LIBERTY ALL-STAR GROWTH AND INCOME FUND
SUPPLEMENT TO THE PROSPECTUSES DATED MARCH 17, 2000
(REPLACING SUPPLEMENTS DATED AUGUST 1, 2000 AND OCTOBER 23, 2000)
1. Effective November 1, 2000, J.P. Morgan Investment Management Inc. was
replaced by Mastrapasqua & Associates (Mastrapasqua) to provide
portfolio management services to the Liberty All-Star Growth and Income
Fund (Fund). Frank Mastrapasqua, Ph.D, Chairman and Chief Executive
Officer, and Thomas A. Trantum, CFA, President, will be responsible for
the management of the Fund's assets assigned to Mastrapasqua.
Pursuant to the portfolio management agreement, the Fund's advisor,
Liberty Asset Management Company, pays Mastrapasqua a fee at an annual
rate of 0.30% of the average daily net assets of that portion of the
Fund's portfolio assigned to Mastrapasqua.
In addition to Mastrapasqua, the Fund's current portfolio managers are
Boston Partners Asset Management, L.P., OpCap Advisors, TCW Investment
Management Company and Westwood Management Corp.
2. The Class A, B and C share prospectus of the Fund is amended as
follows:
The footnote to the table "Class A Sales Charges" under the sub-caption
SALES CHARGES under the section YOUR ACCOUNT is revised as follows:
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% CDSC if the shares are sold within 18 months of the
time of purchase. Subsequent Class A 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 contingent deferred sales
charge does not apply to retirement plans purchased through a fee-based
program.
The following replaces the table called "Purchases Over $1 Million"
under the sub-caption SALES CHARGES under the section YOUR ACCOUNT:
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*
* 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.
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3. The Class Z share prospectus of the Fund is amended to revise the
categories of investors who are eligible to purchase Class Z shares. The
following investors are now eligible to purchase Class Z shares: (i)
clients of broker-dealers or registered investment advisors that both
recommend the purchase of Fund shares and charge such clients an
asset-based fee; (ii) a retirement plan (or the custodian for such plan)
with aggregate plan assets of at least $5 million at the time of purchase
and which purchases shares directly from Liberty Funds Distributor, Inc.,
the Fund's distributor, or through a third party broker-dealer; (iii) any
insurance company, trust company or bank purchasing shares for its own
account; (iv) any endowment, investment company or foundation; (v) clients
of investment advisory affiliates of the distributor provided that the
clients meet certain criteria established by the distributor and its
affiliates; (vi) any shareholder (or family member of such shareholder) who
owned shares of any of the funds 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 has since then continued to own
shares of any funds distributed by Liberty Funds Distributor, Inc.; (vii)
any person investing all or part of the proceeds of a distribution, roll
over or transfer of assets into a Liberty IRA, from any deferred
compensation plan which was a shareholder of any of the funds of Liberty
Acorn Trust on September 29, 2000, in which the investor was a participant
and through which the investor invested in one or more of the funds of
Liberty Acorn Trust immediately prior to the distribution, roll over or
transfer; (viii) any trustee of Liberty Acorn Trust, any employee of
Liberty Wanger Asset Management, L.P., or a member of the family of such
trustee or employee; and (ix) any person or entity listed in the account
registration for any account (such as joint owners, trustees, custodians,
and designated beneficiaries) that held shares of any of the funds of
Liberty Acorn Trust on September 29, 2000 and that has since then continued
to hold shares of any fund distributed by Liberty Funds Distributor, Inc.
Initial purchases of Class Z shares are subject to a minimum purchase
amount of $100,000, except that purchases by (a) retirement plans described
in clause (ii) above are not subject to any initial investment
minimum, and (b) investors described in clauses (vi), (viii) and (ix)
above are subject to a minimum purchase amount of $1,000. The Fund
reserves the right to change the investment minimums.
707-36/846D-1100 November 21, 2000
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LIBERTY ALL-STAR GROWTH AND INCOME FUND
SUPPLEMENT TO THE STATEMENT OF ADDITIONAL INFORMATION DATED MARCH 17, 2000
(REPLACING SUPPLEMENTS DATED JUNE 27, 2000 AND AUGUST 21, 2000)
The Liberty All-Star Growth and Income Fund's (Fund) Statement of Additional
Information is amended as follows:
1. The following is added as the first paragraph under the section
"ORGANIZATION AND HISTORY":
On November 1, 2000, Liberty Financial Companies, Inc. (Liberty Financial),
the ultimate parent of the advisor, announced that it had retained CS First
Boston to help it explore strategic alternatives, including the possible
sale of Liberty Financial.
2. The sixth paragraph under the section "INVESTMENT MANAGEMENT AND OTHER
SERVICES - General" is changed in its entirety as follows:
OpCap Advisors. OpCap Advisors, 1345 Avenue of the Americas, New York, New
York 10105, is a Delaware partnership and a majority-owned subsidiary of
Oppenheimer Capital, which in turn is an indirect wholly-owned subsidiary
of Allianz A.G. OpCap Advisors' principal executive officer is Kenneth M.
Poovey. As of March 31, 2000, OpCap Advisors managed over $45 billion in
assets.
3. Effective November 1, 2000, J.P. Morgan Investment Management Inc. was
replaced by Mastrapasqua & Associates (Mastrapasqua) to serve as one of
Fund's Portfolio Managers.
Mastrapasqua is located at 814 Church Street, Suite 600, Nashville,
Tennessee 37203. Established in 1993, Mastrapasqua is an investment advisor
to individuals, foundations, endowments, retirement plans, mutual funds and
other institutions. As of September 30, 2000, Mastrapasqua was owned 100%
by its officers and trustees. Frank Mastrapasqua, Ph.D., Chairman and Chief
Executive Officer, Thomas A. Trantum, President, and Mauro Mastrapasqua,
First Vice President, are deemed to be control persons of Mastrapasqua by
virtue of the aggregate ownership by them of more than 25% of the
outstanding voting stock of Mastrapasqua. As of September 30, 2000,
Mastrapasqua had $2.5 billion in assets under management.
Pursuant to the portfolio management agreement, the Fund's advisor, Liberty
Asset Management Company, pays Mastrapasqua a fee at an annual rate of
0.30% of the average daily net assets of that portion of the Fund's
portfolio assigned to Mastrapasqua.
In addition to Mastrapasqua, the Fund's current portfolio managers are
Boston Partners Asset Management, L.P., OpCap Advisors, TCW Investment
Management Company and Westwood Management Corp.
4. Pursuant to the Board of Trustees' approval, the shareholders' servicing
and transfer agency fee arrangement between Liberty Funds Services, Inc.
(LFS) and the Fund has been revised, effective January 1, 2000. The Fund
pays LFS a monthly fee at the annual rate of 0.07% of the average daily
closing value of the total net assets of the Fund for such month. In
addition to this compensation, the Fund pays LFS the following fees:
1. A transaction fee of $1.18 per transaction occurring in Fund accounts
during any month; PLUS
2. An account fee for open accounts of $4.00 per annum, payable on a
monthly basis, in an amount equal to 1/12 the per annum charge; PLUS
3. An account fee for closed accounts of $1.50 per annum, payable on a
monthly basis, in an amount equal to 1/12 the per annum charge; PLUS
4. The Fund's allocated share of LFS reimbursement out-of-pocket expenses.
707-35/847D-1100 November 21, 2000
