ACORN INVESTMENT TRUST, 485BPOS, 2000-09-15

ACORN INVESTMENT TRUST
485BPOS, 2000-09-15

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<PAGE>

As filed with the Securities and Exchange Commission on September 15, 2000

Securities Act registration no. 2-34223
Investment Company Act file no. 811-1829
--------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A
______________________________

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Post-Effective Amendment No. 68

and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

Amendment No. 43
______________________________

ACORN INVESTMENT TRUST
(Registrant)

227 West Monroe Street, Suite 3000
Chicago, Illinois 60606

Telephone number: 312/634-9200
______________________________

Ralph Wanger Janet D. Olsen
Acorn Investment Trust Bell, Boyd & Lloyd LLC
227 West Monroe Street, Suite 3000 70 West Madison Street, Suite 3300
Chicago, Illinois 60606 Chicago, Illinois 60602

(Agents for service)
_____________________________

Amending Parts A, B, and C, and filing exhibits
______________________________

It is proposed that this filing will become effective:

[_] immediately upon filing pursuant to rule 485(b)
[X] on September 29, 2000 pursuant to rule 485(b)
[_] 60 days after filing pursuant to rule 485(a)(1)
[_] on ___________ pursuant to rule 485(a)(1)
[_] 75 days after filing pursuant to rule 485(a)(2)
[_] on ___________ pursuant to rule 485(a)(2).

<PAGE>

NUMBER _________

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION BUT HAS NOT YET BECOME EFFECTIVE. THESE
SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME
THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS COMMUNICATION SHALL NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY OR SHALL
THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO QUALIFICATION UNDER THE
SECURITIES LAWS OF ANY SUCH STATE.

SUBJECT TO COMPLETION

LIBERTY ACORN FUND
LIBERTY ACORN INTERNATIONAL
LIBERTY ACORN USA
LIBERTY ACORN TWENTY
LIBERTY ACORN FOREIGN FORTY

Supplement dated September 15, 2000
to Preliminary Prospectus dated September 15, 2000 of Acorn Investment Trust

Enhanced pricing schedule on the Liberty Acorn Funds through February 28, 2001.*

We're celebrating the newest additions to our growing fund family with an
enhanced commission schedule on A, B and C shares of the Liberty Acorn Funds and
a reduced sales load on A share purchases.

Effective October 16, 2000 - February 28, 2001:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
Purchase Price Reduced Upfront Sales Load** Enhanced Dealer Commission
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Less than $250,000 A share - 2.00% A share - 4.00%
B share - 5.00%
C share - 2.00%
------------------------------------------------------------------------------------------------------------
$250,000 to less than $500,000 A share - 2.00% A share - 3.50%
B share - 4.50%
C share - 2.00%
------------------------------------------------------------------------------------------------------------
$500,000 to $1,000,000 A share - 2.00% A share - 2.50%
B share - 3.75%
C share - 2.00%
------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
Liberty Acorn Fund Liberty Acorn International
<S> <C>
A share - 53015P106 A share - 53015P841
B share - 53015P205 B share - 53015P833
C share - 53015P304 C share - 53015P825

Liberty Acorn USA Liberty Foreign Forty
A share - 53015P502 A share - 53015P791
B share - 53015P601 B share - 53015P783
C share - 53015P700 C share - 53015P775

Liberty Acorn Twenty
A share - 53015P882
B share - 53015P874
C share - 53015P866
</TABLE>

*Subject to the successful closing of the acquisition of Wanger Asset
Management, L.P., by Liberty Financial Companies, Inc.
**Reduced sales load on A share purchases only.

Liberty Funds Distributor, Inc. One Financial Center, Boston, MA 02111-2621
VAL-19/892C-0900 (00/1660)

<PAGE>

SUBJECT TO COMPLETION
LIBERTY ACORN FUND Prospectus, September 15, 2000

Class A, B and C Shares

Advised by Liberty Wanger Asset Management, L.P.

Liberty Acorn Trust

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.

-----------------------------------------------------------------------------
T A B L E O F C O N T E N T S

<TABLE>
<S> <C>
LIBERTY ACORN FUND XX
-----------------------------------------------------------------------------
Investment Goal.......................................................... xx
Principal Investment Strategies.......................................... xx
Principal Investment Risks............................................... xx
Performance History...................................................... xx
Your Expenses............................................................ xx

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

MANAGING THE FUND XX
-----------------------------------------------------------------------------
Investment Advisor....................................................... xx
Portfolio Managers....................................................... xx

OTHER INVESTMENT STRATEGIES AND RISKS XX
-----------------------------------------------------------------------------
The Information Edge..................................................... XX
Stock Strength Comes First............................................... XX
Derivative Strategies.................................................... XX
Temporary Defensive Strategies........................................... XX

FINANCIAL HIGHLIGHTS XX
-----------------------------------------------------------------------------
</TABLE>

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

<PAGE>

Liberty Acorn Fund

INVESTMENT GOAL
--------------------------------------------------------------------------------
Liberty Acorn Fund seeks to provide long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES
--------------------------------------------------------------------------------
Liberty Acorn Fund invests primarily in the stocks of small- and medium-sized
companies. The Fund generally invests in the stocks of companies around the
globe with capitalizations of less than $2 billion at the time of purchase with
the intention of holding them as they grow and selling them when they become
large.

The Fund believes that these smaller, less-profiled companies may offer higher
return potential than the stocks of large companies.

Liberty Acorn Fund typically looks for companies with:

. A strong business franchise that offers growth potential.
. Products and services that give a company a competitive advantage.
. A stock price the Fund's advisor believes is reasonable relative to the
assets and earning power of the company.

Liberty Acorn Fund invests the majority of its assets in U.S. companies, but
also invests a portion of its holdings in companies in developed and emerging
markets outside the U.S. The Fund may invest up to 33% of its assets in non-U.S.
companies.

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."

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 competing 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

_____
2
<PAGE>

Liberty Acorn Fund

from factors affecting individual companies, industries or the securities market
as a whole.

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 stock.

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.

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 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.

Emerging markets are subject to additional risk. The risks of foreign
investments are typically increased in less developed countries, which are
sometimes referred to as emerging markets. For example, political and economic
structures in these countries may be new and developing rapidly, which may cause
instability. These countries are also more likely to experience high levels of
inflation, deflation or currency devaluations, which could hurt their economies
and securities markets.

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 Fund does not intend to focus on any particular sector, at
times, the Fund may have a large portion of its assets invested in a particular
sector. An example of a sector in which the Fund 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 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.

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.

_____
3
<PAGE>

Liberty Acorn Fund

UNDERSTANDING PERFORMANCE

CALENDAR YEAR TOTAL RETURNS show the Fund's Class Z share performance for each
of the last ten complete calendar years. They include the effects of Class Z
expenses. Class A, Class B and Class C shares are subject to sales charges,
12b-1 fees and different expenses that are not reflected in the bar chart. If
these amounts were reflected, returns would be less than those shown.

AVERAGE ANNUAL TOTAL RETURNS are measures of the Fund's Class Z performance over
the past one-year, five-year and ten-year periods. They include the effects of
Class Z expenses. The table shows for each class the Class Z performance
restated to reflect the effect of sales charges of the class.

The Fund's return is compared to the S&P 500 Index and the Russell 2000 Index.
The S&P 500 Index is a broad market-weighted average of large U.S. blue-chip
companies. The Russell 2000 Index is a market-weighted index of 2000 small
companies formed by taking the largest 3000 companies and eliminating the
largest 1000 of those companies. 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
--------------------------------------------------------------------------------
Because Class A, Class B and Class C shares have not been offered for a full
calendar year, the information provided in the bar chart below shows changes in
the Fund's performance from year to year by illustrating the Fund's calendar
year total returns for its Class Z shares. Class Z shares are offered to certain
investors through separate prospectuses. The performance table following the bar
chart shows how the Fund's average annual returns for (1) the Class Z shares and
(2) the Class Z shares, restated to reflect the charges of the Class A, Class B
and Class C shares, respectively, compared with those of broad measures of
market performance for one year, five years and ten years. 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 Class Z performance. All returns include the
reinvestment of dividends and distributions. As with all mutual funds, past
performance does not predict the Fund's future performance.

Calendar Year Total Returns (Class Z)/(1)/

________________________________________________________________________________

[BAR CHART]

Year Return
---- ------
1990 (17.52%)
1991 47.35%
1992 24.23%
1993 32.32%
1994 (7.45%)
1995 20.80%
1996 22.55%
1997 24.98%
1998 6.02%
1999 33.38%

________________________________________________________________________________

For period shown in bar chart:
Best quarter: 4th quarter 1999, +21.94%
Worst quarter: 3rd quarter 1990, -23.77%

Average Annual Total Returns-- for periods ended December 31, 1999/(1)//(2)/

Inception Date 1 Year 5 Years 10 Years

Class A 9/29/00 25.71% 19.78% 16.38%
----------------------------------------------------------------------------
Class B 9/29/00 28.38% 21.02% 17.07%
----------------------------------------------------------------------------
Class C 9/29/00 32.38% 21.21% 17.07%
----------------------------------------------------------------------------
Class Z 6/10/70 33.38% 21.21% 17.07%
----------------------------------------------------------------------------
S&P 500 N/A 21.04% 28.56% 18.21%
----------------------------------------------------------------------------
Russell 2000 N/A 21.26% 16.69% 13.34%
----------------------------------------------------------------------------

(1) Class Z shares are not offered through this prospectus, but Class A, Class B
and Class C shares would have substantially similar annual returns because
the shares are invested in the same portfolio of securities and these
returns differ only to the extent that the classes do not have the same
expenses.

(2) Class A, Class B, and Class C are new classes of shares. Their performance
information includes returns of the Fund's Class Z shares (the oldest
existing Fund class) for periods prior to the inception of the newer classes
of shares. Class Z returns are not restated to reflect any differences in
expenses (such as Rule 12b-1 fees) between Class Z shares and the newer
classes of shares. If differences in expenses were reflected, the returns
for prior to the inception of the newer classes of shares would be lower.
Class Z shares were initially offered on June 10, 1970; Class A, Class B
and Class C shares were initially offered on September 29, 2000.

____
4
<PAGE>

Liberty Acorn Fund

UNDERSTANDING EXPENSES

Sales Charges are paid directly by shareholders to Liberty Funds Distributor,
Inc., 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 help you compare the cost of investing in the Fund to the cost
of investing in other mutual funds. It uses the following hypothetical
conditions:

. $10,000 initial investment

. 5% total 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
--------------------------------------------------------------------------------

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

Shareholder Fees /(3)/ (paid directly from your investment)

<TABLE>
<CAPTION>
Class A Class B Class C
<S> <C> <C> <C>
Maximum sales charge (load) on purchases (%)
(as a percentage of the offering price) 5.75 None None
------------------------------------------------------------------------------------------
Maximum deferred sales charge (load) on
redemptions (%) (as a percentage of the
lesser of purchase price or redemption price) 1.00/(4)/ 5.00 1.00
------------------------------------------------------------------------------------------
Redemption fee (5) (5) (5)

</TABLE>

Annual Fund Operating Expenses (deducted directly from fund assets)

<TABLE>
<CAPTION>
Class A Class B Class C
<S> <C> <C> <C>
Management/(6)/(%) .69 .69 .69
--------------------------------------------------------------------------------------
Distribution and service (12b-1) fees (%) .35 1.00 1.00
--------------------------------------------------------------------------------------
Other expenses (%) .33 .33 .33
--------------------------------------------------------------------------------------
Total annual fund operating expenses (%) 1.37% 2.02% 2.02%
</TABLE>

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

(4) This charge applies only to certain Class A shares bought without an initial
sales charge that are sold within 18 months of purchase.

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

(6) In addition to the management fee, the Fund pays the Advisor an
administrative fee of .05%, which is included in "Other Expenses."

<PAGE>

Liberty Acorn Fund

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

<TABLE>
<CAPTION>
Class 1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
Class A: $ 706 $ 984 $1,282 $2,127
-----------------------------------------------------------------------------------------------
Class B: did not sell your shares $ 205 $ 634 $1,088 $2,181

sold all your shares at
the end of the period $ 705 $ 934 $1,288 $2,181
-----------------------------------------------------------------------------------------------
Class C: did not sell your shares $ 205 $ 634 $1,088 $2,348

sold all your shares at
the end of the period $ 305 $ 634 $1,088 $2,348
</TABLE>

____
6
<PAGE>

Your Account

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 the various options for buying shares:

Method Instructions

Through your Your financial advisor can help you establish your
financial advisor account and buy Fund shares on your behalf. Your
financial advisor may charge you fees for executing the
purchase for you.
--------------------------------------------------------------------------------
By check For new accounts, send a completed application and check
(new account) made 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
(existing account) additional 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.
--------------------------------------------------------------------------------

____
7
<PAGE>

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 must be for Class A or Class C shares only. Purchases of $1
million or more can be made only in Class A shares. Based on your personal
situation, your financial advisor can help you decide which class of shares
makes the most sense for you.

The Fund also offers an additional class of shares, Class Z shares, to certain
institutional and other investors. Class Z shares are made available through
separate prospectuses provided to eligible institutional and other
investors.

SALES CHARGES
--------------------------------------------------------------------------------
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 certain 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 initial investment when you open your account. 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

<TABLE>
<CAPTION>
% of offering
As a % of price
the public As a % retained by
offering of your financial
Amount of purchase price investment advisor firm
<S> <C> <C> <C>
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
----------------------------------------------------------------------------------------------
</TABLE>

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 plans purchasing shares through a fee-based
program.

For Class A share purchases of $1 million or more, financial advisors receive a
commission from the distributor as follows:

Purchases Over $1 Million

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.

For Class A share purchases by participants in certain group retirement plans
offered through a fee-based program, financial advisors received a 1.00%
commission from the distributor on all purchases of less than $3 million.

____
8
<PAGE>

Your Account

UNDERSTANDING CONTINGENT DEFERRED SALES CHARGES (CDSC)

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, your 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.

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 net asset value, 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 shares' 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.

Purchases of less than $250,000:

Class B Sales Charges

% deducted when
Holding period after purchase shares are sold

Through first year 5.00
-----------------------------------------------------------------------------
Through second year 4.00
-----------------------------------------------------------------------------
Through third year 3.00
-----------------------------------------------------------------------------
Through fourth year 3.00
-----------------------------------------------------------------------------
Through fifth year 2.00
-----------------------------------------------------------------------------
Through sixth year 1.00
-----------------------------------------------------------------------------
Longer than six years None

Commission to financial advisors is 5.00%.

Automatic conversion to Class A shares is eight years after purchase.

____
9
<PAGE>

Your Account

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 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

% 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.

Purchases of $500,000 to less than $1 million:

Class B Sales Charges

% deducted when
Holding period after purchase shares are sold
-----------------------------------------------------------------------------
Through first year 3.00
-----------------------------------------------------------------------------
Through second year 2.00
-----------------------------------------------------------------------------
Through third year 1.00

Commission to financial advisors is 1.75%.

Automatic conversion to Class A shares is three years after purchase.

____
10
<PAGE>

Your Account

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 Class C's net asset value. Although Class C shares have no front-end sales
charge, they carry a CDSC of 1.00% 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. The distributor pays the financial
advisor firm an up-front commission of 1.00% on sales of Class C shares.

Class C Sales Charges

Years after purchase % deducted when shares are sold

Through one year 1.00
--------------------------------------------------------------------------
Longer than one year 0.00

____
11
<PAGE>

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. 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 cash, under certain circumstances. For more information, see the
paragraph "Non-Cash Redemptions" under the section "How to Sell Shares" in the
Statement of Additional Information.
____
12
<PAGE>

Your Account

Outlined below are the various options for selling shares:

Method Instructions

Through your You may call your financial advisor to place your sell
financial advisor order. 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 Liberty 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 owners. For details,
call 1-800-345-6611.

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 and have the
proceeds sent to you. This feature is not available if
you hold your shares in certificate form. 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.

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 drive
Fund expenses higher. 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.

____
13
<PAGE>

Your Account

DISTRIBUTION AND SERVICE FEES
--------------------------------------------------------------------------------

The Fund has adopted a plan under Rule 12b-1 that permits it to pay the Fund's
distribution, marketing and other fees to support the sale and distribution of
Class A, B and C shares and certain services provided to you by your financial
advisor. The annual service fee may equal up to 0.25% for 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 Class B and Class C shares. Distribution and service fees
are paid out of the assets of these classes. Over time, these fees may 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, eliminating a portion of the distribution fee upon
conversion. Conversion may occur three, four or eight years after purchase,
depending on the program you purchased your shares under. See "Your Account;
Sales Charge" for the conversion schedule applicable to Class B shares.

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's 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 each share class by dividing each
class's total net assets by the number of that class's outstanding shares. In
determining the net asset value, the Fund must determine the price of each
security in its portfolio at the close of each trading day. Because the Fund
holds securities that are traded on foreign exchanges, the value of these
securities may change on days when shareholders will not be able to buy or sell
Fund shares. This will affect the Fund's net asset value on the day it is next
determined. Securities for which market quotations are available are valued each
day at the current market value. However, where market quotations are not
available, or when the advisor believes that subsequent events have made them
unreliable, the Fund 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

____
14
<PAGE>

Your Account

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.

____
15
<PAGE>

Your Account

UNDERSTANDING FUND DISTRIBUTIONS

The Fund earns income from the securities it holds. The Fund also may realize
capital gains and losses on sales of its 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 Represents interest and dividends earned from securities
held by the Fund, net of expenses incurred by the Fund.
--------------------------------------------------------------------------------
Capital gains Represents net long-term capital gains on sales of
securities held for more than 12 months and net short-term
capital gains, which are gains on sales of securities held
for a 12-month period or less.

Distribution Options The Fund distributes dividends in June and December and
any capital gains (including short-term capital gains) 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.

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.

Distribution Options

Reinvest all distributions in additional shares of the 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
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.
___
16
<PAGE>

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 foreign, 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 and local income tax.

Foreign Income Taxes The Fund may receive investment income from sources within
foreign countries, and that income may be subject to foreign income taxes at the
source. If the Fund pays non-refundable taxes to foreign governments during the
year, the taxes will reduce the Fund's dividends but will still be included in
your taxable income.

____
17
<PAGE>

Managing the Fund

INVESTMENT ADVISOR
--------------------------------------------------------------------------------
Liberty Wanger Asset Management (Liberty WAM) (formerly Wanger Asset Management,
L.P. (WAM)), located at 227 West Monroe Street, Suite 3000, Chicago, Illinois
60606, is the Fund's investment advisor. Liberty WAM and its predecessor have
managed mutual funds, including the Fund, since 1992. In its duties as
investment advisor, Liberty WAM runs the Fund's day-to-day business, including
placing all orders for the purchase and sale of the Fund's portfolio securities.
As of June 30, 2000, Liberty WAM managed over $9 billion in assets.

WAM was renamed Liberty WAM on September 29, 2000 when it became a wholly owned
subsidiary of Liberty Financial Companies, Inc. (Liberty), which in turn is a
majority owned indirect subsidiary of Liberty Mutual Insurance Company. For more
information about Liberty's acquisition of WAM, see the Statement of Additional
Information.

Liberty WAM is part of a larger business unit that includes several separate
legal entities known as Liberty Funds Group (LFG). LFG includes certain
affiliates of Liberty WAM, including Stein Roe & Farnham, Incorporated (Stein
Roe) and Colonial Management Associates, Inc. (Colonial). Stein Roe, Colonial
and other LFG entities share personnel, facilities and systems that may be used
in providing administrative or operational services to the Fund. Stein Roe,
Colonial and the other entities that make up the LFG are subsidiaries of
Liberty.

Liberty WAM's advisory fee for managing the Fund in 1999 was 0.69% of the Fund's
average daily net assets. Liberty WAM also receives an administrative services
fee from the Fund at the annual rate of .05% of the Fund's average daily net
assets.

PORTFOLIO MANAGERS
--------------------------------------------------------------------------------
Liberty WAM uses a team to manage the Fund. Team members share responsibility
for providing ideas, information, and knowledge in managing the Fund, and each
team member has one or more particular areas of expertise. The portfolio
managers are responsible for making daily investment decisions, and utilize the
management team's input and advice when making buy and sell determinations.

Ralph Wanger
Lead portfolio manager

Ralph Wanger is chief strategist of the Liberty Acorn Funds and has been
portfolio manager of Liberty Acorn Fund since its inception in 1970. He has been
president and a member of Liberty Acorn Trust's Board of Trustees since 1970.
Mr. Wanger has been president of Liberty WAM since September 29, 2000 and was a
principal of WAM before that date. He is a Chartered Financial Analyst (CFA),
and earned his BS and MS degrees in Industrial Management from the Massachusetts
Institute of Technology.

Charles P. McQuaid
Co-portfolio manager

----
18
<PAGE>

Managing the Fund

member of Liberty Acorn Fund's management team since 1978. He is a CFA, and
earned his BBA from the University of Massachusetts and his MBA from the
University of Chicago.

___
19
<PAGE>

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
"Liberty Acorn Fund - Principal Investment Strategies" and Liberty Acorn Fund -
Principal Investment Risks." In seeking to meet its investment goal, the Fund
may also invest in other securities and use certain other investment techniques.
These securities and investment techniques offer opportunities and carry various
risks.

Liberty WAM 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 achieve its
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 first portion of this prospectus describes the Fund's principal investment
strategies and their associated risks. This section provides more detail about
the Fund's investment strategies, and describes other investments the Fund may
make and the risks associated with them. In seeking to achieve its investment
goal, the Fund 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 investment goal or investment strategies.

THE INFORMATION EDGE
--------------------------------------------------------------------------------
Liberty WAM invests in less-profiled, entrepreneurially managed smaller and
mid-sized companies that it believes are benefiting from an important economic,
social or technological trend and whose domination of a niche creates the
opportunity for superior earnings-growth potential.

In making investments for the Fund, Liberty WAM relies primarily on independent,
internally generated research to uncover companies that may be less well known
than the more popular names. To find these companies, Liberty WAM looks for
growth potential, financial strength and fundamental value.

Growth Potential Financial Strength Fundamental Value
--------------------------------------------------------------------------------

. superior technology . stability . lower stock price
. innovative marketing . reduced risk relative to growth
. solid management . competitive potential and
advantage capitalization
. dominant or niche
position . low debt . growth at a
reasonable price
. superior earnings . adequate working
prospects capital
. fast-growing . conservative
economy accounting practices

STOCK STRENGTH COMES FIRST
--------------------------------------------------------------------------------
Liberty WAM's analysts continually screen companies and make more than 1,000
face-to-face visits around the globe each year. To accomplish this, Liberty WAM
analysts talk to top management, vendors, suppliers and competitors, whenever
possible.

In managing the Fund, Liberty WAM tries to maintain lower taxes and transaction
costs by investing with a long-term time horizon (at least two to five years).
However,

----
20
<PAGE>

Other Investment Strategies and Risks

securities purchased on a long-term basis may be sold within 12 months after
purchase due to changes in the circumstances of a particular company or
industry, or changes in general market or economic conditions.

DERIVATIVE STRATEGIES
--------------------------------------------------------------------------------
The Fund may enter into a number of hedging strategies, including those that
employ futures and options, to gain or reduce exposure to particular securities
or markets. These strategies, commonly referred to as derivatives, involve the
use of financial instruments whose values depend on, or are derived from, the
value of an underlying security, index or currency. The Fund may use these
strategies to adjust the Fund's sensitivity to changes in interest rates or for
other hedging purposes (i.e., attempting to offset a potential loss in one
position by establishing an interest in an opposite position). Derivative
strategies involve the risk that they may exaggerate a loss, potentially losing
more money that the actual cost of the underlying security, or limit a potential
gain. Also, with some derivative strategies there is a risk that the other party
to the transaction may fail to honor its contract terms, causing a loss to the
Fund.

TEMPORARY DEFENSIVE STRATEGIES
--------------------------------------------------------------------------------
At times, Liberty WAM may determine that adverse market conditions make it
desirable to temporarily suspend the Fund's normal investment activities.
During such times, the Fund 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 from achieving its investment goal.

____
21
<PAGE>

Financial Highlights

The financial highlights tables are intended to help you understand the Fund's
financial performance. Because Class A, Class B and Class C shares are new
classes of shares, information is shown for the Fund's Class Z shares for the
last five fiscal years, which run from January 1 to December 31. Class Z shares
are offered to certain investors through separate prospectuses. 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 has been derived from the Fund's financial
statements which have been audited by Ernst & Young LLP, independent auditors
whose report, along with the Fund's financial statements, is included in the
Fund's annual report. You can request a free annual report by calling
1-800-426-3750.

Liberty Acorn Fund

For a share outstanding throughout
each year - years ended 12/31 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class Z Class Z Class Z Class Z Class Z
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year $16.85 $16.99 $15.04 $13.60 $12.24
------------------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:

Net investment income .09 .04 .15 .09 .11
------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on
investments, foreign currency and
futures 5.22 .91 3.57 2.93 2.42
------------------------------------------------------------------------------------------------------------------------------------
Total from investment
operations 5.31 .95 3.72 3.02 2.53
------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income (.09) (.03) (.16) (.11) (.09)
------------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized and
unrealized gains reportable for federal
income taxes (3.54) (1.06) (1.61) (1.47) (1.08)
------------------------------------------------------------------------------------------------------------------------------------
Total distributions (3.63) (1.09) (1.77) (1.58) (1.17)
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $18.53 $16.85 $16.99 $15.04 $13.60
------------------------------------------------------------------------------------------------------------------------------------
Total return 33.4% 6.0% 25.0% 22.6% 20.8%
------------------------------------------------------------------------------------------------------------------------------------
Ratios/supplemental data:

Ratio of expenses to average net
assets .85% .84% .56% .57% .57%
------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to
average net assets .49% .30% .75% .53% .89%
------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 34% 24% 32% 33% 29%
------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year
(in millions) $3,921 $3,549 $3,681 $2,842 $2,399
</TABLE>

----
22
<PAGE>

Notes

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----
23
<PAGE>

Notes

----
24
<PAGE>

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 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

Text-only versions of all Fund documents can be viewed online or downloaded from
the Edgar database on the Securities and Exchange Commission internet site at
www.sec.gov.

You can review and copy information about the Fund by visiting the following
location, and you can obtain copies, upon payment of a duplicating fee by
electronic request at the E-mail address [email protected] or by writing the:

Public Reference Room
Securities and Exchange Commission
Washington, DC 20549-0102

Information on the operation of the Public Reference Room may be obtained by
calling 1-202-942-8090.

Investment Company Act file number:

Liberty Acorn Trust (formerly Acorn Investment Trust): 811-01829

. Liberty Acorn Fund (formerly Acorn Fund)

[LOGO OF LIBERTY FUNDS]
<PAGE>

SUBJECT TO COMPLECTION

--------------------------------------------------------------------------------
LIBERTY ACORN INTERNATIONAL Prospectus, September 15, 2000
--------------------------------------------------------------------------------

Class A, B and C Shares

Advised by Liberty Wanger Asset Management, L.P.

Liberty Acorn Trust

<TABLE>
<CAPTION>
--------------------------------------------------------------------------
T A B L E O F C O N T E N T S

LIBERTY ACORN INTERNATIONAL XX
---------------------------
<S> <C>
Investment Goal..................................................... xx
Principal Investment Strategies..................................... xx
Principal Investment Risks.......................................... xx
Performance History................................................. xx
Your Expenses....................................................... xx

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

MANAGING THE FUND XX
-----------------
Investment Advisor.................................................. xx
Portfolio Managers.................................................. xx

OTHER INVESTMENT
STRATEGIES AND RISKS XX
--------------------
The Information Edge................................................ xx
Stock Strength Comes First.......................................... xx
Derivative Strategies............................................... xx
Temporary Defensive Strategies...................................... xx

FINANCIAL HIGHLIGHTS XX
--------------------
</TABLE>

Not FDIC May Lose Value
-----------------
Insured No Bank Guarantee
<PAGE>

Liberty Acorn International

INVESTMENT GOAL
--------------------------------------------------------------------------------
Liberty Acorn International seeks to provide long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES
--------------------------------------------------------------------------------
Liberty Acorn International invests primarily in stocks of non-U.S. small- and
medium-sized companies. The Fund generally invests in the stocks of companies
based outside the U.S. (or whose primary business takes place outside the U.S.)
with capitalizations of less than $5 billion with the intention of holding them
as they grow and selling them when they become large.

The Fund believes that smaller, less-profiled companies - particularly outside
the U.S. - may offer higher return potential than the stocks of large companies.

Liberty Acorn International typically looks for companies with:

. A strong business franchise that offers growth potential.
. Products and services that give the company a competitive advantage.
. A stock price the Fund's advisor believes is reasonable relative to the
assets and earning power of the company.

Liberty Acorn International is an international fund and invests the majority
(under normal market conditions, at least 75%) of its total assets in the stocks
of foreign companies based in developed and emerging markets outside the U.S.

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."

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

______
2
<PAGE>

Liberty Acorn International

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.

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.

_____
3
<PAGE>

Liberty Acorn International

UNDERSTANDING PERFORMANCE

Calendar year total returns show the Fund's Class Z share performance for each
completed calendar year. They include the effects of Class Z expenses. Class A,
Class B and Class C shares are subject to sales charges, 12b-1 fees and
different expenses that are not reflected in the bar chart. If these amounts
were reflected, returns would be less than those shown.

Average annual total returns are measures of the Fund's Class Z performance over
the past one-year, five-year and life of the Fund periods. They include the
effects of Class Z expenses. The table shows for each class the Class Z
performance restated to reflect the effect of sales charges of the class.

The Fund's return is compared to Morgan Stanley's Europe, Australasia and Far
East Index (EAFE), an index of companies throughout the world in proportion to
stock market capitalizations, excluding the U.S. and Canada, and the EMI (world
ex-U.S.), Salomon Smith Barney's index of the bottom 20% of institutionally
investable capital of countries, selected by Salomon and excluding the U.S.
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
--------------------------------------------------------------------------------

Because Class A, Class B and Class C shares have not been offered for a full
calendar year, the information provided in the bar chart below shows changes in
the Fund's performance from year to year by illustrating the Fund's calendar
year total returns for its Class Z shares. Class Z shares are offered to certain
investors through a separate prospectus. The performance table following the bar
chart shows how the Fund's average annual returns for (1) the Class Z shares and
(2) the Class Z shares, restated to reflect the sales charges of the Class A,
Class B and Class C shares, respectively, compare with those of broad measures
of market performance for one year, five years and 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 Class Z performance. All returns include
the reinvestment of dividends and distributions. As with all mutual funds, past
performance does not predict the Fund's future performance.

Calendar Year Total Returns (Class Z)/(1)(2)/
--------------------------------------------------------------------------------
[BAR CHART]

Year Return
---- ------
1993 49.11%
1994 (3.80%)
1995 8.93%
1996 20.65%
1997 .19%
1998 15.43%
1999 79.19%

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

For period shown in bar chart:
Best quarter: 4th quarter 1999, +41.63%
Worst quarter: 3rd quarter 1998,-16.05%

Average Annual Total Returns -- for periods ended December 31, 1999/(2)(3)/

<TABLE>
<CAPTION>
Life of the
Inception Date 1 Year 5 Years Fund
<S> <C> <C> <C> <C>
Class A 9/29/00 68.89% 20.75% 20.72%
-------------------------------------------------------------------------------
Class B 9/29/00 74.19% 22.01% 21.71%
-------------------------------------------------------------------------------
Class C 9/29/00 78.19% 22.19% 21.71%
-------------------------------------------------------------------------------
Class Z 9/23/92 79.19% 22.19% 21.71%
-------------------------------------------------------------------------------
EAFE N/A 26.96% 12.83% 13.50%
-------------------------------------------------------------------------------
EMI (world ex-U.S.) N/A~ 23.52% 7.21% 9.48%
</TABLE>

(1) Class Z shares are not offered through this prospectus, but Class A, Class
B and Class C shares would have substantially similar annual returns
because the shares are invested in the same portfolio of securities and
these returns differ only to the extent that the classes do not have the
same expenses.

(2) The Fund's performance in 1999 was achieved during a period of unusual
market conditions that are unlikely to continue.

(3) Class A, Class B, and Class C are new classes of shares. Their performance
information includes returns of the Fund's Class Z shares (the oldest
existing Fund class) for periods prior to the inception of the newer
classes of shares. Class Z returns are not restated to reflect any
differences in expenses (such as Rule 12b-1 fees) between Class Z shares
and the newer classes of shares. If differences in expenses were reflected,
the returns for prior to the inception of the newer classes of shares would
be lower. Class Z shares were initially offered on September 23, 1992;
Class A, Class B and Class C shares were initially offered on September 29,
2000.

_____
4
<PAGE>

Liberty Acorn International

UNDERSTANDING EXPENSES

Sales Charges are paid directly by shareholders to Liberty Funds Distributor,
Inc., 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 help you compare the cost of investing in the Fund to the cost
of investing in other mutual funds. It uses the following hypothetical
conditions:

. $10,000 initial investment

. 5% total 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
--------------------------------------------------------------------------------

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

Shareholder Fees/(4)/ (paid directly from your investment)

<TABLE>
<CAPTION>
Class A Class B Class C
<S> <C> <C> <C>
Maximum sales charge (load) on purchases (%)
(as a percentage of the offering price) 5.75 None None
------------------------------------------------------------------------------------------------------
Maximum deferred sales charge (load) on
redemptions (%) (as a percentage of the
lesser of purchase price or redemption price) 1.00/(5)/ 5.00 1.00
------------------------------------------------------------------------------------------------------
Redemption fee (6) (6) (6)
</TABLE>

Annual Fund Operating Expenses (deducted directly from fund assets)

<TABLE>
<CAPTION>
Class A Class B Class C
<S> <C> <C> <C>
Management/(7)/(%) .81 .81 .81
------------------------------------------------------------------------------------------------------
Distribution and service (12b-1) fees (%) .35 1.00 1.00
------------------------------------------------------------------------------------------------------
Other expenses (%) .43 .43 .43
------------------------------------------------------------------------------------------------------
Total annual fund operating expenses (%) 1.59 2.24 2.24
</TABLE>

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

(5) This charge applies only to certain Class A shares bought without an
initial sales charge that are sold within 18 months of purchase.

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

(7) In addition to the management fee, the Fund pays the Advisor an
administrative fee of .05%, which is included in "Other Expenses."

______
5
<PAGE>

Liberty Acorn International

Example Expenses (your actual costs may be higher or lower)
<TABLE>
<CAPTION>

Class 1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
Class A: $ 727 $1,048 $1,391 $2,356
-----------------------------------------------------------------------------------------------
Class B: did not sell your shares $ 227 $ 700 $1,200 $2,411

sold all your shares at
the end of the period $ 727 $1,000 $1,400 $2,411
-----------------------------------------------------------------------------------------------
Class C: did not sell your shares $ 227 $ 700 $1,200 $2,575

sold all your shares at $ 327 $ 700 $1,200 $2,575
the end of the period
</TABLE>

_____
6
<PAGE>

Your Account

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.

HOW TO BUY SHARES
--------------------------------------------------------------------------------

Outlined below are the various options for buying shares:

Method Instructions

Through your Your financial advisor can help you establish
financial advisor your account and buy Fund shares on your behalf.
Your financial advisor may charge you fees for
executing the purchase for you.
--------------------------------------------------------------------------------
By check For new accounts, send a completed application
(new account) and check made 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
(existing account) additional 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.
There may be an additional charge if exchanging
from a money market fund. To exchange by telephone,
call 1-800-422-3737.
--------------------------------------------------------------------------------
By wire You may purchase shares by wiring money from 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 trans-
transfer ferring money from your bank account to your Fund
account by calling 1-800-422-3737. Electronic funds
transfers may take up to two business days to
settle and be considered in "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
investment plan automatically 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.
--------------------------------------------------------------------------------

_____
7
<PAGE>

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 must be for Class A or Class C shares only. Purchases of $1
million or more can be made only in Class A shares. Based on your personal
situation, your financial advisor can help you decide which class of shares
makes the most sense for you.

Class A Sales Charges

<TABLE>
<CAPTION>
% of offering
As a % of price
the public As a % retained by
offering of your financial
Amount of purchase price investment advisor firm
<S> <C> <C> <C>
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
</TABLE>

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 plans purchasing shares through a fee-based
program.

For Class A share purchases of $1 million or more, financial advisors receive a
commission from the distributor as follows:

Purchases Over $1 Million

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.

For Class A share purchases by participants in certain group retirement plans
offered through a fee-based program, financial advisors receive a 1.00%
commission from the distributor on all purchases of less than $3 million.

_____
8
<PAGE>

Your Account

UNDERSTANDING CONTINGENT DEFERRED SALES CHARGES (CDSC)

Class B shares Your purchases of Class B shares are at Class B shares' 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.

Purchases of less than $250,000:

Class B Sales Charges

% deducted when
Holding period after purchase shares are sold

Through first year 5.00
--------------------------------------------------------------------------------
Through second year 4.00
--------------------------------------------------------------------------------
Through third year 3.00
--------------------------------------------------------------------------------
Through fourth year 3.00
--------------------------------------------------------------------------------
Through fifth year 2.00
--------------------------------------------------------------------------------
Through sixth year 1.00
--------------------------------------------------------------------------------
Longer than six years None

Commission to financial advisors is 5.00%.

Automatic conversion to Class A shares is eight years after purchase.

_____
9
<PAGE>

Your Account

Purchases of $250,000 to less than $500,000:

Class B Sales Charges

% 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.

Purchases of $500,000 to less than $1 million:

Class B Sales Charges

% deducted when
Holding period after purchase shares are sold

Commission to financial advisors is 1.75%.

Automatic conversion to Class A shares is three years after purchase.

_____
10
<PAGE>

Your Account

Class C Sales Charges

Years after purchase % deducted when shares are sold

Through one year 1.00
--------------------------------------------------------------------------------

Longer than one year 0.00

_____
11
<PAGE>

Your Account

_____
12
<PAGE>

Your Account

Outlined below are the various options for selling shares:

Method Instructions

Through your You may call your financial advisor to place your sell
financial advisor order. 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 Liberty 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 owners.
For details, call 1-800-345-6611.

By systematic You may automatically sell a specified dollar amount
withdrawal plan or percentage on a monthly, quarterly or semi-annual
basis if your account balance is at least $5,000 and
have the proceeds sent to you. This feature is not
available if you hold your shares in certificate form.
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.

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 drive
Fund expenses higher. 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.

____
13
<PAGE>

Your Account

DISTRIBUTION AND SERVICE FEES
--------------------------------------------------------------------------------
The Fund has adopted a plan under Rule 12b-1 that permits it to pay the Fund's
distribution, marketing and other fees to support the sale and distribution of
Class A, B and C shares and certain services provided to you by your financial
advisor. The annual service fee may equal up to 0.25% for 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 Class B and Class C shares. Distribution and service fees
are paid out of the assets of these classes. Over time, these fees may 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, eliminating a portion of the distribution fee upon
conversion. Conversion may occur three, four or eight years after purchase,
depending on the program you purchased your shares under. See "Your Account;
Sales Charge" for the conversion schedule applicable to Class B shares.

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).

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

_____
14
<PAGE>

Your Account

you add money to your account and bring the value above $1,000 prior to the fee
date, the fee will not be deducted.

_____
15
<PAGE>

Your Account

UNDERSTANDING FUND DISTRIBUTIONS

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

Types of Distributions

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

DISTRIBUTION OPTIONS The Fund distributes dividends in June and December and any
capital gains (including short-term capital gains) 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.

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.

Distribution Options

Reinvest all distributions in additional shares of the 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

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.

_____
16
<PAGE>

Your Account

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 foreign, federal, state, local or other
applicable tax laws.

_____
17
<PAGE>

Managing the Fund

Liberty WAM's advisory fee for managing the Fund in 1999 was 0.81% of the Fund's
average daily net assets. Liberty WAM also receives an administrative services
fee from the Fund at the annual rate of .05% of the Fund's average daily net
assets.

Leah J. Zell
Lead portfolio manager

Leah Zell is a vice president of Liberty Acorn Trust, and was a principal of WAM
before its acquisition by Liberty. She has managed Liberty Acorn International
since its inception in 1992, and was named lead portfolio manager in 1997. She
has worked with Liberty Acorn Fund's international securities since 1984. Ms.
Zell also manages the foreign portfolio of an investment company whose shares
are offered only to non-U.S. investors. She is a CFA and earned her BA and PhD
from Harvard University.

Margaret M. Forster
Co-portfolio manager

____
18
<PAGE>

Managing the Fund

of WAM from January 1999 to September 29, 2000. Prior to that, Ms. Forster was a
professor of finance at Northwestern and Ohio State Universities, and an
economist with the International Monetary Fund. She is a CFA. Her degrees
include a BS from Universidade de Sao Paulo, Escola Politecnica, Brazil, and an
MBA, MS and PhD from Cornell University.

_____
19
<PAGE>

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
"Liberty Acorn International - Principal Investment Strategies" and "Liberty
Acorn International - Principal Investment Risks." In seeking to meet its
investment goal, the Fund may also invest in other securities and use certain
other investment techniques. These securities and investment techniques offer
opportunities and carry various risks.

THE INFORMATION EDGE
--------------------------------------------------------------------------------
The Fund invests in less-profiled, entrepreneurially managed smaller and mid-
sized companies that it believes are benefiting from an important economic,
social or technological trend and whose domination of a niche creates the
opportunity for superior earnings-growth potential.

Growth Potential Financial Strength Fundamental Value
-------------------------------------------------------------------------------
. superior technology . stability . lower stock price
. innovative marketing . reduced risk relative to growth
. solid management . competitive potential and
. dominant or niche advantage capitalization
position . low debt . growth at a
. superior earnings . adequate working reasonable price
prospects capital

. fast-growing . conservative
economy accounting practices

The realization of this A strong balance sheet Once Liberty WAM
growth potential would gives management greater uncovers a great
likely produce superior flexibility to pursue company, it iden-
performance that is strategic objectives and tifies a price that
sustainable over time. is essential to maintain- it believes would
ing a competitive advant- also make the stock
age a good value.
--------------------------------------------------------------------------------

In managing the Fund, Liberty WAM tries to maintain lower taxes and transaction
costs by investing with a long-term time horizon (at least two to five years).
However,

_____
20
<PAGE>

Other Investment Strategies and Risks

DERIVATIVE STRATEGIES
--------------------------------------------------------------------------------

The Fund may enter into a number of hedging strategies, including those that
employ futures and options, to gain or reduce exposure to particular securities
or markets. These strategies, commonly referred to as derivatives, involve the
use of financial instruments whose values depend on, or are derived from, the
value of an underlying security, index or currency. The Fund may use these
strategies to adjust the Fund's sensitivity to changes in interest rates or for
other hedging purposes (i.e., attempting to offset a potential loss in one
position by establishing an interest in an opposite position). Derivative
strategies involve the risk that they may exaggerate a loss, potentially losing
more money than the actual cost of the underlying security, or limit a potential
gain. Also, with some derivative strategies there is a risk that the other party
to the transaction may fail to honor its contract terms, causing a loss to the
Fund.

TEMPORARY DEFENSIVE STRATEGIES
--------------------------------------------------------------------------------

At times, Liberty WAM may determine that adverse market conditions make it
desirable to temporarily suspend the Fund's normal investment activities. During
such times, the Fund 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 from achieving its investment goal.

_____
21
<PAGE>

Financial Highlights

The financial highlights tables are intended to help you understand the Fund's
financial performance. Because Class A, Class B and Class C shares are new
classes of shares, information is shown for the Fund's Class Z shares for the
last five fiscal years, which run from January 1 to December 31. Class Z shares
are offered to certain investors through separate prospectuses. 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 has been derived from the Fund's financial
statements which have been audited by Ernst & Young LLP, independent
auditors whose report, along with the Fund's financial statements, is
included in the Fund's annual report. You can request a free annual report by
calling 1-800-426-3750.

Liberty Acorn International

<TABLE>
<CAPTION>
For a share outstanding throughout
each year - years ended 12/31 1999 1998 1997 1996 1995
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class Z Class Z Class Z Class Z Class Z
---------------------------------------------------------------------------------------------------------
Net asset value, beginning of year $ 20.82 $ 18.39 $ 19.61 $ 16.59 $ 15.24
---------------------------------------------------------------------------------------------------------
Income from Investment Operations:

Net investment income .83 .17 .40 .13 .16
---------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments, foreign currency and
futures 15.45 2.68 (.34) 3.29 1.20
---------------------------------------------------------------------------------------------------------
Total from investment
operations 16.28 2.85 .06 3.42 1.36
---------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income (.22) (.15) (.38) (.12) --
---------------------------------------------------------------------------------------------------------
Distributions from net realized and
unrealized gains reportable for federal
income taxes (1.55) (.27) (.90) (.28) (.01)
---------------------------------------------------------------------------------------------------------
Total distributions (1.77) (.42) (1.28) (.40) (.01)
---------------------------------------------------------------------------------------------------------
Net asset value, end of year $ 35.33 $ 20.82 $ 18.39 $ 19.61 $ 16.59
---------------------------------------------------------------------------------------------------------
Total return 79.2% 15.4% 0.2% 20.7% 8.9%
---------------------------------------------------------------------------------------------------------
Ratios/supplemental data:

Ratio of expenses to average net
assets 1.11% 1.12% 1.19% 1.17% 1.22%
---------------------------------------------------------------------------------------------------------
Ratio of net investment income to
average net assets .12% .86% .58% .51% .90%
---------------------------------------------------------------------------------------------------------
Portfolio turnover rate 46% 37% 39% 34% 26%
---------------------------------------------------------------------------------------------------------
Net assets at end of year
(in millions) $ 2,868 $ 1,725 $ 1,623 $ 1,773 $ 1,276
</TABLE>

_____
22
<PAGE>

Notes

________________________________________________________________________________

____
23
<PAGE>

Notes

________________________________________________________________________________

_____
24
<PAGE>

FOR MORE INFORMATION
--------------------------------------------------------------------------------

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

Text-only versions of all Fund documents can be viewed online or downloaded from
the Edgar database on the Securities and Exchange Commission internet site at
www.sec.gov.

Public Reference Room
Securities and Exchange Commission
Washington, DC 20549-0102

Information on the operation of the Public Reference Room may be obtained by
calling 1-202-942-8090.

Investment Company Act file number:

Liberty Acorn Trust (formerly Acorn Investment Trust): 811-01829

. Liberty Acorn International (formerly Acorn International)

[LOGO OF LIBERTY FUNDS]
<PAGE>

LIBERTY ACORN USA Prospectus, September 15, 2000
----------------------------------------------------------------------------

Class A, B and C Shares

Advised by Liberty Wanger Asset Management, L.P.

Liberty Acorn Trust

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
T A B L E O F C O N T E N T S
<S> <C>
LIBERTY ACORN USA XX
-----------------
Investment Goal............................................................. xx
Principal Investment Strategies............................................. xx
Principal Investment Risks.................................................. xx
Performance History......................................................... xx
Your Expenses............................................................... xx

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

MANAGING THE FUND XX
-----------------
Investment Advisor.......................................................... xx
Portfolio Manager........................................................... xx

OTHER INVESTMENT
STRATEGIES AND RISKS XX
--------------------
The Information Edge........................................................ xx
Stock Strength Comes First.................................................. xx
Derivative Strategies....................................................... xx
Temporary Defensive Strategies.............................................. xx

FINANCIAL HIGHLIGHTS XX
--------------------
</TABLE>

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

<PAGE>

-----------------------------------------------------------------------------
Liberty Acorn USA
-----------------------------------------------------------------------------

INVESTMENT GOAL
--------------------------------------------------------------------------------
Liberty Acorn USA seeks to provide long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES
--------------------------------------------------------------------------------

Liberty Acorn USA invests primarily in stocks of small-and medium-sized U.S.
companies. The Fund generally invests in the stocks of U.S. companies with
capitalizations of less than $2 billion with the intention of holding them as
they grow and selling them when they become large.

The Fund believes that these smaller, less-profiled companies may offer higher
return potential than the stocks of large companies. Liberty Acorn USA typically
looks for companies with:

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."

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 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.
_____
2
<PAGE>

Liberty Acorn USA

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.

_____
3
<PAGE>

Liberty Acorn USA

UNDERSTANDING PERFORMANCE

Average annual total returns are measures of the Fund's Class Z performance over
the past one-year, three-year and life of the Fund periods. They include the
effects of Class Z expenses. The table shows for each class the Class Z
performance restated to reflect the effect of sales charges of the class.

The Fund's return is compared to the Russell 2000 Index. The Russell 2000 Index
is a market-weighted index of 2000 small companies formed by taking the largest
3000 companies and eliminating the largest 1000 of those companies. Unlike the
Fund, an index is not an investment, does not incur fees or expenses and is not
professionally managed. It is not possible to invest directly in an index.

PERFORMANCE HISTORY
--------------------------------------------------------------------------------

Because Class A, Class B and Class C shares have not been offered for a full
calendar year, the information provided in the bar chart below shows changes in
the Fund's performance from year to year by illustrating the Fund's calendar
year total returns for its Class Z shares. Class Z shares are offered to
certain investors through a separate prospectus. The performance table
following the bar chart shows how the Fund's average annual returns for (1) the
Class Z shares and (2) the Class Z shares, restated to reflect the sales charges
of the Class A, Class B and Class C shares, respectively, compare with those of
broad measures of market performance for one year, three years and 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 Class Z performance.
All returns include the reinvestment of dividends and distributions. As with all
mutual funds, past performance does not predict the Fund's future
performance.

Calendar Year Total Returns (Class Z)/(1)/

-------------------------------------------------------------------------------
[BAR CHART]

Year Ended
---- -----
1997 32.30%
1998 5.79%
1999 23.02%

-------------------------------------------------------------------------------
For period shown in bar chart:
Best quarter: 4th quarter 1999, +18.93%
Worst quarter: 3rd quarter 1998, -19.25%

Average Annual Total Returns -- for periods ended December 31, 1999 /(2)/

<TABLE>
<CAPTION>
Life of
the
Inception Date 1 Year 3 Years Fund
<S> <C> <C> <C> <C>
Class A 9/29/00 15.95% 17.51% 21.10%
--------------------------------------------------------------------------------
Class B 9/29/00 18.02% 19.16% 22.72%
--------------------------------------------------------------------------------
Class C 9/29/00 22.02% 19.86% 23.28%
--------------------------------------------------------------------------------
Class Z 9/4/96 23.02% 19.86% 23.28%
--------------------------------------------------------------------------------
Russell 2000 N/A 21.26% 13.08 14.65%
</TABLE>

(1) Class Z shares are not offered through this prospectus, but Class A, Class
B and Class C shares would have substantially similar annual returns
because the shares are invested in the same portfolio of securities and
these returns differ only to the extent that the classes do not have the
same expenses.

(2) Class A, Class B, and Class C are new classes of shares. Their performance
information includes returns of the Fund's Class Z shares (the oldest
existing Fund class) for periods prior to the inception of the newer
classes of shares. Class Z returns are not restated to reflect any
differences in expenses (such as Rule 12b-1 fees) between Class Z shares
and the newer classes of shares. If differences in expenses were reflected,
the returns for prior to the inception of the newer classes of shares would
be lower. Class Z shares were initially offered on September 4, 1996; Class
A, Class B and Class C shares were initially offered on September 29,
2000.

_____
4

<PAGE>

Liberty Acorn USA

UNDERSTANDING EXPENSES

Sales Charges are paid directly by shareholders to Liberty Funds Distributor,
Inc., 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 help you compare the cost of investing in the Fund to the cost
of investing in other mutual funds. It uses the following hypothetical
conditions:

. $10,000 initial investment

. 5% total 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
--------------------------------------------------------------------------------
Expenses are one of several factors to consider before you invest in a mutual
fund. The tables below describe the fees and expenses you may pay when you buy,
hold and sell shares of the Fund.

Shareholder Fees/(3)/ (paid directly from your investment)

<TABLE>
<CAPTION>
CLASS A Class B Class C
<S> <C> <C> <C>
Maximum sales charge (load) on purchases (%)
(as a percentage of the offering price) 5.75 None None
---------------------------------------------------------------------------------------------------------
Maximum deferred sales charge (load) on
redemptions (%) (as a percentage of the
lesser of purchase price or redemption price) 1.00/(4)/ 5.00 1.00
---------------------------------------------------------------------------------------------------------
Redemption fee (5) (5) (5)
</TABLE>

Annual Fund Operating Expenses (deducted directly from fund assets)

<TABLE>
<CAPTION>
CLASS A Class B Class C
<S> <C> <C> <C>
Management fees/(6)/(%) .93 .93 .93
-------------------------------------------------------------------------------------------------
Distribution and service (12b-1) fees (%) .35 1.00 1.00
-------------------------------------------------------------------------------------------------
Other expenses (%) .37 .37 .37
-------------------------------------------------------------------------------------------------
Total annual fund operating expenses (%) 1.65 2.30 2.30
</TABLE>

(3) A $10 annual fee is deducted from accounts of less than $1,000 and paid to
the transfer agent.
(4) This charge applies only to certain Class A shares bought without an
initial sales charge that are sold within 18 months of purchase.
(5) There is a $7.50 charge for wiring sale proceeds to your bank.
(6) In addition to the management fee, the Fund pays the Advisor an
administrative fee of .05%, which is included in "Other Expenses."

_____
5
<PAGE>

Liberty Acorn USA

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

Class 1 Year 3 Years 5 Years 10 Years

Class A: $ 733 $1,065 $1,420 $2,417
--------------------------------------------------------------------------------
Class B: did not sell your shares $ 233 $ 718 $1,230 $2,473

sold all your shares at
the end of the period $ 733 $1,018 $1,430 $2,473
--------------------------------------------------------------------------------
Class C: did not sell your shares $ 233 $ 718 $1,230 $2,636

sold all your shares at
the end of the period $ 333 $ 718 $1,230 $2,636

_____
6
<PAGE>

Your Account

INVESTMENT MINIMUMS

Initial Investment............................ $1,000
Subsequent Investments........................ $ 50

Automatic Investment Plan*.................... $ 50
Retirement Plans*............................. $ 25

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

HOW TO BUY SHARES
--------------------------------------------------------------------------------

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

Method Instructions

Through your Your financial advisor can help you establish your
financial advisor account and buy Fund shares on your behalf. Your
financial advisor may charge you fees for executing the
purchase for you.
--------------------------------------------------------------------------------
By check For new accounts, send a completed application and
(new account) check made payable to the Fund to the transfer agent,
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 of one fund for shares of the
same class of the Fund at no additional cost. There may
be an additional charge if exchanging from a money
market fund. 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
transfer money from your bank account to your Fund account by
calling 1-800-422-3737. Electronic funds transfers may
take up to two business days to settle and be
considered in "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
investment plan automatically 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
diversification another fund into the same class of shares of the Fund
at no additional sales charge. To invest your dividends
in the Fund, call 1-800-345-6611.

_____
7
<PAGE>

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 must be for Class A or Class C shares only. Purchases of $1
million or more can be made only in Class A shares. Based on your personal
situation, your financial advisor can help you decide which class of shares
makes the most sense for you.

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 initial investment when you open your account. 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

<TABLE>
<CAPTION>
% of offering
As a % of price
the public As a % retained by
offering of your financial
Amount of purchase price investment advisor firm
<S> <C> <C> <C>
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
--------------------------------------------------------------------------------
</TABLE>

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 plans purchasing shares through a fee-based program.

For Class A share purchases of $1 million or more, financial advisors receive a
commission from the distributor as follows:

Purchases Over $1 Million

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.

_____
8
<PAGE>

Your Account

UNDERSTANDING CONTINGENT DEFERRED SALES CHARGES (CDSC)

Class B Shares Your purchases of Class B shares are at Class B shares' 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.

Purchases of less than $250,000:

Class B Sales Charges

% deducted when
Holding period after purchase shares are sold

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

_____
9
<PAGE>

Your Account

Purchases of $250,000 to less than $500,000:

Class B Sales Charges

% 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.

Purchases of $500,000 to less than $1 million:

Class B Sales Charges

% deducted when
Holding period after purchase shares are sold

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

______
10
<PAGE>

Your Account

Class C Shares Similar to Class B shares, your purchases of Class C shares are
at Class C's net asset value. Although Class C shares have no front-end sales
charge, they carry a CDSC of 1.00% 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. The distributor pays the financial
advisor firm an up-front commission of 1.00% on sales of Class C shares.

Class C Sales Charges

Years After Purchase % deducted when shares are sold

Through one year 1.00
--------------------------------------------------------------------------------
Longer than one year 0.00

____
11
<PAGE>

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. 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.

_____
12
<PAGE>

Outlined below are the various options for selling shares:

Method Instructions

Through your You may call your financial advisor to place your sell
financial advisor order. 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 Liberty 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 owners.
For details, call 1-800-345-6611.

By systematic You may automatically sell a specified dollar amount
withdrawal plan or percentage on a monthly, quarterly or semi-annual
basis if your account balance is at least $5,000 and
have the proceeds sent to you. This feature is not
available if you hold your shares in certificate form.
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.

FUND POLICY ON TRADING OF FUND SHARES
--------------------------------------------------------------------------------

___
13
<PAGE>

Your Account

DISTRIBUTION AND SERVICE FEES
--------------------------------------------------------------------------------

The Fund has adopted a plan under Rule 12b-1 that permits it to pay the Fund's
distribution, marketing and other fees to support the sale and distribution of
Class A, B and C shares and certain services provided to you by your financial
advisor. The annual service fee may equal up to 0.25% for 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 Class B and Class C shares. Distribution and service fees
are paid out of the assets of these classes. Over time, these fees may 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, eliminating a portion of the distribution fee upon
conversion. Conversion may occur three, four or eight years after purchase,
depending on the program you purchased your shares under. See "Your Account:
Sales Charge" for the conversion schedule applicable to Class B shares.

OTHER INFORMATION ABOUT YOUR ACCOUNT
--------------------------------------------------------------------------------

___
14
<PAGE>

Your Account

____
15
<PAGE>

Your Account

UNDERSTANDING FUND DISTRIBUTIONS

Dividends, Distributions, and Taxes The Fund has the potential to make the
following distributions:

Types of Distributions

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

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.

Distribution Options

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

Distribution of $10 or less will automatically be reinvested in additional Fund
shares. If you elect to receive distribution 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.

____
16
<PAGE>

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.

____
17
<PAGE>

Managing the Fund

INVESTMENT ADVISOR
--------------------------------------------------------------------------------

Liberty Wanger Asset Management (Liberty WAM) (formerly Wanger Asset Management,
L.P. (WAM)), located at 227 West Monroe Street, Suite 3000, Chicago, Illinois
60606, is the Fund's investment advisor. Liberty WAM and its predecessor have
managed mutual funds, including the Fund, since 1992. In its duties as
investment advisor, Liberty WAM runs the Fund's day-to-day business, including
placing all orders for the purchase and sale of the Fund's portfolio securities.
As of June 30, 2000, Liberty WAM managed over $9 billion in assets.

Liberty WAM's advisory fee for managing the Fund in 1999 was 0.93% of the Fund's
average daily net assets. Liberty WAM also receives an administrative services
fee from the Fund at the annual rate of .05% of the Fund's average daily net
assets.

PORTFOLIO MANAGER
--------------------------------------------------------------------------------

Liberty WAM uses a team to manage the Fund. Team members share responsibility
for providing ideas, information, and knowledge in managing the Fund, and each
team member has one or more particular areas of expertise. The portfolio
managers are responsible for making daily investment decisions, and utilize the
management team's input and advice when making buy and sell determinations.

Robert A. Mohn
Lead portfolio manager

Robert Mohn is a vice president of Liberty Acorn Trust. He has been a member of
the domestic analytical team at Liberty WAM and WAM since 1992, and was a
principal of WAM from 1995 to September 29, 2000. He has managed Liberty Acorn
USA since its inception in 1996, and also manages a mutual fund underlying
variable insurance products and the U.S. portfolio of an investment company
whose shares are offered only to non-U.S. investors. He is a CFA and holds a BS
from Stanford University and an MBA from the University of Chicago.

____
18
<PAGE>

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
"Liberty Acorn USA - Principal Investment Strategies" and "Liberty Acorn USA -
Principal Investment Risks." In seeking to meet its investment goal, the Fund
may also invest in other securities and use certain other investment techniques.
These securities and investment techniques offer opportunities and carry various
risks.

THE INFORMATION EDGE
--------------------------------------------------------------------------------

The Fund invests in less-profiled, entrepreneurially managed smaller and mid-
sized companies that it believes are benefiting from an important economic,
social or technological trend and whose domination of a niche creates the
opportunity for superior earnings-growth potential.

<TABLE>
<CAPTION>
Growth Potential Financial Strength Fundamental Value
--------------------------------------------------------------------------------
<S> <C> <C>
. superior technology . stability . lower stock price
. innovative marketing . reduced risk relative to growth
. solid management . competitive potential and
. dominant or niche advantage capitalization
position . low debt . growth at a
. superior earnings . adequate working reasonable price
prospects capital
. fast-growing . conservative
economy accounting practices

STOCK STRENGTH COMES FIRST
--------------------------------------------------------------------------------

Liberty WAM's analysts continually screen companies and make more than 1,000
face-to-face visits around the globe each year. To accomplish this, Liberty WAM
analysts talk to top management, vendors, suppliers and competitors, whenever
possible.

In managing the Fund, Liberty WAM tries to maintain lower taxes and transaction
costs by investing with a long-term time horizon (at least two to five years).
However,

____
19
<PAGE>

Other Investment Strategies and Risks

DERIVATIVE STRATEGIES
--------------------------------------------------------------------------------

TEMPORARY DEFENSIVE STRATEGIES
--------------------------------------------------------------------------------

____
20
<PAGE>

Financial Highlights

The financial highlights tables are intended to help you understand the Fund's
financial performance. Because Class A, Class B and Class C shares are new
classes of shares, information is shown for the Fund's Class Z shares since
inception. The Fund's fiscal year runs from January 1 to December 31. Class Z
shares are offered to certain investors through separate prospectuses. 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 has been derived from the Fund's financial
statements which have been audited by Ernst & Young LLP, independent auditors
whose report, along with the Fund's financial statements, is included in the
Fund's annual report. You can request a free annual report by calling
1-800-426-3750.

Liberty Acorn USA

<TABLE>
<CAPTION>
For a share outstanding throughout Year Ended Year Ended Year Ended Inception 9/4/96
each period 12/31/99 12/31/98 12/31/97 Through 12/31/96
---------------------------------------------------------------------------------------------------------------------------------
Class Z Class Z Class Z Class Z
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 14.80 $ 15.12 $ 11.65 $ 10.00
---------------------------------------------------------------------------------------------------------------------------------

Income from Investment
Operations:

Net investment loss (a) -- (.07) (.07) (.02)
---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on
investments 3.32 .87 3.83 1.67
---------------------------------------------------------------------------------------------------------------------------------
Total from Investment
Operations 3.32 .80 3.76 1.65
---------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income -- -- -- --
---------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized and
unrealized gains reportable for federal
income taxes (1.37) (1.12) (.29) --
---------------------------------------------------------------------------------------------------------------------------------
Total distributions (1.37) (1.12) (.29) --
---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 16.75 $ 14.80 $ 15.12 $ 11.65
---------------------------------------------------------------------------------------------------------------------------------
Total return (c) 23.0% 5.8% 32.3% 16.5%
---------------------------------------------------------------------------------------------------------------------------------
Ratios/supplemental data:

Ratio of expenses to average net
assets (b) 1.15% 1.20% 1.35% 1.85%*
---------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average
net assets 0.00% (.42%) (.49%) (.99%)*
---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 49% 42% 33% 20%*
---------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period
(in millions) $ 371 $ 281 $ 185 $ 53
</TABLE>

(a) Net investment loss per share was based upon the average shares outstanding
during the period.

(b) In accordance with a requirement by the Securities and Exchange Commission,
the ratio of expenses to average net assets for Liberty Acorn USA reflects
gross custodian fees. This ratio net of custodian fees paid indirectly
would have been 1.79% for a the period ended December 31, 1996.

*Annualized

____
21
<PAGE>

Notes

________________________________________________________________________________

____
22
<PAGE>

Notes

________________________________________________________________________________

____
23
<PAGE>

FOR MORE INFORMATION
--------------------------------------------------------------------------------

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

Text-only versions of all Fund documents can be viewed online or downloaded from
the Edgar database on the Securities and Exchange Commission internet site at
www.sec.gov.

Public Reference Room
Securities and Exchange Commission
Washington, DC 20549-0102

Information on the operation of the Public Reference Room may be obtained by
calling 1-202-942-8090.

Investment Company Act file number:

Liberty Acorn Trust (formerly Acorn Investment Trust): 811-01829

. Liberty Acorn USA (formerly Acorn USA)

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

[LOGO OF LIBERTY FUNDS]
<PAGE>

SUBJECT TO COMPLETION

LIBERTY ACORN TWENTY Prospectus, September 15, 2000

Class A, B and C Shares

Advised by Liberty Wanger Asset Management, L.P.

Liberty Acorn Trust

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

<TABLE>
<S> <C>
LIBERTY ACORN TWENTY...................................................... XX
--------------------
Investment Goal........................................................... xx
Principal Investment Strategies........................................... xx
Principal Investment Risks................................................ xx
Performance History....................................................... xx
Your Expenses............................................................. xx

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

MANAGING THE FUND......................................................... XX
-----------------
Investment Advisor........................................................ xx
Portfolio Manager......................................................... xx

OTHER INVESTMENT STRATEGIES AND RISKS..................................... XX
-------------------------------------
The Information Edge...................................................... xx
Stock Strength Comes First................................................ xx
Derivative Strategies..................................................... xx
Temporary Defensive Strategies............................................ xx

FINANCIAL HIGHLIGHTS...................................................... XX
--------------------
</TABLE>

------------------
Not FDIC Insured
May Lose Value
No Bank Guarantee
------------------
<PAGE>

Liberty Acorn Twenty

INVESTMENT GOAL
--------------------------------------------------------------------------------
Liberty Acorn Twenty seeks long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES
--------------------------------------------------------------------------------
Liberty Acorn Twenty invests primarily in the stocks of medium- to larger-sized
U.S. companies. The Fund is a non-diversified fund that takes advantage of its
advisor's research and stock-picking capabilities to invest in a limited number
of companies (between 20-25) with market capitalizations of $2 billion to $12
billion, offering the potential to provide above-average growth over time.

The Fund believes that companies within this capitalization range are less
profiled, and may offer higher return potential than the stocks of companies
with capitalizations above $12 billion.

Liberty Acorn Twenty typically looks for companies with:

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."

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.

____
2
<PAGE>

Liberty Acorn Twenty

As a non-diversified mutual fund, the Fund is allowed to invest a greater
percentage of its total assets in the securities of a single issuer. This may
concentrate issuer risk and, therefore, the Fund may have an increased risk of
loss compared to a similar diversified mutual fund.

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.

____
3
<PAGE>

Liberty Acorn Twenty

UNDERSTANDING PERFORMANCE

Calendar year total returns show the Fund's Class Z share performance for each
completed calendar year. They include the effects of Class Z
expenses. Class A, Class B and Class C shares are subject to sales charges, 12b-
1 fees and different expenses that are not reflected in the bar chart. If these
amounts were reflected, returns would be less than those shown.

Average annual total returns are measures of the Fund's Class Z performance over
the past one-year and life of the Fund periods. They include the effects of
Class Z expenses. The table shows for each class the Class Z performance
restated to reflect the effect of sales charges of the class.

The Fund's return is compared to the S&P Mid Cap 400 Index. The S&P Mid Cap 400
is an unmanaged, market value-weighted index of 400 midcap U.S. companies.
Unlike the Fund, an index is not an investment, does not incur fees or expenses
and is not professionally managed. It is not possible to invest directly in an
index.

PERFORMANCE HISTORY
--------------------------------------------------------------------------------

Because Class A, Class B and Class C shares have not been offered for a full
calendar year, the information provided in the bar chart below shows changes in
the Fund's performance from year to year by illustrating the Fund's calendar
year total returns for its Class Z shares. Class Z shares are offered to certain
investors through a separate prospectus. The performance table following the bar
chart shows how the Fund's average annual returns for (1) the Class Z shares and
(2) the Class Z shares, restated to reflect the sales charges of the Class A,
Class B and Class C shares, respectively, compare with those of broad measures
of market performance for one year and 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 Class Z performance. All returns include the reinvestment
of dividends and distributions. Performance results include the effect of
expense reduction arrangements. If these arrangements were not in place, then
performance 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 (Class Z)/(1)/

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

[Bar Chart]

Year Return
---- ------
1999 29.30%

--------------------------------------------------------------------------------
For period shown in bar chart:
Best quarter: 4th quarter 1999, +14.35%
Worst quarter: 3rd quarter 1999, -7.13%

Average Annual Total Returns -- for periods ended December 31, 1999/(2)/

<TABLE>
<CAPTION>
Life of the
Inception Date 1 Year Fund

<S> <C> <C> <C>
Class A 9/29/00 21.87% 27.20%
--------------------------------------------------------------------------------
Class B 9/29/00 24.30% 30.69%
--------------------------------------------------------------------------------
Class C 9/29/00 28.30% 34.20%
--------------------------------------------------------------------------------
Class Z 11/23/98 29.30% 34.20%
--------------------------------------------------------------------------------
S&P Mid Cap 400 N/A 14.72% 24.49%
</TABLE>

(1) Class Z shares are not offered through this prospectus, but Class A, Class
B and Class C shares would have substantially similar annual returns
because the shares are invested in the same portfolio of securities and
these returns differ only to the extent that the classes do not have the
same expenses.

(2) Class A, Class B, and Class C are new classes of shares. Their performance
information includes returns of the Fund's Class Z shares (the oldest
existing Fund class) for periods prior to the inception of the newer
classes of shares. Class Z returns are not restated to reflect any
differences in expenses (such as Rule 12b-1 fees) between Class Z shares
and the newer classes of shares. If differences in expenses were reflected,
the returns for prior to the inception of the newer classes of shares would
be lower. Class Z shares were initially offered on November 28, 1998; Class
A, Class B and Class C shares were initially offered on September 29,
2000.

____
4

<PAGE>

Liberty Acorn Twenty

UNDERSTANDING EXPENSES

Sales Charges are paid directly by shareholders to Liberty Funds Distributor,
Inc., 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 help you compare the cost of investing in the Fund to the cost
of investing in other mutual funds. It uses the following hypothetical
conditions:

. $10,000 initial investment

. 5% total 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

Shareholder Fees/(3)/ (paid directly from your investment)
<TABLE>
<CAPTION>
Class A Class B Class C
<S> <C> <C> <C>
Maximum sales charge (load) on purchases (%)
(as a percentage of the offering price) 5.75 None None
-------------------------------------------------------------------------------------------------
Maximum deferred sales charge (load) on
redemptions (%) (as a percentage of the
lesser of purchase price or redemption price) 1.00/(4)/ 5.00 1.00
-------------------------------------------------------------------------------------------------
Redemption fee
(5) (5) (5)
</TABLE>

Annual Fund Operating Expenses (deducted directly from fund assets)
<TABLE>
<CAPTION>
Class A Class B Class C
<S> <C> <C> <C>
Management fees/(6)/(%) .90 .90 .90
-------------------------------------------------------------------------------------------------
Distribution and service (12b-1) fees (%) .35 1.00 1.00
-------------------------------------------------------------------------------------------------
Other expenses (%) .57 .57 .57
-------------------------------------------------------------------------------------------------
Total annual fund operating expenses/(7)/ (%) 1.82 2.47 2.47
</TABLE>

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

(4) This charge applies only to certain Class A shares
bought without an initial sales charge that are sold within 18 months of
purchase.

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

(6) In addition to the management fee, the Fund pays the Advisor an
administrative fee of .05%, which is included in "Other Expenses."

(7) The Fund's Advisor has voluntarily agreed to reimburse the Fund for any
ordinary operating expenses (exclusive of distribution and service fees,
interest, taxes and extraordinary expenses, if any) exceeding 1.70%, 2.35%
and 2.35% of the average annual net assets for Class A, Class B and Class C
shares, respectively. This arrangement may be modified or terminated by
either the Fund or its advisor on 30 days' notice. As a result, the actual
total annual fund operating expenses for Class A, Class B and Class C
shares would be 1.70%, 2.35%, and 2.35% of respectively.
____
5
<PAGE>

Liberty Acorn Twenty

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

<TABLE>
<CAPTION>
Class 1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
Class A: $ 749 $1,115 $1,504 $2,589
-----------------------------------------------------------------------------------------------------
Class B: did not sell your shares $ 250 $ 770 $1,316 $2,646

sold all your shares at
the end of the period $ 750 $1,070 $1,516 $2,646
-----------------------------------------------------------------------------------------------------
Class C: did not sell your shares $ 250 $ 770 $1,316 $2,806

sold all your shares at
the end of the period $ 350 $ 770 $1,316 $2,806
</TABLE>

____
6
<PAGE>

Your Account

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.

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 the various options for buying shares:

Method Instructions

Through your Your financial advisor can help you establish your
financial advisor account and buy Fund shares on your behalf. Your
financial advisor may charge you fees for executing the
purchase for you.
--------------------------------------------------------------------------------
By check For new accounts, send a completed application and
(new account) check made payable to the Fund to the transfer agent,
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. There may
be an additional charge if exchanging from a money
market fund. 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
transfer money from your bank account to your Fund account by
calling 1-800-422-3737. Electronic funds transfers may
take up to two business days to settle and be
considered in "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
investment plan automatically 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.
--------------------------------------------------------------------------------

____
7
<PAGE>

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 must be for Class A or Class C shares
only. Purchases of $1 million or more can be made only in Class A shares. Based
on your personal situation, your financial advisor can help you decide which
class of shares makes the most sense for you.

Class A Sales Charges

<TABLE>
<CAPTION>
% of offering
As a % of price
the public As a % retained by
offering of your financial
Amount of purchase price investment advisor firm
<S> <C> <C> <C>
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
-------------------------------------------------------------------------------------------------
</TABLE>

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 plans purchasing shares through a fee-based program.

For Class A share purchases of $1 million or more, financial advisors receive a
commission from the distributor as follows:

Purchases Over $1 Million

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.

Your Account

UNDERSTANDING CONTINGENT DEFERRED SALES CHARGES (CDSC)

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 net asset value, 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 shares' 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.

Purchases of less than $250,000:

Class B Sales Charges

% deducted when
Holding period after purchase shares are sold

Through first year 5.00
-------------------------------------------------------------------------
Through second year 4.00
-------------------------------------------------------------------------
Through third year 3.00
-------------------------------------------------------------------------
Through fourth year 3.00
-------------------------------------------------------------------------
Through fifth year 2.00
-------------------------------------------------------------------------
Through sixth year 1.00
-------------------------------------------------------------------------
Longer than six years None

Commission to financial advisors is 5.00%.

Automatic conversion to Class A shares is eight years after purchase.

____
9
<PAGE>

Your Account

Purchases of $250,000 to less than $500,000:

Class B Sales Charges

% 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.

Purchases of $500,000 to less than $1 million:

Class B Sales Charges

% deducted when
Holding period after purchase shares are sold

Commission to financial advisors is 1.75%.

Automatic conversion to Class A shares is three years after purchase.

____
10
<PAGE>

Your Account

Class C shares Similar to Class B shares, your purchases of Class C shares are
at Class C's net asset value. Although Class C shares have no front-end
sales charge, they carry a CDSC of 1.00% 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. The distributor pays the
financial advisor firm an up-front commission of 1.00% on sales of Class C
shares.

Class C Sales Charges

Years after purchase % deducted when shares are sold

Through one year 1.00
--------------------------------------------------------------------------
Longer than one year 0.00

<PAGE>

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. 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.

____
12
<PAGE>

Your Account

Outlined below are the various options for selling shares:

Method Instructions

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 and have
the proceeds sent to you. This feature is not available
if you hold your shares in certificate form. 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.

FUND POLICY ON TRADING OF FUND SHARES
--------------------------------------------------------------------------------

____
13
<PAGE>

Your Account

DISTRIBUTION AND SERVICE FEES
--------------------------------------------------------------------------------

____
14
<PAGE>

Your Account

____
15
<PAGE>

Your Account

UNDERSTANDING FUND DISTRIBUTIONS

Dividends, Distributions, and Taxes The Fund has the potential to make the
following distributions:

Types of Distributions

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

Distribution Options The Fund distributes dividends in June and
December and any capital gains (including short-term capital gains) 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.

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.

Distribution Options

Reinvest all distributions in additional shares of the Fund
--------------------------------------------------------------------------------

Reinvest all distributions in shares of another fund
--------------------------------------------------------------------------------

. 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

____
16
<PAGE>

Your Account

____
17
<PAGE>

Managing the Fund

INVESTMENT ADVISOR
--------------------------------------------------------------------------------
Liberty Wanger Asset Management (Liberty WAM) (formerly Wanger Asset
Management, L.P. (WAM)), located at 227 West Monroe Street, Suite 3000, Chicago,
Illinois 60606, is the Fund's investment advisor. Liberty WAM and its
predecessor have managed mutual funds, including the Fund, since 1992. In its
duties as investment advisor, Liberty WAM runs the Fund's day-to-day business,
including placing all orders for the purchase and sale of the Fund's portfolio
securities. As of June 30, 2000, Liberty WAM managed over $9 billion in assets.

Liberty WAM's advisory fee for managing the Fund in 1999 was 0.90% of the Fund's
average daily net assets. Liberty WAM also receives an administrative services
fee from the Fund at the annual rate of .05% of the Fund's average daily net
assets.

PORTFOLIO MANAGER
--------------------------------------------------------------------------------
Liberty WAM uses a team to manage the Fund. Team members share responsibility
for providing ideas, information, and knowledge in managing the Fund, and each
team member has one or more particular areas of expertise. The portfolio manager
is responsible for making daily investment decisions, and utilizes the
management team's input and advice when making buy and sell determinations.

John H. Park
Lead portfolio manager

John Park is a vice president of Liberty Acorn Trust, and has managed Liberty
Acorn Twenty since its inception in 1998. He has been a member of the domestic
investment team at Liberty WAM and WAM since 1993, and was a principal of WAM
from 1998 to September 29, 2000. Mr. Park is also manager of a mutual fund
underlying variable insurance products. He is a CFA and earned both his BA and
MBA degrees from the University of Chicago.

____
18
<PAGE>

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
"Liberty Acorn Twenty - Principal Investment Strategies" and "Liberty Acorn
Twenty - Principal Investment Risks." In seeking to meet its investment goal,
the Fund may also invest in other securities and use certain other investment
techniques. These securities and investment techniques offer opportunities and
carry various risks.

THE INFORMATION EDGE
--------------------------------------------------------------------------------
The Fund invests in less-profiled, entrepreneurially managed smaller, mid-sized
and larger companies that it believes are benefiting from an important economic,
social or technological trend and whose domination of a niche creates the
opportunity for superior earnings-growth potential.

Growth Potential Financial Strength Fundamental Value
--------------------------------------------------------------------------------

The realization of this A strong balance sheet Once Liberty WAM
growth potential would gives management uncovers a great
likely produce superior greater flexibility to company, it identifies
performance that is pursue strategic a price that it
sustainable over time. objectives and is believes would also
essential to maintaining make the stock a good
a competitive advantage value.
--------------------------------------------------------------------------------
STOCK STRENGTH COMES FIRST
--------------------------------------------------------------------------------
Liberty WAM's analysts continually screen companies and make more than 1,000
face-to-face visits around the globe each year. To accomplish this, Liberty WAM
analysts talk to top management, vendors, suppliers and competitors, whenever
possible.

In managing the Fund, Liberty WAM tries to maintain lower taxes and transaction
costs by investing with a long-term time horizon (at least two to five years).
However,

____
19
<PAGE>

Other Investments Strategies and Risks

DERIVATIVE STRATEGIES
--------------------------------------------------------------------------------
The Fund may enter into a number of hedging strategies, including those that
employ futures and options, to gain or reduce exposure to particular securities
or markets. These strategies, commonly referred to as derivatives, involve the
use of financial instruments whose values depend on, or are derived from, the
value of an underlying security, index or currency. The Fund may use these
strategies to adjust the Fund's sensitivity to changes in interest rates or for
other hedging purposes (i.e., attempting to offset a potential loss in one
position by establishing an interest in an opposite position). Derivative
strategies involve the risk that they may exaggerate a loss, potentially losing
more money than the actual cost of the underlying security, or limit a potential
gain. Also, with some derivative strategies there is a risk that the other party
to the transaction may fail to honor its contract terms, causing a loss to the
Fund.

TEMPORARY DEFENSIVE STEATEGIES
--------------------------------------------------------------------------------

At times, Liberty WAM may determine that adverse market conditions make it
desirable to temporarily suspend the Fund's normal investment activities. During
such times, the Fund 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 from achieving its investment goal.
____
20
<PAGE>

Financial Highlights

The financial highlights tables are intended to help you understand the Fund's
financial performance. Because Class A, Class B and Class C shares are new
classes of shares, information is shown for the Fund's Class Z shares since
inception. The Fund's fiscal year runs from January 1 to December 31. Class Z
shares are offered to certain investors through separate prospectuses. 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 has been derived from the Fund's financial
statements which have been audited by Ernst & Young LLP, independent
auditors, whose report, along with the Fund's financial statements, is included
in the Fund's annual report. You can request a free annual report by calling 1-
800-426-3750.

Liberty Acorn Twenty

<TABLE>
<CAPTION>
Inception 11/23/98
For a share outstanding throughout each period Year Ended 12/31/99 Through 12/31/98
------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class Z Class Z
------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $10.71 $10.00
------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (a) (.08) --
------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments 3.21 .71
------------------------------------------------------------------------------------------------------------------
Total from investment operations 3.13 .71
------------------------------------------------------------------------------------------------------------------
Less Distributions:

Distributions from net realized and unrealized gains
reportable for federal income taxes (.14) --
------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.70 $10.71
------------------------------------------------------------------------------------------------------------------
Total return 29.3% 7.1%
------------------------------------------------------------------------------------------------------------------
Ratios/supplemental data:

Ratio of expenses to average net assets (b)(c) 1.37% 1.41%*
------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average net assets (c) (.62)% .22%*
------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 101% 173%*
------------------------------------------------------------------------------------------------------------------
Net assets at end of period
(in millions) $ 68 $ 34
</TABLE>

(a) Net investment income (loss) per share was based upon the average shares
outstanding during the period.

(b) In accordance with a requirement by the Securities and Exchange Commission,
the expense ratio reflects total expenses prior to the reduction of
custodian fees for cash balances it maintains with the custodian
("custodian fees paid indirectly"). This ratio net of custodian fees paid
indirectly would have been 1.35% for the period ended December 31, 1998 and
the year ended December 31, 1999.

(c) Liberty Acorn Twenty was reimbursed by Liberty WAM for certain net expenses
from November 23, 1998 through December 31, 1999. Without the
reimbursement, the ratio of expenses (prior to custodian fees paid
indirectly) to average net assets and the ratio of net investment income to
average net assets would have been 1.83% and (.21%), respectively, for the
period ended 12/31/98 and 1.41% and (.66%), respectively, for the year
ended 12/31/99.

(d) Total return is not annualized for periods less than one year.

* Annualized

____
21
<PAGE>

Notes

______________________________________________________________________________
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______________________________________________________________________________
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______________________________________________________________________________
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______________________________________________________________________________
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______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

____
22
<PAGE>

Notes

____
23
<PAGE>

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 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

Text-only versions of all Fund documents can be viewed online or downloaded from
the Edgar database on the Securities and Exchange Commission internet site at
www.sec.gov.

Public Reference Room
Securities and Exchange Commission
Washington, DC 20549-0102

Information on the operation of the Public Reference Room may be obtained by
calling 1-202-942-8090.

Investment Company Act file number:

Liberty Acorn Trust (formerly Acorn Investment Trust): 811-01829

. Liberty Acorn Twenty (formerly Acorn Twenty)

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

[LETTERHEAD OF LIBERTY FUNDS]
<PAGE>

SUBJECT TO COMPLETION

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

LIBERTY ACORN FOREIGN FORTY Prospectus, September 15, 2000
-------------------------------------------------------------------------------

Class A, B and C Shares

Advised by Liberty Wanger Asset Management, L.P.

Liberty Acorn Trust

--------------------------------------------------------------------------------
T A B L E O F C O N T E N T S
<TABLE>
<S> <C>
LIBERTY ACORN FOREIGN FORTY XX
---------------------------
Investment Goal...................................................... xx
Principal Investment Strategies...................................... xx
Principal Investment Risks........................................... xx
Performance History.................................................. xx
Your Expenses........................................................ xx

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

MANAGING THE FUND XX
-----------------
Investment Advisor................................................... xx
Portfolio Managers................................................... xx

OTHER INVESTMENT STRATEGIES AND RISKS XX
-------------------------------------
The Information Edge................................................. xx
Stock Strength Comes First........................................... xx
Derivative Strategies................................................ xx
Temporary Defensive Strategies....................................... xx

FINANCIAL HIGHLIGHTS XX
--------------------
</TABLE>

Not FDIC May Lose Value
-----------------
Insured No Bank Guarantee
<PAGE>

Liberty Acorn Foreign Forty

INVESTMENT GOAL
-------------------------------------------------------------------------------
Liberty Acorn Foreign Forty seeks long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES
-------------------------------------------------------------------------------

Liberty Acorn Foreign Forty invests primarily in the stocks of medium- to
larger-sized companies based in developed markets outside the U.S. The Fund
invests in at least three countries. The Fund is a non-diversified fund that
takes advantage of its advisor's research and stock-picking capabilities to
invest in a limited number of foreign companies (between 40-60) with market
capitalizations of $5 billion to $15 billion, offering the potential to provide
above-average growth over time.

The Fund believes that companies within this capitalization range are less
profiled, and may offer higher return potential than the stocks of companies
with capitalizations above $15 billion.

Liberty Acorn Foreign Forty typically looks for companies with:
. A strong business franchise that offers growth potential.
. Products and services that give the company a competitive advantage.
. A stock price the Fund's advisor believes is reasonable relative to the
assets and earning power of the company.

Liberty Acorn Foreign Forty is an international fund and invests the majority of
its assets in the stocks of foreign companies based in developed markets outside
the U.S.

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."

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.

---
2
<PAGE>

Liberty Acorn Foreign Forty

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.

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.

---
3
<PAGE>

Liberty Acorn Foreign Forty

UNDERSTANDING PERFORMANCE

The Fund's return is compared to the SSB World ex-U.S. Cap Range $2-10 Billion
Index. The SSB World ex-U.S. Cap Range $2-10 Billion Index is Salomon Smith
Barney's two to ten billion U.S. dollar security market subset of its Broad
Market Index. It represents a midcap developed market index, excluding the U.S.
Unlike the Fund, an index is not an investment, does not incur fees or expenses
and is not professionally managed. It is not possible to invest directly in an
index.

PERFORMANCE HISTORY
--------------------------------------------------------------------------------

Because Class A, Class B and Class C shares have not been offered for a full
calendar year, the information provided in the bar chart below shows changes in
the Fund's performance from year to year by illustrating the Fund's calendar
year total returns for its Class Z shares. Class Z shares are offered to certain
investors through a separate prospectus. The performance table following the bar
chart shows how the Fund's average annual returns for (1) the Class Z shares and
(2) the Class Z shares, restated to reflect the sales charges of the Class A,
Class B and Class C shares, respectively, compare with those of broad measures
of market performance for one year and 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 Class Z performance. All returns include the reinvestment
of dividends and distributions. Performance results include the effect of
expense reduction arrangements. If these arrangements were not in place, then
performance 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 (Class Z)/(1)(2)/

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

[Bar Chart]

Year Return
---- ------
1999 81.60%

-------------------------------------------------------------------------------
For period shown in bar chart:
Best quarter: 4th quarter 1999, +46.65%
Worst quarter: 3rd quarter 1999, +3.90%

Average Annual Total Returns -- for periods ended December 31, 1999/(2)(3)/

<TABLE>
<CAPTION>
Inception Date 1 Year Life of the Fund
<S> <C> <C> <C>
Class A 9/29/00 71.16% 77.11%
-------------------------------------------------------------------------------
Class B 9/29/00 76.60% 83.46%
-------------------------------------------------------------------------------
Class C 9/29/00 80.60% 86.84%
-------------------------------------------------------------------------------
Class Z 11/23/98 81.60% 86.84%
-------------------------------------------------------------------------------
SSB Cap Range $2-10 B N/A 23.52% 24.72%
</TABLE>

(2) The Fund's performance during 1999 was achieved in a period of unusual
market conditions that are unlikely to continue.

(3) Class A, Class B, and Class C are new classes of shares. Their performance
information includes returns of the Fund's Class Z shares (the oldest
existing Fund class) for periods prior to the inception of the newer
classes of shares. Class Z returns are not restated to reflect any
differences in expenses (such as Rule 12b-1 fees) between Class Z shares
and the newer classes of shares. If differences in expenses were reflected,
the returns for prior to the inception of the newer classes of shares would
be lower. Class Z shares were initially offered on November 28, 1998; Class
A, Class B and Class C shares were initially offered on September 29,
2000.

---
4
<PAGE>

Liberty Acorn Foreign Forty

UNDERSTANDING EXPENSES

Sales Charges are paid directly by shareholders to Liberty Funds Distributor,
Inc., 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 help you compare the cost of investing in the Fund to the cost
of investing in other mutual funds. It uses the following hypothetical
conditions:

. $10,000 initial investment

. 5% total 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
-------------------------------------------------------------------------------

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

Shareholder Fees/(4)/ (paid directly from your investment)

<TABLE>
<CAPTION>
Class A Class B Class C
<S> <C> <C> <C>
Maximum sales charge (load) on purchases (%)
(as a percentage of the offering price) 5.75 None None
-------------------------------------------------------------------------------
Maximum deferred sales charge (load) on
redemptions (%) (as a percentage of the
lesser of purchase price or redemption price) 1.00/(5)/ 5.00 1.00
-------------------------------------------------------------------------------
Redemption fee (6) (6) (6)
</TABLE>

Annual Fund Operating Expenses (deducted directly from fund assets)

<TABLE>
<CAPTION>
Class A Class B Class C
<S> <C> <C> <C>
Management fees/(7)/ (%) .95 .95 .95
-------------------------------------------------------------------------------
Distribution and service (12b-1) fees (%) .35 1.00 1.00
-------------------------------------------------------------------------------
Other expenses (%) .73 .73 .73
-------------------------------------------------------------------------------
Total annual fund operating expenses/(8)/ (%) 2.03 2.68 2.68
---- ---- ----
</TABLE>

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

(5) This charge applies only to certain Class A shares bought without an initial
sales charge that are sold within 18 months of purchase.

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

(7) In addition to the management fee, the Fund pays the Advisor an
administrative fee of .05%, which is included in "Other Expenses."

(8) The Fund's advisor has voluntarily agreed to reimburse the Fund for any
ordinary operating expenses (exclusive of distribution and service fees,
interest, taxes and extraordinary expenses, if any) exceeding 1.80%, 2.45%
and 2.45% of the average annual net assets for Class A, Class B and Class C,
respectively. This arrangement may be modified or terminated by either the
Fund or its advisor on 30 days' notice. As a result, the actual total annual
Fund operating expenses for Class A, Class B and Class C shares would be
1.80%, 2.45%, 2.45% respectively.

---
5
<PAGE>

Liberty Acorn Foreign Forty

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

Class 1 Year 3 Years 5 Years 10 Years

Class A: $769 $1,175 $1,605 $2,798
-------------------------------------------------------------------------------
Class B: did not sell your shares $271 $ 832 $1,420 $2,856

sold all your shares at
the end of the period $771 $1,132 $1,620 $2,856
-------------------------------------------------------------------------------
Class C: did not sell your shares $271 $ 832 $1,420 $3,012

sold all your shares at
the end of the period $371 $ 832 $1,420 $3,012

---
6
<PAGE>

Your Account

INVESTMENT MINIMUMS

Initial Investment ............................................... $1,000
Subsequent Investments............................................ $ 50

Automatic Investment Plan*........................................ $ 50

Retirement Plans*................................................. $ 25

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

HOW TO BUY SHARES
-------------------------------------------------------------------------------

Outlined below are the various options for buying shares:

Method Instructions

Through your Your financial advisor can help you establish your
financial advisor account and buy Fund shares on your behalf. Your
financial advisor may charge you fees for executing
the purchase for you.
-------------------------------------------------------------------------------
By check For new accounts, send a completed application and
(new account) check made 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
(existing account) additional 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.
There may be an additional charge if exchanging
from a money market fund. 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
transfer transferring money from your bank account to your
Fund account by calling 1-800-422-3737. Electronic
funds transfers may take up to two business days to
settle and be considered in "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
investment plan automatically 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
diversification by another fund into the same class of shares of
the Fund at no additional sales charge. To invest
your dividends in the Fund, call 1-800-345-6611.

---
7
<PAGE>

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 must be for Class A or Class C shares only. Purchases of $1
million or more can be made only in Class A shares. Based on your personal
situation, your financial advisor can help you decide which class of shares
makes the most sense for you.

SALES CHARGES
-------------------------------------------------------------------------------

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 certain 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 initial investment when you open your account. 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

<TABLE>
<CAPTION>
% of offering
As a % of price
the public As a % retained by
offering of your financial
Amount of purchase price investment advisor firm
<S> <C> <C> <C>
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
-------------------------------------------------------------------------------
</TABLE>

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 plans purchasing shares through a fee-based program.

For Class A share purchases of $1 million or more, financial advisors receive a
commission from the distributor as follows:

Purchases Over $1 Million

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.

---
8
<PAGE>

Your Account

UNDERSTANDING CONTINGENT DEFERRED SALES CHARGES (CDSC)

Class B shares Your purchases of Class B shares are at Class B shares' 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.

Purchases of less than $250,000:

Class B Sales Charges

% deducted when
Holding period after purchase shares are sold

Through first year 5.00
-------------------------------------------------------------------------------
Through second year 4.00
-------------------------------------------------------------------------------
Through third year 3.00
-------------------------------------------------------------------------------
Through fourth year 3.00
-------------------------------------------------------------------------------
Through fifth year 2.00
-------------------------------------------------------------------------------
Through sixth year 1.00
-------------------------------------------------------------------------------
Longer than six years None

Commission to financial advisors is 5.00%.

Automatic conversion to Class A shares is eight years after purchase.

---
9
<PAGE>

Your Account

Purchases of $250,000 to less than $500,000:

Class B Sales Charges

% deducted when
Holding period after purchase shares are sold

Commission to financial advisors is 2.50%.

Automatic conversion to Class A shares is four years after purchase.

Purchases of $500,000 to less than $1 million:

Class B Sales Charges

% deducted when
Holding period after purchase shares are sold

Commission to financial advisors is 1.75%.

Automatic conversion to Class A shares is three years after purchase.

---
10
<PAGE>

Your Account

Class C Sales Charges

Years after purchase % deducted when shares are sold

Through one year 1.00
-------------------------------------------------------------------------------
Longer than one year 0.00

---
11
<PAGE>

Your Account

HOW TO EXCHANGE SHARES
-------------------------------------------------------------------------------

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.

---
12
<PAGE>

Your Account

Outlined below are the various options for selling shares:

Method Instructions

Through your You may call your financial advisor to place your sell
financial advisor order. 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 Liberty 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 owners. For details,
call 1-800-345-6611.

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 and have the
proceeds sent to you. This feature is not available if
you hold your shares in certificate form. 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.

FUND POLICY ON TRADING OF FUND SHARES
-------------------------------------------------------------------------------

---
13
<PAGE>

Your Account

DISTRIBUTION AND SERVICE FEES
-------------------------------------------------------------------------------

OTHER INFORMATION ABOUT YOUR ACCOUNT
-------------------------------------------------------------------------------

---
14
<PAGE>

Your Account

you add money to your account and bring the value above $1,000 prior to the fee
date, the fee will not be deducted.

---
15
<PAGE>

Your Account

UNDERSTANDING FUND DISTRIBUTIONS

Dividends, Distributions, and Taxes The Fund has the potential to make the
following distributions:

Types of Distributions

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

Distribution Options The Fund distributes dividends in June and December and any
capital gains (including short-term capital gains) 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.

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.

Distribution Options

Reinvest all distributions in additional shares of the 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

<PAGE>

Your Account

---
17
<PAGE>

Managing the Fund

INVESTMENT ADVISOR
-------------------------------------------------------------------------------

Liberty WAM's advisory fee for managing the Fund in 1999 was 0.95% of the Fund's
average daily net assets. Liberty WAM also receives an administrative services
fee from the Fund at the annual rate of .05% of the Fund's average daily net
assets.

PORTFOLIO MANAGERS
-------------------------------------------------------------------------------

Marcel P. Houtzager

Co-portfolio manager

Marcel Houtzager is a vice president of Liberty Acorn Trust, and has managed
Liberty Acorn Foreign Forty since its inception in 1998. He has been a member
of the international analytical team at Liberty WAM and at WAM since 1992, and
was a principal of WAM from 1995 to September 29, 2000. Mr. Houtzager also
manages an international mutual fund underlying variable insurance products and
the foreign portfolio of an investment company whose shares are offered only to
non-U.S. investors. He is a CFA and a CPA, and earned his BA from Pomona College
and his MBA from the University of California at Berkley.

---
18
<PAGE>

Managing the Fund

Roger D. Edgley

Co-portfolio manager

Roger Edgley is a vice president of Liberty Acorn Trust and became co-portfolio
manager of Liberty Acorn Foreign Forty in December 1999. He has been director of
International Research at Liberty WAM and WAM, and was a principal of WAM from
January 1999 to September 29, 2000. Mr. Edgley has been a member of the
international analytical team at Liberty WAM and at WAM since 1994. Prior to
that, Mr. Edgley was a securities analyst in Hong Kong. He is a CFA and was
educated in the United Kingdom, completing his MSc degree from the London School
of Economics.

---
19
<PAGE>

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
"Liberty Acorn Foreign Forty - Principal Investment Strategies" and "Liberty
Acorn Foreign Forty - Principal Investment Risks." In seeking to meet its
investment goal, the Fund may also invest in other securities and use certain
other investment techniques. These securities and investment techniques offer
opportunities and carry various risks.

THE INFORMATION EDGE
-------------------------------------------------------------------------------

The Fund invests in less-profiled, entrepreneurially managed smaller, mid-sized
and larger companies that it believes are benefiting from an important economic,
social or technological trend and whose domination of a niche creates the
opportunity for superior earnings-growth potential.

. fast-growing . conservative
economy accounting practices

STOCK STRENGTH COMES FIRST
-------------------------------------------------------------------------------

In managing the Fund, Liberty WAM tries to maintain lower taxes and transaction
costs by investing with a long-term time horizon (at least two to five years).

---
20
<PAGE>

Other Investment Strategies and Risks

However, securities purchased on a long-term basis may be sold within 12 months
after purchase due to changes in the circumstances of a particular company or
industry, or changes in general market or economic conditions.

DERIVATIVE STRATEGIES
-------------------------------------------------------------------------------
The Fund may enter into a number of hedging strategies, including those that
employ futures and options, to gain or reduce exposure to particular securities
or markets. These strategies, commonly referred to as derivatives, involve the
use of financial instruments whose values depend on, or are derived from, the
value of an underlying security, index or currency. The Fund may use these
strategies to adjust the Fund's sensitivity to changes in interest rates or for
other hedging purposes (i.e., attempting to offset a potential loss in one
position by establishing an interest in an opposite position). Derivative
strategies involve the risk that they may exaggerate a loss, potentially losing
more money than the actual cost of the underlying security, or limit a potential
gain. Also, with some derivative strategies there is a risk that the other party
to the transaction may fail to honor its contract terms, causing a loss to the
Fund.

TEMPORARY DEFENSIVE STRATEGIES
-------------------------------------------------------------------------------

---
21
<PAGE>

Financial Highlights

The financial highlights table is intended to help you understand the Fund's
financial performance. Because Class A, Class B and Class C shares are new
classes of shares, information is shown for the Fund's Class Z shares since
inception. The Fund's fiscal year runs from January 1 to December 31. Class Z
shares are offered to certain investors through separate prospectuses. 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 has been derived from the Fund's financial
statements which have been audited by Ernst & Young LLP, independent
auditors, whose report, along with the Fund's financial statements, is included
in the Fund's annual report. You can request a free annual report by calling
1-800-426-3750.

Liberty Acorn Foreign Forty

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
Year Ended Inception 11/23/98
For a share outstanding throughout each period 12/31/99 Through 12/31/98
--------------------------------------------------------------------------------------------------------------------
Class Z Class Z
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $ 11.00 $ 10.00
--------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:

Net investment loss (a) (.02) (.01)
--------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments 8.98 1.01
--------------------------------------------------------------------------------------------------------------------
Total from investment operations 8.96 1.00
--------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from net realized and unrealized gains reportable
for federal income taxes (.03) --
--------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 19.93 $ 11.00
--------------------------------------------------------------------------------------------------------------------
Total return (d) 81.6% 10.0%
--------------------------------------------------------------------------------------------------------------------
Ratios/supplemental data:

Ratio of expenses to average net assets (b)(c) 1.48% 1.73%*
--------------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average net assets (c) (.17%) (.78%)*
--------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 60% 90%*
--------------------------------------------------------------------------------------------------------------------
Net assets at end of period
(in millions) $ 107 $ 16
</TABLE>

(a) Net investment loss per share was based upon the average shares outstanding
during the period.

(b) In accordance with a requirement by the Securities and Exchange Commission,
the expense ratio reflects total expenses prior to the reduction of
custodian fees for cash balances it maintains with the custodian
("custodian fees paid indirectly"). This ratio net of custodian fees paid
indirectly would have been 1.45% for the period ended December 31, 1998,
and the year ended December 31, 1999.

(c) Liberty Acorn Foreign Forty was reimbursed by Liberty WAM for certain net
expenses from November 23, 1998 through December 31, 1999. Without the
reimbursement, the ratio of expenses (prior to custodian fees paid
indirectly) to average net assets and the ratio of net investment income to
average net assets would have been 2.70% and (1.75%), respectively, for the
period ended 12/31/98 and 1.57% and (.26%), respectively, for the year
ended 12/31/99.

(d) Total return is not annualized for periods less than one year.

*Annualized

---
22
<PAGE>

Notes

_______________________________________________________________________________

---
23
<PAGE>

Notes

_______________________________________________________________________________

---
24
<PAGE>

FOR MORE INFORMATION
-------------------------------------------------------------------------------

You may wish to read the Statement of Additional Information for more
information on the Fund 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

Text-only versions of all Fund documents can be viewed online or downloaded from
the Edgar database on the Securities and Exchange Commission internet site at
www.sec.gov.

Public Reference Room
Securities and Exchange Commission
Washington, DC 20549-0102

Information on the operation of the Public Reference Room may be obtained by
calling 1-202-942-8090.

Investment Company Act file number:

Liberty Acorn Trust (formerly Acorn Investment Trust): 811-01829

. Liberty Acorn Foreign Forty (formerly Acorn Foreign Forty)

[LOGO OF LIBERTY FUNDS]
<PAGE>

SUBJECT TO COMPLETION

------------------------------------------------------------------------------
LIBERTY ACORN FUND Prospectus, September __, 2000
-------------------------------------------------------------------------------
Class Z Shares

Advised by Liberty Wanger Asset Management, L.P.

Liberty Acorn Trust

Only eligible investors may purchase Class Z shares. See "Your Account -
Eligible Investors" for more information.

--------------------------------------------------------------------------------
T A B L E O F C O N T E N T S

<TABLE>
<S> <C>
LIBERTY ACORN FUND XX
------------------
Investment Goals.......................................................... xx
Principal Investment Strategies........................................... xx
Principal Investment Risks................................................ xx

Performance History....................................................... xx
Your Expenses............................................................. xx

YOUR ACCOUNT XX
------------
How to Buy Shares......................................................... xx
Eligible Investors........................................................ xx
Sales Charges............................................................. xx
How to Exchange Shares.................................................... xx
How to Sell Shares........................................................ xx
Fund Policy on Trading of Fund Shares..................................... xx
Other Information About Your Account...................................... xx

MANAGING THE FUND XX
-----------------
Investment Advisor........................................................ xx
Portfolio Managers........................................................ xx

OTHER INVESTMENT
STRATEGIES AND RISKS XX
--------------------
The Information Edge...................................................... xx
Stock Strength Comes First................................................ xx
Derivative Strategies..................................................... xx
Temporary Defensive Strategies............................................ xx

FINANCIAL HIGHLIGHTS XX
--------------------
</TABLE>

---------------------------
Not FDIC May Lose Value
-----------------
Insured No Bank Guarantee
---------------------------
____
1
<PAGE>

Liberty Acorn Fund

INVESTMENT GOAL
--------------------------------------------------------------------------------

Liberty Acorn Fund seeks to provide long-term growth of capital.

INVESTMENT STRATEGIES
--------------------------------------------------------------------------------

Liberty Acorn Fund invests primarily in the stocks of small- and medium-sized
companies. The Fund generally invests in the stocks of companies around the
globe with capitalizations of less than $2 billion with the intention of holding
them as they grow and selling them when they become large.

The Fund believes that these smaller, less-profiled companies may offer higher
return potential than the stocks of large companies.

Liberty Acorn Fund typically looks for companies with:

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

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) that
could prevent the Fund from achieving its investment goal. You may lose money
by investing in the Fund.

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

____
2
<PAGE>

Acorn Fund

from factors affecting individual companies, industries or the securities market
as a whole.

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 Fund does not intend to focus on any particular sector, at
times, the Fund may have a large portion of its assets invested in a particular
sector. An example of a sector in which the Fund may sometimes have a large
portion of it 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 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.

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.
____
3
<PAGE>

Acorn Fund

UNDERSTANDING PERFORMANCE

CALENDAR YEAR TOTAL RETURNS show the Fund's Class Z share performance for each
of the last ten complete calendar years. They include the effects of Fund
expenses.

AVERAGE ANNUAL TOTAL RETURNS are measures of the Fund's performance over the
past one-year, five-year and ten-year periods. They include the effects of Fund
expenses.

PERFORMANCE HISTORY
--------------------------------------------------------------------------------

The bar chart below shows changes in the Fund's performance from year to year by
illustrating the Fund's calendar year total returns for its Class Z shares. The
performance table following the bar chart shows how the Fund's average annual
returns for Class Z shares compare with those of broad measures of market
performance for one year, five years and ten years. 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. As with all mutual funds, past performance does
not predict the Fund's future performance.

Calendar Year Total Returns

--------------------------------------------------------------------------------
[BAR CHART]

Year Return
---- ------
1990 (17.52%)
1991 47.35%
1992 24.23%
1993 32.32%
1994 (7.45%)
1995 20.80%
1996 22.55%
1997 24.98%
1998 6.02%
1999 38.38%

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

For period shown in bar chart:
Best quarter: 4th quarter 1999, +21.94%
Worst quarter: 3rd quarter 1990, -23.77%

Average Annual Total Returns -- for periods ended December 31, 1999

<TABLE>
<CAPTION>
1 Year 5 Years 10 Years
<S> <C> <C> <C>
Class Z 33.38% 21.21% 17.07%
-------------------------------------------------------------------------------
S&P 500 21.04% 28.56% 18.21%
-------------------------------------------------------------------------------
Russell 2000 21.26% 16.69% 13.34%
</TABLE>

____
4

<PAGE>

Acorn Fund

UNDERSTANDING EXPENSES

Annual Fund Operating Expenses are deducted from the Fund. They include
management and administration fees, and administrative costs including pricing
and custody services.

Example Expenses help you compare the cost of investing in the Fund to the cost
of investing in other mutual funds. It uses the following hypothetical
conditions:

. $10,000 initial investment

. 5% total return for each year

. fund operating expenses remain the same

. assumes reinvestment of all dividends and distributions

Shareholder Fees (paid directly from your investment)

<TABLE>
<S> <C>
Maximum sales charge (load) on purchases None
----------------------------------------------------------------
Maximum deferred sales charge (load) on
redemptions None
----------------------------------------------------------------
Redemption fee (%) (as a percentage of
amount redeemed) None
</TABLE>

Annual Fund Operating Expenses (deducted directly from Fund assets)

<TABLE>
<S> <C>
Management fees/(1)/ (%) .69
----------------------------------------------------------------
Distribution and service (12b-1) fees (%) None
----------------------------------------------------------------
Other expenses (%) .16
----------------------------------------------------------------
Total annual fund operating expenses (%) .85
----------------------------------------------------------------
</TABLE>

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

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C>
$87 $271 $471 $1,049
</TABLE>

(1) In addition to the management fee, the Fund pays the Advisor an
administrative fee of .05%, which is included in "Other Expenses."

____
5
<PAGE>

Your Account

INVESTMENT MINIMUMS

<TABLE>
<S> <C>
Initial Investment................................................ $1,000
Subsequent Investments............................................ $50
Automatic Investment Plan......................................... $50
Retirement Plans.................................................. $25
</TABLE>

HOW TO BUY SHARES
--------------------------------------------------------------------------------

If you are an Eligible Investor (described below), your shares will be bought at
the next calculated price after the Fund receives your purchase request in "good
form." "Good form" means that your payment has been received and your
application is complete, including all necessary signatures. The Fund reserves
the right to refuse a purchase order for any reason, including if the Fund
believes that doing so would be in the best interest of the Fund and its
shareholders.

Outlined below are the various options for buying shares:

Method Instructions
--------------------------------------------------------------------------------
By check For new accounts, send a completed application and
(new account) check made 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
(existing account) additional investment stub included in your quarterly
statement, or send a letter of instruction including
the 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 may acquire shares by exchanging shares you own in
one fund for shares of the same class of shares of the
Fund at no additional cost. There may be an additional
charge if exchanging from a money market fund. 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
transfer (existing money from your bank account to your Fund account by
account) calling 1-800-422-3737. Electronic funds transfers may
take up to two business days to settle and be considered
in "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
investment plan automatically 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
diversification one fund into the same class of shares of the Fund at
no additional sales charge. To invest your dividends in
the Fund, call 1-800-345-6611.
--------------------------------------------------------------------------------
Through an Contact your financial professional. Financial
intermediary professionals may charge fees for their services.

____
6
<PAGE>

Your Account

ELIGIBLE INVESTORS

Only Eligible Investors may purchase Class Z shares of the Fund, directly or by
exchange. An Eligible Investor is:

. any shareholder who owned shares of any of the funds of Liberty Acorn Trust
on September 29, 2000 (when all of the Trust's then outstanding shares were
re-designated Class Z shares) and who has since then continued to own
shares of any funds distributed by Liberty Funds Distributor, Inc. or any
member of the family of any such shareholder;

. Any person investing all or part of the proceeds of a distribution from, or
"rolling over" or transferring assets, into a Liberty IRA from, any
deferred compensation plan which was a shareholder of any of the Liberty
Acorn funds on September 29, 2000, in which the investor was a participant
and through which the investor invested in one or more of the Liberty Acorn
funds immediately prior to the distribution, transfer or roll over.

. any client of a broker-dealer or registered investment advisor that
recommends Fund shares and charges an asset-based fee;

. any retirement plan with aggregate assets of at least $5 million at the
time it purchases Class Z shares and which is purchasing shares directly
from the distributor or through a third party broker-dealer;

. any insurance company, trust company or bank, which is purchasing shares
for its own account;

. any endowment, investment company or foundation;

. any client of an investment advisory affiliate of the distributor if the
client meets certain criteria established by the distributor and its
affiliate;

. any trustee of Liberty Acorn Trust, any employee of Liberty WAM, or a
member of the family of the trustee or employee; and

. 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 continued to hold shares of any funds distributed by
Liberty Funds Distributor, Inc.

If you have any questions about your eligibility to purchase Class Z shares of
the Fund, please call 800-345-6611. If you hold Fund shares through a broker-
dealer or other financial institution, your eligibility to purchase Class Z
shares may differ depending on that institution's policies.

The Fund reserves the right to change the criteria for eligible investors.

____
7
<PAGE>

Your Account

CHOOSING A SHARE CLASS

The Fund offers one class of shares in this prospectus -- Class Z.

The Fund also offers three additional classes of shares -- Class A, B and C
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 Z shares,
which do not incur Rule 12b-1 fees or sales charges, should do so in preference
over other classes.

PRICE OF FUND SHARES

Your purchases of Class Z shares generally are at net asset value, which is the
value of a Fund share without any sales charge. Class Z shares are not subject
to an initial sales charge when purchased, or a contingent deferred sales charge
when sold.

If you purchase Class Z shares of the Fund through certain broker-dealers, banks
or other intermediaries (intermediaries), they may charge a fee for their
services. They may also place limits on your ability to use services the Fund
offers. There are no sales charges or limitations if you purchase shares
directly from the Fund, except as described in this prospectus.

If an intermediary is an agent or designee of the Fund, orders are processed at
the net asset value next calculated after the intermediary receives the order.
The intermediary must segregate any orders it receives after the close of
regular trading on the NYSE and transmit those orders separately for execution
at the net asset value next determined.

HOW TO EXCHANGE SHARES

You may exchange your shares for shares of the same share class of another fund
or Class A shares of certain other funds distributed by Liberty Funds
Distributor, Inc., at net asset value without a sales charge. 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

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 net asset value. 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, and (ii) 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.

____
8
<PAGE>

Your Account

Outlined below are the various options for selling shares:

Method Instructions

--------------------------------------------------------------------------------
By exchange You may sell shares by exchanging from the Fund into Class Z
shares or Class A shares 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 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 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.
--------------------------------------------------------------------------------
Systematic You may automatically sell a specified dollar amount or
Withdrawal Plan percentage on a monthly, quarterly or semiannual basis if
your account balance is at least $5,000 and have the
proceeds sent to you. This feature is not available if you
hold your shares in certificate form. Be sure to complete
the appropriate section of the account application for this
feature.
--------------------------------------------------------------------------------
Through an Contact your financial professional. Financial
Intermediary professionals may charge fees for their services.

FUND POLICY ON TRADING OF FUND SHARES
--------------------------------------------------------------------------------

____
9
<PAGE>

Your Account

OTHER INFORMATION ABOUT YOUR ACCOUNT
--------------------------------------------------------------------------------

How the Fund's Share Price is Determined The price of a Fund's Class Z shares is
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 Fund (or an
authorized broker-dealer, financial services company, or other agent, some of
whom may charge a fee for their services). In most cases, in order to receive
that day's price, the Fund must receive your order before that day's
transactions are processed. If you request a transaction through an agent, that
agent 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 its Class Z shares by dividing total
net assets attributable to Class Z shares by the number of outstanding Class Z
shares. In determining the net asset value, the Fund must determine the price
of each security in its portfolio at the close of each trading day. Because the
Fund may hold securities that are traded on foreign exchanges, the value of
these securities may change on days when shareholders will not be able to buy or
sell Fund shares. This will affect the Fund's net asset value on the day it is
next determined. Securities for which market quotations are available are valued
each day at the current market value. However, where market quotations are not
available, or when the advisor believes that subsequent events have made them
unreliable, the Fund may use other data to determine the fair value of the
securities.

Share Certificates Share certificates are not available for Class Z shares.

____
10
<PAGE>

Your Account

UNDERSTANDING FUND DISTRIBUTIONS

Dividends, Distributions, and Taxes The Fund has the potential to make the
following distributions:

Types of Distributions

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

Distribution Options. The Fund distributes dividends in June and
December and any capital gains (including short-term capital gains) 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.

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.

Distribution Options

Reinvest all distributions in additional shares of the 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

____
11
<PAGE>

Your Account

____
12
<PAGE>

Managing the Fund

INVESTMENT ADVISOR
--------------------------------------------------------------------------------

WAM, was renamed Liberty WAM on September 29, 2000 when it became a wholly owned
subsidiary of Liberty Financial Companies, Inc. (Liberty), which in turn is a
majority owned indirect subsidiary of Liberty Mutual Insurance Company. For more
information about Liberty's acquisition of WAM, see the Statement of Additional
Information.

Liberty WAM is part of a larger business unit that includes several separate
legal entities known as Liberty Funds Group (LFG). LFG includes certain
affiliates of the Liberty WAM, including Stein Roe & Farnham, Incorporated
(Stein Roe) and Colonial Management Associates, Inc. (Colonial). Stein Roe,
Colonial and other LFG entities share personnel, facilities and systems that may
be used in providing administrative or operational services to the Fund. Stein
Roe, Colonial and the other entities that make up the LFG are subsidiaries of
Liberty.

Liberty WAM's advisory fee for managing the Fund in 1999 was 0.69% of the Fund's
average daily net assets. Liberty WAM also receives an administrative fee from
the Fund at the annual rate of .05% of the Fund's average daily net assets.

PORTFOLIO MANAGERS
--------------------------------------------------------------------------------

Ralph Wanger

Lead portfolio manager

Ralph Wanger is chief strategist of the Liberty Acorn Fund and has been
portfolio manager of Liberty Acorn Fund since its inception in 1970. He has
been president and a member of Liberty Acorn Trust's Board of Trustees since
1970. Mr. Wanger has been president of Liberty WAM since September 29, 2000 and
was a principal of WAM before that date. He is a Chartered Financial Analyst
(CFA), and earned his BS and MS degrees in Industrial Management from the
Massachusetts Institute of Technology.

Charles P. McQuaid

Co-portfolio manager

Charles McQuaid is a senior vice president and member of Liberty Acorn Trust's
Board of Trustees. He has been director of Domestic Research at Liberty WAM and
WAM,

____
13
<PAGE>

Managing the Fund

and was a principal of WAM until September 29, 2000. Mr. McQuaid has been a
member of Liberty Acorn Fund's management team since 1978. He is a CFA, and
earned his BBA from the University of Massachusetts and his MBA from the
University of Chicago.

____
14
<PAGE>

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
"Liberty Acorn Fund - Principal Investment Strategies" and "Liberty Acorn Fund -
Principal Investment Risks." In seeking to meet its investment goal, the Fund
may also invest in other securities and use certain other investment techniques.
These securities and investment techniques offer opportunities and carry various
risks.

THE INFORMATION EDGE
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Growth Potential Financial Strength Fundamental Value
--------------------------------------------------------------------------------
<S> <C> <C> <C>
. superior technology . stability . lower stock price
. innovative marketing . reduced risk relative to growth
. solid management . competitive potential and
. dominant or niche advantage capitalization
position . low debt . growth at a
. superior earnings . adequate working reasonable price
prospects capital
. fast-growing . conservative
economy accounting practices

STOCK STRENGTH COMES FIRST
--------------------------------------------------------------------------------

In managing the Fund, Liberty WAM tries to maintain lower taxes and transaction
costs by investing with a long-term time horizon (at least two to five years).
However,

____
15
<PAGE>

Other Investment Strategies and Risks

DERIVATIVE STRATEGIES
--------------------------------------------------------------------------------

TEMPORARY DEFENSIVE STRATEGIES
--------------------------------------------------------------------------------

____
16
<PAGE>

Financial Highlights

The financial highlights tables are intended to help you understand the Fund's
financial performance. Information is shown for the Fund's last five fiscal
years, which run from January 1 to December 31. 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 has been derived from the Fund's financial statements which have
been audited by Ernst & Young LLP, independent auditors whose report, along
with the Fund's financial statements, is included in the Fund's annual report.
You can request a free annual report by calling 1-800-426-3750.

Liberty Acorn Fund

<TABLE>
<CAPTION>
For a share outstanding throughout
each year - years ended 12/31 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------
Class Z Class Z Class Z Class Z Class Z
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $16.85 $16.99 $15.04 $13.60 $12.24
------------------------------------------------------------------------------------------------------------
Income from Investment Operations:

Net investment income .09 .04 .15 .09 .11
------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on
investments, foreign currency and
futures 5.22 .91 3.57 2.93 2.42
------------------------------------------------------------------------------------------------------------
Total from investment
operations 5.31 .95 3.72 3.02 2.53
============================================================================================================
Less distributions:
Dividends from net investment income (.09) (.03) (.16) (.11) (.09)
------------------------------------------------------------------------------------------------------------
Distributions from net realized and
unrealized gains reportable for federal
income taxes (3.54) (1.06) (1.61) (1.47) (1.08)
------------------------------------------------------------------------------------------------------------
Total distributions (3.63) (1.09) (1.77) (1.58) (1.17)
============================================================================================================
Net asset value, end of year $18.53 $16.85 $16.99 $15.04 $13.60
------------------------------------------------------------------------------------------------------------
Total return 33.4% 6.0% 25.0% 22.6% 20.8%
============================================================================================================
Ratios/supplemental data:

Ratio of expenses to average net
assets .85% .84% .56% .57% .57%
------------------------------------------------------------------------------------------------------------
Ratio of net investment income to
average net assets .49% .30% .75% .53% .89%
------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 34% 24% 32% 33% 29%
------------------------------------------------------------------------------------------------------------
Net assets at end of year
(in millions) $3,921 $3,549 $3,681 $2,842 $2,399
</TABLE>

____
17
<PAGE>

Notes

________________________________________________________________________________

____
18
<PAGE>

________________________________________________________________________________

____
19

<PAGE>

FOR MORE INFORMATION
--------------------------------------------------------------------------------

You may wish to read the Statement of Additional Information for more
information on the Fund 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.acornfunds.com

Text-only versions of all Fund documents can be viewed online or downloaded from
the Edgar database on the Securities and Exchange Commission internet site at
www.sec.gov.

Public Reference Room
Securities and Exchange Commission
Washington, DC 20549-0102

Information on the operation of the Public Reference Room may be obtained by
calling 1-202-942-8090.

Investment Company Act file number:

Liberty Acorn Trust: 811-01829

. Liberty Acorn Fund (formerly Acorn Fund)
--------------------------------------------------------------------------------

[LETTERHEAD OF LIBERTY FUNDS]
<PAGE>

SUBJECT TO COMPLETION

--------------------------------------------------------------------------------
LIBERTY ACORN TWENTY Prospectus, September __, 2000
--------------------------------------------------------------------------------

Class Z Shares

Advised by Liberty Wanger Asset Management, L.P.

Liberty Acorn Trust

Only eligible investors may purchase Class Z shares. See "Your Account -
Eligible Investors" for more information.

--------------------------------------------------------------------------------
T A B L E O F C O N T E N T S

<TABLE>
<S> <C>
XX
LIBERTY ACORN TWENTY
--------------------
Investment Goals......................................................... xx
Principal Investment Strategies.......................................... xx
Principal Investment Risks............................................... xx

Performance History...................................................... xx
Your Expenses............................................................ xx

YOUR ACCOUNT XX
------------
How to Buy Shares........................................................ xx
Eligible Investors....................................................... xx
Sales Charges............................................................ xx
How to Exchange Shares................................................... xx
How to Sell Shares....................................................... xx
Fund Policy on Trading of Fund Shares.................................... xx
Other Information About Your Account..................................... xx

MANAGING THE FUND........................................................ XX
-----------------
Investment Advisor....................................................... xx
Portfolio Manager........................................................ xx

OTHER INVESTMENT
STRATEGIES AND RISKS XX
--------------------
The Information Edge..................................................... xx
Stock Strength Comes First............................................... xx
Derivative Strategies.................................................... xx
Temporary Defensive Strategies........................................... xx

FINANCIAL HIGHLIGHTS XX
--------------------
</TABLE>

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

-----
1
<PAGE>

Liberty Acorn Twenty

INVESTMENT GOAL
--------------------------------------------------------------------------------

Liberty Acorn Twenty seeks long-term growth of capital.

INVESTMENT STRATEGIES
--------------------------------------------------------------------------------
Liberty Acorn Twenty invests primarily in the stocks of medium- to larger-sized
U.S. companies. The Fund is a non-diversified fund that takes advantage of its
advisor's research and stock-picking capabilities to invest in a limited number
of companies (between 20-25) with market capitalizations of $2 billion to $12
billion, offering the potential to provide above-average growth over time.

The Fund believes that companies within this capitalization range are less
profiled, and may offer higher return potential than the stocks of companies
with capitalizations above $12 billion.

Liberty Acorn Twenty typically looks for companies with:

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

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) that
could prevent the Fund from achieving its investment goal. You may lose money by
investing in the Fund.

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.

-----
2
<PAGE>

Liberty Acorn Twenty

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.

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.

------
3
<PAGE>

Liberty Acorn Twenty

UNDERSTANDING PERFORMANCE

Calendar year total returns show the Fund's Class Z share performance for each
completed calendar year since inception. They include the effects of Fund
expenses.

Average annual total returns are measures of the Fund's performance over the
past one-year and life of the Fund periods. They include the effects of Fund
expenses.

The Fund's return is compared to the S&P Mid Cap 400 Index. The S&P Mid Cap 400
is an unmanaged, market value-weighted index of 400 mid cap U.S. companies.
Unlike the Fund, an index is not an investment, does not incur fees or expenses
and is not professionally managed. It is not possible to invest directly in an
index.

PERFORMANCE HISTORY
--------------------------------------------------------------------------------

The bar chart below shows changes in the Fund's performance from year to year by
illustrating the Fund's calendar year total returns for its Class Z shares. The
performance table following the bar chart shows how the Fund's average annual
returns for Class Z shares compare with those of broad measures of market
performance for one year and 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 these arrangements were not in place, then performance 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 CHART]
Year Returns
---- -------
'99 29.30%

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

For period shown in bar chart:
Best quarter: 4th quarter 1999, +14.35%
Worst quarter: 3rd quarter 1999, - 7.13%

Average Annual Total Returns -- for periods ended December 31, 1999

Inception Date 1 Year Life of the Fund

Class Z 11/23/98 29.30% 34.20%
--------------------------------------------------------------------------------
S&P Mid Cap 400 N/A 14.72% 24.49%
<PAGE>

Liberty Acorn Twenty

UNDERSTANDING EXPENSES

Annual Fund Operating Expenses are deducted from the Fund. They include
management and administration fees, and administrative costs including pricing
and custody services.

Example Expenses help you compare the cost of investing in the Fund to the cost
of investing in other mutual funds. It uses the following hypothetical
conditions:

. $10,000 initial investment

. 5% total return for each year

. fund operating expenses remain the same

. assumes reinvestment of all dividends and distributions

Shareholder Fees (paid directly from your investment)

Maximum sales charge (load) on purchases None
-----------------------------------------------------------------------
Maximum deferred sales charge (load) on redemptions None

Redemption fee (%) (as a percentage of amount redeemed) None

Annual Fund Operating Expenses (deducted directly from Fund assets)

Management fees/(1)/ (%) .90
-----------------------------------------------------------------------
Distribution and service (12b-1) fees (%) None
-----------------------------------------------------------------------
Other expenses (%) .51
-----------------------------------------------------------------------
Total annual fund operating expenses(2) (%) 1.41
-----------------------------------------------------------------------

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

1 Year 3 Years 5 Years 10 Years

$144 $446 $ 771 $1,691

(1) In addition to the management fee, the Fund pays the Advisor an
administrative fee of .05%, which is included in "Other Expenses."

(2) The Fund's advisor has voluntarily agreed to reimburse the Fund for any
ordinary operating expenses (exclusive of distribution and service fees,
interest, taxes and extraordinary expenses, if any) exceeding 1.35% of its
average annual net assets. This arrangement may be modified or terminated by
either the Fund or its advisor on 30 days' notice to the other. As a result,
the actual total annual Fund operating expenses for Class Z would be 1.35%.

-----
5
<PAGE>

Your Account

INVESTMENT MINIMUMS

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

HOW TO BUY SHARES
--------------------------------------------------------------------------------
If you are an Eligible Investor (described below), your shares will be bought at
the next calculated price after the Fund receives your purchase request in "good
form." "Good form" means that your payment has been received and your
application is complete, including all necessary signatures. The Fund reserves
the right to refuse a purchase order for any reason, including if the Fund
believes that doing so would be in the best interest of the Fund and its
shareholders.

Outlined below are the various options for buying shares:

<TABLE>
<CAPTION>
Method Instructions
-------------------------------------------------------------------------------------------------------
<S> <C>
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 the 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 may acquire shares by exchanging shares you own in one fund for shares
of the same class of shares of the Fund at no additional cost. There may be
an additional charge if exchanging from a money market fund. 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 (existing bank account to your Fund account by calling 1-800-422-3737.
account) Electronic funds transfers may take up to two business days to settle and
be considered in "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
diversification fund into the same class of shares of the Fund at no additional sales
charge. To invest your dividends in the Fund, call 1-800-345-6611.
-------------------------------------------------------------------------------------------------------
Through an Contact your financial professional. Financial professionals may charge
intermediary fees for their services.
</TABLE>

----
6
<PAGE>

Your Account

ELIGIBLE INVESTORS
--------------------------------------------------------------------------------
Only Eligible Investors may purchase Class Z shares of the Fund, directly or by
exchange. An Eligible Investor is:

. any client of a broker-dealer or registered investment advisor that
recommends Fund shares and charges an asset-based fee;

. any insurance company, trust company or bank, which is purchasing shares
for its own account;

. any endowment, investment company or foundation;

. any client of an investment advisory affiliate of the distributor if the
client meets certain criteria established by the distributor and its
affiliate;

. any trustee of Liberty Acorn Trust, any employee of Liberty WAM, or a
member of the family of the trustee or employee; and

The Fund reserves the right to change the criteria for eligible investors.

----
7
<PAGE>

Your Account

CHOOSING A SHARE CLASS

The Fund offers one class of shares in this prospectus -- Class Z.

The Fund also offers three additional classes of shares -- Class A, B and C
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 Z shares,
which do not incur Rule 12b-1 fees or sales charges, should do so in preference
over other classes.

PRICE OF FUND SHARES
--------------------------------------------------------------------------------

HOW TO EXCHANGE SHARES
--------------------------------------------------------------------------------

HOW TO SELL 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 net asset value. 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, and (ii) any other required
documents are attached. For additional documents required for sales by
corporations, agents, fiduciaries and surviving joint owners, please call 1-800-
345-6511. Retirement plan accounts have special requirements; please call 1-800-
799-7526 for more information.

----
8
<PAGE>

Your Account

Outlined below are the various options for selling shares:

<TABLE>

Method Instructions
---------------------------------------------------------------------------------------------------
<S> <C>
By exchange You may sell shares by exchanging from the Fund into Class Z shares or
Class A shares 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 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 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.
---------------------------------------------------------------------------------------------------
Systematic You may automatically sell a specified dollar amount or percentage on a
Withdrawal Plan monthly, quarterly or semiannual basis if your account balance is at
least $5,000 and have the proceeds sent to you. This feature is not available
if you hold your shares in certificate form. Be sure to complete the appropriate
section of the account application for this feature.
---------------------------------------------------------------------------------------------------
Through an Contact your financial professional. Financial professionals may charge
Intermediary fees for their services.
</TABLE>

----
9
<PAGE>

Your Account

OTHER INFORMATION ABOUT YOUR ACCOUNT
--------------------------------------------------------------------------------
How the Fund's Share Price is Determined The price of a Fund's Class Z shares is
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).

Share Certificates Share certificates are not available for Class Z shares.

-----
10
<PAGE>

Your Account

UNDERSTANDING FUND DISTRIBUTIONS

Dividends, Distributions, and Taxes The Fund has the potential to make the
following distributions:

Types of Distributions

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

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.

Distribution Options

Reinvest all distributions in additional shares of the 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

____
11
<PAGE>

Your Account

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 and local income tax.

____
12
<PAGE>

Managing the Fund

Liberty WAM's advisory fee for managing the Fund in 1999 was 0.90% of the Fund's
average daily net assets. Liberty WAM also receives an administrative fee from
the Fund at the annual rate of .05% of the Fund's average daily net assets.

John H. Park

Lead portfolio manager

____
13
<PAGE>

OTHER INVESTMENT STRATEGIES AND RISKS

UNDERSTANDING THE FUND'S OTHER INVESTMENT STRATEGIES AND RISKS

THE INFORMATION EDGE
--------------------------------------------------------------------------------
The Fund invests in less-profiled, entrepreneurially managed smaller, mid-sized
and larger companies that it believes are benefiting from an important economic,
social or technological trend and whose domination of a niche creates the
opportunity for superior earnings-growth potential.

Growth Potential Financial Strength Fundamental Value
--------------------------------------------------------------------------------

. superior technology . stability . lower stock price
. innovative marketing . reduced risk relative to growth
. solid management . competitive potential and
advantage capitalization
. dominant or niche . low debt . growth at a
position reasonable price
. superior earnings . adequate working
prospects capital
. fast-growing . conservative
economy accounting practices

In managing the Fund, Liberty WAM tries to maintain lower taxes and transaction
costs by investing with a long-term time horizon (at least two to five years).
However,

____
14
<PAGE>

Other Investment Strategies and Risks

securities purchased on a long-term basis may be sold
within 12 months after purchase due to changes in the
circumstances of a particular company or industry, or
changes in general market or economic conditions.

DERIVATIVE STRATEGIES
------------------------------------------------------
The Fund may enter into a number of hedging strategies,
including those that employ futures and options, to
gain or reduce exposure to particular securities or
markets. These strategies, commonly referred to as
derivatives, involve the use of financial instruments
whose values depend on, or are derived from, the value
of an underlying security, index or currency. The Fund
may use these strategies to adjust the Fund's
sensitivity to changes in interest rates or for other
hedging purposes (i.e., attempting to offset a
potential loss in one position by establishing an
interest in an opposite position). Derivative
strategies involve the risk that they may exaggerate a
loss, potentially losing more money than the actual
cost of the underlying security, or limit a potential
gain. Also, with some derivative strategies there is a
risk that the other party to the transaction may fail
to honor its contract terms, causing a loss to the
Fund.

TEMPORARY DEFENSIVE STRATEGIES
-------------------------------------------------------
At times, Liberty WAM may determine that adverse market
conditions make it desirable to temporarily suspend the
Fund's normal investment activities. During such times,
the Fund 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 from achieving its investment
goal.

____
15
<PAGE>

Financial Highlights

The financial highlights table is intended to help you
understand the Fund's financial performance.
Information is shown for the Fund's Class Z shares
since inception. The Fund's fiscal year runs from
January 1 to December 31. 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 has been derived from
the Fund's financial statements which have been audited
by Ernst & Young LLP, independent auditors, whose
report, along with the Fund's financial statements, is
included in the Fund's annual report. You can request a
free annual report by calling 1-800-426-3750.

Liberty Acorn Twenty
<TABLE>
<CAPTION>
Inception 11/23/98
For a share outstanding throughout each period Year ended 12/31/99 Through 12/31/98
-------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class Z Class Z
-------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $10.71 $ 10.00
-------------------------------------------------------------------------------------------------------------
Income from investment Operations:

Net investment income (loss) (a) (.08) --
-------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments 3.21 .71
-------------------------------------------------------------------------------------------------------------
Total from investment operations 3.13 .71
-------------------------------------------------------------------------------------------------------------
Less Distributions:
Distribution from net realized and unrealized gains
reportable for federal income taxes (.14) --
-------------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.70 $ 10.71
-------------------------------------------------------------------------------------------------------------
Total return (d) 29.3% 7.1%
-------------------------------------------------------------------------------------------------------------
Ratios/supplemental data:
-------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (b)(c) 1.37% 1.41%*
-------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average net assets (c) (.62)% .22%*
-------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 101% 173%*
-------------------------------------------------------------------------------------------------------------
Net assets at end of period
(in millions) $ 68 $ 34
</TABLE>

<TABLE>
<S> <C>
(a) Net investment income (loss) per (c) Liberty Acorn Twenty was reimbursed
share was based upon the average by Liberty WAM for certain net
shares outstanding during the period. expenses from November 23, 1998
through December 31, 1999. Without
(b) In accordance with a requirement by the reimbursement, the ratio of
the Securities and Exchange expenses (prior to custodian fees paid
Commission, the expense ratio indirectly) to average net assets and
reflects total expenses prior to the the ratio of net investment income to
reduction of custodian fees for cash average net assets would have been
balances it maintains with the 1.83% and (.21%), respectively, for
custodian ("custodian fees paid the period ended 12/31/98 and 1.41%
indirectly"). This ratio net of custodian and (.66%), respectively, for the year
fees paid indirectly would have been ended 12/31/99.
1.35% for the period ended December
31, 1998 and the year ended (d) Total return is not annualized for
December 31, 1999. periods less than one year.

* Annualized
</TABLE>

____
16
<PAGE>

Notes

---
17

<PAGE>

---
18
<PAGE>

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 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.acornfunds.com

Text-only versions of all Fund documents can
be viewed online or downloaded from the Edgar
database on the Securities and Exchange
Commission internet site at www.sec.gov.

You can review and copy information about the
Fund by visiting the following location, and
you can obtain copies, upon payment of a
duplicating fee by electronic request at the
E-mail address [email protected] or by
writing the:

Public Reference Room
Securities and Exchange Commission
Washington, DC 20549-0102

Information on the operation of the Public
Reference Room may be obtained by calling 1-
202-942-8090.

Investment Company Act file number:

Liberty Acorn Trust (formerly Acorn
Investment Trust): 811-01829

. Liberty Acorn Twenty
(formerly Acorn Twenty)

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

[LOGO OF LIBERTY FUNDS]
<PAGE>

THE INFORMATION IN THIS PROSPECTUS IN NOT COMPLETE AND MAY BE CHANGED. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION BUT HAS NOT YET BECOME EFFECTIVE. THESE
SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME
THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS COMMUNICATION SHALL NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY OR SHALL
THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO QUALIFICATION UNDER THE
SECURITIES LAWS OF ANY SUCH STATE.

SUBJECT TO COMPLETION

--------------------------------------------------------------------------------
LIBERTY ACORN INTERNATIONAL Prospectus, September --, 2000
--------------------------------------------------------------------------------

Class Z Shares

Advised by Liberty Wanger Asset Management, L.P.

Liberty Acorn Trust

Only eligible investors may purchase Class Z shares. See "Your Account -
Eligible Investors" for more information.

--------------------------------------------------------------------------------
T A B L E OF C O N T E N T S

<TABLE>
<S> <C>
LIBERTY ACORN INTERNATIONAL XX
---------------------------
Investment Goals........................................................ xx
Principal Investment Strategies......................................... xx
Principal Investment Risks.............................................. xx
Performance History..................................................... xx
Your Expenses........................................................... xx

YOUR ACCOUNT XX
------------
How to Buy Shares....................................................... xx
Eligible Investors...................................................... xx
Sales Charges........................................................... xx
How to Exchange Shares.................................................. xx
How to Sell Shares...................................................... xx
Fund Policy on Trading of Fund Shares................................... xx
Other Information About Your Account.................................... xx

MANAGING THE FUND XX
-----------------
Investment Advisor...................................................... xx
Portfolio Managers...................................................... xx

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

The Information Edge.................................................... XX
Stock Strength Comes First.............................................. XX
Derivative Strategies................................................... XX
Temporary Defensive Strategies.......................................... XX

FINANCIAL HIGHLIGHTS XX
--------------------
</TABLE>

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

____
1
<PAGE>

Liberty Acorn International

INVESTMENT GOAL
--------------------------------------------------------------------------------

Liberty Acorn International seeks to provide long-term growth of capital.

INVESTMENT STRATEGIES
--------------------------------------------------------------------------------

Liberty Acorn International invests primarily in stocks of non-U.S. small- and
medium-sized companies. The Fund generally invests in the stocks of companies
based outside the U.S. (or whose primary business takes place outside the U.S.)
with capitalizations of less than $5 billion with the intention of holding them
as they grow and selling them when they become large.

The Fund believes that smaller, less-profiled companies - particularly outside
the U.S. -may offer higher return potential than the stocks of large companies.

Liberty Acorn International typically looks for companies with:

. A strong business franchise that offers growth potential.

. Products and services that give the company a competitive advantage.

. A stock price the Fund's advisor believes is reasonable relative to the
assets and earning power of the company.

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

PRINCIPAL INVESTMENT RISKS
--------------------------------------------------------------------------------

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
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

____
2
<PAGE>

Liberty Acorn International

from factors affecting individual companies, industries or the securities market
as a whole.

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.

____
3
<PAGE>

Liberty Acorn International

UNDERSTANDING PERFORMANCE

Calendar year total returns show the Fund's Class Z share performance for each
completed calendar year. They include the effects of Fund expenses.

Average annual total returns are measures of the Fund's performance over the
past one-year, five-year and life of the Fund periods. They include the effects
of Fund expenses.

PERFORMANCE HISTORY
--------------------------------------------------------------------------------

The bar chart below shows changes in the Fund's performance from year to year by
illustrating the Fund's calendar year total returns for its Class Z shares. The
performance table following the bar chart shows how the Fund's average annual
returns for Class Z shares compare with those of broad measures of market
performance for one year, five years and 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. As with all mutual funds, past performance does not
predict the Fund's future performance.

Calendar Year Total Returns/(1)/

--------------------------------------------------------------------------------
[BAR CHART]

Year Return
---- ------
1993 49.11%
1994 (3.80%)
1995 8.93%
1996 20.65%
1997 .19%
1998 15.43%
1999 79.19%

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

For period shown in bar chart:
Best quarter: 4th quarter 1999, +41.63%
Worst quarter: 3rd quarter 1998, -16.05%

Average Annual Total Returns -- For Periods Ended December 31, 1999/(1)/

Inception Life Of The
Date 1 Year 5 Years Fund

Class Z 9/23/92 79.19% 22.19% 21.71%
--------------------------------------------------------------------------------
EAFE N/A 26.96% 12.83% 13.50%
--------------------------------------------------------------------------------
EMI (world ex-U.S.) N/A 23.52% 7.21% 9.48%

(1) The Fund's performance in 1999 was achieved during a period of unusual
market conditions that are unlikely to continue.

____
4
<PAGE>

Liberty Acorn International

UNDERSTANDING EXPENSES

Annual Fund Operating Expenses are deducted from the Fund. They include
management and administration fees, and administrative costs including pricing
and custody services.

Example Expenses help you compare the cost of investing in the Fund to the cost
of investing in other mutual funds. It uses the following hypothetical
conditions:

. $10,000 initial investment

. 5% total return for each year

. fund operating expenses remain the same

. assumes reinvestment of all dividends and distributions

YOUR EXPENSES
--------------------------------------------------------------------------------

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

Shareholder Fees (paid directly from your investment)

Maximum sales charge (load) on purchases None
------------------------------------------------------------------

Maximum deferred sales charge (load) on
redemptions None
------------------------------------------------------------------

Redemption fee (%) (as a percentage of
amount redeemed) None

Annual Fund Operating Expenses (deducted directly from Fund assets)

Management fees /(2)/(%) .81
------------------------------------------------------------------

Distribution and service (12b-1) fees (%) None
------------------------------------------------------------------

Other expenses (%) .30
------------------------------------------------------------------

Total annual fund operating expenses (%) 1.11
------------------------------------------------------------------

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

1 Year 3 Years 5 Years 10 Years

$113 $353 $612 $1,352

(2) In addition to the management fee, the Fund pays the Advisor an
administrative fee of .05%, which is included in "Other Expenses."

____
5
<PAGE>

Your Account

INVESTMENT MINIMUMS

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

HOW TO BUY SHARES
--------------------------------------------------------------------------------

Outlined below are the various options for buying shares:

Method Instructions

--------------------------------------------------------------------------------
By check For new accounts, send a completed application and check
(new account) made 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
(existing account) additional investment stub included in your quarterly
statement, or send a letter of instruction including the
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.
--------------------------------------------------------------------------------

____
6
<PAGE>

Your Account

ELIGIBLE INVESTORS
--------------------------------------------------------------------------------

Only Eligible Investors may purchase Class Z shares of the Fund, directly or by
exchange. An Eligible Investor is:

. any person investing all or part of the proceeds of a distribution from, or
"rolling over" or transferring assets, into a Liberty IRA from, any
deferred compensation plan which was a shareholder of any of the Liberty
Acorn funds on September 29, 2000, in which the investor was a participant
and through which the investor invested in one or more of the Liberty Acorn
funds immediately prior to the distribution, transfer or roll over.

. any client of a broker-dealer or registered investment advisor that
recommends Fund shares and charges an asset-based fee;

. any insurance company, trust company or bank, which is purchasing shares
for its own account;

. any endowment, investment company or foundation;

. any client of an investment advisory affiliate of the distributor if the
client meets certain criteria established by the distributor and its
affiliate;

. any trustee of Liberty Acorn Trust, any employee of Liberty WAM, or a
member of the family of the trustee or employee; and

If you have any questions about your eligibility to purchase Class Z shares of
the Fund, please call 1-800-345-6611. If you hold Fund shares through a broker-
dealer or other financial institution, your eligibility to purchase Class Z
shares may differ depending on that institution's policies.

The Fund reserves the right to change the criteria for eligible investors.

____
7
<PAGE>

Your Account

CHOOSING A SHARE CLASS

The Fund offers one class of shares in this prospectus -- Class Z.

PRICE OF FUND SHARES
--------------------------------------------------------------------------------

HOW TO EXCHANGE SHARES
--------------------------------------------------------------------------------

You may exchange your shares for shares of the same class of another fund or
Class A shares of certain other funds distributed by Liberty Funds Distributor,
Inc., at net asset value without a sales charge. 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
--------------------------------------------------------------------------------

You may sell shares of the Fund on any regular business day that the New York
Stock Exchange (NYSE) is open.

____
8
<PAGE>

Your Account

<TABLE>
<CAPTION>
Method Instructions

----------------------------------------------------------------------------------------------------
<S> <C>
By exchange You may sell shares by exchanging from the Fund into Class Z shares or
Class A shares 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 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 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.
----------------------------------------------------------------------------------------------------
Systematic You may automatically sell a specified dollar amount or percentage on a
Withdrawal Plan monthly, quarterly or semiannual basis if your account balance is at
least $5,000 and have the proceeds sent to you. This feature is not available
if you hold your shares in certificate form. Be sure to complete the
appropriate section of the account application for this feature.
----------------------------------------------------------------------------------------------------
Through an Contact your financial professional. Financial professionals may charge
Intermediary fees for their services.
----------------------------------------------------------------------------------------------------
</TABLE>

____
9
<PAGE>

Your Account

OTHER INFORMATION ABOUT YOUR ACCOUNT
-------------------------------------------------------

How the Fund's Share Price is Determined. The price of
a Fund's Class Z shares is 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 Fund (or an
authorized broker-dealer, financial services company,
or other agent, some of whom may charge a fee for their
services). In most cases, in order to receive that
day's price, the Fund must receive your order before
that day's transactions are processed. If you request
a transaction through an agent, that agent 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 its Class Z
shares by dividing total net assets attributable to
Class Z shares by the number of outstanding Class Z
shares. In determining the net asset value, the Fund
must determine the price of each security in its
portfolio at the close of each trading day. Because the
Fund may hold securities that are traded on foreign
exchanges, the value of these securities may change on
days when shareholders will not be able to buy or sell
Fund shares. This will affect the Fund's net asset
value on the day it is next determined. Securities for
which market quotations are available are valued each
day at the current market value. However, where market
quotations are not available, or when the advisor
believes that subsequent events have made them
unreliable, the Fund 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.acornfunds.com.

Share Certificates. Share certificates are not
available for Class Z shares.

____
10
<PAGE>

Your Account

UNDERSTANDING FUND DISTRIBUTIONS

Dividends, Distributions, and Taxes The Fund has the potential to make the
following distributions:

Types of Distributions

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

Distribution Options Normally, the Fund distributes dividends in June and
December and any capital gains (including short-term capital gains) 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.

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.

Distribution Options

Reinvest all distributions in additional shares of the 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

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.

____
11
<PAGE>

Your Account

____
12
<PAGE>

Managing the Fund

Liberty WAM's advisory fee for managing the Fund in 1999 was 0.81% of the Fund's
average daily net assets. Liberty WAM also receives an administrative fee from
the Fund at the annual rate of .05% of the Fund's average daily net assets.

Leah J. Zell

Lead portfolio manager

Margaret M. Forster

Co-portfolio manager

Margaret Forster is a vice president of Liberty Acorn Trust and became co-
portfolio manager of Liberty Acorn International in May 1999. She has been a
member of the

____
13
<PAGE>

Managing the Fund

international analytical team at Liberty WAM and WAM since 1994, and was a
principal of WAM from January 1999 to September 29, 2000. Prior to that, Ms.
Forster was a professor of finance at Northwestern and Ohio State Universities,
and an economist with the International Monetary Fund. She is a CFA. Her degrees
include a BS from Universidade de Sao Paulo, Escola Politecnica, Brazil, and an
MBA, MS and PhD from Cornell University.

____
14
<PAGE>

Other Investment Strategies and Risks

UNDERSTANDING THE FUND'S OTHER INVESTMENT STRATEGIES AND RISKS

Growth Potential Financial Strength Fundamental Value
-------------------------------------------------------------------------------

. superior technology . stability . lower stock price
. innovative marketing . reduced risk relative to growth
. solid management . competitive potential and
. dominant or niche advantage capitalization
position . low debt . growth at a
. superior earnings . adequate working reasonable price
prospects capital

. fast-growing . conservative
economy accounting practices

STOCK STRENGTH COMES FIRST
--------------------------------------------------------------------------------

In managing the Fund, Liberty WAM tries to maintain lower taxes and transaction
costs by investing with a long-term time horizon (at least two to five
years).

____
15
<PAGE>

Other Investment Strategies and Risks

Occasionally, however, securities purchased on a long-term basis may be sold
within 12 months after purchase due to changes in the circumstances of a
particular company or industry, or changes in general market or economic
conditions.

DERIVATIVE STRATEGIES
--------------------------------------------------------------------------------

TEMPORARY DEFENSIVE STRATEGIES
--------------------------------------------------------------------------------

____
16
<PAGE>

Financial Highlights

The financial highlights tables are intended to help you understand the Fund's
financial performance. Information is shown for the Fund's last five fiscal
years, which run from January 1 to December 31. 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 has been derived from the Fund's financial statements which have
been audited by Ernst & Young LLP, independent auditors and for, whose report,
along with the Fund's financial statements, is included in the Fund's annual
report. You can request a free annual report by calling 1-800-426-3750.

<TABLE>
<CAPTION>
Liberty Acorn International

For a share outstanding throughout
each year - years ended 12/31 1999 1998 1997 1996 1995

--------------------------------------------------------------------------------------------------------------
Class Z Class Z Class Z Class Z Class Z
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $20.82 $18.39 $19.61 $16.59 $15.24
--------------------------------------------------------------------------------------------------------------

Income from Investment Operations:

Ratios/supplemental data:

Ratio of expenses to average net
assets 1.11% 1.12% 1.19% 1.17% 1.22%
--------------------------------------------------------------------------------------------------------------
Ratio of net investment income to
average net assets .12% .86% .58% .51% .90%
--------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 46% 37% 39% 34% 26%
--------------------------------------------------------------------------------------------------------------
Net assets at end of year
(in millions) $2,868 $1,725 $1,623 $1,773 $1,276
</TABLE>

____
17
<PAGE>

Notes

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____
18
<PAGE>

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____
19
<PAGE>

FOR MORE INFORMATION
--------------------------------------------------------------------------------

You may wish to read the Statement of Additional Information for more
information on the Fund 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.acornfunds.com

Text-only versions of all Fund documents can be viewed online or downloaded from
the Edgar database on the Securities and Exchange Commission internet site at
www.sec.gov.

Public Reference Room
Securities and Exchange Commission
Washington, DC 20549-0102

Information on the operation of the Public Reference Room may be obtained by
calling 1-202-942-8090.

Investment Company Act file number:

Liberty Acorn Trust (formerly Acorn Investment Trust): 811-01829

. Liberty Acorn International (formerly Acorn International)

[LOGO OF LIBERTY FUNDS]
<PAGE>

SUBJECT TO COMPLETION

-------------------------------------------------------------------------------
LIBERTY ACORN USA Prospectus, September --, 2000
-------------------------------------------------------------------------------

Class Z Shares

Advised by Liberty Wanger Asset Management, L.P.

Liberty Acorn Trust

Only eligible investors may purchase Class Z shares. See "Your Account -
Eligible Investors" for more information.

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
T A B L E O F C O N T E N T S
<S> <C>
LIBERTY ACORN USA XX
-----------------
Investment Goals........................................................ xx
Principal Investment Strategies......................................... xx
Principal Investment Risks.............................................. xx
Performance History..................................................... xx
Your Expenses........................................................... xx

MANAGING THE FUND XX
-----------------
Investment Advisor...................................................... xx
Portfolio Manager....................................................... xx

OTHER INVESTMENT
STRATEGIES AND RISKS XX
--------------------
The Information Edge.................................................... xx
Stock Strength Comes
First................................................................... xx
Derivative Strategies................................................... xx
Temporary Defensive
Strategies.............................................................. xx

FINANCIAL HIGHLIGHTS.................................................... XX
--------------------
</TABLE>

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

___
1

<PAGE>

Liberty Acorn USA

INVESTMENT GOAL
-------------------------------------------------------------------------------

Liberty Acorn USA seeks to provide long-term growth of capital.

INVESTMENT STRATEGIES
-------------------------------------------------------------------------------

The Fund believes that these smaller, less-profiled companies may offer higher
return potential than the stocks of large companies. Liberty Acorn USA typically
looks for companies with:

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

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) that
could prevent the Fund from achieving its investment goal. You may lose money by
investing in the Fund.

__
2
<PAGE>

Liberty Acorn USA

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.

__
3
<PAGE>

Liberty Acorn USA

UNDERSTANDING PERFORMANCE

CALENDAR YEAR TOTAL RETURNS show the Fund's Class Z share performance for each
completed calendar year since inception. They include the effects of Fund
expenses.

AVERAGE ANNUAL TOTAL RETURNS are measures of the performance over the past one-
year, three-year and life of the Fund periods. They include the effects of Fund
expenses.

PERFORMANCE HISTORY
--------------------------------------------------------------------------------

The bar chart below shows changes in the Fund's performance from year to year by
illustrating the Fund's calendar year total returns for its Class Z shares. The
performance table following the bar chart shows how the Fund's average annual
returns for Class Z shares compare with those of broad measures of market
performance for one year, three years and 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. As with all mutual funds, past performance does not
predict the Fund's future performance.

CALENDAR YEAR TOTAL RETURNS
_______________________________________________________________________________

[BAR CHART]

Year Return
---- ------
1997 32.30%
1998 5.79%
1999 23.02%

_______________________________________________________________________________
For period shown in bar chart:
Best quarter: 4th quarter 1999, +18.93%
Worst quarter: 3rd quarter 1998, -19.25%

Average Annual Total Returns -- for periods ended December 31, 1999

Inception Date Life of The
1 Year 3 Years Fund

Class Z 9/4/96 23.02% 19.86% 23.28%
-------------------------------------------------------------------------------
Russell 2000 N/A 21.26% 13.08% 14.65%

__
4
<PAGE>

Liberty Acorn USA

UNDERSTANDING EXPENSES

Annual Fund Operating Expenses are deducted from the Fund. They include
management and administration fees, and administrative costs including pricing
and custody services.

Example Expenses help you compare the cost of investing in the Fund to the cost
of investing in other mutual funds. It uses the following hypothetical
conditions:

. $10,000 initial investment

. 5% total return for each year

. fund operating expenses remain the same

. assumes reinvestment of all dividends and distributions

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

Shareholder Fees (paid directly from your investment)

Maximum sales charge (load) on purchases None
_________________________________________________________________
Maximum deferred sales charge (load) on
redemptions None
_________________________________________________________________
Redemption fee (%) (as a percentage of
amount redeemed) None

Annual Fund Operating Expenses (deducted directly from Fund assets)

Management fees/(1)/ (%) .93
_________________________________________________________________
Distribution and service (12b-1) fees (%) None
_________________________________________________________________
Other expenses (%) .22
_________________________________________________________________
Total annual fund operating expenses (%) 1.15
_________________________________________________________________

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

1 Year 3 Years 5 Years 10 Years

$117 $365 $ 633 $1,398

(1) In addition to the management fee, the Fund pays the Advisor an
administrative fee of .05%, which is included in "Other Expenses."
__
5
<PAGE>

Your Account

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

HOW TO BUY SHARES
-------------------------------------------------------------------------------
If you are an Eligible Investor (described below), your shares will be bought at
the next calculated price after the Fund receives your purchase request in "good
form." "Good form" means that your payment has been received and your
application is complete, including all necessary signatures. The Fund reserves
the right to refuse a purchase order for any reason, including if the Fund
believes that doing so would be in the best interest of the Fund and its
shareholders.

Outlined below are the various options for buying shares:

Method Instructions
-------------------------------------------------------------------------------
By check For new accounts, send a completed application and
(new account) check made 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
(existing account) additional investment stub included in your quarterly
statement, or send a letter of instruction including
the 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 may acquire shares by exchanging shares you own in
one fund for shares of the same class of shares of the
Fund at no additional cost. There may be an additional
charge if exchanging from a money market fund. 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
transfer (existing transferring money from your bank account to your
account) Fund account by calling 1-800-422-3737. Electronic
funds transfers may take up to two business days to
settle and be considered in "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
investment plan automatically 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
diversification one fund into the same class of shares of the Fund
at no additional sales charge. To invest your
dividends in the Fund, call 1-800-345-6611.
-------------------------------------------------------------------------------
Through an Contact your financial professional. Financial
intermediary professionals may charge fees for their services.

__
6
<PAGE>

Your Account

ELIGIBLE INVESTORS
-------------------------------------------------------------------------------
Only Eligible Investors may purchase Class Z shares of the Fund, directly or by
exchange. An Eligible Investor is:

. any shareholder who owned shares of any of the funds of Liberty Acorn
Trust on September 29, 2000 (when all of the Trust's then outststanding
shares were re-designated Class Z shares) and who has since then
continued to own shares of any funds distributed by Liberty Funds
Distributor, Inc. or any member of the family of any such shareholder;

. Any person investing all or part of the proceeds of a distribution from,
or "rolling over" or transferring assets, into a Liberty IRA from, any
deferred compensation plan which was a shareholder of any of the Liberty
Acorn funds on September 29, 2000, in which the investor was a
participant and through which the investor invested in one or more of the
Liberty Acorn funds immediately prior to the distribution, transfer or
roll over.

. any client of a broker-dealer or registered investment advisor that
recommends Fund shares and charges an asset-based fee;

. any insurance company, trust company or bank, which is purchasing shares
for its own account;

. any endowment, investment company or foundation;

. any client of an investment advisory affiliate of the distributor if the
client meets certain criteria established by the distributor and its
affiliate;

. any trustee of Liberty Acorn Trust, any employee of Liberty WAM, or a
member of the family of the trustee or employee; and

. 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 continued to hold shares of any
funds distributed by Liberty Funds Distributor, Inc.

The Fund reserves the right to change the criteria for eligible investors.

__
7
<PAGE>

Your Account

CHOOSING A SHARE CLASS

The Fund offers one class of shares in this prospectus -- Class Z.

The Fund also offers three additional classes of shares -- Class A, B and C
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 Z shares,
which do not incur Rule 12b-1 fees or sales charges, should do so in preference
over other classes.

PRICE OF FUND SHARES
-------------------------------------------------------------------------------

HOW TO EXCHANGE SHARES
-------------------------------------------------------------------------------

HOW TO SELL SHARES
-------------------------------------------------------------------------------
You may sell shares of the Fund on any regular business day that the New York
Stock Exchange (NYSE) is open.

__
8
<PAGE>

Your Account

Outlined below are the various options for selling shares:

Method Instructions
-------------------------------------------------------------------------------
By exchange You may sell shares by exchanging from the Fund into Class Z
shares or Class A shares 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 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.

Systematic You may automatically sell a specified dollar amount or
Withdrawal Plan percentage on amonthly, quarterly or semiannual basis if
your account balance is at least $5,000 and have the proceeds
sent to you. This feature is not available if you hold your
shares in certificate form. Be sure to complete the
appropriate section of the account application for this
feature.
-------------------------------------------------------------------------------
Through an Contact your financial professional. Financial professionals
Intermediary may charge fees for their services.

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 drive
Fund expenses higher. In order to promote the best interests of the Fund, the
Fund reserves the right to reject any purchase or order 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.

____
9
<PAGE>

Your Account

OTHER INFORMATION ABOUT YOUR ACCOUNT
--------------------------------------------------------------------------------

Share Certificates Share certificates are not available for Class Z shares.

____
10
<PAGE>

Your Account

UNDERSTANDING FUND DISTRIBUTIONS

Dividends, Distributions, and Taxes The Fund has the potential to make the
following distributions:

Types of Distributions

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

Distribution Options. The Fund distributes dividends in June and December and
any capital gains (including short-term capital gains) 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.

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.

Distribution Options

Reinvest all distributions in additional shares of the Fund
--------------------------------------------------------------------------------

. 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

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.

____
11
<PAGE>

Your Account

____
12
<PAGE>

Managing the Fund

INVESTMENT ADVISOR
--------------------------------------------------------------------------------

Liberty WAM's advisory fee for managing the Fund in 1999 was 0.93% of the Fund's
average daily net assets. Liberty WAM also receives an administrative fee from
the Fund at the annual rate of .05% of the Fund's average daily net assets.

PORTFOLIO MANAGER
--------------------------------------------------------------------------------

Robert A. Mohn

Lead portfolio manager

Robert Mohn is a vice president of Liberty Acorn Trust He has been a member of
the domestic analytical team at Liberty WAM and WAM since 1992, and was a
principal of WAM from 1995 to September 29, 2000. He has managed Liberty Acorn
USA since its inception in 1996, and also manages a mutual fund underlying
variable insurance products and the U.S. portfolio of an investment company
whose shares are offered only to non-U.S. investors. He is a CFA and holds a BS
from Stanford University and an MBA from the University of Chicago.

____
13
<PAGE>

Other Investment Strategies and Risks

UNDERSTANDING THE FUND'S OTHER INVESTMENT STRATEGIES AND RISKS

THE INFORMATION EDGE
--------------------------------------------------------------------------------

Growth Potential Financial Strength Fundamental Value
--------------------------------------------------------------------------------

. superior technology . stability . lower stock price
. innovative marketing . reduced risk relative to growth
. solid management . competitive advantage potential and
. dominant or niche . low debt capitalization
position . adequate working . growth at a
. superior earnings capital reasonable price
prospects . conservative

. fast-growing accounting practices
economy

The realization of this A strong balance sheet Once Liberty WAM uncovers
growth potential would gives management greater a great company, it
likely produce superior flexibility to pursue identifies a price that
performance that is strategic objectives and it believes would also
sustainable over time. is essential to make the stock a good
maintaining a competitive value.
advantage.
--------------------------------------------------------------------------------

STOCK STRENGTH COMES FIRST
--------------------------------------------------------------------------------

In managing the Fund, Liberty WAM tries to maintain lower taxes and transaction
costs by investing with a long-term time horizon (at least two to five years).
However,

____
14
<PAGE>

Other Investment Strategies and Risks

DERIVATIVE STRATEGIES
--------------------------------------------------------------------------------

TEMPORARY DEFENSIVE STRATEGIES
-------------------------------------------------------------------------------

Financial Highlights

The financial highlights table is intended to help you understand the Fund's
financial performance. Information is shown for the Fund's Class Z shares since
inception. The Fund's fiscal year runs from January 1 to December 31. 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 has been derived from the Fund's financial
statements which have been audited by Ernst & Young LLP, independent auditors,
whose report, along with the Fund's financial statements, is included in the
Fund's annual report. You can request a free annual report by calling 1-800-426-
3750.

Liberty Acorn USA

<TABLE>
<CAPTION>
For a share outstanding throughout Year Ended Year Ended Year Ended Inception 9/4/96
each period 12/31/99 12/31/98 12/31/97 Through 12/31/96
------------------------------------------------------------------------------------------------------------------------------------
Class Z Class Z Class Z Class Z
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 14.80 $ 15.12 $ 11.65 $ 10.00
------------------------------------------------------------------------------------------------------------------------------------
Income from Investment
Operations:

Net investment loss (a) -- (.07) (.07) (.02)
------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on
investments 3.32 .87 3.83 1.67
------------------------------------------------------------------------------------------------------------------------------------
Total from investment
operations 3.32 .80 3.76 1.65
------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized and
unrealized gains reportable for federal
income taxes (1.37) (1.12) (.29) --
------------------------------------------------------------------------------------------------------------------------------------
Total distributions (1.37) (1.12) (.29) --
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 16.75 $ 14.80 $ 15.12 $ 11.65
------------------------------------------------------------------------------------------------------------------------------------
Total return (c) 23.0% 5.8% 32.3% 16.5%
------------------------------------------------------------------------------------------------------------------------------------
Ratios/supplemental data:

Ratio of expenses to average net
assets (b) 1.15% 1.20% 1.35% 1.85%*
------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average
net assets 0.00% (.42%) (.49%) (.99%)*
------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 49% 42% 33% 20%*
------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period
(in millions) $ 371 $ 281 $ 185 $ 53
</TABLE>

(a) Net investment loss per share was based upon the average shares outstanding
during the period.

(b) In accordance with a requirement by the Securities and Exchange Commission,
the ratio of expenses to average net assets for Liberty Acorn USA reflects
gross custodian fees. This ratio net of custodian fees paid indirectly would
have been 1.79% for the period ended December 31, 1996.

*Annualized

____
16
<PAGE>

Notes

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

____
17
<PAGE>

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

____
18
<PAGE>

FOR MORE INFORMATION
--------------------------------------------------------------------------------

You may wish to read the Statement of Additional Information for more
information on the Fund 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.acornfunds.com

Text-only versions of all Fund documents can be viewed online or downloaded from
the Edgar database on the Securities and Exchange Commission internet site at
www.sec.gov.

Public Reference Room
Securities and Exchange Commission
Washington, DC 20549-0102

Information on the operation of the Public Reference Room may be obtained by
calling 1-202-942-8090.

Investment Company Act file number:

Liberty Acorn Trust: (formerly Acorn Investment Trust) 811-01829

. Liberty Acorn USA (formerly Acorn USA)

[LOGO OF LIBERTY FUNDS]
<PAGE>

SUBJECT TO COMPLETION

LIBERTY ACORN FOREIGN FORTY Prospectus, September --, 2000

Class Z Shares

Advised by Liberty Wanger Asset Management, L.P.

Liberty Acorn Trust

Only eligible investors may purchase Class Z shares. See "Your Account -
Eligible Investors" for more information.

-------------------------------------------------------------------------------
T A B L E O F C O N T E N T S

<TABLE>
<CAPTION>
<S> <C>
Liberty Acorn Foreign Forty XX
---------------------------
Investment Goals........................................................... xx
Principal Investment Strategies............................................ xx
Principal Investment Risks................................................. xx
Performance History........................................................ xx
Your Expenses.............................................................. xx

YOUR ACCOUNT XX
------------
How to Buy Shares.......................................................... xx
Eligible Investors......................................................... xx
Price of Fund Shares....................................................... xx
How to Exchange Shares..................................................... xx
How to Sell Shares......................................................... xx
Fund Policy on Trading of Fund Shares...................................... xx
Other Information About Your Account....................................... xx

MANAGING THE FUND XX
-----------------
Investment Advisor......................................................... xx
Portfolio Managers......................................................... xx

OTHER INVESTMENT
STRATEGIES AND RISKS XX
--------------------
The Information Edge
Stock Strength Comes First
Derivative Strategies
Temporary Defensive Strategies

FINANCIAL HIGHLIGHTS XX
--------------------
</TABLE>

Not FDIC May Lose Value
-----------------
Insured No Bank Guarantee
____
1
<PAGE>

Liberty Acorn Foreign Forty

INVESTMENT GOAL
-------------------------------------------------------------------------------
Liberty Acorn Foreign Forty seeks long-term growth of capital.

INVESTMENT STRATEGIES
-------------------------------------------------------------------------------

The Fund believes that companies within this capitalization range are less
profiled, and may offer higher return potential than the stocks of companies
with capitalizations above $15 billion.

Liberty Acorn Foreign Forty is an international fund and invests the majority of
its assets in the stocks of foreign companies based in developed markets outside
the U.S.

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

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) that
could prevent the Fund from achieving its investment goal. You may lose money
by investing in the Fund.

____
2
<PAGE>

Liberty Acorn Foreign Forty

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.

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 stock of many different companies in a
market sector may be similarly affected by particular economic or market events.
Although the Fund does not intend to focus on any particular sector, at times,
the Fund may have a large portion of its assets invested in a particular sector.
An example of a sector in which the Fund 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 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.

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.

____
3
<PAGE>

Liberty Acorn Foreign Forty

UNDERSTANDING PERFORMANCE

Calendar year total returns show the Fund's Class Z share performance for each
completed calendar year since inception. They include the effects of Fund
expenses.

Average annual total returns are measures of the Fund's performance over the
past one-year and life of the Fund periods. They include the effects of Fund
expenses.

PERFORMANCE HISTORY
--------------------------------------------------------------------------------

The bar chart below shows changes in the Fund's performance from year to year by
illustrating the Fund's calendar year total returns for its Class Z shares. The
performance table following the bar chart shows how the Fund's average annual
returns for Class Z shares compare with those of broad measures of market
performance for one year and 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 these arrangements were not in place, then performance would
have been lower. Any expense reduction arrangements may be discounted at any
time. As with all mutual funds, past performance does not predict the Fund's
future performance.

Calendar Year Total Returns/(1)/

--------------------------------------------------------------------------------
[Bar Chart]

Year Return
---- ------
1999 81.60%

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

For period shown in bar chart:
Best quarter: 4th quarter 1999, +46.65%
Worst quarter: 3rd quarter 1999, +3.90%

Average Annual Total Returns -- for periods ended December 31, 1999/(1)/

Inception Date 1 Year Life of the Fund

Class Z 11/23/98 81.60% 86.84%
-------------------------------------------------------------------------------

SSB Cap Range $2-10B N/A 23.52% 24.72%

(1) The Fund's performance during 1999 was achieved in a period of unusual
market conditions that are unlikely to continue.

____
4
<PAGE>

Liberty Acorn Foreign Forty

UNDERSTANDING EXPENSES

Annual Fund Operating Expenses are deducted from the Fund. They include
management and administration fees, and administrative costs including pricing
and custody services.

Example Expenses help you compare the cost of investing in the Fund to the cost
of investing in other mutual funds. It uses the following hypothetical
conditions:

. $10,000 initial investment

. 5% total return for each year

. fund operating expenses remain the same

. assumes reinvestment of all dividends and distributions

Shareholder Fees (paid directly from your investment)

Maximum sales charge (load) on purchases None
-----------------------------------------------------------------
Maximum deferred sales charge (load) on
redemptions None
-----------------------------------------------------------------
Redemption fee (%) (as a percentage of
amount redeemed) None

Annual Fund Operating Expenses (deducted directly from Fund assets)

Management fees/(2)/ (%) .95
-----------------------------------------------------------------
Distribution and service (12b-1) fees (%) None
-----------------------------------------------------------------
Other expenses (%) .62
-----------------------------------------------------------------
Total annual fund operating expenses/(3)/ (%) 1.57
-----------------------------------------------------------------

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

1 Year 3 Years 5 Years 10 Years

$160 $496 $ 855 $1,867

(2) In addition to the management fee, the Fund pays the Advisor an
administrative fee of .05%, which is included in "Other Expenses."

(3) The Fund's advisor has voluntarily agreed to reimburse the Fund for any
ordinary operating expenses (exclusive of distribution and service fees,
interest, taxes and extraordinary expenses, if any) exceeding 1.45% of its
average annual net assets. This arrangement may be modified or terminated
by either the Fund or its advisor on 30 days' notice to the other. As a
result, the actual total annual fund operating expenses for Class Z would
be 1.45%.

____
5
<PAGE>

Your Account

INVESTMENT MINIMUMS

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

Outlined below are the various options for buying shares:

Method Instructions
-------------------------------------------------------------------------------
By check For new accounts, send a completed application and
(new account) check made 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
(existing account) additional investment stub included in your
quarterly statement, or send a letter of
instruction including the 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 may acquire shares by exchanging shares you own
in one fund for shares of the same class of shares
of the Fund at no additional cost. There may be an
additional charge if exchanging from a money market
fund. 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
transfer (existing transferring money from your bank account to your
account) Fund account by calling 1-800-422-3737. Electronic
funds transfers may take up to two business days to
settle and be considered in "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
investment plan automatically 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
diversification by one fund into the same class of shares of the
Fund at no additional sales charge. To invest your
dividends in the Fund, call 1-800-345-6611.
-------------------------------------------------------------------------------
Through an Contact your financial professional. Financial
intermediary professionals may charge fees for their services.

____
6
<PAGE>

. any client of a broker-dealer or registered investment advisor that
recommends Fund shares and charges an asset-based fee;

. any insurance company, trust company or bank, which is purchasing shares
for its own account;

. any endowment, investment company or foundation;

. any client of an investment advisory affiliate of the distributor if the
client meets certain criteria established by the distributor and its
affiliate;

. any trustee of Liberty Acorn Trust, any employee of Liberty WAM, or a
member of the family of the trustee or employee; and

. 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 funds
distributed by Liberty Funds Distributor, Inc.

The Fund reserves the right to change the criteria for eligible investors.

____
7
<PAGE>

CHOOSING A SHARE CLASS

The Fund offers one class of shares in this prospectus -- Class Z.

PRICE OF FUND SHARES
--------------------------------------------------------------------------------

HOW TO EXCHANGE SHARES
--------------------------------------------------------------------------------

When the Fund receives your sales request in "good form," shares will be sold at
the next calculated net asset value. 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, and (ii) 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.

____
8
<PAGE>

Outlined below are the various options for selling shares:

By mail You may send a signed letter of instruction or stock power
form 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 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.
--------------------------------------------------------------------------------
Systematic You may automatically sell a specified dollar amount or
Withdrawal Plan percentage on a monthly, quarterly or semiannual basis if
your account balance is at least $5,000 and have the proceeds
sent to you. This feature is not available if you hold your
shares in certificate form. Be sure to complete the
appropriate section of the account application for this
feature.
-------------------------------------------------------------------------------
Through an Contact your financial professional. Financial professionals
Intermediary may charge fees for their services.

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 drive
Fund expenses higher. 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.

____
9
<PAGE>

OTHER INFORMATION ABOUT YOUR ACCOUNT
--------------------------------------------------------------------------------
How the Fund's Share Price is Determined The price of a Fund's Class Z shares
is 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).

Share Certificates Share certificates are not available for Class Z shares.

____
10
<PAGE>

UNDERSTANDING FUND DISTRIBUTIONS

Dividends, Distributions, and Taxes The Fund has the potential to make the
following distributions:

Types of Distributions

Distribution Options The Fund distributes dividends in June and December and any
capital gains (including short-term capital gains) 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.

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.

Distribution Options

Reinvest all distributions in additional shares of the 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

____
11
<PAGE>

____
12
<PAGE>

Managing the Fund

Liberty WAM's advisory fee for managing the Fund in 1999 was 0.95% of the Fund's
average daily net assets. Liberty WAM also receives an administrative fee from
the Fund at the annual rate of .05% of the Fund's average daily net assets.

Marcel P. Houtzager
Co-portfolio manager

Marcel Houtzager is a vice president of Liberty Acorn Trust, and has managed
Liberty Acorn Foreign Forty since its inception in 1998. He has been a member
of the international analytical team at Liberty WAM and WAM since 1992, and was
a principal of WAM from 1995 to September 29, 2000. Mr. Houtzager also manages
an international mutual fund underlying variable insurance products and the
foreign portfolio of an investment company whose shares are offered only to non-
U.S. investors. He is a CFA and a CPA, and earned his BA from Pomona College and
his MBA from the University of California at Berkeley.

____
13
<PAGE>

Managing the Fund

Roger D. Edgley
Co-portfolio manager

Roger Edgley is a vice president of Liberty Acorn Trust and became co-portfolio
manager of Liberty Acorn Foreign Forty in December 1999. He has been director of
International Research at Liberty WAM and WAM, and was a principal of WAM from
January 1999 to September 29, 2000. Mr. Edgley has been a member of the
international analytical team at Liberty WAM and WAM since 1994. Prior to that,
Mr. Edgley was a securities analyst in Hong Kong. He is a CFA and was educated
in the United Kingdom, completing his MSc degree from the London School of
Economics.

____
14
<PAGE>

Other Investment Strategies and Risks

UNDERSTANDING THE FUND'S OTHER INVESTMENT STRATEGIES AND RISKS

THE INFORMATION EDGE
--------------------------------------------------------------------------------
The Fund invests in less-profiled, entrepreneurially managed smaller, mid-sized
and larger companies that it believes are benefiting from an important economic,
social or technological trend and whose domination of a niche creates the
opportunity for superior earnings-growth potential.

Growth Potential Financial Strength Fundamental Value
--------------------------------------------------------------------------------

. superior technology . stability . lower stock price
. innovative . reduced risk relative to growth
marketing potential and
. solid management . competitive capitalization
advantage
. dominant or niche . low debt . growth at a
position reasonable price
. superior earnings . adequate working
prospects capital

. fast-growing . conservative
economy accounting practices

In managing the Fund, Liberty WAM tries to maintain lower taxes and transaction
costs by investing with a long-term time horizon (at least two to five years).
However,

____
15
<PAGE>

Other Investment Strategies and Risks

DERIVATIVE STRATEGIES
--------------------------------------------------------------------------------
The Fund may enter into a number of hedging strategies, including those that
employ futures and options, to gain or reduce exposure to particular securities
or markets. These strategies, commonly referred to as derivatives, involve the
use of financial instruments whose values depend on, or are derived from, the
value of an underlying security, index or currency. The Fund may use these
strategies to adjust the Fund's sensitivity to changes in interest rates or for
other hedging purposes (i.e., attempting to offset a potential loss in one
position by establishing an interest in an opposite position). Derivative
strategies involve the risk that they may exaggerate a loss, potentially losing
more money than the actual cost of the underlying security, or limit a potential
gain. Also, with some derivative strategies there is a risk that the other party
to the transaction may fail to honor its contract terms, causing a loss to the
Fund.

TEMPORARY DEFENSIVE STRATEGIES
--------------------------------------------------------------------------------
At times, Liberty WAM may determine that adverse market conditions make it
desirable to temporarily suspend the Fund's normal investment activities. During
such times, the Fund 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 from achieving its investment goal.

____
16
<PAGE>

Financial Highlights

The financial highlights tables are intended to help you understand the Fund's
financial performance. Information is shown for the Fund's Class Z shares since
inception. The Fund's fiscal year runs from January 1 to December 31. 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 has been derived from the Fund's financial
statements which have been audited by Ernst & Young LLP, independent auditors,
whose report, along with the Fund's financial statements, is included in the
Fund's annual report. You can request a free annual report by calling 1-800-426-
3750.

<TABLE>
<CAPTION>
Liberty Acorn Foreign Forty
--------------------------------------------------------------------------------------------------------------
Year Ended Inception 11/23/98
12/31/99 Through 12/31/98
<S> <C> <C>
--------------------------------------------------------------------------------------------------------------
For a share outstanding throughout each period
--------------------------------------------------------------------------------------------------------------
Class Z Class Z
--------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 11.00 $ 10.00
--------------------------------------------------------------------------------------------------------------
Income from Investment Operations:

Net investment loss (a) (.02) (.01)
--------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments 8.98 1.01
--------------------------------------------------------------------------------------------------------------
Total from investment operations 8.96 1.00
--------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from net realized and unrealized gains reportable
for federal income taxes (.03) --
--------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 19.93 $ 11.00
--------------------------------------------------------------------------------------------------------------
Total return (d) 81.6% 10.0%
--------------------------------------------------------------------------------------------------------------
Ratios/supplemental data:

Ratio of expenses to average net assets (b)(c) 1.48% 1.73%*
--------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average net assets (c) (.17%) (.78%)*
--------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 60% 90%*
--------------------------------------------------------------------------------------------------------------
Net assets at end of period
(in millions) $ 107 $ 16
</TABLE>

(a) Net investment loss per share was based upon the average shares outstanding
during the period.

(b) In accordance with a requirement by the Securities and Exchange Commission,
the expense ratio reflects total expenses prior to the reduction of
custodian fees for cash balances it maintains with the custodian
("custodian fees paid indirectly"). This ratio net of custodian fees paid
indirectly would have been 1.45% for the period ended December 31, 1998,
and the year ended December 31, 1999.

(d) Total return is not annualized for periods less than one year.

*Annualized

____
17
<PAGE>

Notes

_______________________________________________________________________________
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_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________

____
18

<PAGE>

_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
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_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________

____
19

<PAGE>

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 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.acornfunds.com

Text-only versions of all Fund documents can be viewed online or downloaded from
the Edgar database on the Securities and Exchange Commission internet site at
www.sec.gov.

Public Reference Room
Securities and Exchange Commission
Washington, DC 20549-0102

Information on the operation of the Public Reference Room may be obtained by
calling 1-202-942-8090.

Investment Company Act file number:

Liberty Acorn Trust (formerly Acorn Investment Trust: 811-08129

. Liberty Acorn Foreign Forty (formerly Foreign Forty)

--------------------------------------------------------------------------------
[LOGO] [LIBERTY FUNDS]
<PAGE>

SUBJECT TO COMPLETION

LIBERTY ACORN TRUST Prospectus, September __, 2000

Class Z Shares

Advised by Liberty Wanger Asset Management, L.P.

Liberty Acorn Fund
Liberty Acorn International
Liberty Acorn USA
Liberty Acorn Twenty
Liberty Acorn Foreign Forty

Only eligible investors may purchase Class Z shares. See "Your Account -
Eligible Investors" for more information.

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 accurate or complete.
Any representation to the contrary is a criminal offense.

--------------------------------------------------------------------------------
T A B L E O F C O N T E N T S

<TABLE>
<CAPTION>
<S> <C>
THE FUNDS XX
---------
Investment Goals......................................................... xx
Principal Investment Strategies.......................................... xx
Principal Investment Risks............................................... xx
Performance History...................................................... xx
Your Expenses............................................................ xx

YOUR ACCOUNT XX
------------
How to Buy Shares........................................................ xx
Eligible Investors....................................................... xx
Sales Charges............................................................ xx
How to Exchange Shares................................................... xx
How to Sell Shares....................................................... xx
Other Information About Your Account..................................... xx

MANAGING THE FUNDS XX
------------------
Investment Advisor....................................................... xx
Portfolio Managers....................................................... xx

FINANCIAL HIGHLIGHTS XX
</TABLE>

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

<PAGE>

Liberty Acorn Fund

INVESTMENT GOAL
-------------------------------------------------------

Liberty Acorn Fund seeks to provide long-term growth of
capital

PRINCIPAL INVESTMENT STRATEGIES
-------------------------------------------------------

Liberty Acorn Fund invests primarily in the stocks of
small-and medium-sized companies. The Fund generally
invests in the stocks of companies around the globe
with capitalizations of less than $2 billion with the
intention of holding them as they grow and selling them
when they become large.

The Fund believes that these smaller, less-profiled
companies may offer higher return potential than the
stocks of large companies.

Liberty Acorn Fund typically looks for companies with:

. A strong business franchise that offers growth
potential.

. Products and services that give a company a
competitive advantage.

. A stock price the Fund's advisor believes is
reasonable relative to the assets and earning
power of the company.

Liberty Acorn Fund invests the majority of its assets
in U.S. companies, but also invests a portion of its
holdings in companies in developed and emerging markets
outside the U.S. The Fund may invest up to 33% of its
assets in non-U.S. companies.

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

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) that 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 competing 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
____
2
<PAGE>

Liberty Acorn Fund

from factors affecting individual companies, industries
or the securities market as a
whole.

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 stock.

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.

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 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.

Emerging markets are subject to additional risk. The
risks of foreign investments are typically increased in
less developed countries, which are sometimes referred
to as emerging markets. For example, political and
economic structures in these countries may be new and
developing rapidly, which may cause instability. These
countries are also more likely to experience high
levels of inflation, deflation or currency
devaluations, which could hurt their economies and
securities markets.

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 Fund does not intend to focus on
any particular sector, at times, the Fund may have a
large portion of its assets invested in a particular
sector. An example of a sector in which the Fund 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 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.

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.

____
3
<PAGE>

Liberty Acorn Fund

UNDERSTANDING PERFORMANCE

Calendar year total return shows the Fund's Class Z share performance for each
of the last ten complete calendar years. They include the effects of Fund
expenses.

Average annual total return is a measure of the Fund's performance over the past
one-year, five-year and ten-year periods. They include the effects of Fund
expenses.

PERFORMANCE HISTORY
--------------------------------------------------------------------------------

Calendar Year Total Returns

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

[Bar Chart]
Year Return
---- ------
'90 (17.52%)
'91 47.35%
'92 24.23%
'93 32.32%
'94 (7.45%)
'95 20.80%
'96 22.55%
'97 24.98%
'98 6.02%
'99 33.38%

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

For period shown in bar chart:
Best quarter: 4th quarter 1999, +21.94%
Worst quarter: 3rd quarter 1990, -23.77%

Average Annual Total Returns -- for periods ended December 31, 1999

1 Year 5 Years 10 Years

Class Z 33.38% 21.21% 17.07%
--------------------------------------------------------------------------------
S&P 500 21.04% 28.56% 18.21%
--------------------------------------------------------------------------------
21.26% 16.69% 13.34%
Russell 2000

____
4
<PAGE>

Liberty Acorn Fund

UNDERSTANDING EXPENSES

Annual Fund Operating Expenses are deducted from the Fund. They include
management and administration fees, and administrative costs including pricing
and custody services.

Example Expenses help you compare the cost of investing in the Fund to the cost
of investing in other mutual funds. It uses the following hypothetical
conditions:

. $10,000 initial investment

. 5% total return for each year

. Fund operating expenses remain the same

. Assumes reinvestment of all dividends and distributions

YOUR EXPENSES
--------------------------------------------------------------------------------

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

Shareholder Fees (paid directly from your investment)

Maximum sales charge (load) on purchases None
--------------------------------------------------------------------
Maximum deferred sales charge (load) on
redemptions None
--------------------------------------------------------------------
Redemption fee (%) (as a percentage of
amount redeemed) None

Annual Fund Operating Expenses (deducted directly from Fund assets)

Management fees/(1)/(%) .69
--------------------------------------------------------------------
Distribution and service (12b-1) fees (%) None
--------------------------------------------------------------------
Other expenses (%) .16
--------------------------------------------------------------------
Total annual fund operating expenses (%) .85
--------------------------------------------------------------------

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

1 Year 3 Years 5 Years 10 Years

$87 $271 $471 $1,049

(1) In addition to the management fee, the Fund pays the Advisor an
administrative fee of .05% which is included in "Other Expenses."
____
5
<PAGE>

Liberty Acorn International

INVESTMENT GOAL
-------------------------------------------------------

Liberty Acorn International seeks to provide long-term
growth of capital.

PRINCIPAL INVESTMENT STRATEGIES
-------------------------------------------------------

Liberty Acorn International invests primarily in stocks
of non-U.S. small- and medium-sized companies. The Fund
generally invests in the stocks of companies based
outside the U.S. (or whose primary business takes place
outside the U.S.) with capitalizations of less than $5
billion with the intention of holding them as they grow
and selling them when they become large.

The Fund believes that smaller, less-profiled
companies - particularly outside the U.S. - may offer
higher return potential than the stocks of large
companies.

Liberty Acorn International typically looks for
companies with:

. A strong business franchise that offers growth
potential.

. Products and services that give a company a
competitive advantage.

. A stock price the Fund's advisor believes is
reasonable relative to the assets and earning
power of the company.

Liberty Acorn International is an international fund
and invests the majority (under normal market
conditions, at least 75%) of its total assets in the
stocks of foreign companies based in developed and
emerging markets outside the U.S.

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

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 competing 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

____
6
<PAGE>

Liberty Acorn International

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.

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 stock.

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.

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 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.

Emerging markets are subject to additional risk. The
risks of foreign investments are typically increased in
less developed countries, which are sometimes referred
to as emerging markets. For example, political and
economic structures in these countries may be new and
developing rapidly, which may cause instability. These
countries are also more likely to experience high
levels of inflation, deflation or currency
devaluations, which could hurt their economies and
securities markets.

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 Fund does not intend to focus on
any particular sector, at times, the Fund may have a
large portion of its assets invested in a particular
sector. An example of a sector in which the Fund 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 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.

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.

____
7
<PAGE>

Liberty Acorn International

UNDERSTANDING PERFORMANCE

Calendar year total return shows the Fund's Class Z share performance for each
completed calendar year since it commenced operations. They include the effects
of Fund expenses.

Average annual total return is a measure of the Fund's performance over the past
one-year, five-year and life of the funds periods. They include the effects of
Fund expenses.

The Fund's return is compared to Morgan Stanley's Europe, Australasia and Far
East Index (EAFE), an index of companies throughout the world in proportion to
world stock market capitalizations, excluding the U.S. and Canada, and the EMI
(world ex-U.S.) Salomon Smith Barney's index of the bottom 20% of
institutionally investable capital of countries, selected by Salomon and
excluding the U.S. 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 from year to year by
illustrating the Fund's calendar year total returns for its Class Z shares. The
performance table following the bar chart shows how the Fund's average annual
returns for Class Z shares compare with those of broad measures of market
performance for one year, five 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. As with all mutual funds, past
performance does not predict the Fund's future performance.

Calendar Year Total Returns/(1)/

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

[Bar Chart]
Year Returns
---- -------
'93 49.11%
'94 (3.80%)
'95 8.93%
'96 20.65%
'97 .19%
'98 15.43%
'99 79.19%

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

For period shown in bar chart:
Best quarter: 4th quarter 1999, +41.63%
Worst quarter: 3rd quarter 1998, -16.05%

Average Annual Total Returns -- for periods ended December 31, 1999/(1)/

Inception Date 1 Year 5 Years Life of the Fund

(1) The Fund's performance in 1999 was achieved during a period of unusual
market conditions that are unlikely to continue.

____
8
<PAGE>

Liberty Acorn International

UNDERSTANDING EXPENSES

Annual Fund Operating Expenses are deducted from the Fund. They include
management and administration fees, and administrative costs including pricing
and custody services.

Example Expenses help you compare the cost of investing in the Fund to the cost
of investing in other mutual funds. It uses the following hypothetical
conditions:

. $10,000 initial investment

. 5% total return for each year

. Fund operating expenses remain the same

. Assumes reinvestment of all dividends and distributions

YOUR EXPENSES
--------------------------------------------------------------------------------

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

Shareholder Fees (paid directly from your investment)

Maximum sales charge (load) on purchases None
-------------------------------------------------------------------------
Maximum deferred sales charge (load) on
redemptions None
-------------------------------------------------------------------------
Redemption fee (%) (as a percentage of
amount redeemed) None

Annual Fund Operating Expenses (deducted directly from Fund assets)

Management fees/(2)/ (%) .81
-------------------------------------------------------------------------
Distribution and service (12b-1) fees (%) None
-------------------------------------------------------------------------
Other expenses (%) .30
-------------------------------------------------------------------------
Total annual fund operating expenses (%) 1.11

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

1 Year 3 Years 5 Years 10 Years

$113 $353 $ 612 $1,352

(2) In addition to the management fee, the Fund pays the Advisor an
administrative fee of .05%, which is included in "Other Expenses."

____
9
<PAGE>

Liberty Acorn USA

INVESTMENT GOAL
-------------------------------------------------------

Liberty Acorn USA seeks to provide long-term growth of
capital.

PRINCIPAL INVESTMENT STRATEGIES
-------------------------------------------------------

Liberty Acorn USA invests primarily in stocks of small-
and medium-sized U.S. companies. The Fund generally
invests in the stocks of U.S. companies with
capitalizations of less than $2 billion with the
intention of holding them as they grow and selling them
when they become large.

The Fund believes that these smaller, less-profiled
companies may offer higher return potential than the
stocks of large companies.

Liberty Acorn USA typically looks for companies with:

. A strong business franchise that offers growth
potential.

. Products and services that give a company a
competitive advantage.

. A stock price the Fund's advisor believes is
reasonable relative to the assets and earning
power of the company.

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

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 competing 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.

____
10
<PAGE>

Liberty Acorn USA

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.

___
11
<PAGE>

Liberty Acorn USA

UNDERSTANDING PERFORMANCE

Calendar year total return shows the Fund's Class Z share performance for each
completed calendar year since it commenced operations. They include the effects
of Fund expenses.

Average annual total return is a measure of the Fund's performance over the past
one-year, three-year and life of the Fund periods. They include the effects of
Fund expenses.

The Fund's return is compared to the Russell 2000 Index. The Russell 2000 Index
is a market-weighted index, with dividends reinvested, of 2000 small companies
formed by taking the largest 3000 companies and eliminating the largest 1000 of
those companies. Unlike the Fund, an index is not an investment, does not incur
fees or expenses and is not professionally managed. It is not possible to
invest directly in an index.

PERFORMANCE HISTORY
--------------------------------------------------------------------------------

The bar chart below shows changes in the Fund's performance from year to year by
illustrating the Fund's calendar year total returns for its Class Z shares. The
performance table following the bar chart shows how the Fund's average annual
returns for Class Z shares compare with those of a broad measure of market
performance for one year, three 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. As with all mutual funds, past
performance does not predict the Fund's future performance.

Calendar Year Total Returns

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

[Bar Chart]
Year Return
---- ------
'97 32.30%
'98 5.79%
'99 23.02%

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

For period shown in bar chart:
Best quarter: 4th quarter 1999, +18.93%
Worst quarter: 3rd quarter 1998, -19.25%

Average Annual Total Returns -- for periods ended December 31, 1999

Inception Date 1 Year 3 Years Life of the Fund

Class Z 9/4/96 23.02% 19.86% 23.28%
-------------------------------------------------------------------------------
Russell 2000 N/A 21.26% 13.08% 14.65%

___
12
<PAGE>

Liberty Acorn USA

UNDERSTANDING EXPENSES

Annual Fund Operating Expenses are deducted from the Fund. They include
management and administration fees, and administrative costs including pricing
and custody services.

Example Expenses help you compare the cost of investing in the Fund to the cost
of investing in other mutual funds. It uses the following hypothetical
conditions:

. $10,000 initial investment

. 5% total return for each year

. Fund operating expenses remain the same

. Assumes reinvestment of all dividends and distributions

YOUR EXPENSES
--------------------------------------------------------------------------------

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

Shareholder Fees (paid directly from your investment)

Maximum sales charge (load) on purchases None
------------------------------------------------------------------
Maximum deferred sales charge (load) on
redemptions None
------------------------------------------------------------------
Redemption fee (%) (as a percentage of
amount redeemed, if applicable) None

Annual Fund Operating Expenses (deducted directly from Fund assets)

Management fees/(1)/ (%) .93
------------------------------------------------------------------
Distribution and service (12b-1) fees (%) None
------------------------------------------------------------------
Other expenses (%) .22
------------------------------------------------------------------
Total annual fund operating expenses (%) 1.15
------------------------------------------------------------------

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

1 Year 3 Years 5 Years 10 Years

$117 $365 $633 $1,398

(1) In addition to the management fee, the Fund pays the Advisor an
administrative fee of .05%, which is included in "Other Expenses."

___
13
<PAGE>

Liberty Acorn Twenty
--------------------

INVESTMENT GOAL
--------------------------------------------------------------------------------

Liberty Acorn Twenty seeks long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES
--------------------------------------------------------------------------------

Liberty Acorn Twenty invests primarily in the stocks of medium- to larger-sized
U.S. companies. The Fund is a non-diversified fund that takes advantage of its
advisor's research and stock-picking capabilities to invest in a limited number
of companies (between 20-25) with market capitalizations of $2 billion to $12
billion, offering the potential to provide above-average growth over time.

The Fund believes that companies within this capitalization range are less
profiled, and may offer higher return potential than the stocks of companies
with capitalizations above $12 billion.

Liberty Acorn Twenty typically looks for companies with:

. A strong business franchise that offers growth potential.

. Products and services that give a company a competitive advantage.

. A stock price the Fund's advisor believes is reasonable relative to the
assets and earning power of the company.

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

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 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.

___
14
<PAGE>

Liberty Acorn Twenty

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.

___
15
<PAGE>

Liberty Acorn Twenty

UNDERSTANDING PERFORMANCE

Calendar year total return shows the Fund's Class Z share performance for each
completed calendar year since it commenced operations. They include the effects
of Fund expenses.

Average annual total return is a measure of the Fund's performance over the past
one-year and the life of the Fund periods. They include the effects of Fund
expenses.

The Fund's return is compared to the S&P MidCap 400 Index. The S&P MidCap 400
is an unmanaged, market value-weighted index of 400 midcap U.S. companies.
Unlike the Fund, an index is not an investment, does not incur fees or expenses
and is not professionally managed. It is not possible to invest directly in an
index.

PERFORMANCE HISTORY
--------------------------------------------------------------------------------

The bar chart below shows the Fund's performance for the past year by
illustrating the Fund's calendar year total return for its Class Z shares. The
performance table following the bar chart shows how the Fund's average annual
returns for Class Z shares compare with those of a broad measure of market
performance for one year 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 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 Chart]
Year Returns
---- -------
'99 29.30%

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

For period shown in bar chart:
Best quarter: 4th quarter 1999, +14.35%
Worst quarter: 3rd quarter 1999, -7.13%

Average Annual Total Returns -- for periods ended December 31, 1999

Inception Date 1 Year Life of Fund

Class Z 11/23/98 29.30% 34.20%
--------------------------------------------------------------------------------
S&P MidCap 400 N/A 14.72% 24.49%

___
16
<PAGE>

Liberty Acorn Twenty

UNDERSTANDING EXPENSES

Annual Fund Operating Expenses are deducted from the Fund. They include
management and administration fees, and administrative costs including pricing
and custody services.

Example Expenses help you compare the cost of investing in the Fund to the cost
of investing in other mutual funds. The table does not take into account any
expense reduction arrangements discussed in the footnotes to the Annual Fund
Operating Expenses table. It uses the following hypothetical conditions:

. $10,000 initial investment

. 5% total return for each year

. Fund operating expenses remain the same

. Assumes reinvestment of all dividends and distributions

YOUR EXPENSES
--------------------------------------------------------------------------------

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

Shareholder Fees (paid directly from your investment)

Maximum sales charge (load) on purchases None
---------------------------------------------------------------
Maximum deferred sales charge (load) on
redemptions None
---------------------------------------------------------------
Redemption fee (%) (as a percentage of
amount redeemed) None
---------------------------------------------------------------

Annual Fund Operating Expenses (deducted directly from Fund assets)

Management fees /(1)/ (%) 0.90
---------------------------------------------------------------
Distribution and service (12b-1) fees (%) None
---------------------------------------------------------------
Other expenses (%) 0.51
---------------------------------------------------------------
Total annual fund operating expenses /(2)/ (%) 1.41
---------------------------------------------------------------

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

1 Year 3 Years 5 Years 10 Years

$144 $446 $ 771 $1,691

(1) In addition to the management fee, the Fund pays the Advisor an
administrative fee of .05%, which is included in "Other Expenses."

(2) The Fund's advisor has voluntarily agreed to reimburse the Fund for any
ordinary operating expenses (exclusive of distribution and service fees,
interest, taxes and extraordinary expenses if any) exceeding 1.35% of its
average annual net assets. This arrangement may be modified or terminated by
either the Fund or its advisor on 30 days' notice to the other. As a result,
the actual total annual fund operating expenses for Class Z would be 1.35%.

___
17
<PAGE>

Liberty Acorn Foreign Forty

INVESTMENT GOAL
--------------------------------------------------------------------------------

Liberty Acorn Foreign Forty seeks long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES
--------------------------------------------------------------------------------

Liberty Acorn Foreign Forty invests primarily in the stocks of medium- and
larger-sized companies based in developed markets outside the U.S. The Fund
invests in at least three countries. The Fund is a non-diversified Fund that
takes advantage of its advisor's research and stock-picking capabilities to
invest in a limited number of foreign companies (between 40-60) with market
capitalizations of $5 billion to $15 billion, offering the potential to provide
above-average growth over time.

The Fund believes that companies within this capitalization range are less
profiled, and may offer higher return potential than the stocks of companies
with capitalizations above $15 billion.

Liberty Acorn Foreign Forty typically looks for companies with:

. A strong business franchise that offers growth potential.

. Products and services that give a company a competitive advantage.

. A stock price the Fund's advisor believes is reasonable relative to the
assets and earning power of the company.

Liberty Acorn Foreign Forty is an international fund and invests the majority of
its assets in the stocks of foreign companies based in developed markets outside
the U.S.

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

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.

___
18
<PAGE>

Liberty Acorn Foreign Forty

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.

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.

___
19
<PAGE>

Liberty Acorn Foreign Forty

UNDERSTANDING PERFORMANCE

Calendar year total return shows the Fund's Class Z share performance for each
completed calendar year since it commenced operations. They include the effect
of Fund expenses.

Average annual total return is a measure of the Fund's performance over the past
one-year and the life of the Fund periods. They include the effects of Fund
expenses.

The Fund's return is compared to the SSB Cap Range $2-10B Index. The SSB World
ex-U.S. Cap Range $2-10 Billion Index is Salomon Smith Barney's two to ten
billion U.S. dollar security market subset of its Broad Market Index. It
represents a midcap developed market index, excluding the U.S. Unlike the Fund,
an index is not an investment, does not incur fees or expenses and is not
professionally managed. It is not possible to invest directly in an index.

PERFORMANCE HISTORY
--------------------------------------------------------------------------------

The bar chart below shows changes in the Fund's performance for the past year by
illustrating the Fund's calendar year total return for its Class Z shares. The
performance table following the bar chart shows how the Fund's average annual
returns for Class Z shares compare with those of a broad measure of market
performance for one year 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/(1)/

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

[Bar Chart]
Year Returns
---- -------
'99 81.60%

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

For period shown in bar chart:
Best quarter: 4th quarter 1999, +46.65%
Worst quarter: 3rd quarter 1999, -3.90%

Average Annual Total Returns -- for periods ended December 31, 1999/(1)/

Inception Date 1 Year Life of Fund

Class Z 11/23/98 81.60% 86.84%
-------------------------------------------------------------------------------
SSB Cap Range $2-10B N/A 23.52% 24.72%
-------------------------------------------------------------------------------

(1) The Fund's performance during 1999 was achieved in a period of unusual
market conditions that are unlikely to continue.

___
20
<PAGE>

Liberty Acorn Foreign Forty

UNDERSTANDING EXPENSES

Annual Fund Operating Expenses are deducted from the Fund. They include
management and administration fees, and administrative costs including pricing
and custody services.

. $10,000 initial investment

. 5% total return for each year

. Fund operating expenses remain the same

. Assumes reinvestment of all dividends and distributions

YOUR EXPENSES
--------------------------------------------------------------------------------

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

Shareholder Fees (paid directly from your investment)

Maximum sales charge (load) on purchases None
----------------------------------------------------------------------
Maximum deferred sales charge (load) on redemptions None
----------------------------------------------------------------------
Redemption fee (%) (as a percentage of amount redeemed) None

Annual Fund Operating Expenses (deducted directly from Fund assets)

Management fees /(2)/ (%) 0.95
----------------------------------------------------------------------
Distribution and service (12b-1) fees (%) None
----------------------------------------------------------------------
Other expenses (%) 0.62
----------------------------------------------------------------------
Total annual fund operating expenses /(3)/ (%) 1.57

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

1 Year 3 Years 5 Years 10 Years

$160 $496 $ 855 $1,867

(2) In addition to the management fee, the Fund pays the Advisor an
administrative fee of .05%, which is included in "Other Expenses."

(3) The Fund's advisor has voluntarily agreed to reimburse the Fund for any
ordinary operating expenses (exclusive of distribution and service fees,
interest, taxes and extraordinary expenses, if any) exceeding 1.45% of its
average net assets. This arrangement may be modified or terminated by either
the Fund or its advisor on 30 days' notice to the other. As a result, the
actual total annual Fund operating expenses for Class Z would be 1.45%.

___
21
<PAGE>

Your Account

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 Funds reserve the right to change these investment minimums. Each 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
--------------------------------------------------------------------------------

If you are an Eligible Investor your shares will be bought at the next
calculated price (described below), after the Fund receives your purchase
request in "good form." "Good form" means that your payment has been received
and your application is complete, including all necessary signatures. The Funds
reserve the right to refuse a purchase order for any reason, including if a Fund
believes that doing so would be in the best interest of the Funds and its
shareholders.

Outlined below are the various options for buying shares:

<TABLE>
<CAPTION>
Method Instructions
------------------------------------------------------------------------------------------------------------
<S> <C>
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 may acquire shares by exchanging shares you own in one Fund for
shares of the same class of another Liberty Acorn Fund at no additional
cost. You also may exchange your Class Z shares of a Fund for Class Z
or, if there are no Class Z shares, Class A shares of certain other funds
distributed by Liberty Funds Distributors, Inc., at net asset value without a
sales charge. See the SAI for a listing of the funds currently available.
There may be an additional charge if exchanging from a money market
fund. 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 (existing bank account to your Fund account by calling 1-800-422-3737.
account) Electronic funds transfers may take up to two business days to settle and
be considered in "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 Liberty Acorn
diversification Fund into the same class of shares of another Liberty Acorn Fund at no
additional sales charge. To invest your dividends in another Fund, call 1-
800-345-6611.
------------------------------------------------------------------------------------------------------------
Through an Contact your financial professional.
intermediary
</TABLE>

___
22
<PAGE>

Your Account

ELIGIBLE INVESTORS
--------------------------------------------------------------------------------

Only Eligible Investors may purchase Class Z shares of the Funds, directly or by
exchange. An Eligible Investor is:

. any shareholder who owned shares of any funds of Liberty Acorn Trust on
September 29, 2000 (when all of the Trust's then outstanding shares were
re-designated Class Z shares) and who has since then continued to own
shares of any funds distributed by Liberty Funds Distributor, Inc. or any
member of the family of any such shareholder;

. Any person investing all or part of a distribution from, or "rolling over"
or transferring assets, into a Liberty IRA from, and deferred compensation
plan which was a shareholder of any of the Liberty Acorn funds on September
29, 2000, in which the investor was a participant and through which the
investor invested in one or more of the Liberty Acorn funds immediately
prior to the distribution, transfer or roll over

. any client of a broker-dealer or registered investment advisor that
recommends Fund shares and charges an asset-based fee;

. any insurance company, trust company or bank, which is purchasing shares
for its own account;

. any endowment, investment company or foundation;

. any client of an investment advisory affiliate of the distributor if the
client meets certain criteria established by the distributor and its
affiliate;

. any trustee of Liberty Acorn Trust, any employee of Liberty WAM, or a
member of the family of the trustee or employee; and

If you have any questions about your eligibility to purchase Class Z shares of
the Funds, please call 800-345-6611. If you hold Fund shares through a broker-
dealer or other financial institution, your eligibility to purchase Class Z
shares may differ depending on that institution's policies.

The Funds reserve the right to change the criteria for eligible investors.

___
23
<PAGE>

<PAGE>

Your Account

CHOOSING A SHARE CLASS

The Funds offer one class of shares in this prospectus -- Class Z.

PRICE OF FUND SHARES
--------------------------------------------------------------------------------

If you purchase Class Z shares of the Funds through certain broker-dealers,
banks or other intermediaries (intermediaries), they may charge a fee for their
services. They may also place limits on your ability to use services the Funds
offer. There are no sales charges or limitations if you purchase shares directly
from the Funds, except as described in this prospectus.

If an intermediary is an agent or designee of the Funds, orders are processed at
the net asset value next calculated after the intermediary receives the order.
The intermediary must segregate any orders it receives after the close of
regular trading on the NYSE and transmit those orders separately for execution
at the net asset value next determined.

HOW TO EXCHANGE SHARES
--------------------------------------------------------------------------------
You may exchange your Class Z shares of the Funds for shares of another Fund at
no additional charge. You also may exchange your Class Z shares of any Fund for
Class Z shares or, if there are no Class Z shares, Class A shares of certain
other funds distributed by Liberty Funds Distributor, Inc., at net asset value
without a sales charge. 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 Funds may terminate your exchange privilege if the
advisor determines that your exchange activity is likely to adversely impact its
ability to manage the Funds. To exchange by telephone, call 1-800-422-3737.

HOW TO SELL SHARES
--------------------------------------------------------------------------------
You may sell shares of a Fund on any regular business day that the New York
Stock Exchange (NYSE) is open.

When a Fund receives your sales request in "good form," shares will be sold at
the next calculated net asset value. 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, and (ii) 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.

A 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, a Fund may delay
sending the proceeds from the sale of

---
25
<PAGE>

Your Account

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, under certain
circumstances. For more information, see the paragraph "Non-Cash Redemptions"
under the section "How to Sell Shares" in the Statement of Additional
Information.

Outlined below are the various options for selling shares:

<TABLE>
<CAPTION>
Method Instructions
----------------------------------------------------------------------------------------------------------------
<S> <C>
By exchange You may sell shares by exchanging from a Fund into Class Z shares or
Class A shares of another fund distributed by Liberty Funds Distributors,
Inc.at no additional cost. To exchange by telephone, call 1-800-422-
3737.
----------------------------------------------------------------------------------------------------------------
By telephone You 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 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 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.
----------------------------------------------------------------------------------------------------------------
Systematic You may sell a specified dollar amount of shares from your account on a
Withdrawal Plan monthly or quarterly basis. The sale takes place on or around the 23/rd/
day of the month (for monthly redemptions) or the 23/rd/ day of January,
April, July and October (for quarterly redemptions). You must have an
account balance of at least $25,000 to be eligible for this service.
----------------------------------------------------------------------------------------------------------------
Through an Contact your financial professional.
Intermediary
</TABLE>

___
26
<PAGE>

Your Account

OTHER INFORMATION ABOUT YOUR ACCOUNT
--------------------------------------------------------------------------------

How the Funds' Share Price is Determined The price of a Fund's Class Z Shares is
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 [Liberty Acorn (or
an authorized broker-dealer, financial services company, or other agent, some of
whom may charge a fee for their services)]. In most cases, in order to receive
that day's price, Liberty Acorn must receive your order before that day's
transactions are processed. If you request a transaction through an agent, that
agent must receive your order by the close of trading on the NYSE to receive
that day's price.

A Fund determines its net asset value for its Class Z shares by dividing total
net assets attributable to Class Z shares by the number of outstanding Class Z
shares. In determining the net asset value, the Fund must determine the price
of each security in its portfolio at the close of each trading day. Because
Liberty Acorn Fund, Liberty Acorn International and Liberty Acorn Foreign Forty
may hold securities that are traded on foreign exchanges, the value of these
Funds' securities may change on days when shareholders will not be able to buy
or sell Fund shares. This will affect the net asset value on the day it is next
determined. 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 Fund may use other data to determine the fair value of the
securities.

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

Share Certificates Share certificates are not available for Class Z shares.

___
27
<PAGE>

Your Account

UNDERSTANDING FUND DISTRIBUTIONS

Each Fund earns income from the securities it holds. Each Fund also may realize
capital gains and losses on sales of its securities. A Fund distributes
substantially all of its net investment income and capital gains to
shareholders. As a shareholder, you are entitled to a portion of your 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 Each Fund has the potential to make the
following distributions:

Types of Distributions

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

</TABLE>

Distribution Options, Each Fund distributes dividends in June and December and
any capital gains (including short-term capital gains) 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-
6511.

If you do not indicate on your application your preference for handling
distributions, a Fund will automatically reinvest all distributions in
additional shares of the Fund.

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

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.

___
28
<PAGE>

Your Account

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 a Fund may have additional personal tax implications. Please
consult your tax advisor on foreign, federal, state, local or other applicable
tax laws.

In addition to the dividends and capital gains distributions made by each 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 and local income tax.

Foreign Income Taxes A Fund may receive investment income from sources within
foreign countries, and that income may be subject to foreign income taxes at the
source. If your Fund pays non-refundable taxes to foreign governments during the
year, the taxes will reduce that Fund's dividends but will still be included in
your taxable income. You may be able to claim an offsetting credit or deduction
on your tax return for your share of foreign taxes paid by Liberty Acorn
International or Liberty Acorn Foreign Forty.

___
29
<PAGE>

Managing the Fund

INVESTMENT ADVISOR
--------------------------------------------------------------------------------

Liberty Wanger Asset Management (Liberty WAM) (formerly Wanger Asset Management,
L.P. (WAM)), located at 227 West Monroe Street, Suite 3000, Chicago, Illinois
60606, is the Funds' investment advisor. Liberty WAM and its predecessor have
managed mutual funds, including the Funds, since 1992. In its duties as
investment advisor, Liberty WAM runs the Funds' day-to-day business, including
placing all orders for the purchase and sale of the Funds' portfolio securities.
As of June 30, 2000, Liberty WAM managed over $9 billion in assets.

Liberty WAM is part of a larger business unit that includes several separate
legal entities known as Liberty Funds Group (LFG). LFG includes certain
affiliates of the Liberty WAM, including Stein Roe & Farnham, Incorporated
(Stein Roe) and Colonial Management Associates, Inc. (Colonial). Stein Roe,
Colonial and other LFG entities share personnel, facilities and systems that may
be used in providing administrative or operational services to the Funds. Stein
Roe, Colonial and the other entities that make up the LFG are subsidiaries of
Liberty.

Liberty WAM earns the following advisory fees for managing the Funds.
-------------------------------------------------------------------------------
Fund Name Fund Fee as a % of
Average Net Assets
During 1999
--------------------------------------------------------------------------------
Liberty Acorn Fund .69%
Liberty Acorn International .81%
Liberty Acorn USA .93%
Liberty Acorn Twenty .90%
Liberty Acorn Foreign Forty .95%

Liberty WAM also receives an administrative services fee from each Fund at the
annual rate of .05% of that Fund's average daily net assets.

PORTFOLIO MANAGERS
--------------------------------------------------------------------------------

Liberty WAM uses a team to manage the Funds. Team members share responsibility
for providing ideas, information, and knowledge in managing the Funds, and each
team member has one or more particular areas of expertise. The portfolio
managers are responsible for making daily portfolio selection decisions, and
utilize the management team's input and advice when making buy and sell
determinations.

Ralph Wanger

Liberty Acorn Fund, Lead portfolio manager

---
30
<PAGE>

Managing the Funds

before that date. He is a Chartered Financial Analyst (CFA), and earned his BS
and MS degrees in Industrial Management from the Massachusetts Institute of
Technology.

Charles P. McQuaid

Liberty Acorn Fund, Co-portfolio manager

Charles McQuaid is a senior vice president and member of Liberty Acorn Trust's
Board of Trustees. He has been director of Domestic Research at Liberty WAM and
WAM, and was a principal of WAM until September 29, 2000. Mr. McQuaid has been a
member of Liberty Acorn Fund's management team since 1978. He is a CFA, and
earned his BBA from the University of Massachusetts and his MBA from the
University of Chicago.

Leah J. Zell

Liberty Acorn International, Lead portfolio manager

Margaret M. Forster

Liberty Acorn International, Co-portfolio manager

Margaret Forster is a vice president of Liberty Acorn Trust and became co-
portfolio manager of Liberty Acorn International in May 1999. She has been a
member of the international analytical team at Liberty WAM and WAM since 1994,
and was a principal of WAM from January 1999 to September 29, 2000. Prior to
that, Ms. Forster was a professor of finance at Northwestern and Ohio State
Universities, and an economist with the International Monetary Fund. She is a
CFA. Her degrees include a BS from Universidade de Sao Paulo, Escola
Politecnica, Brazil, and an MBA, MS and PhD from Cornell University.

Robert A. Mohn

Liberty Acorn USA, Lead portfolio manager

___
31
<PAGE>

Managing the Funds

John H. Park
Liberty Acorn Twenty, Lead portfolio manager

John Park is a vice president of Liberty Acorn Trust,
and has managed Liberty Acorn Twenty since its
inception in 1998. He has been a member of the
domestic investment team at Liberty WAM and WAM since
1993, and was a principal of WAM from 1998 to September
29, 2000. Mr. Park is also manager of a mutual fund
underlying variable insurance products. He is a CFA
and earned both his BA and MBA degrees from the
University of Chicago.

Marcel P. Houtzager
Liberty Acorn Foreign Forty, Co-portfolio manager

Marcel Houtzager is a vice president of Liberty Acorn
Trust, and has managed Liberty Acorn Foreign Forty
since its inception in 1998. He has been a member of
the international analytical team at Liberty WAM and
WAM since 1992, and was a principal of WAM from 1995 to
September 29, 2000. Mr. Houtzager also manages an
international mutual fund underlying variable insurance
products and the foreign portfolio of an investment
company whose shares are offered only to non-U.S.
investors. He is a CFA and a CPA, and earned his BA
from Pomona College and his MBA from the University of
California at Berkeley.

Roger D. Edgley
Liberty Acorn Foreign Forty, Co-portfolio manager

Roger Edgley is a vice president of Liberty Acorn Trust
and became co-portfolio manager of Liberty Acorn
Foreign Forty in December 1999. He has been director
of International Research at Liberty WAM and WAM, and
was a principal of WAM from January 1999 to September
29, 2000. Mr. Edgley has been a member of the
international analytical team at Liberty WAM and WAM
since 1994. Prior to that, Mr. Edgley was a securities
analyst in Hong Kong. He is a CFA and was educated in
the United Kingdom, completing his MSc degree from the
London School of Economics.

--
32
<PAGE>

Other Investment Strategies and Risks

UNDERSTANDING THE FUNDS' OTHER INVESTMENT STRATEGIES AND RISKS

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

Liberty WAM may elect not to buy any of these securities or use any of these
techniques unless it believes that doing so will help a Fund achieve its
investment goal. A Fund may not always achieve its investment goal.

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

The first portion of this prospectus describes the Funds' principal investment
strategies and their associated risks. This section provides more detail about
the Funds' investment strategies, and describes other investments a Fund may
make and the risks associated with them. In seeking to achieve its investment
goal, a Fund 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 Funds' Statements of
Additional Information, which you may obtain free of charge (see back cover).
Approval by the Funds' shareholders is not required to modify or change the
Funds' investment goals or investment strategies.

THE INFORMATION EDGE
--------------------------------------------------------------------------------

The Funds invest in less-profiled, entrepreneurially managed smaller, mid-sized
and larger companies that they believe are benefiting from an important
economic, social or technological trend and whose domination of a niche creates
the opportunity for superior earnings-growth potential.

In making investments for the Funds, Liberty WAM relies primarily on
independent, internally generated research to uncover companies that may be less
well known than the more popular names. To find these companies, Liberty WAM
looks for growth potential, financial strength and fundamental value.

<TABLE>
<CAPTION>
Growth Potential Financial Strength Fundamental Value
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
. superior technology . stability . lower stock price
. innovative marketing . reduced risk relative to growth
. solid management . competitive advantage potential and capitalization
. dominant or niche . low debt . growth at a reasonable price
position . adequate working
. superior earnings capital
prospects . conservative
. fast-growing accounting practices
economy

The realization of this A strong balance sheet gives Once Liberty WAM
growth potential would management greater flexibility uncovers a great company,
likely produce superior to pursue strategic objectives it identifies a
performance that is and is essential to maintaining price that it believes
sustainable over time. a competitive advantage. would also make the
stock a good value.
-----------------------------------------------------------------------------------------------------
</TABLE>

STOCK STRENGTH COMES FIRST
--------------------------------------------------------------------------------

Liberty WAM's analysts continually screen companies and make more than 1,000
face-to-face visits around the globe each year. To accomplish this, Liberty
WAM's analysts talk to top management, vendors, suppliers and competitors,
whenever possible.

In managing the Funds, Liberty WAM tries to maintain lower taxes and transaction
costs by investing with a long-term time horizon (at least 2-5 years). However,
securities purchased on a long-term basis may be sold within 12 months after
purchase due to changes in the circumstances of a particular company or
industry, or changes in general market or economic conditions.

Other Investment Strategies and Risks

DERIVATIVE STRATEGIES
-------------------------------------------------------
A Fund may enter into a number of hedging strategies, including those that
employ futures and options, to gain or reduce exposure to particular securities
or markets. These strategies, commonly referred to as derivatives, involve the
use of financial instruments whose values depend on, or are derived from, the
value of an underlying security, index or currency. The Fund may use these
strategies to adjust the Fund's sensitivity to changes in interest rates or for
other hedging purposes (i.e., attempting to offset a potential loss in one
position by establishing an interest in an opposite position). Derivative
strategies involve the risk that they may exaggerate a loss, potentially losing
more money than the actual cost of the underlying security, or limit a potential
gain. Also, with some derivative strategies there is a risk that the other party
to the transaction may fail to honor its contract terms, causing a loss to the
Fund.
--
33
<PAGE>

TEMPORARY DEFENSIVE STRATEGIES
--------------------------------------------------------------------------------

At times, Liberty WAM may determine that adverse market conditions make it
desirable to temporarily suspend a Fund's normal investment activities. During
such times, the Fund 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 from achieving its investment goal.

--
34
<PAGE>

Financial Highlights

The financial highlights tables are intended to
help you understand the Funds' financial
performance. Information is shown for each Fund's
last five fiscal years, or since the Fund's
inception. The Funds' fiscal year runs from
January 1 to December 31. Certain information
reflects financial results for a single Fund share.
The total returns in each table represent the rate
that you would have earned (or lost) on an
investment in a Fund (assuming reinvestment of all
dividends and distributions). This information has
been derived from the Funds' financial statements
which have been audited by Ernst & Young LLP,
independent auditors, whose report, along with the
Funds' financial statements, is included in the
Funds' annual report. You can request a free annual
report by calling 1-800-9-ACORN-9
(800-922-6769).

Liberty Acorn Fund

<TABLE>
<CAPTION>
For a share outstanding throughout
each year - years ended 12/31 1999 1998 1997 1996 1995
--------------------------------------------------------------------------------------------------------------
Class Z Class Z Class Z Class Z Class Z
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $16.85 $16.99 $15.04 $13.60 $12.24
--------------------------------------------------------------------------------------------------------------
Income from Investment Operations:

Net investment income .09 .04 .15 .09 .11
--------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on
investments, foreign currency and
futures 5.22 .91 3.57 2.93 2.42
--------------------------------------------------------------------------------------------------------------
Total from investment
operations 5.31 .95 3.72 3.02 2.53
--------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income (.09) (.03) (.16) (.11) (.09)
--------------------------------------------------------------------------------------------------------------
Distributions from net realized and
unrealized gains reportable for federal
income taxes (3.54) (1.06) (1.61) (1.47) (1.08)
--------------------------------------------------------------------------------------------------------------
Total distributions (3.63) (1.09) (1.77) (1.58) (1.17)
--------------------------------------------------------------------------------------------------------------
Net asset value, end of year $18.53 $16.85 $16.99 $15.04 $13.60
--------------------------------------------------------------------------------------------------------------
Total return 33.4% 6.0% 25.0% 22.6% 20.8%
--------------------------------------------------------------------------------------------------------------
Ratios/supplemental data:
--------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net
assets .85% .84% .56% .57% .57%
--------------------------------------------------------------------------------------------------------------
Ratio of net investment income to
average net assets .49% .30% .75% .53% .89%
--------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 34% 24% 32% 33% 29%
--------------------------------------------------------------------------------------------------------------
Net assets at end of year
(in millions) $3,921 $3,549 $3,681 $2,842 $2,399
</TABLE>

--
35
<PAGE>

Liberty Acorn International

<TABLE>
<CAPTION>
For a share outstanding throughout
each year - years ended 12/31 1999 1998 1997 1996 1995
--------------------------------------------------------------------------------------------------------------
Class Z Class Z Class Z Class Z Class Z
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $20.82 $18.39 $19.61 $16.59 $15.24
--------------------------------------------------------------------------------------------------------------
Income from Investment Operations:

Net investment income .83 .17 .40 .13 .16
--------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments, foreign currency and
futures 15.45 2.68 (.34) 3.29 1.20
--------------------------------------------------------------------------------------------------------------
Total from investment
operations 16.28 2.85 .06 3.42 1.36
--------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income (.22) (.15) (.38) (.12) --
--------------------------------------------------------------------------------------------------------------
Distributions from net realized and
unrealized gains reportable for federal
income taxes (1.55) (.27) (.90) (.28) (.01)
--------------------------------------------------------------------------------------------------------------
Total distributions (1.77) (.42) (1.28) (.40) (.01)
--------------------------------------------------------------------------------------------------------------
Net asset value, end of year $35.33 $20.82 $18.39 $19.61 $16.59
--------------------------------------------------------------------------------------------------------------
Total return 79.2% 15.4% 0.2% 20.7% 8.9%
--------------------------------------------------------------------------------------------------------------
Ratios/supplemental data:
--------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net
assets 1.11% 1.12% 1.19% 1.17% 1.22%
--------------------------------------------------------------------------------------------------------------
Ratio of net investment income to
average net assets .12% .86% .58% .51% .90%
--------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 46% 37% 39% 34% 26%
--------------------------------------------------------------------------------------------------------------
Net assets at end of year
(in millions) $2,868 $1,725 $1,623 $1,773 $1,276
</TABLE>

--
36
<PAGE>

Liberty Acorn USA

<TABLE>
<CAPTION>
For a share outstanding throughout Year Ended Year Ended Year Ended Inception 9/4/96
each period 12/31/99 12/31/98 12/31/97 Through 12/31/96
-------------------------------------------------------------------------------------------------------------------
Class Z Class Z Class Z Class Z
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 14.80 $ 15.12 $ 11.65 $ 10.00
-------------------------------------------------------------------------------------------------------------------
Income from Investment
Operations:

Net investment loss (a) -- (.07) (.07) (.02)
-------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on
investments 3.32 .87 3.83 1.67
-------------------------------------------------------------------------------------------------------------------
Total from investment
operations 3.32 .80 3.76 1.65
-------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income -- -- -- --
-------------------------------------------------------------------------------------------------------------------
Distributions from net realized and
unrealized gains reportable for federal
income taxes (1.37) (1.12) (.29) --
-------------------------------------------------------------------------------------------------------------------
Total distributions (1.37) (1.12) (.29) --
-------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 16.75 $ 14.80 $ 15.12 $ 11.65
-------------------------------------------------------------------------------------------------------------------
Total return (c) 23.0% 5.8% 32.3% 16.5%
-------------------------------------------------------------------------------------------------------------------
Ratios/supplemental data:

Ratio of expenses to average net
assets (b) 1.15% 1.20% 1.35% 1.85%*
-------------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average
net assets 0.00% (.42%) (.49%) (.99%)*
-------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 49% 42% 33% 20%*
-------------------------------------------------------------------------------------------------------------------
Net assets at end of period
(in millions) $ 371 $ 281 $ 185 $ 53
</TABLE>

(a) Net investment loss per share was based upon the average shares outstanding
during the period.

(b) In accordance with a requirement by the Securities and Exchange Commission,
the ratio of expenses to average net assets for Liberty Acorn USA reflects
gross custodian fees paid indirectly would have been 1.79% for the period
ended December 31, 1996.

* Annualized

--
37
<PAGE>

Liberty Acorn Twenty

<TABLE>
<CAPTION>
Year Ended Inception 11/23/98
For a share outstanding throughout each period 12/31/99 Through 12/31/98
-------------------------------------------------------------------------------------------------------------------------
Class Z Class Z
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $ 10.71 $ 10.00
-------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
-------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (a) (.08) --
-------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments 3.21 .71
-------------------------------------------------------------------------------------------------------------------------
Total from investment operations 3.13 .71
-------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from net realized and unrealized gains
reportable for federal income taxes (.14) --
-------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 13.70 $ 10.71
-------------------------------------------------------------------------------------------------------------------------
Total return (d) 29.3% 7.1%
-------------------------------------------------------------------------------------------------------------------------
Ratios/supplemental data:
-------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (b)(c) 1.37% 1.41%*
-------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average net assets (c) (.62%) .22%*
-------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 101% 1.73%*
-------------------------------------------------------------------------------------------------------------------------
Net assets at end of period
(in millions) $ 68 $ 34
</TABLE>

(a) Net investment income (loss) per share was based upon the average shares
outstanding during the period.

(b) In accordance with a requirement by the Securities and Exchange Commission,
the Liberty Acorn Twenty ratio reflects total expenses prior to the
reduction of custodian fees for cash balances it maintains with the
custodian ("custodian fees paid indirectly"). This ratio net of custodian
fees paid indirectly would have been 1.35% for the period ended December
31, 1998 and the year ended December 31, 1999.

(c) Liberty Acorn Twenty was reimbursed by the Advisor for certain net expenses
from November 23, 1998 through December 31, 1999. Without the
reimbursement, the ratio of expenses (prior to custodian fees paid
indirectly) to average net assets and the ratio of net investment income to
average net assets would have been 1.83% and (.21%), respectively, for the
period ended 12/31/98 and 1.41% and (.66%), respectively, for the year
ended 12/31/99.

(d) Total return is not annualized for periods less than one year.

*Annualized

--
38
<PAGE>

Liberty Acorn Foreign Forty

<TABLE>
<CAPTION>
Year Ended Inception 11/23/98
For a share outstanding throughout each period 12/31/99 Through 12/31/98
-------------------------------------------------------------------------------------------------------------------------
Class Z Class Z
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $ 11.00 $ 10.00
-------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
-------------------------------------------------------------------------------------------------------------------------
Net investment loss (a) (.02) (.01)
-------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments 8.98 1.01
-------------------------------------------------------------------------------------------------------------------------
Total from investment operations 8.96 1.00
-------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from net realized and unrealized gains reportable
for federal income taxes (.03) --
-------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 19.93 $ 11.00
-------------------------------------------------------------------------------------------------------------------------
Total return (d) 81.6% 10.0%
-------------------------------------------------------------------------------------------------------------------------
Ratios/supplemental data:
-------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (b)(c) 1.48% 1.73%*
-------------------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average net assets (c) (.17%) (.78%)*
-------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 60% 90%*
-------------------------------------------------------------------------------------------------------------------------
Net assets at end of period
(in millions) $ 107 $ 16
</TABLE>

(a) Net investment loss per share was based upon the average shares outstanding
during the period.

(b) In accordance with a requirement by the Securities and Exchange Commission,
the Liberty Acorn Foreign Forty ratio reflects total expenses prior to the
reduction of custodian fees for cash balances it maintains with the
custodian ("custodian fees paid indirectly"). This ratio net of custodian
fees paid indirectly would have been 1.45% for the period ended December
31, 1998, and the year ended December 31, 1999.

(c) Liberty Acorn Foreign Forty was reimbursed by the Advisor for certain net
expenses from November 23, 1998 through December 31, 1999. Without the
reimbursement, the ratio of expenses (prior to custodian fees paid
indirectly) to average net assets and the ratio of net investment income to
average net assets would have been 2.70% and (1.75%), respectively, for the
period ended 12/31/98 and 1.57% and (.26%), respectively, for the year
ended 12/31/99.

(d) Total return is not annualized for periods less than one year.

* Annualized

--
39
<PAGE>

Notes

--
40
<PAGE>

--
41
<PAGE>

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

You may wish to read the Statement of Additional
Information for more information on the Funds and
the securities in which they invest. 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
Liberty Acorn by writing or calling Liberty
Acorn's distributor at:

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

Text-only versions of all Fund documents can be
viewed online or downloaded from the Edgar
database on the Securities and Exchange Commission
internet site at www.sec.gov.

You can review and copy information about the
Funds by visiting the following location, and you
can obtain copies, upon payment of a duplicating
fee by electronic request at the E-mail address
[email protected] or by writing the:

Public Reference Room
Securities and Exchange Commission
Washington, DC 20549-0102

Information on the operation of the Public
Reference Room may be obtained by calling
1-202-942-8090.

Investment Company Act file number:

Liberty Acorn Trust: 811-01829

(formerly Acorn Investment Trust)

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

[LIBERTY FUNDS LETTER HEAD]

<PAGE>

THE INFORMATION IN THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT COMPLETE AND
MAY BE CHANGED. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION BUT HAS NOT YET BECOME
EFFECTIVE. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED
PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS
COMMUNICATION SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY OR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN
WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO QUALIFICATION
UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

SUBJECT TO COMPLETION
LIBERTY ACORN TRUST
Statement of Additional Information
September --, 2000

This Statement of Additional Information (SAI) contains information which may be
useful to investors but which is not included in the Prospectuses of Liberty
Acorn Trust (Liberty Acorn or Trust). This SAI is not a prospectus and is
authorized for distribution only when accompanied or preceded by a Prospectus
of the Trust dated September 29, 2000. This SAI should be read together with a
Prospectus of the Trust. Investors may obtain a free copy of a Prospectus from
Liberty Funds Distributor, Inc. (LFD), One Financial Center, Boston, MA 02111-
2621.

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
<S> <C>
Definitions
Organization and History
Investment Policies
Portfolio Turnover
Additional Information Concerning Investment Practices
Taxes - General
Management of the Trust
Liberty Acorn Charges and Expenses
Custodian
Independent Auditors
Determination of Net Asset Value
How to Buy Shares
Special Purchase Programs/Investor Services
Programs for Reducing or Eliminating Sales Charges
How to Sell Shares
How to Exchange Shares
Suspension of Redemptions
Shareholder Liability
Shareholder Meetings
Performance Measures and Information
Appendix I--Description of Bond Ratings
</TABLE>
<PAGE>

Part 1

LIBERTY ACORN TRUST
Statement of Additional Information
September __, 2000

<TABLE>
<CAPTION>
DEFINITIONS
<S> <C>
"Trust" Liberty Acorn Trust
"Funds" Liberty Acorn Fund, Liberty Acorn International, Liberty Acorn USA, Liberty Acorn
Twenty and Liberty Acorn Foreign Forty
"Advisor" Liberty Wanger Asset Management, L.P., the Fund's investment advisor and
administrator
"LFD" Liberty Funds Distributor, Inc., the Fund's distributor
"LFS" Liberty Funds Services, Inc., the Fund's investor services and transfer agent
</TABLE>

ORGANIZATION AND HISTORY

The Trust is a Massachusetts business trust organized in 1992 as successor to
The Acorn Fund, Inc., which became the Acorn Fund series of the Trust. The Funds
are series of the Trust, and each Fund is an open-end, management investment
company. The Trust is not required to hold annual shareholder meetings, but
special meetings may be called for certain purposes. Shareholders receive one
vote for each Fund share. Shares of each Fund and any other series of the Trust
that may be in existence from time to time generally vote together except when
required by law to vote separately by Fund or by class. Shareholders owning in
the aggregate ten percent of Trust shares may call meetings to consider removal
of Trustees. Under certain circumstances, the Trust will provide information to
assist shareholders in calling such a meeting.

The Trust changed its name from "Acorn Investment Trust" to its current name on
September 29, 2000. On that date, the Funds also changed their names from "Acorn
Fund," "Acorn International," "Acorn USA," "Acorn Twenty" and "Acorn Foreign
Forty" to their current names.

INVESTMENT POLICIES

Liberty Acorn Fund, Liberty Acorn International, Liberty Acorn USA, Liberty
Acorn Twenty and Liberty Acorn Foreign Forty invest with the objective of long-
term growth of capital. The Funds are not designed for investors seeking
primarily income rather than capital appreciation. The Funds are not, alone or
together, a balanced investment program, and there can be no assurance that any
of the Funds will achieve its investment objective.

The Funds are subject to the following fundamental investment policies, which
may not be changed without the affirmative vote of a majority of that Fund's
outstanding voting securities. The Investment Company Act of 1940 (Act) provides
that a "vote of a majority of the outstanding voting securities" of a Fund means
the affirmative vote of the lesser of (1) more than 50% of the outstanding
shares of the Fund, or (2) 67% or more of the shares present at a meeting if
more than 50% of the outstanding shares are represented at the meeting in person
or by proxy.

Liberty Acorn Fund will not:
1. Invest more than 5% of its assets (valued at time of investment) in
securities of any one issuer, except in government obligations;

2. Acquire securities of any one issuer which at the time of investment (a)
represent more than 10% of the voting securities of the issuer or (b) have
a value greater than 10% of the value of the outstanding securities of the
issuer;

3. Invest more than 25% of its assets (valued at time of investment) in
securities of companies in any one industry;

4. Invest more than 5% of its assets (valued at time of investment) in
securities of issuers with less than three years' operation (including
predecessors);

2
<PAGE>

5. Borrow money except (a) from banks for temporary or emergency purposes in
amounts not exceeding 33% of the value of the fund's assets at the time of
borrowing, and (b) in connection with transactions in options and in
securities index futures [the fund will not purchase additional securities
when its borrowings, less amounts receivable on sales of portfolio
securities, exceed 5% of total assets];

6. Pledge, mortgage or hypothecate its assets, except in connection with
permitted borrowings;

7. Underwrite the distribution of securities of other issuers; however the
fund may acquire "restricted" securities which, in the event of a resale,
might be required to be registered under the Securities Act of 1933 on the
ground that the fund could be regarded as an underwriter as defined by that
act with respect to such resale; but the fund will limit its total
investment in restricted securities and in other securities for which there
is no ready market to not more than 10% of its total assets at the time of
acquisition;

8. Purchase and sell real estate or interests in real estate, although it may
invest in marketable securities of enterprises which invest in real estate
or interests in real estate;

9. Purchase and sell commodities or commodity contracts, except that it may
enter into (a) futures and options on futures and (b) forward contracts;

10. Make margin purchases of securities, except for use of such short-term
credits as are needed for clearance of transactions and except in
connection with transactions in options, futures and options on futures;

11. Sell securities short or maintain a short position, except short sales
against-the-box;

12. Participate in a joint or on a joint or several basis in any trading
account in securities;

13. Invest in companies for the purpose of management or the exercise of
control;

14. Issue any senior security except to the extent permitted under the
Investment Company Act of 1940;

15. Make loans, but this restriction shall not prevent the Fund from (a) buying
a part of an issue of bonds, debentures, or other obligations that are
publicly distributed, or from investing up to an aggregate of 15% of its
total assets (taken at market value at the time of each purchase) in parts
of issues of bonds, debentures or other obligations of a type privately
placed with financial institutions, (b) investing in repurchase agreements,
or (c) lending portfolio securities, provided that it may not lend
securities if, as a result, the aggregate value of all securities loaned
would exceed 33% of its total assets (taken at market value at the time of
such loan).

Liberty Acorn International will not:
1. With respect to 75% of the value of the fund's total assets, invest more
than 5% of its total assets (valued at time of investment) in securities of
a single issuer, except securities issued or guaranteed by the government
of the U.S., or any of its agencies or instrumentalities;

2. Acquire securities of any one issuer that at the time of investment (a)
represent more than 10% of the voting securities of the issuer or (b) have
a value greater than 10% of the value of the outstanding securities of the
issuer;

3. Invest more than 25% of its assets (valued at time of investment) in
securities of companies in any one industry;

4. Make loans, but this restriction shall not prevent the fund from (a) buying
a part of an issue of bonds, debentures, or other obligations that are
publicly distributed, or from investing up to an aggregate of 15% of its
total assets (taken at market value at the time of each purchase) in parts
of issues of bonds, debentures or other obligations of a type privately
placed with financial institutions, (b) investing in repurchase agreements,
or (c) lending portfolio securities, provided that it may not lend
securities if, as a result, the aggregate value of all securities loaned
would exceed 33% of its total assets (taken at market value at the time of
such loan);

3
<PAGE>

5. Borrow money except (a) from banks for temporary or emergency purposes in
amounts not exceeding 33% of the value of the fund's total assets at the
time of borrowing, and (b) in connection with transactions in options,
futures and options on futures. [The fund will not purchase additional
securities when its borrowings, less amounts receivable on sales of
portfolio securities, exceed 5% of total assets.];

6. Underwrite the distribution of securities of other issuers; however the
fund may acquire "restricted" securities which, in the event of a resale,
might be required to be registered under the Securities Act of 1933 on the
ground that the fund could be regarded as an underwriter as defined by that
act with respect to such resale; but the fund will limit its total
investment in restricted securities and in other securities for which there
is no ready market, including repurchase agreements maturing in more than
seven days, to not more than 15% of its total assets at the time of
acquisition;

7. Purchase and sell real estate or interests in real estate, although it may
invest in marketable securities of enterprises that invest in real estate
or interests in real estate;

8. Purchase and sell commodities or commodity contracts, except that it may
enter into (a) futures and options on futures and (b) forward contracts;

9. Make margin purchases of securities, except for use of such short-term
credits as are needed for clearance of transactions and except in
connection with transactions in options, futures and options on futures;

10. Sell securities short or maintain a short position, except short sales
against-the-box.

11. Issue any senior security except to the extent permitted under the
Investment Company Act of 1940.

Liberty Acorn USA will not:
1. With respect to 75% of the value of the Fund's total assets, invest more
than 5% of its total assets (valued at time of investment) in securities of
a single issuer, except securities issued or guaranteed by the government
of the U.S., or any of its agencies or instrumentalities;

3. Invest more than 25% of its assets (valued at time of investment) in
securities of companies in any one industry, except that this restriction
does not apply to investments in U.S. government securities;

4. Make loans, but this restriction shall not prevent the Fund from (a) buying
a part of an issue of bonds, debentures, or other obligations that are
publicly distributed, or from investing up to an aggregate of 15% of its
total assets (taken at market value at the time of each purchase) in parts
of issues of bonds, debentures or other obligations of a type privately
placed with financial institutions, (b) investing in repurchase agreements,
or (c) lending portfolio securities, provided that it may not lend
securities if, as a result, the aggregate value of all securities loaned
would exceed 33% of its total assets (taken at market value at the time of
such loan);

5. Borrow money except (a) from banks for temporary or emergency purposes in
amounts not exceeding 33% of the value of the Fund's total assets at the
time of borrowing, and (b) in connection with transactions in options,
futures and options on futures;

6. Underwrite the distribution of securities of other issuers; however, the
Fund may acquire "restricted" securities which, in the event of a resale,
might be required to be registered under the Securities Act of 1933 on the
ground that the Fund could be regarded as an underwriter as defined by that
act with respect to such resale;

7. Purchase and sell real estate or interests in real estate, although it may
invest in marketable securities of enterprises which invest in real estate
or interests in real estate;

4
<PAGE>

8. Purchase and sell commodities or commodity contracts, except that it may
enter into (a) futures and options on futures and (b) foreign currency
contracts;

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

Each of Liberty Acorn Twenty and Liberty Acorn Foreign Forty will not:
1. Acquire securities of any one issuer which at the time of investment (a)
represent more than 10% of the voting securities of the issuer or (b) have
a value greater than 10% of the value of the outstanding securities of the
issuer;

2. With respect to 50% of the value of the Fund's total assets, purchase the
securities of any issuer (other than cash items and U.S. government
securities and securities of other investment companies) if such purchase
would cause the Fund's holdings of that issuer to exceed 5% of the Fund's
total assets;

3. Invest more than 25% of its total assets in a single issuer (other than
U.S. government securities);

4. Invest more than 25% of its total assets in the securities of companies in
a single industry (excluding U.S. government securities);

5. Make loans, but this restriction shall not prevent the Fund from (a)
investing in debt securities, (b) investing in repurchase agreements, or
(c) lending its portfolio securities, provided that it may not lend
securities if, as a result, the aggregate value of all securities loaned
would exceed 33% of its total assets (taken at market value at the time of
such loan);

6. Borrow money except (a) from banks for temporary or emergency purposes in
amounts not exceeding 33% of the value of the Fund's total assets at the
time of borrowing, and (b) in connection with transactions in options,
futures and options on futures;

7. Underwrite the distribution of securities of other issuers; however, the
Fund may acquire "restricted" securities which, in the event of a resale,
might be required to be registered under the Securities Act of 1933 on the
ground that the Fund could be regarded as an underwriter as defined by that
act with respect to such resale;

8. Purchase and sell real estate or interests in real estate, although it may
invest in marketable securities of enterprises which invest in real estate
or interests in real estate;

9. Purchase and sell commodities or commodity contracts, except that it may
enter into (a) futures and options on futures and (b) foreign currency
contracts;

11. Issue any senior security except to the extent permitted under the
Investment Company Act of 1940.

As non-fundamental investment policies which may be changed without a
shareholder vote, each Fund may not:
a. Acquire securities of other registered investment companies except in
compliance with the Investment Company Act of 1940;

b. Invest more than 33% of its total assets (valued at time of investment) in
securities of foreign issuers [this restriction applies only to Liberty
Acorn Fund];

c. Invest more than 15% of its total assets in the securities of foreign
issuers [this restriction applies only to Liberty Acorn Twenty].

5
<PAGE>

d. Invest more than 10% of its total assets (valued at the time of investment)
in securities of non-U.S. issuers, not including securities represented by
American Depository Receipts [this restriction applies only to Liberty
Acorn USA].

e. Invest more than 15% of its total assets in securities of United States
issuers, under normal market conditions [this restriction applies only to
Liberty Acorn Foreign Forty].

f. Invest in companies for the purpose of management or the exercise of
control;

g. Pledge, mortgage or hypothecate its assets, except as may be necessary in
connection with permitted borrowings or in connection with short sales,
options, futures and options on futures;

h. Invest more than 10% of its total assets (valued at the time of investment)
in restricted securities [this restriction applies only to Liberty Acorn
Fund, Liberty Acorn International and Liberty Acorn USA];

i. Invest more than 15% of its net assets (valued at time of investment) in
illiquid securities, including repurchase agreements maturing in more than
seven days; and

j. Make short sales of securities unless the Fund owns at least an equal
amount of such securities, or owns securities that are convertible or
exchangeable, without payment of further consideration, into at least an
equal amount of such securities.

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

Total assets and net assets are determined at current value for purposes of
compliance with investment restrictions and policies. All percentage limitations
will apply at the time of investment and are not violated unless an excess or
deficiency occurs as a result of such investment. For the purpose of the Act's
diversification requirement, an issuer is the entity whose revenues support the
security.

PORTFOLIO TURNOVER

High portfolio turnover may cause a Fund to realize capital gains which, if
realized and distributed by the Fund, may be taxable to shareholders as ordinary
income. High portfolio turnover may result in correspondingly greater brokerage
commissions and other transaction costs, which will be borne directly by each
Fund. Under normal conditions, the portfolio turnover rates of Liberty Acorn
Fund, Liberty Acorn International and Liberty Acorn USA are expected to be below
about 50%. The portfolio turnover rates of Liberty Acorn Twenty and Liberty
Acorn Foreign Forty are likely to be greater than 50% but, under normal market
conditions, are expected to be no more than about 100%.

6
<PAGE>

ADDITIONAL INFORMATION CONCERNING CERTAIN INVESTMENT PRACTICES

Additional information concerning certain of the Funds' investments and
investment practices is set forth below.

Common Stocks

The Funds invest mostly in common stocks, which represent an equity interest
(ownership) in a corporation. This ownership interest often gives the Funds the
right to vote on measures affecting the company's organization and operations.
The Funds also invest in other types of equity securities, including preferred
stocks and securities convertible into common stocks. Over time, common stocks
have historically provided superior long-term capital growth potential. However,
stock prices may decline over short or even extended periods. Stock markets tend
to move in cycles, with periods of rising stock prices and periods of falling
stock prices. As a result, the Funds should be considered long-term investments,
designed to provide the best results when held for several years or more. The
Funds may not be suitable investments if you have a short-term investment
horizon or are unwilling to accept fluctuations in share price, including
significant declines over a given period. Under normal conditions, the Funds'
common stock investments (as a percent of total assets) are allocated as
follows:

-----------------------------------------------------------------
U.S. Foreign
Companies Companies
-----------------------------------------------------------------
Fund Maximum Maximum
-----------------------------------------------------------------
Liberty Acorn Fund no limit up to 33%
Liberty Acorn up to 25% no limit
International
Liberty Acorn USA no limit up to 10%
Liberty Acorn Twenty no limit up to 15%
Liberty Acorn Foreign up to 15% no limit
Forty
-----------------------------------------------------------------

Liberty Acorn Twenty usually limits its investments in foreign companies to
those whose operations are primarily in the U.S.

Liberty Acorn Foreign Forty usually limits its investments in U.S. companies to
those whose operations are primarily overseas.

See also the discussion of foreign securities below.

Diversification

Diversification is a means of reducing risk by investing in a broad range of
stocks or other securities. Because Liberty Acorn Twenty and Liberty Acorn
Foreign Forty are non-diversified, those Funds have the ability to take larger
positions in a smaller number of issuers. The appreciation or depreciation of a
single stock may have a greater impact on the NAV of a non-diversified fund,
because it is likely to have a greater percentage of its assets invested in that
stock. As a result, the share price of Liberty Acorn Twenty and Liberty Acorn
Foreign Forty can be expected to fluctuate more than that of broadly diversified
Funds investing in similar securities. Because they are non-diversified, those
Funds are not subject to the limitations under the Act in the percentage of
their assets that they may invest in any one issuer. Both Funds, however, intend
to comply with the diversification standards for regulated investment companies
under Subchapter M of the Internal Revenue Code (summarized above under
"Investment Policies").

Although Liberty Acorn Foreign Forty is registered as a non-diversified fund, it
has (through the date of this SAI) invested as if it were diversified. Liberty
Acorn Foreign Forty expects that it will begin to invest in a non-diversified
manner when it believes market conditions are appropriate to do so. However, if
Liberty Acorn Foreign Forty's investments remain diversified through November
23, 2001 (three years after it began operations), the Fund will lose the ability
to invest in a non-diversified manner and would thereafter be a diversified
fund. Liberty Acorn Foreign Forty would not be able to become non-diversified
unless it sought and obtained the approval of the holders of a "majority of its
outstanding voting securities," as defined in the Act.

7
<PAGE>

Foreign Securities

The Funds invest in foreign securities, which may entail a greater degree of
risk (including risks relating to exchange rate fluctuations, tax provisions, or
expropriation of assets) than does investment in securities of domestic issuers.
As noted above, under normal market conditions, each Fund may invest in foreign
securities (as a percentage of total assets) as set forth below:

-----------------------------------------------
Foreign
Companies
-----------------------------------------------
Fund Maximum
-----------------------------------------------
Liberty Acorn Fund up to 33%
Liberty Acorn no limit
International
Liberty Acorn USA up to 10%
Liberty Acorn Twenty up to 15%
Liberty Acorn Foreign no limit
Forty
-----------------------------------------------

Liberty Acorn Foreign Forty invests primarily in developed countries but may
invest up to 15% of its total assets in securities of companies with broad
international interests that are domiciled in the United States or in countries
considered "emerging markets," if the operations of those companies are located
primarily in developed overseas markets. The Funds use the terms "developed
markets" and "emerging markets" as those terms are defined by the International
Financial Corporation, a member of the World Bank Group ("IFC"). "Emerging
markets" as used by the Fund includes markets designated "frontier markets" by
the IFC. Liberty Acorn Foreign Forty does not intend to invest more than 5% of
its total assets in those countries included in the "emerging markets" or
"frontier markets" categories.

Liberty Acorn Twenty usually limits its investments in foreign companies to
those whose operations are primarily in the U.S.

The Funds may invest in securities of foreign issuers directly or in the form of
American Depositary Receipts (ADRs), European Depositary Receipts (EDRs), Global
Depositary Receipts (GDRs) or other securities representing underlying shares of
foreign issuers. Positions in these securities are not necessarily denominated
in the same currency as the common stocks into which they may be converted. ADRs
are receipts typically issued by an American bank or trust company evidencing
ownership of the underlying securities. EDRs are European receipts evidencing a
similar arrangement. GDRs trade in both U.S. and non-U.S. markets. Generally
ADRs, in registered form, are designed for use in the U.S. securities markets
and EDRs, in bearer form, are designed for use in European securities markets.
The Funds may invest in both "sponsored" and "unsponsored" depositary receipts.
In a sponsored depositary receipt, the issuer typically pays some or all of the
expenses of the depository and agrees to provide its regular shareholder
communications to depositary receipt holders. An unsponsored depositary receipt
is created independently of the issuer of the underlying security. The
depositary receipt holders generally pay the expenses of the depository and do
not have an undertaking from the issuer of the underlying security to furnish
shareholder communications. Therefore, in the case of an unsponsored depositary
receipt, a Fund is likely to bear its proportionate share of the expenses of the
depository and it may have greater difficulty in receiving shareholder
communications than it would have with a sponsored depositary receipt. None of
the Funds expects to invest 5% or more of its total assets in unsponsored
depositary receipts.

The Funds' investment performance is affected by the strength or weakness of the
U.S. dollar against the currencies of the foreign markets in which its
securities trade or in which they are denominated. For example, if the dollar
falls in value relative to the Japanese yen, the dollar value of a yen-
denominated stock held in the portfolio will rise even though the price of the
stock remains unchanged. Conversely, if the dollar rises in value relative to
the yen, the dollar value of the yen-denominated stock will fall. (See
discussion of transaction hedging and portfolio hedging under "Currency Exchange
Transactions.")

Currency Exchange Transactions

The Funds may enter into currency exchange transactions. A currency exchange
transaction 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 a forward currency exchange contract ("forward contract"). A
forward contract is an agreement to purchase or sell a specified currency at a

8
<PAGE>

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,
foreign exchange dealers or broker-dealers, are not exchange-traded, and are
usually for less than one year, but may be renewed.

Forward currency transactions may involve currencies of the different countries
in which the Funds may invest, and serve as hedges against possible variations
in the exchange rate between these currencies. The Funds' currency transactions
are limited to transaction hedging and portfolio hedging involving either
specific transactions or portfolio positions, except to the extent described
below under "Synthetic Foreign Money Market Positions." Transaction hedging is
the purchase or sale of a forward contract with respect to specific payables or
receivables of a fund accruing in connection with the purchase or sale of
portfolio securities. Portfolio hedging is the use of a forward contract with
respect to a portfolio security position denominated or quoted in a particular
currency. The Funds may engage in portfolio hedging with respect to the currency
of a particular country in amounts approximating actual or anticipated positions
in securities denominated in that currency. When a Fund owns or anticipates
owning securities in countries whose currencies are linked, the Advisor may
aggregate such positions as to the currency hedged.

If a Fund enters into a forward contract hedging an anticipated purchase of
portfolio securities, assets of that Fund having a value at least as great as
the Fund's commitment under such forward contract will be segregated on the
books of the Fund while the contract is outstanding.

At the maturity of a forward contract to deliver a particular currency, a Fund
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 Fund 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 that the Fund 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 that Fund is obligated to deliver.

If a Fund retains the portfolio security and engages in an offsetting
transaction, that Fund will incur a gain or a loss to the extent that there has
been movement in forward contract prices. If the Fund engages in an offsetting
transaction, it may subsequently enter into a new forward contract to sell the
currency. Should forward prices decline during the period between a Fund's
entering into a forward contract for the sale of a currency and the date it
enters into an offsetting contract for the purchase of the currency, the Fund
will realize a gain to the extent the price of the currency it has agreed to
sell exceeds the price of the currency it has agreed to purchase. Should forward
prices increase, a Fund will suffer a loss to the extent the price of the
currency it has agreed to purchase exceeds the price of the currency it has
agreed to sell. A default on the contract would deprive the Fund of unrealized
profits or force the Fund 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 Fund to hedge against a devaluation that is so
generally anticipated that the Fund is not able to contract to sell the currency
at a price above the devaluation level it anticipates. The cost to a Fund 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.

Synthetic Foreign Money Market Positions. The Funds may invest in money market
instruments denominated in foreign currencies. In addition to, or in lieu of,
such direct investment, the Funds may construct a synthetic foreign money market
position by (a) purchasing a money market instrument denominated in one currency
(generally U.S. dollars) and (b) concurrently entering into a forward contract
to deliver a corresponding amount of that currency in exchange for a different
currency on a future date and at a specified rate of exchange. For example, a
synthetic money market position in Japanese yen could be constructed by
purchasing a U.S. dollar money market instrument, and entering concurrently into
a forward contract to deliver a corresponding amount of U.S. dollars in exchange
for Japanese yen on a specified date and at a specified rate of exchange.

9
<PAGE>

Because of the availability of a variety of highly liquid short-term U.S. dollar
money market instruments, a synthetic money market position utilizing such U.S.
dollar instruments may offer greater liquidity than direct investment in foreign
money market instruments. The results of a direct investment in a foreign
currency and a concurrent construction of a synthetic position in such foreign
currency, in terms of both income yield and gain or loss from changes in
currency exchange rates, in general should be similar, but would not be
identical because the components of the alternative investments would not be
identical. Except to the extent a synthetic foreign money market position
consists of a money market instrument denominated in a foreign currency, the
synthetic foreign money market position shall not be deemed a "foreign security"
for purposes of the Funds' investment limits.

OTC Derivatives. The Funds may buy and sell over-the-counter ("OTC")
derivatives. Unlike exchange-traded derivatives, which are standardized with
respect to the underlying instrument, expiration date, contract size, and strike
price, the terms of OTC derivatives (derivatives not traded on exchanges)
generally are established through negotiation with the other party to the
contract. While this type of arrangement allows a Fund greater flexibility to
tailor an instrument to its needs, OTC derivatives generally involve greater
credit risk than exchange-traded derivatives, which are guaranteed by the
clearing organization of the exchanges where they are traded. Each Fund will
limit its investments so that no more than 5% of its total assets will be placed
at risk in the use of OTC derivatives. See "Illiquid and Restricted Securities"
below for more information on the risks associated with investing in OTC
derivatives.

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

There can be no assurance that a liquid market will exist when a Fund seeks to
close out an option position. If a Fund 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 Fund
were unable to close out a covered call option that it had written on a
security, it would not be able to sell the underlying security until the option
expired. As the writer of a covered call option on a security, a Fund 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. As the writer of a covered call option on a
foreign currency, a Fund foregoes, during the option's life, the opportunity to
profit from currency appreciation.

If trading were suspended in an options purchased or written by one of the
Funds, that Fund would not be able to close out the option. If restrictions on
exercise were imposed, the Fund might be unable to exercise an option it has
purchased.

Futures Contracts and Options on Futures Contracts. The Funds may use interest
rate futures contracts and index futures contracts. An interest rate or index
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 /1/ 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; the Russell
2000 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.

The Funds may purchase and write call and put futures options. Futures options
possess many of the same characteristics as options on securities and indexes
(discussed above). A futures option gives the holder the right, in return for
the premium paid, to assume a long position (call) or short position (put) in a
futures contract at a specified exercise price at any time during the period of
the option. Upon exercise of a call option, the holder acquires a long position
in the futures contract and the writer is assigned the opposite short position.
In the case of a put option, the opposite is true.

___________________
/1/ 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.

10
<PAGE>

To the extent required by regulatory authorities having jurisdiction over the
Funds, the Funds will limit their use of futures contracts and futures options
to hedging transactions. For example, a Fund might use futures contracts to
hedge against 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 Fund's securities or the price of the securities that
the Fund intends to purchase. The Fund's hedging may include sales of futures
contracts as an offset against the effect of expected declines in stock prices
or currency exchange rates or increases in interest rates and purchases of
futures contracts as an offset against the effect of expected increases in stock
prices or currency exchange rates or declines in interest rates. Although other
techniques could be used to reduce the Funds' exposure to stock price, interest
rate, and currency fluctuations, the Funds may be able to hedge their exposure
more effectively and perhaps at a lower cost by using futures contracts and
futures options.

The success of any hedging technique depends on Liberty WAM's ability to
correctly predict changes in the level and direction of stock prices, interest
rates, currency exchange rates, and other factors. Should those predictions be
incorrect, a Fund's return might have been better had hedging not been
attempted; however, in the absence of the ability to hedge, Liberty WAM 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 Fund, that Fund is
required to deposit with its custodian or broker 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 generally set
by the exchange on which the contract is traded; however, the margin requirement
may be modified during the term of the contract, and the Fund's broker may
require margin deposits in excess of the minimum required by the exchange. The
initial margin is in the nature of a performance bond or good faith deposit on
the futures contract, which is returned to the Fund upon termination of the
contract, assuming all contractual obligations have been satisfied. The Funds
expect to earn interest income on their initial margin deposits. A futures
contract held by a Fund is valued daily at the official settlement price of the
exchange on which it is traded. Each day the Fund 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 Fund does not represent a borrowing or loan by the Fund but is instead
settlement between that Fund 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 ("NAV"), the Funds will mark-to-market their
open futures positions.

The Funds are also required to deposit and maintain margin with respect to put
and call options on futures contracts they write. 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 Funds.

Although some futures contracts call for making or taking delivery of the
underlying securities, usually these obligations are closed out prior to
delivery by offsetting purchases or sales of matching futures contracts (same
exchange, underlying security or index, and delivery month). If an offsetting
sale price is more than the original purchase price, the Fund engaging in the
transaction realizes a capital gain, or if it is less, the Fund realizes a
capital loss. Conversely, if an offsetting purchase price is less than the
original sale price, the Fund realizes a capital gain, or if it is more, the
Fund 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 as hedging techniques. A purchase or
sale of a futures contract may result in losses in excess of the amount invested
in the futures contract. There can be no guarantee that there will be a
correlation between price movements in the hedging vehicle and in the portfolio
securities being hedged. 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 hedge 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 Funds' investments being hedged and
the securities underlying the standard contracts available for trading. For
example, in the case of index futures contracts, the composition of the index,
including the issuers and the weighting of each issue, may differ from the
composition of a Fund's portfolio, and, in the case of interest rate futures
contracts, the interest rate levels, maturities, and creditworthiness of the
issues underlying the futures contract may differ from the financial instruments
held in a Fund's portfolio. A decision as to whether, when, and how to hedge
involves the exercise of skill and judgment, and even a well-conceived hedge may
be unsuccessful to some degree because of market behavior or unexpected stock
price or interest rate trends.

11
<PAGE>

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 Fund
seeks to close out a futures or futures option position. The Fund 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 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. A Fund will not enter into a futures
contract or purchase an option thereon if, immediately thereafter, the initial
margin deposits for futures contracts held by that Fund plus premiums paid by it
for open futures option positions, less the amount by which any such positions
are "in-the-money," /2/ would exceed 5% of the Fund's total assets.
-

When purchasing a futures contract or writing a put option on a futures
contract, a Fund must maintain with its custodian or broker readily-marketable
securities having a fair market value (including any margin) at least equal to
the market value of such contract. When writing a call option on a futures
contract, a Fund similarly will maintain with its custodian or broker readily-
marketable securities having a fair market value (including any margin) at least
equal to the amount by which such option is in-the-money until the option
expires or is closed out by the Fund.

A Fund 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 Fund 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," the "underlying commodity value"
of each long position in a commodity contract in which a Fund invests will not
at any time exceed the sum of:

(1) the value of short-term U.S. debt obligations or other U.S. dollar
denominated high-quality short-term money market instruments and cash
set aside in an identifiable manner, plus any funds deposited as
margin on the contract;

(2) unrealized appreciation on the contract held by the broker; and

(3) cash proceeds from existing investments due in not more than 30 days.

"Underlying commodity value" means the size of the contract multiplied by
the daily settlement price of the contract.

Swap Agreements. A swap agreement is generally individually negotiated and
structured to include exposure to one or more of a variety of different types of
investments or market factors. Depending on its structure, a swap agreement may
increase or decrease a Fund's exposure to changes in the value of an index of
securities in which the Fund might invest, the value of a

____________________
/2/ 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.

12
<PAGE>

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
Fund may enter into any form of swap agreement if the Advisor determines it is
consistent with that Fund's investment objective and policies, but each Fund
will limit its use of swap agreements so that no more than 5% of its total
assets will be invested in such agreements.

A swap agreement tends to shift a Fund's investment exposure from one type of
investment to another. For example, if a Fund 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 that Fund's 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 Fund's investments and its NAV.

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 Fund. If a swap agreement calls for payments by a
Fund, that Fund 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. The Advisor expects to be
able to eliminate a Fund's exposure under any swap agreement either by
assignment or by other disposition, or by entering into an offsetting swap
agreement with the same party or a similarly creditworthy party.

A Fund will segregate assets to cover its current obligations under a swap
agreement. If a Fund enters into a swap agreement on a net basis, it will
segregate assets with a daily value at least equal to the excess, if any, of
that Fund's accumulated obligations under the swap agreement over the
accumulated amount the Fund is entitled to receive under the agreement. If a
Fund enters into a swap agreement on other than a net basis, it will segregate
assets with a value equal to the full amount of that Fund's accumulated
obligations under the agreement.

Short Sales Against the Box

Each Fund may make short sales of securities if, at all times when a short
position is open, the Fund owns an equal amount of such securities or securities
convertible into or exchangeable for, without payment of any further
consideration, securities of the same issue as, and equal in amount to, the
securities sold short. This technique is called selling short "against the box."
Although permitted by its investment restrictions, the Funds do not currently
intend to sell securities short.

In a short sale against the box, a Fund does not deliver from its portfolio the
securities sold and does not receive immediately the proceeds from the short
sale. Instead, the Fund 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 Fund, to the purchaser of such securities. Such
broker-dealer is entitled to retain the proceeds from the short sale until the
Fund delivers to such broker-dealer the securities sold short. In addition, the
Fund 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 Fund 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 without the payment of additional consideration. The Fund is said to
have a short position in the securities sold until it delivers to the broker-
dealer the securities sold, at which time the Fund receives the proceeds of the
sale. Because the Fund ordinarily will want to continue to hold securities in
its portfolio that are sold short, the Fund will normally close out a short
position by purchasing on the open market and delivering to the broker-dealer an
equal amount of the securities sold short, rather than by delivering portfolio
securities.

Short sales may protect a Fund 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 Fund owns,
either directly or indirectly, and, in the case where the Fund owns convertible
securities, changes in the conversion premium. The Funds will incur transaction
costs in connection with short sales.

In addition to enabling the Funds to hedge against market risk, short sales may
afford a Fund an opportunity to earn additional current income to the extent the
Fund is able to enter into arrangements with broker-dealers through which the
short sales are

13
<PAGE>

executed to receive income with respect to the proceeds of the short sales
during the period the Fund's short positions remain open.

The Taxpayer Relief Act of 1997 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) 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. 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.

Debt Securities

The Funds may invest in debt securities, including lower-rated securities (i.e.,
securities rated BB or lower by Standard & Poor's Corporation ("S&P") or Ba or
lower by Moody's Investor Services, Inc. ("Moody's"), commonly called "junk
bonds"), and securities that are not rated. There are no restrictions as to the
ratings of debt securities acquired by the Funds or the portion of a Fund's
assets that may be invested in debt securities in a particular ratings category,
except that Liberty Acorn International may not invest more than 20% of its
assets in securities rated below investment grade or considered by the Advisor
to be of comparable credit quality. Neither Liberty Acorn Fund nor Liberty Acorn
International expects to invest more than 5% of its net assets in such
securities during the current fiscal year. Each of Liberty Acorn USA, Liberty
Acorn Twenty and Liberty Acorn Foreign Forty do not intend to invest more than
20% of their total assets in debt securities nor more than 5% of their total
assets in securities rated at or lower than the lowest investment grade.

Securities rated BBB or Baa are considered to be medium grade and to have
speculative characteristics. Lower-rated debt securities are predominantly
speculative with respect to the issuer's capacity to pay interest and repay
principal. Investment in medium- or lower-quality debt securities involves
greater investment risk, including the possibility of issuer default or
bankruptcy. An economic downturn could severely disrupt the market for such
securities and adversely affect the value of such securities. In addition,
lower-quality bonds are less sensitive to interest rate changes than higher-
quality instruments and generally are more sensitive to adverse economic changes
or individual corporate developments. During a period of adverse economic
changes, including a period of rising interest rates, the junk bond market may
be severely disrupted, and issuers of such bonds may experience difficulty in
servicing their principal and interest payment obligations.

Medium- and lower-quality debt securities may be less marketable than higher-
quality debt securities because the market for them is less broad. The market
for unrated debt securities is even narrower. During periods of thin trading in
these markets, the spread between bid and asked prices is likely to increase
significantly, and a Fund may have greater difficulty selling its portfolio
securities. The market value of these securities and their liquidity may be
affected by adverse publicity and investor perceptions. A more complete
description of the characteristics of bonds in each ratings category is included
in Appendix I to this SAI.

Illiquid and Restricted Securities

The Funds may not invest in illiquid securities, if as a result they would
comprise more than 15% of the value of the net assets of the Fund. An illiquid
security generally is one that cannot be sold in the ordinary course of business
within seven days at substantially the value assigned to it in calculations of a
Fund's net asset value. Repurchase agreements maturing in more than seven days,
OTC derivatives and restricted securities are generally illiquid; other types of
investments may also be illiquid from time to time. If, through the appreciation
of illiquid securities or the depreciation of liquid securities, a Fund should
be in a position where more than 15% of the value of its net assets are invested
in illiquid assets, that Fund will take appropriate steps to protect liquidity.
Illiquid securities are priced at a fair value determined in good faith by the
board of trustees or its delegate.

Restricted securities may be sold only in privately negotiated transactions or
in a public offering with respect to which a registration statement is in effect
under the Securities Act of 1933 (the "1933 Act"). Where registration is
required, a Fund may be obligated to pay all or part of the registration
expenses and a considerable period may elapse between the time of the decision
to sell and the time the Fund may be permitted to sell a security under an
effective registration statement. If, during such a period, adverse market
conditions were to develop, the Fund might obtain a less favorable price than
prevailed when it decided to sell. Restricted securities will be priced at a
fair value as determined in good faith by the board of trustees. Neither

14
<PAGE>

Liberty Acorn Fund, Liberty Acorn International nor Liberty Acorn USA will
invest more than 10% of its total assets (valued at the time of investment) in
restricted securities.

Notwithstanding the above, a Fund may purchase securities that have been
privately placed but that are eligible for purchase and sale under Rule 144A
under the 1933 Act. That rule permits certain qualified institutional buyers,
such as the Funds, to trade in privately placed securities that have not been
registered for sale under the 1933 Act. The Advisor, under the supervision of
the board of trustees, will consider whether securities purchased under Rule
144A are illiquid and thus subject to a Fund's restriction of investing no more
than 10% (for Liberty Acorn Fund) or 15% (for Liberty Acorn International,
Liberty Acorn USA, Liberty Acorn Twenty and Liberty Acorn Foreign Forty) of its
assets in illiquid securities. A determination of whether a Rule 144A security
is liquid or not is a question of fact. In making this determination the Advisor
will consider the trading markets for the specific security taking into account
the unregistered nature of a Rule 144A security. In addition, the Advisor 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 market place 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 Funds' holdings of illiquid securities would be reviewed to
determine what, if any, steps are required to assure that a Fund does not invest
more than the specified percentage of its assets in illiquid securities.
Investing in Rule 144A securities could have the effect of increasing the amount
of a Fund's assets invested in illiquid securities if qualified institutional
buyers are unwilling to purchase such securities.

Repurchase Agreements

Repurchase agreements are transactions in which a Fund purchases a security from
a bank or recognized securities dealer and simultaneously commits to resell that
security to the bank or dealer at an agreed-upon price, date, and market rate of
interest unrelated to the coupon rate or maturity of the purchased security.
Although repurchase agreements carry certain risks not associated with direct
investments in securities, a Fund will enter into repurchase agreements only
with banks and dealers the Advisor believes present minimal credit risks in
accordance with guidelines approved by the board of trustees. The Advisor will
review and monitor the creditworthiness of such institutions, and will consider
the capitalization of the institution, the Advisor's prior dealings with the
institution, any rating of the institution's senior long-term debt by
independent rating agencies, and other relevant factors.

A Fund will invest only in repurchase agreements collateralized at all times in
an amount at least equal to the repurchase price plus accrued interest. To the
extent that the proceeds from any sale of such collateral upon a default in the
obligation to repurchase were less than the repurchase price, the Fund would
suffer a loss. If the financial institution which is party to the repurchase
agreement petitions for bankruptcy or otherwise becomes subject to bankruptcy or
other liquidation proceedings there may be restrictions on a Fund's ability to
sell the collateral and the Fund could suffer a loss. However, with respect to
financial institutions whose bankruptcy or liquidation proceedings are subject
to the U.S. Bankruptcy Code, each Fund intends to comply with provisions under
such Code that would allow it immediately to resell such collateral.

At present, Liberty Acorn USA, Liberty Acorn Twenty and Liberty Acorn Foreign
Forty are the only Funds that invest in repurchase agreements, and then only
with respect to not more than 5% of their respective total assets. Liberty Acorn
Fund and Liberty Acorn International have no present intention of investing in
repurchase agreements.

When-Issued and Delayed Delivery Securities; Reverse Repurchase Agreements

The Funds may purchase securities on a when-issued or delayed delivery basis.
Although the payment and interest terms of these securities are established at
the time a Fund 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 Fund makes such commitments only with the intention of actually
acquiring the securities, but may sell the securities before the settlement date
if the Advisor deems it advisable for investment reasons. A Fund may utilize
spot and forward foreign currency exchange transactions to reduce the risk
inherent in fluctuations in the exchange rate between one currency and another
when securities are purchased or sold on a when-issued or delayed delivery
basis.

A Fund may enter into reverse repurchase agreements with banks and securities
dealers. A reverse repurchase agreement is a repurchase agreement in which the
Fund is the seller of, rather than the investor in, securities and agrees to
repurchase them at

15
<PAGE>

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 Fund enters into a binding obligation to purchase securities on a
when-issued basis or enters into a reverse repurchase agreement, assets of the
Fund having a value at least as great as the purchase price of the securities to
be purchased will be segregated on the books of the Fund and held by the
custodian throughout the period of the obligation. The use of these investment
strategies, as well as any borrowing by a Fund, may increase NAV fluctuation.
The Funds have no present intention of investing in reverse repurchase
agreements.

Temporary Strategies

The Funds have the flexibility to respond promptly to changes in market and
economic conditions. In the interest of preserving shareholders' capital, the
Advisor may employ a temporary defensive investment strategy if it determines
such a strategy to be warranted. Pursuant to such a defensive strategy, a Fund
temporarily may hold cash (U.S. dollars, foreign currencies, multinational
currency units) and/or invest up to 100% of its assets in high quality debt
securities or money market instruments of U.S. issuers (or, in the case of
Liberty Acorn Fund, Liberty Acorn International and Liberty Acorn Foreign Forty,
those of foreign issuers), and most or all of the Fund's investments may be made
in the United States and denominated in U.S. dollars. It is impossible to
predict whether, when, or for how long a Fund might employ defensive strategies.

In addition, pending investment of proceeds from new sales of Fund shares or to
meet ordinary daily cash needs, a Fund temporarily may hold cash (U.S. dollars,
foreign currencies, or multinational currency units) and may invest any portion
of its assets in money market instruments.

Line of Credit

Liberty Acorn maintains a line of credit with a group of banks 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. Any borrowings under that line of credit by the Funds
would be subject to each Fund's restrictions on borrowing under "Investment
Policies," above.

TAXES - GENERAL

In this section, all discussions of taxation at the shareholder level relate to
federal taxes only. Consult your tax advisor for state, local and foreign tax
considerations and for information about special tax considerations that may
apply to shareholders that are not natural persons.

Dividends Received Deductions. Distributions will qualify for the corporate
dividends received deduction only to the extent that dividends earned by each
Fund qualify. Any such dividends are, however, includable in adjusted current
earnings for purposes of computing corporate alternative minimum tax. The
dividends received deduction for eligible dividends is subject to a holding
period requirement imposed pursuant to the Taxpayer Relief Act of 1997 (1997
Act).

Dividends paid by Liberty Acorn International and Liberty Acorn Foreign Forty
are generally not eligible for the dividends-received deduction for corporate
shareholders because little or none of those Funds' income consists of dividends
paid by United States corporations. A portion of the dividends paid by Liberty
Acorn Fund, Liberty Acorn USA and Liberty Acorn Twenty is generally eligible for
the dividends-received deduction. Capital gain distributions paid from the Funds
are never eligible for this deduction.

Fund Distributions. Distributions from a Fund (other than exempt-interest
dividends, as discussed below) will be taxable to shareholders as ordinary
income to the extent derived from the Fund's investment income and net short-
term gains. Distributions of net capital gains (that is, the excess of net gains
from capital assets held for more than one year over net losses from capital
assets held for one year or less) will be taxable to shareholders as such,
regardless of how long a shareholder has held shares in the Fund. In general,
any distributions of net capital gains will be taxed at a rate of 20%. As a
result of tax legislation passed in 1997, the maximum long-term capital gains
rate will decrease from 20% to 18% for capital assets that have been held for
more than five years and whose holding periods begin after December 31, 2000.

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<PAGE>

Distributions will be taxed as described above whether received in cash or in
Fund shares. Dividends and distributions on the Funds' shares are generally
subject to federal income tax as described herein to the extent they do not
exceed a Fund's realized income and gains, even though such dividends and
distributions may economically represent a return of a particular shareholder's
investment. Such distributions are likely to occur in respect of shares
purchased at a time when a Fund's net asset value reflects gains that are either
unrealized, or realized but not distributed. Such realized gains may be required
to be distributed even when a Fund's net asset value also reflects unrealized
losses.

Return of Capital Distributions. To the extent that a distribution is a return
of capital for federal tax purposes, it reduces the cost basis of the shares on
the record date and is similar to a partial return of the original investment
(on which a sales charge may have been paid). There is no recognition of a gain
or loss, however, unless the return of capital reduces the cost basis in the
shares to below zero.

U.S. Government Securities. Many states grant tax-free status to dividends paid
to shareholders of mutual funds from interest income earned by the Funds from
direct obligations of the U.S. government. Investments in mortgage-backed
securities (including GNMA, FNMA and FHLMC Securities) and repurchase agreements
collateralized by U.S. government securities do not qualify as direct federal
obligations in most states. Shareholders should consult with their own tax
advisors about the applicability of state and local intangible property, income
or other taxes to their Fund shares and distributions and redemption proceeds
received from a Fund.

Sales of Shares. The sale, exchange or redemption of Fund shares may give rise
to a gain or loss. In general, any gain realized upon a taxable disposition of
shares generally will be treated as long-term capital gain if the shares have
been held for more than one year. Otherwise the gain on the sale, exchange or
redemption of Fund shares will be treated as short-term capital gain. In
general, any loss realized upon a taxable disposition of shares will be treated
as long-term loss if the shares have been held more than one year, and otherwise
as short-term loss. However, any loss realized upon a taxable disposition of
shares held for six months or less will be treated as long-term, rather than
short-term, capital loss to the extent of any long-term capital gain
distributions received by the shareholder with respect to those shares. All or a
portion of any loss realized upon a taxable disposition of shares will be
disallowed if other shares are purchased within 30 days before or after the
disposition. In such a case, the basis of the newly purchased shares will be
adjusted to reflect the disallowed loss.

Backup Withholding. Certain distributions and redemptions may be subject to a
31% backup withholding unless a taxpayer identification number and certification
that the shareholder is not subject to the withholding is provided to Liberty
Acorn. This number and form may be provided by either a Form W-9 or the
accompanying application. In certain instances, LFS may be notified by the
Internal Revenue Service that a shareholder is subject to backup withholding.

Excise Tax. To the extent that a Fund does not annually distribute
substantially all taxable income and realized gains, it is subject to an excise
tax. The Advisor intends to avoid this tax except when the cost of processing
the distribution is greater than the tax.

Tax Accounting Principles. To qualify as a "regulated investment company," each
Fund must (a) derive at least 90% of its gross income from dividends, interest,
payments with respect to securities loans, gains from the sale or other
disposition of stock, securities or foreign currencies or other income
(including but not limited to gains from options, futures or forward contracts)
derived with respect to its business of investing in such stock, securities or
currencies; (b) diversify its holdings so that, at the close of each quarter of
its taxable year, (i) at least 50% of the value of its total assets consists of
cash, cash items, U.S. Government securities, and other securities limited
generally with respect to any one issuer to not more than 5% of the total assets
of the Fund and not more than 10% of the outstanding voting securities of such
issuer, and (ii) not more than 25% of the value of its total assets is invested
in the securities of any issuer (other than U.S. Government securities) and (c)
distribute at least 90% of its ordinary income (inclusive of net short-term
capital gains) earned each year.

Hedging Transactions. If a Fund engages in hedging transactions, including
hedging transactions in options, futures contracts, and straddles, or other
similar transactions, it will be subject to special tax rules (including
constructive sale, mark-to-market, straddle, wash sale, and short sale rules),
the effect of which may be to accelerate income to the Fund, defer losses to the
Fund, cause adjustments in the holding periods of the Fund's securities, convert
long-term capital gains into short-term capital gains or convert short-term
capital losses into long-term capital losses. These rules could therefore affect
the amount, timing and

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<PAGE>

character of distributions to shareholders. Each Fund will endeavor to make any
available elections pertaining to such transactions in a manner believed to be
in the best interests of the Fund and its shareholders.

Options and Futures. If a Fund exercises a call or put option that it holds,
the premium paid for the option is added to the cost basis of the security
purchased (call) or deducted from the proceeds of the security sold (put). For
cash settlement options and futures options exercised by a Fund, 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 Fund is exercised, the premium is included
in the proceeds of the sale of the underlying security (call) or reduces the
cost basis of the security purchased (put). For cash settlement options and
futures options written by a Fund, 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 Fund is 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 Fund writes an equity call option/3/ other than a "qualified covered call
option," as defined in the Internal Revenue Code (the "Code"), any loss on such
option transaction, to the extent it does not exceed the unrealized gains on the
securities covering the option, may be subject to deferral until the securities
covering the option have been sold.

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

For federal income tax purposes, a Fund generally is required to recognize for
each taxable year its net unrealized gains and losses as of the end of the year
on futures, futures options and non-equity options positions ("year-end mark-to-
market"). Generally, any gain or loss recognized with respect to such positions
(either by year-end mark-to-market or by actual closing of the positions) is
considered to be 60% long-term and 40% short-term, without regard to the holding
periods of the contracts. However, in the case of positions classified as part
of a "mixed straddle," the recognition of losses on certain positions (including
options, futures and futures options positions, the related securities and
certain successor positions thereto) may be deferred to a later taxable year.
Sale of futures contracts or writing of call options (or futures call options)
or buying put options (or futures put options) that are intended to hedge
against a change in the value of securities held by a Fund may affect the
holding period of the hedged securities.

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

The imposes 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 or "offsetting notional principal contracts" (as
defined by the Code) with respect to, or futures or "forward contracts" (as
defined by the Code) 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. 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.

------------------------
3 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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<PAGE>

In order for the Funds to continue to qualify for federal income tax treatment
as regulated investment companies, at least 90% of each Fund's 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.

The Funds intend to distribute to shareholders annually any capital gains that
have been recognized for federal income tax purposes (including year-end mark-
to-market gains) on options and futures transactions, together with gains on
other Fund investments, to the extent such gains exceed recognized capital
losses and any net capital loss carryovers of the Funds. Shareholders will be
advised of the nature of such capital gain distributions.

Securities Issued at a Discount. A Fund's investment in debt securities issued
at a discount and certain other obligations will (and investments in securities
purchased at a discount may) require the Fund to accrue and distribute income
not yet received. In such cases, a Fund may be required to sell assets
(including when it is not advantageous to do so) to generate the cash necessary
to distribute as dividends to its shareholders all of its income and gains and
therefore to eliminate any tax liability at the Fund level.

Foreign Currency-Denominated Securities and Related Hedging Transactions. A
Fund's transactions in foreign currencies, foreign currency-denominated debt
securities, certain foreign currency options, futures contracts and forward
contracts (and similar instruments) may give rise to ordinary income or loss to
the extent such income or loss results from fluctuations in the value of the
foreign currency concerned.

Foreign currency gains and losses, including the portion of gain or loss on the
sale of debt securities attributable to foreign exchange rate fluctuations, are
taxable as ordinary income. If the net effect of these transactions is a gain,
the income dividend paid by a Fund will be increased; if the result is a loss,
the income dividend paid by a Fund will be decreased.

If more than 50% of a Fund's total assets at the end of its fiscal year are
invested in stock or securities of foreign corporate issuers, the Fund may make
an election permitting its shareholders to take a deduction or credit for
federal tax purposes for their portion of certain qualified foreign taxes paid
by the Fund. The Advisor will consider the value of the benefit to a typical
shareholder, the cost to a Fund of compliance with the election, and incidental
costs to shareholders in deciding whether to make the election. A shareholder's
ability to claim such a foreign tax credit will be subject to certain
limitations imposed by the Code, including a holding period requirement, as a
result of which a shareholder may not get a full credit for the amount of
foreign taxes so paid by a Fund. Shareholders who do not itemize on their
federal income tax returns may claim a credit (but not a deduction) for such
foreign taxes.

Each of Liberty Acorn International and Liberty Acorn Foreign Forty intends to
meet the requirements of the Code to "pass through" to its shareholders foreign
income taxes paid, but there can be no assurance that it will be able to do so.
Each shareholder will be notified within 60 days after the close of each taxable
year of Liberty Acorn International or Liberty Acorn Foreign Forty, if the
foreign taxes paid by the Fund will "pass through" for that year, and, if so,
the amount of each shareholder's pro rata share (by country) of (i) the foreign
taxes paid, and (ii) the Fund's gross income from foreign sources. Shareholders
who are not liable for federal income taxes, including retirement plans
qualified under Section 401 of the Code, will not be affected by any such "pass
through" of foreign tax credits. Liberty Acorn Fund, Liberty Acorn USA and
Liberty Acorn Twenty do not expect to be able to "pass through" foreign tax
credits.

Investment by a Fund in certain "passive foreign investment companies" could
subject the Fund to a U.S. federal income tax (including interest charges) on
distributions received from the company or on proceeds received from the
disposition of shares in the company, which tax cannot be eliminated by making
distributions to Fund shareholders. However, a Fund may be able to elect to
treat a passive foreign investment company as a "qualified electing fund," in
which case the Fund will be required to include its share of the company's
income and net capital gain annually, regardless of whether it receives any
distribution from the company. Alternatively, a Fund may make an election to
mark the gains (and, to a limited extent, losses) in such holdings "to the
market" as though it had sold and repurchased its holdings in those passive
foreign investment companies on the last day of the Fund's taxable year. Such
gains and losses are treated as ordinary income and loss. The qualified electing
fund and mark-to-market elections may have the effect of accelerating the
recognition of income (without the receipt of cash) and increasing the amount
required to be distributed for a Fund to avoid taxation. Making either of these
elections therefore may

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<PAGE>

require a Fund to liquidate other investments (including when it is not
advantageous to do so) in order to meet its distribution requirement, which also
may accelerate the recognition of gain and affect the Fund's total return.

MANAGEMENT OF THE FUND

Each of the Advisor, LFS and LFD is an indirect wholly owned subsidiary of
Liberty Financial Companies, Inc. (Liberty Financial), which in turn is a direct
majority-owned subsidiary of Liberty Corporate Holdings, Inc., which in turn is
a direct wholly owned subsidiary of LFC Management Corporation, which in turn is
a direct wholly owned subsidiary of LFC Holdings, Inc., which in turn is a
direct wholly owned subsidiary of Liberty Mutual Equity Corporation, which in
turn is a direct wholly owned subsidiary of Liberty Mutual Insurance Company
(Liberty Mutual). Liberty Mutual is an underwriter of workers' compensation
insurance and a property and casualty insurer in the U.S. Liberty Financial's
address is 600 Atlantic Avenue, Boston, MA 02210. Liberty Mutual's address is
175 Berkeley Street, Boston, MA 02117.

Trustees and Officers The officers and trustees of the Trust are:

Position(s) Held
Name and with
Date of Birth Liberty Acorn Principal Occupation(s) During Past Five Years
------------- ------------- ----------------------------------------------
<C> <S> <C>
Irving B. Harris Trustee and Chairman, William Harris Investors, Inc. (investment adviser); Chairman,
8/4/1910 chairman The Harris Foundation (charitable foundation); Chairman of the executive
committee and director, Pittway Corporation (multi-product manufacturer
and publisher) until February 2000.

Ralph Wanger Trustee and Portfolio manager, Liberty WAM and WAM; principal, WAM until September 29,
6/21/1934 president* 2000; president, WAM Ltd. since July 1992; trustee and president, Wanger
Advisors Trust; director, Wanger Investment Company plc.

James H. Lorie Trustee and Vice Retired; Eli B. and Harriet B. Williams Professor of Business
2/23/1922 Chairman Administration Emeritus, University of Chicago Graduate School of
Business; director, Thornburg Mortgage Asset Corp. (REIT) and Santa Fe
Natural Tobacco.

Leo A. Guthart Trustee Executive vice president, Honeywell International (home and building
9/26/1937 control); Chairman, Cylink Corporation (supplier of encryption
equipment); director, AptarGroup, Inc. (producer of dispensing values,
pumps and closures); former chariman of the board of trustees, Hofstra
University; director, Symbol Technologies, Inc. since December 1999;
chairman, Long Island Venture Fund, L.P.

Jerome Kahn, Jr. Trustee President, William Harris Investors, Inc. (investment adviser); director,
4/13/1934 Pittway Corporation (multi-product manufacturer and publisher) until
February 2000.

Steven N. Kaplan Trustee Neubauer Family Professor of Entrepreneurship and Finance, Graduate School
12/21/1959 of Business, University of Chicago; director, ImageMax (provider of
document management products and services); director, divine
interVentures, Inc. (business to business e-commerce).

David C. Kleinman Trustee Adjunct professor of strategic management, University of Chicago Graduate
10/12/1935 School of Business; Business consultant; Chairman of the Board, Irex
Corporation (insulation contractor); Director, Sonic Foundry, Inc.
(software); FirstCom Corp. (competitive local exchange carrier); Organics
Management Company (organic waste processor); Wisconsin Paper & Products
(paper merchant); Plymouth Tube Company (seamless and welded metal
tubing); Member of the advisory board, DSC Logistics Company (warehousing
and logistics services).
</TABLE>

20
<PAGE>

Position(s) Held
Name and with
Date of Birth Liberty Acorn Principal Occupation(s) During Past Five Years
------------- ------------- ----------------------------------------------
<C> <S> <C>
Charles P. McQuaid Trustee and Portfolio manager and director of research, Liberty WAM since July 1992;
8/27/1953 senior vice Principal, WAM from July 1992 to September 29, 2000; trustee and senior
president* vice president, Wanger Advisors Trust.

Roger S. Meier Trustee CEO and Chairman of the Board, AMCO, Inc. (investment and real estate
1/18/1926 management); president, AMCO, Inc. 1986-1999; director, Fred Meyer, Inc.
(retail chain) until 1999; advisory board member, Key Bank of Oregon
(banking); chairman of Investment Counsel and member of Committee of
Legacy Systems (hospital); Executive director and chairman of investment
committee and trustee, Portland Art Museum.

Allan B. Muchin Trustee Partner, Katten, Muchin & Zavis (law firm); director, Alberto-Culver
1/10/1936 Company (toiletries).

Robert E. Nason Trustee Consultant and private investor since 1998; from 1990-1998, Executive
7/29/1936 partner and chief executive officer, member of the executive committee of
Grant Thornton, LLP (public accounting firm) and member of the policy
board of Grant Thornton International; director, Fruit of the Loom, Ltd.
(apparel manufacturer) since February 2000; director, Fairfax Insurance
Limited (privately owned insurance company) since October 1994.

Katherine Schipper Trustee Professor (since September 2000) and visiting Professor of Fuqua School of
10/04/1949 Business, Duke University, since (1999-2000); prior thereto, Professor of
accounting, University of Chicago Graduate School of Business.

Margaret M. Forster Vice President Analyst and portfolio manager, Liberty WAM and WAM since 1994; principal,
1/28/1960 WAM from 1999 to September 29, 2000; assistant professor of finance,
Kellogg Graduate School of Management, Northwestern University, 1993-1994.

Marcel P. Houtzager Vice President Analyst and portfolio manager, Liberty WAM and WAM since 1992; principal,
10/26/1960 WAM from 1995 to September 29, 2000.

Kenneth A. Kalina Assistant Chief financial officer, Liberty WAM and WAM since April 2000; assistant
8/4/1959 Treasurer treasurer, Wanger Advisors Trust; fund controller, Liberty WAM and WAM
since September 1995; prior thereto, treasurer of the Stein Roe Mutual
Funds.

Bruce H. Lauer Vice President, Chief operating officer, Liberty WAM and WAM since April 1995; principal,
7/22/1957 Assistant WAM from January 2000 to September 29, 2000; vice president, treasurer
Secretary and and assistant secretary, Wanger Advisors Trust; director, Wanger
Treasurer Investment Company plc and New Americas Small Cap Fund.

Steven A. Radis Secretary Chief marketing officer and managing director, Liberty WAM and WAM since
8/24/1962 April 1999; prior thereto, vice president of corporate and marketing
communications, Zurich Kemper Life, January 1998 to March 1999, and first
vice president corporate communications, Zurich Kemper Life, January 1987
to December 1997.
</TABLE>

21
<PAGE>

Position(s) Held
Name and with
Date of Birth Liberty Acorn Principal Occupation(s) During Past Five Years
------------- ------------- ----------------------------------------------
<C> <S> <C>
Robert A. Mohn Vice President Analyst and portfolio manager, Liberty WAM and WAM since August 1992;
9/13/1961 principal, WAM from 1995 to September 29, 2000; vice president, Wanger
Advisors Trust.

John H. Park Vice President Analyst and portfolio manager, Liberty WAM and WAM since July 1993;
5/30/1967 principal, WAM from 1998 to September 29, 2000; vice president, Wanger
Advisors Trust.

Roger D. Edgely Vice president Analyst, Liberty WAM and WAM since 1994; director of international
4/18/1955 research, Liberty WAM and WAM since 1998; principal, WAM from January 2000
to September 29, 2000.

Leah J. Zell Vice President Analyst, and portfolio manager, Liberty WAM and WAM since July 1992; vice
5/23/1949 president, Liberty-Wanger Trust; managing director and member of trust
committee, Chai Trust Company.
</TABLE>

*Messrs. McQuaid and Wanger are trustees who are interested persons of Liberty
Acorn as defined in the Act, and of Liberty WAM. Mr. Wanger and Ms. Zell are
married to each other. Messrs. Harris, Lorie, and Wanger are members, and Mr.
McQuaid is an alternate member, of the executive committee, which has authority
during intervals between meetings of the board of trustees to exercise the
powers of the board, with certain exceptions.

The addresses for Mr. Wanger, Mr. McQuaid, Mr. Edgely, Ms. Forster, Mr.
Houtzager, Mr. Kalina, Mr. Lauer, Mr. Mohn, Mr. Park, Mr. Radis and Ms. Zell is
Wanger Asset Management, L.P., 227 West Monroe Street, Suite 3000, Chicago,
Illinois 60606. The address for Messrs. Harris and Kahn is Two North LaSalle
Street, Suite 400, Chicago, Illinois 60602. The address for Messrs. Lorie,
Kaplan, and Kleinman is 1101 East 58th Street, Chicago, Illinois 60637. The
address for Mr. Guthart is 165 Eileen Way, Syosset, New York 11791. The address
for Mr. Meier is 1211 S.W. Fifth Avenue, Portland, Oregon 97204. The address for
Mr. Muchin is 525 W. Monroe Street, Suite 1600, Chicago, Illinois 60661-3693.
The address for Mr. Nason is 567 Rockefeller Road, Lake Forest, Illinois 60045.
The address for Ms. Schipper is Fuqua School of Business, Duke University,
Durham, North Carolina 27708.

During 1999 the Funds paid fees aggregating $448,500 to board members who were
not affiliated with the Advisor. The following table sets forth the total
compensation, (including any amounts deferred, as described below) paid by the
Trust during the fiscal year ended December 31, 1999 to each of the trustees of
the Trust:

22
<PAGE>

Aggregate Comp. From
---------------------------------------------------------------------------
AggregateComp.
Liberty Liberty Liberty Liberty Liberty Acorn from
Name of Trustee Acorn Fund Acorn Int. Acorn USA Acorn Twenty Foreign Forty Fund Complex
-----------------------------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C> <C>
Irving B. Harris 65,503 33,822 5,299 870 506 $106,000
Leo A. Guthart 24,396 12,176 1,928 320 180 $ 39,000
Jerome Kahn, Jr. 25,659 13,196 2,090 348 207 $ 41,500
Steven N. Kaplan* 7,493 4,097 669 134 107 $ 12,500
David C. Kleinman 28,746 14,780 2,345 394 235 $ 46,500
James H. Lorie 25,304 12,235 1,943 323 195 $ 40,000
Charles P. McQuaid 0 0 0 0 0 0
Roger S. Meier 24,387 12,585 1,992 335 201 $ 39,500
Allan B. Muchin 24,387 12,585 1,992 335 201 $ 39,500
Robert E. Nason 25,904 13,387 2,124 364 221 $ 42,000
Katherine Schipper 25,904 13,387 2,124 364 221 $ 42,000
Ralph Wanger 0 0 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
* Elected to the Board of the Trust effective September 28, 1999.

The officers and trustees affiliated with the Advisor serve without any
compensation from the Trust. Liberty Acorn has adopted a deferred compensation
plan (the Plan) for its non-interested trustees. Under the Plan, the trustees
who are not "interested persons" of Liberty Acorn or Liberty WAM (participating
trustees) may defer receipt of all or a portion of their compensation from the
Trust in order to defer payment of income taxes or for other reasons. The
deferred compensation payable to a participating trustee is credited to a book
reserve account as of the business day such compensation would have been paid to
such trustee. The deferred compensation accrues income from the date of credit
in an amount equal to the amount that would have been earned had such deferred
compensation (and all income earned thereon) been invested and reinvested in
shares of one or more of the Funds. If a participating trustee retires, such
trustee may elect to receive payments under the plan in a lump sum or in equal
annual installments over a period of five years. If a participating trustee
dies, any amount payable under the Plan will be paid to that trustee's
beneficiaries. Each Fund's obligation to make payments under the Plan is a
general obligation of that Fund. No Fund is liable for any other Fund's
obligations to make payments under the Plan.

The Agreement and Declaration of Trust (Declaration) of the Trust provides that
the Trust will indemnify its Trustees and officers against liabilities and
expenses incurred in connection with litigation in which they may be involved
because of their offices with the Trust but that such indemnification will not
relieve any officer or Trustee of any liability to the Trust or its shareholders
by reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of his or her duties. The Trust, at its expense, provides liability
insurance for the benefit of its Trustees and officers.

Investment Advisor

Liberty Wanger Asset Management (Liberty WAM) (formerly Wanger Asset Management,
L.P. (WAM)), serves as the investment advisor for the Funds and for other
institutional accounts. As of June 30, 2000, Liberty WAM had approximately $9
billion under management, including the Funds. Liberty WAM and its predecessor
have managed mutual funds, including Liberty Acorn since 1992. WAM was renamed
Liberty WAM on September 29, 2000 when it became a wholly owned subsidiary of
Liberty Financial Companies (Liberty Financial).

23
<PAGE>

As of June 9, 2000, WAM, Wanger Asset Management, Ltd. (WAM's former general
partner), Liberty Financial and WAM Acquisition L.P. (Liberty Sub) entered into
an Agreement and Plan of Merger pursuant to which WAM became a wholly owned
subsidiary of Liberty Financial. Under the Merger Agreement, Liberty Sub merged
with and into WAM. WAM, the surviving entity, was renamed "Liberty Wanger Asset
Management, L.P." WAM, under its new name Liberty WAM, continues to be each
Fund's investment adviser. The portfolio managers who have managed the Funds
continue to manage the Funds after the Merger, following the same investment
strategies and objectives currently in place.

WAM has entered into employment agreements with each of the former principals of
WAM, including the portfolio managers of each of the Funds. Pursuant to the
terms of the employment agreements, these individuals have agreed to remain
employees of Liberty WAM until December 31, 2005. The employment agreement of
each of the portfolio managers includes an agreement by each of them that they
will not, through December 31, 2005 (with certain exceptions) participate in any
other investment management business, or solicit any Liberty WAM client or
employee to end their relationship with Liberty WAM.

Under its Investment Advisory Agreement with the Funds, the Advisor provides the
Fund with discretionary investment services. Specifically, the Advisor is
responsible for supervising and directing the investments of the Fund in
accordance with the Fund's investment objective, program, and restrictions as
provided in the Funds' prospectuses and this SAI. The Advisor is also
responsible for effecting all security transactions on behalf of the Funds,
including the allocation of principal business and portfolio brokerage and the
negotiation of commissions (see "Portfolio Transactions" below). The
Administration Agreement provides for the payment to the Advisor of the fee
described in the Prospectuses.

Under the Administration Agreement, the Advisor is not liable for any error of
judgment or mistake of law or for any loss suffered by the Funds in connection
with the matters to which such Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence in the performance of its
duties or from reckless disregard of its obligations and duties under the
Agreement.

The advisory fees paid to the Advisor by each Fund for the fiscal years ended
December 31, 1999, 1998, and 1997 were as follows:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
Fund 1999 1998 1997
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Liberty Acorn Fund $23,436,860 $24,905,000 $14,349,000
-----------------------------------------------------------------------------------------------------------------------
Liberty Acorn International $15,668,082 $14,124,000 $16,235,000
-----------------------------------------------------------------------------------------------------------------------
Liberty Acorn USA $ 2,805,167 $ 2,336,000 $ 1,199,000
-----------------------------------------------------------------------------------------------------------------------
Liberty Acorn Twenty gross advisory fee: $ 503,457 $ 25,723* ---
exp. reimb: (23,136) (12,202)
------------------------------------- -----------
net advisory fee: $ 480,321 $ 13,521
-----------------------------------------------------------------------------------------------------------------------
Liberty Acorn Foreign Forty gross advisory fee: $ 426,095 $ 11,674* ---
exp. reimb: (42,270) (11,875)
------------------------------------- -----------
net advisory fee: $ 383,825 $ (201)
----------------------------------------------------------------------------------------------------------------------
</TABLE>
* From inception on November 23, 1998.

The administrative fees paid to the Advisor by each Fund for the fiscal years
ended December 31, 1999 and 1998 were as follows:

<TABLE>
<CAPTION>
------------------------------------------------------------------
Fund 1999 1998
------------------------------------------------------------------
<S> <C> <C>
Liberty Acorn Fund $ 1,698,989 $ 1,812,000
------------------------------------------------------------------
Liberty Acorn International 961,025 858,000
------------------------------------------------------------------
Liberty Acorn USA 150,256 124,000
------------------------------------------------------------------
Liberty Acorn Twenty 27,970 1,000*
------------------------------------------------------------------
Liberty Acorn Foreign Forty 22,426 1,000*
------------------------------------------------------------------
</TABLE>

* From inception on November 23, 1998.

Portfolio Transactions

The Advisor places the orders for the purchase and sale of the Funds' portfolio
securities and options and futures contracts. The Advisor's overriding objective
in effecting portfolio transactions is to seek to obtain the best combination of
price and execution. The best net price, giving effect to brokerage commissions,
if any, and other transaction costs, normally is an important factor in this
decision, but a number of other judgmental factors may also enter into the
decision. These include: the Advisor's knowledge of negotiated commission rates
currently available and other current transaction costs; the nature of the
security being traded; the size of the transaction; the desired timing of the
trade; the activity existing and expected in the market for the particular
security; confidentiality; the execution, clearance and settlement capabilities
of the broker or dealer selected and others which are considered; the Advisor's
knowledge of the financial stability of the broker or dealer selected and such
other brokers or

24
<PAGE>

dealers; and the Advisor's knowledge of actual or apparent operational problems
of any broker or dealer. Recognizing the value of these factors, the Funds may
pay a brokerage commission in excess of that which another broker or dealer may
have charged for effecting the same transaction. Evaluations of the
reasonableness of brokerage commissions, based on the foregoing factors, are
made on an ongoing basis by the Advisor's staff while effecting portfolio
transactions. The general level of brokerage commissions paid is reviewed by the
Advisor, and reports are made annually to the Board of Trustees of the Funds.

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

With respect to the Funds' purchases and sales of portfolio securities
transacted with a broker or dealer on a net basis, the Advisor may also consider
the part, if any, played by the broker or dealer in bringing the security
involved to the Advisor's attention, including investment research related to
the security and provided to a Fund. Liberty Acorn has arranged for its
custodian to act as a soliciting dealer to accept any fees available to the
custodian as a soliciting dealer in connection with any tender offer for the
Funds' portfolio securities held by the Funds. 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 National Association of
Securities Dealers.

Beginning in October 2002, the Advisor may use the services of AlphaTrade, Inc.
(ATI), a registered broker-dealer subsidiary of the Advisor, when buying or
selling equity securities for the Fund's portfolio pursuant to procedures
adopted by the Trustees and 1940 Act Rule 17e-1. Under the Rule, the Advisor
must ensure that commissions the Fund pays ATI on portfolio transactions are
reasonable and fair compared to commissions received by other broker-dealers in
connection with comparable transactions involving similar securities being
bought or sold at about the same time. The Advisor will report quarterly to the
Trustees on all securities transactions placed through ATI so that the Trustees
may consider whether such trades complied with these procedures and the Rule.
ATI employs electronic trading methods by which it seeks to obtain best price
and execution for the Fund, and will use a clearing broker to settle
trades.

Administration Agreement

Liberty Acorn has a separate administrative services agreement with the Advisor
under which the Advisor receives a fee, calculated daily and paid monthly, at
the annual rate of 0.05% of each Fund's average daily net assets. Pursuant to
that agreement, Liberty WAM provides certain administrative services to each
Fund, including: (i) maintaining the books and records, including financial and
corporate records, of Liberty Acorn; (ii) supervising the preparation and filing
of registration statements, notices, reports, tax returns and other documents;
(iii) overseeing and assisting in the coordination of the performance of
administrative and professional services rendered to the Funds by others; (iv)
providing administrative office and data processing facilities; (v) developing
and implementing procedures to monitor each Fund's compliance with regulatory
requirements and with

25
<PAGE>

each Fund's investment policies and restrictions; (vi) providing for the
services of employees of Liberty WAM who may be appointed as officers of Liberty
Acorn; and (vii) providing services to shareholders of the Funds. The
Administration Agreement has a one year term. Liberty WAM has the power under
the Administration Agreement to delegate some or all of its responsibilities to
others, at Liberty WAM's expense. Liberty WAM retains responsibility for any
services it delegates. Liberty WAM has delegated some or all of the services
provided pursuant to the Administration Agreement to affiliates of Liberty
Financial.

Principal Underwriter

LFD is the principal underwriter of the Fund's shares. LFD has no obligation to
buy shares, and purchases shares only upon receipt of orders from authorized
financial service firms (FSFs) or investors.

LIBERTY ACORN'S CHARGES AND EXPENSES

The advisory fees the Funds pay to Liberty WAM are calculated daily and paid
monthly, at the annual rates shown below:

<TABLE>
<CAPTION>
Liberty Acorn Fund
Average Daily Net Assets Rate of Fee
------------------------ -------------
<S> <C> <C>
First $700 million 0.75%
$700 million to $2 billion 0.70%
In excess of $2 billion 0.65%

Liberty Acorn International

Average Daily Net Assets Rate of Fee
------------------------ -------------
First $100 million 1.20%
$100 million to $500 million 0.95%
In excess of $500 million 0.75%

Liberty Acorn USA
Average Daily Net Assets Rate of Fee
------------------------ -------------
First $200 million 0.95%
In excess of $200 million 0.90%

Liberty Acorn Twenty
Rate of Fee
------------
All assets 0.90%

Liberty Acorn Foreign Forty
Rate of Fee
------------
All assets 0.95%
</TABLE>

Liberty WAM has voluntarily agreed to reimburse Liberty Acorn Twenty to the
extent the ordinary operating expenses exceed 1.35%, 1.70%, 2.35% and 2.35% of
the average annual net assets for Class Z, Class A, Class B and Class C,
respectively. Liberty WAM has also voluntarily agreed to reimburse Liberty Acorn
Foreign Forty to the extent the ordinary operating expenses exceed 1.45%, 1.80%,
2.45% and 2.45% of the average net assets for Class Z, Class A, Class B and
Classs C, respectively. These arrangements may be modified or terminated by
either Liberty WAM or the Fund on 30 days' notice to the other.

Liberty Acorn has a separate administrative services agreement with Liberty WAM
under which Liberty WAM receives a fee, calculated daily and paid monthly, at
the annual rate of 0.05% of each Fund's average daily net assets.

Under the Fund's transfer agency and shareholder servicing agreement, the Funds
pay LFS a monthly fee at the annual rate of .07% of the average daily closing
value of the total net assets for the Class A, Class B and Class C Shares and
certain specified fees on a per account basis, plus certain out-of-pocket
expenses. The Funds also pay LFS a monthly fee for the Class Z shares based on
specified transactions on a per account basis, plus certain out-of-pocket
expenses.

26
<PAGE>

Ownership of the Fund

At August 31, 2000, the only persons known to own of record or beneficially 5%
or more of the outstanding shares of any Fund were:

<TABLE>
<CAPTION>
Percentage of
Outstanding
Name and Address Fund Shares Held
---------------- ---- -----------
<S> <C> <C>
Charles Schwab & Co. Inc./(1)/ Acorn Fund 7.3%
101 Montgomery Street Acorn International 19.7%
San Francisco, CA 94101-4122 Acorn USA 19.3%
Acorn Twenty 10.8%
Acorn Foreign Forty 19.1%

National Financial Services Corp./(1)/ Acorn Fund 8.1%
P.O. Box 3908 Acorn International 8.8%
Church Station Acorn USA 5.5%
New York, NY 10008-3908 Acorn Twenty 6.4%
Acorn Foreign Forty 12.7%

State of Illinois Deferred Acorn Fund 11.5%
Compensation Plan/(2)/
604 Stratton Office Bldg
Springfield, IL 62706-0001

Irving Harris/(3)/ Acorn Foreign Forty 6.6%
2 N. LaSalle Street
Suite 400
Chicago, IL 60602
</TABLE>

(1) Shares are held of record on behalf of customers, and not beneficially.
(2) Shares are held of record on behalf of plan participants, and not
beneficially.
(3) Includes shares over which Mr. Harris has indirect power to vote and
dispose, but no economic beneficial interest.

At August 31, 2000, the trustees and officers of Liberty Acorn as a group owned
beneficially 1.2% of the outstanding shares of Liberty Acorn Fund, 1.6% of the
outstanding shares of Liberty Acorn International, less than 1% of the
outstanding shares of Liberty Acorn USA, 3.4% of the outstanding shares of
Liberty Acorn Twenty, and 7.7% of the outstanding shares of Liberty Acorn
Foreign Forty. This includes shares held in the Liberty WAM profit sharing plan.
Mr. McQuaid, a trustee of Liberty Acorn, is a trustee of the plan, and has
beneficial interest by virtue of having voting discretion over the shares held
in the plan.

12b-1 Plan, Contingent Deferred Sales Charges and Conversion of Shares

Each Fund offers four classes of shares - Class A, Class B, Class C and Class Z.
Each Fund may in the future offer other classes of shares. The Trustees have
approved a 12b-1 Plan (Plan) pursuant to Rule 12b-1 under the Act for each Class
except Class Z. Under the Plan, each Fund pays LFD service and distribution fees
at the annual rates described in the Prospectus for that Funds' Class A, Class B
and Class C shares. LFD may use the entire amount of such fees to defray the
cost of commissions and service fees paid to FSFs and for certain other
purposes. Since the distribution and service fees are payable regardless of
LFD's expenses, LFD may realize a profit from the fees. The Plan authorizes any
other payments by the Funds to LFD and its affiliates (including the Advisor)
with respect to the Class A, B and C Shares to the extent that such payments
might be construed to be indirect financing of the distribution of those shares.

The Trustees believe 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 Fund
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 Trustees who are not interested persons of the Trust and
have no direct or indirect financial interest in the operation of the Plan or in
any agreements related to the Plan (Independent Trustees), cast in person at a
meeting called for the purpose of voting on the Plan. The Plan may not be
amended to increase the fee materially without approval by 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
vote of

27
<PAGE>

a majority of the independent Trustees or by vote of a majority of the
outstanding voting securities of the relevant class of shares. The continuance
of the Plan will only be effective if the selection and nomination of the
Trustees who are not interested persons of the Trust is effected by such
disinterested Trustees.

Class A shares are offered at net asset value plus varying sales charges which
may include a Contingent Deferred Sales Charge (CDSC). Class B shares are
offered at net asset value and are subject to a CDSC if redeemed within six
years after purchase. Class C shares are offered at net asset value and are
subject to a 1.00% CDSC on redemptions within three years after purchase. Class
Z shares are offered at net asset value and are not subject to a CDSC. The CDSCs
are described in the Prospectus.

No CDSC will be imposed on shares derived from reinvestment of distributions or
amounts representing capital appreciation. In determining the applicability and
rate of any CDSC, 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 period of time.

CODE OF ETHICS

The 1940 Act and rules thereunder require that the Trust and Liberty WAM
establish standards and procedures for the detection and prevention of certain
conflicts of interest, including activities by which persons having knowledge of
the investments and investment intentions of the Funds might take advantage of
that knowledge for their own benefit. The Trust, Liberty WAM and LFD each have
adopted Code of Ethics to meet those concerns and legal requirements. Although
the Codes do not prohibit employees who have knowledge of the investments and
investment intentions of the Funds from engaging in personal securities
investing, they do regulate such personal securities investing by these
employees as a part of the effort by the Trust and WAM to detect and prevent
conflicts of interest.

CUSTODIAN

State Street Bank and Trust Company, P.O. Box 8502, Boston Massachusetts 02266-
8502 ("State Street") is the custodian of the assets of the Funds. It is
responsible for holding all securities and cash of the Funds, receiving and
paying for securities purchased, delivering against payment securities sold,
receiving and collecting income from investments, making all payments covering
expenses of the Funds, and performing other administrative duties, all as
directed by authorized persons of the Funds. State Street does not exercise any
supervisory function in such matters as purchase and sale of portfolio
securities, payment of dividends, or payment of expenses of the Funds. The Funds
have authorized State Street to deposit certain portfolio securities of the
Funds in central depository systems as permitted under federal law. The Funds
may invest in obligations of State Street and may purchase or sell securities
from or to State Street.

INDEPENDENT AUDITORS

Ernst & Young LLP, located at Sears Tower, 233 South Wacker Drive, Chicago, IL
60606, are the Fund's independent auditors providing audit services, tax return
review, other tax consulting services, and assistance and consultation in
connection with the review of various SEC filings.

DETERMINATION OF NET ASSET VALUE

The Fund determines net asset value (NAV) per share for each class as of the
close of the New York Stock Exchange (Exchange) (normally 4:00 p.m. Eastern
time), each day the Exchange is open. Currently, the Exchange is closed
Saturdays, Sundays and the following holidays: New Year's Day, Martin Luther
King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving and Christmas.

Liberty Acorn Fund, Liberty Acorn International and Liberty Acorn Foreign Forty
may invest in securities which are primarily listed on foreign exchanges that
are open and allow trading on days on which the Funds do not determine NAV. This
may significantly affect the NAV of Liberty Acorn Fund, Liberty Acorn
International and Liberty Acorn Foreign Forty'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,

28
<PAGE>

in circumstances where such prices are not available or where the Advisor 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 Funds'
Trustees. The values of foreign securities quoted in foreign currencies are
translated into U.S. dollars at the exchange rate for that day. Fund positions
for which there are no such valuations and other assets are valued at a fair
value as determined by the Advisor in good faith under the direction of the
Funds' Trustees.

Generally, trading in certain securities (such as foreign securities) is
substantially completed each day at various times prior to the close of the
Exchange. Trading on certain foreign securities markets may not take place on
all business days in New York, and trading on some foreign securities markets
takes place on days which are not business days in New York and on which the
Fund's NAV is not calculated. The values of these securities used in
determining the NAV 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 quotations collected earlier in the day at the latest
practicable time prior to the close of the Exchange. Occasionally, events
affecting the value of such securities may occur between such times and the
close of the Exchange which will not be reflected in the computation of the
Funds' NAV. 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 Funds' Trustees.

HOW TO BUY SHARES

The Prospectuses contain a general description of how investors may buy shares
of the Funds and tables of charges. This SAI contains additional information
which may be of interest to investors.

The Funds will accept unconditional orders for shares to be executed at the
public offering price based on the NAV per share next determined after the order
is placed in good order. The public offering price is the NAV plus the
applicable sales charge, if any. In the case of orders for purchase of shares
placed through FSFs, the public offering price will be determined on the day the
order is placed in good order, but only if the FSF receives the order prior to
the time at which shares are valued and transmits it to a Fund before the Fund
processes that day's transactions. If the FSF fails to transmit before a 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. If the FSF
receives the order after the time at which a Fund values its shares, the price
will be based on the NAV determined as of the close of the Exchange on the next
day it is open. If funds for the purchase of shares are sent directly to LFS,
they will be invested at the public offering price next determined after receipt
in good order. Payment for shares of a Fund must be in U.S. dollars; if made by
check, the check must be drawn on a U.S. bank. Checks presented for the
purchase of shares of a Fund which are returned by the purchaser's bank will
subject the purchaser to a $15 service fee for each check returned.

Each Fund receives the entire NAV of shares sold. For shares subject to an
initial sales charge, LFD's commission is the sales charge shown in the Funds'
Prospectuses less any applicable FSF discount. The FSF discount is the same for
all FSFs, except that LFD retains the entire sales charge on any sales made to a
shareholder who does not specify a FSF on the Investment Account Application
("Application"), and except that LFD may from time to time reallow additional
amounts to all or certain FSFs. LFD generally retains some or all of any asset-
based sales charge (distribution fee) or contingent deferred sales charges.
Such charges generally reimburse LFD for any up-front and/or ongoing commissions
paid to FSFs.

LFS 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
will receive the applicable sales commission. Shareholders may change FSFs at
any time by written notice to LFS, provided the new FSF has a sales agreement
with LFD.

Shares credited to an account are transferable upon written instructions in good
order to LFS and may be redeemed as described under General Information
Regarding Buying and Selling Shares in the Prospectuses. Certificates will not
be issued for Class A shares unless specifically requested and no certificates
will be issued for Class B, C or Z shares. Shareholders may send any
certificates which have been previously acquired to LFS for deposit to their
account.

29
<PAGE>

LFD may, at its expense, provide special sales incentives (such as cash payments
in addition to the commissions specified in the Funds' SAI) to FSFs that agree
to promote the sale of shares of the Funds or other funds that LFD distributes.
At its discretion, the Distributor may offer special sales incentives only to
selected FSFs or to FSFs who have previously sold or expect to sell significant
amounts of the Funds' shares.

SPECIAL PURCHASE PROGRAMS/INVESTOR SERVICES

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

Automatic Investment Plan. As a convenience to investors, shares of any Fund may
be purchased through the Automatic Investment Plan. Pre-authorized 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 LFD
receives the proceeds from the draft (normally the 5th or the 20th of each
month, or the next business day thereafter). If your Automatic Investment Plan
purchase is by electronic funds transfer, you may request the Automatic
Investment Plan purchase for any day. Further information and application forms
are available from FSFs or from LFD.

Tax-Sheltered Retirement Plans. LFD offers prototype tax-qualified plans,
including IRAs, and Pension and Profit-Sharing Plans for individuals,
corporations, employees and the self-employed. The minimum initial Retirement
Plan investment is $1,000. Investors Bank & Trust Company is the Trustee of LFD
prototype plans and charges a $15 annual fee. Detailed information concerning
these Retirement Plans and copies of the Retirement Plans are available from
LFD.

Participants in non-LFD prototype Retirement Plans (other than IRAs) also are
charged a $15 annual fee unless the plan maintains an omnibus account with LFS.
Participants in LFD prototype Plans (other than IRAs) who liquidate the total
value of their account will also be charged a $15 close-out processing fee
payable to LFS. The fee is in addition to any applicable CDSC. The fee will
not apply if the participant uses the proceeds to open a LFD 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 LFS, shareholders, beneficiaries
or their FSFs 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.

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

Rights of Accumulation (Class A and Class B only). Reduced sales charges on
Class A, and B shares can be effected by combining a current purchase with prior
purchases of shares of the Liberty funds. The applicable sales charge is based
on the combined total of:

30
<PAGE>

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 fund shares held by the shareholder or donor
(except Class A 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).

LFD 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 or donor's holdings by LFS. The Fund may
terminate or amend this Right of Accumulation.

Statement of Intent (Class A only). Any person may qualify for reduced sales
charges on purchases of Class A shares made within a thirteen-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
Liberty fund shares held by the shareholder on the date of the Statement in
Liberty funds (except Class A 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, LFS 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 a 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 applicable offering price. As a part of this
adjustment, the FSF shall return to LFD the excess commission previously paid
during the thirteen-month period. If the amount of the Statement is not
purchased, the shareholder shall remit to LFD 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 twenty days after a written request to pay such
difference in sales charge, LFS will redeem that number of escrowed Class A
shares to equal such difference. The additional amount of FSF discount from the
applicable offering price shall be remitted to the shareholder's FSF of record.

Additional information about and the terms of Statements of Intent are available
from your FSF, or from LFS 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 a Fund at the NAV next determined after LFS
receives a written reinstatement request and payment. Any CDSC 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 CDSC or conversion date.
Investors who desire to exercise this privilege should contact their FSF or LFS.
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 Employees or Financial Service Firms. Class A shares of the Funds
may be sold at NAV to the following individuals whether currently employed or
retired: Trustees of funds advised or administered by the Advisor; directors,
officers and employees of the Advisor, LFD and other companies affiliated with
the Advisor; registered representatives and employees of FSFs (including their
affiliates) that are parties to dealer agreements or other sales arrangements
with LFD; and such persons' families and their beneficial accounts.

Sponsored Arrangements. Class A shares of the Funds 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

31
<PAGE>

solicitation of, its employees, members or participants in connection with the
purchase of shares of the Funds 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, 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 Funds reserve the right to revise the terms of or to suspend or
discontinue sales pursuant to sponsored plans at any time.

Class A shares of the Funds may also be purchased at reduced or no sales charge
by clients of dealers, brokers or registered investment advisors that have
entered into agreements with LFD pursuant to which a Fund is included as an
investment option in programs involving fee-based compensation arrangements and
by participants in certain retirement plans.

Waiver of Contingent Deferred Sales Charges (CDSCs) (Classes B and C shares).
CDSCs may be waived on redemptions in the following situations with the proper
documentation:

1. Death. CDSCs 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 CDSC 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 CDSC, when redeemed from the
transferee's account. If the account is transferred to a new registration
and then a redemption is requested, the applicable CDSC will be charged.

2. Systematic Withdrawal Plan (SWP). CDSCs may be waived on redemptions
--------------------------------
occurring pursuant to a monthly, quarterly or semi-annual SWP established
with LFS, 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 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, CDSCs 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. CDSCs 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
registration and then a redemption is requested, the applicable CDSC will
be charged.

4. Death of a trustee. CDSCs 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 CDSC will be
charged upon any subsequent redemption.

5. Returns of excess contributions. CDSCs may be waived on redemptions
-------------------------------
required to return excess contributions made to retirement plans or IRAs,
so long as the FSF agrees to return the applicable portion of any
commission paid by LFD.

6. Qualified Retirement Plans. CDSCs may be waived on redemptions required to
--------------------------
make distributions from qualified retirement plans following normal
retirement (as stated in the Plan document). CDSCs also will be waived on
SWP redemptions made to make required minimum distributions from qualified
retirement plans that have invested in funds distributed by LFD for at
least two years.

The CDSC also may be waived where the FSF agrees to return all or an agreed upon
portion of the commission earned on the sale of the shares being redeemed.

32
<PAGE>

HOW TO SELL SHARES

Shares may also be sold on any day the Exchange is open, either directly to the
Funds or through the shareholder's FSF. 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, Liberty Acorn will
delay sending proceeds for up to 15 days in order to protect the Funds against
financial losses and dilution in net asset value caused by dishonored purchase
payment checks.

To sell shares directly to the Funds, send a signed letter of instruction or
stock power form to LFS, along with any certificates for shares to be sold. The
sale price is the net asset value (less any applicable contingent deferred sales
charge) next calculated after the Funds receive the request in proper form.
Signatures on some redemption requests must be guaranteed by a bank, a member
firm of a national stock exchange or another eligible guarantor institution, as
described in the prospectus. Stock power forms are available from FSFs, LFS, and
many banks. Additional documentation is required for sales by corporations,
agents, fiduciaries, surviving joint owners and IRA holders. Call LFS for more
information 1-800-345-6611.

FSFs must receive requests before the time at which the Funds' shares are valued
to receive that day's price, are responsible for furnishing all necessary
documentation to LFS and may charge for this service.

Systematic Withdrawal Plan

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 Funds designated by the
shareholder will be paid monthly, quarterly or semi-annually 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 of the 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 shares of the Funds in the shareholder's
account. No CDSCs 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 Service regulation to withdraw more than 12%, on an
annual basis, of the value of their Class B and C share account may do so but
will be subject to a CDSC 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 of the shareholder's income dividends and other distributions payable in
shares of the Funds rather than in cash.

A shareholder or a shareholder's FSF 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.

A shareholder may not establish a SWP if the shareholder holds shares in
certificate form. 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 the Funds
(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.

Liberty Acorn 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 or incapacity of a shareholder. Until this
evidence is received, LFS 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.

33
<PAGE>

Shareholders whose positions are held in "street name" by certain FSFs 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 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.

Fast Cash. As a convenience to investors, a shareholder is automatically
eligible to redeem up to $100,000 from the shareholder's account in a 30-day
period and have it mailed to the shareholder's address of record. This service
is not available within 30 days of an address change. Shareholders wishing to
avail themselves of this service, should complete the appropriate section of the
Application.

HOW TO EXCHANGE SHARES

Exchanges at net asset value may be made at any time from any other continuously
offered fund distributed by LFD into shares of the same class of a Fund. The
Class A and B shares of the Funds may be exchanged for the same class of shares
of any other continuously offered funds distributed by LFD (with certain
exceptions) on the basis of the NAVs per share at the time of exchange and only
once per twelve-month period measured from the time the account was opened. The
Class C shares of the Funds may be exchanged for the same class of shares of any
other continuously offered funds distributed by LFD but only one "roundtrip"
exchange of such Class may be made per three-month period, measured from the
date of the initial purchase. The Class Z shares of the Funds may be exchanged
for the Class A or Class Z shares of any other fund distributed by LFD (with
certain exceptions). The prospectus of each fund distributed by LFD describes
its investment objective and policies, and shareholders should obtain a
prospectus and consider these objectives and policies carefully before
requesting an exchange. Shares of certain funds distributed by LFD are not
available to residents of all states. Consult LFS before requesting an
exchange.

By calling LFS, shareholders or their FSF 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 LFS by telephone to exercise
the telephone exchange privilege. Because an exchange involves a redemption and
reinvestment in another Liberty fund, completion of an exchange may be delayed
under unusual circumstances, such as if the fund suspends repurchases or
postpones payment for the fund shares being exchanged in accordance with federal
securities law. LFS will also make exchanges upon receipt of a written exchange
request and, share certificates, if any. If the shareholder is a corporation,
partnership, agent, or surviving joint owner, LFS will require customary
additional documentation. Prospectuses of the other funds are available from
the LFD Literature Department by calling 1-800-426-3750.

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 generally a sale transaction for federal income tax purposes and
may result in capital gain or loss. The exchange privilege may be revised,
suspended or terminated at any time.

34
<PAGE>

SUSPENSION OF REDEMPTIONS

Liberty Acorn may suspend shareholders' right of redemption or postpone payment
for more than seven days (i) if the Exchange is closed for other than customary
weekends or holidays, (ii) during certain periods when trading on the Exchange
is restricted, (iii) during any emergency which makes it impracticable for the
Funds to dispose of their securities or to determine fairly the value of its net
assets, or (v) during any other period permitted by order of the SEC for
protection of investors.

SHAREHOLDER LIABILITY

Under Massachusetts law, shareholders could, under certain circumstances, be
held personally liable for the obligations of the Trust. However, the
Declaration disclaims shareholder liability for acts or obligations of the Funds
and the Trust and requires that notice of such disclaimer be given in each
agreement, obligation, or instrument entered into or executed by the Funds or
the Trust's Trustees. The Declaration provides for indemnification out of a
Fund's property for all loss and expense of any shareholder held personally
liable for the obligations of a Fund. Thus, the risk of a shareholder incurring
financial loss on account of shareholder liability is limited to circumstances
(which are considered remote) in which a Fund would be unable to meet its
obligations and the disclaimer was inoperative.

The risk of a particular Fund incurring financial loss on account of another
Fund is also believed to be remote, because it would be limited to
circumstances in which the disclaimer was inoperative and the other Fund was
unable to meet its obligations.

SHAREHOLDER MEETINGS

As described under the caption "Organization and History," Liberty Acorn will
not hold annual shareholders' meetings. The Trustees may fill any vacancies in
the Board of Trustees except that the Trustees may not fill a vacancy if,
immediately after filling such vacancy, less than two-thirds of the Trustees
then in office would have been elected to such office by the shareholders. In
addition, at such times as less than a majority of the Trustees then in office
have been elected to such office by the shareholders, the Trustees must call a
meeting of shareholders for the purpose of electing trustees. Trustees may be
removed from office, with or without cause, by a vote of the holders of two-
thirds of the outstanding shares at a meeting duly called for the purpose.
Except as otherwise disclosed in the Prospectuses and this SAI, the Trustees
shall continue to hold office and may appoint their successors.

At any shareholders' meetings that may be held, shareholders of all Funds would
vote together, irrespective of Fund, on the election of Trustees or the
selection of independent accountants, but each Fund would vote separately from
the others on other matters, such as changes in the investment policies of that
Fund or the approval of the management agreement for that Fund.

PERFORMANCE MEASURES AND INFORMATION

Total Return

Standardized total return and average annual total return. Total return on a
per share basis is the amount of dividends received per share plus or minus the
change in the net asset value per share for a given period. Total return
percentage may be calculated by dividing the value of a share at the end of a
given period by the value of the share at the beginning of the period and
subtracting one. Average annual total return is the actual return on a $1,000
investment in a particular class of shares of each Fund, made at the beginning
of a stated period, adjusted for the maximum sales charge or applicable CDSC for
the class of shares of each Fund and assuming that all distributions were
reinvested at NAV, converted to an average annual return assuming annual
compounding. For example, the Total Return and Average Total Return on a $1,000
investment in Class Z shares of each Fund for the following periods ended
December 31, 1999 were:

LIBERTY ACORN FUND
------------------ Average Annual
Total Return Total Return
-------------- --------------

1 year............................ 33.38% 33.38%
5 years........................... 161.63% 21.21%

35
<PAGE>

10 years.......................... 383.77% 17.07%
Life of Fund (inception 6/10/70).. 10,672.60% 17.14%

LIBERTY ACORN INTERNATIONAL
--------------------------- Average Annual
Total Return Total Return
-------------- --------------

1 year............................ 79.19% 79.19%
3 years........................... 107.22% 27.49%
5 years........................... 172.34% 22.19%

Life of Fund (inception 9/23/92).. 317.61% 21.71%

LIBERTY ACORN USA
----------------- Average Annual
Total Return Total Return
-------------- ---------------

1 Year............................ 23.02% 23.02%
3 Years........................... 72.18% 19.86%

Life of Fund (inception 9/4/96)... 100.59% 23.28%

LIBERTY ACORN TWENTY
--------------------
Average Annual
Total Return Total Return
-------------- ---------------

1 Year............................ 29.30% 29.30%

Life of Fund (inception 11/23/98). 38.48% 34.20%

LIBERTY ACORN FOREIGN FORTY
---------------------------
Average Annual
Total Return Total Return
-------------- ---------------

1 Year............................ 81.60% 81.60%

Life of Fund (inception 11/23/98). 99.75% 86.84%

Nonstandardized total return. Nonstandardized total returns may differ from
standardized average annual total returns in that they may relate to
nonstandardized periods, represent aggregate rather than average annual total
returns or may not reflect the sales charge or CDSC.

Total return for a newer class of shares for periods prior to their inception
includes (a) the performance of the newer class of shares since inception and
(b) the performance of the oldest existing class of shares from its inception
date up to the date the newer class was offered for sale. The performance will
not be adjusted to take into account the fact that the newer class of shares
bears different class specific expenses than the oldest class of shares (e.g.,
Rule 12b-1 fees). Therefore, the total rate of return quoted for a newer class
of shares will differ from the return that would be quoted had the newer class
of shares been outstanding for the entire period over which the calculation is
based (i.e., the total rate of return quoted for the newer class will be higher
than the return that would have been quoted had the newer class of shares been
outstanding for the entire period over which the calculation is based if the
class specific expenses for the newer class are higher than the class specific
expenses of the oldest class, and the total rate of return quoted for the newer
class will be lower than the return that would be quoted had the newer class of
shares been outstanding for this entire period if the class specific expenses
for the newer class are lower than the class specific expenses of the oldest
class).

For example, the Average Total Return on a $1,000 investment in Class Z shares
of each Fund restated to reflect the effects of charges of the Class A, Class B
and Class C shares, respectively, for the following periods ended December 31,
1999 are:

36
<PAGE>

<TABLE>
<CAPTION>
Average Annual
LIBERTY ACORN FUND Total Return
------------------ ---------------
Class A Class B Class C
----------- ---------- ----------
<S> <C> <C> <C>

1 Year............................ 25.71% 28.38% 32.38%
5 years........................... 19.78% 21.02% 21.21%
10 years.......................... 16.38% 17.07% 17.07%

Average Annual
LIBERTY ACORN INTERNATIONAL Total Return
--------------------------- --------------
Class A Class B Class C
----------- ---------- ----------
1 year............................ 68.89% 74.19% 78.19%
5 years........................... 20.75% 22.01% 22.19%
Life of Fund (inception 9/23/92).. 20.72% 21.71% 21.71%

Average Annual
LIBERTY ACORN USA Total Return
----------------- ---------------
Class A Class B Class C
----------- ---------- ----------
1 Year............................ 15.95% 18.02% 22.02%
3 Years........................... 17.51% 19.16% 19.86%
Life of Fund (inception 9/4/96)... 21.10% 22.72% 23.28%

Average Annual
LIBERTY ACORN TWENTY Total Return
-------------------- ---------------
Class A Class B Class C
----------- ---------- ----------
1 Year............................ 21.87% 24.30% 28.30%
Life of Fund (inception 11/23/98). 27.20% 30.69% 34.20%

Average Annual
LIBERTY ACORN FOREIGN FORTY Total Return
--------------------------- ---------------
Class A Class B Class C
----------- ---------- ----------
1 Year............................ 71.16% 76.60% 80.60%
Life of Fund (inception 11/23/98). 77.11% 83.46% 86.84%
</TABLE>
37
<PAGE>

Tax-Related Illustrations.

The Funds may also quote after tax total returns and tax efficiency. After-tax
returns show the Funds' annualized after-tax total returns for the time period
specified. After-tax returns with redemptions show the Funds' annualized after-
tax total return for the time period specified plus the tax effects of selling
your shares of the Funds at the end of the period. To determine these figures,
all income, short-term capital gain distributions, and long-term capital gain
distributions are assumed to have been taxed at the actual historical maximum
tax rate. Those maximum tax rates are applied to distributions prior to
reinvestment and the after-tax portion is assumed to have been reinvested in the
Funds. State and local taxes are ignored.

Tax Efficiency is derived by dividing after-tax returns by pretax returns. The
highest possible score would be 100%, which would apply to a Fund that had no
taxable distributions. Because many interrelated factors affect tax efficiency,
it is difficult to predict tax efficiency.

Actual after-tax returns depend on a shareholder's tax situation and may differ
from those shown. After-tax returns reflect past tax-effects and are not
predictive of future tax effects.

As of December 31, 1999, the After-Tax Average Annual Total Return on a $1,000
investment in Class Z shares of each Fund for the following periods were:

LIBERTY ACORN FUND
------------------ After-tax With
After-tax Redemption
----------- ---------------
1 Year............................ 28.54% 24.08%
5 Years........................... 18.14% 16.80%
10 Years.......................... 14.72% 13.78%

LIBERTY ACORN FUND'S TAX EFFICIENCY
-----------------------------------

1 Year............................ 85.50%
5 Years........................... 85.53%
10 Years.......................... 86.28%

LIBERTY ACORN INTERNATIONAL
--------------------------- After-tax With
After-tax Redemption
---------- ----------------
1 year............................ 77.00% 49.13%
5 years........................... 21.18% 18.42%
Life of Fund (inception 9/23/92).. 20.98% 18.58%

LIBERTY ACORN INTERNATIONAL'S TAX EFFICIENCY
--------------------------------------------

1 Year............................ 97.23%
5 Years........................... 95.45%
Life of Fund (inception 9/23/92).. 96.55%

38
<PAGE>

LIBERTY ACORN USA
----------------- After-tax With
After-tax Redemption
--------- --------------
1 year................................. 21.01% 15.61%
3 years................................ 18.17% 15.90%
Life of Fund (inception 9/4/96)........ 21.17% 18.94%

LIBERTY ACORN USA'S TAX EFFICIENCY
----------------------------------

1 Year................................. 91.27%
3 Years................................ 91.49%
Life of Fund (inception 9/4/96)........ 90.74%

LIBERTY ACORN TWENTY
--------------------
After-tax With
After-tax Redemption
--------- --------------

1 year................................. 28.75% 17.70%
Life of Fund (inception 11/23/98)...... 33.68% 27.17%

LIBERTY ACORN TWENTY'S TAX EFFICIENCY
-------------------------------------

1 Year................................. 98.12%
Life of Fund (inception 11/23/98)...... 97.79%

LIBERTY ACORN FOREIGN FORTY
---------------------------
After-tax With
After-tax Redemption
--------- --------------

1 year................................. 81.43% 49.26%
Life of Fund (inception 11/23/98)...... 86.70% 69.80%

LIBERTY ACORN FOREIGN FORTY'S TAX EFFICIENCY
--------------------------------------------

1 Year................................. 99.79%
Life of Fund (inception 11/23/98)...... 99.00%

Performance results reflect any voluntary fee waivers or reimbursement of Fund
expenses by the Advisor or its affiliates. Absent these fee waivers or expense
reimbursements, performance results would have been lower.

The Funds may also use statistics to indicate volatility or risk. The premise of
each of these measures is that greater volatility connotes greater risk
undertaken in achieving performance. The Funds may quote the following measures
of volatility:

39
<PAGE>

Beta. Beta is the volatility of a fund's total return relative to the movements
----
of a benchmark index. A beta greater than one indicates volatility greater than
the index, and a beta of less than one indicates a volatility less than the
index.

R-squared. R-squared reflects the percentage of a fund's price movements that
---------
are explained by movements in the benchmark index. An R-squared of 1.00
indicates that all movements of a fund's price are completely explained by
movements in the index. Generally, a higher R-squared will indicate a more
reliable beta figure.

Alpha. Alpha is a measure used to discuss a fund's relative performance. Alpha
-----
measures the actual return of a fund compared to the expected return of a fund
given its risk (as measured by beta). The expected return of a fund is based on
how historical movements of the benchmark index and historical performance of a
fund compare to the benchmark index. The expected return is computed by
multiplying the advance or decline in a market represented by a fund's beta. A
positive alpha quantifies the value that a fund manager has added and a negative
alpha quantifies the value that a fund manager has lost.

Standard deviation. Standard deviation quantifies the volatility in the returns
------------------
of a Fund by measuring the amount of variation in the group of returns that make
up a Fund's average return. Standard deviation is generally calculated over a
three or five year period using monthly returns and modified to present on
annualized standard deviation.

Sharpe ratio. A Fund's Sharpe ratio quantifies its total return in excess of
------------
the return of a guaranteed investment (90 day U.S. treasury bills), relative to
its volatility as measured by its standard deviation. The higher a Fund's
Sharpe ratio, the better a Fund's returns have been relative to the amount of
investment risk it has taken.

Beta and R-squared are calculated by performing a least squares linear
regression using three years of monthly total return figures for each portfolio
and benchmark combination. Alpha is calculated by taking the difference between
the average monthly portfolio return and the beta-adjusted average monthly
benchmark return. The result of this calculation is then geometrically
annualized.

As of December 31, 1999, some statistics for the Class Z shares of the Funds are
as follows:

R/2/ Beta Alpha
-- ---- ------
Liberty Acorn Fund
------------------
vs. S&P 500 0.61 0.87 -2.26%
vs. Russell 2000 0.92 0.83 6.50%

Liberty Acorn International
---------------------------
vs. EMI Ex U.S. 0.63 1.01 14.43%
vs. EAFE 0.56 0.83 10.95%

Other measures of volatility and relative performance may be used as
appropriate. All such measures will fluctuate and do not represent future
results.

Performance Depictions and Comparisons. In advertising and sales literature,
each Fund's performance may be compared with those of market indexes and other
mutual funds. In addition to the performance information described above, a
Fund might use comparative performance as computed in a ranking or rating
determined by Lipper, Inc., an independent service that monitors the performance
of mutual funds, Morningstar, Incorporated or another service.

Each Fund may also refer to quotations, graphs and electronically transmitted
data from sources believed by the Advisor or LFD to be reputable, and
publications in the press pertaining to the Fund's performance or to the Advisor
or its affiliates, including comparisons with competitors and matters of
national and global economic and financial interest. Examples include Forbes,
Business Week, Money Magazine, The Wall Street Journal, The New York Times, The
Boston Globe, Barron's National Business & Financial Weekly, Financial Planning,
Changing Times, Reuters Information Services, Wiesenberger Mutual Funds
Investment

40
<PAGE>

Report, Lipper Analytical Services Corporation, Morningstar, Inc., Sylvia
Porter's Personal Finance Magazine, Money Market Directory, SEI Funds Evaluation
Services, FTA World Index, Disclosure Incorporated, Bloomberg and Ibbotson.

All data are based on past performance and do not predict future results.

General. From time to time, each Fund may discuss or quote its current
portfolio manager(s) as well as other investment personnel, including such
person's views on: the economy; securities markets; portfolio securities and
their issuers; investment philosophies, strategies, techniques and criteria used
in the selection of securities to be purchased or sold for a Fund; a Fund's
portfolio holdings; the investment research and analysis process; the
formulation and evaluation of investment recommendations; and the assessment and
evaluation of credit, interest rate, market and economic risks and similar or
related matters.

The Funds may note their mention or recognition in newsletters, newspapers,
magazines, or other media. Portfolio managers and other members of the
Advisor's staff may make presentations at conferences or trade shows, appear on
television or radio programs, or conduct or participate in telephone conference
calls, and the Funds may announce those presentations, appearances or calls to
some or all shareholders, or to potential investors in the Funds. Biographical
and other information about a Fund's portfolio manager, including information
about awards received by that portfolio manager or mentions of the manager in
the media, may also be described or quoted in Fund advertisements or sales
literature.

Each Fund may also quote evaluations mentioned in independent radio or
television broadcasts, and use charts and graphs to illustrate the past
performance of various indices and illustrations using hypothetical rates of
return to illustrate the effects of compounding and tax-deferral. Each Fund may
advertise examples of the effects of periodic investment plans, including the
principle of dollar cost averaging. In such a program, an investor invests a
fixed dollar amount in a fund at periodic intervals, thereby purchasing fewer
shares when prices are high and more shares when prices are low.

From time to time, each Fund may also discuss or quote the views of LFD, the
Advisor, and other financial planning, legal, tax, accounting, insurance, estate
planning and other professionals, or from surveys, regarding individual and
family financial planning. Such views may include information regarding:
retirement planning; general investment techniques (e.g., asset allocation and
disciplined saving and investing); business succession; issues with respect to
insurance (e.g., disability and life insurance and Medicare supplemental
insurance); issues regarding financial and health care management for elderly
family members; and similar or related matters.

41
<PAGE>

Appendix I - Description of Bond Ratings

A rating of a rating service represents the service's opinion as to the
credit quality of the security being rated. However, the ratings are general
and are not absolute standards of quality or guarantees as to the
creditworthiness of an issuer. Consequently, the Advisor believes that the
quality of debt securities in which the Funds invest should be continuously
reviewed. 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 ratings 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.

The following is a description of the characteristics of ratings used by
Moody's Investors Service, Inc. ("Moody's") and Standard & Poor's Corporation
("S&P").

Moody's Ratings

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

Aa--Bonds rated Aa are judged to be 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 risk 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 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 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 rated Caa are of poor standing. Such bonds may be in default or
there may be present elements of danger with respect to principal or interest.

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

S&P Ratings

AAA--Bonds rated AAA have the highest rating. Capacity to pay principal
and interest is extremely strong.

AA--Bonds rated AA have a very strong capacity to pay principal and
interest and differ from AAA bonds only in small degree.

42
<PAGE>

A--Bonds rated A have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than bonds in higher rated categories.

BBB--Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay principal and interest for bonds in this capacity
than for bonds in higher rated categories.

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

43
<PAGE>

PART C OTHER INFORMATION

Item 23 Exhibits:
--------

a.1 Agreement and declaration of trust(1).

a.2 Form of Amendment No. 1 to Agreement and declaration of trust (9).

b. Bylaws, as amended October 24, 1997 (exhibit 2.3 to post-effective
amendment no. 60)(2).

c.1 Specimen share certificate- Acorn Fund(3).

c.2 Specimen share certificate- Acorn International (exhibit 4.2 to post-
effective amendment no. 54)(3).

c.3 Specimen share certificate- Acorn USA(4).

c.4 Specimen share certificates- Acorn Twenty and Acorn Foreign
Forty(6).

c.5 Form of Specimen share certificates for Class A shares of Liberty
Acorn Fund, Liberty Acorn International, Liberty Acorn USA, Liberty
Acorn Twenty and Liberty Acorn Foreign Forty (9).

d.1 Investment Advisory Agreement among Acorn Fund, Acorn International,
Acorn USA and Wanger Asset Management, L.P., dated January 1,
1998(5).

d.2 Administration Agreement among Acorn Fund, Acorn International, Acorn
USA and Wanger Asset Management, L.P., dated January 1, 1998
(exhibit 5.2 to post-effective amendment no. 61)(5).

d.3 Organizational Expenses Agreement between Acorn Investment Trust and
Wanger Asset Management, L.P., dated September 3, 1996 (exhibit 5.3
to post-effective amendment no. 61)(5).

d.4 Supplement to the Investment Advisory Agreement among Acorn Investment
Trust and Wanger Asset Management, L.P. relating to Acorn Twenty and
Acorn Foreign Forty dated August 17, 1998 (exhibit d.4 to post-
effective amendment no. 64) (7).

d.5 Amendment to the Administrative Agreement between Acorn Investment
Trust and Wanger Asset Management, L.P. relating to Acorn Twenty and
Acorn Foreign Forty, dated August 17, 1998 (exhibit d.5 to post-
effective amendment no. 64) (7).

d.6 Form of Investment Advisory Agreement between Liberty Acorn Investment
Trust (on behalf of Liberty Acorn Fund, Liberty Acorn International,
Liberty Acorn USA, Liberty Acorn Twenty and Liberty Acorn Foreign
Forty) and Liberty Wanger Asset Management, L.P., to be dated
September 29, 2000 (9).
<PAGE>

d.7 Form of Administration Agreement between Liberty Acorn Investment
Trust (on behalf of Liberty Acorn Fund, Liberty Acorn International,
Liberty Acorn USA, Liberty Acorn Twenty and Liberty Acorn Foreign
Forty) and Liberty Wanger Asset Management, L.P., to be dated
September 29, 2000 (9).

e.1 Distribution Agreement between Acorn Investment Trust and WAM
Brokerage Services, L.L.C. dated January 1, 1998 (exhibit 6 to post-
effective amendment no. 61)(5).

e.2 Amendment to the Distribution Agreement between Acorn Investment Trust
and WAM Brokerage Services, L.L.C., relating to Acorn Twenty and
Acorn Foreign Forty dated August 17, 1998 (exhibit e.2 to post-
effective amendment no. 64) (7).

e.3 Form of Distribution Agreement between Liberty Acorn Investment Trust
and Liberty Funds Distributor, Inc. to be dated September 29,
2000 (9).

f. None

g.1 Custodian contract between the Registrant and State Street Bank and
Trust Company dated July 1, 1992 (exhibit 8.1 to post-effective
amendment no. 60)(1).

g.2 Letter agreement applying custodian contract relating to Acorn
International (exhibit 8.2 to post-effective amendment no. 60)(1).

g.3 Letter agreement applying custodian contract (exhibit 8.1) relating to
Acorn USA (exhibit no. 8.3 to post-effective amendment no. 61)(5).

g.4 Letter agreement applying custodian contract and transfer agency and
service agreement (exhibit 8.1) relating to Acorn Twenty and Acorn
Foreign Forty, dated August 17, 1998 (exhibit g.4 to post-effective
amendment no. 64)(7).

h.1 Transfer Agency and Service Agreement between Acorn Investment Trust
and State Street Bank and Trust Company dated July 1, 1999 (exhibit
h to post-effective amendment no. 65) (8).

h.2 Form of Transfer Agency and Service Agreement between Liberty Acorn
Trust and Liberty Funds Services, Inc., to be dated September 29,
2000 (9).

i. Consent of Bell, Boyd & Lloyd LLC.

j. Consent of Ernst & Young LLP.

k. None.

l. None.

m.1 Form of Rule 12b-1 Distribution Plan to be dated September 29, 2000
(9).

2
<PAGE>

m.2 Form of Rule 12b-1 Plan Implementing Agreement to be dated September
29, 2000(9).

n. Form of Plan Pursuant to Rule 18f-3(d) to be dated September 29,
2000(9).

p.1 Code of Ethics, as amended effective March 15, 2000 (exhibit p.1 to
post-effective amendment 65)(8).

p.2 Code of Ethics for Non-Interested Board Members, as amended May 25,
1999 (exhibit p.2 to post-effective amendment 65)(8).

_______________________
(1) Previously filed. Incorporated by reference to the exhibit of the same
number filed in post-effective amendment No. 53 to the registrant's
registration statement, Securities Act file number 2-34223 (the
"Registration Statement"), filed on April 30, 1996.

(2) Previously filed. Incorporated by reference to the exhibit of the same
number filed in post-effective amendment No. 60 to the Registration
Statement, filed on December 30, 1997.

(3) Previously filed. Incorporated by reference to exhibit 4.1 filed in post-
effective amendment No. 54 to the Registration Statement, filed on June 18,
1996.

(4) Previously filed. Incorporated by reference to exhibit 4.3 filed in post-
effective amendment No. 55 to the Registration Statement, filed on
September 3, 1996.

(5) Previously filed. Incorporated by reference to the exhibit of the same
number filed in post-effective amendment No. 61 to the Registration
Statement filed on April 30, 1998.

(6) Previously filed. Incorporated by reference to exhibit 4.4 filed in post-
effective amendment No. 62 to the Registration Statement, filed on June 3,
1998.

(7) Previously filed. Incorporated by reference to the exhibit of the same
number filed in post-effective amendment No. 64 to the Registration
Statement filed on February 26, 1999.

(8) Previously filed. Incorporated by reference to the exhibit of the same
number filed in post-effective amendment No. 65 to the Registration
Statement filed on May 1, 2000.

(9) Previously filed. Incorporated by reference to the exhibit of the same
number filed in post-effective amendment No. 66 to the Registration
Statement filed on July 31, 2000.

Item 24. Persons Controlled By or Under Common Control with Registrant
-------------------------------------------------------------

The Registrant does not consider that there are any persons directly or
indirectly controlled by, or under common control with, the Registrant within
the meaning of this item. The information in the prospectus under the caption
"Managing the Fund - Investment Advisor" and in the statement of additional
information under the caption "Management of the Trust - Investment Advisor" is
incorporated by reference.

3
<PAGE>

Item 25. Indemnification
---------------

Article VIII of the Agreement and Declaration of Trust of the Registrant
(exhibit a.1) provides in effect that Registrant shall provide certain
indemnification of its trustees and officers. In accordance with Section 17(h)
of the Investment Company Act, that provision shall not protect any person
against any liability to the Registrant or its shareholders to which he would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to trustees, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a trustee, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
trustee, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

Registrant, its trustees and officers, its investment adviser and persons
affiliated with them are insured under a policy of insurance maintained by
Registrant and its investment adviser, within the limits and subject to the
limitations of the policy, against certain expenses in connection with the
defense of actions, suits or proceedings, and certain liabilities that might be
imposed as a result of such actions, suits or proceedings, to which they are
parties by reason of being or having been such trustees or officers. The policy
expressly excludes coverage for any trustee or officer whose personal
dishonesty, fraudulent breach of trust, lack of good faith, or intention to
deceive or defraud has been finally adjudicated or may be established or who
willfully fails to act prudently.

Item 26. Business and Other Connections of Investment Adviser
----------------------------------------------------

The information in the prospectus under the caption "Managing the Fund -
Investment Advisor" is incorporated by reference. Neither Wanger Asset
Management, L.P. nor its general partner has at any time during the past two
years been engaged in any other business, profession, vocation or employment of
a substantial nature either for its own account or in the capacity of director,
officer, employee, partner or trustee.

4
<PAGE>

Item 27. Principal Underwriters
----------------------

WAM Brokerage Services, L.L.C. also acts as principal underwriter for
Wanger Advisors Trust.

Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
------------------ ---------------------------- -----------------------
Bruce H. Lauer President Vice President,
Assistant Secretary and
Treasurer

Marilyn Morrison Vice President and Secretary

The principal business of each officer of WAM Brokerage Services, L.L.C. is 227
West Monroe Street, Suite 3000, Chicago, Illinois 60606.

Item 28. Location of Accounts and Records
--------------------------------

Bruce H. Lauer, Vice President, Assistant Secretary and Treasurer
Acorn Investment Trust
227 West Monroe Street, Suite 3000
Chicago, Illinois 60606

Item 29. Management Services
-------------------

None

Item 30. Undertakings
------------

Not applicable.

5
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this registration statement under Rule
485(b) under the Securities Act and has duly caused this amendment to the
registration statement to be signed on its behalf by the undersigned, duly
authorized, in Chicago, Illinois on September 15, 2000.

ACORN INVESTMENT TRUST
By /s/ Ralph Wanger
-----------------------
Ralph Wanger, President

Pursuant to the requirements of the Securities Act of 1933, this amendment
to the registration statement has been signed below by the following persons in
the capacities and on the dates indicated.

Name Title Date
---- ----- ----

/s/ Irving B. Harris Trustee and chairman )
------------------------- )
Irving B. Harris )
)
/s/ Leo A. Guthart Trustee )
------------------------- )
Leo A. Guthart )
)
/s/ Jerome Kahn, Jr. Trustee )
------------------------- )
Jerome Kahn, Jr. )
)
/s/ Steven N. Kaplan Trustee )
------------------------- )
Steven N. Kaplan )
)
/s/ David C. Kleinman Trustee )
------------------------- )
David C. Kleinman )
)
/s/ James H. Lorie Trustee )
------------------------- )
James H. Lorie )
)
/s/ Charles P. McQuaid Trustee ) September 15, 2000
------------------------- )
Charles P. McQuaid )
)
/s/ Roger S. Meier Trustee )
------------------------- )
Roger S. Meier )
)
/s/ Allan B. Muchin Trustee )
------------------------- )
Allan B. Muchin )
)
/s/ Robert E. Nason Trustee )
------------------------- )
Robert E. Nason )
)
/s/ Katherine Schipper Trustee )
------------------------- )
Katherine Schipper )
)
/s/ Ralph Wanger Trustee and President )
------------------------- )
Ralph Wanger (principal executive )
officer) )
)
/s/ Bruce H. Lauer Treasurer (principal )
------------------------- )
Bruce H. Lauer financial and accounting )
officer) )

6
<PAGE>

Index of Exhibits Filed with this Amendment
-------------------------------------------

Exhibit
Number Exhibit
------ -------

i. Consent of Bell, Boyd & Lloyd LLC.

j. Consent of Ernst & Young LLP.