[Graphic Omitted]
- --------------------------------------------------------------------------------
COLONIAL MONEY MARKET FUND Semiannual report
- --------------------------------------------------------------------------------
December 31, 1999
<PAGE>
President's Message
Dear Shareholder:
I am pleased to present the semiannual report for Colonial Money Market Fund for
the six-month period ended December 31, 1999.
Recently, the current United States economic expansion set a record for
longevity. We have experienced nine years of economic growth. Inflation has
risen barely one point from its low rate. National productivity gains continue.
If we have entered a new era of economic growth, our substantial investment in
technology is certainly one reason. The first control on our inflation rate was
the flood of competitive imports from the recession-burdened Pacific Rim
nations. Finally, the sensitive monetary policies of the Federal Reserve System
have helped to keep our economy in order.
Consumer confidence is high, reflecting growth in real income and a strong job
market. Business capital spending remains high. Even exports are picking up as
foreign economies accelerate. Our real Gross Domestic Product is growing at
approximately 4% year-over-year.
During the six-month period ended December 31, 1999, most bonds succumbed to the
pressure of inflation worries and rising interest rates. Stronger-than-expected
U.S. economic growth, combined with the rebound of the Japanese, European and
emerging market economies, prompted the Federal Reserve Board to raise interest
rates in preemptive strikes against potential inflation. Bond prices, which move
in the opposite direction of their yields, posted significant losses as a
result.
As the year 2000 evolves, we believe that the investment environment will
benefit fixed-income investments. Future Fed moves with short-term interest
rates will have both positive monetary and psychological effects on
inflation-wary investors. For those seeking a relatively stable haven for their
dollars and potential for current income, we believe Colonial Money Market Fund
remains an attractive option.
Thank you for giving us the opportunity to serve your investment needs.
Sincerely,
/s/ Stephen E. Gibson
Stephen E. Gibson
President
February 10, 2000
Past performance cannot predict future investment results. Because market and
economic conditions change frequently, there can be no assurance that the trends
described above or on the following pages will continue.
<PAGE>
- --------------------------------------------------------------------------------
Highlights
- --------------------------------------------------------------------------------
o Objective(1)
Colonial Money Market Fund seeks to obtain maximum current income
consistent with preservation of capital and the maintenance of liquidity.
o Credit tightening benefits shareholders
The Federal Reserve raised short-term interest rates three times during
the period, each by 0.25%, starting on June 30, 1999. This credit
tightening benefited shareholders by enhancing income of money market
instruments, including corporate floating rate notes, whose rates improved
late in 1999.
o Average weighted maturity increased
We increased average weighted maturity in the Portfolio from 27 days on
June 30, 1999, to 28 days on December 31, 1999, to take advantage of
higher short-term interest rates.
o Portfolio management anticipates interest rate increase
We are anticipating that the Fed will tighten credit again in one or two
moves during the first half of 2000. Most of our holdings reflect that
strategy.
/s/ Jane M. Naeseth
Jane M. Naeseth, senior vice president of Stein Roe & Farnham Incorporated, is
portfolio manager of Colonial Money Market Fund and SR&F Cash Reserves
Portfolio.
Portfolio Breakdown(2)
(as of 12/31/1999)
- -------------------------------------
Commercial Paper........ 89.9%
Yankee Certificate of
Deposit................. 3.4%
Corporate Notes......... 5.7%
Portfolio Maturity(2)
(as of 12/31/1999)
- -------------------------------------
0-4 days................ 9.9%
5-14 days............... 30.5%
15-29 days.............. 22.7%
30-59 days.............. 27.9%
60+ days................ 9.0%
(1) The fund pursues its objective by investing all of its assets in the SR&F
Cash Reserve Portfolio (Portfolio), a money market fund with the same investment
objective as the Fund.
(2) Portfolio breakdown and maturity weightings are calculated as a percentage
of total market value of the investment portfolio. Because it is actively
managed, there can be no guarantee the Portfolio will continue to hold or invest
in these securities in the future. An investment in the Fund is not insured or
guaranteed by the U.S. government. There can be no assurance that the $1.00 net
asset value per share will be maintained. On March 2, 1998, the Fund became a
feeder fund for the SR&F Cash Reserves Portfolio, a money market fund managed by
Stein Roe & Farnham Incorporated. Prior to this transition, approximately
two-thirds of the portfolio holdings represented a selection of short-term U.S.
government agency securities. The Fund no longer invests primarily in U.S.
government securities, but rather in the Portfolio, which has flexibility to
search for the highest relative yield among a variety of money market
instruments.
The Standard & Poor's 500 Index is an unmanaged index that tracks the
performance of 500 widely held, large-capitalization U.S. stocks. Unlike mutual
funds, an index does not incur fees or charges. It is not possible to invest in
an index.
- --------------------------------------------------------------------------------
Six-month distributions
declared per share
Class A 0.024
- -------------------------------------
Class B 0.019
- -------------------------------------
Class C 0.022
- -------------------------------------
7-day yields on 12/31/99(3)
Class A 5.59%
- -------------------------------------
Class B 4.61%
- -------------------------------------
Class C 5.21%
- -------------------------------------
30-day yields on 12/31/99(3)
Class A 5.39%
- -------------------------------------
Class B 4.41%
- -------------------------------------
Class C 5.00%
- -------------------------------------
(3) If the Advisor or its affiliates had not waived certain Fund expenses, the
7-day and 30-day yields would have been 5.40% and 5.20% for Class A shares,
4.42% and 4.22% for Class B shares and 4.42% and 4.21% for Class C shares.
- --------------------------------------------------------------------------------
1
<PAGE>
- --------------------------------------------------------------------------------
SR&F Cash Reserves Portfolio
- --------------------------------------------------------------------------------
Portfolio of Investments at December 31, 1999 (Unaudited)
(All amounts in thousands)
<TABLE>
<CAPTION>
Interest Maturity
Commercial Rate Date
Paper -- 89.9% Range(a) Range Par Value
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
American Home Products Corp. 5.000% 1/5/00(b) $13,695 $ 13,687
Asset Securitization Corp. 6.240% 1/20/00(b) 22,000 21,928
Associates First Capital 4.000% 1/3/00 41,640 41,631
Banco Bradesco 5.510% 2/16/00 30,000 29,796
Cardinal Health Corp. 4.250% 1/3/00(b) 15,000 14,997
6.810% 1/7/00(b) 18,000 17,980
Centric Capital 6.630% 1/10/00(b) 22,350 22,313
Coca-Cola Co. 6.060% 2/3/00 13,000 12,928
Coca-Cola Enterprises 5.530% 2/3/00(b) 7,775 7,736
Corporate Asset Funding 6.060% 1/31/00(b) 30,000 29,850
Countrywide Home Loans 6.090% 1/21/00 38,000 37,869
Donaldson Lufkin Corp. 6.400% 1/18/00 30,000 29,910
Eaton Corp. 7.030% 1/14/00(b) 13,000 12,967
6.890% 1/19/00(b) 25,000 24,914
Enterprise Funding 6.300% 1/13/00(b) 20,000 19,958
Export Development Corp. 5.970% 2/23/00 25,000 24,785
Falcon Asset Securitization 6.200% 1/20/00(b) 6,340 6,319
Federal Home Loan Mortgage 5.670% 3/16/00 19,000 18,782
5.760% 3/30/00 35,000 34,509
Finova Capital Corp. 6.550% 1/11/00 10,000 9,982
6.310% 1/19/00 14,000 13,956
GTE Corp. 5.320% 1/26/00(b) 23,700 23,613
Harley-Davidson Funding 6.360% 2/22/00(b) 20,000 19,818
6.110% 2/24/00(b) 18,000 17,837
International Securitization 7.280% 1/14/00(b) 38,000 37,901
MCI Worldcom 6.780% 1/14/00(b) 20,000 19,951
6.650% 1/26/00(b) 15,000 14,931
Northern Industry Public Services 6.540% 1/12/00 10,000 9,980
7.130% 1/14/00 14,780 14,742
Old Line Funding 6.370% 1/6/00(b) 18,000 17,984
6.340% 1/13/00(b) 20,000 19,958
Preferred Receivables Funding 6.530% 1/4/00(b) 30,000 29,984
Receivables Capital Corp. 6.840% 1/12/00(b) 20,000 19,958
6.640% 1/13/00(b) 10,000 9,978
Special Purpose Accounts Receivables 6.240% 3/7/00(b) 25,000 25,000
Superior Funding Corp. 6.180% 2/9/00(b) 20,000 19,868
Thames Asset Global 6.750% 1/18/00(b) 22,212 22,142
Windmill Funding Corp. 6.650% 1/5/00(b) 18,500 18,486
6.840% 1/20/00(b) 2,164 2,156
--------
Total Commercial Paper
(cost of $787,993) $791,084
--------
<CAPTION>
Corporate Fixed Income Bonds & Notes -- 5.7%
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Textron Financial Corp. 5.560% 5/15/00 $25,000 $ 24,992
Goldman Sachs Floating Rate 5.020% 2/17/00(b) 25,000 25,000
--------
Total Corporate Fixed
Income Bonds & Notes
(cost of $49,988) 49,992
--------
<CAPTION>
Yankee Certificates Of Deposit -- 3.4%
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Commerzbank New York
(cost of $29,990) 5.085% 2/16/00 30,000 29,999
--------
Total Investments - 99.0%
(cost of $867,971)(c) 871,075
--------
Other Assets &
Liabilities - 1.0% 8,873
--------
Total Net Assets - 100.0% $879,948
========
</TABLE>
Notes to Investment Portfolio:
(a) The interest rate is the effective rate at the date of purchase except for
corporate notes, for which the interest rate represents the investment's
coupon rate.
(b) Represents private placement securities exempt from registration by
Section 4(2) Securities Act of 1933. These securities are issued to
investors who agree that they are purchasing the securities for investment
and not with a view to public distribution. Any resale by the Fund must be
in an exempt transaction, normally to other institutional investors. At
December 31, 1999, the aggregate value of the Fund's private placement
securities was $537,213, which represented 61.1% of net assets. None of
these securities were deemed illiquid.
(c) The cost for federal income tax purposes was the same.
See notes to financial statements.
2
<PAGE>
- --------------------------------------------------------------------------------
SR&F Cash Reserves Portfolio
- --------------------------------------------------------------------------------
For the Six Months Ended December 31, 1999 (Unaudited)
(All amounts in thousands)
Statement of Assets and Liabilities
- --------------------------------------------------------------------------------
Assets
Investments, at amortized cost $871,075
Cash 7,083
Interest receivable 1,849
--------
Total assets 880,007
--------
Liabilities
Other liabilities 59
--------
Total liabilities 59
--------
Net assets applicable to investors' beneficial interest $879,948
========
Statement of Operations
- --------------------------------------------------------------------------------
Investment Income
Interest $ 22,210
--------
Expenses
Management fees 979
Transfer agent fees 3
Accounting fees 22
Trustees' fees 10
Custodian fees 2
Audit fees 9
Legal fees 1
Other 11
--------
Total expenses 1,037
--------
Net investment income 21,173
--------
Net Increase in Net Assets Resulting from Operations 21,173
--------
Realized Loss on Investments
Net Realized loss on investments (1)
--------
Net Increase in Net Assets Resulting from Operations $21,172
========
Statements of Changes in Net Assets
- -------------------------------------------------------------------------------
(Unaudited)
Six Months Year
Ended Ended
December 31, June 30,
1999 1999
- -------------------------------------------------------------- -----------
Operations
Net investment income $ 21,173 $ 37,933
Net realized losses on investments (1) (4)
----------- -----------
Net increase in net assets resulting
from operations 21,172 37,929
----------- -----------
Transactions in Investors' Beneficial
Interest
Contributions 1,349,923 1,549,789
Withdrawals (1,263,608) (1,501,534)
----------- -----------
Net increase from transactions in
investors' beneficial interest 86,315 48,255
----------- -----------
Net increase in net assets 107,487 86,184
Total Net Assets
Beginning of period 772,461 686,277
----------- -----------
End of period $ 879,948 $ 772,461
=========== ===========
Financial Highlights
- --------------------------------------------------------------------------------
(Unaudited)
Six Months Year Period
Ended Ended Ended
December 31, June 30, June 30,
1999 1999 1998(a)
- ------------------------------------------------- -------- --------
Ratio to Average Net Assets
Ratio of net expenses
to average net assets 0.25%(b) 0.25% 0.26%(b)
Ratio of net investment
income to average net
assets 5.21%(b) 4.83% 5.45%(b)
Notes to Investment Portfolio:
(a) From commencemnt of operations on March 2, 1998.
(b) Annualized
See notes to financial statements.
3
<PAGE>
- --------------------------------------------------------------------------------
SR&F Cash Reserves Portfolio Notes To Financial Statements
- --------------------------------------------------------------------------------
December 31, 1999 (Unaudited)
Note 1. Organization of the SR&F Cash Reserves Portfolio
SR&F Cash Reserves Portfolio (the "Portfolio") is a separate series of SR&F Base
Trust, a Massachusetts common law trust organized under an Agreement and
Declaration of Trust dated August 23, 1993. The Declaration of Trust permits the
Trustees to issue non-transferable interests in the Portfolio. The investment
objective of the Portfolio is to seek maximum current income consistent with
capital preservation and maintenance of liquidity.
The Portfolio commenced operations on March 2, 1998. At commencement, Colonial
Money Market Fund contributed $187,536,920 in securities and other assets in
exchange for beneficial ownership of the Portfolio. The Portfolio allocates
income, expenses and realized gains (losses) to each investor on a daily basis,
based on their respective percentage of ownership. At December 31, 1999,
Colonial Money Market Fund owned 35.8% of the Portfolio.
Note 2. Significant Accounting Policies
The following summarizes the significant accounting policies of the Portfolio.
These policies are in conformity with generally accepted accounting principles,
which require management to make estimates and assumptions that affect the
amounts reported in the financial statements and accompanying notes. Actual
results could differ from those estimates.
Investment Transactions and Investment Income:
Investment transactions are accounted for on trade date. Interest income,
including discount accretion and premium amortization, is recorded daily on the
accrual basis. Realized gains (losses) from investment transactions are reported
on an identified cost basis.
The Portfolio is permitted to invest in repurchase agreements involving
securities issued or guaranteed by the U.S. Government or by its agencies or
instrumentalities. The Portfolio requires issuers of repurchase agreements to
transfer the securities underlying those agreements to the Portfolio's custodian
at the time of origination.
Investment Valuations:
The Portfolio utilizes the amortized cost method to value its investments. This
technique approximates market value and involves valuing a security initially at
cost and, thereafter assuming a constant amortization to maturity of any
discount or premium, regardless of the impact of fluctuating interest rates on
the market value of the instrument. In the event that a deviation of 0.50% or
more exists between the Fund's $1.00 per-share net asset value, calculated at
amortized cost, and the net asset value calculated by reference to market
quotations, the Board of Trustees would consider what action, if any, should be
taken. Other assets are valued at fair value as determined in good faith by or
under the direction of the Board of Trustees.
Federal Income Taxes:
No provision is made for federal income taxes because the Portfolio is treated
as a partnership for federal income tax purposes and all of its income is
allocated to its owners based on their respective percentages of ownership.
Note 3. Portfolio Composition
Under normal market conditions, the Portfolio will invest a least 25% of its
total assets in securities of issuers in the financial services industry (which
includes, but is not limited to, banks, consumer and business credit
institutions, and other financial services companies). See the portfolio of
investments for additional information regarding portfolio composition.
Note 4. Trustees Fees and Transactions With Affiliates
The Portfolio pays a monthly management fee to Stein Roe & Farnham Incorporated
(the "Advisor"), an indirect, majority-owned subsidiary of Liberty Mutual
Insurance Company, for its services as investment Advisor and manager. The
management fee for the Portfolio is computed at an annual rate of 0.25% of the
first $500 million of average daily net assets, and 0.225% thereafter. The
Advisor also provides accounting services.
Certain officers and trustees of the Trust are also officers of the Advisor.
Compensation is paid to trustees not affiliated with the Advisor. No
remuneration was paid to any other trustee or officer of the Trust.
4
<PAGE>
- --------------------------------------------------------------------------------
Colonial Money Market Fund -- Statements of Assets and Liabilities
- --------------------------------------------------------------------------------
December 31, 1999 (Unaudited)
(In thousands except for per share amounts)
Assets
Investment in SR&F Cash Reserves
Portfolio $314,935
Receivable for:
Fund shares sold $ 7,305
Other 20 7,325
------- --------
Total Assets 322,260
Liabilities
Payable for:
Fund shares repurchased 12,998
Distributions 233
Accrued:
Deferred Trustees fees 5
Other 42
-------
Total Liabilities 13,278
========
Net Assets $308,982
========
Net asset value:
Class A ($206,614/206,639) $ 1.00(a)
========
Class B ($97,323/97,312) $ 1.00(a)
========
Class C ($5,045/5,046) $ 1.00(a)
========
Composition of Net Assets
Capital paid in $308,993
Overdistributed net investment income (8)
Accumulated net realized loss (3)
--------
$308,982
========
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
- --------------------------------------------------------------------------------
Statements of Operations
- --------------------------------------------------------------------------------
For the six months ended December 31, 1999 (Unaudited)
(In thousands)
Investment Income
Interest income from
SR&F Cash Reserves Portfolio $7,749
Expenses allocated from
SR&F Cash Reserves Portfolio (362)
------
7,387
------
Expenses
Administration fee $ 354
Service fee -- Class B 118
Service fee -- Class C 4
Distribution fee -- Class B 362
Distribution fee -- Class C 13
Transfer agent fee 344
Bookkeeping fee 36
Trustees fee 8
Custodian fee 1
Audit fee 5
Legal fee 1
Registration fee 40
Reports to shareholders 5
Other 10
-----
1,301
Fee waived by the Administrator (269)
Fee waived by the Distributor -- Class C (10) 1,022
----- ------
Net Investment Income 6,365
------
Increase in Net Assets from Operations $6,365
======
See notes to financial statements.
5
<PAGE>
- --------------------------------------------------------------------------------
Colonial Money Market Fund -- Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
(In thousands)
(Unaudited)
Six
Months ended Year ended
December 31 June 30
----------- -----------
Increase (Decrease) In Net Assets 1999 1999
- --------------------------------------------------------------------------------
Operations:
Net investment income $ 6,365 $ 10,912
Net realized loss -- (2)
----------- -----------
Net Increase from Operations 6,365 10,910
Distributions:
From net investment income -- Class A (4,437) (7,849)
From net investment income -- Class B (1,865) (2,956)
From net investment income -- Class C (78) (125)
----------- -----------
(15) (20)
----------- -----------
Fund Share Transactions:
Receipts for shares sold -- Class A 1,032,069 1,246,973
Receipts for shares issued in the
acquisition of Crabbe Huson
Money Market Fund -- 87,134
Value of distributions reinvested --
Class A 3,931 7,069
Cost of shares repurchased -- Class A (987,152) (1,312,028)
----------- -----------
48,848 29,148
----------- -----------
Receipts for shares sold -- Class B 105,704 230,456
Value of distributions reinvested --
Class B 1,647 2,569
Cost of shares repurchased -- Class B (103,857) (201,012)
----------- -----------
3,494 32,013
----------- -----------
Receipts for shares sold -- Class C 6,144 7,368
Value of distributions reinvested --
Class C 71 114
Cost of shares repurchased -- Class C (3,365) (8,591)
----------- -----------
2,850 (1,109)
----------- -----------
Net Increase from Fund
Share Transactions 55,192 60,052
----------- -----------
Total Increase 55,177 60,032
Net Assets
Beginning of period 253,805 193,773
----------- -----------
End of period (net of overdistributed
and including undistributed net
investment income of $8 and $7,
respectively) $ 308,982 $ 253,805
=========== ===========
Sold -- Class A 1,032,069 1,246,974
Issued in the acquisition of Crabbe
Huson Money Market Fund 87,140
Issued for distributions reinvested --
Class A 3,931 7,069
Repurchased -- Class A (987,152) (1,312,028)
----------- -----------
48,848 29,155
----------- -----------
Sold -- Class B 105,704 230,455
Issued for distributions reinvested --
Class B 1,647 2,569
Repurchased -- Class B (103,857) (201,012)
----------- -----------
3,494 32,012
----------- -----------
Sold -- Class C 6,144 7,368
Issued for distributions reinvested --
Class C 71 114
Repurchased -- Class C (3,364) (8,592)
----------- -----------
2,851 (1,110)
----------- -----------
See notes to financial statements.
6
<PAGE>
- --------------------------------------------------------------------------------
Colonial Money Market Fund -- Notes To Financial Statements
- --------------------------------------------------------------------------------
December 31, 1999 (Unaudited)
Note 1. Interim Financial Statements
In the opinion of the Administrator of Colonial Money Market Fund (the Fund), a
series of Liberty Funds Trust II, the accompanying financial statements contain
all normal and recurring adjustments necessary for the fair presentation of the
financial position of the Fund at December 31, 1999, and the results of its
operations, the changes in its net assets and the financial highlights for the
six months then ended.
Note 2. Accounting Policies
Organization:
The Fund is a diversified portfolio of a Massachusetts business trust,
registered under the Investment Company Act of 1940, as amended, as an open-end
management investment company. The Fund invests all of its investable assets in
interests in the SR&F Cash Reserves Portfolio (the Portfolio), a Massachusetts
common trust, having the same investment objective as the Fund. The value of the
Fund's investment in the Portfolio reflects the Fund's proportionate interest in
the net assets of the Portfolio (35.8% at December 31, 1999). The performance of
the Fund is directly affected by the performance of the Portfolio.
The financial statements of the Portfolio, including the portfolio of
investments, are included elsewhere in this report and should be read in
conjunction with the Fund's financial statements. The Fund may issue an
unlimited number of shares. The Fund offers three classes of shares: Class A,
Class B, and Class C shares. Class A shares are sold with a front-end sales
charge. A 1.00% contingent deferred sales charge is assessed on redemptions made
within 18 months on an original purchase of $1 million to $5 million. Class B
shares are subject to an annual distribution fee and a contingent deferred sales
charge. Class B shares will convert to Class A shares when they have been
outstanding approximately eight years. Class C shares are subject to a
contingent deferred sales charge on redemptions made within one year after
purchase and an annual service and distribution fee.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. The following is a summary of
significant accounting policies followed by the Fund in the preparation of its
financial statements.
Security valuation and transactions:
Valuation of securities by the Portfolio is discussed in Note 2 of the
Portfolio's Notes to Financial Statements which are included elsewhere in this
report.
Determination of class net asset values and financial highlights:
All income, expenses (other than the Class B and Class C service and
distribution fees), and realized and unrealized gains (losses), are allocated to
each class proportionately on a daily basis for purposes of determining the net
asset value of each class. Class B and Class C per share data and ratios are
calculated by adjusting the net investment income per share data and ratios for
the Fund for the entire period by the service fee and distribution fee
applicable to Class B and Class C shares only.
Federal income taxes:
Consistent with the Fund's policy to qualify as a regulated investment company
and to distribute all of its taxable income, no federal income tax has been
accrued.
Distributions to shareholders:
The Fund declares and records distributions daily and pays monthly.
Note 3. Fees and Compensation Paid to Affiliates
Administration fee:
Colonial Management Associates, Inc. (the Administrator) provides accounting and
other services and office facilities for a monthly fee equal to 0.25% annually
of the Fund's average net assets. The Administrator has voluntarily agreed to
waive a portion of the administration fee so that it does not exceed 0.06%
annually.
Bookkeeping fee:
The Advisor provides bookkeeping and pricing services for a monthly fee equal to
$27,000 annually plus 0.0233% of the Fund's average net assets over $50 million.
Transfer agent fee:
Liberty Funds Services, Inc., (the Transfer Agent), an affiliate of the
Administrator, provides shareholder services for a monthly fee equal to 0.20%
annually of the Fund's average net assets and receives reimbursement for certain
out-of-pocket expenses.
7
<PAGE>
- --------------------------------------------------------------------------------
Colonial Money Market Fund -- Notes To Financial Statements (continued)
- --------------------------------------------------------------------------------
December 31, 1999 (Unaudited)
Notes To Financial Statements
Underwriting discounts, service and distribution fees:
Liberty Funds Distributor, Inc., (the Distributor), a subsidiary of the
Administrator, is the Fund's principal underwriter. During the six months ended
December 31, 1999, the Fund has been advised that the Distributor received
contingent deferred sales charges (CDSC) of none, $329,991 and $4,611 on Class
A, Class B, and Class C shares redemptions, respectively.
The Fund has adopted a 12b-1 plan which requires the payment of a service fee to
the Distributor equal to 0.25% annually of Class B and Class C net assets as of
the 20th of each month. The plan also requires the payment of a distribution fee
to the Distributor equal to 0.75% annually of the average net assets
attributable to Class B and Class C shares. The Distributor has voluntarily
agreed to waive a portion of the Class C share distribution fee so that it does
not exceed 0.15% annually.
Expense limits:
The Administrator has agreed, until further notice, to waive fees and bear
certain Fund expenses to the extent that total expenses (inclusive of the Fund's
proportionate share of the Portfolio's expenses and exclusive of service and
distribution fees, brokerage commissions, interest, taxes and extraordinary
expenses, if any) exceed 1.00% annually of the Fund's average net assets.
For the six months ended December 31, 1999, the Fund's total expenses as defined
above did not exceed the 1.00% expense limit.
Other:
The Fund pays no compensation to its officers, all of whom are employees of the
Administrator.
The Fund's Trustees may participate in a deferred compensation plan which may be
terminated at any time. Obligations of the plan will be paid solely out of the
Fund's assets.
Note 4. Other Related Party Transactions
At December 31, 1999, the Fund had one shareholder who owned greater than 5% of
the Fund's outstanding shares.
8
<PAGE>
- --------------------------------------------------------------------------------
Colonial Money Market Fund -- Financial Highlights
- --------------------------------------------------------------------------------
Selected data for a share of each class outstanding throughout the period is as
follows:
<TABLE>
<CAPTION>
(Unaudited)
Six months ended December 31
----------------------------------------
1999
----------------------------------------
Class A Class B Class C
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value -- Beginning of period $ 1.000 $ 1.000 $ 1.000
--------- --------- ---------
Income From Investment Operations:
Net investment income (a)(b) 0.024 0.019 0.022(c)
--------- --------- ---------
Less Distributions Declared to Shareholders:
From net investment income (0.024) (0.019) (0.022)
--------- --------- ---------
Net asset value -- End of period $ 1.000 $ 1.000 $ 1.000
========= ========= =========
Total return (d)(e)(f) 2.47% 1.95% 2.26%
========= ========= =========
Ratios to Average Net Assets
Expenses (a)(b)(g)(h) 0.63% 1.63% 1.03%(c)
Net investment income (a)(b)(g)(h) 0.04% 0.04% 4.44%(c)
Net assets at end of period (000) $ 206,614 $ 97,323 $ 5,045
</TABLE>
(a) Net of fees waived by the Administrator which amounted to $0.001 per share
and 0.19%.
(b) The per share amounts and ratios reflect income and expenses assuming
inclusion of the Fund's proportionate share of the income and expenses of
SR&F Cash Reserves Portfolio.
(c) Net of fees waived by the Distributor which amounted to $0.003 per share
and 0.60%.
(d) Total return at net asset value assuming all distributions reinvested and
no contingent deferred sales charge.
(e) Had the Administrator and Distributor not waived a portion of expenses,
total return would have been reduced.
(f) Not annualized.
(g) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
(h) Annualized.
<TABLE>
<CAPTION>
Year ended June 30
----------------------------------------
1999
----------------------------------------
Class A Class B Class C
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value -- Beginning of period $ 1.000 $ 1.000 $ 1.000
--------- --------- ---------
Income From Investment Operations:
Net investment income (a)(b) 0.046 0.036 0.042(c)
--------- --------- ---------
Less Distributions Declared to Shareholders:
From net investment income (0.046) (0.036) (0.042)
--------- --------- ---------
Net asset value -- End of period $ 1.000 $ 1.000 $ 1.000
========= ========= =========
Total return (d)(e) 4.70% 3.68% 4.30%
========= ========= =========
Ratios to Average Net Assets
Expenses (a)(b)(f) 0.68% 1.68% 1.08%(c)
Net investment income (a)(b)(f) 4.61% 3.61% 4.21%(c)
Net assets at end of period (000) $ 157,790 $ 93,821 $ 2,194
</TABLE>
(a) Net of fees waived by the Administrator which amounted to $0.002 per share
and 0.19%.
(b) The per share amounts and ratios reflect income and expenses assuming
inclusion of the Fund's proportionate share of the income and expenses of
SR&F Cash Reserves Portfolio.
(c) Net of fees waived by the Distributor which amounted to $0.006 per share
and 0.60%.
(d) Total return at net asset value assuming all distributions reinvested and
no contingent deferred sales charge.
(e) Had the Administrator and Distributor not waived a portion of expenses,
total return would have been reduced.
(f) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
9
<PAGE>
- --------------------------------------------------------------------------------
Colonial Money Market Fund -- Financial Highlights (continued)
- --------------------------------------------------------------------------------
Selected data for a share of each class outstanding throughout the period is as
follows:
<TABLE>
<CAPTION>
Period ended June 30
------------------------------------------------------------------
1998 (a)(b)
------------------------------------------------------------------
Class A Class B Class C
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value -- Beginning of period $ 1.000 $ 1.000 $ 1.000
--------- -------- --------
Income From Investment Operations:
Net investment income 0.041(c)(d) 0.032(c)(d) 0.037(c)(d)(e)
--------- -------- --------
Less Distributions Declared to Shareholders:
From net investment income (0.041) (0.032) (0.037)
--------- -------- --------
Net asset value -- End of period $ 1.000 $ 1.000 $ 1.000
========= ======== ========
Total return (f) 4.17%(g)(h) 3.28%(g)(h) 3.81%(g)(h)
========= ======== ========
Ratios to Net Assets
Expenses (i) 0.69%(c)(d)(j) 1.69%(c)(d)(j) 1.09%(c)(d)(e)(j)
Net investment income (i) 4.93%(c)(d)(j) 3.93%(c)(d)(j) 4.53%(c)(d)(e)(j)
Net assets at end of period (000) $ 128,658 $ 61,811 $ 3,304
</TABLE>
(a) The Fund changed its fiscal year end from August 31 to June 30.
Information presented is for the period September 1, 1997 through June 30,
1998.
(b) Effective March 2, 1998, SR&F became the investment Advisor of the Fund.
(c) The per share amounts and ratios reflect income and expenses assuming
inclusion of the Fund's proportionate share of the income and expenses of
SR&F Cash Reserves Portfolio.
(d) Net of fees waived by the Administrator which amounted to $0.001 per share
and 0.19% (annualized).
(e) Net of fees waived by the Distributor which amounted to $0.005 per share
and 0.60% (annualized).
(f) Total return at net asset value assuming all distributions reinvested and
no contingent deferred sales charge.
(g) Not annualized.
(h) Had the Administrator and Distributor not waived a portion of expenses,
total return would have been reduced.
(i) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
(j) Annualized.
<TABLE>
<CAPTION>
Years ended August 31
-----------------------------------------------------------------------------------
1997 1996
-----------------------------------------------------------------------------------
Class A Class B Class C (a) Class A Class B Class C
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value -- Beginning of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
--------- --------- --------- --------- --------- ---------
Income From Investment Operations:
Net investment income 0.048 0.038 0.039 0.048 0.038 0.038
--------- --------- --------- --------- --------- ---------
Less Distributions Declared to Shareholders:
From net investment income (0.048) (0.038) (0.039) (0.048) (0.038) (0.038)
--------- --------- --------- --------- --------- ---------
Net asset value -- End of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
========= ========= ========= ========= ========= =========
Total return (b) 4.90% 3.82% 3.97% 4.93% 3.86% 3.85%
========= ========= ========= ========= ========= =========
Ratios to Average Net Assets
Expenses (c) 0.72% 1.72% 1.64% 0.70% 1.70% 1.70%
Net investment income (c) 0.72% 1.72% 1.64% 0.70% 1.70% 1.70%
Net assets at end of period (000) $ 144,076 $ 70,242 $ 2,904 $ 115,063 $ 76,539 $ 4,435
</TABLE>
(a) Effective July 1, 1994, Class D shares were redesignated Class C shares.
(b) Total return at net asset value assuming all distributions reinvested and
no contingent deferred sales charge.
(c) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
10
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
Selected data for a share of each class outstanding throughout the period is as
follows:
<TABLE>
<CAPTION>
Year ended August 31
--------------------------------------
1995
--------------------------------------
Class A Class B Class C
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value -- Beginning of period $ 1.000 $ 1.000 $ 1.000
-------- -------- --------
Income From Investment Operations:
Net investment income (a) 0.050 0.040 0.040
-------- -------- --------
Less Distributions Declared to Shareholders:
From net investment income (0.050) (0.040) (0.040)
-------- -------- --------
Net asset value -- End of period $ 1.000 $ 1.000 $ 1.000
======== ======== ========
Total return (b)(c) 5.14% 4.08% 4.07%
======== ======== ========
Ratios to Net Assets
Expenses 0.69% 1.69% 1.69%
Fees and expenses waived or borne by the Advisor 0.04% 0.04% 0.04%
Net investment income 4.96% 3.96% 3.96%
Net assets at end of period (000) $ 83,086 $ 55,441 $ 625
(a) Net of fees and expenses waived or borne by the Advisor which amounted to: $ 0.000 $ 0.000 $ 0.000
</TABLE>
(b) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(c) Had the Advisor not waived or reimbursed a portion of expenses, total
return would have been reduced.
<TABLE>
<CAPTION>
Year ended August 31
--------------------------------------
1994
--------------------------------------
Class A Class B Class C (b)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value -- Beginning of period $ 1.000 $ 1.000 $ 1.000
-------- -------- --------
Income From Investment Operations:
Net investment income (a) 0.028 0.018 0.005
-------- -------- --------
Less Distributions Declared to Shareholders:
From net investment income (0.028) (0.018) (0.005)
-------- -------- --------
Net asset value -- End of period $ 1.000 $ 1.000 $ 1.000
======== ======== ========
Total return (c)(d) 2.85% 1.82% 0.45%(e)
======== ======== ========
Ratios to Net Assets
Expenses 0.73% 1.73% 1.73%(f)
Fees and expenses waived or borne by the Advisor 0.20% 0.20% 0.20%(f)
Net investment income 3.01% 2.01% 2.01%(f)
Net assets at end of period (000) $ 97,115 $ 54,535 $ 518
(a) Net of fees and expenses waived or borne by the Advisor which amounted to: $ 0.002 $ 0.002 $ 0.002
</TABLE>
(b) Class C shares were initially offered on July 1, 1994. Per share amounts
reflect activity from that date.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(d) Had the Advisor not waived or reimbursed a portion of expenses, total
return would have been reduced.
(e) Not annualized.
(f) Annualized.
11
<PAGE>
This page intentionally left blank
<PAGE>
Trustees & Transfer Agent
- --------------------------------------------------------------------------------
Tom Bleasdale
Retired (formerly Chairman of the Board and Chief Executive Officer, Shore Bank
& Trust Company)
John V. Carberry
Senior Vice President of Liberty Financial Companies, Inc. (formerly Managing
Director, Salomon Brothers)
Lora S. Collins
Attorney (formerly Attorney, Kramer, Levin, Naftalis & Frankel)
James E. Grinnell
Private Investor (formerly Senior Vice President-Operations, The Rockport
Company)
Richard W. Lowry
Private Investor (formerly Chairman and Chief Executive Officer, U.S. Plywood
Corporation)
Salvatore Macera
Private Investor (formerly Executive Vice President of Itek Corp. and President
of Itek Optical & Electronic Industries, Inc.)
William E. Mayer
Partner, Development Capital, LLC (formerly Dean, College of Business and
Management, University of Maryland; Dean, Simon Graduate School of Business,
University of Rochester; Chairman and Chief Executive Officer, CS First Boston
Merchant Bank; and President and Chief Executive Officer, The First Boston
Corporation)
James L. Moody, Jr.
Retired (formerly Chairman of the Board, Chief Executive Officer and Director,
Hannaford Bros. Co.)
John J. Neuhauser
Academic Vice President and Dean of Faculties, Boston College (formerly Dean,
Boston College School of Management)
Thomas E. Stitzel
Business Consultant and Chartered Financial Analyst (Formerly Professor of
Finance and Dean, College of Business, Boise State University)
Robert L. Sullivan
Retired Partner, KPMG LLP (formerly Management Consultant, Saatchi and Saatchi
Consulting Ltd. and Principal and International Practice Director, Management
Consulting, Peat Marwick Main & Co.)
Anne-Lee Verville
Consultant (formerly General Manager, Global Education Industry, and President,
Applications Solutions Division, IBM Corporation)
- --------------------------------------------------------------------------------
Important Information About This Report
The Transfer Agent for Colonial Money Market Fund is:
Liberty Funds Services, Inc.
P.O. Box 1722
Boston, MA 02105-1722
1-800-345-6611
The Fund mails one shareholder report to each shareholder address. If you would
like more than one report, please call 1-800-426-3750 and additional reports
will be sent to you.
This report has been prepared for shareholders of Colonial Money Market Fund.
This report may also be used as sales literature when preceded or accompanied by
the current prospectus which provides details of sales charges, investment
objectives and operating policies of the Fund and with the most recent copy of
the Liberty Funds Distributor, Inc. Performance Update.
Annual Report:
Colonial Money Market Fund
<PAGE>
Liberty offers the independent thinking and collective strength of six financial
specialists. Our distinguished product line helps financial advisors and their
clients build diversified investment portfolios for long-term financial goals.
LIBERTY
- --------------------------------------------------------------------------------
FUNDS
ALL-STAR Institutional money management approach for individual
investors.
- --------------------------------------------------------------------------------
COLONIAL Fixed income and value style equity investing.
- --------------------------------------------------------------------------------
CRABBE A contrarian approach to fixed income and equity investing.
HUSON
- --------------------------------------------------------------------------------
NEWPORT A leader in international investing(SM)
- --------------------------------------------------------------------------------
STEIN ROE Innovative solutions for growth and income investing.
ADVISOR
- --------------------------------------------------------------------------------
KEYPORT A leading provider of innovative annuity products.
- --------------------------------------------------------------------------------
Liberty's mutual funds are offered by prospectus through Liberty Funds
Distributor, Inc.
Before you invest, consult your financial advisor.
Your financial advisor can help you develop a long-term plan for reaching your
financial goals.
- --------------------------------------------------------------------------------
COLONIAL MONEY MARKET FUND Semiannual Report
- --------------------------------------------------------------------------------
[LOGO] LIBERTY
--------
FUNDS
ALL-STAR o COLONIAL o CRABBE HUSON o NEWPORT o STEIN ROE ADVISOR
---------------
BULK RATE
U.S. POSTAGE
PAID
HOLLISTON, MA
PERMIT NO. 20
---------------
Liberty Funds Distributor, Inc. (C)2000
One Financial Center, Boston, MA 02111-2621, 1-800-426-3750
www.libertyfunds.com
767-03/229A-0100 (2/00)(00/133)
