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[COLONIAL MUTUAL FUNDS LOGO]
COLONIAL
HIGH YIELD SECURITIES FUND
[GRAPHIC]
SEMIANNUAL REPORT
JUNE 30, 1995
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COLONIAL HIGH YIELD SECURITIES FUND HIGHLIGHTS
JANUARY 1, 1995 - JUNE 30, 1995
INVESTMENT OBJECTIVE: Colonial High Yield Securities Fund seeks high current
income and total return.
STRATEGY: The Fund pursues its objective by investing in lower-rated
corporate debt securities. These securities are considered to be highly
speculative.
THE FUND IS DESIGNED TO OFFER:
- High monthly income
- Attractive long-term total return potential
- Broad diversification
- Expert portfolio management
PORTFOLIO MANAGER COMMENTARY: "Companies that issue high yield corporate bonds
have recently benefited from improved earnings and low interest rates. Looking
ahead, we believe the environment should remain favorable, with the economy
likely to come in for the 'soft landing' that has been the Federal Reserve
Board's goal for the past two years."
COLONIAL HIGH YIELD SECURITIES FUND PERFORMANCE
<TABLE>
<CAPTION>
CLASS A CLASS B
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<S> <C> <C>
Inception date 3/31/80* 6/8/92
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Distributions declared per share $0.312 $0.288
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SEC Yield 8.35% 8.02%
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Total returns, assuming reinvestment of all
distributions and no sales charge or contingent
deferred sales charge
- 6 months 9.58% 9.17%
- 12 months 9.63% 8.81%
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Net asset value per share at 6/30/95 $6.58 $6.58
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</TABLE>
* Colonial High Yield Securities Fund adopted its current investment policies
on 3/31/80.
<TABLE>
<CAPTION>
TOP FIVE HOLDINGS TOP FIVE SECTORS
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<S> <C>
1. SCI Television 1. Manufacturing
2. Continental Cablevision 2. Industrial
3. AK Steel 3. Services
4. Gulf Canada Resources 4. Energy
5. Agricultural Minerals & Chemical 5. U.S. Government
</TABLE>
2
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PRESIDENT'S MESSAGE
TO FUND SHAREHOLDERS
[PHOTO]
John A. McNelce, Jr.
President
During the six months ended June 30, 1995, most fixed-income markets provided
investors with steady income and attractive returns. Many of these markets
benefited from the slowdown in the U.S. economy over the first six months of
1995.
Almost all sectors of the bond market performed well during the period,
including foreign bonds, U.S. government bonds, and the high yield, high risk
corporate bonds that are your Fund's primary investment focus. High yield
corporate bonds benefited from strong earnings growth by their issuing
corporations and an expectation that the Federal Reserve Board would achieve its
goal of a "soft landing" for the U.S. economy. Although foreign economies slowed
during the first half of 1995, foreign bonds showed some improvement as local
currencies strengthened relative to the U.S. dollar. There was a dramatic
recovery in the U.S. government bond market, reflecting a general decline in
interest rates in the United States, and especially in long-term rates.
Lead Portfolio Manager Andrea Feingold believes economic conditions for high
yield securities should remain favorable in the months ahead. In fact, she feels
that some high yield sectors may offer some good buying opportunities for the
Fund. In the following report, Andrea comments on the Fund's management strategy
and on key issues affecting the high yield bond market.
Respectfully,
/s/ John A. McNeice, Jr.
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John A. McNeice, Jr.
President
August 11, 1995
3
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PORTFOLIO MANAGEMENT REPORT
ANDREA FEINGOLD is the Manager of the Colonial High Yield Securities Fund.
Andrea is a Vice President of Colonial Management Associates, Inc. She is a
Certified Financial Analyst.
