales     
charge or NAV, which is the value of a Fund share excluding any sales charges.  
See the Statement of Additional Information for a description of these          
situations.                                                                     

CLASS B SHARES Your purchases of Class B shares are at Class B's net asset      
value. Class B shares have no front-end sales charge, but they do carry a CDSC, 
that is imposed only on shares sold prior to the completion of the periods shown
in the charts below. The CDSC generally declines each year and eventually       
disappears over time. The distributor pays the financial advisor firm an        
up-front commission on sales of Class B shares as depicted in the charts below. 

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YOUR ACCOUNT                                                                    

PURCHASES OF LESS THAN $250,000                                                 

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Class B Sales Charges                                                           
--------------------------------------------------------------------------------

                                                                [Download Table]

HOLDING PERIOD AFTER PURCHASE                    % DEDUCTED WHEN       
                                                 SHARES ARE SOLD       
                                                                       
Through the end of the first year                      5.00            
-----------------------------------------------------------------------
Through the end of the second year                     4.00            
-----------------------------------------------------------------------
Through the end of the third year                      3.00            
-----------------------------------------------------------------------
Through the end of the fourth year                     3.00            
-----------------------------------------------------------------------
Through the end of the fifth year                      2.00            
-----------------------------------------------------------------------
Through the end of the sixth year                      1.00            
-----------------------------------------------------------------------
Longer than six years                                  0.00            

Commission to financial advisors is 5.00%                                       
Automatic conversion to Class A shares is eight years after purchase.           

You can pay a lower CDSC and reduce the holding period when making purchases of 
Class B shares through a financial advisor firm which participates in the Class 
B share discount program for larger purchases as described in the charts below. 
Some financial advisor firms are not able to participate because their record   
keeping or transaction processing systems are not designed to accommodate these 
reductions. For non-participating firms, purchases of Class B shares must be    
less than $250,000. Consult your financial advisor to see whether it            
participates in the discount program for larger purchases. For participating    
firms, Rights of Accumulation apply, so that if the combined value of the Fund  
accounts maintained by you, your spouse or your minor children is at or above a 
discount level, your next purchase will receive the lower CDSC and the          
applicable reduced holding period.                                              

PURCHASES OF $250,000 TO LESS THAN $500,000:                                    

--------------------------------------------------------------------------------
Class B Sales Charges                                                           
--------------------------------------------------------------------------------

                                                                [Download Table]

                                               % DEDUCTED WHEN            
HOLDING PERIOD AFTER PURCHASE                  SHARES ARE SOLD            
                                                                          
Through first year                                   3.00                 
--------------------------------------------------------------------------
Through second year                                  2.00                 
--------------------------------------------------------------------------
Through third year                                   1.00                 
--------------------------------------------------------------------------
Longer than three years                              0.00                 

Commission to financial advisors is 2.50%.                                      
Automatic conversion to Class A shares is four years after purchase.            

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YOUR ACCOUNT                                                                    

PURCHASES OF $500,000 TO LESS THAN $1 MILLION:                                  

--------------------------------------------------------------------------------
Class B Sales Charges                                                           
--------------------------------------------------------------------------------

                                                                [Download Table]

                                               % DEDUCTED WHEN            
HOLDING PERIOD AFTER PURCHASE                  SHARES ARE SOLD            
                                                                          
Through first year                                   3.00                 
--------------------------------------------------------------------------
Through second year                                  2.00                 
--------------------------------------------------------------------------
Through third year                                   1.00                 
--------------------------------------------------------------------------
Longer than three years                              0.00                 

Commission to financial advisors is 1.75%.                                      
Automatic conversion to Class A shares is three years after purchase.           

If you exchange into a fund participating in the Class B share discount program 
or transfer your fund account from a financial advisor which does not           
participate in the program to one who does, the exchanged or transferred shares 
will retain the pre-existing CDSC but any additional purchases of Class B shares
which cause the exchanged or transferred account to exceed the applicable       
discount level will receive the lower CDSC and the reduced holding period for   
amounts in excess of the discount level. Your financial advisor will receive the
lower commission for purchases in excess of the applicable discount level. If   
you exchange from a participating fund or transfer your account from a financial
advisor that does participate in the program into a fund or financial advisor   
which does not, the exchanged or transferred shares will retain the pre-existing
CDSC but all additional purchases of Class B shares will be in accordance with  
the higher CDSC and longer holding period of the non-participating fund or      
financial advisor.                                                              

CLASS C SHARES Similar to Class B shares, your purchases of Class C shares are  
at the Class C's net asset value. Although Class C shares have no front-end     
sales charge, they carry a CDSC of 1% that is applied to shares sold within the 
first year after they are purchased. After holding shares for one year, you may 
sell them at any time without paying a CDSC. Class C shares do not convert into 
Class A shares. The distributor pays the financial advisor firm an up-front     
commission of 1.00% on sales of Class C shares.                                 

--------------------------------------------------------------------------------
Class C Sales Charges                                                           
--------------------------------------------------------------------------------

                                                                [Download Table]

YEARS AFTER PURCHASE                    % DEDUCTED WHEN SHARES ARE SOLD      
                                                                             
Through first year                                   1.00                    
-----------------------------------------------------------------------------
Longer than one year                                 0.00                    

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YOUR ACCOUNT                                                                    

DISTRIBUTION AND SERVICE FEES                                                   
--------------------------------------------------------------------------------
The Fund has adopted a plan under Rule 12b-1 that permits it to pay the Fund's  
distributor marketing and other fees to support the sale and distribution of    
Class A, B and C shares and the services provided to you by your financial      
advisor. The annual service fee may equal up to 0.25% for each of Class A, Class
B and Class C shares. The annual distribution fee may equal up to 0.10% for     
Class A shares and 0.75% for each of Class B and Class C shares. Distribution   
and service fees are paid out of the assets of these classes. The distributor   
has voluntarily agreed to waive a portion of the Class A share distribution fee 
so that it does not exceed 0.05% annually. Over time, these fees will reduce the
return on your investment and may cost you more than paying other types of sales
charges. Class B shares automatically convert to Class A shares after a certain 
number of years, depending on the program you purchased your shares under,      
eliminating a portion of the distribution fee upon conversion. A conversion may 
occur three, four or eight years after purchase, depending on the program under 
which you purchased your shares. See "Your Account: Sales Charges" for the      
conversion schedule applicable to Class B shares.                               

HOW TO EXCHANGE SHARES                                                          
--------------------------------------------------------------------------------
You may exchange your shares for shares of the same share class of another fund 
distributed by Liberty Funds Distributor, Inc. at net asset value. Shareholders 
of Liberty Acorn funds that qualify to purchase Class A shares at net asset     
value may exchange their Class A shares for Class Z shares of another fund      
distributed by Liberty Funds Distributor, Inc. (see the Statement of Additional 
Information for a description of these situations). If your shares are subject  
to a CDSC, you will not be charged a CDSC upon the exchange. However, when you  
sell the shares acquired through the exchange, the shares sold may be subject to
a CDSC, depending upon when you originally purchased the shares you exchanged.  
For purposes of computing the CDSC, the length of time you have owned your      
shares will be computed from the date of your original purchase, and the        
applicable CDSC will be the CDSC of the original fund. Unless your account is   
part of a tax-deferred retirement plan, an exchange is a taxable event.         
Therefore, you may realize a gain or a loss for tax purposes. The Fund may      
terminate your exchange privilege if the advisor determines that your exchange  
activity is likely to adversely impact its ability to manage the Fund. To       
exchange by telephone, call 1-800-422-3737.                                     

HOW TO SELL SHARES                                                              
--------------------------------------------------------------------------------
Your financial advisor can help you determine if and when you should sell your  
shares. You may sell shares of the Fund on any regular business day that the New
York Stock Exchange (NYSE) is open.                                             

When the Fund receives your sales request in "good form," shares will be sold at
the next calculated price. In "good form" means that money used to purchase your
shares is fully collected. When selling shares by letter of instruction, "good  
form" means (i) your letter has complete instructions, the proper signatures and
signature guarantees, (ii) you have included any certificates for shares to be  
sold, and (iii) any other required documents are                                

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YOUR ACCOUNT                                                                    

attached. For additional documentation required for sales by corporations,      
agents, fiduciaries and surviving joint owners, please call 1-800-345-6611.     
Retirement plan accounts have special requirements; please call 1-800-799-7526  
for more information.                                                           

The Fund will generally send proceeds from the sale to you within seven days    
(usually on the next business day after your request is received in "good       
form"). However, if you purchased your shares by check, the Fund may delay      
sending the proceeds from the sale of your shares for up to 15 days after your  
purchase to protect against checks that are returned. No interest will be paid  
on uncashed redemption checks. Redemption proceeds may be paid in securities,   
rather than in cash, if the advisor determines that it is in the best interest  
of the Fund.                                                                    

--------------------------------------------------------------------------------
Outlined below are the various options for selling shares:                      
--------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

METHOD               INSTRUCTIONS                                                     
                                                                                      
Through your         You may call your financial advisor to place your sell order.    
financial advisor    To receive the current trading day's price, your financial       
                     advisor firm must receive your request prior to the close        
                     of the NYSE, usually 4:00 p.m. Eastern time.                     
--------------------------------------------------------------------------------------
By exchange          You or your financial advisor may sell shares by exchanging      
                     from the Fund into the same share class of another fund at no    
                     additional cost. To exchange by telephone, call 1-800-422-3737.  
--------------------------------------------------------------------------------------
By telephone         You or your financial advisor may sell shares by telephone and   
                     request that a check be sent to your address of record by        
                     calling 1-800-422-3737 unless you have notified the Fund of an   
                     address change within the previous 30 days.  The dollar limit    
                     for telephone sales is $100,000 in a 30-day period.  You do not  
                     need to set up this feature in advance of your call.  Certain    
                     restrictions apply to retirement accounts.  For details, call    
                     1-800-345-6611.                                                  
--------------------------------------------------------------------------------------
By mail              You may send a signed letter of instruction or stock power form  
                     along with any certificates to be sold to the address below.     
                     In your letter of instruction, note your fund's name, share      
                     class, account number, and the dollar value or number of shares  
                     you wish to sell.  All account owners must sign the letter, and  
                     signatures must be guaranteed by either a bank, a member firm    
                     of a national stock exchange or another eligible guarantor       
                     institution.  Additional documentation is required for sales by  
                     corporations, agents, fiduciaries, surviving joint owners and    
                     individual retirement account (IRA) owners.  For details, call   
                     1-800-345-6611.                                                  
                     Mail your letter of instruction to  Liberty Funds Services,      
                     Inc., P.O. Box 1722, Boston, MA 02105-1722.                      
--------------------------------------------------------------------------------------
By wire              You may sell shares and request that the proceeds be wired to    
                     your bank. You must set up this feature prior to your telephone  
                     request. Be sure to complete the  appropriate section of the     
                     account application for this feature.                            
--------------------------------------------------------------------------------------
By systematic        You may automatically sell a specified dollar amount or          
withdrawal plan      percentage on a monthly, quarterly or semi-annual basis if your  
                     account balance is at least $5,000. This feature is not          
                     available if you hold your shares in certificate form. All       
                     dividend and capital gains distributed must be reinvested.       
                     Be sure to complete the appropriate section of the account       
                     application for this feature.                                    
--------------------------------------------------------------------------------------
By electronic        You may sell shares and request that the proceeds be             
funds transfer       electronically transferred to your bank.  Proceeds may take up   
                     to two business days to be received by your bank. You must       
                     set up this feature prior to your request. Be sure to            
                     complete the appropriate section of the account                  
                     application for this feature.                                    

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YOUR ACCOUNT                                                                    

FUND POLICY ON TRADING OF FUND SHARES                                           
--------------------------------------------------------------------------------
The Fund does not permit short-term or excessive trading. Excessive purchases,  
redemptions or exchanges of Fund shares disrupt portfolio management and        
increase Fund expenses. In order to promote the best interests of the Fund, the 
Fund reserves the right to reject any purchase order or exchange request,       
particularly from market timers or investors who, in the advisor's opinion, have
a pattern of short-term or excessive trading or whose trading has been or may be
disruptive to the Fund. The Fund into which you would like to exchange also may 
reject your request.                                                            

OTHER INFORMATION ABOUT YOUR ACCOUNT                                            
--------------------------------------------------------------------------------
HOW THE FUND'S SHARE PRICE IS DETERMINED The price of each class of the Fund's  
shares is based on its NAV. The NAV is determined at the close of regular       
session trading on the NYSE, usually 4:00 p.m. Eastern time, on each business   
day that the NYSE is open (typically Monday through Friday).                    

When you request a transaction, it will be processed at the NAV (after any      
applicable sales charges) next determined after your request is received in good
form by the distributor. In most cases, in order to receive that day's price,   
the distributor must receive your order before that day's transactions are      
processed. If you request a transaction through your financial advisor's firm,  
the firm must receive your order by the close of trading on the NYSE to receive 
that day's price.                                                               

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

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

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YOUR ACCOUNT                                                                    

UNDERSTANDING FUND DISTRIBUTIONS                                                

The Fund earns income from the securities the Portfolio holds. The Fund also may
experience capital gains and losses on sales of the Portfolio's securities. The 
Fund distributes substantially all of its net investment income and capital     
gains to shareholders. As a shareholder, you are entitled to a portion of the   
Fund's income and capital gains based on the number of shares you own at the    
time these distributions are declared.                                          
================================================================================

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

You can find the daily prices of some share classes for the Fund in most major  
daily newspapers. You can find daily prices for all share classes by visiting   
the Fund's web site at www.libertyfunds.com.                                    

ACCOUNT FEES If your account value falls below $1,000 (other than as a result of
depreciation in share value), you may be subject to an annual account fee of    
$10. This fee is deducted from the account in June each year. Approximately 60  
days prior to the fee date, the Fund's transfer agent will send you written     
notification of the upcoming fee. If you add money to your account and bring the
value above $1,000 prior to the fee date, the fee will not be deducted.         

SHARE CERTIFICATES Share certificates are not available for Class B and C       
shares. Certificates will be issued for Class A shares only if requested. If you
decide to hold share certificates, you will not be able to sell your shares     
until you have endorsed your certificates and returned them to the Distributor. 

DIVIDENDS, DISTRIBUTIONS, AND TAXES The Fund has the potential to make the      
following distributions:                                                        

--------------------------------------------------------------------------------
Types of Distributions                                                          
--------------------------------------------------------------------------------

                                                                [Download Table]
                                                                                
Dividend income      Represents interest and dividends earned from              
                     securities held by the Portfolio, net of expenses incurred 
                     by the Portfolio..                                         
-------------------- -----------------------------------------------------------
Capital gains        Represents long-term capital gains on sales of             
                     securities held for more than 12 months and short-term     
                     capital gains, which are gains on sales of securities held 
                     by the Portfolio for a 12-month period or less.            

DISTRIBUTION OPTIONS Income dividends are declared and paid annually. Any       
capital gains are distributed at least annually. You can choose one of the      
options listed in the table below for these distributions when you open your    
account. To change your distribution option call 1-800-345-6611.                

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YOUR ACCOUNT                                                                    

--------------------------------------------------------------------------------
Distribution Options                                                            
--------------------------------------------------------------------------------

Reinvest all distributions in additional shares of your current fund            
--------------------------------------------------------------------------------
Reinvest all distributions in shares of another fund                            
--------------------------------------------------------------------------------
Receive dividends in cash (see options below) and reinvest capital gains        
--------------------------------------------------------------------------------
Receive all distributions in cash (with one of the following options):          

-    send the check to your address of record                                   
-    send the check to a third party address                                    
-    transfer the money to your bank via electronic funds transfer              

If you do not indicate on your application your preference for handling         
distributions, the Fund will automatically reinvest all distributions in        
additional shares of the Fund. Distributions of $10 or less will automatically  
be reinvested in additional Fund shares. If you elect to receive distributions  
by check and the check is returned as undeliverable, or if you do not cash a    
distribution check within six months of the check date, the distribution will be
reinvested in additional shares of the Fund.                                    

TAX CONSEQUENCES Regardless of whether you receive your distributions in cash or
reinvest them in additional Fund shares, all Fund distributions are subject to  
federal income tax. Depending on the state where you live, distributions may    
also be subject to state and local income taxes.                                

In general, any distributions of dividends, interest and short-term capital     
gains are taxable as ordinary income. Distributions of long-term capital gains  
are generally taxable as such, regardless of how long you have held your Fund   
shares. You will be provided with information each year regarding the amount of 
ordinary income and capital gains distributed to you for the previous year and  
any portion of your distribution which is exempt from state and local taxes.    
Your investment in the Fund may have additional personal tax implications.      
Please consult your tax advisor on federal, state, local or other applicable tax
laws.                                                                           

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

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Managing the Fund                                                               
--------------------------------------------------------------------------------

INVESTMENT ADVISOR                                                              
--------------------------------------------------------------------------------
Stein Roe & Farnham Incorporated (Stein Roe), a wholly owned subsidiary of      
Liberty Funds Group LLC (LFG), located at One South Wacker Drive, Suite 3500,   
Chicago, Illinois 60606, is the Fund's investment advisor. In its duties as     
investment advisor, Stein Roe runs the Fund's day-to-day business, including    
placing all orders for the purchase and sale of portfolio securities for the    
Portfolio. Stein Roe has been an investment advisor since 1932. Stein Roe's     
mutual funds and institutional investment advisory businesses are part of LFG   
which includes several separate legal entities. LFG includes certain affiliates 
of Stein Roe, including Colonial Management Associates, Inc. (Colonial). The LFG
business unit is managed by a single management team. Colonial and other LFG    
entities also share personnel, facilities, and systems with Stein Roe that may  
be used in providing administrative or operational services to the Fund.        
Colonial is a registered investment adviser. Stein Roe and the other entities   
that make up LFG are subsidiaries of Liberty Financial Companies, Inc.          

For the fiscal year ended September 30, 2000, the Fund and Portfolio paid       
aggregate fees 0.68% of its average net assets to Stein Roe.                    

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

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

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Other Investment Strategies and Risks                                           
--------------------------------------------------------------------------------

UNDERSTANDING THE FUND'S OTHER INVESTMENT STRATEGIES AND RISKS                  

The Fund's principal investment strategies and risks are described under "The   
Fund - Principal Investment Strategies" and "The Fund - Principal Investment    
Risks." In seeking to meet its investment goal, the Portfolio may also invest in
other securities and use certain other investment techniques. These securities  
and investment techniques offer opportunities and carry various risks.          

The advisor may elect not to buy any of these securities or use any of these    
techniques unless it believes that doing so will help the Fund and Portfolio    
achieve their investment goal. The Fund may not always achieve its investment   
goal.                                                                           

Additional information about the Fund's securities and investment techniques, as
well as the Fund's fundamental and non-fundamental investment policies, is      
contained in the Statement of Additional Information.                           
================================================================================

The Fund's principal investment strategies and their associated risks are       
described above. This section describes other investments the Portfolio may make
and the risks associated with them. In seeking to achieve its investment goal,  
the Portfolio may invest in various types of securities and engage in various   
investment techniques which are not the principal focus of the Portfolio and    
therefore are not described in this prospectus. These types of securities and   
investment practices are identified and discussed in the Fund's Statement of    
Additional Information, which you may obtain free of charge (see back cover).   
Approval by the Fund's shareholders is not required to modify or change any of  
the Fund's investment goal or investment strategies.                            

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

TEMPORARY DEFENSIVE POSITIONS                                                   
--------------------------------------------------------------------------------
At times, the advisor may determine that adverse market conditions make it      
desirable to temporarily suspend the Portfolio's normal investment activities.  
During such times, the Portfolio may, but is not required to, invest in cash or 
high-quality, short-term debt securities, without limit. Taking a temporary     
defensive position may prevent the Fund and the Portfolio from achieving their  
investment goal.                                                                

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

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

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Financial Highlights                                                            
--------------------------------------------------------------------------------

The financial highlights table is intended to help you understand the Fund's    
financial performance. Information is shown for the Fund's fiscal years since   
inception. The fiscal year runs from October 1 to September 30. Certain         
information reflects financial results for a single Fund share. The total       
returns in the table represent the rate that you would have earned (or lost) on 
an investment in the Fund (assuming reinvestment of all dividends and           
distributions). This information is included in the Fund's financial statements 
for the years ended September 30, 2000 and 1999, which have been audited by     
PricewaterhouseCoopers LLP, independent accountants. Their report, along with   
the Fund's financial statements, is included in the annual report. The          
information for the period ended September 30, 1998 has been audited by other   
independent accountants, whose report expressed an unqualified opinion on the   
financial highlights. You can request a free annual report by calling           
1-800-426-3750.                                                                 

--------------------------------------------------------------------------------
The Fund                                                                        
--------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

                                                      Year Ended September 30, 2000  
                                                       Class A    Class B   Class C  
                                                                                     
Net asset value-- Beginning of period ($)               15.98      15.76      15.74  
-------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS ($)                                                
Net investment loss (a)                                 (0.16)(b)  (0.30)     (0.30) 
-------------------------------------------------------------------------------------
Net realized and unrealized gain                         5.58       5.50       5.49  
-------------------------------------------------------------------------------------
Total from investment operations                         5.42       5.20       5.19  
-------------------------------------------------------------------------------------
Net asset value--                                                                    
End of period ($)                                       21.40      20.96      20.93  
-------------------------------------------------------------------------------------
Total return (c)(%)                                     33.92(d)   32.99      32.97  
-------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS                                                         
Expenses (e)(%)                                          1.31(b)    2.01       2.01  
-------------------------------------------------------------------------------------
Net investment income (loss)  (e)(%)                    (0.81)(b)  (1.51)     (1.51) 
-------------------------------------------------------------------------------------
Portfolio turnover (f)(%)                                  74         74         74  
-------------------------------------------------------------------------------------
Net assets at end of period (000's)($)                197,345    886,331     70,818  

(a)  Per share data was calculated using average shares outstanding during the  
period.                                                               

(b)  Net of fees waived by the Distributor which amounted to $0.010 per share   
and 0.05%.                                                            

(c)  Total return at net asset value assuming all distributions reinvested and  
no initial sales charge or contingent deferred sales charge.          

(d)  Had the Distributor not waived a portion of expenses, total return would   
have been reduced.                                                    

(e)  The benefits derived from custody credits and directed brokerage           
arrangements had no impact.                                           

(f)  Portfolio turnover of the Portfolio.                                       

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FINANCIAL HIGHLIGHTS                                                            

--------------------------------------------------------------------------------
The Fund                                                                        
--------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

                                                                Year Ended September 30, 1999             
                                                       Class A                 Class B             Class C

                                                                                                          
 Net asset value-- Beginning of period ($)              11.82                   11.74               11.72 
--------------------------------------------------------------------------------------------------------- 
 INCOME FROM INVESTMENT OPERATIONS ($)                                                                    

 Net investment loss (a)                                (0.09)(b)               (0.20)              (0.20)
--------------------------------------------------------------------------------------------------------- 
 Net realized and unrealized gain                        4.25                    4.22                4.22 
--------------------------------------------------------------------------------------------------------- 
 Total from investment operations                        4.16                    4.02                4.02 
--------------------------------------------------------------------------------------------------------- 
 Net asset value--                                                                                        
 End of period ($)                                      15.98                   15.76               15.74 
--------------------------------------------------------------------------------------------------------- 
 Total return (d)(%)                                    35.19                   34.24               34.30 
--------------------------------------------------------------------------------------------------------- 
 RATIOS TO AVERAGE NET ASSETS                                                                             

 Expenses (c)(%)                                         1.35(b)                 2.05                2.05 
--------------------------------------------------------------------------------------------------------- 
 Net investment income (loss)  (d)(%)                   (0.60)(b)               (1.30)              (1.30)
--------------------------------------------------------------------------------------------------------- 
 Portfolio turnover (e)(%)                                 57                      57                  57 
--------------------------------------------------------------------------------------------------------- 
 Net assets at end of period (000's) ($)               93,835                 304,754              26,373 

(a)  Per share data was calculated using average shares outstanding during the  
period.                                                               

(b)  Net of fees waived by the Distributor which amounted to $0.008 per share   
and 0.05%.                                                            

(c)  Total return at net asset value assuming all distributions reinvested and  
no initial sales charge or contingent deferred sales charge.          

(d)  The benefits derived from custody credits and directed brokerage           
arrangements had no impact.                                           

(e)  Portfolio turnover of the Portfolio.                                       

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FINANCIAL HIGHLIGHTS                                                            

--------------------------------------------------------------------------------
The Fund                                                                        
--------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

                                                               Period Ended September 30, 1998(a)              
                                                       Class A                Class B                Class C   

                                                                                                               
 Net asset value-- Beginning of period ($)              11.59                  11.59                  11.59    
-----------------------------------------------------------------------------------------------------------    
 INCOME FROM INVESTMENT OPERATIONS ($)                                                                         

 Net investment loss (a)                                (0.04)                 (0.08)                 (0.08)   
-----------------------------------------------------------------------------------------------------------    
 Net realized and unrealized gain                        0.27                   0.23                   0.21    
-----------------------------------------------------------------------------------------------------------    
 Total from investment operations                        0.23                   0.15                   0.13    
-----------------------------------------------------------------------------------------------------------    
 Net asset value--                                                                                             
 End of period ($)                                      11.82                  11.74                  11.72    
-----------------------------------------------------------------------------------------------------------    
 Total return (d)(%)                                     1.98(e)                1.29(e)                1.12(e) 
-----------------------------------------------------------------------------------------------------------    
 RATIOS TO AVERAGE NET ASSETS                                                                                  

 Expenses (c)(%)                                         1.40(f)                2.10(f)                2.10(f) 
-----------------------------------------------------------------------------------------------------------    
 Net investment income (loss)(d)(%)                     (0.50)(e)              (1.20)(e)              (1.21)(e)
-----------------------------------------------------------------------------------------------------------    
 Portfolio turnover (g)(%)                                 39                     39                     39    
-----------------------------------------------------------------------------------------------------------    
 Net assets at end of period (000's)($)                39,521                 64,148                 10,472    

(a)  From commencement of multi-class offering on October 15, 1997.             

(b)  Per share data was calculated using average shares outstanding during the  
period.                                                               

(c)  If the Fund had paid all of its expenses and there had been no             
   reimbursement by the Advisor, this ratio would have been 1.63%, 2.31% and
2.30%, respectively, for Class A, B and C shares.                     

(d)  Computed giving effect to Advisor's expense limitation undertaking.        

(e)  Not annualized.                                                            

(f)  Annualized.                                                                

(g)  Portfolio turnover of the Portfolio.                                       

                                                                             ---
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Appendix A                                                                      
--------------------------------------------------------------------------------

MORNINGSTAR CATEGORIES                                                          
--------------------------------------------------------------------------------
In an effort to distinguish funds by what they own, as well as by their         
prospectus objectives and styles, Morningstar, Inc. (Morningstar) developed the 
Morningstar categories. While the prospectus objective identifies a fund's      
investment goals based on the wording in the fund prospectus, the Morningstar   
category identifies funds based on their actual investment styles as measured by
their underlying portfolio holdings (portfolio statistics and compositions over 
the past three years). Morningstar may change a fund's category assignment from 
time to time.                                                                   

Morningstar places domestic equity funds in a category based on the style and   
size of the stocks they typically own. The style and size parameters are based  
on the divisions used in the investment style box: Value, Blend, or Growth style
and Small, Mid-Cap, or Large median market capitalization (see "Morningstar     
Style Box" below for more details on style methodology). By reviewing their     
investment style over the past three years, Morningstar places domestic equity  
funds in one of the following nine categories: Large Growth, Large Blend, Large 
Value, Mid-Cap Growth, Mid-Cap Blend, Mid-Cap Value, Small Growth, Small Blend, 
and Small Value. Morningstar also includes several other domestic equity        
categories, including: Specialty Health Care, Specialty Technology, Specialty   
Utilities, Specialty Communications, Specialty Financials, Specialty Real       
Estate, Specialty Natural Resources, Convertible Bond, and Domestic Hybrid. The 
Domestic Hybrid category contains those funds with stock holdings of greater    
than 20% but less than 70% of the portfolio.                                    

MORNINGSTAR STYLE BOX                                                           
--------------------------------------------------------------------------------
The style box is a snapshot in time. It identifies the fund's investment style  
as of a particular date. The Morningstar category is based on style box         
information from the trailing 36 months. It provides a general picture of the   
fund's investment style over the past three years.                              

The Morningstar equity style box is a nine-box matrix that displays both the    
fund's investment methodology and the size of the companies in which it invests.
Set forth below is the nine-box matrix.                                         

                                                                [Download Table]

   VALUE      BLEND     GROWTH                  
---------------------------------               
                                                
1            2         3                 Large  
---------------------------------               
4            5         6                 Mid-Cap
---------------------------------               
7            8         9                 Small  
---------------------------------               

The equity style box for domestic stock funds comprises two components: MARKET  
CAPITALIZATION on the vertical axis and VALUATION on the horizontal axis.       

                                                                             ---
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APPENDIX A                                                                      

Market Capitalization: Morningstar ties market cap to the relative movements of 
the market. The top 5% of the 5000 largest domestic stocks in Morningstar's     
equity database are classified as large-cap, the next 15% of the 5000 are       
mid-cap, and the remaining 80% (as well as companies that fall outside the      
largest 5000) are small-cap.                                                    

Morningstar then determines a fund's market cap by ranking the stocks in a      
fund's portfolio from the largest market-capitalized stock to the smallest, and 
then calculating the average weighted market capitalization of the stocks in the
middle quintile (middle 40th percentile to 60th percentile) of the portfolio.   
After a fund's market cap has been determined, Morningstar places the fund in   
the large-cap, mid-cap or small-cap group noted above.                          

Valuation: Morningstar categorizes funds by comparing the stocks in their       
portfolios with the most relevant of the three market cap groups. Specifically, 
each stock in Morningstar's equities database receives a price-to-earnings (P/E)
score and a price-to-book (P/B) score. This is derived by dividing each stock's 
P/E and P/B by the asset-weighted median P/E and asset-weighted median P/B,     
respectively, of the stock's market cap group. For example, to calculate the    
asset-weighted median P/E, Morningstar first ranks the P/E ratios of the stocks 
in each market-cap group from highest to lowest, then counts down by their      
market caps until it reaches the 50th percentile of that market-cap group. The  
P/E ratio attached to that stock is the asset-weighted median P/E. Morningstar  
does the same to find the asset-weighted median P/B. Next, Morningstar          
calculates the P/E style box Score and the P/B style box Score for each fund by 
ranking the stocks in a fund's portfolio by their P/E Scores and P/B Scores,    
respectively, and then calculating an average weighted P/E score and an average 
weighted P/B score from the stocks in the middle quintile of each fund's        
portfolio. These average weighted scores are the P/E style box Score and the P/B
style box Score of the fund's portfolio.                                        

For each measure, 1.00 represents the market-cap group average. If the fund has 
a P/E style box score + P/B style box Score that exceeds 2.25, the fund is      
categorized as growth. If the combined score falls below 1.75, the fund is      
categorized as value. Finally, if the score is between 1.75 and 2.25, the fund  
is categorized as blend                                                         

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FOR MORE INFORMATION                                                            
--------------------------------------------------------------------------------
You can get more information about the Fund's investments in the Fund's         
semi-annual and annual reports to shareholders. The annual report contains a    
discussion of the market conditions and investment strategies that significantly
affected the Fund's performance over its last fiscal year.                      

You may wish to read the Statement of Additional Information for more           
information on the Portfolio and the securities in which it invests. The        
Statement of Additional Information is incorporated into this prospectus by     
reference, which means that it is considered to be part of this prospectus.     

You can get free copies of reports and the Statement of Additional Information, 
request other information and discuss your questions about the Fund by writing  
or calling the Fund's distributor at:                                           

Liberty Funds Distributor, Inc.                                                 
One Financial Center                                                            
Boston, MA 02111-2621                                                           
1-800-426-3750                                                                  
www.libertyfunds.com                                                            

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

INVESTMENT COMPANY ACT FILE NUMBER:                                             

Liberty-Stein Roe Advisor Trust: 811-07955                                      
- Liberty Growth Stock Fund (formerly, Stein Roe Advisor Growth Stock Fund).    

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

[LIBERTY FUNDS LOGO]                                      
Liberty Funds Distributor, Inc. (c)2001                   
One Financial Center, Boston, MA 02111-2621, 800-426-3750 
www.libertyfunds.com                                      

706-01/812E-0101                                                                

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LIBERTY YOUNG INVESTOR(SM) FUND         PROSPECTUS, FEBRUARY 1, 2001            
--------------------------------------------------------------------------------

CLASS A SHARES                                                                  

Advised by Stein Roe & Farnham Incorporated                                     

Although these securities have been registered with the Securities and Exchange 
Commission, the Commission has not approved or disapproved any shares offered in
this prospectus or determined whether this prospectus is truthful or complete.  
Any representation to the contrary is a criminal offense.                       

--------------------------------------------------------------------------------
TABLE OF CONTENTS                                                               

                                                                [Download Table]
                                           
THE FUND                                2  
------------------------------------------ 

Investment Goal.........................2  

Principal Investment Strategies.........2  

Principal Investment Risks..............3  

Performance History.....................5  

Your Expenses...........................6  

YOUR ACCOUNT                            7  
------------------------------------------ 

How to Buy Shares.......................7  

Sales Charges...........................8  

Distribution and Service Fees...........8  

How to Exchange Shares..................9  

How to Sell Shares......................9  

Fund Policy on Trading of Fund Shares..11  

Other Information About Your Account...11  

MANAGING THE FUND                      14  
------------------------------------------ 

Investment Advisor.....................14  

Portfolio Managers.....................14  
------------------------------------------ 

OTHER INVESTMENT                           
STRATEGIES AND RISKS                   15  
------------------------------------------ 

FINANCIAL HIGHLIGHTS                   16  

APPENDIX A                             17  
------------------------------------------ 

---------------------------                                                     
NOT FDIC    MAY LOSE VALUE                                                      
-----------------                                           
INSURED   NO BANK GUARANTEE                                                     
---------------------------                                                     

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THE FUND - LIBERTY YOUNG INVESTOR FUND                                          
--------------------------------------------------------------------------------

INVESTMENT GOAL                                                                 
--------------------------------------------------------------------------------
The Fund seeks long-term growth.                                                

PRINCIPAL INVESTMENT STRATEGIES                                                 
--------------------------------------------------------------------------------
The Fund invests all of its assets in SR&F Growth Investor Portfolio (the       
"Portfolio") as part of a master fund/feeder fund structure. The Portfolio      
invests primarily in common stocks believed to have long-term growth potential. 
Under normal market conditions, the Fund invests at least 65% of its assets in  
common stocks of companies that the Portfolio's portfolio managers believe      
affect the lives of children or teenagers. The Portfolio's investments are      
diversified among various industries and market sectors. The Portfolio seeks to 
invest in companies that produce products or provide services that the portfolio
managers believe children or teenagers use, are aware of, or have an interest   
in. These companies may include, but are not limited to, computer hardware or   
software manufacturers, internet service providers and companies in the apparel,
entertainment, retail, financial services and personal care products industries.
The Portfolio may invest in companies of any size, including smaller emerging   
companies. The Portfolio may invest up to 25% of its assets in foreign stocks.  

To select investments for the Portfolio, the portfolio managers look for        
companies that are market leaders with growing market share in their respective 
industries, have strong financial balance sheets and experienced management     
teams, have products and services that give the company a competitive advantage,
and have stock prices which the portfolio managers believe are reasonable       
relative to the assets and earning power of the company.                        

The Fund also has an educational objective. It seeks to teach children and      
teenagers information about mutual funds, basic economic principles and personal
finance through a variety of educational materials (such as newsletters and     
activity books). The materials are paid for by the Fund and distributed to      
shareholders on a regular basis.                                                

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

The Fund compares its performance to other similarly managed mutual funds as    
determined by Morningstar, Inc. ("Morningstar"). For performance comparison     
purposes, Morningstar places an equity fund in one of nine "categories" based   
upon guidelines established by Morningstar that examines both a fund's          
investment methodology and the size of the companies in which the fund invests. 
The portfolio managers generally manage the Portfolio in accordance with the    
Morningstar guidelines for a "Large Blend" fund. See Appendix A for a           
description of the Morningstar categories.                                      

Additional strategies that are not principal investment strategies and the risks
associated with them are described later in this prospectus under "Other        
Investment Strategies and Risks."                                               

                                                                             ---
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THE FUND - LIBERTY YOUNG INVESTOR FUND                                          

Defining Capitalization. A company's market capitalization is simply its stock  
price multiplied by the number of shares of stock it has issued and outstanding.
In the financial markets, companies generally are sorted into one of three      
capitalization-based categories: large capitalization (large-cap); medium       
capitalization (mid-cap); or small capitalization (small-cap). In defining a    
company's market capitalization, we use capitalization-based categories that are
based in part on Standard & Poor's Index Services.                              

Large capitalization stocks are stocks with market capitalizations greater than 
$5 billion. In addition, any stock that is a member of the S&P 500 Index is     
considered a large capitalization stock.                                        

Middle capitalization stocks are stocks with market capitalizations between $1  
billion and the largest stock in the S&P MidCap 400 Index ($9.9 billion as of   
December 31, 2000). In addition, any stock that is a member of the S&P MidCap   
400 Index is considered a middle capitalization stock.                          

Small capitalization stocks are stocks with market capitalizations equal to or  
less than the largest stock in the S&P SmallCap 600 Index ($2.6 billion as of   
December 31, 2000).                                                             

PRINCIPAL INVESTMENT RISKS                                                      
--------------------------------------------------------------------------------
The principal risks of investing in the Fund are described below. There are many
circumstances (including additional risks that are not described here) which    
could prevent the Fund from achieving its investment goal. You may lose money by
investing in the Fund.                                                          

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

Since it purchases equity securities, the Fund is subject to equity risk. This  
is the risk that stock prices will fall over short or extended periods of time. 
Although the stock market has historically outperformed other asset classes over
the long term, the equity market tends to move in cycles and individual stock   
prices may fluctuate drastically from day-to-day and may underperform other     
asset classes over an extended period of time. Individual companies may report  
poor results or be negatively affected by industry and/or economic trends and   
developments. The prices of securities issued by such companies may suffer a    
decline in response. These price movements may result from factors affecting    
individual companies, industries or the securities market as a whole.           

                                                                             ---
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THE FUND - LIBERTY YOUNG INVESTOR FUND                                          

Value stocks are securities of companies that may have experienced adverse      
business or industry developments or may be subject to special risks that have  
caused the stocks to be out of favor and undervalued in the advisor's opinion.  
If the advisor's assessment of a company's prospects is wrong, the price of its 
stock may not approach the value the advisor has placed on it.                  

Growth stock prices may be more sensitive to changes in current or expected     
earnings than the prices of other stocks. Growth stocks may not perform as well 
as value stocks or the stock market in general.                                 

The securities issued by mid-capitalization companies may have more risk than   
those of larger companies. These securities may be more susceptible to market   
downturns, and their prices could be more volatile.                             

Smaller companies are more likely than larger companies to have limited product 
lines, operating histories, markets or financial resources. They may depend     
heavily on a small management team. Stocks of smaller companies may trade less  
frequently, may trade in smaller volumes and may fluctuate more sharply in price
than stocks of larger companies. In addition, they may not be widely followed by
the investment community, which can lower the demand for their stocks.          

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

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

Information on other securities and risks appears under "Other Investment       
Strategies and Risks."                                                          

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THE FUND - LIBERTY YOUNG INVESTOR FUND                                          

UNDERSTANDING PERFORMANCE                                                       

CALENDAR-YEAR TOTAL RETURNS show the Portfolio's and the Fund's Class A share   
performance for each calendar year since the Portfolio or the Fund commenced    
operations.                                                                     

AVERAGE ANNUAL TOTAL RETURNS ARE a measure of the Fund's share performance for  
the past one year, five years and life of the Fund. The Fund (Class K shares)   
commenced operations on February 14, 1997. Class A shares commenced operations  
on January 26, 1998. The Fund's historical performance for all periods prior to 
February 14, 1997, is the performance of the Portfolio and has not been restated
to reflect the higher gross annual operating expenses of the Fund.              

The Fund's return is compared to the S&P 500 Index, an unmanaged broad-based    
measure of market performance. Unlike the Fund, indices are not investments, do 
not incur fees or expenses and are not professionally managed. It is not        
possible to invest directly in indices.                                         

PERFORMANCE HISTORY                                                             
--------------------------------------------------------------------------------
The bar chart below shows changes in the Fund's performance (and for the        
Portfolio for periods prior to the inception of the Fund) from year to year by  
illustrating the Fund's calendar year total returns for its Class A shares. The 
performance table following the bar chart shows how the Fund's average annual   
returns for Class A shares compares with those of a broad measure of market     
performance for 1 year, 5 years and the life of the Fund. The chart and table   
are intended to illustrate some of the risks of investing in the Fund by showing
the changes in the Fund's performance. All returns include the reinvestment of  
dividends and distributions. Performance results include the effect of expense  
reduction arrangements, if any. If these arrangements were not in place, then   
the performance results would have been lower. Any expense reduction            
arrangements may be discontinued at any time. As with all mutual funds, past    
performance does not predict the Fund's future performance.                     

--------------------------------------------------------------------------------
CALENDAR-YEAR TOTAL RETURNS                                                     
--------------------------------------------------------------------------------

[BAR GRAPH] 

                                                                [Download Table]
                          
1995                39.31%
1996                34.92%
1997                25.91%
1998                15.05%
1999                30.85%
2000               -11.13%

For period shown on chart above:                                                
Best quarter: 4th quarter 1999 +28.04%                                          
Worst quarter: 3rd quarter 1998, -16.36%                                        

--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS -- FOR PERIODS ENDED DECEMBER 31, 2000(1)(2)       
--------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

                                 INCEPTION                                 LIFE OF THE
                                   DATE         1 YEAR       5 YEARS          FUND    

                                                                                      
Class A (%)                       1/26/98       -11.13        17.33           20.09   
--------------------------------------------------------------------------------------
S&P Index (%)                       N/A          -9.10        18.33           19.70   

(1)  Class A shares are a newer class of shares. Its performance includes       
   returns of the Portfolio through February 13, 1997 and the performance of
     the Fund's Class K shares from February 14, 1997 through December 31, 1997.
 The performance for calendar year 1998 shows the performance of Class K
     shares from January 1, 1998 through January 25, 1998 and the performance of
Class A shares from January 26, 1998 through December 31, 1998. The   
performance for 2000 and 1999 shows the performance of Class A shares.
 Class A shares were initially offered on January 25, 1998. For years or
     periods prior to 1997, performance is that of the Portfolio. calendar years
     1998, 1999 and 2000 shows the performance of the Fund's Class K shares. For
years or periods prior to 1997, performance is that of the Portfolio. 

                                                                             ---
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THE FUND - LIBERTY YOUNG INVESTOR FUND                                          

UNDERSTANDING EXPENSES                                                          

SHAREHOLDER FEES are paid directly by shareholders to the Fund's distributor.   

ANNUAL FUND OPERATING EXPENSES are deducted from the Fund. They include         
management and administration fees, 12b-1 fees and administrative costs         
including pricing and custody services.                                         

EXAMPLE EXPENSES helps you compare the cost of investing in the Fund to the cost
of investing in other mutual funds. This example reflects expenses of both the  
Fund and the Portfolio. The table does not take into account any expense        
reduction arrangements discussed in the Annual Fund Operating Expenses table. It
uses the following hypothetical conditions:                                     

-    $10,000 initial investment                                                 

-    5% return for each year                                                    

-    Fund operating expenses remain the same                                    

-    Assumes reinvestment of all dividends and distributions                    

YOUR EXPENSES                                                                   
--------------------------------------------------------------------------------
The tables below describe the fees and expenses you may pay when you buy, hold  
and sell shares of the Fund. Expenses are one of several factors to consider    
before you invest in a mutual fund.                                             

--------------------------------------------------------------------------------
SHAREHOLDER FEES(2) (PAID DIRECTLY FROM YOUR INVESTMENT)                        
--------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

                                                                            CLASS A  

                                                                                     
Maximum sales charge (load) on purchases                                             
(as a percentage of the offering price)                                       None   
-------------------------------------------------------------------------------------
Maximum deferred sales charge (load) on redemptions                                  
(as a percentage of the offering price)                                       2.00(3)

--------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES(4) (DEDUCTED DIRECTLY FROM FUND ASSETS)          
--------------------------------------------------------------------------------

                                                                [Download Table]

                                                                          CLASS A  

                                                                                   
Management fee(5) (%)                                                       0.76   
-----------------------------------------------------------------------------------
Distribution and service (12b-1) fees(6) (%)                                0.35(6)
-----------------------------------------------------------------------------------
Other expenses (%)                                                          0.55   
-----------------------------------------------------------------------------------
Total annual fund operating expenses(6) (%)                                 1.66   

--------------------------------------------------------------------------------
EXAMPLE EXPENSES (YOUR ACTUAL COSTS MAY BE HIGHER OR LOWER)                     
--------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

CLASS                                    1 YEAR     3 YEARS     5 YEARS     10 YEARS 

-------------------------------------------------------------------------------------
                                                                                     
Class A: did not sell your shares         $168        $522        $900       $1,961  

         sold all your shares at                                                     
         the end of the period            $368        $722        $900       $1,961  

(2)  A $10 annual fee is deducted from accounts of less than $1,000 and paid to 
the transfer agent.                                                   

(3)  A 1.00% contingent deferred sales charge applies to purchases of $1 million
to $25 million redeemed within approximately 18 months after purchase 

(4)  There is a $7.50 charge for wiring sale proceeds to your bank.             

(5)  The Portfolio pays a management fee of 0.56% and the Fund pays an          
administrative fee of 0.20%.                                          

(6)  Stein Roe has voluntarily agreed to waive advisory and administration fees 
   and reimburse the Fund for certain expenses so that the total annual fund
     operating expenses (exclusive of brokerage commissions, interest, taxes and
    extraordinary expenses, if any) will not exceed 1.65% or such lower amount
   as Stein Roe shall determine. The Fund's distributor has also voluntarily
    agreed to waive a portion of the 12b-1 fee for Class A shares. As a result
   of these waivers and reimbursements, the actual Management fee was 0.64%,
   the 12b-1 fee was 0.30% and the total annual fund operating expenses were
    1.49% for the fiscal year ended September 30, 2000. These arrangements may
be terminated by the advisor or distributor at any time.              

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YOUR ACCOUNT
--------------------------------------------------------------------------------

INVESTMENT MINIMUMS                                                             

                                                                [Download Table]
                                        
Initial Investment................$1,000
Subsequent Investments............$   50
Automatic Investment Plan*........$   50
Retirement Plans*.................$   25

* The initial investment minimum of $1,000 is waived on this plan.              

The Fund reserves the right to change these investment minimums. The Fund also  
reserves the right to refuse a purchase order for any reason, including if it   
believes that doing so would be in the best interest of the Fund and its        
shareholders.                                                                   

HOW TO BUY SHARES                                                               
--------------------------------------------------------------------------------
Your financial advisor can help you establish an appropriate investment         
portfolio, buy shares and monitor your investments. When the Fund receives your 
purchase request in "good form," your shares will be bought at the next         
calculated at the next calculated public offering price. "Good form" means that 
you placed your order with your brokerage firm or your payment has been received
and your application is complete, including all necessary signatures.           

--------------------------------------------------------------------------------
OUTLINED BELOW ARE VARIOUS OPTIONS FOR BUYING SHARES:                           
--------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

METHOD              INSTRUCTIONS                                                             

                                                                                             
Through your        Your financial advisor can help you establish your account and buy Fund  
financial advisor   shares on your behalf.                                                   
 --------------------------------------------------------------------------------------------
By check            For new accounts, send a completed application and check made payable    
(new account)       to the Fund to the transfer agent, Liberty Funds Services, Inc., P.O. Box
                    1722, Boston, MA 02105-1722.                                             
 --------------------------------------------------------------------------------------------
By check            For existing accounts, fill out and return the additional investment stub
(existing account)  included in your quarterly statement, or send a letter of instruction    
                    including your Fund name and account number with a check made            
                    payable to the Fund to Liberty Funds Services, Inc., P.O. Box 1722,      
                    Boston, MA 02105-1722.                                                   
 --------------------------------------------------------------------------------------------
By exchange         You or your financial advisor may acquire shares by exchanging shares    
                    you own in one fund for shares of the same class of the Fund at no       
                    additional cost. To exchange by telephone, call 1-800-422-3737.          
 -------------------- -----------------------------------------------------------------      
By wire             You may purchase shares by wiring money from your bank account to your   
                    fund account. To wire funds to your fund account, call 1-800-422-3737 to 
                    obtain a control number and the wiring instructions.                     
 --------------------------------------------------------------------------------------------
By electronic funds You may purchase shares by electronically transferring money from your   
transfer            bank account to your fund account by calling 1-800-422-3737. Electronic  
                    transfers may take up to two business days to settle and be considered   
                    "good form." You must set up this feature prior to your telephone        
                    request. Be sure to complete the appropriate section of the application. 
 --------------------------------------------------------------------------------------------
Automatic           You can make monthly or quarterly investments automatically from your    
investment plan     bank account to your fund account. You can select a pre-authorized       
                    amount to be sent via electronic funds transfer. Be sure to complete the 
                    appropriate section of the application for this feature.                 
 --------------------------------------------------------------------------------------------
By dividend         You may automatically invest dividends distributed by one fund into the  
diversification     same class of shares of the fund at no addition sales charge. To invest  
                    your dividends in another Fund, call 1-800-345-6611.                     

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YOUR ACCOUNT                                                                    

UNDERSTANDING CONTINGENT DEFERRED SALES CHARGES                                 

Certain investments in Class A shares are subject to a CDSC, a sales charge     
applied at the time you sell your shares. You will pay the CDSC only on shares  
you sell within a certain amount of time after purchase. The CDSC is applied to 
the net asset value at the time of purchase or sale, whichever is lower. For    
purposes of calculating the CDSC, the start of the holding period is the        
month-end of the month in which the purchase is made. Shares you purchase with  
reinvested dividends or capital gains are not subject to a CDSC. When you place 
an order to sell shares, the Fund will automatically sell first those shares not
subject to a CDSC and then those shares you have held the longest. This policy  
helps reduce and possibly eliminate the potential impact of the CDSC.           

SALES CHARGES                                                                   
--------------------------------------------------------------------------------
You may be subject to a contingent deferred sales charge (CDSC) when you sell   
shares of the Fund. The CDSCs are described below. In certain circumstances the 
CDSCs are waived, as described below and in the Statement of Additional         
Information.                                                                    

CLASS A SHARES Purchases of less than $1 million are subject to a CDSC of 2.00% 
on redemptions made within 3 years after purchase. The financial advisor        
receives a commission of 2.00% from the Fund's distributor, Liberty Funds       
Distributor, Inc. For purchases of $1 million or more, financial advisors       
receive from the distributor a commission as follows:                           

--------------------------------------------------------------------------------
PURCHASES OVER $1 MILLION                                                       
--------------------------------------------------------------------------------

                                                                [Download Table]

AMOUNT PURCHASED                                           COMMISSION %    

                                                                           
First $3 million                                               1.00        
---------------------------------------------------------------------------
$3 million to less than $5 million                             0.80        
---------------------------------------------------------------------------
$5 million to less than $25 million                            0.50        
---------------------------------------------------------------------------
$25 million or more                                            0.25        

The commission to financial advisors for Class A share purchases of $25 million 
or more is paid over 12 months but only to the extent the shares remain         
outstanding.                                                                    

Class A shares bought in accounts aggregating $1 million to $25 million at the  
time of purchase are subject to a 1.00% CDSC if the shares are sold within 18   
months of the time of purchase. Subsequent Class A share purchases that bring   
your account value above $1 million are subject to a CDSC if redeemed within 18 
months of the date of purchase. The 18-month period begins on the first day of  
the month following each purchase. The CDSC does not apply to retirement plans  
purchased through a fee-based program.                                          

DISTRIBUTION AND SERVICE FEES                                                   
--------------------------------------------------------------------------------
The Fund has adopted a plan under Rule 12b-1 that permits it to pay the Fund's  
distributor marketing and other fees to support the sale and distribution of    
Class A shares and the services provided to you by your financial advisor. The  
annual service fee may equal up to 0.25% for Class A shares. The annual         
distribution fee may equal up to 0.10% for Class A shares. Distribution and     
service fees are paid out of the assets of the class. The distributor has       
voluntarily agreed to waive a portion of the Class A share distribution fee so  
that it does not exceed 0.05% annually. Over time, these fees will increase the 
cost of your shares and may cost you more than paying other types of sales      
charges.                                                                        

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YOUR ACCOUNT                                                                    

HOW TO EXCHANGE SHARES                                                          
--------------------------------------------------------------------------------
You may exchange your shares for shares of the same share class of another fund 
distributed by Liberty Funds Distributor, Inc. at net asset value. Shareholders 
of Liberty Acorn funds that qualify to purchase Class A shares at net asset     
value may exchange their Class A shares for Class Z shares of another fund      
distributed by Liberty Funds Distributor, Inc. (see the Statement of Additional 
Information for a description of these situations). If your shares are subject  
to a CDSC, you will not be charged a CDSC upon the exchange. However, when you  
sell the shares acquired through the exchange, the shares sold may be subject to
a CDSC, depending upon when you originally purchased the shares you exchanged.  
For purposes of computing the CDSC, the length of time you have owned your      
shares will be computed from the date of your original purchase, and the        
applicable CDSC will be the CDSC of the original fund. Unless your account is   
part of a tax-deferred retirement plan, an exchange is a taxable event.         

Therefore, you may realize a gain or a loss for tax purposes. The Fund may      
terminate your exchange privilege if the advisor determines that your exchange  
activity is likely to adversely impact its ability to manage the Fund. To       
exchange by telephone, call 1-800-422-3737.                                     

HOW TO SELL SHARES                                                              
--------------------------------------------------------------------------------
Your financial advisor can help you determine if and when you should sell your  
shares. You may sell shares of the Fund on any regular business day that the New
York Stock Exchange (NYSE) is open.                                             

When the Fund receives your sales request in "good form," shares will be sold at
the next calculated price. In "good form" means that money used to purchase your
shares is fully collected. When selling shares by letter of instruction, "good  
form" also means (i) your letter has complete instructions, the proper          
signatures and signature guarantees, (ii) you have included any certificates for
shares to be sold, and (iii) any other required documents are attached. For     
additional documents required for sales by corporations, agents, fiduciaries and
surviving joint owners, please call 1-800-345-6611. Retirement plan accounts    
have special requirements; please call 1-800-799-7526 for more information.     

The Fund will generally send proceeds from the sale to you within seven days    
(usually on the next business day after your request is received in "good       
form"). However, if you purchased your shares by check, the Fund may delay      
sending the proceeds from the sale of your shares for up to 15 days after your  
purchase to protect against checks that are returned. No interest will be paid  
on uncashed redemption checks. Redemption proceeds may be paid in securities,   
rather than in cash, if the advisor determines that it is in the best interest  
of the Fund.                                                                    

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YOUR ACCOUNT                                                                    

--------------------------------------------------------------------------------
OUTLINED BELOW ARE THE VARIOUS OPTIONS FOR SELLING SHARES:                      
--------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

METHOD              INSTRUCTIONS                                                                

                                                                                                
Through your        You may call your financial advisor to place your sell order. To receive the
financial advisor   current trading day's price, your financial advisor firm must receive your  
                    request prior to the close of the NYSE, usually 4:00 p.m. Eastern time.     
---------------------------------------------------------------------------------------         
By exchange         You or your financial advisor may sell shares by exchanging from the        
                    Fund into the same share class of another fund at no additional cost.       
                    To exchange by telephone, call 1-800-422-3737.                              
---------------------------------------------------------------------------------------         
By telephone        You or your financial advisor may sell shares by telephone and request      
                    that a check be sent to your address of record by calling 1-800-422-3737,   
                    unless you have notified the Fund of an address change within the           
                    previous 30 days. The dollar limit for telephone sales is $100,000 in a     
                    30-day period. You do not need to set up this feature in advance of your    
                    call. Certain restrictions apply to retirement accounts. For details, call  
                    1-800-345-6611.                                                             
---------------------------------------------------------------------------------------         
By mail             You may send a signed letter of instruction or stock power form along       
                    with any certificates to be sold to the address below. In your letter of    
                    instruction, note the Fund's name, share class, account number, and the     
                    dollar value or number of shares you wish to sell. All account owners       
                    must sign the letter, and signatures must be guaranteed by either a bank,   
                    a member firm of a national stock exchange or another eligible guarantor    
                    institution. Additional documentation is required for sales by              
                    corporations, agents, fiduciaries, surviving joint owners and individual    
                    retirement account owners. For details, call 1-800-345-6611.                

                    Mail your letter of instruction to Liberty Funds Services, Inc., P.O. Box   
                    1722, Boston, MA 02105-1722.                                                
---------------------------------------------------------------------------------------         
By wire             You may sell shares and request that the proceeds be wired to your          
                    bank. You must set up this feature prior to your telephone request. Be      
                    sure to complete the appropriate section of the account application for     
                    this feature.                                                               
---------------------------------------------------------------------------------------         
By systematic       You may automatically sell a specified dollar amount or percentage on a     
withdrawal plan     monthly, quarterly or semi-annually basis and have your proceeds sent to    
                    you if your account balance is at least $5,000. This feature is not         
                    available if you hold your shares in certificate form. All dividend and     
                    capital gains distributions must be reinvested. Be sure to complete the     
                    appropriate section of the account application for this feature.            
---------------------------------------------------------------------------------------         
By electronic       You may sell shares and request that the proceeds be electronically         
funds transfer      transferred to your bank. Proceeds may take up to two business days         
                    to be received by your bank. You must set up this feature prior to your     
                    request. Be sure to complete the appropriate section of the account         
                    application for this feature.                                               

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YOUR ACCOUNT                                                                    

FUND POLICY ON TRADING OF FUND SHARES                                           
--------------------------------------------------------------------------------
The Fund does not permit short-term or excessive trading. Excessive purchases,  
redemptions or exchanges of Fund shares disrupt portfolio management and        
increase Fund expenses. In order to promote the best interests of the Fund, the 
Fund reserves the right to reject any purchase order or exchange request,       
particularly from market timers or investors who, in the advisor's opinion, have
a pattern of short-term or excessive trading or whose trading has been or may be
disruptive to the Fund. The Fund into which you would like to exchange also may 
reject your request.                                                            

OTHER INFORMATION ABOUT YOUR ACCOUNT                                            
--------------------------------------------------------------------------------
HOW THE FUND'S SHARE PRICE IS DETERMINED The price of each class of the Fund's  
shares is based on its net asset value. The net asset value is determined at the
close of regular trading on the NYSE, usually 4:00 p.m. Eastern time, on each   
business day that the NYSE is open (typically Monday through Friday).           

When you request a transaction, it will be processed at the net asset value     
(plus any applicable sales charges) next determined after your request is       
received in "good form" by the distributor. In most cases, in order to receive  
that day's price, the distributor must receive your order before that day's     
transactions are processed. If you request a transaction through your financial 
advisor firm, the firm must receive your order by the close of trading on the   
NYSE to receive that day's price.                                               

The Fund determines its net asset value for Class A shares by dividing total net
assets attributable to Class A shares by the number of outstanding Class A      
shares. In determining the net asset value, the Portfolio must determine the    
price of each security in its portfolio at the close of each trading day.       
Securities for which market quotations are available are valued each day at the 
current market value. However, where market quotations are unavailable, or when 
the advisor believes that subsequent events have made them unreliable, the      
Portfolio may use other data to determine the fair value of the securities.     

You can find the daily prices of some share classes for the Fund in most major  
daily newspapers under the caption "Liberty." You can find daily prices for all 
share classes by visiting the Fund's web site at www.libertyfunds.com.          

ACCOUNT FEES If your account value falls below $1,000 (other than as a result of
depreciation in share value) you may be subject to an annual account fee of $10.
This fee is deducted from the account in June each year. Approximately 60 days  
prior to the fee date, the Fund's transfer agent will send you written          
notification of the upcoming fee. If you add money to your account and bring the
value above $1,000 prior to the fee date, the fee will not be deducted.         

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YOUR ACCOUNT                                                                    

UNDERSTANDING FUND DISTRIBUTIONS                                                

The Fund earns income from the securities the Portfolio holds. The Fund also may
experience capital gains and losses on sales of the Portfolio's securities. The 
Fund distributes substantially all of its net investment income and capital     
gains to shareholders. As a shareholder, you are entitled to a portion of the   
Fund's income and capital gains based on the number of shares you own at the    
time these distributions are declared.                                          

DIVIDENDS, DISTRIBUTIONS, AND TAXES The Fund has the potential to make the      
following distributions:                                                        

--------------------------------------------------------------------------------
TYPES OF DISTRIBUTIONS                                                          
--------------------------------------------------------------------------------

Dividend income     Represents interest and dividends earned from securities    
              held by the Portfolio, net of expenses incurred by the
Portfolio.                              
--------------------------------------------------------------------------------
Capital gains       Represents long-term capital gains on sales of securities   
                  held for more than 12 months and short-term capital gains,
                    which are gains on sales of securities held by the Portfolio
for a 12-month period or less.          

DISTRIBUTION OPTIONS Income dividends are declared and paid annually. Any       
capital gains are distributed at least annually. You can choose one of the      
options listed in the table below for these distributions when you open your    
account. To change your distribution option call 1-800-345-6611.                

--------------------------------------------------------------------------------
DISTRIBUTION OPTIONS                                                            
--------------------------------------------------------------------------------

Reinvest all distributions in additional shares of your current fund            
--------------------------------------------------------------------------------
Reinvest all distributions in shares of another fund                            
--------------------------------------------------------------------------------
Receive dividends in cash (see options below) and reinvest capital gains        
--------------------------------------------------------------------------------
Receive all distributions in cash (with one of the following options):          

-    send the check to your address of record                                   
-    send the check to a third party address                                    
-    transfer the money to your bank via electronic funds transfer              

If you do not indicate on your application your preference for handling         
distributions, the Fund will automatically reinvest all distributions in        
additional shares of the Fund. Distributions of $10 or less will automatically  
be reinvested in additional Fund shares. If you elect to receive distributions  
by check and the check is returned as undeliverable, or if you do not cash a    
distribution check within six months of the check date, the distribution will be
reinvested in additional shares of the Fund.                                    

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YOUR ACCOUNT                                                                    

TAX CONSEQUENCES Regardless of whether you receive your distributions in cash or
reinvest them in additional Fund shares, all Fund distributions are subject to  
federal income tax. Depending on the state where you live, distributions may    
also be subject to state and local income taxes.                                

In general, any distributions of dividends, interest and short-term capital     
gains are taxable as ordinary income. Distributions of long-term capital gains  
are generally taxable as such, regardless of how long you have held your Fund   
shares. You will be provided with information each year regarding the amount of 
ordinary income and capital gains distributed to you for the previous year and  
any portion of your distribution which is exempt from state and local taxes.    
Your investment in the Fund may have additional personal tax implications.      
Please consult your tax advisor on federal, state, local or other applicable tax
laws.                                                                           

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

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MANAGING THE FUNDS
--------------------------------------------------------------------------------

INVESTMENT ADVISOR                                                              
--------------------------------------------------------------------------------
Stein Roe & Farnham Incorporated (Stein Roe), a wholly owned subsidiary of      
Liberty Funds Group LLC (LFG). located at One South Wacker Drive, Suite 3500,   
Chicago, Illinois 60606, is the Portfolio's investment advisor. In its duties as
investment advisor, Stein Roe runs the Fund's day-to-day business, including    
placing all orders for the purchase and sale of portfolio securities for the    
Portfolio. Stein Roe has been an investment advisor since 1932. Stein Roe's     
mutual funds and institutional investment advisory businesses are part of LFG   
which includes several separate legal entities. LFG includes certain affiliates 
of Stein Roe, including Colonial Management Associates, Inc. (Colonial). The LFG
business unit is managed by a single management team. Colonial and other LFG    
entities also share personnel, facilities, and systems with Stein Roe that may  
be used in providing administrative or operational services to the Fund and the 
Portfolio. Colonial is a registered investment adviser. Stein Roe and the other 
entities that make up LFG are subsidiaries of Liberty Financial Companies, Inc. 

For the period ended September 30, 2000, the Fund and Portfolio paid 0.76% of   
average net assets in fees to Stein Roe.                                        

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

PORTFOLIO MANAGERS                                                              
--------------------------------------------------------------------------------
ERIK P. GUSTAFSON AND DAVID P. BRADY, CFA, are the portfolio managers.          

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

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

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--------------------------------------------------------------------------------
OTHER INVESTMENT STRATEGIES AND RISKS 
--------------------------------------------------------------------------------

UNDERSTANDING THE FUND'S                                                        
OTHER INVESTMENT STRATEGIES AND RISKS                                           

The Fund's principal investment strategies and risks are described under "The   
Fund - Principal Investment Strategies" and "The Fund - Principal Investment    
Risks." In seeking to meet its investment goal, the Portfolio may also invest in
other securities and use certain other investment techniques. These securities  
and investment techniques offer opportunities and carry various risks.          

The advisor may elect not to buy any of these securities or use any of these    
techniques unless it believes that doing so will help the Portfolio achieve its 
investment goal. The Fund may not always achieve its investment goal.           

Additional information about the Portfolio's securities and investment          
techniques, as well as the Fund's fundamental and non-fundamental investment    
policies, is contained in the Statement of Additional Information.              

The Fund's and Portfolio's principal investment strategies and their associated 
risks are described above. This section describes other investments the         
Portfolio may make and the risks associated with them. In seeking to achieve its
investment goal, the Portfolio may invest in various types of securities and    
engage in various investment techniques which are not the principal focus of the
Fund and therefore are not described in this prospectus. These types of         
securities and investment practices are identified and discussed in the Fund's  
Statement of Additional Information, which you may obtain free of charge (see   
back cover). Approval by the Fund's shareholders is not required to modify or   
change the Fund's or Portfolio's investment goal or investment strategies.      

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

TEMPORARY DEFENSIVE POSITIONS                                                   
--------------------------------------------------------------------------------
At times, the advisor may determine that adverse market conditions make it      
desirable to temporarily suspend the Portfolio's normal investment activities.  
During such times, the Portfolio may, but is not required to, invest in cash or 
high-quality, short-term debt securities, without limit. Taking a temporary     
defensive position may prevent the Fund and the Portfolio from achieving their  
investment goal.                                                                

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

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OTHER INVESTMENT STRATEGIES AND RISKS                                           

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

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

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FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------

The financial highlights table is intended to help you understand the Fund's    
financial performance. Information is shown for the Fund's fiscal years since   
its inception. The fiscal year runs from October 1 to September 30. Certain     
information reflects the financial results for a single Fund share. The total   
returns in the table represent the rate that you would have earned (or lost) on 
an investment in the Fund (assuming reinvestment of all dividends and           
distributions). This information has been derived from the Fund's financial     
statements, which, for the years ended September 30, 2000 and 1999, have been   
audited by PricewaterhouseCoopers LLP, independent accountants, whose report,   
along with the Fund's financial statements, is included in the annual report.   
The information for the period ended September 30, 1998 has been audited by     
other independent accountants, whose report expressed an unqualified opinion on 
the financial highlights. You can request a free annual report by calling       
1-800-426-3750.                                                                 

--------------------------------------------------------------------------------
THE FUND                                                                        
--------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

                                                                    Year Ended September 30                Period Ended 
                                                                                                           September, 30
                                                                 2000                   1999                  1998(a)   
                                                                Class A                Class A                Class A   

                                                                                                                        
Net asset value--Beginning of period ($)                         13.98                  11.35                  11.67    
--------------------------------------------------------------------------------------------------------------------    
INCOME FROM INVESTMENT OPERATIONS ($)                                                                                   

Net investment loss (b)                                          (0.15)(c)              (0.10)(c)              (0.02)   
--------------------------------------------------------------------------------------------------------------------    
Net gains (losses) on securities (both realized                                                                         
and unrealized)                                                   4.41                   2.73                  (0.30)   
--------------------------------------------------------------------------------------------------------------------    
Total loss from investment operations                             4.26                   2.63                  (0.32)   
--------------------------------------------------------------------------------------------------------------------    
Net asset value--                                                                                                       
End of period ($)                                                18.24                  13.98                  11.35    
--------------------------------------------------------------------------------------------------------------------    
Total return (e) (%)                                             30.47                  21.17                  (2.74)(g)
--------------------------------------------------------------------------------------------------------------------    
RATIOS/SUPPLEMENTAL DATA                                                                                                

Net assets at end of period (000 omitted)($)                   168,110                 97,233                 36,843    
--------------------------------------------------------------------------------------------------------------------    
Ratio of net expenses to average net assets                                                                             
(d) (%)                                                           1.49(c)                1.65(c)                1.65(f) 
--------------------------------------------------------------------------------------------------------------------    
Ratio of net investment loss to average net                                                                             
assets (d) (%)                                                   (0.86)(c)              (0.69)(b)              (0.52)(e)
--------------------------------------------------------------------------------------------------------------------    
Portfolio turnover (h) (%)                                          72                     45                     45    

(a)  From commencement of multi-class offering on January 26, 1998.             

(b)  Per share data was calculated using average shares outstanding during the  
period.                                                               

(c)  Net of fees waived by the Distributor which amounted to $0.009 per share   
and 0.05% in 2000 and $0.007 and 0.05% in 1999.                       

(d)  If the Fund had paid all of its expenses and there had been no             
     reimbursement by the Advisor and/or Distributor, this ratio would have been
1.66% and 1.74% for the years ended September 30, 200 and 1999,       
respectively, and 2.02% for the period ended September 30, 1998.      

(e)  Computed giving effect to the Advisor's and/or Distributor's expense       
limitation undertaking.                                               

(f)  Annualized.                                                                

(g)  Not annualized.                                                            

(h)  Portfolio turnover of the Portfolio.                                       

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APPENDIX A
--------------------------------------------------------------------------------

MORNINGSTAR CATEGORIES                                                          
--------------------------------------------------------------------------------
In an effort to distinguish funds by what they own, as well as by their         
prospectus objectives and styles, Morningstar, Inc. (Morningstar) developed the 
Morningstar categories. While the prospectus objective identifies a fund's      
investment goals based on the wording in the fund prospectus, the Morningstar   
category identifies funds based on their actual investment styles as measured by
their underlying portfolio holdings (portfolio statistics and compositions over 
the past three years). Morningstar may change a fund's category assignment from 
time to time.                                                                   

Morningstar places domestic equity funds in a category based on the style and   
size of the stocks they typically own. The style and size parameters are based  
on the divisions used in the investment style box: Value, Blend, or Growth style
and Small, Mid-Cap, or Large median market capitalization (see "Morningstar     
Style Box" below for more details on style methodology). By reviewing their     
investment style over the past three years, Morningstar places domestic equity  
funds in one of the following nine categories: Large Growth, Large Blend, Large 
Value, Mid-Cap Growth, Mid-Cap Blend, Mid-Cap Value, Small Growth, Small Blend, 
and Small Value. Morningstar also includes several other domestic equity        
categories, including: Specialty Health Care, Specialty Technology, Specialty   
Utilities, Specialty Communications, Specialty Financials, Specialty Real       
Estate, Specialty Natural Resources, Convertible Bond, and Domestic Hybrid. The 
Domestic Hybrid category contains those funds with stock holdings of greater    
than 20% but less than 70% of the portfolio.                                    

MORNINGSTAR STYLE BOX                                                           
--------------------------------------------------------------------------------
The style box is a snapshot in time. It identifies the fund's investment style  
as of a particular date. The Morningstar category is based on style box         
information from the trailing 36 months. It provides a general picture of the   
fund's investment style over the past three years.                              

The Morningstar equity style box is a nine-box matrix that displays both the    
fund's investment methodology and the size of the companies in which it invests.
Set forth below is the nine-box matrix.                                         

                                                                [Download Table]

   VALUE      BLEND     GROWTH                  
-------------------------------                 
                                                
1            2         3                 Large  
-------------------------------                 
4            5         6                 Mid-Cap
-------------------------------                 
7            8         9                 Small  
-------------------------------                 

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The equity style box for domestic stock funds comprises two components: market  
capitalization on the vertical axis and valuation on the horizontal axis.       

Market Capitalization: Morningstar ties market cap to the relative movements of 
the market. The top 5% of the 5000 largest domestic stocks in Morningstar's     
equity database are classified as large-cap, the next 15% of the 5000 are       
mid-cap, and the remaining 80% (as well as companies that fall outside the      
largest 5000) are small-cap.                                                    

Morningstar then determines a fund's market cap by ranking the stocks in a      
fund's portfolio from the largest market-capitalized stock to the smallest, and 
then calculating the average weighted market capitalization of the stocks in the
middle quintile (middle 40th percentile to 60th percentile) of the portfolio.   
After a fund's market cap has been determined, Morningstar places the fund in   
the large-cap, mid-cap or small-cap group noted above.                          

Valuation: Morningstar categorizes funds by comparing the stocks in their       
portfolios with the most relevant of the three market cap groups. Specifically, 
each stock in Morningstar's equities database receives a price-to-earnings (P/E)
score and a price-to-book (P/B) score. This is derived by dividing each stock's 
P/E and P/B by the asset-weighted median P/E and asset-weighted median P/B,     
respectively, of the stock's market cap group. For example, to calculate the    
asset-weighted median P/E, Morningstar first ranks the P/E ratios of the stocks 
in each market-cap group from highest to lowest, then counts down by their      
market caps until it reaches the 50th percentile of that market-cap group. The  
P/E ratio attached to that stock is the asset-weighted median P/E. Morningstar  
does the same to find the asset-weighted median P/B. Next, Morningstar          
calculates the P/E style box Score and the P/B style box Score for each fund by 
ranking the stocks in a fund's portfolio by their P/E Scores and P/B Scores,    
respectively, and then calculating an average weighted P/E score and an average 
weighted P/B score from the stocks in the middle quintile of each fund's        
portfolio. These average weighted scores are the P/E style box Score and the P/B
style box Score of the fund's portfolio.                                        

For each measure, 1.00 represents the market-cap group average. If the fund has 
a P/E style box score + P/B style box Score that exceeds 2.25, the fund is      
categorized as growth. If the combined score falls below 1.75, the fund is      
categorized as value. Finally, if the score is between 1.75 and 2.25, the fund  
is categorized as blend.                                                        

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FOR MORE INFORMATION                                                            
--------------------------------------------------------------------------------
You can get more information about the Fund's investments in the Fund's         
semi-annual and annual reports to shareholders. The annual report contains a    
discussion of the market conditions and investment strategies that significantly
affected the Fund's performance over its last fiscal year.                      

You may wish to read the Statement of Additional Information for more           
information on the Fund and the securities in which the Portfolio invests. The  
Statement of Additional Information is incorporated into this prospectus by     
reference, which means that it is considered to be part of this prospectus.     

You can get free copies of reports and the Statement of Additional Information, 
request other information and discuss your questions about the Fund by writing  
or calling the Fund's distributor at:                                           

Liberty Funds Distributor, Inc.                                                 
One Financial Center                                                            
Boston, MA 02111-2621                                                           
1-800-426-3750                                                                  
www.libertyfunds.com                                                            

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

INVESTMENT COMPANY ACT FILE NUMBER:                                             

Liberty-Stein Roe Advisor Trust: 811-07955                                      

-    Liberty Young Investor Fund (formerly, Stein Roe Advisor Young Investor    
Fund)                                                                 

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

[LIBERTY FUNDS LOGO]                                      

Liberty Funds Distributor, Inc. (c)2001                   
One Financial Center, Boston, MA 02111-2621, 800-426-3750 
www.libertyfunds.com                                      

712-01/811E-0101                                                                

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LIBERTY YOUNG INVESTOR(SM) FUND                     PROSPECTUS, FEBRUARY 1, 2001
--------------------------------------------------------------------------------

CLASS K SHARES                                                                  

Advised by Stein Roe & Farnham Incorporated                                     

The following eligible institutional investors may purchase Class K shares: (i) 
any retirement plan with aggregate assets of at least $5 million at the time of 
purchase of Class K shares and which purchases shares directly from Liberty     
Funds Distributor, Inc., the Fund's distributor, or through a third-party       
broker-dealer; (ii) any registered investment adviser purchasing shares for its 
clients; (iii) any insurance company, trust company or bank purchasing shares   
for its own account; (iv) any endowment, investment company or foundation; and  
(v) any trustee of Liberty-Stein Roe Advisor Trust, any employee of Stein Roe & 
Farnham Incorporated, or any of its affiliates, or any member of the immediate  
family of any trustee or employee.                                              

Although these securities have been registered with the Securities and Exchange 
Commission, the Commission has not approved or disapproved any shares offered in
this prospectus or determined whether this prospectus is truthful or complete.  
Any representation to the contrary is a criminal offense.                       

--------------------------------------------------------------------------------
TABLE OF CONTENTS                                                               

                                                                [Download Table]
                                           
THE FUND                                2  
-----------------------------------------  

Investment Goal.........................2  

Principal Investment Strategies.........2  

Principal Investment Risks..............3  

Performance History.....................5  

Your Expenses...........................7  

YOUR ACCOUNT                            8  
-----------------------------------------  

How to Buy Shares.......................8  

Distribution and Service Fees...........9  

How to Exchange Shares..................9  

How to Sell Shares......................9  

Fund Policy on Trading of Fund Shares..11  

Other Information About Your Account...11  

MANAGING THE FUND                      14  
-----------------------------------------  

Investment Advisor.....................14  

Portfolio Managers.....................14  

OTHER INVESTMENT                           
STRATEGIES AND RISKS                   15  
-----------------------------------------  

FINANCIAL HIGHLIGHTS                   17  
-----------------------------------------  

APPENDIX A                             18  
-----------------------------------------  

---------------------------                                                     
Not FDIC   May Lose Value                                                       
-----------------                                           
Insured   No Bank Guarantee                                                     
---------------------------                                                     

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THE FUND - LIBERTY YOUNG INVESTOR FUND                                          
--------------------------------------------------------------------------------

INVESTMENT GOAL                                                                 
--------------------------------------------------------------------------------
The Fund seeks long-term growth.                                                

PRINCIPAL INVESTMENT STRATEGIES                                                 
--------------------------------------------------------------------------------
The Fund invests all of its assets in SR&F Growth Investor Portfolio (the       
"Portfolio") as part of a master fund/feeder fund structure. The Portfolio      
invests primarily in common stocks believed to have long-term growth potential. 
Under normal market conditions, the Fund invests at least 65% of its assets in  
common stocks of companies that the Portfolio's portfolio managers believe      
affect the lives of children or teenagers. The Portfolio's investments are      
diversified among various industries and market sectors. The Portfolio seeks to 
invest in companies that produce products or provide services that the portfolio
managers believe children or teenagers use, are aware of, or have an interest   
in. These companies may include, but are not limited to, computer hardware or   
software manufacturers, internet service providers and companies in the apparel,
entertainment, retail, financial services and personal care products industries.
The Portfolio may invest in companies of any size, including smaller emerging   
companies. The Portfolio may invest up to 25% of its assets in foreign stocks.  

To select investments for the Portfolio, the portfolio managers look for        
companies that are market leaders with growing market share in their respective 
industries, have strong financial balance sheets and experienced management     
teams, have products and services that give the company a competitive advantage,
and have stock prices which the portfolio managers believe are reasonable       
relative to the assets and earning power of the company.                        

The Fund also has an educational objective. It seeks to teach children and      
teenagers information about mutual funds, basic economic principles and personal
finance through a variety of educational materials (such as newsletters and     
activity books). The materials are paid for by the Fund and distributed to      
shareholders on a regular basis.                                                

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

The Fund compares its performance to other similarly managed mutual funds as    
determined by Morningstar, Inc. ("Morningstar"). For performance comparison     
purposes, Morningstar places an equity fund in one of nine "categories" based   
upon guidelines established by Morningstar that examines both a fund's          
investment methodology and the size of the companies in which the fund invests. 
The portfolio managers generally manage the Portfolio in accordance with the    
Morningstar guidelines for a "Large Blend" fund. See Appendix A for a           
description of the Morningstar categories.                                      

Additional strategies that are not principal investment strategies and the risks
associated with them are described later in this prospectus under "Other        
Investment Strategies and Risks."                                               

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THE FUND - LIBERTY YOUNG INVESTOR                                               

Defining Capitalization. A company's market capitalization is simply its stock  
price multiplied by the number of shares of stock it has issued and outstanding.
In the financial markets, companies generally are sorted into one of three      
capitalization-based categories: large capitalization (large-cap); medium       
capitalization (mid-cap); or small capitalization (small-cap). In defining a    
company's market capitalization, we use capitalization-based categories that are
based in part on Standard & Poor's Index Services.                              

Large capitalization stocks are stocks with market capitalizations greater than 
$5 billion. In addition, any stock that is a member of the S&P 500 Index is     
considered a large capitalization stock.                                        

Middle capitalization stocks are stocks with market capitalizations between $1  
billion and the largest stock in the S&P MidCap 400 Index ($9.9 billion as of   
December 31, 2000). In addition, any stock that is a member of the S&P MidCap   
400 Index is considered a middle capitalization stock.                          

Small capitalization stocks are stocks with market capitalizations equal to or  
less than the largest stock in the S&P SmallCap 600 Index ($2.6 billion as of   
December 31, 2000).                                                             

PRINCIPAL INVESTMENT RISKS                                                      
--------------------------------------------------------------------------------
The principal risks of investing in the Fund are described below. There are many
circumstances (including additional risks that are not described here) which    
could prevent the Fund from achieving its investment goal. You may lose money by
investing in the Fund.                                                          

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

Since it purchases equity securities, the Fund is subject to equity risk. This  
is the risk that stock prices will fall over short or extended periods of time. 
Although the stock market has historically outperformed other asset classes over
the long term, the equity market tends to move in cycles and individual stock   
prices may fluctuate drastically from day-to-day and may underperform other     
asset classes over an extended period of time. Individual companies may report  
poor results or be negatively affected by industry and/or economic trends and   
developments. The prices of securities issued by such companies may suffer a    
decline in response. These price movements may result from factors affecting    
individual companies, industries or the securities market as a whole.           

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THE FUND - LIBERTY YOUNG INVESTOR FUND                                          

Value stocks are securities of companies that may have experienced adverse      
business or industry developments or may be subject to special risks that have  
caused the stocks to be out of favor and undervalued in the advisor's opinion.  
If the advisor's assessment of a company's prospects is wrong, the price of its 
stock may not approach the value the advisor has placed on it.                  

Growth stock prices may be more sensitive to changes in current or expected     
earnings than the prices of other stocks. Growth stocks may not perform as well 
as value stocks or the stock market in general.                                 

The securities issued by mid-capitalization companies may have more risk than   
those of larger companies. These securities may be more susceptible to market   
downturns, and their prices could be more volatile.                             

Smaller companies are more likely than larger companies to have limited product 
lines, operating histories, markets or financial resources. They may depend     
heavily on a small management team. Stocks of smaller companies may trade less  
frequently, may trade in smaller volumes and may fluctuate more sharply in price
than stocks of larger companies. In addition, they may not be widely followed by
the investment community, which can lower the demand for their stocks.          

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

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

Information on other securities and risks appears under "Other Investment       
Strategies and Risks."                                                          

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THE FUND - LIBERTY YOUNG INVESTOR FUND                                          

UNDERSTANDING PERFORMANCE                                                       

CALENDAR-YEAR TOTAL RETURNS show the Portfolio's and the Fund's Class K share   
performance for each calendar year since the Portfolio or the Fund commenced    
operations.                                                                     

AVERAGE ANNUAL TOTAL RETURNS ARE a measure of the Fund's share performance for  
the past one year, five years and life of the Fund. The Fund (Class K shares)   
commenced operations on February 14, 1997. The Fund's historical performance for
all periods prior to February 14, 1997 is the performance of the Portfolio and  
has not been restated to reflect the higher gross annual operating expenses of  
the Fund.                                                                       

The Fund's return is compared to the S&P 500 Index, an unmanaged broad-based    
measure of market performance. Unlike the Fund, indices are not investments, do 
not incur fees or expenses and are not professionally managed. It is not        
possible to invest directly in indices.                                         

=============================================================================== 

PERFORMANCE HISTORY                                                             
--------------------------------------------------------------------------------
The bar chart below shows changes in the Fund's performance (and for the        
Portfolio for periods prior to the inception of the Fund) from year to year by  
illustrating the Fund's calendar year total returns for its Class K shares. The 
performance table following the bar chart shows how the Fund's average annual   
returns for Class K shares compares with those of a broad measure of market     
performance for 1 year, 5 years and the life of the Fund. The chart and table   
are intended to illustrate some of the risks of investing in the Fund by showing
the changes in the Fund's performance. All returns include the reinvestment of  
dividends and distributions. Performance results include the effect of expense  
reduction arrangements, if any. If these arrangements were not in place, then   
the performance results would have been lower. Any expense reduction            
arrangements may be discontinued at any time. As with all mutual funds, past    
performance does not predict the Fund's future performance.                     

--------------------------------------------------------------------------------
CALENDAR-YEAR TOTAL RETURNS                                                     
--------------------------------------------------------------------------------

[BAR GRAPH] 

                                                                [Download Table]
                               
1995                     39.44%
1996                     34.76%
1997                     26.41%
1998                     15.33%
1999                     30.94%
2000                    -11.21%

For period shown on the chart above:                                            
Best quarter: 4th quarter 1999, +28.04%                                         
Worst quarter: 3rd quarter 1998, -16.36%                                        

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THE FUND-LIBERTY YOUNG INVESTOR FUND                                            

--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS - FOR PERIODS ENDED DECEMBER 31, 2000(1)(2)        
--------------------------------------------------------------------------------

                                                                [Download Table]

                              INCEPTION                                  LIFE OF THE
                                DATE          1 YEAR        5 YEARS         FUND    

                                                                                    
Class K (%)                    2/14/97        -11.21         17.97          20.19   
------------------------------------------------------------------------------------
S&P Index (%)                    N/A           -9.10         18.33           N/A    

(1)  The total return for calendar year 1997 is comprised of the Portfolio's    
 performance through February 13, 1997 and the performance of the Fund's
Class K shares from February 14, 1997 through December 31, 1997. The  
     performance for calendar years 1998, 1999 and 2000 shows the performance of
    the Fund's Class K shares. For years or periods prior to 1997, performance
is that of the Portfolio.                                             

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THE FUND - LIBERTY YOUNG INVESTOR FUND                                          

UNDERSTANDING EXPENSES                                                          

SHAREHOLDER FEES are paid directly by shareholders to the Fund's distributor.   

ANNUAL FUND OPERATING EXPENSES are deducted from the Fund. They include         
management and administration fees, 12b-1 fees, brokerage costs, and            
administrative costs including pricing and custody services.                    

EXAMPLE EXPENSES helps you compare the cost of investing in the Fund to the cost
of investing in other mutual funds. This example reflects the expenses of both  
the Fund and the Portfolio. The table does not take into account any expense    
reduction arrangements discussed in the Annual Fund Operating Expenses table. It
uses the following hypothetical conditions:                                     

-    $10,000 initial investment                                                 

-    5% return for each year                                                    

-    Fund operating expenses remain the same                                    

-    Assumes reinvestment of all dividends and distributions                    

================================================================================

YOUR EXPENSES                                                                   
--------------------------------------------------------------------------------
The tables below describe the fees and expenses you may pay when you buy, hold  
and sell shares of the Fund. Expenses are one of several factors to consider    
before you invest in a mutual fund.                                             

--------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES(2) (DEDUCTED DIRECTLY FROM FUND ASSETS)          
--------------------------------------------------------------------------------

                                                                [Download Table]

                                                                          CLASS K  

                                                                                   
Management fee(3) (%)                                                       0.76   
-----------------------------------------------------------------------------------
Distribution and service (12b-1) fees (%)                                   0.25   
-----------------------------------------------------------------------------------
Other expenses (%)                                                          0.61   
-----------------------------------------------------------------------------------
Total annual fund operating expenses (%)(4)                                 1.62   

--------------------------------------------------------------------------------
EXAMPLE EXPENSES (YOUR ACTUAL COSTS MAY BE HIGHER OR LOWER)                     
--------------------------------------------------------------------------------

                                                                [Download Table]

CLASS                                     1 YEAR     3 YEARS     5 YEARS    10 YEARS

------------------------------------------------------------------------------------
                                                                                    
Class K                                    $165        $511        $881      $1,922 

(2)  There is a $7.50 charge for wiring sale proceeds to your bank. A $10 fee is
 deducted from accounts less than $1,000 and paid to the transfer agent.

(3)  The Portfolio pays a management fee of 0.56% and the Fund pays an          
administrative fee of 0.20%.                                          

(4)  Stein Roe has voluntarily agreed to reimburse the Fund for management and  
    administration fees and for certain expenses so that the total annual fund
     operating expenses (exclusive of brokerage commissions, interest, taxes and
    extraordinary expenses, if any) will not exceed 1.61% or such lower amount
    as Stein Roe shall determine. As a result of (4) these reimbursements, the
  actual Management fee was 0.64% and total annual fund operating expenses
   were 1.50% for the fiscal year ended September 30, 2000. This arrangement
may be terminated by Stein Roe at any time.                           

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YOUR ACCOUNT                                                                    
--------------------------------------------------------------------------------

INVESTMENT MINIMUMS                                                             

                                                                [Download Table]
                                        
Initial Investment................$1,000
Subsequent Investments............$   50
Automatic Investment Plan*........$   50
Retirement Plans*.................$   25

* The initial investment minimum of $1,000 is waived on this plan.              

The Fund reserves the right to change these investment minimums. The Fund also  
reserves the right to refuse a purchase order for any reason, including if it   
believes that doing so would be in the best interest of the Fund and its        
shareholders.                                                                   

================================================================================

HOW TO BUY SHARES                                                               
--------------------------------------------------------------------------------
Your financial advisor can help you establish an appropriate investment         
portfolio, buy shares and monitor your investments. When the Fund receives your 
purchase request in "good form," your shares will be bought at the next         
calculated net asset value. "Good form" means that you placed your order with   
your brokerage firm or your payment has been received and your application is   
complete, including all necessary signatures.                                   

--------------------------------------------------------------------------------
OUTLINED BELOW ARE VARIOUS OPTIONS FOR BUYING SHARES:                           
--------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

METHOD              INSTRUCTIONS                                                             

                                                                                             
Through your        Your financial advisor can help you establish your account and buy Fund  
financial advisor   shares on your behalf.                                                   
---------------------------------------------------------------------------------------------
By check            For new accounts, send a completed application and check made payable    
(new account)       to the Fund to the transfer agent, Liberty Funds Services, Inc., P.O. Box
                    1722, Boston, MA 02105-1722.                                             
---------------------------------------------------------------------------------------------
By check            For existing accounts, fill out and return the additional investment stub
(existing account)  included in your quarterly statement, or send a letter of instruction    
                    including your Fund name and account number with a check made            
                    payable to the Fund to Liberty Funds Services, Inc., P.O. Box 1722,      
                    Boston, MA 02105-1722.                                                   
---------------------------------------------------------------------------------------------
By exchange         You or your financial advisor may acquire shares by exchanging shares    
                    you own in one fund for shares of the same class of the Fund at no       
                    additional cost. To exchange by telephone, call 1-800-422-3737.          
---------------------------------------------------------------------------------------------
By wire             You may purchase shares by wiring money from your bank account to your   
                    fund account. To wire funds to your fund account, call 1-800-422-3737 to 
                    obtain a control number and the wiring instructions.                     
---------------------------------------------------------------------------------------------
By electronic funds You may purchase shares by electronically transferring money from your   
transfer            bank account to your fund account by calling 1-800-422-3737. Your        
                    money may take up to two business days to be invested. You must set      
                    up this feature prior to your telephone request. Be sure to complete the 
                    appropriate section of the application.                                  
---------------------------------------------------------------------------------------------
Automatic           You can make monthly or quarterly investments automatically from your    
investment plan     bank account to your fund account. You can select a pre-authorized       
                    amount to be sent via electronic funds transfer. Be sure to complete the 
                    appropriate section of the application for this feature.                 
---------------------------------------------------------------------------------------------
By dividend         You may automatically invest dividends distributed by one fund into the  
diversification     same class of shares of another fund at no addition sales charge. To     
                    invest your dividends in another Fund, call 1-800-345-6611.              

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YOUR ACCOUNT                                                                    

DISTRIBUTION AND SERVICE FEES                                                   
--------------------------------------------------------------------------------
The Fund has adopted a plan under Rule 12b-1 that permits it to pay marketing   
and other fees to support the sale and distribution of Class K shares and the   
services provided to you by your financial advisor. The annual service fee may  
equal up to 0.25% for Class K shares and are paid out of the assets of the      
class. Over time, these fees will reduce the return on your investment and may  
cost you more than paying other types of sales charges.                         

HOW TO EXCHANGE SHARES                                                          
--------------------------------------------------------------------------------
You may exchange your shares for shares of the same share class of another fund 
distributed by Liberty Funds Distributor, Inc. at net asset value. Unless your  
account is part of a tax-deferred retirement plan, an exchange is a taxable     
event. Therefore, you may realize a gain or a loss for tax purposes. The Fund   
may terminate your exchange privilege if Stein Roe determines that your exchange
activity is likely to adversely impact its ability to manage the Fund. To       
exchange by telephone, call 1-800-422-3737.                                     

HOW TO SELL SHARES                                                              
--------------------------------------------------------------------------------
Your financial advisor can help you determine if and when you should sell your  
shares. You may sell shares of the Fund on any regular business day that the New
York Stock Exchange (NYSE) is open.                                             

When the Fund receives your sales request in "good form," shares will be sold at
the next calculated price. "Good form" means that money used to purchase your   
shares is fully collected. When selling shares by letter of instruction, "good  
form" means (i) your letter has complete instructions, the proper signatures and
signature guarantees, (ii) you have included any certificates for shares to be  
sold, and (iii) any other required documents are attached. For additional       
documents required for sales by corporations, agents, fiduciaries and surviving 
joint owners, please call 1-800-345-6611. Retirement plan accounts have special 
requirements. Please call 1-800-799-7526 for more information.                  

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YOUR ACCOUNT                                                                    

The Fund will generally send proceeds from the sale to you within seven days    
(usually on the next business day after your request is received in good form). 
However, if you purchased your shares by check, the Fund may delay sending the  
proceeds from the sale of your shares for up to 15 days after your purchase to  
protect against checks that are returned. No interest will be paid on uncashed  
redemption checks. Redemption proceeds may be paid in securities, rather than   
cash, if the advisor determines that it is in the best interest of the Fund.    

--------------------------------------------------------------------------------
OUTLINED BELOW ARE THE VARIOUS OPTIONS FOR SELLING SHARES:                      
--------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

METHOD              INSTRUCTIONS                                                                  

                                                                                                  
Through your        You may call your financial advisor to place your sell order. To receive the  
financial advisor   current trading day's price, your financial advisor firm must receive your    
                    request prior to the close of the NYSE, usually 4:00 p.m., Eastern time.      
--------------------------------------------------------------------------------------------------
By exchange         You or your financial advisor may sell shares by exchanging from the          
                    Fund into the same share class of another fund at no additional cost. To      
                    exchange by telephone, call 1-800-422-3737.                                   
--------------------------------------------------------------------------------------------------
By telephone        You or your financial advisor may sell shares by telephone and request        
                    that a check be sent to your address of record by calling 1-800-422-3737      
                    unless you have notified the Fund of an address change within the             
                    previous 30 days. The dollar limit for telephone sales is $100,000 in a       
                    30-day period. You do not need to set up this feature in advance of your      
                    call. Certain restrictions apply to retirement accounts.  For details, call 1-
                    800-345-6611.                                                                 
--------------------------------------------------------------------------------------------------
By mail             You may send a signed letter of instruction or stock power form along         
                    with any certificates to be sold to the address below. In your letter of      
                    instruction, note your fund's name, share class, account number, and the      
                    dollar value or number of shares you wish to sell. All account owners         
                    must sign the letter, and signatures must be guaranteed by either a bank,     
                    a member firm of a national stock exchange or another eligible guarantor      
                    institution. Additional documentation is required for sales by                
                    corporations, agents, fiduciaries, surviving joint owners and individual      
                    retirement account (IRA) owners. For details, call 1-800-345-6611.            

                    Mail your letter of instruction to Liberty Funds Services, Inc., P.O. Box     
                    1722, Boston, MA 02105-1722.                                                  
--------------------------------------------------------------------------------------------------
By wire             You may sell shares and request that the proceeds be wired to your            
                    bank. You must set up this feature prior to your telephone request. Be        
                    sure to complete the appropriate section of the account application for       
                    this feature.                                                                 
--------------------------------------------------------------------------------------------------
By systematic       You may automatically sell a specified dollar amount or percentage on a       
withdrawal plan     monthly, quarterly or semi-annually basis and have your proceeds sent to      
                    you if your account balance is at least $5,000. This feature is not           
                    available if you hold your shares in certificate form. All dividend and       
                    capital gains distributions must be reinvested. Be sure to complete the       
                    appropriate section of the account application for this feature.              
--------------------------------------------------------------------------------------------------
By electronic       You may sell shares and request that the proceeds be electronically           
funds transfer      transferred to your bank. Proceeds may take up to two business days           
                    to be received by your bank. You must set up this feature prior to your       
                    request. Be sure to complete the appropriate section of the account           
                    application for this feature.                                                 

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YOUR ACCOUNT                                                                    

CHOOSING A SHARE CLASS                                                          

The Fund offers one class of shares in this prospectus -- CLASS K.              

The Fund also offers one additional class of shares -- Class A shares are       
available through a separate prospectus. Each share class has its own sales     
charge and expense structure. Determining which share class is best for you     
depends on the dollar amount you are investing and the number of years for which
you are willing to invest. Based on your personal situation, your investment    
advisor can help you decide which class of shares makes the most sense for you. 
In general, anyone who is eligible to purchase Class K shares, which do not     
incur contingent deferred sales charges, should do so in preference over Class  
A.                                                                              

================================================================================

FUND POLICY ON TRADING OF FUND SHARES                                           
--------------------------------------------------------------------------------
The Fund does not permit short-term or excessive trading. Excessive purchases,  
redemptions or exchanges of Fund shares disrupt portfolio management and        
increase Fund expenses. In order to promote the best interests of the Fund, the 
Fund reserves the right to reject any purchase order or exchange request,       
particularly from market timers or investors who, in the advisor's opinion, have
a pattern of short-term or excessive trading or whose trading has been or may be
disruptive to the Fund. The Fund into which you would like to exchange also may 
reject your request.                                                            

OTHER INFORMATION ABOUT YOUR ACCOUNT                                            
--------------------------------------------------------------------------------
HOW THE FUND'S SHARE PRICE IS DETERMINED The price of the Fund's Class K shares 
is based on its net asset value. The net asset value is determined at the close 
of regular trading on the NYSE, usually 4:00 p.m. Eastern time, on each business
day that the NYSE is open (typically Monday through Friday).                    

When you request a transaction, it will be processed at the net asset value next
determined after your request is received in "good form" by the distributor. In 
most cases, in order to receive that day's price, the distributor must receive  
your order before that day's transactions are processed. If you request a       
transaction through your financial advisor firm, the firm must receive your     
order by the close of trading on the NYSE to receive that day's price.          

The Fund determines its net asset value for Class K shares by dividing total net
assets by the number of outstanding Class K shares. In determining the net asset
value, the Portfolio must determine the price of each security in its portfolio 
at the close of each trading day. Securities for which market quotations are    
available are valued each day at the current market value. However, where market
quotations are unavailable, or when the advisor believes that subsequent events 
have made them unreliable, the Portfolio may use other data to determine the    
fair value of the securities.                                                   

You can find the daily prices of some share classes for the Fund in most major  
daily newspapers under the caption "Liberty." You can find daily prices for all 
share classes by visiting the Fund's web site at www.libertyfunds.com.          

ACCOUNT FEES If your account value falls below $1,000 (other than as a result of
depreciation in share value), you may be subject to an annual account fee of    
$10. This fee is deducted from the account in June each year. Approximately 60  
days prior to the fee date, the Fund's transfer agent will send you written     
notification of the upcoming fee. If you add money to your account and bring the
value above $1,000 prior to the fee date, the fee will not be deducted.         

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YOUR ACCOUNT                                                                    

UNDERSTANDING FUND DISTRIBUTIONS                                                

The Fund earns income from the securities the Portfolio holds. The Fund also may
experience capital gains and losses on sales of the Portfolio's securities. The 
Fund distributes substantially all of its net investment income and capital     
gains to shareholders. As a shareholder, you are entitled to a portion of the   
Fund's income and capital gains based on the number of shares you own at the    
time these distributions are declared.                                          

================================================================================

DIVIDENDS, DISTRIBUTIONS, AND TAXES The Fund has the potential to make the      
following distributions:                                                        

--------------------------------------------------------------------------------
TYPES OF DISTRIBUTIONS                                                          
--------------------------------------------------------------------------------

Dividend income     Represents interest and dividends earned from securities    
              held by the Portfolio, net of expenses incurred by the
Portfolio.                              

Capital gains       Represents long-term capital gains on sales of securities   
                  held for more than 12 months and short-term capital gains,
                    which are gains on sales of securities held by the Portfolio
for a 12-month period or less.          

DISTRIBUTION OPTIONS Income dividends are declared and paid annually. Any       
capital gains are distributed at least annually. You can choose one of the      
options listed in the table below for these distributions when you open your    
account. To change your distribution option call 1-800-345-6611.                

--------------------------------------------------------------------------------
DISTRIBUTION OPTIONS                                                            
--------------------------------------------------------------------------------

Reinvest all distributions in additional shares of your current fund            
--------------------------------------------------------------------------------
Reinvest all distributions in shares of another fund                            
--------------------------------------------------------------------------------
Receive dividends in cash (see options below) and reinvest capital gains        
--------------------------------------------------------------------------------
Receive all distributions in cash (with one of the following options):          

-    send the check to your address of record                                   
-    send the check to a third party address                                    
-    transfer the money to your bank via electronic funds transfer              

If you do not indicate on your application your preference for handling         
distributions, the Fund will automatically reinvest all distributions in        
additional shares of the Fund. Distributions of $10 or less will automatically  
be reinvested in additional Fund shares. If you elect to receive distributions  
by check and the check is returned as undeliverable, or if you do not cash a    
distribution check within six months of the check date, the distribution will be
reinvested in additional shares of the Fund.                                    

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YOUR ACCOUNT                                                                    

TAX CONSEQUENCES Regardless of whether you receive your distributions in cash or
reinvest them in additional Fund shares, all Fund distributions are subject to  
federal income tax. Depending on the state where you live, distributions may    
also be subject to state and local income taxes.                                

In general, any distributions of dividends, interest and short-term capital     
gains are taxable as ordinary income. Distributions of long-term capital gains  
are generally taxable as such, regardless of how long you have held your Fund   
shares. You will be provided with information each year regarding the amount of 
ordinary income and capital gains distributed to you for the previous year and  
any portion of your distribution which is exempt from state and local taxes.    
Your investment in the Fund may have additional personal tax implications.      
Please consult your tax advisor on federal, state, local or other applicable tax
laws.                                                                           

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

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MANAGING THE FUNDS
--------------------------------------------------------------------------------

INVESTMENT ADVISOR                                                              
--------------------------------------------------------------------------------
Stein Roe & Farnham Incorporated (Stein Roe), a wholly owned subsidiary of      
Liberty Funds Group LLC (LFG) located at One South Wacker Drive, Suite 3500,    
Chicago, Illinois 60606, is the Portfolio's investment advisor. In its duties as
investment advisor, Stein Roe runs the Fund's day-to-day business, including    
placing all orders for the purchase and sale of portfolio securities for the    
Portfolio. Stein Roe has been an investment advisor since 1932. Stein Roe's     
mutual funds and institutional investment advisory businesses are part of LFG   
which includes several separate legal entities. LFG includes certain affiliates 
of Stein Roe, including Colonial Management Associates, Inc. (Colonial). The LFG
business unit is managed by a single management team. Colonial and other LFG    
entities also share personnel, facilities, and systems with Stein Roe that may  
be used in providing administrative or operational services to the Portfolio or 
the Fund. Colonial is a registered investment adviser. Stein Roe and the other  
entities that make up LFG are subsidiaries of Liberty Financial Companies, Inc. 

For the period ended September 30, 2000, the Fund and Portfolio paid 0.76% of   
average net assets in fees to Stein Roe.                                        

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

PORTFOLIO MANAGERS                                                              
--------------------------------------------------------------------------------
ERIK P. GUSTAFSON AND DAVID P. BRADY, CFA, are the portfolio managers.          

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

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

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OTHER INVESTMENT STRATEGIES AND RISKS                                           
--------------------------------------------------------------------------------

UNDERSTANDING THE FUND'S OTHER INVESTMENT STRATEGIES AND RISKS                  

The Fund's principal investment strategies and risks are described under "The   
Fund - Principal Investment Strategies" and "The Fund - Principal Investment    
Risks." In seeking to meet its investment goal, the Portfolio may also invest in
other securities and use certain other investment techniques. These securities  
and investment techniques offer opportunities and carry various risks.          

The advisor may elect not to buy any of these securities or use any of these    
techniques unless it believes that doing so will help the Fund and Portfolio    
achieve their investment goal. The Fund and may not always achieve its          
investment goal.                                                                

Additional information about the Fund's securities and investment techniques, as
well as the Fund's fundamental and non-fundamental investment policies, is      
contained in the Statement of Additional Information.                           

================================================================================

The Fund's and Portfolio's principal investment strategies and their associated 
risks are described above. This section describes other investments the         
Portfolio may make and the risks associated with them. In seeking to achieve its
investment goal, the Portfolio may invest in various types of securities and    
engage in various investment techniques which are not the principal focus of the
Portfolio and therefore are not described in this prospectus. These types of    
securities and investment practices are identified and discussed in the Fund's  
Statement of Additional Information, which you may obtain free of charge (see   
back cover). Approval by the Fund's shareholders is not required to modify or   
change any of the Fund's or Portfolio's investment goal or investment           
strategies.                                                                     

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

TEMPORARY DEFENSIVE POSITIONS                                                   
--------------------------------------------------------------------------------
At times, the advisor may determine that adverse market conditions make it      
desirable to temporarily suspend the Portfolio's normal investment activities.  
During such times, the Portfolio may, but is not required to, invest in cash or 
high-quality, short-term debt securities, without limit. Taking a temporary     
defensive position may prevent the Fund and the Portfolio from achieving their  
investment goal.                                                                

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

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

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OTHER INVESTMENT STRATEGIES AND RISKS                                           

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

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FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------

The financial highlights table is intended to help you understand the Fund's    
financial performance. Information is shown for the Fund's fiscal years since   
its inception. The fiscal year runs from October 1 to September 30. Certain     
information reflects the financial results for a single Fund share. The total   
returns in the table represent the rate that you would have earned (or lost) on 
an investment in the Fund (assuming reinvestment of all dividends and           
distributions). This information has been derived from the Fund's financial     
statements, which for the years ended September 30, 2000 and 1999, have been    
audited by PricewaterhouseCoopers LLP, independent accountants, whose report,   
along with the Fund's financial statements, is included in the annual report.   
The information for periods prior to 1999 has been audited by other independent 
accountants, whose report expressed an unqualified opinion on the financial     
highlights. You can request a free annual report by calling 1-800-426-3750.     

--------------------------------------------------------------------------------
THE FUND                                                                        
--------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

                                                                                                     Period Ended 
                                                              Year Ended September 30,               September 30,
                                                      2000             1999             1998            1997(a)   
                                                     Class K          Class K          Class K          Class K   

                                                                                                                  
 Net asset value --                                                                                               
 Beginning of period ($)                              14.08            11.41            11.49            10.00    
------------------------------------------------------------------------------------------------------------------
 INCOME FROM INVESTMENT OPERATIONS ($)                                                                            

 Net investment loss (b)                              (0.15)           (0.09)           (0.03)           (0.02)   
------------------------------------------------------------------------------------------------------------------
 Net gains (losses) on securities (both                                                                           
 realized and unrealized)                              4.47             2.76            (0.04)            1.51    
------------------------------------------------------------------------------------------------------------------
 Total loss from investment operations                 4.32             2.67            (0.07)            1.49    
------------------------------------------------------------------------------------------------------------------
 Distributions                                                                                                    
 Net investment income                                   --               --            (0.01)              --    
------------------------------------------------------------------------------------------------------------------
 Net asset value--                                                                                                
 End of period ($)                                    18.40            14.08            11.41            11.49    
------------------------------------------------------------------------------------------------------------------

 RATIOS/SUPPLEMENTAL DATA                                                                                         
------------------------------------------------------------------------------------------------------------------
 Ratio of net expenses to average net                                                                             
 assets (c) (%)                                        1.50             1.50             1.50             1.50(e) 
------------------------------------------------------------------------------------------------------------------
 Ratio of net investment loss to average                                                                          
 net assets (d) (%)                                   (0.87)           (0.64)           (0.48)           (0.24)(e)
------------------------------------------------------------------------------------------------------------------
 Total return (d) (%)                                 30.68            23.40            (0.62)           14.90(f) 
------------------------------------------------------------------------------------------------------------------
 Portfolio Turnover (%)                                  72               45               45               38    
------------------------------------------------------------------------------------------------------------------
 Net assets, end of period (000's) ($)                  572              410              331              116    

(a)  From commencement of multi-class offering on February 14, 1997.            

(b)  Per share data was calculated using average shares outstanding during the  
period.                                                               

(c)  If the Fund had paid all of its expenses and there had been no             
     reimbursement by the Advisor and/or Distributor, this ratio would have been
     1.62% and 1.70% and 20.42% for the years ended September 30, 2000 and 1999,
respectively, and 89.45% for the period ended September 30, 1997.     

(d)  Computed giving effect to the Advisor's and/or Distributor's expense       
limitation undertaking.                                               

(e)  Annualized.                                                                

(f)  Not annualized.                                                            

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APPENDIX A
--------------------------------------------------------------------------------

MORNINGSTAR CATEGORIES                                                          
--------------------------------------------------------------------------------
In an effort to distinguish funds by what they own, as well as by their         
prospectus objectives and styles, Morningstar, Inc. (Morningstar) developed the 
Morningstar categories. While the prospectus objective identifies a fund's      
investment goals based on the wording in the fund prospectus, the Morningstar   
category identifies funds based on their actual investment styles as measured by
their underlying portfolio holdings (portfolio statistics and compositions over 
the past three years). Morningstar may change a fund's category assignment from 
time to time.                                                                   

Morningstar places domestic equity funds in a category based on the style and   
size of the stocks they typically own. The style and size parameters are based  
on the divisions used in the investment style box: Value, Blend, or Growth style
and Small, Mid-Cap, or Large median market capitalization (see "Morningstar     
Style Box" below for more details on style methodology). By reviewing their     
investment style over the past three years, Morningstar places domestic equity  
funds in one of the following nine categories: Large Growth, Large Blend, Large 
Value, Mid-Cap Growth, Mid-Cap Blend, Mid-Cap Value, Small Growth, Small Blend, 
and Small Value. Morningstar also includes several other domestic equity        
categories, including: Specialty Health Care, Specialty Technology, Specialty   
Utilities, Specialty Communications, Specialty Financials, Specialty Real       
Estate, Specialty Natural Resources, Convertible Bond, and Domestic Hybrid. The 
Domestic Hybrid category contains those funds with stock holdings of greater    
than 20% but less than 70% of the portfolio.                                    

MORNINGSTAR STYLE BOX                                                           
--------------------------------------------------------------------------------
The style box is a snapshot in time. It identifies the fund's investment style  
as of a particular date. The Morningstar category is based on style box         
information from the trailing 36 months. It provides a general picture of the   
fund's investment style over the past three years.                              

The Morningstar equity style box is a nine-box matrix that displays both the    
fund's investment methodology and the size of the companies in which it invests.
Set forth below is the nine-box matrix.                                         

                                                                [Download Table]

   VALUE      BLEND     GROWTH                  
---------------------------------               
                                                
1            2         3                 Large  
---------------------------------               
4            5         6                 Mid-Cap
---------------------------------               
7            8         9                 Small  
---------------------------------               

The equity style box for domestic stock funds comprises two components: MARKET  
CAPITALIZATION on the vertical axis and VALUATION on the horizontal axis.       

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APPENDIX A                                                                      

Market Capitalization: Morningstar ties market cap to the relative movements of 
the market. The top 5% of the 5000 largest domestic stocks in Morningstar's     
equity database are classified as large-cap, the next 15% of the 5000 are       
mid-cap, and the remaining 80% (as well as companies that fall outside the      
largest 5000) are small-cap.                                                    

Morningstar then determines a fund's market cap by ranking the stocks in a      
fund's portfolio from the largest market-capitalized stock to the smallest, and 
then calculating the average weighted market capitalization of the stocks in the
middle quintile (middle 40th percentile to 60th percentile) of the portfolio.   
After a fund's market cap has been determined, Morningstar places the fund in   
the large-cap, mid-cap or small-cap group noted above.                          

Valuation: Morningstar categorizes funds by comparing the stocks in their       
portfolios with the most relevant of the three market cap groups. Specifically, 
each stock in Morningstar's equities database receives a price-to-earnings (P/E)
score and a price-to-book (P/B) score. This is derived by dividing each stock's 
P/E and P/B by the asset-weighted median P/E and asset-weighted median P/B,     
respectively, of the stock's market cap group. For example, to calculate the    
asset-weighted median P/E, Morningstar first ranks the P/E ratios of the stocks 
in each market-cap group from highest to lowest, then counts down by their      
market caps until it reaches the 50th percentile of that market-cap group. The  
P/E ratio attached to that stock is the asset-weighted median P/E. Morningstar  
does the same to find the asset-weighted median P/B. Next, Morningstar          
calculates the P/E style box Score and the P/B style box Score for each fund by 
ranking the stocks in a fund's portfolio by their P/E Scores and P/B Scores,    
respectively, and then calculating an average weighted P/E score and an average 
weighted P/B score from the stocks in the middle quintile of each fund's        
portfolio. These average weighted scores are the P/E style box Score and the P/B
style box Score of the fund's portfolio.                                        

For each measure, 1.00 represents the market-cap group average. If the fund has 
a P/E style box score + P/B style box Score that exceeds 2.25, the fund is      
categorized as growth. If the combined score falls below 1.75, the fund is      
categorized as value. Finally, if the score is between 1.75 and 2.25, the fund  
is categorized as blend.                                                        

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FOR MORE INFORMATION                                                            
--------------------------------------------------------------------------------
You can get more information about the Fund's investments in the Fund's         
semi-annual and annual reports to shareholders. The annual report contains a    
discussion of the market conditions and investment strategies that significantly
affected the Fund's performance over its last fiscal year.                      

You may wish to read the Statement of Additional Information for more           
information on the Fund and the securities in which the Portfolio invests. The  
Statement of Additional Information is incorporated into this prospectus by     
reference, which means that it is considered to be part of this prospectus.     

You can get free copies of reports and the Statement of Additional Information, 
request other information and discuss your questions about the Fund by writing  
or calling the Fund's distributor at:                                           

Liberty Funds Distributor, Inc.                                                 
One Financial Center                                                            
Boston, MA 02111-2621                                                           
1-800-426-3750                                                                  
www.libertyfunds.com                                                            

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

INVESTMENT COMPANY ACT FILE NUMBER:                                             

Liberty-Stein Roe Advisor Trust: 811-07955                                      
- Liberty Young Investor Fund (formerly Stein Roe Advisor Young Investor Fund)  

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

[LIBERTY FUNDS LOGO]                                      

Liberty Funds Distributor, Inc. (c)2001                   
One Financial Center, Boston, MA 02111-2621, 800-426-3750 
www.libertyfunds.com                                      

DIR-01/795E-0101                                                                

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LIBERTY GROWTH STOCK FUND          PROSPECTUS, FEBRUARY, 2001                   
--------------------------------------------------------------------------------

CLASS K SHARES                                                                  

Advised by Stein Roe & Farnham Incorporated                                     

The following eligible institutional investors may purchase Class K shares: (i) 
any retirement plan with aggregate assets of at least $5 million at the time of 
purchase of Class K shares and which purchases shares directly from Liberty     
Funds Distributor, Inc., the Fund's distributor, or through a third-party       
broker-dealer; (ii) any registered investment adviser purchasing shares for its 
clients; (iii) any insurance company, trust company or bank purchasing shares   
for its own account; (iv) any endowment, investment company or foundation; and  
(v) any trustee of Liberty-Stein Roe Advisor Trust, any employee of Stein Roe & 
Farnham Incorporated, or any of its affiliates, or any member of the immediate  
family of any trustee or employee.                                              

Although these securities have been registered with the Securities and Exchange 
Commission, the Commission has not approved or disapproved any shares offered in
this prospectus or determined whether this prospectus is truthful or complete.  
Any representation to the contrary is a criminal offense.                       

--------------------------------------------------------------------------------
TABLE OF CONTENTS                                                               

THE FUND 2                                                                      
--------------------------------------------------------------------------------
Investment Goal.........................2                                       
Principal Investment Strategies.........2                                       
Principal Investment Risks..............3                                       
Performance History.....................5                                       
Your Expenses...........................6                                       

YOUR ACCOUNT                            7                                       
--------------------------------------------------------------------------------
How to Buy Shares.......................7                                       
Distribution and Service Fees...........8                                       
How to Exchange Shares..................8                                       
How to Sell Shares......................8                                       
Fund Policy on Trading of Fund Shares..10                                       
Other Information About Your Account...10                                       

MANAGING THE FUND                      13                                       
--------------------------------------------------------------------------------
Investment Advisor.....................13                                       
Portfolio Manager......................13                                       
--------------------------------------------------------------------------------

OTHER INVESTMENT                                                                
STRATEGIES AND RISKS                   14                                       
--------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS                   16                                       
--------------------------------------------------------------------------------

APPENDIX A                             17                                       
--------------------------------------------------------------------------------

-----------------------------                                                   
NOT FDIC    MAY LOSE VALUE                                                      
INSURED     NO BANK GUARANTEE                                                   
-----------------------------                                                   

--------------------------------------------------------------------------------
THE FUND LIBERTY GROWTH STOCK FUND                                              
--------------------------------------------------------------------------------

INVESTMENT GOAL                                                                 
--------------------------------------------------------------------------------
The Fund seeks long-term growth.                                                

PRINCIPAL INVESTMENT STRATEGIES                                                 
--------------------------------------------------------------------------------
Growth Stock Fund invests all of its assets in SR&F Growth Stock Portfolio (the 
"Portfolio") as part of a master fund/feeder fund structure. Growth Stock       
Portfolio invests primarily in the common stocks of companies with large-market 
capitalizations.                                                                

The Portfolio may invest in any market sector but emphasizes the technology,    
financial services, health care, and global consumer franchise sectors. The     
Portfolio may invest up to 25% of its assets in foreign stocks. To select       
investments for the Portfolio, the portfolio manager considers companies that he
believes will generate earnings growth over the long term regardless of the     
economic environment.                                                           

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

The Fund compares its performance to other similarly managed mutual funds as    
determined by Morningstar, Inc. ("Morningstar"). For performance comparison     
purposes, Morningstar places an equity fund in one of nine "categories" based   
upon guidelines established by Morningstar that examines both a fund's          
investment methodology and the size of the companies in which the fund invests. 
The portfolio manager generally manages the Fund in accordance with the         
Morningstar guidelines for a "Large Growth" fund. See Appendix A for a          
description of the Morningstar categories.                                      

Additional strategies that are not principal investment strategies and the risks
associated with them are described later in this prospectus under "Other        
Investment Strategies and Risks."                                               

Defining Capitalization. A company's market capitalization is simply its stock  
price multiplied by the number of shares of stock it has issued and outstanding.
In the financial markets, companies generally are sorted into one of three      
capitalization-based categories: large capitalization (large-cap); medium       
capitalization (mid-cap); or small capitalization (small-cap). In defining a    
company's market capitalization, we use capitalization-based categories that are
based in part on Standard & Poor's Index Services.                              

Large capitalization stocks are stocks with market capitalizations greater than 
$5 billion. In addition, any stock that is a member of the S&P 500 Index is     
considered a large capitalization stock.                                        

Middle capitalization stocks are stocks with market capitalizations between $1  
billion and the largest stock in the S&P MidCap 400 Index ($9.9 billion as of   
December 31, 2000). In addition, any stock that is a member of the S&P MidCap   
400 Index is considered a middle capitalization stock.                          

                                                                               2

THE FUND LIBERTY GROWTH STOCK FUND                                              

Small capitalization stocks are stocks with market capitalizations equal to or  
less than the largest stock in the S&P SmallCap 600 Index ($2.6 billion as of   
December 31, 2000).                                                             

PRINCIPAL INVESTMENT RISKS                                                      
--------------------------------------------------------------------------------
The principal risks of investing in the Fund are described below. There are many
circumstances (including additional risks that are not described here) which    
could prevent the Fund from achieving its investment goal. You may lose money by
investing in the Fund.                                                          

Since it purchases equity securities, the Portfolio is subject to equity risk.  
This is the risk that stock prices will fall over short or extended periods of  
time. Although the stock market has historically outperformed other asset       
classes over the long term, the equity market tends to move in cycles and       
individual stock prices may fluctuate drastically from day-to-day and may       
underperform other asset classes over an extended period of time. Individual    
companies may report poor results or be negatively affected by industry and/or  
economic trends and developments. The prices of securities issued by such       
companies may suffer a decline in response. These price movements may result    
from factors affecting individual companies, industries or the securities market
as a whole.                                                                     

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

Growth stock prices may be more sensitive to changes in current or expected     
earnings than the prices of other stocks. Growth stocks may not perform as well 
as value stocks or the stock market in general.                                 

Sector risk is inherent in the Fund's investment strategy. Companies that are in
different but closely related industries are sometimes described as being in the
same broad economic sector. The values of stocks of many different companies in 
a market sector may be similarly affected by particular economic or market      
events. Although the Portfolio does not intend to focus on any particular       
sector, at times, the Portfolio may have a large portion of its assets invested 
in particular sectors. An example of a sector in which the Portfolio may        
sometimes have a large portion of its assets invested is technology. Technology 
companies may be significantly affected by falling prices and profits, and      
intense competition. In addition, the rate of technological change for          
technology companies is generally higher than for other companies, often        
requiring extensive and sustained investment in research and development, and   
exposing such companies to the risk of rapid product obsolescence. The price of 
many technology stocks has risen based on projections of future earnings and    
company growth. If a                                                            

                                                                               3

THE FUND LIBERTY GROWTH STOCK FUND                                              

company does not perform as expected, the price of the stock could decline      
significantly. Many technology companies are currently operating at a loss and  
may never be profitable.                                                        

Foreign securities are subject to special risks. Foreign stock markets can be   
extremely volatile. Fluctuations in currency exchange rates may impact the value
of foreign securities without a change in the intrinsic value of those          
securities. The liquidity of foreign securities may be more limited than        
domestic securities, which means that the Portfolio may, at times, be unable to 
sell foreign securities at desirable prices. Brokerage commissions, custodial   
fees and other fees are generally higher for foreign investments. In addition,  
foreign governments may impose withholding taxes which would reduce the amount  
of income and capital gains available to distribute to shareholders. Other risks
include the following: possible delays in the settlement of transactions or in  
the notification of income; less publicly available information about companies;
the impact of political, social or diplomatic events; and possible seizure,     
expropriation or nationalization of the company or its assets or imposition of  
currency exchange controls.                                                     

                                                                               4

THE FUND LIBERTY GROWTH STOCK FUND                                              

--------------------------------------------------------------------------------
UNDERSTANDING PERFORMANCE                                                       

CALENDAR-YEAR TOTAL RETURN shows the Portfolio's and the Fund's performance over
the past 10 calendar years.                                                     

AVERAGE ANNUAL TOTAL RETURN is a measure of the Fund's share performance for the
past one, five and ten year periods. The Fund commenced operations on February  
14, 1997. The Fund's historical performance for all periods prior to February   
14, 1997, is the performance of the Portfolio and has not been restated to      
reflect the higher gross annual operating expenses of the Fund.                 

The Fund's returns are compared to the S&P 500 Index, an unmanaged broad-based  
measure of market performance. Unlike the Fund, indices are not investments, do 
not incur fees or expenses and are not professionally managed. It is not        
possible to invest directly in indices.                                         
--------------------------------------------------------------------------------

PERFORMANCE HISTORY                                                             
--------------------------------------------------------------------------------
The bar chart below shows the historical performance for the Fund and for the   
Portfolio prior to the Fund's inception, for the past 10 calendar years. The    
performance table following the bar chart shows how the average annual total    
returns of the Fund and the Portfolio compare with those of a broad measure of  
market performance for the past one, five and ten years. Performance for the    
Portfolio prior to the Fund's inception has not been restated to reflect the    
higher gross annual operating expenses of the Fund. If those gross annual       
operating expenses were reflected, performance of the Portfolio would be lower. 
The chart and table are intended to illustrate some of the risks of investing in
the Fund by showing the changes in performance. All returns include the         
reinvestment of dividends and distributions. Performance results include the    
effect of expense reduction arrangements, if any. If these arrangements were not
in place, then the performance results would have been lower. Any expense       
reduction arrangements may be discontinued at any time. As with all mutual      
funds, past performance does not predict the future performance of the Fund.    

--------------------------------------------------------------------------------
CALENDAR-YEAR TOTAL RETURNS (CLASS K)(1)                                        
--------------------------------------------------------------------------------

[BAR GRAPH]                                                                     

1991      45.64%                                                                
1992       7.97%                                                                
1993       2.58%                                                                
1994      -4.02%                                                                
1995      35.30%                                                                
1996      20.64%                                                                
1997      32.86%                                                                
1998      24.39%                                                                
1999      35.48%                                                                
2000     -11.63%                                                                

For period shown on the chart above:    Best quarter: 4th quarter 1999, +25.05% 
                                        Worst quarter: 4th quarter 2000, -17.68%

--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS -- FOR PERIODS ENDED DECEMBER 31, 2000 (1)         
--------------------------------------------------------------------------------

                                                                [Download Table]

                       INCEPTION                                               
                          DATE         1 YEAR        5 YEARS       10 YEARS    
                                                                               
Class K (%)             2/14/97        -11.63         19.00          17.46     
-------------------- -------------- -------------- ------------- --------------
S&P Index (%)             N/A           -9.10         18.33          17.44     

(1)  The total return for calendar year 1997 is comprised of the Portfolio's    
 performance through February 13, 1997 and the performance of the Fund's
Class K shares from February 14, 1997 through December 31, 1997. The  
     performance for calendar years 1998, 1999 and 2000 shows the performance of
    the Fund's Class K shares. For years prior to 1997, performance is that of
the Portfolio.                                                        

                                                                               5

THE FUND LIBERTY GROWTH STOCK FUND                                              

--------------------------------------------------------------------------------
UNDERSTANDING EXPENSES                                                          

SHAREHOLDER FEES are paid directly by shareholders to the Fund's distributor.   

ANNUAL FUND OPERATING EXPENSES are deducted from the Fund. They include         
management and administration fees, 12b-1 fees, brokerage costs, and            
administrative costs including pricing and custody services.                    

EXAMPLE EXPENSES helps you compare the cost of investing in the Fund to the cost
of investing in other mutual funds. This example reflects the expenses of both  
the Fund and the Portfolio. It uses the following hypothetical conditions:      

-    $10,000 initial investment                                                 

-    5% return for each year                                                    

-    Fund operating expenses remain the same                                    

-    Assumes reinvestment of all dividends and distributions                    
--------------------------------------------------------------------------------

YOUR EXPENSES                                                                   
--------------------------------------------------------------------------------
The tables below describe the fees and expenses you may pay when you buy, hold  
and sell shares of the Fund. Expenses are one of several factors to consider    
before you invest in a mutual fund.                                             

--------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES(2) (DEDUCTED DIRECTLY FROM FUND ASSETS)          
--------------------------------------------------------------------------------

                                                                [Download Table]

                                                                      CLASS K   
                                                                                
Management fee(3) (%)                                                   0.68    
-------------------------------------------------------------------- -----------
Distribution and service (12b-1) fees (%)                               0.25    
-------------------------------------------------------------------- -----------
Other expenses (%)                                                      0.39    
-------------------------------------------------------------------- -----------
Total annual fund operating expenses (%)                                1.32    
-------------------------------------------------------------------- -----------

--------------------------------------------------------------------------------
EXAMPLE EXPENSES (YOUR ACTUAL COSTS MAY BE HIGHER OR LOWER)                     
--------------------------------------------------------------------------------

                                                                [Download Table]

CLASS                               1 YEAR     3 YEARS     5 YEARS    10 YEARS  
                                                                                
Class K                              $134        $418        $723      $1,590   
---------------------------------- ---------- ----------- ----------- ----------

(2)  There is a $7.50 charge for wiring sale proceeds to your bank. A $10 fee is
 deducted from accounts less than $1,000 and paid to the transfer agent.

(3)  The Portfolio pays a management fee of 0.54% and the Fund pays an          
administrative fee of 0.14%.                                          

                                                                               6

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YOUR ACCOUNT                                                                    
--------------------------------------------------------------------------------

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INVESTMENT MINIMUMS                                                             

Initial Investment.............$1,000                                           
Subsequent Investments............$50                                           
Automatic Investment Plan*........$50                                           
Retirement Plans*.................$25                                           

* The initial investment minimum of $1,000 is waived on this plan.              

The Fund reserves the right to change these investment minimums. The Fund also  
reserves the right to refuse a purchase order for any reason, including if it   
believes that doing so would be in the best interest of the Fund and its        
shareholders.                                                                   
--------------------------------------------------------------------------------

HOW TO BUY SHARES                                                               
--------------------------------------------------------------------------------
Your financial advisor can help you establish an appropriate investment         
portfolio, buy shares and monitor your investments. When the Fund receives your 
purchase request in "good form," your shares will be bought at the next         
calculated NAV. "Good form" means that you placed your order with your brokerage
firm or your payment has been received and your application is complete,        
including all necessary signatures.                                             

--------------------------------------------------------------------------------
OUTLINED BELOW ARE VARIOUS OPTIONS FOR BUYING SHARES:                           
--------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

METHOD                INSTRUCTIONS                                                       
                                                                                         
Through your          Your financial advisor can help you establish your account and     
financial advisor     buy Fund shares on your behalf.                                    
--------------------- -------------------------------------------------------------------
By check              For new accounts, send a completed application and check made      
(new account)         payable to the Fund to the transfer agent, Liberty Funds           
                      Services, Inc., P.O. Box 1722, Boston, MA 02105-1722.              
--------------------- -------------------------------------------------------------------
By check              For existing accounts, fill out and return the additional          
(existing account)    investment stub included in your quarterly statement, or send a    
                      letter of instruction including your Fund name and account         
                      number with a check made payable to the Fund to Liberty Funds      
                      Services, Inc., P.O. Box 1722, Boston, MA 02105-1722.              
--------------------- -------------------------------------------------------------------
By exchange           You or your financial advisor may acquire shares                   
                      by exchanging shares you own in one fund for shares of the         
                      same class of the Fund at no additional cost. To exchange          
                      by telephone, call 1-800-422-3737.                                 
--------------------- -------------------------------------------------------------------
By wire               You may purchase shares by wiring money from your                  
                      bank account to your fund account. To wire funds to your           
                      fund account, call 1-800-422-3737 to obtain a control              
                      number and the wiring instructions.                                
--------------------- -------------------------------------------------------------------
By electronic funds   You may purchase shares by electronically transferring money       
transfer              from your bank account to your fund account by calling             
                      1-800-422-3737.  Your money may take up to two business days to    
                      be invested.  You must set up this feature prior to your           
                      telephone request.  Be sure to complete the appropriate section    
                      of the application.                                                
--------------------- -------------------------------------------------------------------
Automatic             You can make monthly or quarterly investments automatically        
investment plan       from your bank account to your fund account.  You can select a     
                      pre-authorized amount to be sent via electronic funds              
                      transfer. Be sure to complete the appropriate section of           
                      the application for this feature.                                  
--------------------- -------------------------------------------------------------------
By dividend           You may automatically invest dividends distributed by one fund     
diversification       into the same class of shares of another fund at no additional     
                      sales charge.  To invest your dividends in another fund, call      
                      1-800-345-6611.                                                    

                                                                               7

YOUR ACCOUNT                                                                    

DISTRIBUTION AND SERVICE FEES                                                   
--------------------------------------------------------------------------------
The Fund has adopted a plan under Rule 12b-1 that permits it to pay marketing   
and other fees to support the sale and distribution of Class K shares and the   
services provided to you by your financial advisor. These annual distribution   
fees may equal up to 0.25% for Class K shares and are paid out of the assets of 
the class. The distributor has voluntarily agreed to waive a portion of the     
distribution fee. Over time, these fees will reduce the return on your          
investment and may cost you more than paying other types of sales charges.      

HOW TO EXCHANGE SHARES                                                          
--------------------------------------------------------------------------------
You may exchange your shares for shares of the same share class of another fund 
distributed by Liberty Funds Distributor, Inc. at net asset value. Unless your  
account is part of a tax-deferred retirement plan, an exchange is a taxable     
event. Therefore, you may realize a gain or a loss for tax purposes. The Fund   
may terminate your exchange privilege if Stein Roe determines that your exchange
activity is likely to adversely impact the advisor's ability to manage the Fund.
To exchange by telephone, call 1-800-422-3737.                                  

HOW TO SELL SHARES                                                              
--------------------------------------------------------------------------------
Your financial advisor can help you determine if and when you should sell your  
shares. You may sell shares of the Fund on any regular business day that the New
York Stock Exchange (NYSE) is open.                                             

When the Fund receives your sales request in "good form," shares will be sold at
the next calculated price. "Good form" means that money used to purchase your   
shares is fully collected. When selling shares by letter of instruction, "good  
form" means (i) your letter has complete instructions, the proper signatures and
signature guarantees, (ii) you have included any certificates for shares to be  
sold, and (iii) any other required documents are attached. For additional       
documentation required for sales by corporations, agents, fiduciaries and       
surviving joint owners, please call 1-800-345-6611. Retirement plan accounts    
have special requirements. Please call 1-800-799-7526 for more information.     

                                                                               8

YOUR ACCOUNT                                                                    

The Fund will generally send proceeds from the sale to you within seven days    
(usually on the next business day after your request is received in good form). 
However, if you purchased your shares by check, the Fund may delay sending the  
proceeds from the sale of your shares for up to 15 days after your purchase to  
protect against checks that are returned. No interest will be paid on uncashed  
redemption checks. Redemption proceeds may be paid in securities, rather than   
cash, if the advisor determines that it is in the best interest of the Fund.    

--------------------------------------------------------------------------------
OUTLINED BELOW ARE VARIOUS OPTION FOR SELLING SHARES:                           
--------------------------------------------------------------------------------

                                                        [Enlarge/Download Table]

METHOD                INSTRUCTIONS                                                       
                                                                                         
Through your          You may call your financial advisor to place your sell order.      
financial advisor     To receive current trading day's price, your financial advisor     
                      firm must receive your request prior to the close of the NYSE,     
                      usually 4:00 p.m., Eastern time.                                   
--------------------- -------------------------------------------------------------------
By exchange           You or your financial advisor may sell shares by                   
                      exchanging from the Fund into the same share class of              
                      another fund at no additional cost. To exchange by                 
                      telephone, call 1-800-422-3737.                                    
--------------------- -------------------------------------------------------------------
By telephone          You or your financial advisor may sell shares by telephone and     
                      request that a check be sent to your address of record by          
                      calling 1-800-422-3737 unless you have notified the Fund of an     
                      address change within the previous 30 days.  The dollar limit      
                      for telephone sales is $100,000 in a 30-day period.  You do not    
                      need to set up this feature in advance of your call.  Certain      
                      restrictions apply to retirement accounts.  For details, call      
                      1-800-345-6611.                                                    
--------------------- -------------------------------------------------------------------
By mail               You may send a signed letter of instruction or stock power form    
                      along with any certificates to be sold to the address below.       
                      In your letter of instruction, note your fund's name, share        
                      class, account number, and the dollar value or number of shares    
                      you wish to sell.  All account owners must sign the letter, and    
                      signatures must be guaranteed by either a bank, a member firm      
                      of a national stock exchange or another eligible guarantor         
                      institution.  Additional documentation is required for sales by    
                      corporations, agents, fiduciaries, surviving joint owners and      
                      individual retirement account (IRA) owners.  For details, call     
                      1-800-345-6611.                                                    
                      Mail your letter of instruction to Liberty Funds Services,         
                      Inc., P.O. Box 1722, Boston, MA 02105-1722.                        
--------------------- -------------------------------------------------------------------
By wire               You may sell shares and request that the proceeds be               
                      wired to your bank. You must set up this feature prior to          
                      your telephone request. Be sure to complete the                    
                      appropriate section of the account application for this            
                      feature.                                                           
--------------------- -------------------------------------------------------------------
By systematic         You may automatically sell a specified dollar amount or            
withdrawal plan       percentage on a monthly, quarterly or semi-annual basis and        
                      have your proceeds sent to you if your account balance is          
                      at least $5,000. This feature is not available if you hold         
                      your shares in certificate form. All dividend and capital          
                      gains distributions must be reinvested. Be sure to                 
                      complete the appropriate section of the account                    
                      application for this feature.                                      
--------------------- -------------------------------------------------------------------
By electronic         You may sell shares and request that the proceeds be               
funds transfer        electronically transferred to your bank.  Proceeds may take up     
                      to two business days to be received by your bank. You must set up  
                      this feature prior to your request. Be sure to complete the        
                      appropriate section of the account application for this feature.   


                                                                               9

YOUR ACCOUNT                                                                    

FUND POLICY ON TRADING OF FUND SHARES                                           
--------------------------------------------------------------------------------
The Fund does not permit short-term or excessive trading. Excessive purchases,  
redemptions or exchanges of Fund shares disrupt portfolio management and        
increase Fund expenses. In order to promote the best interests of the Fund, the 
Fund reserves the right to reject any purchase order or exchange request,       
particularly from market timers or investors who, in the advisor's opinion, have
a pattern of short-term or excessive trading or whose trading has been or may be
disruptive to the Fund. The Fund into which you would like to exchange also may 
reject your request.                                                            

OTHER INFORMATION ABOUT YOUR ACCOUNT                                            
--------------------------------------------------------------------------------
HOW THE FUND'S SHARE PRICE IS DETERMINED The price of the Fund's Class K shares 
is based on its net asset value. The net asset value is determined at the close 
of regular trading on the NYSE, usually 4:00 p.m. Eastern time, on each business
day that the NYSE is open (typically Monday through Friday).                    

When you request a transaction, it will be processed at the NAV (after any      
applicable sales charges) next determined after your request is received in good
form by the distributor. In most cases, in order to receive that day's price,   
the distributor must receive your order before that day's transactions are      
processed. If you request a transaction through your financial advisor's firm,  
the firm must receive your order by the close of trading on the NYSE to receive 
that day's price.                                                               

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

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

                                                                              10

YOUR ACCOUNT                                                                    

--------------------------------------------------------------------------------
UNDERSTANDING FUND DISTRIBUTIONS                                                

The Fund earns income from the securities the Portfolio holds. The Fund also may
experience capital gains and losses on sales of the Portfolio's securities. The 
Fund distributes substantially all of its net investment income and capital     
gains to shareholders. As a shareholder, you are entitled to a portion of the   
Fund's income and capital gains based on the number of shares you own at the    
time these distributions are declared.                                          
--------------------------------------------------------------------------------

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

You can find the daily prices of some share classes for the Fund in most major  
daily newspapers under the caption "Liberty." You can find daily prices for all 
share classes by visiting the Fund's web site at www.libertyfunds.com.          

ACCOUNT FEES If your account value falls below $1,000 (other than as a result of
depreciation in share value) you may be subject to an annual account fee of $10.
This fee is deducted from the account in June each year. Approximately 60 days  
prior to the fee date, the Fund's transfer agent will send you written          
notification of the upcoming fee. If you add money to your account and bring the
value above $1,000 prior to the fee date, the fee will not be deducted.         

DIVIDENDS, DISTRIBUTIONS, AND TAXES The Fund has the potential to make the      
following distributions:                                                        

--------------------------------------------------------------------------------
TYPES OF DISTRIBUTIONS                                                          
--------------------------------------------------------------------------------

                                                                [Download Table]
                                                                                
Dividend income       Represents interest and dividends earned from securities  
                      held by the Portfolio, net of expenses incurred by the    
                      Portfolio.                                                
--------------------- ----------------------------------------------------------
Capital gains         Represents long-term capital gains on sales of            
                      securities held for more than 12 months and short-term    
                      capital gains, which are gains on sales of securities held
                      by the Portfolio for a 12-month period or less.           

DISTRIBUTION OPTIONS Income dividends are declared and paid annually. Any       
capital gains are distributed at least annually. You can choose one of the      
options listed in the table below for these distributions when you open your    
account.(1) To change your distribution option call 1-800-345-6611.             

--------------------------------------------------------------------------------
DISTRIBUTION OPTIONS                                                            
--------------------------------------------------------------------------------

Reinvest all distributions in additional shares of your current fund            
--------------------------------------------------------------------------------
Reinvest all distributions in shares of another fund                            
--------------------------------------------------------------------------------
Receive dividends in cash (see options below) and reinvest capital gains        
--------------------------------------------------------------------------------
Receive all distributions in cash (with one of the following options):          

-    send the check to your address of record                                   
-    send the check to a third party address                                    
-    transfer the money to your bank via electronic funds transfer              

If you do not indicate on your application your preference for handling         
distributions, the Fund will automatically reinvest all distributions in        
additional shares of the Fund. Distributions of $10 or less will automatically  
be reinvested in additional Fund shares. If you elect to receive distributions  
by check and the check is returned as undeliverable, or                         

                                                                              11

YOUR ACCOUNT                                                                    

if you do not cash a distribution check within six months of the check date, the
distribution will be reinvested in additional shares of the Fund.               

TAX CONSEQUENCES Regardless of whether you receive your distributions in cash or
reinvest them in additional Fund shares, all Fund distributions are subject to  
federal income tax. Depending on the state where you live, distributions may    
also be subject to state and local income taxes.                                

In general, any distributions of dividends, interest and short-term capital     
gains are taxable as ordinary income. Distributions of long-term capital gains  
are generally taxable as such, regardless of how long you have held your Fund   
shares. You will be provided with information each year regarding the amount of 
ordinary income and capital gains distributed to you for the previous year and  
any portion of your distribution which is exempt from state and local taxes.    
Your investment in the Fund may have additional personal tax implications.      
Please consult your tax advisor on federal, state, local or other applicable tax
laws.                                                                           

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

                                                                              12

--------------------------------------------------------------------------------
MANAGING THE FUND                                                               
--------------------------------------------------------------------------------

INVESTMENT ADVISOR                                                              
--------------------------------------------------------------------------------
Stein Roe & Farnham Incorporated (Stein Roe), a wholly owned subsidiary of      
Liberty Funds Group LLC (LFG), located at One South Wacker Drive, Suite 3500,   
Chicago, Illinois 60606, is the Fund's investment advisor. In its duties as     
investment advisor, Stein Roe runs the Fund's day-to-day business, including    
placing all orders for the purchase and sale of portfolio securities for the    
Portfolio. Stein Roe has been an investment advisor since 1932. Stein Roe's     
mutual funds and institutional investment advisory businesses are part of LFG   
that includes several separate legal entities. LFG includes certain affiliates  
of Stein Roe, including Colonial Management Associates, Inc. (Colonial). The LFG
business unit is managed by a single management team. Colonial and other LFG    
entities also share personnel, facilities, and systems with Stein Roe that may  
be used in providing administrative or operational services to the Fund.        
Colonial is a registered investment adviser. Stein Roe and the other entities   
that make up LFG are subsidiaries of Liberty Financial Companies, Inc.          

For the period ended September 30, 2000, the Fund and Portfolio paid 0.68% of   
average net assets in fees to Stein Roe.                                        

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

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

                                                                              13

--------------------------------------------------------------------------------
OTHER INVESTMENT STRATEGIES AND RISKS                                           
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
UNDERSTANDING THE FUND'S                                                        
OTHER INVESTMENT STRATEGIES AND RISKS                                           

The Fund's principal investment strategies and risks are described under "The   
Fund - Principal Investment Strategies" and "The Fund - Principal Investment    
Risks." In seeking to meet its investment goal, the Portfolio may also invest in
other securities and use certain other investment techniques. These securities  
and investment techniques offer opportunities and carry various risks.          

The advisor may elect not to buy any of these securities or use any of these    
techniques unless it believes that doing so will help the Portfolio achieve     
their investment goal. The Fund may not always achieve its investment goal.     

Additional information about the Fund's securities and investment techniques, as
well as the Fund's fundamental and non-fundamental investment policies, is      
contained in the Statement of Additional Information.                           
--------------------------------------------------------------------------------

The Fund's and Portfolio's principal investment strategies and their associated 
risks are described above. This section describes other investments the         
Portfolio may make and the risks associated with them. In seeking to achieve its
investment goal, the Portfolio may invest in various types of securities and    
engage in various investment techniques which are not the principal focus of the
Portfolio and therefore are not described in this prospectus. These types of    
securities and investment practices are identified and discussed in the Fund's  
Statement of Additional Information, which you may obtain free of charge (see   
back cover). Approval by the Fund's shareholders is not required to modify or   
change any of the Fund's investment goal or investment strategies.              

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

TEMPORARY DEFENSIVE POSITIONS                                                   
--------------------------------------------------------------------------------
At times, the advisor may determine that adverse market conditions make it      
desirable to temporarily suspend the Portfolio's normal investment activities.  
During such times, the Portfolio may, but is not required to, invest in cash or 
high-quality, short-term debt securities, without limit. Taking a temporary     
defensive position may prevent the Fund and the Portfolio from achieving their  
investment goal.                                                                

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

                                                                              14

OTHER INVESTMENT STRATEGIES AND RISKS                                           

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

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STATEMENT OF ADDITIONAL INFORMATION DATED FEBRUARY 1, 2001

 LIBERTY-STEIN ROE ADVISOR TRUST
One Financial Center, Boston, MA 02111

 LIBERTY GROWTH STOCK FUND
 LIBERTY YOUNG INVESTOR FUND

   This Statement of Additional Information ("SAI") is not a prospectus, but
provides additional information that should be read in conjunction with the     
Funds' prospectuses dated February 1, 2001, and any supplements thereto         
("Prospectus"). Financial statements, which are contained in the Funds'         
September 30, 2000 Annual Reports, are incorporated by reference into this SAI. 
A Prospectus and Annual Report may be obtained at no charge by calling (800)    
426-3750.                                                                       

 TABLE OF CONTENTS

                                                                            Page
General Information and History..............................................2  
Investment Policies..........................................................3  
Portfolio Investments and Strategies.........................................4  
Investment Restrictions......................................................20 
Additional Investment Considerations.........................................23 
Management...................................................................24 
Financial Statements.........................................................28 
Principal Shareholders.......................................................29 
Investment Advisory and Other Services.......................................29 
Custodian....................................................................31 
Independent Accountants......................................................32 
Distributor..................................................................32 
Transfer Agent and Shareholder Servicing.....................................35 
Purchases and Redemptions....................................................36 
Portfolio Transactions.......................................................46 
Additional Income Tax Considerations.........................................52 
Investment Performance.......................................................52 
Master Fund/Feeder Fund: Structure and Risk Factors..........................56 
Appendix--Ratings............................................................58 

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 GENERAL INFORMATION AND HISTORY

 The mutual funds (referred to collectively as the "Funds") described in
this SAI are the following separate series of Liberty-Stein Roe Advisor Trust   
(the "Trust"):                                                                  

 Liberty Growth Stock Fund ("Growth Stock Fund")
 Liberty Young Investor Fund ("Young Investor Fund")

     Growth Stock Fund offers four classes of shares (Classes A, B, C and K) and
Young Investor Fund offers two classes of shares (Classes A and K). Class K of  
each Fund commenced operations on February 14, 1997; Classes A, B and C of      
Growth Stock Fund commenced operations on October 15, 1997; and Class A of Young
Investor Fund commenced operations on January 26, 1998.                         

  On September 13, 1996, the name of the Trust was changed from "Stein Roe
Adviser Trust" to "Stein Roe Advisor Trust." The name of the Trust was changed  
from "Stein Roe Advisor Trust" to "Liberty-Stein Roe Advisor Trust" on March 3, 
1999. Prior to July 14, 2000, Growth Stock Fund was known as Stein Roe Advisor  
Growth Stock Fund and Young Investor Fund was known as Stein Roe Advisor Young  
Investor Fund.                                                                  

  The Trust is a Massachusetts business trust organized under an Agreement
and Declaration of Trust ("Declaration of Trust") dated July 31, 1996, which    
provides that each shareholder shall be deemed to have agreed to be bound by the
terms thereof. The Declaration of Trust may be amended by a vote of either the  
Trust's shareholders or its trustees. The Trust may issue an unlimited number of
shares, in one or more series, each with one or more classes of shares, as the  
Board may authorize. Currently, four series are authorized and outstanding. Each
series invests in a separate portfolio of securities and other assets, with its 
own objectives and policies.                                                    

 Under Massachusetts law, shareholders of a Massachusetts business trust
such as the Trust could, in some circumstances, be held personally liable for   
unsatisfied obligations of the trust. The Declaration of Trust provides that    
persons extending credit to, contracting with, or having any claim against the  
Trust or any particular series shall look only to the assets of the Trust or of 
the respective series for payment under such credit, contract or claim, and that
the shareholders, trustees and officers shall have no personal liability        
therefor. The Declaration of Trust requires that notice of such disclaimer of   
liability be given in each contract, instrument or undertaking executed or made 
on behalf of the Trust. The Declaration of Trust provides for indemnification of
any shareholder against any loss and expense arising from personal liability    
solely by reason of being or having been a shareholder. Thus, the risk of a     
shareholder incurring financial loss on account of shareholder liability is     
believed to be remote, because it would be limited to circumstances in which the
disclaimer was inoperative and the Trust was unable to meet its obligations. The
risk of a particular series incurring financial loss on account of unsatisfied  
liability of another series of the Trust also is believed to be remote, because 
it would be limited to claims to which the disclaimer did not apply and to      
circumstances in which the other series was unable to meet its obligations.     

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

SPECIAL CONSIDERATIONS REGARDING MASTER FUND/FEEDER FUND STRUCTURE              

    Rather than invest in securities directly, the Funds seek to achieve their
objectives by pooling their assets with those of other investment companies for 
investment in a master fund having the identical investment objective and       
substantially the same investment policies as its feeder funds. The purpose of  
such an arrangement is to achieve greater operational efficiencies and reduce   
costs. Each Fund invests all of its net investable assets in a separate master  
fund that is a series of SR&F Base Trust, as follows:                           

                                                                [Download Table]

      FEEDER FUND                         MASTER FUND                            
      -----------                         -----------                            
                                                                                 
Growth Stock Fund    SR&F Growth Stock Portfolio ("Growth Stock Portfolio")      
Young Investor Fund  SR&F Growth Investor Portfolio ("Growth Investor Portfolio")

     The master funds are referred to collectively as the "Portfolios." For more
information, please refer to Master Fund/Feeder Fund: Structure and Risk        
Factors.                                                                        

        Stein Roe & Farnham Incorporated ("Stein Roe") provides administrative
and accounting and recordkeeping services to the Funds and Portfolios and       
provides investment advisory services to each Portfolio.                        

 INVESTMENT POLICIES

     The Trust and SR&F Base Trust are open-end management investment companies.
The Funds and the Portfolios are diversified, as that term is defined in the    
Investment Company Act of 1940.                                                 

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The investment objectives and policies are described in the Prospectus
under The Fund. In pursuing its objective, a Fund or Portfolio may employ the   
investment techniques described in its Prospectus and Portfolio Investments and 
Strategies in this SAI. The investment objective is a non-fundamental policy and
may be changed by the Board of Trustees without the approval of a "majority of  
the outstanding voting securities."(1)                                          

PORTFOLIO INVESTMENTS AND STRATEGIES

DEBT SECURITIES                                                                 

In pursuing its investment objective, a 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 Stock Portfolio are limited to
those that are investment grade. Growth Investor Portfolio may invest up to 35% 
of its assets in debt securities, but does not expect to invest more than 5% of 
its assets in debt securities that are rated below investment grade. "Investment
grade" refers to debt securities that are within the four highest grades        
assigned by a nationally recognized statistical rating organization or, if      
unrated, deemed to be of comparable quality by Stein Roe.                       

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

    When Stein Roe determines that adverse market or economic conditions exist
and 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.                                                       

----------------------------                                                    
(1) A "majority of the outstanding voting securities" means the approval of the 
lesser of (i) 67% or more of the shares at a meeting if the holders of more than
50% of the outstanding shares are present or represented by proxy or (ii) more  
than 50% of the outstanding shares.                                             

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DERIVATIVES                                                                     

   Consistent with its objective, a Portfolio may invest in a broad array of
financial instruments and securities, including conventional exchange-traded and
non-exchange-traded options, futures contracts, futures options, securities     
collateralized by underlying pools of mortgages or other receivables, floating  
rate instruments, and other instruments that securitize assets of various types 
("Derivatives"). In each case, the value of the instrument or security is       
"derived" from the performance of an underlying asset or a "benchmark" such as a
security index, an interest rate, or a currency.                                

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

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

    No Portfolio currently intends to invest more than 5% of its net assets in
any type of Derivative except for options, futures contracts, and futures       
options. (See Options and Futures below.)                                       

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

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

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

CONVERTIBLE SECURITIES                                                          

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

FOREIGN SECURITIES                                                              

     A 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 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, it  
is likely to bear its proportionate share of the expenses of the depositary and 
it may have greater difficulty in receiving shareholder communications than it  
would have with a sponsored ADR. No Portfolio currently intends to invest more  
than 5% of its net assets in unsponsored ADRs.                                  

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As of September 30, 1999, Growth Stock Portfolio and Growth Investor  
Portfolio had no holdings of foreign companies.                                 

    With respect to portfolio securities that are issued by foreign issuers or
denominated in foreign currencies, investment performance is affected by the    
strength or weakness of the U.S. dollar against these currencies. For example,  
if the dollar falls in value relative to the Japanese yen, the dollar value of a
yen-denominated stock held in a Portfolio will rise even though the price of the
stock remains unchanged. Conversely, if the dollar rises in value relative to   
the yen, the dollar value of the yen-denominated stock will fall. (See          
discussion of transaction hedging and portfolio hedging under Currency Exchange 
Transactions.)                                                                  

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

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

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

The Portfolios' foreign currency exchange transactions are limited to 
transaction and portfolio hedging involving either specific transactions or     
portfolio positions.                                                            

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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 portfolio denominated or quoted in that     
particular currency, except that it may hedge all or part of its foreign        
currency exposure through the use of a basket of currencies or a proxy currency 
where such currencies or currency act as an effective proxy for other           
currencies. In such a case, the Portfolio may enter into a forward contract     
where the amount of the foreign currency to be sold exceeds the value of the    
securities denominated in such currency. The use of this basket hedging         
technique may be more efficient and economical than entering into separate      
forward contracts for each currency held. No Portfolio may engage in            
"speculative" currency exchange transactions.                                   

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

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

    If a Portfolio retains the portfolio security and engages in an offsetting
transaction, it 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 the           
Portfolio's entering into a forward contract for the sale of a currency and the 
date it enters into an offsetting contract for the purchase of the currency, it 
will realize a gain to the extent the price of the currency it has agreed to    
sell exceeds the price of the currency it has agreed to purchase. Should forward
prices increase, the Portfolio will suffer a loss to the extent the price of the
currency it has agreed to purchase exceeds the price of the currency it has     
agreed to sell. A default on the contract would                                 

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deprive the Portfolio of unrealized profits or force it 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 it 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 currency exchange transactions are usually conducted on a     
principal basis, no fees or commissions are involved.                           

LENDING OF PORTFOLIO SECURITIES                                                 

 Subject to restriction (5) under Investment Restrictions in this SAI, a
Portfolio may lend its portfolio securities to broker-dealers and banks. Any    
such loan must be continuously secured by collateral in cash or cash equivalents
maintained on a current basis in an amount at least equal to the market value of
the securities loaned by the Portfolio. The Portfolio would continue to receive 
the equivalent of the interest or dividends paid by the issuer on the securities
loaned, and would also receive an additional return that may be in the form of a
fixed fee or a percentage of the collateral. The Portfolio would have the right 
to call the loan and obtain the securities loaned at any time on notice of not  
more than five business days. The Portfolio would not have the right to vote the
securities during the existence of the loan but would call the loan to permit   
voting of the securities if, in Stein Roe's judgment, a material event requiring
a shareholder vote would otherwise occur before the loan was repaid. In the     
event of bankruptcy or other default of the borrower, it 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 it 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.         

REPURCHASE AGREEMENTS                                                           

    A Portfolio may invest in repurchase agreements, provided that it will not
invest more than 15% of net assets in repurchase agreements maturing in more    
than seven days and any other illiquid securities. A repurchase agreement is a  
sale of securities to 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.                                                                     

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WHEN-ISSUED AND DELAYED-DELIVERY SECURITIES; REVERSE REPURCHASE AGREEMENTS      

  A 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 it 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 Stein Roe 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.                                   

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

At the time a Portfolio enters into a binding obligation to purchase  
securities on a when-issued basis or enters into a reverse repurchase agreement,
liquid assets (cash, U.S. Government securities or other "high-grade" debt      
obligations) having a value at least as great as the purchase price of the      
securities to be purchased will be segregated on its books and held by the      
custodian throughout the period of the obligation. The use of these investment  
strategies, as well as borrowing under a line of credit as described below, may 
increase net asset value fluctuation.                                           

SHORT SALES "AGAINST THE BOX"                                                   

    A 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 it owns at least an equal amount of such    
securities or securities convertible into or exchangeable for securities of the 
same issue as, and equal in amount to, the securities sold short, at no         
additional cost.                                                                

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

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

     Short sale transactions involve certain risks. If the price of the security
sold short increases between the time of the short sale and the time the        
Portfolio replaces the borrowed security, it will incur a loss and if the price 
declines during this period, it will realize a short-term capital gain. Any     
realized short-term capital gain will be decreased, and any incurred loss       
increased, by the amount of transaction costs and any premium, dividend or      
interest which the Portfolio may have to pay in connection with such short sale.
Certain provisions of the Internal Revenue Code may limit the degree to which a 
Portfolio is able to enter into short sales. There is no limitation on the      
amount of 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. No Portfolio will invest    
more than 5% of its total assets in short sales against the box.                

RULE 144A SECURITIES                                                            

 A Portfolio may purchase securities that have been privately placed but
that are eligible for purchase and sale under Rule 144A under the Securities Act
of 1933. That Rule permits certain qualified institutional buyers, such as a    
Portfolio, to trade in privately placed securities that have not been registered
for sale under the 1933 Act. Stein Roe, under the supervision of the Board of   
Trustees, will consider whether securities purchased under Rule 144A are        
illiquid and thus subject to the restriction on investing no more than 15% of   
its net assets in illiquid securities. A determination of whether a Rule 144A   
security is liquid or not is a question of fact. In making this determination,  
Stein Roe will consider the trading markets for the specific security, taking   
into account the unregistered nature of a Rule 144A security. In addition, Stein
Roe could consider the (1) frequency of trades and quotes, (2) number of dealers
and potential purchasers, (3) dealer undertakings to make a market, and (4)     
nature of the security and of marketplace trades (e.g., the time needed to      
dispose of the security, the method of soliciting offers, and the mechanics of  
transfer). The liquidity of Rule 144A securities would be monitored and if, as a
result of changed conditions, it is determined that a Rule 144A security is no  
longer liquid, the Portfolio's holdings of illiquid securities would be reviewed
to determine what, if any, steps are required to assure that it does not invest 
more than 15% of its assets in illiquid securities. Investing in Rule 144A      
securities could have the effect of increasing the amount of its assets invested
in illiquid securities if qualified institutional buyers are unwilling to       
purchase such securities. No Portfolio expects to invest as much                

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as 5% of its total assets in Rule 144A securities that have not been deemed to  
be liquid by Stein Roe.                                                         

SWAPS, CAPS, FLOORS AND COLLARS                                                 

 A Portfolio may enter into swaps and may purchase or sell related caps,
floors and collars. A Portfolio would enter into these transactions primarily to
preserve a return or spread on a particular investment or portion of its        
portfolio, to protect against currency fluctuations, as a duration management   
technique or to protect against any increase in the price of securities it      
anticipates purchasing at a later date. The Portfolios intend to use these      
techniques as hedges and not as speculative investments and will not sell       
interest rate income stream they may be obligated to pay.                       

 A swap agreement is generally individually negotiated and structured to
include exposure to a variety of different types of investments or market       
factors. Depending on its structure, a swap agreement may increase or decrease a
Portfolio's exposure to changes in the value of an index of securities in which 
it might invest, the value of a particular security or group of securities, or  
foreign currency values. Swap agreements can take many different forms and are  
known by a variety of names. A Portfolio may enter into any form of swap        
agreement if Stein Roe determines it is consistent with its investment objective
and policies.                                                                   

A swap agreement tends to shift investment exposure from one type of  
investment to another. For example, if a Portfolio agrees to exchange payments  
in dollars at a fixed rate for payments in a foreign currency the amount of     
which is determined by movements of a foreign securities index, the swap        
agreement would tend to increase its exposure to foreign stock market movements 
and foreign currencies. Depending on how it is used, a swap agreement may       
increase or decrease the overall volatility of a Portfolio's investments and its
net asset value.                                                                

The performance of a swap agreement is determined by the change in the
specific currency, market index, security, or other factors that determine the  
amounts of payments due to and from a Portfolio. If a swap agreement calls for  
payments by a Portfolio, it must be prepared to make such payments when due. If 
the counterparty's creditworthiness declines, the value of a swap agreement     
would be likely to decline, potentially resulting in a loss. No Portfolio will  
enter into any swap, cap, floor or collar transaction unless, at the time of    
entering into such transaction, the unsecured long-term debt of the             
counterparty, combined with any credit enhancements, is rated at least A by     
Standard & Poor's or Moody's Investors Service, Inc. or has an equivalent rating
from a nationally recognized statistical rating organization or is determined to
be of equivalent credit quality by Stein Roe.                                   

The purchase of a cap entitles the purchaser to receive payments on a 
notional principal amount from the party selling the cap to the extent that a   
specified index exceeds a predetermined interest rate or amount. The purchase of
a floor entitles the purchaser to receive payments on a notional principal      
amount from the party selling such floor to the extent that a specified index   
falls below a predetermined interest rate or                                    

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amount. A collar is a combination of a cap and floor that preserves a certain   
return within a predetermined range of interest rates or values.                

     At the time a Portfolio enters into swap arrangements or purchases or sells
caps, floors or collars, liquid assets having a value at least as great as the  
commitment underlying the obligations will be segregated on its books and held  
by the custodian throughout the period of the obligation.                       

LINE OF CREDIT                                                                  

    Subject to restriction (6) under Investment Restrictions in this SAI, each
Fund and Portfolio may establish and maintain a line of credit with a major bank
in order to permit borrowing on a temporary basis to meet share redemption      
requests in circumstances in which temporary borrowing may be preferable to     
liquidation of portfolio securities.                                            

INTERFUND BORROWING AND LENDING PROGRAM                                         

Pursuant to an exemptive order issued by the Securities and Exchange  
Commission, each Fund and Portfolio may lend money to and borrow money from     
other mutual funds advised by Stein Roe. They will borrow through the program   
when borrowing is necessary and appropriate and the costs are equal to or lower 
than the costs of bank loans.                                                   

PORTFOLIO TURNOVER                                                              

 Although the Portfolios do not purchase securities with a view to rapid
turnover, there are no limitations on the length of time that portfolio         
securities must be held. Portfolio turnover can occur for a number of reasons   
such as general conditions in the securities markets, more favorable investment 
opportunities in other securities, or other factors relating to the desirability
of holding or changing a portfolio investment. Because of the Portfolios'       
flexibility of investment and emphasis on growth of capital, they may have      
greater portfolio turnover than that of mutual funds that have primary          
objectives of income or maintenance of a balanced investment position. The      
future turnover rate may vary greatly from year to year. A high rate of         
portfolio turnover if it should occur, would result in increased transaction    
expenses, which must be borne by the Portfolio. High portfolio turnover may also
result in the realization of capital gains or losses and, to the extent net     
short-term capital gains are realized, any distributions resulting from such    
gains will be considered ordinary income for federal income tax purposes.       

OPTIONS ON SECURITIES AND INDEXES                                               

A 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.               

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

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

     A put or call option purchased by a Portfolio is an asset, 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.                                                                         

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

    There can be no assurance that a liquid market will exist when a 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, 
the Portfolio foregoes, during the option's life, the opportunity to profit from
increases in the market value of the security covering the call option above the
sum of the premium and the exercise price of the call.                          

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

FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS                              

A Portfolio may use interest rate futures contracts, index futures    
contracts, and foreign currency futures contracts. An interest rate, index or   
foreign currency futures contract provides for the future sale by one party and 
purchase by another party of a specified quantity of a financial instrument or  
the cash value of an index(2) at a specified price and time. A public market    
exists in futures contracts covering a number of indexes (including, but not    
limited to: the Standard & Poor's 500 Index, the Value Line Composite Index, and
the New York Stock Exchange Composite Index) as well as financial instruments   
(including, but not limited to: U.S. Treasury bonds, U.S. Treasury notes,       
Eurodollar certificates of deposit, and foreign currencies). Other index and    
financial instrument futures contracts are available and it is expected that    
additional futures contracts will be developed and traded.                      

  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                                                                       

----------------------------                                                    
(2) A futures contract on an index is an agreement pursuant to which two parties
agree to take or make delivery of an amount of cash equal to the difference     
between the value of the index at the close of the last trading day of the      
contract and the price at which the index contract was originally written.      
Although the value of a securities index is a function of the value of certain  
specified securities, no physical delivery of those securities is made.         

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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 the portfolio securities or the price of   
the securities that the Portfolio intends to purchase. Although other techniques
could be used to reduce or increase portfolio exposure to stock price, interest 
rate and currency fluctuations, it 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 accurate predictions of
changes in the level and direction of stock prices, interest rates, currency    
exchange rates and other factors. Should those predictions be incorrect, the    
return might have been better had the transaction not been attempted; however,  
in the absence of the ability to use futures contracts, Stein Roe might have    
taken portfolio actions in anticipation of the same market movements with       
similar investment results but, presumably, at greater transaction costs.       

     When a purchase or sale of a futures contract is made by a Portfolio, it is
required to deposit with its custodian (or broker, if legally permitted) a      
specified amount of cash or U.S. Government securities or other securities      
acceptable to the broker ("initial margin"). The margin required for a futures  
contract is set by the exchange on which the contract is traded and may be      
modified during the term of the contract. The initial margin is in the nature of
a performance bond or good faith deposit on the futures contract, which is      
returned to the Portfolio upon termination of the contract, assuming all        
contractual obligations have been satisfied. 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 the Portfolio pays or receives cash, called        
"variation margin," equal to the daily change in value of the futures contract. 
This process is known as "marking-to-market." Variation margin paid or received 
by a Portfolio does not represent a borrowing or loan by it 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), the current market value of the option,   
and other futures positions held by the Portfolio.                              

   Although some futures contracts call for making or taking delivery of the
underlying securities, usually these obligations are closed out prior to        
delivery by offsetting purchases or sales of matching futures contracts (same   
exchange, underlying                                                            

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security or index, and delivery month). If an offsetting purchase price is less 
than the original sale price, the Portfolio realizes a capital gain, or if it is
more, it realizes a capital loss. Conversely, if an offsetting sale price is    
more than the original purchase price, it realizes a capital gain, or if it is  
less, it realizes a capital loss. The transaction costs must also be included in
these calculations.                                                             

RISKS ASSOCIATED WITH FUTURES                                                   

  There are several risks associated with the use of futures contracts and
futures options. A purchase or sale of a futures contract may result in losses  
in excess of the amount invested in the futures contract. In trying to increase 
or reduce market exposure, there can be no guarantee that there will be a       
correlation between price movements in the futures contract and in the portfolio
exposure sought. In addition, there are significant differences between the     
securities and futures markets that could result in an imperfect correlation    
between the markets, causing a given transaction not to achieve its objectives. 
The degree of imperfection of correlation depends on circumstances such as:     
variations in speculative market demand for futures, futures options and the    
related securities, including technical influences in futures and futures       
options trading and differences between the securities market and the securities
underlying the standard contracts available for trading. For example, in the    
case of index futures contracts, the composition of the index, including the    
issuers and the weighting of each issue, may differ from the composition of the 
investment 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      
investment 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. The Portfolio
would be exposed to possible loss on the position during the interval of        
inability to close, and would continue to be required to meet margin            
requirements until the position is closed. In addition, many of the contracts   
discussed above are relatively new instruments without a significant            

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trading history. As a result, there can be no assurance that an active secondary
market will develop or continue to exist.                                       

LIMITATIONS ON OPTIONS AND FUTURES                                              

     If other options, futures contracts, or futures options of types other than
those described herein are traded in the future, a Portfolio may also use those 
investment vehicles, provided the Board of Trustees determines that their use is
consistent with the 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 it plus premiums paid by it for open futures option positions,
less the amount by which any such positions are "in-the-money,"(3) would exceed 
5% of total assets.                                                             

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

 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 the 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, 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%].                                                             

----------------------------                                                    
(3) A call option is "in-the-money" if the value of the futures contract that is
the subject of the option exceeds the exercise price. A put option is           
"in-the-money" if the exercise price exceeds the value of the futures contract  
that is the subject of the option.                                              

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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 it, 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 the Portfolio, the difference between the
cash paid at exercise and the premium received is a capital gain or loss.       

  Entry into a closing purchase transaction will result in capital gain or
loss. If an option written by 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(4) other than a "qualified
covered call option," as defined in the Internal Revenue Code, any loss on such 
option transaction, to the extent it does not exceed the unrealized gains on the
securities covering the option, may be subject to deferral until the securities 
covering the option have been sold.                                             

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, it
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                                             

----------------------------                                                    
(4) An equity option is defined to mean any option to buy or sell stock, and any
other option the value of which is determined by reference to an index of stocks
of the type that is ineligible to be traded on a commodity futures exchange     
(e.g., an option contract on a sub-index based on the price of nine hotel-casino
stocks). The definition of equity option excludes options on broad-based stock  
indexes (such as the Standard & Poor's 500 index).                              

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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 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 its portfolio were deemed to "mimic"  
the performance of the index underlying such contract, the option or futures    
contract position and its 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 Fund distributes to shareholders annually any net capital gains that
have been recognized for federal income tax purposes (including year-end        
mark-to-market gains) on options and futures transactions. Such distributions   
are combined with distributions of capital gains realized on the other          
investments, and shareholders are advised of the nature of the payments.        

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

 INVESTMENT RESTRICTIONS

Each Fund and Portfolio operates under the following investment       
restrictions. No Fund or Portfolio may:                                         

  (1)  with respect to 75% of its total assets, invest more than 5% of its
total assets, taken at market value at the time of a particular purchase, in the
securities of a single                                                          

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issuer, except for securities issued or guaranteed by the U.S. Government or any
of its agencies or instrumentalities or repurchase agreements for such          
securities, and [Funds only] except that all or substantially all of the assets 
of the Fund may be invested in another registered investment company having the 
same investment objective and substantially similar investment policies as the  
Fund;                                                                           

    (2)  acquire more than 10%, taken at the time of a particular purchase, of
the outstanding voting securities of any one issuer, [Funds only] except that   
all or substantially all of the assets of the Fund may be invested in another   
registered investment company having the same investment objective and          
substantially similar investment policies as the Fund;                          

(3)  act as an underwriter of securities, except insofar as it may be 
deemed an underwriter for purposes of the Securities Act of 1933 on disposition 
of securities acquired subject to legal or contractual restrictions on resale,  
[Funds only] except that all or substantially all of the assets of the Fund may 
be invested in another registered investment company having the same investment 
objective and substantially similar investment policies as the Fund;            

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

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

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

  (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, except that this restriction  
does not apply to securities issued or guaranteed by the U.S. Government or its 
agencies or instrumentalities, and [Funds only] except that all or substantially
all of the assets of the Fund may be invested in another registered investment  
company having the same investment objective and substantially similar          
investment policies as the Fund; or                                             

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

The above restrictions (other than bracketed portions thereof) are    
fundamental policies and may not be changed without the approval of a "majority 
of the outstanding voting securities" as defined above. The Funds and Portfolios
are also subject to the following non-fundamental restrictions and policies,    
which may be changed by the Board of Trustees. None of the following            
restrictions shall prevent a Fund from investing all or substantially all of its
assets in another investment company having the same investment objective and   
substantially the same investment policies. A Fund or Portfolio may not:        

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

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

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

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

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

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

   (g)  purchase a put or call option if the aggregate premiums paid for all
put and call options exceed 20% of its net assets (less the amount by which any 
such positions are in-the-money), excluding put and call options purchased as   
closing transactions;                                                           

     (h)  purchase securities on margin (except for use of short-term credits as
are necessary for the clearance of transactions), or sell securities short      
unless (i) it owns or                                                           

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

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

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

ADDITIONAL INVESTMENT CONSIDERATIONS

    Stein Roe seeks to provide superior long-term investment results through a
disciplined, research-intensive approach to investment selection and prudent    
risk management. In working to take sensible risks and make intelligent         
investments, it has been guided by three primary objectives which it believes   
are the foundation of a successful investment program. These objectives are     
preservation of capital, limited volatility through managed risk, and consistent
above-average returns, as appropriate for the particular client or managed      
account. Stein Roe's focus on a long-term investment style can result in lower  
turnover rates, often leading to increased tax efficiencies for shareholders    
subject to income tax. Because every investor's needs are different, Stein Roe  
mutual funds are designed to accommodate different investment objectives, risk  
tolerance levels, and time horizons. In selecting a mutual fund, investors      
should ask the following questions:                                             

What are my investment goals?                                                   
It is important to a choose a fund that has investment objectives compatible    
with your investment goals.                                                     

What is my investment time frame?                                               
If you have a short investment time frame (e.g., less than three years), a      
mutual fund that seeks to provide a stable share price, such as a money market  
fund, or one that seeks capital preservation as one of its objectives may be    
appropriate. If you have a longer investment time frame, you may seek to        
maximize your investment returns by investing in a mutual fund that offers      
greater yield or appreciation potential in exchange for greater investment risk.

What is my tolerance for risk?                                                  
All investments, including those in mutual funds, have risks which will vary    
depending on investment objective and security type. However, mutual funds seek 
to reduce risk through professional investment management and portfolio         
diversification.                                                                

  In general, equity mutual funds emphasize long-term capital appreciation
and tend to have more volatile net asset values than bond or money market mutual
funds.                                                                          

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Although there is no guarantee that they will be able to maintain a stable net  
asset value of $1.00 per share, money market funds emphasize safety of principal
and liquidity, but tend to offer lower income potential than bond funds. Bond   
funds tend to offer higher income potential than money market funds but tend to 
have greater risk of principal and yield volatility.                            

MANAGEMENT

  The Board of Trustees of the Trust has overall management responsibility
for the Trust and the Fund. The following table sets forth certain information  
with respect to the trustees and officers of the Trust:                         

                                                        [Enlarge/Download Table]

                            POSITION(S) HELD               PRINCIPAL OCCUPATION(S)                        
    NAME, AGE; ADDRESS       WITH THE TRUST                DURING PAST FIVE YEARS                         
    ------------------       --------------                ----------------------                         
                                                                                                          
William D. Andrews, 53;     Executive Vice-   Executive Vice president of Stein Roe & Farnham             
One South Wacker Drive,     President         Incorporated ("Stein Roe")                                  
Chicago, IL 60606 (4)                                                                                     

Christine Balzano, 35;      Vice-President    Senior Vice President of Liberty Funds Services, Inc.;      
245 Summer Street, Boston,                    formerly Vice President and Assistant Vice President        
MA 02210                                                                                                  

Kevin M. Carome, 44;        Executive Vice-   Chief Legal Officer, Liberty Financial Companies, Inc.      
One Financial Center,       President         (Liberty Financial) since August, 2000 (formerly            
Boston, MA 02111 (4)                          Associate General Counsel and Vice President through        

                                              January, 1999); Executive Vice President of the Stein Roe   
                                              Funds since May 1999 (formerly Vice President and           
                                              Secretary); Executive Vice President of Stein Roe since     
                                              January 2001 (formerly General Counsel and Secretary from   
                                              1998 until January 2001); Executive Vice President of       
                                              Liberty Funds Group-Boston and Liberty All-Star Funds since 
                                              October, 2000; Executive Vice President, Legal since January
                                              1999 of Liberty Funds Group LLC (LFG)                       

Denise E. Chasmer, 32       Vice President    Employee of Liberty Funds Services, Inc. and Assistant      
12100 East Iliffe Avenue                      Vice President of Stein Roe since November 1999; manager    
Aurora, CO 80014 (4)                          with Scudder Kemper Investments from October 1995 to        
                                              November 1999; assistant manager with Scudder Kemper        
                                              prior thereto                                               

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                                                        [Enlarge/Download Table]
                                                                                                             
J. Kevin Connaughton, 36    Controller       Controller of the Funds since December 2000 (formerly           
One Financial Center                         Controller of the Funds from May 2000 to October, 2000);        
Boston, MA 02111 (4)                         Treasurer and Chief Financial Officer of the Liberty            
                                             Funds and of the Liberty All-Star Funds since December, 2000    
                                             (formerly Controller and Chief Accounting Officer of the        
                                             Liberty Funds from February, 1998 to October, 2000); Vice       
                                             President of Colonial Management Associates, Inc. (CMA)         
                                             since February, 1998; Senior Tax Manager, Coopers & Lybrand,    
                                             LLP from April, 1996 to January, 1998; Vice President, 440      
                                             Financial Group/First Data Investor Services Group from         
                                             March, 1994 to April, 1996                                      

William M. Garrison, 34;    Vice-President   Vice President of Stein Roe since February 1998; associate      
One South Wacker Drive,                      portfolio manager for Stein Roe since August, 1994              
Chicago, IL 60606 (4)                                                                                        

Stephen E. Gibson, 47; One  President        Director of Stein Roe since September 1, 2000, President        
Financial Center                             and Vice Chairman of Stein Roe since January, 2000 (formerly    
Boston, MA 02111 (4)                         Assistant Chairman from August, 1998 to January, 2000);         
                                             President of the Stein Roe Funds since November 1999;           
                                             President of the Liberty Funds since June, 1998, Chairman of    
                                             the Board of the Liberty Funds since July, 1998, Chief          
                                             Executive Officer and President since December, 1996 and        
                                             Director, since July, 1996 of CMA (formerly Executive Vice      
                                             President from July, 1996 to December, 1996); Director,         
                                             Chief Executive Officer and President of LFG since December,    
                                             1998 (formerly Director, Chief Executive Officer and            
                                             President of The Colonial Group, Inc. (TCG) from December,      
                                             1996 to December, 1998); Managing Director of Marketing of      
                                             Putnam Investments, June, 1992 to July, 1996                    

Erik P. Gustafson, 36;      Vice-President   Senior portfolio manager of Stein Roe; Senior Vice              
One South Wacker Drive,                      President of Stein Roe since April, 1996; Vice President        
Chicago, IL  60606  (4)                      of Stein Roe prior thereto                                      

Douglas A. Hacker, 44;      Trustee          Senior Vice President and Chief Financial Officer of            
P.O. Box 66100                               UAL, Inc. (airline)                                             
Chicago, IL 60666 (3) (4)                                                                                    

Loren A. Hansen, 52;        Executive Vice-  Chief Investment Officer/Equity of CMA since 1997; Executive    
One South Wacker Drive,     President        Vice President of Stein Roe since December, 1995; Vice President
Chicago, IL  60606  (4)                      of The Northern Trust (bank) prior thereto                      

Harvey B. Hirschhorn, 50;   Vice-President   Executive Vice President, senior portfolio manager, and         
One South Wacker Drive,                      chief economist and investment strategist of Stein Roe;         
Chicago, IL 60606 (4)                        director of research of Stein Roe, 1991 to 1995                 

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                                                        [Enlarge/Download Table]
                                                                                                       
Janet Langford Kelly, 42;   Trustee         Executive Vice President-corporate development, General    
One Kellogg Square, Battle                  Counsel and Secretary of Kellogg Company (food, beverage   
Creek, MI 49016 (3)(4)                      and tobacco manufacturing) since September 1999; Senior    
                                            Vice President, Secretary and General Counsel of Sara Lee  
                                            Corporation (branded, packaged, consumer-products          
                                            manufacturer) from 1995 to August 1999; partner of Sidley &
                                            Austin (law firm) prior thereto                            

Richard W. Lowry, 64        Trustee         Private Investor since August, 1987 (formerly Chairman     
10701 Charleston Drive                      and Chief Executive Officer, U.S. Plywood Corporation      
Vero Beach, FL  32963 (4)                   (building products manufacturer)                           

Salvatore Macera, 69;       Trustee         Private Investor since 1981 (formerly Executive Vice       
26 Little Neck Lane                         President and Director of Itek Corporation (electronics)   
New Seabury, MA  02349 (4)                  from 1975 to 1981).                                        

William E. Mayer, 60;       Trustee         Managing Partner, Park Avenue Equity Partners (venture     
500 Park Avenue, 5th Floor                  capital) (formerly Founding Partner, Development Capital   
New York, NY 10022                          LLC from 1996 to 1998; Dean and Professor, College of      
(1) (4)                                     Business and Management, University of Maryland from       
                                            October, 1992 to November, 1996);Director, Johns Manville  
                                            (building products manufacturer); Director, Lee Enterprises
                                            (print and on-line media); Director, WR Hambrecht & Co.    
                                            (financial services provider); Director, Systech Retail    
                                            Systems (retail industry technology provider)              

Mary D. McKenzie, 46;       Vice President  President of Liberty Funds Services, Inc.                  
One Financial Center,                                                                                  
Boston, MA 02111 (4)                                                                                   

Charles R. Nelson, 58;      Trustee         Van Voorhis Professor of Political Economy, Department of  
Department of Economics,                    Economics of the University of Washington; consultant on   
University of Washington;                   economic and statistical matters                           
Seattle, WA 98195 (3)(4)                                                                               

John J. Neuhauser, 57;      Trustee         Academic Vice President and Dean of Faculties since        
84 College Road                             August, 1999, Boston College (formerly Dean, Boston        
Chestnut Hill, MA  02467-                   College School of Management from September, 1977 to       
3838 (4)                                    September, 1999).                                          

Nicholas S. Norton, 41;     Vice President  Senior vice president of Liberty Funds Services, Inc.      
12100 East Iliff Avenue,                    since Aug. 1999; vice president of Scudder Kemper, Inc.    
Aurora, CO 80014 (4)                        from May 1994 to Aug. 1999                                 

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                                                        [Enlarge/Download Table]
                                                                                                                         
Joseph R. Palombo, 47             Trustee and Chairman  Chief Operations Officer of Mutual Funds, Liberty                
One Financial Center,             of the Board          Financial since August, 2000; Executive Vice President           
Boston, MA 02111 (1) (4)                                and Director of CMA since April, 1999; Executive Vice            
                                                        President and Chief Administrative Officer of LFG since          
                                                        April, 1999; Director of Stein Roe since September 1, 2000;      
                                                        Chief Operating Officer, Putnam Mutual Funds from 1994 to        
                                                        1998                                                             

Thomas Stitzel, 64;               Trustee               Business Consultant (formerly Professor of Finance from          
2208 Tawny Woods Place                                  1975 to 1999 and Dean from 1977 to 1991, College of              
Boise, ID  83706 (4)                                    Business, Boise State University); Chartered Financial           
                                                        Analyst                                                          

Thomas C. Theobald, 63;           Trustee               Managing Director, William Blair Capital Partners                
Suite 1300, 222 West Adams                              (private equity investing) since 1994; (formerly Chief           
Street, Chicago, IL 60606 (3)(4)                        Executive Officer and Chairman of the Board of                   
                                                        Directors, Continental Bank Corporation); Director of Xerox      
                                                        Corporation (business products and services), Anixter            
                                                        International (network support equipment distributor), Jones     
                                                        Lang LaSalle (real estate management services) and MONY          
                                                        Group (life insurance)                                           

Anne-Lee Verville, 55;            Trustee               Consultant since 1997 (formerly General Manager, Global          
359 Stickney Hill Road                                  Education Industry from 1994 to 1997, and President, Applications
Hopkinton, NH 03229 (4)                                 Solutions Division from 1991 to 1994, IBM Corporation (global    
                                                        education and global applications)).                             

(1)  Trustee who is an "interested person" of the Trust and of Stein Roe, as    
defined in the Investment Company Act of 1940.                        
(2)  Member of the Executive Committee of the Board of Trustees, which is       
authorized to exercise all powers of the Board with certain statutory 
exceptions.                                                           
(3)  Member of the Audit Committee of the Board, which makes recommendations to 
     the Board regarding the selection of auditors and confers with the auditors
regarding the scope and results of the audit.                         
(4)  This person holds the corresponding officer or trustee position with SR&F  
Base Trust.                                                           

    Certain of the trustees and officers of the Trust are trustees or officers
of other investment companies managed by Stein Roe; and some of the officers are
also officers of Liberty Funds Distributor, Inc., the Fund's distributor.       

Officers and trustees affiliated with Stein Roe serve without any     
compensation from the Trust. In compensation for their services to the Trust,   
trustees who are not "interested persons" of the Trust or Stein Roe are paid an 
annual retainer plus an attendance fee for each meeting of the Board or standing
committee thereof attended. The Trust has no retirement or pension plan. The    
following table sets forth compensation paid during the fiscal year ended       
September 30, 2000 and calendar year ended December 31, 2000 to each of the     
trustees:                                                                       

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                                                        [Enlarge/Download Table]

                           Aggregate           Aggregate                                
                       Compensation From   Compensation From    Total Compensation From 
                       Growth Stock Fund     Young Investor     the Fund Complex Paid to
                      Fund for the Fiscal  Fund for the Fiscal    the Trustees for the  
                          Year Ended           Year Ended          Calendar Year Ended  
Trustee                September 30, 2000  September 30, 2000      December 31, 2000*   
-------                ------------------  ------------------      ------------------   
                                                                                        
Lindsay Cook **             $  -0-             $   -0-                  $    -0-        
John A. Bacon Jr.**          1,300               1,300                    98,100        
William W. Boyd **           1,400               1,400                   102,600        
Douglas A. Hacker            1,300               1,300                    98,100        
Janet Langford Kelly         1,300               1,300                    93,600        
Charles R. Nelson            1,300               1,300                    98,100        
Thomas C. Theobald           1,300               1,300                    98,100        

*    At September 30, 2000, the Stein Roe Fund Complex consisted of 12
          series of the Trust, one series of Liberty-Stein Roe Funds Trust, four
     series of Liberty-Stein Roe Funds Municipal Trust, four series of
          Liberty-Stein Roe Funds Income Trust, five series of Liberty-Stein Roe
        Advisor Trust, five series of SteinRoe Variable Investment Trust, 12
          portfolios of SR&F Base Trust, Liberty-Stein Roe Advisor Floating Rate
        Fund, Liberty-Stein Roe Institutional Floating Rate Income Fund, and
Stein Roe Floating Rate Limited Liability Company.          
**   Retired as of December 27, 2000.                                 

On December 27, 2000, the following Trustees were elected. This table sets forth
the compensation paid to each Trustee in their capacities as Trustees of the    
Liberty Funds Complex:                                                          

                                                                [Download Table]

                                    Total Compensation From
                                     the Fund Complex Paid 
                                    to the Trustees for the
                                      Calendar Year Ended  
Trustee                               December 31, 2000*   
-------                               ------------------   
                                                           
Richard L. Lowry                          $ 99,000         
Salvatore Macera                          $ 98,000         
William E. Mayer                          $100,000         
John J. Neuhauser                         $101,200         
Thomas E. Stitzel                         $ 97,000         
Anne-Lee Verville                         $ 94,667**       

*    At December 31, 2000, the complex consisted of 50 open-end and 9 
      closed-end management investment company portfolios in the Liberty
 Funds Group-Boston (Liberty Funds) and 17 open-end management
investment portfolios in the Liberty Variable Trust.        
  **   Total compensation of $94,667 is payable in later years as deferred
compensation.                                               

FINANCIAL STATEMENTS

    Please refer to the September 30, 2000 Financial Statements (statements of
assets and liabilities and schedules of investments as of September 30, 2000 and
the statements of operations, changes in net assets, financial highlights, and  
notes thereto) and the report of independent accountants contained in the       
September 30, 2000 Annual Reports. The Financial Statements and the report of   
independent accountants (but no other material from the Annual Reports) are     
incorporated herein by reference. An Annual Report may be obtained at no charge 
by telephoning 800-322-1130.                                                    

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PRINCIPAL SHAREHOLDERS

     As of December 31, 2000, trustees and officers of the Trust owned less than
1% of the outstanding shares of Funds.                                          

As of December 31, 2000, the only persons known by the Trust to own of
record or "beneficially" 5% or more of outstanding shares of any class of a Fund
within the definition of that term as contained in Rule 13d-3 under the         
Securities Exchange Act of 1934 were as follows:                                

                                                        [Enlarge/Download Table]

                                                 FUND/                 APPROXIMATE % OF OUTSTANDING
          NAME AND ADDRESS                       CLASS                          SHARES HELD        
          ----------------                       -----                 ----------------------------
                                                                                                   
Merrill Lynch Pierce Fenner & Smith for  Growth Stock Fund,                                        
    the Sole Benefit of its Customers    Class A                                      6%           
Attn: Fund Administration                Class C                                     10%           
4800 Deer Lake Drive E. 2nd floor                                                                  
Jacksonville, FL  32246                                                                            

Liberty Financial Companies, Inc.        Young Investor Fund, Class K                29%           
600 Atlantic Avenue                                                                                
Federal Reserve Plaza                                                                              
Boston, MA 02210                                                                                   

Smith Barney Corporate Trust Co.         Growth Stock Fund, Class K                  64%           
Smith Barney 401(k) Advisor Group Trust                                                            
Two Tower Center, P.O. Box 1063                                                                    
East Brunswick, NJ 08816                                                                           

WFB NA IRA Cust                          Young Investor Fund, Class K                 6%           
Margaret Gail Goodfellow                                                                           
420 Montgomery Street                                                                              
San Francisco, CA  94104-1205                                                                      

A. G. Edwards & Sons, Inc.               Advisor Young Investor Fund,                              
C/F Edward T. Crossen IRA Account        Class K                                     12%           
One North Jefferson                                                                                
St. Louis, MO  63103                                                                               

     As of December 31, 2000, trustees and officers of the Trust owned less than
1% of the outstanding shares of any class of a Fund.                            

INVESTMENT ADVISORY AND OTHER SERVICES

     Stein Roe & Farnham Incorporated provides investment management services to
the Portfolios and administrative services to the Funds and the Portfolios.     
Stein Roe is a wholly owned subsidiary of Liberty Funds Group LLC, which is a   
wholly owned subsidiary of Liberty Financial Services, Inc., which is a wholly  
owned subsidiary of Liberty Financial Companies, Inc. (Liberty Financial), which
is a majority owned subsidiary of Liberty Corporate Holdings, Inc., which is a  
wholly owned subsidiary of LFC Holdings, Inc., which                            

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is a wholly owned subsidiary of Liberty Mutual Insurance Company. Liberty Mutual
Insurance Company is a mutual insurance company, principally in the             
property/casualty insurance field, organized under the laws of Massachusetts in 
1912. As of September 30, 2000, Stein Roe managed over $24.2 billion in assets. 

  On November 1, 2000, Liberty Financial announced that it had retained CS
First Boston to help it explore strategic alternatives, including the possible  
sale of Liberty Financial.                                                      

  The directors of Stein Roe are C. Allen Merritt, Jr., J. Andrew Hilbert,
Stephen E. Gibson and Joseph R. Palombo. Mr. Merritt is Chief Operating Officer 
of Liberty Financial. Mr. Hilbert is Senior Vice President and Chief Financial  
Officer of Liberty Financial. The positions held by Messrs. Gibson and Palombo  
are listed above. The business address of Messrs. Merritt and Hilbert is Federal
Reserve Plaza, Boston, MA 02210. The business address of Messrs. Gibson and     
Palombo is One Financial Center, Boston, MA 02111.                              

In return for its services, Stein Roe is entitled to receive a monthly
administrative fee from each Fund and a monthly management fee from each        
Portfolio. The table below shows the annual rates (in millions) of such fees as 
a percentage of average net assets, gross fees paid for each of the last three  
fiscal years or periods (in thousands), and any expense reimbursements by Stein 
Roe or the Distributor (see Distributor):                                       

                                                        [Enlarge/Download Table]

---------------------------------------------------------------------------------------------------------------------
                                                                               YEAR ENDED    YEAR ENDED    YEAR ENDED
    FUND/PORTFOLIO             TYPE                  CURRENT RATES               9/30/00       9/30/99       9/30/98 
---------------------------------------------------------------------------------------------------------------------
                                                                                                                     
Growth Stock Fund       Administrative      .15% up to $500, .125% next                                              
                                            $500, .10% thereafter                 $1,146          $394          $107 
                        ---------------------------------------------------------------------------------------------
    Class A             Reimbursement       Expenses exceeding 1.40%               -----            32            66 
                        ---------------------------------------------------------------------------------------------
    Class B             Reimbursement       Expenses exceeding 2.10%                ----            --            74 
                        ---------------------------------------------------------------------------------------------
    Class C             Reimbursement       Expenses exceeding 2.10%               -----            --            12 
                        ---------------------------------------------------------------------------------------------
    Class K             Reimbursement       Expenses exceeding 1.35%               -----            --             9 
---------------------------------------------------------------------------------------------------------------------
Growth Stock Portfolio  Management          .60% up to $500, .55% next                                               
                                            $500, .50% thereafter                 10,349         6,076         4,252 
---------------------------------------------------------------------------------------------------------------------
Young Investor Fund     Administrative      .20% up to $500, .150% next                                              
                                            $500, .125% thereafter                   284           142            26 
                        ---------------------------------------------------------------------------------------------
    Class A             Reimbursement       Expenses exceeding 1.65%               (171)           105            41 
                        ---------------------------------------------------------------------------------------------
    Class K             Reimbursement       Expenses exceeding 1.61%                ----             4            42 
---------------------------------------------------------------------------------------------------------------------
Growth Investor         Management          .60% up to $500, .55% next                                               
    Portfolio                               $500, .50% thereafter                  7,245         5,415         3,758 
---------------------------------------------------------------------------------------------------------------------

  Stein Roe provides office space and executive and other personnel to the
Funds and bears any sales or promotional expenses. Each Fund pays all expenses  
other than those paid by Stein Roe, including but not limited to printing and   
postage charges, securities registration and custodian fees, and expenses       
incidental to its organization.                                                 

   The administrative agreement provides that Stein Roe shall reimburse each
Fund to the extent that its total annual expenses (including fees paid to Stein 
Roe, but excluding taxes, interest, commissions and other normal charges        
incident to the purchase and sale of portfolio securities, and expenses of      
litigation to the extent permitted under applicable                             

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state law) exceed the applicable limits prescribed by any state in which its    
shares are being offered for sale to the public; provided, however, Stein Roe is
not required to reimburse a Fund an amount in excess of fees paid under that    
agreement for such year. In addition, in the interest of further limiting       
expenses of a Fund, Stein Roe may waive its fees and/or absorb certain expenses 
for a Fund. Any such reimbursement will enhance the yield of such Fund.         

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

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

BOOKKEEPING AND ACCOUNTING AGREEMENT                                            

   Pursuant to a separate agreement with the Trust, Stein Roe receives a fee
for performing certain bookkeeping and accounting services. For services        
provided to the Trust, Stein Roe receives an annual fee of $25,000 per Fund plus
.0025 of 1% of average net assets over $50 million. During the fiscal years   
ended September 30, 1998,1999 and 2000, Stein Roe received (in thousands), $224,
$106, and $197, respectively, from the Trust for services provided under this   
agreement.                                                                      

 CUSTODIAN

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

     Portfolio securities purchased in the U.S. are maintained in the custody of
the Bank or of other domestic banks or depositories. Portfolio securities       
purchased outside of the U.S. are maintained in the custody of foreign banks and
trust companies that are members of the Bank's Global Custody Network and       
foreign depositories ("foreign sub-custodians"). Each of the domestic and       
foreign custodial institutions holding portfolio                                

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securities has been approved by the Board of Trustees in accordance with        
regulations under the Investment Company Act of 1940.                           

    The Board of Trustees of each Trust reviews, at least annually, whether it
is in the best interests of the Portfolios, the Funds, and their shareholders to
maintain assets in each of the countries in which it invests with particular    
foreign sub-custodians in such countries, pursuant to contracts between such    
respective foreign sub-custodians and the Bank. The review includes an          
assessment of the risks of holding assets in any such country (including risks  
of expropriation or imposition of exchange controls), the operational capability
and reliability of each such foreign sub-custodian, and the impact of local laws
on each such custody arrangement. Each Board of Trustees is aided in its review 
by the Bank, which has assembled the network of foreign sub-custodians, as well 
as by Stein Roe and counsel. However, with respect to foreign sub-custodians,   
there can be no assurance that a Fund and the value of its shares will not be   
adversely affected by acts of foreign governments, financial or operational     
difficulties of the foreign sub-custodians, difficulties and costs of obtaining 
jurisdiction over or enforcing judgments against the foreign sub-custodians, or 
application of foreign law to foreign sub-custodial arrangements. Accordingly,  
an investor should recognize that the non-investment risks involved in holding  
assets abroad are greater than those associated with investing in the United    
States.                                                                         

The Funds and Portfolios may invest in obligations of the Bank and may
purchase or sell securities from or to the Bank.                                

 INDEPENDENT ACCOUNTANTS

The independent accountants for the Funds and the Portfolios are      
PricewaterhouseCoopers LLP, 160 Federal Street, Boston, MA 02110. The           
independent accountants audit and report on the annual financial statements and 
provide tax return preparation services and assistance and consultation in      
connection with the review of various SEC filings.                              

 DISTRIBUTOR

     Shares of the Funds are distributed by Liberty Funds Distributor, Inc. (the
"Distributor"), One Financial Center, Boston, MA 02111, an indirect subsidiary  
of Liberty Financial, under a Distribution Agreement. The Distribution Agreement
continues in effect from year to year, provided such continuance is approved    
annually (i) by a majority of the trustees or by a majority of the outstanding  
voting securities of the Trust, and (ii) by a majority of the trustees who are  
not parties to the Agreement or interested persons of any such party            
("independent trustees"). The Distributor has no obligation, as underwriter, to 
buy Fund shares, and purchases shares only upon receipt of orders from          
authorized financial service firms or investors. The Trust has agreed to pay all
expenses in connection with registration of its shares with the Securities and  
Exchange Commission and auditing and filing fees in connection with registration
of its shares                                                                   

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under the various state blue sky laws and assumes the cost of preparation of    
prospectuses and other expenses.                                                

At Liberty Funds, we believe in giving children the best life has to offer.     
That's why LFD is supporting the Make-A-Wish Foundation of America with a $1    
donation for every new account opened in any of its Young Investor Funds. To    
learn more about the Make-A-Wish Foundation of America, please call             
1-800-722-9474 or visit its Web site at www.wish.org.                           

12b-1 PLANS, CONTINGENT DEFERRED SALES CHARGES, AND CONVERSION OF SHARES        

    The trustees of the Trust have adopted a plan pursuant to Rule 12b-1 under
the Investment Company Act of 1940 (the "Plan"). The Plan provides that, as     
compensation for personal service and/or the maintenance of shareholder         
accounts, the Distributor receives a service fee at an annual rate not to exceed
0.25% of net assets attributed to each class of shares other than Class K       
shares. The Plan also provides that as compensation for the promotion and       
distribution of shares of a Fund including its expenses related to sale and     
promotion of Fund shares, the Distributor receives from the Fund a fee at an    
annual rate not exceeding 0.10% of the average net assets attributed to Class A 
shares, and 0.75% of the average net assets attributed to each of its Class B   
and Class C shares. The Plan further provides that, as compensation for services
and/or distribution, the Distributor receives a fee at an annual rate not to    
exceed 0.25% of the average net assets attributable to Class K shares. At this  
time, the Distributor has voluntarily agreed to limit the Class A distribution  
fee to 0.05% annually. The Distributor may terminate this voluntary limitation  
without shareholder approval. Class B shares automatically convert to Class A   
shares approximately eight years after the Class B shares are purchased. Class C
and Class K shares do not convert. The Distributor generally pays this amount to
institutions that distribute Fund shares and provide services to the Funds and  
their shareholders. Those institutions may use the payments for, among other    
purposes, compensating employees engaged in sales and/or shareholder servicing. 
The amount of fees paid by a Fund during any year may be more or less than the  
cost of distribution or other services provided to the Fund. NASD rules limit   
the amount of annual distribution fees that may be paid by a mutual fund and    
impose a ceiling on the cumulative sales charges paid. The Trust's Plan complies
with those rules.                                                               

 The trustees believe that the Plan could be a significant factor in the
growth and retention of Fund assets resulting in a more advantageous expense    
ratio and increased investment flexibility which could benefit each class of    
shareholders. The Plan will continue in effect from year to year so long as     
continuance is specifically approved at least annually by a vote of the         
trustees, including the independent trustees. The Plan may not be amended to    
increase the fee materially without approval by a vote of a majority of the     
outstanding voting securities of the relevant class of shares and all material  
amendments of the Plan must be approved by the trustees in the manner provided  
in the foregoing sentence. The Plan may be terminated at any time by a vote of a
majority of the independent trustees or by a vote of a majority of the          
outstanding voting securities of the relevant Class of shares.                  

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    Young Investor Fund offers two classes of shares (Class A and Class K) and
Growth Stock Fund offers four classes of shares (Class A, Class B, Class C, and 
Class K). The Funds may in the future offer other classes of shares. Class K    
shares are offered at net asset value, subject to a Rule 12b-1 fee. Class A     
shares of Young Investor Fund are offered at net asset value and a subject to a 
Rule 12b-1 fee and a contingent deferred sales charge on redemptions made within
three years of purchase. Class A shares of Growth Stock Fund are offered at net 
asset value plus a front-end sales charge to be imposed at the time of purchase 
and are subject to a Rule 12b-1 fee. Class B shares are offered at net asset    
value subject to a Rule 12b-1 fee and a declining contingent deferred sales     
charge on redemptions made within six years of purchase. Class C shares are     
offered at net asset value, subject to a Rule 12b-1 fee and a contingent        
deferred sales charge on redemptions made within one year of purchase. The      
contingent deferred sales charges are described in the Prospectus.              

    No contingent deferred sales charge will be imposed on shares derived from
reinvestment of distributions or amounts representing capital appreciation. In  
determining the applicability and rate of any contingent deferred sales charge, 
it will be assumed that a redemption is made first of shares representing       
capital appreciation, next of shares representing reinvestment of distributions,
and finally of other shares held by the shareholder for the longest time.       

Eight years after the end of the month in which a Class B share is    
purchased, such shares and a pro-rated portion of any shares issued on the      
reinvestment of distributions will be automatically invested into Class A shares
of that Fund having an equal value, which are not subject to the distribution or
service fee.                                                                    

12b-1 FEES paid for the fiscal year ended September 30, 2000 (in thousands)     

                                                                [Download Table]

            GROWTH STOCK FUND                       YOUNG INVESTOR FUND        
            -----------------                       -------------------        
                                                                               
Distribution Fees-Class A        $153  Distribution Fees-Class A           $148
Service Fees-Class A              387  Service Fees-Class A                 354
Distribution Fees-Class B       4,633  Distribution Fees-Class K              1
Service Fees-Class B            1,568                                          
Distribution Fees-Class C         351                                          
Service Fees-Class C              116                                          
Distribution Fees-Class K           8                                          

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SALES CHARGES (dollars in thousands) paid for the fiscal year ended September   
30, 2000:                                                                       

                                                                [Download Table]

                                                      GROWTH STOCK  YOUNG INVESTOR
                                                           FUND          FUND     
                                                      ------------  --------------
                                                                                  
Aggregate initial sales charges on Fund shares sales     $3,123        $1,678     
Initial sales charges retained by the Distributor           267             1     
Aggregate CDSCs on Fund redemptions retained by the                               
Distributor                                               1,894            79     

SALES-RELATED EXPENSES (dollars in thousands) of the Distributor relating to the
Funds for the fiscal year ended September 30, 2000:                             

                                                        [Enlarge/Download Table]

                                                                                                 YOUNG    
                                                                 GROWTH STOCK FUND           INVESTOR FUND
                                                        CLASS A       CLASS B       CLASS C     CLASS A   
                                                        -------       -------       -------     -------   
                                                                                                          
Fees to FSFs                                              $452        $32,125         $  0     $1,298     
Cost of sales material relating to the Fund (including                                                    
   printing and mailing expenses)                          302          1,803          163        329     
Allocated travel, entertainment, and other promotional                                                    
   expenses (including advertising)                        309          1,845          169        237     

TRANSFER AGENT AND SHAREHOLDER SERVICING

     Liberty Funds Services, Inc. (the "Transfer Agent"), P.O. Box 1722, Boston,
MA 02105, an indirect subsidiary of Liberty Financial, is the agent of the Trust
for the transfer of shares, disbursement of dividends, and maintenance of       
shareholder accounting records. For performing these services, the Transfer     
Agent receives from each Fund a fee based on the following annual rates:        

                                                        [Enlarge/Download Table]

                                          CLASS K    CLASS A      CLASS B      CLASS C  
                                                                                        
Account maintenance and trade processing   0.05%   Bundled Fee  Bundled Fee  Bundled Fee
Client services                            0.25%                                        
Total                                      0.30%      0.236%      0.236%        0.236%  

The Trust believes the charges by the Transfer Agent to the Funds are comparable
to those of other companies performing similar services.                        

Some financial services firms ("FSF") or other intermediaries having  
special selling arrangements with the Distributor, including certain bank trust 
departments, wrap fee programs and retirement plan service providers            
("Intermediaries") that maintain nominee accounts with the Funds for their      
clients who are Fund shareholders, may be paid a fee from the Transfer Agent for
shareholder servicing and accounting services they provide with respect to the  
underlying Fund shares.                                                         

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 PURCHASES AND REDEMPTIONS

     Purchases and redemptions are discussed in the Prospectus under the heading
Your Account, and that information is incorporated herein by reference. It is   
the responsibility of any investment dealers, banks, or other institutions,     
including retirement plan service providers, through whom you purchase or redeem
shares to establish procedures insuring the prompt transmission to the Trust of 
any order.                                                                      

     The Funds will accept unconditional orders for shares to be executed at the
public offering price based on the net asset value per share next determined    
after the order is received in good order. The public offering price is the net 
asset value plus the applicable sales charge, if any. In the case of orders for 
purchase of shares placed through FSFs or Intermediaries, the public offering   
price will be determined on the day the order is placed in good order, but only 
if the FSF or Intermediary receives the order prior to the time at which shares 
are valued and transmits it to the Fund before that day's transactions are      
processed. If the FSF or Intermediary fails to transmit before the Fund         
processes that day's transactions, the customer's entitlement to that day's     
closing price must be settled between the customer and the FSF or Intermediary. 
If the FSF or Intermediary receives the order after the time at which the Fund  
values its shares, the price will be based on the net asset value determined as 
of the close of the NYSE on the next day it is open. If funds for the purchase  
of shares are sent directly to the Transfer Agent, they will be invested at the 
public offering price next determined after receipt in good order. Payment for  
shares of the Fund must be in U.S. dollars; if made by check, the check must be 
drawn on a U.S. bank.                                                           

   Each Fund receives the entire net asset value of shares sold. For Class A
shares of Growth Stock Fund, which are subject to an initial sales charge, the  
Distributor's commission is the sales charge shown in the Prospectus less any   
applicable FSF or Intermediary discount. The FSF or Intermediary discount is the
same for all FSFs or Intermediaries, except that the Distributor retains the    
entire sales charge on any sales made to a shareholder who does not specify an  
FSF or Intermediary on the application, and except that the Distributor or its  
affiliates may from time to time reallow additional amounts to all or certain   
FSFs or Intermediaries. The Distributor generally retains 100% of any           
asset-based sales charge (distribution fee) or contingent deferred sales charge.
Such charges generally reimburse the Distributor for any up-front and/or ongoing
commissions paid to FSFs or Intermediaries.                                     

The Distributor will reallow to participating FSFs the entire sales charge for  
all sales of Class A shares for orders placed for Individual Retirement Accounts
(IRA's) through April 16, 2001. The Distributor has elected to pay participating
FSFs an amount equal to 0.50% of the net asset value of Growth Stock Fund's     
Class B shares sold to IRAs through April 16, 2001.                             

    Checks presented for the purchase of Fund shares which are returned by the
purchaser's bank will subject the purchaser to a $15 service fee for each check 
returned.                                                                       

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 The Transfer Agent acts as the shareholder's agent whenever it receives
instructions to carry out a transaction on the shareholder's account. Upon      
receipt of instructions that shares are to be purchased for a shareholder's     
account, the designated FSF or Intermediary will receive the applicable sales   
commission. Shareholders may change FSFs or Intermediaries at any time by       
written notice to the Transfer Agent, provided the new FSF or Intermediary has a
sales agreement with the Distributor.                                           

DETERMINATION OF NET ASSET VALUE                                                

    The net asset value per share for each Class is determined as of the close
of business (normally 4 p.m., Eastern time) on days on which the New York Stock 
Exchange (the "NYSE") is open for trading. The NYSE is regularly closed on      
Saturdays and Sundays and on New Year's Day, the third Monday in January, the   
third Monday in February, Good Friday, the last Monday in May, Independence Day,
Labor Day, Thanksgiving, and Christmas. If one of these holidays falls on a     
Saturday or Sunday, the NYSE will be closed on the preceding Friday or the      
following Monday, respectively. Net asset value will not be determined on days  
when the NYSE is closed unless, in the judgment of the Board of Trustees, net   
asset value of a Fund should be determined on any such day, in which case the   
determination will be made at 4 p.m., Eastern time.                             

   A Portfolio may invest in securities that are listed primarily on foreign
exchanges that are open and allow trading on days on which the Funds do not     
determine net asset value. This may significantly affect the net asset value of 
a Fund's redeemable securities on days when an investor cannot redeem such      
securities. Debt securities generally are valued by a pricing service which     
determines valuations based upon market transactions for normal,                
institutional-size trading units of similar securities. However, in             
circumstances where such prices are not available or where Stein Roe deems it   
appropriate to do so, an over-the-counter or exchange bid quotation is used.    
Securities listed on an exchange or on Nasdaq are valued at the last sale price.
Listed securities for which there were no sales during the day and unlisted     
securities are valued at the last quoted bid price. Options are valued at the   
last sale price or in the absence of a sale, the mean between the last quoted   
bid and offering prices. Short-term obligations with a maturity of 60 days or   
less are valued at amortized cost pursuant to procedures adopted by the Board of
Trustees. The values of foreign securities quoted in foreign currencies are     
translated into U.S. dollars at the exchange rate for that day. Positions for   
which there are no such valuations and other assets are valued at fair value as 
determined in good faith under the direction of the Board of Trustees.          

  Generally, trading in certain securities (such as foreign securities) is
substantially completed each day at various times prior to the close of the     
NYSE. Trading on certain foreign securities markets may not take place on all   
NYSE business days, and trading on some foreign securities markets takes place  
on days that are not NYSE business days and on which net asset value is not     
calculated. The values of these securities used in determining net asset value  
are computed as of such times. Also, because of the amount of time required to  
collect and process trading information as to large numbers of securities       
issues, the values of certain securities (such as convertible bonds, U.S.       
government securities, and tax-exempt securities) are determined based on market

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quotations collected earlier in the day at the latest practicable time prior to 
the close of the NYSE. Occasionally, events affecting the value of such         
securities may occur between such time and the close of the NYSE which will not 
be reflected in the computation of the net asset value. If events materially    
affecting the value of such securities occur during such period, then these     
securities will be valued at their fair value following procedures approved by  
the Board of Trustees.                                                          

 The Trust intends to pay all redemptions in cash. The Trust retains the
right, subject to the Rule 18f-1 notice described below, to alter this policy to
provide for redemptions in whole or in part by a distribution in kind of        
securities held by a Fund or Portfolio in lieu of cash. If redemptions were made
in kind, the redeeming shareholders might incur transaction costs in selling the
securities received in the redemptions. The Trust filed a Notification of       
Election pursuant to Rule 18f-1 under the Investment Company Act of 1940 with   
the Securities and Exchange Commission which commits the Funds to pay in cash   
all requests for redemptions by any shareholder, limited in amount with respect 
to each shareholder during any 90-day period to the lesser of $250,000 or 1% of 
the net asset value of a Fund at the beginning of such period.                  

    Due to the relatively high cost of maintaining smaller accounts, the Trust
may deduct $10 (payable to the Transfer Agent) from accounts valued at less than
$1,000 unless the account value has dropped below $1,000 solely as a result of  
share depreciation. An investor will be notified that the value of his account  
is less than that minimum and allowed at least 60 days to bring the value of the
account up to at least $1,000 before the fee is deducted. The Agreement and     
Declaration of Trust also authorizes the Trust to redeem shares under certain   
other circumstances as may be specified by the Board of Trustees.               

 The Trust reserves the right to suspend or postpone redemptions of Fund
shares during any period when: (a) trading on the NYSE is restricted, as        
determined by the Securities and Exchange Commission, or the NYSE is closed for 
other than customary weekend and holiday closings; (b) the Securities and       
Exchange Commission has by order permitted such suspension; or (c) an emergency,
as determined by the Securities and Exchange Commission, exists, making disposal
of portfolio securities or valuation of net assets of a Fund not reasonably     
practicable.                                                                    

SPECIAL PURCHASE PROGRAMS/INVESTOR SERVICES                                     

     The following special purchase programs/investor services may be changed or
eliminated at any time.                                                         

Fundamatic Program (Classes A, B and C only). As a convenience to     
investors, Class A, B and C shares of the Funds may be purchased through the    
Colonial Fundamatic Program. Preauthorized monthly bank drafts or electronic    
funds transfer for a fixed amount of at least $50 are used to purchase Fund     
shares at the public offering price next determined after the Transfer Agent    
receives the proceeds from the draft (normally the 5th or 20th of each month, or
the next business day thereafter). If your Fundamatic purchase is by electronic 
funds transfer, you may request the Fundamatic purchase for any                 

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day. Further information and application forms are available from FSFs or       
Intermediaries or from the Distributor.                                         

   Tax-Sheltered Retirement Plans (Classes A, B and C only). The Distributor
offers prototype tax-qualified plans, including IRAs and pension and            
profit-sharing plans for individuals, corporations, employees and the           
self-employed. The minimum initial investment for a retirement account sponsored
by the Distributor is $25. The First National Bank of Boston is the trustee of  
the Distributor's prototype plans and charges a $10 annual fee. Detailed        
information concerning these retirement plans and copies of the retirement plans
are available from the Distributor.                                             

     Participants in other prototype retirement plans (other than IRAs) also are
charged a $10 annual fee unless the plan maintains an omnibus account with the  
Transfer Agent. Participants in prototype plans offered by the Distributor      
(other than IRAs) who liquidate the total value of their account will also be   
charged a $15 close-out processing fee payable to the Transfer Agent. The fee is
in addition to any applicable contingent deferred sales charge. The fee will not
apply if the participant uses the proceeds to open an IRA Rollover account in   
any fund, or if the plan maintains an omnibus account.                          

 Consultation with a competent financial and tax advisor regarding these
plans and consideration of the suitability of Fund shares as an investment under
the Employee Retirement Income Security Act of 1974 or otherwise is recommended.

Telephone Address Change Services. By calling the Transfer Agent,     
shareholders, beneficiaries or their FSF or Intermediary of record may change an
address on a recorded telephone line. Confirmations of address change will be   
sent to both the old and the new addresses. Telephone redemption privileges are 
suspended for 30 days after an address change is effected.                      

    Colonial Cash Connection. Dividends and any other distributions, including
Systematic Withdrawal Plan (SWP) payments, on Class A, Class B or Class C shares
may be automatically deposited to a shareholder's bank account via electronic   
funds transfer. Shareholders wishing to avail themselves of this electronic     
transfer procedure should complete the appropriate sections of the Application. 

PROGRAMS FOR REDUCING OR ELIMINATING SALES CHARGES                              

  Exchanges for Affiliates of Investment Advisor. Clients of affiliates of
the Distributor who have previously purchased shares of other investment        
companies and have been charged a front-end load or other sales charge on such  
purchases may exchange those shares for Class A shares of any funds distributed 
by the Distributor, without incurring an additional front-end load or sales     
charge for those exchanged shares. Certain funds may charge an annual 12b-1     
distribution and service fee.                                                   

  Privileges of Liberty Acorn Fund Shareholders. Any shareholder who owned
shares of any fund of Liberty Acorn Trust on September 29, 2000 (when all of the
then outstanding shares of Liberty Acorn Trust were re-designated Class Z       
shares) and who                                                                 

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since that time has remained a shareholder of any fund distributed by the       
Distributor, may purchase Class A shares of any fund distributed by the         
Distributor at net asset value in those cases where a Liberty Fund Class Z share
is not available. Qualifying shareholders will not be subject to Class A initial
or contingent deferred sales charges; however, they will be subject to the      
annual 12b-1 service and distribution fee.                                      

     Right of Accumulation and Statement of Intent (Class A of Growth Stock Fund
only). Reduced sales charges on Class A shares can be effected by combining a   
current purchase with prior purchases of Class A, B, C, T, and Z shares of other
funds managed by Colonial Management Associates, Inc. or distributed by the     
Distributor (such funds hereinafter referred to as "Liberty Funds"). The        
applicable sales charged is based on the combined total of: (1) the current     
purchase and (2) the value at the public offering price at the close of business
on the previous day of all Liberty Funds' Class A shares held by the shareholder
(except shares of any Liberty money market fund, unless such shares were        
acquired by exchange from Class A shares of another Liberty Fund other than a   
money market fund and Class B, C, T and Z shares).                              

     The Distributor must be promptly notified of each purchase which entitles a
shareholder to a reduced sales charge. Such reduced sales charge will be applied
upon confirmation of the shareholder's holdings by the Transfer Agent. A Liberty
Fund may terminate or amend this right of Accumulation.                         

 Any person may qualify for reduced sales charges on purchase of Class A
shares made within a 13-month period pursuant to a Statement of Intent          
("Statement"). A shareholder may include, as an accumulation credit toward the  
completion of such Statement, the value of all Class A, B, C, T and Z shares    
held by the shareholder on the date of the Statement in the Trust's Funds and   
Liberty Funds (except shares of any Liberty money market fund, unless such      
shares were acquired by exchange from Class A shares of another non-money market
Liberty Fund). The value is determined at the public offering price on the date 
of the Statement. Purchases made through reinvestment of distributions do not   
count toward satisfaction of the Statement.                                     

During the term of a Statement, the Transfer Agent will hold shares in
escrow to secure payment of the higher sales charge applicable to Class A shares
actually purchased. Dividends and capital gains will be paid on all escrowed    
shares and these shares will be released when the amount indicated has been     
purchased. A Statement does not obligate the investor to buy or the Fund to sell
the amount of the Statement.                                                    

    If a shareholder exceeds the amount of the Statement and reaches an amount
which would qualify for a further quantity discount, a retroactive price        
adjustment will be made at the time of expiration of the Statement. The         
resulting difference in offering price will purchase additional shares for the  
shareholder's account at the then-current applicable offering price. As a part  
of this adjustment, the FSF or Intermediary shall return to the Distributor the 
excess commission previously paid during the 13-month period.                   

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If the amount of the Statement is not purchased, the shareholder shall
remit to the Distributor an amount equal to the difference between the sales    
charge paid and the sales charge that should have been paid. If the shareholder 
fails within 20 days after a written request to pay such difference in sales    
charge, the Transfer Agent will redeem that number of escrowed Class A shares   
equal to such difference. The additional amount of FSF or Intermediary discount 
from the applicable offering price shall be remitted to the shareholder's FSF or
Intermediary of record.                                                         

Additional information about and the terms of Statements of Intent are
available from your FSF or Intermediary or from the Transfer Agent at           
1-800-345-6611.                                                                 

     Reinstatement Privilege. An investor who has redeemed Fund shares may, upon
request, reinstate within one year a portion or all of the proceeds of such sale
in shares of the same class of that Fund at the net asset value next determined 
after the Transfer Agent receives a written reinstatement request and payment.  
Any contingent deferred sales charge paid at the time of the redemption will be 
credited to the shareholder upon reinstatement. The period between the          
redemption and the reinstatement will not be counted in aging the reinstated    
shares for purposes of calculating any contingent deferred sales charge or      
conversion date. Investors who desire to exercise this privilege should contact 
their FSF or Intermediary or the Distributor. Shareholders may exercise this    
privilege an unlimited number of times. Exercise of this privilege does not     
alter the federal income tax treatment of any capital gains realized on the     
prior sale of Fund shares, but to the extent any such shares were sold at a     
loss, some or all of the loss may be disallowed for tax purposes. Consult your  
tax advisor.                                                                    

  Shareholders may reinvest all or a portion of a recent cash distribution
without a sales charge. A shareholder request must be received within 30        
calendar days of the distribution. A shareholder may exercise this privilege    
only once. No charge is currently made for reinvestment.                        

    Privileges of Adviser Employees, FSFs or Intermediaries (Class A of Growth
Stock Fund only). Class A shares may be sold at net asset value to the following
individuals whether currently employed or retired: Trustees of funds advised or 
administered by Stein Roe or an affiliate of Stein Roe; directors, officers and 
employees of Stein Roe or an affiliate of Stein Roe, including the Transfer     
Agent and the Distributor; registered representatives and employees of FSFs or  
Intermediaries (including their affiliates) that are parties to dealer          
agreements or other sales arrangements with the Distributor; and such persons'  
families and their beneficial accounts.                                         

    Sponsored Arrangements (Class A of Growth Stock Fund only). Class A shares
may be purchased at reduced or no sales charge pursuant to sponsored            
arrangements, which include programs under which an organization makes          
recommendations to, or permits group solicitation of, its employees, members or 
participants in connection with the purchase of Fund shares on an individual    
basis. The amount of the sales charge reduction will reflect the anticipated    
reduction in sales expense associated with sponsored arrangements. The reduction
in sales expense, and therefore the reduction in sales charge,                  

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will vary depending on factors such as the size and stability of the            
organization's group, the term of the organization's existence and certain      
characteristics of the members of its group. The Fund reserves the right to     
revise the terms of or to suspend or discontinue sales pursuant to sponsored    
plans at any time.                                                              

    Class A shares of Growth Stock Fund may also be purchased at reduced or no
sales charge by clients of dealers, brokers or registered investment advisers   
that have entered into agreements with the Distributor pursuant to which the    
Fund is included as an investment option in programs involving fee-based        
compensation arrangements.                                                      

Waiver of Contingent Deferred Sales Charges (Class A of Young Investor
Fund, Class A of Growth Stock Fund with accounts in excess of $1,000,000, and   
Classes B and C). Contingent deferred sales charges may be waived on redemptions
in the following situations with the proper documentation:                      

1.   Death. Contingent deferred sales charges may be waived on redemptions      
within one year following the death of (i) the sole shareholder on an individual
account, (ii) a joint tenant where the surviving joint tenant is the deceased's 
spouse, or (iii) the beneficiary of a Uniform Gifts to Minors Act ("UGMA"),     
Uniform Transfers to Minors Act ("UTMA") or other custodial account. If, upon   
the occurrence of one of the foregoing, the account is transferred to an account
registered in the name of the deceased's estate, the contingent deferred sales  
charge will be waived on any redemption from the estate account occurring within
one year after the death. If the shares are not redeemed within one year of the 
death, they will remain subject to the applicable contingent deferred sales     
charge, when redeemed from the transferee's account. If the account is          
transferred to a new registration and then a redemption is requested, the       
applicable contingent deferred sales charge will be charged.                    

2.   Systematic Withdrawal Plan (SWP). Contingent deferred sales charges may be 
waived on redemptions occurring pursuant to a monthly, quarterly or semiannual  
SWP established with the Transfer Agent, to the extent the redemptions do not   
exceed, on an annual basis, 12% of the account's value, so long as at the time  
of the first SWP redemption the account had distributions reinvested for a      
period at least equal to the period of the SWP (e.g., if it is a quarterly SWP, 
distributions must have been reinvested at least for the three month period     
prior to the first SWP redemption); otherwise contingent deferred sales charges 
will be charged on SWP redemptions until this requirement is met; this          
requirement does not apply to Class B or C accounts if the SWP is set up at the 
time the account is established, and distributions are being reinvested. See    
below under How to Sell Shares--Systematic Withdrawal Plan.                     

3.   Disability. Contingent deferred sales charges may be waived on redemptions 
occurring within one year after the sole shareholder on an individual account or
a joint tenant on a spousal joint tenant account becomes disabled (as defined in
Section 72(m)(7) of the Internal Revenue Code). To be eligible for such waiver, 
(i) the disability must arise after the purchase of shares and (ii) the disabled
shareholder must have been under age 65 at the time of the initial determination
of disability. If the account is transferred to a new                           

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registration and then a redemption is requested, the applicable contingent      
deferred sales charge will be charged.                                          

4.   Death of a trustee. Contingent deferred sales charges may be waived on     
redemptions occurring upon dissolution of a revocable living or grantor trust   
following the death of the sole trustee where (i) the grantor of the trust is   
the sole trustee and the sole life beneficiary, (ii) death occurs following the 
purchase and (iii) the trust document provides for dissolution of the trust upon
the trustee's death. If the account is transferred to a new registration        
(including that of a successor trustee), the applicable contingent deferred     
sales charge will be charged upon any subsequent redemption.                    

5.   Returns on excess contributions. Contingent deferred sales charges may be  
waived on redemptions required to return excess contributions made to retirement
plans or IRAs, so long as the FSF or Intermediary agrees to return the          
applicable portion of any commission paid by the Distributor.                   

6.   Qualified Retirement Plans. Contingent deferred sales charges may be waived
on redemptions required to make distributions from qualified retirement plans   
following (i) normal retirement (as stated in the plan document) or (ii)        
separation from service. For shares purchased in a prototype 401K plan after    
September 1, 1997, contingent deferred sales charges will not be waived upon    
separation from service except if such plan is held in an omnibus account.      
Contingent deferred sales charges also will be waived on SWP redemptions made to
make required minimum distributions from qualified retirement plans that have   
invested in a Fund for at least two years.                                      

  The contingent deferred sales charge also may be waived where the FSF or
Intermediary agrees to return all or an agreed upon portion of the commission   
earned on the sale of the shares being redeemed.                                

HOW TO SELL ("REDEEM") SHARES                                                   

   Shares may be sold on any day the NYSE is open, either directly to a Fund
or through an FSF or Intermediary. Sale proceeds generally are sent within seven
days (usually on the next business day after your request is received in good   
form). However, for shares recently purchased by check, the Fund will delay     
sending proceeds for 15 days in order to protect the Fund against financial     
losses and dilution in net asset value caused by dishonored purchase payment    
checks. To avoid delays in payment, investors are advised to purchase shares    
unconditionally, such as by certified check or other immediately available      
funds.                                                                          

   To sell shares directly to a Fund, send a signed letter of instruction to
the Transfer Agent. The sale price is the net asset value next determined (less 
any applicable contingent deferred sales charge) after the Fund or an FSF or    
Intermediary receives the request in proper form. Signatures must be guaranteed 
by a bank, a member firm of a national stock exchange or another eligible       
guarantor institution. Additional documentation is required for sales by        
corporations, agents, fiduciaries, surviving joint                              

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owners and IRA holders. Call the Transfer Agent for more information at (800)   
345-6611.                                                                       

     FSFs and Intermediaries must receive requests before the time at which Fund
shares are valued to receive that day's price, are responsible for furnishing   
all necessary documentation to the Transfer Agent and may charge for this       
service.                                                                        

  Systematic Withdrawal Plan (Class A, B and C shares). If a shareholder's
account balance is at least $5,000, the shareholder may establish a SWP. A      
specified dollar amount or percentage of the then-current net asset value of the
shareholder's investment in the Fund designated by the shareholder will be paid 
monthly, quarterly or semiannually to a designated payee. The amount or         
percentage the shareholder specifies generally may not, on an annualized basis, 
exceed 12% of the value, as of the time the shareholder makes the election of   
the shareholder's investment. Withdrawals from Class B and C shares under a SWP 
will be treated as redemptions of shares purchased through the reinvestment of  
Fund distributions, or, to the extent such shares in the shareholder's account  
are insufficient to cover plan payments, as redemptions from the earliest       
purchased Fund shares in the shareholder's account. No contingent deferred sales
charges apply to a redemption pursuant to a SWP of 12% or less, even if, after  
giving effect to the redemption, the shareholder's account balance is less than 
the shareholder's base amount. Qualified plan participants who are required by  
Internal Revenue Code regulation to withdraw more than 12%, on an annual basis, 
of the value of their Class B or C share account may do so but will be subject  
to a contingent deferred sales charge ranging from 1% to 5% of the excess over  
12%. If a shareholder wishes to participate in a SWP, the shareholder must elect
to have all income dividends and other distributions payable in Fund shares     
rather than in cash.                                                            

A shareholder or its FSF or Intermediary of record may establish a SWP
account by telephone on a recorded line. However, SWP checks will be payable    
only to the shareholder and sent to the address of record. SWPs from retirement 
accounts cannot be established by telephone.                                    

    Purchasing additional shares (other than through dividend and distribution
reinvestment) while receiving SWP payments is ordinarily disadvantageous because
of duplicative sales charges. For this reason, a shareholder may not maintain a 
plan for the accumulation of shares of a Fund (other than through the           
reinvestment of dividends) and a SWP at the same time.                          

     SWP payments are made through share redemptions, which may result in a gain
or loss for tax purposes, may involve the use of principal and may eventually   
use up all of the shares in a shareholder's account.                            

A Fund may terminate a shareholder's SWP if the shareholder's account 
balance falls below $5,000 due to any transfer or liquidation of shares other   
than pursuant to the SWP. SWP payments will be terminated on receiving          
satisfactory evidence of the death                                              

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or incapacity of a shareholder. Until this evidence is received, the Transfer   
Agent will not be liable for any payment made in accordance with the provisions 
of a SWP.                                                                       

The cost of administering SWPs for the benefit of shareholders who    
participate in them is borne by the Funds as an expense of all shareholders.    

   Shareholders whose positions are held in "street name" by certain FSFs or
Intermediaries may not be able to participate in a SWP. If a shareholder's Fund 
shares are held in "street name," the shareholder should consult his or her FSF 
or Intermediary to determine whether he or she may participate in a SWP.        

     Telephone Redemptions. Telephone redemption privileges are described in the
Prospectus.                                                                     

    Non-Cash Redemptions. For redemptions of any single shareholder within any
90-day period exceeding the lesser of $250,000 or 1% of a Fund's net asset      
value, the Fund may make the payment or a portion of the payment with portfolio 
securities held by the Fund instead of cash, in which case the redeeming        
shareholder may incur brokerage and other costs in selling the securities       
received.                                                                       

HOW TO EXCHANGE SHARES                                                          

   With respect to Class A, Class B and Class C shares of Growth Stock Fund,
exchanges at net asset value may be made among shares of the same class of any  
other fund that is a series of the Trust or of most Liberty Funds. With respect 
to Class A shares of Young Investor Fund, for a period of 90 days following the 
purchase of shares, exchanges at net asset value may be made among Class A      
shares of Liberty Municipal Money Market Fund or Liberty Money Market Fund (or  
its successor). Thereafter, exchanges at net asset value may be made among Class
A shares of any other fund that is a series of the Trust or of most Liberty     
Funds. For more information on the Liberty Funds, see your FSF or Intermediary  
or call (800) 345-6611.                                                         

  With respect to Class K shares, exchanges at net asset value may be made
among shares of Class K of any other fund that is a series of the Trust. Shares 
may be exchanged on the basis of the net asset value per share at the time of   
exchange and only one "round-trip" exchange of Class C shares may be made per   
three-month period, measured from the date of the initial purchase. Before      
exchanging into another fund, you should obtain the prospectus for the fund in  
which you wish to invest and read it carefully. Prospectuses of Liberty Funds   
are available by calling (800) 426-3750. Consult the Transfer Agent before      
requesting an exchange.                                                         

     By calling the Transfer Agent, shareholders or their FSF or Intermediary of
record may exchange among accounts with identical registrations, provided that  
the shares are held on deposit. During periods of unusual market changes and/or 
shareholder activity, shareholders may experience delays in contacting the      
Transfer Agent by telephone to exercise the telephone exchange privilege.       
Because an exchange involves a redemption and reinvestment in another fund,     
completion of an exchange may be delayed under                                  

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unusual circumstances, such as if a Fund suspends repurchases or postpones      
payment for Fund shares being exchanged in accordance with federal securities   
law. The Transfer Agent will also make exchanges upon receipt of a written      
exchange request. If the shareholder is a corporation, partnership, agent, or   
surviving joint owner, the Transfer Agent will require customary additional     
documentation.                                                                  

A loss to a shareholder may result from an unauthorized transaction   
reasonably believed to have been authorized. No shareholder is obligated to use 
the telephone to execute transactions.                                          

    In all cases, the shares to be exchanged must be registered on the records
of the Fund in the name of the shareholder desiring to exchange.                

    An exchange is a capital sale transaction for federal income tax purposes.
The exchange privilege may be revised, suspended or terminated at any time.     

PORTFOLIO TRANSACTIONS

Stein Roe places the orders for the purchase and sale of portfolio    
securities and options and futures contracts for its clients, including private 
clients and mutual fund clients ("Clients"). Stein Roe and its affiliate        
Colonial Management Associates, Inc. ("Colonial") maintain a single, unified    
trading operation for trading equity securities. Stein Roe's overriding         
objective in selecting brokers and dealers to effect portfolio transactions is  
to seek the best combination of net price and execution. The best net price,    
giving effect to brokerage commissions, if any, is an important factor in this  
decision; however, a number of other judgmental factors may also enter into the 
decision. These factors include Stein Roe's knowledge of negotiated commission  
rates currently available and other current transaction costs; the nature of the
security being purchased or sold; the size of the transaction; the desired      
timing of the transaction; the activity existing and expected in the market for 
the particular security; confidentiality; the execution, clearance and          
settlement capabilities of the broker or dealer selected and others considered; 
Stein Roe's knowledge of the financial condition of the broker or dealer        
selected and such other brokers and dealers; and Stein Roe's knowledge of actual
or apparent operation problems of any broker or dealer.                         

     Recognizing the value of these factors, Stein Roe may cause a Client to pay
a brokerage commission in excess of that which another broker may have charged  
for effecting the same transaction. Stein Roe has established internal policies 
for the guidance of its trading personnel, specifying minimum and maximum       
commissions to be paid for various types and sizes of transactions and effected 
for Clients in those cases where Stein Roe has discretion to select the broker  
or dealer by which the transaction is to be executed. Stein Roe has discretion  
for all trades of the Funds. Transactions which vary from the guidelines are    
subject to periodic supervisory review. These guidelines are reviewed and       
periodically adjusted, and the general level of brokerage commissions paid is   
periodically reviewed by Stein Roe. Evaluations of the reasonableness of        
brokerage commissions, based on the factors described in the preceding          
paragraph, are made by                                                          

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Stein Roe's trading personnel while effecting portfolio transactions. The       
general level of brokerage commissions paid is reviewed by Stein Roe, and       
reports are made annually to the Board of Trustees.                             

     Stein Roe maintains and periodically updates a list of approved brokers and
dealers which, in Stein Roe's judgment, are generally capable of providing best 
price and execution and are financially stable. Stein Roe's traders are directed
to use only brokers and dealers on the approved list, except in the case of     
Client designations of brokers or dealers to effect transactions for such       
Clients' accounts. Stein Roe generally posts certain Client information on the  
"Alert" broker database system as a means of facilitating the trade affirmation 
and settlement process.                                                         

    It is Stein Roe's practice, when feasible, to aggregate for execution as a
single transaction orders for the purchase or sale of a particular security for 
the accounts of several Clients (and, when feasible, Colonial clients), in order
to seek a lower commission or more advantageous net price. The benefit, if any, 
obtained as a result of such aggregation generally is allocated pro rata among  
the accounts of Clients which participated in the aggregated transaction. In    
some instances, this may involve the use of an "average price" execution wherein
a broker or dealer to which the aggregated order has been given will execute the
order in several separate transactions during the course of a day at differing  
prices and, in such case, each Client participating in the aggregated order will
pay or receive the same price and commission, which will be an average of the   
prices and commissions for the several separate transactions executed by the    
broker or dealer.                                                               

   Stein Roe sometimes makes use of an indirect electronic access to the New
York Stock Exchange's "SuperDOT" automated execution system, provided through a 
NYSE member floor broker, W&D Securities, Inc., a subsidiary of Jeffries & Co., 
Inc., particularly for the efficient execution of smaller orders in NYSE listed 
equities. Stein Roe sometimes uses similar arrangements through Billings & Co., 
Inc. and Driscoll & Co., Inc., floor broker members of the Chicago Stock        
Exchange, for transactions to be executed on that exchange. In using these      
arrangements, Stein Roe must instruct the floor broker to refer the executed    
transaction to another brokerage firm for clearance and settlement, as the floor
brokers do not deal with the public. Transactions of this type sometimes are    
referred to as "step-in" or "step-out" transactions. The brokerage firm to which
the executed transaction is referred may include, in the case of transactions   
effected through W&D Securities, brokerage firms which provide Stein Roe        
investment research or related services.                                        

Stein Roe places certain trades for the Funds through its affiliate   
AlphaTrade, Inc. ("ATI"). ATI is a wholly owned subsidiary of Colonial          
Management Associates, Inc. ATI is a fully disclosed introducing broker that    
limits its activities to electronic execution of transactions in listed equity  
securities. The Funds pay ATI a commission for these transactions. The Funds    
have adopted procedures consistent with Investment Company Act Rule 17e-1       
governing such transactions. Certain of Stein Roe's officers also serve as      
officers, directors and/or employees of ATI.                                    

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   CONSISTENT WITH THE RULES OF FAIR PRACTICE OF THE NATIONAL ASSOCIATION OF
SECURITIES DEALERS, INC. AND SUBJECT TO SEEKING BEST EXECUTION AND SUCH OTHER   
POLICIES AS THE TRUSTEES OF THE FUNDS MAY DETERMINE, STEIN ROE MAY CONSIDER     
SALES OF SHARES OF EACH OF THE FUNDS AS A FACTOR IN THE SELECTION OF            
BROKER-DEALERS TO EXECUTE SUCH MUTUAL FUND SECURITIES TRANSACTIONS.             

INVESTMENT RESEARCH PRODUCTS AND SERVICES FURNISHED BY BROKERS AND DEALERS      

 Stein Roe engages in the long-standing practice in the money management
industry of acquiring research and brokerage products and services ("research   
products") from broker-dealer firms in return directing trades for Client       
accounts to those firms. In effect, Stein Roe is using the commission dollars   
generated from these Client accounts to pay for these research products. The    
money management industry uses the term "soft dollars" to refer to this industry
practice. Stein Roe may engage in soft dollar transactions on trades for those  
Client accounts for which Stein Roe has the discretion to select the            
broker-dealers.                                                                 

    The ability to direct brokerage for a Client account belongs to the Client
and not to Stein Roe. When a Client grants Stein Roe the discretion to select   
broker-dealers for Client trades, Stein Roe has a duty to seek the best         
combination of net price and execution. Stein Roe faces a potential conflict of 
interest with this duty when it uses Client trades to obtain soft dollar        
products. This conflict exists because Stein Roe is able to use the soft dollar 
products in managing its Client accounts without paying cash ("hard dollars")   
for the product. This reduces Stein Roe's expenses.                             

  Moreover, under a provision of the federal securities laws applicable to
soft dollars, Stein Roe is not required to use the soft dollar product in       
managing those accounts that generate the trade. Thus, the Client accounts that 
generate the brokerage commission used to acquire the soft dollar product may   
not benefit directly from that product. In effect, those accounts are cross     
subsidizing Stein Roe's management of the other accounts that do benefit        
directly from the product. This practice is explicitly sanctioned by a provision
of the Securities Exchange Act of 1934, which creates a "safe harbor" for soft  
dollar transactions conducted in a specified manner. Although it is inherently  
difficult, if not impossible, to document, Stein Roe believes that over time    
most, if not all, Clients benefit from soft dollar products such that cross     
subsidizations even out.                                                        

     Stein Roe attempts to reduce or eliminate this conflict by directing Client
trades for soft dollar products only if Stein Roe concludes that the            
broker-dealer supplying the product is capable of providing a combination of the
best net price and execution on the trade. As noted above, the best net price,  
while significant, is one of a number of judgmental factors Stein Roe considers 
in determining whether a particular broker is capable of providing the best net 
price and execution. Stein Roe may cause a Client account to pay a brokerage    
commission in a soft dollar trade in excess of that which another broker-dealer 
might have charged for the same transaction.                                    

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Stein Roe acquires two types of soft dollar research products: (i)    
proprietary research created by the broker-dealer firm executing the trade and  
(ii) other products created by third parties that are supplied to Stein Roe     
through the broker-dealer firm executing the trade.                             

  Proprietary research consists primarily of traditional research reports,
recommendations and similar materials produced by the in house research staffs  
of broker-dealer firms. This research includes evaluations and recommendations  
of specific companies or industry groups, as well as analyses of general        
economic and market conditions and trends, market data, contacts and other      
related information and assistance. Stein Roe's research analysts periodically  
rate the quality of proprietary research produced by various broker-dealer      
firms. Based on these evaluations, Stein Roe develops target levels of          
commission dollars on a firm-by-firm basis. Stein Roe attempts to direct trades 
to each firm to meet these targets.                                             

Stein Roe also uses soft dollars to acquire products created by third 
parties that are supplied to Stein Roe through broker-dealers executing the     
trade (or other broker-dealers who "step in" to a transaction and receive a     
portion of the brokerage commission for the trade). These products include the  
following:                                                                      

-    DATABASE SERVICES--comprehensive databases containing current and/or       
historical information on companies and industries. Examples include  
  historical securities prices, earnings estimates, and SEC filings. These
services may include software tools that allow the user to search the 
database or to prepare value-added analyses related to the investment 
process (such as forecasts and models used in the portfolio management
process).                                                             
-    QUOTATION/TRADING/NEWS SYSTEMS--products that provide real time market data
  information, such as pricing of individual securities and information on
current trading, as well as a variety of news services.               
-    ECONOMIC DATA/FORECASTING TOOLS--various macro economic forecasting tools, 
such as economic data and economic and political forecasts for various
countries or regions.                                                 
-    QUANTITATIVE/TECHNICAL ANALYSIS--software tools that assist in quantitative
and technical analysis of investment data.                            
-    FUNDAMENTAL INDUSTRY ANALYSIS--industry-specific fundamental investment    
research.                                                             
-    FIXED INCOME SECURITY ANALYSIS--data and analytical tools that pertain     
 specifically to fixed income securities. These tools assist in creating
financial models, such as cash flow projections and interest rate     
sensitivity analyses, that are relevant to fixed income securities.   
-    OTHER SPECIALIZED TOOLS--other specialized products, such as specialized   
economic consulting analyses and attendance at investment oriented    
conferences.                                                          

    Many third-party products include computer software or on-line data feeds.
Certain products also include computer hardware necessary to use the product.   

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  Certain of these third party services may be available directly from the
vendor on a hard dollar basis. Others are available only through broker-dealer  
firms for soft dollars. Stein Roe evaluates each product to determine a cash    
("hard dollars") value of the product to Stein Roe. Stein Roe then on a         
product-by-product basis targets commission dollars in an amount equal to a     
specified multiple of the hard dollar value to the broker-dealer that supplies  
the product to Stein Roe. In general, these multiples range from 1.25 to 1.85   
times the hard dollar value. Stein Roe attempts to direct trades to each firm to
meet these targets. (For example, if the multiple is 1.5:1.0, assuming a hard   
dollar value of $10,000, Stein Roe will target to the broker-dealer providing   
the product trades generating $15,000 in total commissions.)                    

   The targets that Stein Roe establishes for both proprietary and for third
party research products typically will reflect discussions that Stein Roe has   
with the broker-dealer providing the product regarding the level of commissions 
it expects to receive for the product. However, these targets are not binding   
commitments, and Stein Roe does not agree to direct a minimum amount of         
commissions to any broker-dealer for soft dollar products. In setting these     
targets, Stein Roe makes a determination that the value of the product is       
reasonably commensurate with the cost of acquiring it. These targets are        
established on a calendar year basis. Stein Roe will receive the product whether
or not commissions directed to the applicable broker-dealer are less than, equal
to or in excess of the target. Stein Roe generally will carry over target       
shortages and excesses to the next year's target. Stein Roe believes that this  
practice reduces the conflicts of interest associated with soft dollar          
transactions, since Stein Roe can meet the non-binding expectations of          
broker-dealers providing soft dollar products over flexible time periods. In the
case of third party products, the third party is paid by the broker-dealer and  
not by Stein Roe. Stein Roe may enter into a contract with the third party      
vendor to use the product. (For example, if the product includes software, Stein
Roe will enter into a license to use the software from the vendor.)             

    In certain cases, Stein Roe uses soft dollars to obtain products that have
both research and non-research purposes. Examples of non-research uses are      
administrative and marketing functions. These are referred to as "mixed use"    
products. As of the date of this SAI, Stein Roe acquires two mixed use products.
These are (i) a fixed income security data service and (ii) a mutual fund       
performance ranking service. In each case, Stein Roe makes a good faith         
evaluation of the research and non-research uses of these services. These       
evaluations are based upon the time spent by Firm personnel for research and    
non-research uses. Stein Roe pays the provider in cash ("hard dollars") for the 
non-research portion of its use of these products.                              

Stein Roe may use research obtained from soft dollar trades in the    
management of any of its discretionary accounts. Thus, consistent with industry 
practice, Stein Roe does not require that the Client account that generates the 
trade receive any benefit from the soft dollar product obtained through the     
trade. As noted above, this may result in cross subsidization of soft dollar    
products among Client accounts. As so noted, this practice is explicitly        
sanctioned by a provision of the Securities Exchange Act of 1934, which creates 
a "safe harbor" for soft dollar transactions conducted in a specified manner.   

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   In certain cases, Stein Roe will direct a trade to one broker-dealer with
the instruction that it execute the trade and pay over a portion of the         
commission from the trade to another broker-dealer who provides Stein Roe with a
soft dollar research product. The broker-dealer executing the trade "steps out" 
of a portion of the commission in favor of the other broker-dealer providing the
soft dollar product. Stein Roe may engage in step out transactions in order to  
direct soft dollar commissions to a broker-dealer which provides research but   
may not be able to provide best execution. Brokers who receive step out         
commissions typically are brokers providing a third party soft dollar product   
that is not available on a hard dollars basis. Stein Roe has not engaged in step
out transactions as a manner of compensating broker-dealers that sell shares of 
investment companies managed by Stein Roe.                                      

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The table below shows information on brokerage commissions paid (in   
thousands) by the Portfolios as follows:                                        

                                                                [Download Table]

                                               GROWTH STOCK FUND            
                                               -----------------            
                                 2000                 1999              1998
                                 ----                 ----              ----
                                                                            
Total Commissions                $1,791              $  958             $562
Directed Transactions             2,198               2,158              N/A
Commissions on directed                                                     
        Transactions                  2                 667              N/A
Commissions paid to                                                         
        AlphaTrade                   45                N/A               N/A

                                                                [Download Table]

                                              GROWTH INVESTOR FUND          
                                              --------------------          
                                 2000                 1999              1998
                                 ----                 ----              ----
                                                                            
Total Commissions                $1,349              $2,204             $807
Directed Transactions             1,204                 437              N/A
Commissions on directed                                                     
        Transactions                  3               1,334              N/A
Commissions paid to                                                         
        AlphaTrade                   63                 N/A              N/A

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

ADDITIONAL INCOME TAX CONSIDERATIONS

The Funds and Portfolios intend to qualify under Subchapter M of the  
Internal Revenue Code and to comply with the special provisions of the Internal 
Revenue Code that relieve it of federal income tax to the extent of its net     
investment income and capital gains currently distributed to shareholders.      

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

  The Funds expect that less than 100% of their dividends will qualify for
the deduction for dividends received by corporate shareholders.                 

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     A 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 the Fund'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 the Portfolio holds its investment. In addition,  
the 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.                          

In accordance with tax regulations, the Portfolios intend to treat    
securities of PFICs as sold on the last day of its fiscal year and recognize any
gains for tax purposes at that time; losses will not be recognized. Such gains  
will be considered ordinary income which it will be required to distribute even 
though it has not sold the security and received cash to pay such distributions.

INVESTMENT PERFORMANCE

   A Fund may quote total return figures from time to time. A "Total Return"
is your return on an investment which takes into account the change in value of 
your investment with distributions reinvested. A "Total Return Percentage" may  
be calculated by dividing the value of a share at the end of a period (including
reinvestment of distributions) by the value of the share at the beginning of the
period and subtracting one. For a given period, an "Average Annual Total Return"
may be computed by finding the average annual compounded rate that would equate 
a hypothetical initial amount invested of $1,000 to the ending redeemable value.

Average Annual Total Return is computed as follows:  ERV  =  P(1+T)[n]

Where:    P       =   a hypothetical initial payment of $1,000        
T       =   average annual total return           
n       =   number of years                       
            ERV     =   ending  redeemable value of a hypothetical  $1,000
                        payment made at the beginning of the period at the
                end of the period (or fractional portion).

Class K shares of each Fund commenced operations on February 14, 1997,
Classes A, B and C of Growth Stock Fund commenced operations on October 15,     
1997, and Class A of Young Investor Fund commenced operations on January 26,    
1998. The historical performance of Class A shares of the Fund prior to         
commencement of operations is based on the performance of the Portfolio,        
restated to reflect the sales charges, 12b-1 fees and other expenses set forth  
in the fee table, without giving effect to any Class A share fee reimbursements,
and assuming reinvestment of dividends and capital gains. The Fund's performance
results since commencement of operations include any expense reduction          
arrangements. If these arrangements were not in place, then the performance     
results would have been lower. Any reduction arrangements may be discontinued at
any time.                                                                       

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As with all mutual funds, past performance does not predict the Fund's future   
performance. Average annual returns as of September 30, 2000 were as follows:   

                                                                [Download Table]

GROWTH STOCK FUND                     1 YEAR       5 YEARS          10 YEARS   
-----------------                     ------       -------          --------   
                                                                               
Class A with sales charge of 5.75%    26.25%       23.63%            19.86%    
Class A without sales charge          33.92        25.11             20.57     

Class B with applicable CDSC          27.99        24.06             19.71     
Class B without applicable CDSC       32.99        24.23             19.71     

Class C with applicable CDSC          31.97        24.19             19.69     
Class C without CDSC                  32.97        24.19             19.69     

Class K                               34.25        25.00             20.55     

YOUNG INVESTOR FUND                   1 YEAR      5 YEARS       SINCE INCEPTION
-------------------                   ------      -------       ---------------
Class A with applicable CDSC           28.47%       22.11%         23.56%      
Class A without applicable CDSC        30.47        22.11          23.56       
Class K                                30.68        22.30          23.71       

 Investment performance figures assume reinvestment of all dividends and
distributions and do not take into account any federal, state, or local income  
taxes which shareholders must pay on a current basis. The performance of a Fund 
is a result of conditions in the securities markets, portfolio management, and  
operating expenses. Although investment performance information is useful in    
reviewing a Fund's performance and in providing some basis for comparison with  
other investment alternatives, it should not be used for comparison with other  
investments using different reinvestment assumptions or time periods.           

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A Fund may note its mention or recognition, or the mention or 
recognition of Stein Roe and its affiliates, in newspapers, magazines, or other 
media, including comparisons with competitors and matters of national or global 
economic and financial interest, from time to time. However, the Trust assumes  
no responsibility for the accuracy of such data. Newspapers and magazines which 
might mention the Funds include, but are not limited to, the following:         

Architectural Digest                                                            
Arizona Republic                                                                
Atlanta Constitution                                                            
Atlantic Monthly                                                                
Associated Press                                                                
Barron's                                                                        
Bloomberg                                                                       
Boston Globe                                                                    
Boston Herald                                                                   
Business Week                                                                   
Chicago Tribune                                                                 
Chicago Sun-Times                                                               
Cleveland Plain Dealer                                                          
CNBC                                                                            
CNN                                                                             
Crain's Chicago Business                                                        
Consumer Reports                                                                
Consumer Digest                                                                 
Dow Jones Investment Advisor                                                    
Dow Jones Newswire                                                              
Fee Advisor                                                                     
Financial Planning                                                              
Financial World                                                                 
Forbes                                                                          
Fortune                                                                         
Fund Action                                                                     
Fund Marketing Alert                                                            
Gourmet                                                                         
Individual Investor                                                             
Investment Dealers' Digest                                                      
Investment News                                                                 
Investor's Business Daily                                                       
Kiplinger's Personal Finance Magazine                                           
Knight-Ridder                                                                   
Lipper Analytical Services                                                      
Los Angeles Times                                                               
Louis Rukeyser's Wall Street                                                    
Money                                                                           
Money on Line                                                                   
Morningstar                                                                     
Mutual Fund Market News                                                         
Mutual Fund News Service                                                        
Mutual Funds Magazine                                                           
Newsday                                                                         
Newsweek                                                                        
New York Daily News                                                             
The New York Times                                                              
No-Load Fund Investor                                                           
Pension World                                                                   
Pensions and Investment                                                         
Personal Investor                                                               
Physicians Financial News                                                       
Jane Bryant Quinn (syndicated column)                                           
Reuters                                                                         
The San Francisco Chronicle                                                     
Securities Industry Daily                                                       
Smart Money                                                                     
Smithsonian                                                                     
Strategic Insight                                                               
Street.com                                                                      
Time                                                                            
Travel & Leisure                                                                
USA Today                                                                       
U.S. News & World Report                                                        
Value Line                                                                      
The Wall Street Journal                                                         
The Washington Post                                                             
Working Women                                                                   
Worth                                                                           
Your Money                                                                      

 In advertising and sales literature, a Fund may compare its performance
with that of other mutual funds, indexes or averages of other mutual funds,     
indexes of related financial assets or data, and other competing investment and 
deposit products available from or through other financial institutions. The    
composition of these indexes or averages differs from that of the Funds.        
Comparison of a Fund to an alternative investment should be made with           
consideration of differences in features and expected performance. All of the   
indexes and averages noted below will be obtained from the indicated sources or 
reporting services, which the Trust believes to be generally accurate. A Fund   
may compare its performance to the Consumer Price Index (All Urban), a widely   
recognized measure of inflation. The performance of the Funds may be compared to
the following indexes or averages:                                              

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                                                        [Enlarge/Download Table]
                                                                                                     
Dow-Jones Industrial Average                       New York Stock Exchange Composite Index           
Standard & Poor's 500 Stock Index                  American Stock Exchange Composite Index           
Standard & Poor's 400 Industrials                  Nasdaq Composite                                  
Wilshire 5000                                      Nasdaq Industrials                                
  (These indexes are widely recognized indicators    (These indexes generally reflect the performance
  of general U.S. stock market results.)              of stocks traded in the indicated markets.)    

In addition, a Fund may compare its performance to the indicated      
benchmarks:                                                                     

                                                                [Download Table]

            BENCHMARK                                  FUND(S)         
            ---------                                  -------         
                                                                       
Lipper Equity Fund Average                          Both Funds         
Lipper General Equity Fund Average                  Both Funds         
Lipper Growth Fund Average                          Both Funds         
Lipper Growth Fund Index                            Both Funds         
Morningstar Large Blend Category                    Young Investor Fund
Morningstar Large Growth Category                   Both Funds         
Morningstar Domestic Hybrid Category                Young Investor Fund

     Lipper Growth Fund Index reflects the net asset value weighted total return
of the largest thirty growth funds and thirty growth and income funds,          
respectively, as calculated and published by Lipper. The Lipper and Morningstar 
averages are unweighted averages of total return performance of mutual funds as 
classified, calculated, and published by these independent services that monitor
the performance of mutual funds. A Fund may also use comparative performance as 
computed in a ranking by Lipper or category averages and rankings provided by   
another independent service. Should Lipper or another service reclassify a Fund 
to a different category or develop (and place it into) a new category, the Fund 
may compare its performance or ranking with those of other funds in the newly   
assigned category, as published by the service.                                 

A Fund may also cite its rating, recognition, or other mention by     
Morningstar or any other entity. Morningstar's rating system is based on        
risk-adjusted total return performance and is expressed in a star-rating format.
The risk-adjusted number is computed by subtracting a fund's risk score (which  
is a function of the fund's monthly returns less the 3-month T-bill return) from
its load-adjusted total return score. This numerical score is then translated   
into rating categories, with the top 10% labeled five star, the next 22.5%      
labeled four star, the next 35% labeled three star, the next 22.5% labeled two  
star, and the bottom 10% one star. A high rating reflects either above-average  
returns or below-average risk, or both.                                         

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Of course, past performance is not indicative of future results.      

    To illustrate the historical returns on various types of financial assets,
a Fund may use historical data provided by Ibbotson Associates, Inc.            
("Ibbotson"), a Chicago-based investment firm. Ibbotson constructs (or obtains) 
very long-term (since 1926) total return data (including, for example, total    
return indexes, total return percentages, average annual total returns and      
standard deviations of such returns) for the following asset types:             

Common stocks                 
Small company stocks          
Long-term corporate bonds     
Long-term government bonds    
    Intermediate-term government bonds
U.S. Treasury bills           
Consumer Price Index          

The Fund may also refer to quotations, graphs and electronically      
transmitted data from sources believed by Stein Roe or the Distributor to be    
reputable.                                                                      

     DOLLAR COST AVERAGING. Dollar cost averaging is an investment strategy that
requires investing a fixed amount of money in Fund shares at set intervals. This
allows you to purchase more shares when prices are low and fewer shares when    
prices are high. Over time, this tends to lower your average cost per share.    
Like any investment strategy, dollar cost averaging can't guarantee a profit or 
protect against losses in a steadily declining market. Dollar cost averaging    
involves uninterrupted investing regardless of share price and therefore may not
be appropriate for every investor.                                              

 MASTER FUND/FEEDER FUND: STRUCTURE AND RISK FACTORS

  Each Fund (each a series of the Trust, an open-end management investment
company) seeks to achieve its objective by investing all of its assets in       
another mutual fund having an investment objective identical to that of the     
Fund. The shareholders of each Fund approved this policy of permitting a Fund to
act as a feeder fund by investing in a Portfolio. Please refer to Investment    
Policies, Portfolio Investments and Strategies, and Investment Restrictions for 
a description of the investment objectives, policies, and restrictions of the   
Funds and the Portfolios. The management fees and expenses of the Funds and the 
Portfolios are described under Investment Advisory and Other Services. Each     
feeder Fund bears its proportionate share of the expenses of its master         
Portfolio.                                                                      

  Stein Roe has provided investment management services in connection with
other mutual funds employing the master fund/feeder fund structure since 1991.  

  Each Portfolio is a separate series of SR&F Base Trust ("Base Trust"), a
Massachusetts common law trust organized under an Agreement and Declaration of  
Trust ("Declaration of Trust") dated August 23, 1993. The Declaration of Trust  
of Base Trust provides that a Fund and other investors in a Portfolio will be   
liable for all obligations of that Portfolio that are not satisfied by the      
Portfolio. However, the risk of a Fund incurring                                

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financial loss on account of such liability is limited to circumstances in which
liability was inadequately insured and a Portfolio was unable to meet its       
obligations. Accordingly, the trustees of the Trust believe that neither the    
Funds nor their shareholders will be adversely affected by reason of a Fund's   
investing in a Portfolio.                                                       

The Declaration of Trust of Base Trust provides that a Portfolio will 
terminate 120 days after the withdrawal of a Fund or any other investor in the  
Portfolio, unless the remaining investors vote to agree to continue the business
of the Portfolio. The trustees of the Trust may vote a Fund's interests in a    
Portfolio for such continuation without approval of the Fund's shareholders.    

The common investment objectives of the Funds and the Portfolios are  
nonfundamental and may be changed without shareholder approval, subject,        
however, to at least 30 days' advance written notice to a Fund's shareholders.  

 The fundamental policies of each Fund and the corresponding fundamental
policies of its master Portfolio can be changed only with shareholder approval. 
If a Fund, as a Portfolio investor, is requested to vote on a change in a       
fundamental policy of a Portfolio or any other matter pertaining to the         
Portfolio (other than continuation of the business of the Portfolio after       
withdrawal of another investor), the Fund will solicit proxies from its         
shareholders and vote its interest in the Portfolio for and against such matters
proportionately to the instructions to vote for and against such matters        
received from Fund shareholders. A Fund will vote shares for which it receives  
no voting instructions in the same proportion as the shares for which it        
receives voting instructions. There can be no assurance that any matter         
receiving a majority of votes cast by Fund shareholders will receive a majority 
of votes cast by all investors in a Portfolio. If other investors hold a        
majority interest in a Portfolio, they could have voting control over that      
Portfolio.                                                                      

    In the event that a Portfolio's fundamental policies were changed so as to
be inconsistent with those of the corresponding Fund, the Board of Trustees of  
the Trust would consider what action might be taken, including changes to the   
Fund's fundamental policies, withdrawal of the Fund's assets from the Portfolio 
and investment of such assets in another pooled investment entity, or the       
retention of an investment adviser to invest those assets directly in a         
portfolio of securities. A Fund's inability to find a substitute master fund or 
comparable investment management could have a significant impact upon its       
shareholders' investments. Any withdrawal of a Fund's assets could result in a  
distribution in kind of portfolio securities (as opposed to a cash distribution)
to the Fund. Should such a distribution occur, the Fund would incur brokerage   
fees or other transaction costs in converting such securities to cash. In       
addition, a distribution in kind could result in a less diversified portfolio of
investments for the Fund and could affect the liquidity of the Fund.            

  Each investor in a Portfolio, including a Fund, may add to or reduce its
investment in the Portfolio on each day the NYSE is open for business. The      
investor's percentage of the aggregate interests in the Portfolio will be       
computed as the percentage equal to the fraction (i) the numerator of which is  
the beginning of the day value of such investor's                               

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investment in the Portfolio on such day plus or minus, as the case may be, the  
amount of any additions to or withdrawals from the investor's investment in the 
Portfolio effected on such day; and (ii) the denominator of which is the        
aggregate beginning of the day net asset value of the Portfolio on such day plus
or minus, as the case may be, the amount of the net additions to or withdrawals 
from the aggregate investments in the Portfolio by all investors in the         
Portfolio. The percentage so determined will then be applied to determine the   
value of the investor's interest in the Portfolio as of the close of business.  

     Base Trust may permit other investment companies and/or other institutional
investors to invest in a Portfolio, but members of the general public may not   
invest directly in the Portfolio. Other investors in a Portfolio are not        
required to sell their shares at the same public offering price as a Fund, might
incur different administrative fees and expenses than the Fund, and might charge
a sales commission. Therefore, Fund shareholders might have different investment
returns than shareholders in another investment company that invests exclusively
in a Portfolio. Investment by such other investors in a Portfolio would provide 
funds for the purchase of additional portfolio securities and would tend to     
reduce the operating expenses as a percentage of the Portfolio's net assets.    
Conversely, large-scale redemptions by any such other investors in a Portfolio  
could result in untimely liquidations of the Portfolio's security holdings, loss
of investment flexibility, and increases in the operating expenses of the       
Portfolio as a percentage of its net assets. As a result, a Portfolio's security
holdings may become less diverse, resulting in increased risk.                  

 Information regarding other investors in a Portfolio may be obtained by
writing to SR&F Base Trust at One Financial Center, Boston, MA 02111, or by     
calling 800-338-2550. Stein Roe may provide administrative or other services to 
one or more of such investors.                                                  

 APPENDIX--RATINGS

RATINGS IN GENERAL                                                              

 A rating of a rating service represents the service's opinion as to the
credit quality of the security being rated. However, the ratings are general and
are not absolute standards of quality or guarantees as to the creditworthiness  
of an issuer. Consequently, Stein Roe believes that the quality of debt         
securities should be continuously reviewed and that individual analysts give    
different weightings to the various factors involved in credit analysis. A      
rating is not a recommendation to purchase, sell or hold a security because it  
does not take into account market value or suitability for a particular         
investor. When a security has received a rating from more than one service, each
rating should be evaluated independently. Ratings are based on current          
information furnished by the issuer or obtained by the rating services from     
other sources which they consider reliable. Ratings may be changed, suspended or
withdrawn as a result of changes in or unavailability of such information, or   
for other reasons.                                                              

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The following is a description of the characteristics of ratings of   
corporate debt securities used by Moody's Investors Service, Inc. ("Moody's")   
and Standard & Poor's ("S&P").                                                  

RATINGS BY MOODY'S                                                              

Aaa. Bonds rated Aaa are judged to be the best quality. They carry the smallest 
degree of investment risk and are generally referred to as "gilt edge." Interest
payments are protected by a large or an exceptionally stable margin and         
principal is secure. Although the various protective elements are likely to     
change, such changes as can be visualized are more unlikely to impair the       
fundamentally strong position of such bonds.                                    

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

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

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

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

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

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

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

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

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modifier 2 indicates a mid-range ranking; and the modifier 3 indicates that the 
issue ranks in the lower end of its generic rating category.                    

RATINGS BY S&P                                                                  

AAA. Debt rated AAA has the highest rating. Capacity to pay interest and repay  
principal is extremely strong.                                                  

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

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

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

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

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

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

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

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

61

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘497’ Filing		Date		First		Last			Other Filings
		4/16/01		101
Filed on:		2/12/01
		2/1/01		1		66
		12/31/00		2		94
		12/27/00		93					DEFS14A,  PRES14A
		11/1/00		95
		9/30/00		17		119			24F-2NT,  N-30D,  NSAR-B,  NT-NSAR
		9/29/00		104
		9/1/00		90		92
		7/14/00		67
		9/30/99		19		96			24F-2NT,  N-30D,  NSAR-B
		3/3/99		67					N-30D
		12/31/98		29					N-30D,  NSAR-A
		9/30/98		19		96			24F-2NT,  N-30D,  NSAR-B
		1/26/98		29		118
		1/25/98		29
		1/1/98		29
		12/31/97		5		65
		10/15/97		5		118			497
		10/14/97		5
		9/30/97		61					24F-2NT,  497,  N-30D,  NSAR-B,  NSAR-B/A
		9/1/97		108
		6/8/97		85
		2/14/97		5		118			497
		2/13/97		5		65
		9/13/96		67
		7/31/96		67
		8/23/93		122
									List all Filings