<PAGE>
[GRAPHIC 1]
COLONIAL
MUTUAL FUNDS
[GRAPHIC 2]
COLONIAL
GLOBAL NATURAL
RESOURCES FUND
SEMIANNUAL REPORT
APRIL 30, 1995
[RECYCLE LOGO] Printed on recycled paper.
NR-03/899A-0495
COLONIAL INVESTMENT SERVICES, INC. (C)1995
<PAGE>
LETTER FROM THE PRESIDENT
Dear Shareholder:
The following is Colonial Global Natural Resources Fund's semiannual report
for the six months ended April 30, 1995.
During the period, your Fund's name was changed from Colonial Natural
Resources Fund to Colonial Global Natural Resources Fund. This was done to more
closely reflect the diversified approach the Fund uses in seeking its objective
of preservation of capital purchasing power and long-term growth.
FUND PERFORMANCE (11/1/94 - 4/30/95)
<TABLE>
<CAPTION>
CLASS A CLASS B
INCEPTION 6/8/92 6/8/92
- --------------------------------------------------------------------------------
<S> <C> <C>
Distributions declared
per share $ 0.29 $ 0.2504
- --------------------------------------------------------------------------------
Six-month total return, assuming
reinvestment of all distributions
and no sales charge or CDSC -2.29% -2.63%
- --------------------------------------------------------------------------------
Net asset value per share
on 4/30/95 $12.55 $12.50
- --------------------------------------------------------------------------------
</TABLE>
ECONOMIC/MARKET OVERVIEW
The global economic conditions that influence resource stocks were quite
volatile during the semiannual period, and this was reflected in the Fund's
performance.
Economic growth in global markets slowed, as evidenced in the loss in
momentum experienced by the world's largest economies, including the United
States, Japan, and Germany. Key industries in Europe and the United States,
including construction and automotive, weakened, resulting in lower demand for
metals. Overall, interest rate trends have had a negative impact on resource
stocks in these and other countries.
After the Federal Reserve Board increased interest rates for the sixth time
during 1994, inflation concerns in the United States began to subside, pushing
gold prices lower. Gold prices increased modestly late in the period, due
primarily to the continued weakness of the dollar.
Energy prices were less volatile than gold prices. Natural gas prices moved
lower, as that sector contended with one of the warmest winters in 100 years.
However, there was some good news from other sectors, including crude oil. In
fact, crude oil prices reached their highest levels in almost three years. Oil's
recovery reflected a fortuitous confluence of events. Restrictions on Iraq's oil
exports were reaffirmed by the United Nations Security Council, and other
members of the Organization of Petroleum Exporting Countries (OPEC) continued to
observe production quotas. At the same time, North Sea production declined due
to seasonal maintenance of equipment. Another positive factor was increased
demand for gasoline in the United States.
[PHOTO]
[CAPTION: "John A. McNeice, Jr., President]
INVESTMENT STRATEGY
During the period, lead portfolio manager Susan Cordes increased portfolio
diversification by selectively increasing investments in some sectors, and
deemphasizing other sectors with less promising prospects.
One of the biggest changes in the portfolio was the decrease in gold stocks,
from 18.08% of investments on November 1, 1994, to 15.14% on April 30, 1995.
Susan invested the proceeds in paper, forest products, and chemicals, among
others.
For further information about Colonial Global Natural Resources Fund, please
contact your financial adviser or call Colonial at 1-800-426-3750.
Sincerely,
/s/ JOHN A. MCNEICE, JR.
- --------------------------------
John A. McNeice, Jr.
President
June 10, 1995
Past performance cannot predict future results. Return and value of an
investment will vary, resulting in a gain or loss on sale. All results shown
assume reinvestment of distributions. Net asset value (NAV) return does not
include sales charges or contingent deferred sales charges (CDSC). Performance
for different share classes will vary based on differences in sales charges and
fees associated with each class.
<PAGE>
INVESTMENT PORTFOLIO (UNAUDITED, IN THOUSANDS) APRIL 30, 1995
<TABLE>
<CAPTION>
COUNTRY
COMMON STOCKS - 94.4% ABBREV. SHARES VALUE
- -------------------------------------------------------------------
<S> <C> <C> <C>
FINANCE, INSURANCE & REAL ESTATE - 0.6%
REAL ESTATE - 0.6%
United Overseas Land Ltd. S 186 $ 358
- -------------------------------------------------------------------
MANUFACTURING - 42.0%
CHEMICALS - 4.9%
Borden Chemicals & Plastic 15 256
Dow Chemical Co. 8 563
E.I. DuPont De Nemours & Co. 10 678
Norsk Hydro AS No 13 525
OM Group, Inc. 20 466
Sterling Chemicals, Inc. (a) 25 313
------
2,801
------
FABRICATED METAL - 0.4%
Acme Metals, Inc. (a) 16 253
------
LUMBER & WOOD PRODUCTS - 3.6%
Georgia Pacific Corp. 7 540
Noranda, Inc. Ca 30 521
Pacific Forest Products Ltd. (a) Ca 32 328
Quno Corp. (a) Ca 14 262
West Fraser Timber Co., Ltd. Ca 17 403
------
2,054
------
MACHINERY & COMPUTER EQUIPMENT - 1.9%
Methanex Corp. (a) Ca 25 260
NN Ball and Roller, Inc. 27 414
Varco International, Inc. (a) 50 420
------
1,094
------
PAPER & PAPER MILLS - 6.5%
Carter Holt Harvey Nz 191 486
International Paper Co. 4 323
Longview Fibre Co. 32 525
Louisiana-Pacific Corp. 20 518
Pope & Talbot, Inc. 31 511
Repap Enterprises, Inc. (a) Ca 54 376
Republic Gypsum Co. 34 348
Weyerhaeuser Co. 15 638
------
3,725
------
PETROLEUM REFINING - 14.1%
Amoco Corp. 8 525
Atlantic Richfield Co. 4 475
British Petroleum Co. PLC 7 642
Burmah Castrol PLC UK 41 575
Diamond Shamrock, Inc. 18 484
Exxon Corp. 9 592
MAPCO, Inc. 7 398
Mobil Corp. 7 655
Murphy Oil Corp. 10 446
OMV Handels AG Aus 6 584
Petrofina SA Be 2 484
Phillips Petroleum Co. 17 602
Repsol SA 19 598
Royal Dutch Petroleum Co. 5 $ 558
Texaco, Inc. 6 424
------
8,042
------
PRIMARY METAL - 5.8%
Alcan Aluminum Ltd. 22 624
Aluminum Company of America 14 610
Armco, Inc. (a) 63 444
Inland Steel Industries, Inc. 12 302
J & L Specialty Steel, Inc. 18 340
Kim Hin Industry Berhad (a) M 61 294
Nucor Corp. 9 422
Quanex Corp. 12 274
--------
3,310
--------
PRIMARY SMELTING - 2.5%
Alcan Australia Ltd. (a) Au 71 143
RTZ Corp. 10 528
Western Mining Corp.
Holdings Ltd. Au 130 736
--------
1,407
--------
RUBBER & PLASTIC - 0.6%
Goodyear Tire & Rubber Co. 9 350
--------
STONE, CLAY, GLASS & CONCRETE - 1.7%
Holderbank Financiere
Glarus-AG Sz 1 402
Medusa Corp. 13 290
USG Corp. (a) 12 288
--------
980
- -------------------------------------------------------------------
MINING - 44.7%
COAL MINING - 0.9%
Ashland Coal, Inc. 19 519
--------
CRUDE PETROLEUM & NATURAL GAS - 11.6%
Ampolex Ltd. Au 240 695
Anadarko Petroleum Corp. 16 658
Apache Corp. 25 686
Burlington Resources, Inc. 13 503
Compagnie Francaise de
Petroleum Total B Fr 9 548
Occidental Petroleum 26 598
Ranger Oil Ltd. 77 569
Saga Petroleum Free No 44 633
Shell Transport & Trading Co. UK 44 520
Societe Nationale elf Aquitaine Fr 8 606
Triton Energy Corp. (a) 15 562
--------
6,578
--------
GOLD & SILVER MINING - 8.7%
American Barrick Resources Corp. 23 552
Ashanti Goldfields Co. Ltd. 10 244
Cambior, Inc. Ca 45 511
Gold Mines of Kalgoorlie Ltd. Au 763 666
Newmont Mining Corp. 11 470
Placer Dome, Inc. 26 625
</TABLE>
See notes to investment portfolio.
2
<PAGE>
INVESTMENT PORTFOLIO - CONTINUED
<TABLE>
<CAPTION>
COUNTRY
COMMON STOCKS - CONT. ABBREV. SHARES VALUE
- --------------------------------------------------------------------------
<S> <C> <C> <C>
GOLD & SILVER MINING - CONT.
Placer Pacific Ltd. Au 197 $ 489
Sons of Gwalia Ltd. Au 160 706
TVX Gold, Inc. Ca 94 694
-------
4,957
-------
METAL MINING - 13.1%
Acacia Resources Ltd. (a) Au 130 256
Alumax, Inc. (a) 20 565
Ashton Mining Ltd. Au 265 463
Brush Wellman, Inc. 18 354
Cyprus Amax Minerals Co. 17 485
Freeport-McMoRan Copper
& Gold, Inc. 22 468
Goldcorp, Inc. Ca 41 446
Impala Platinum Holdings Ltd. 20 446
Kinross Gold Corp. (a) Ca 66 399
MIM Holdings Ltd. Au 3 5
Magma Copper Class B (a) 19 325
Malaysia Mining Corp. BHD M 289 487
Mount Edon Gold Mines Au 156 341
Pancontinental Mining Ltd.(a) Au 440 589
QNI Ltd. (a) Au 278 375
Rayrock Yellowknife
Resources, Inc. (a) Ca 40 426
Santa Fe Pacific Gold Corp. (a) 40 508
Teck Corp., Class B Ca 30 529
-------
7,467
-------
MISCELLANEUOS METAL ORES - 2.8%
Broken Hill Proprietary Au 48 695
Co. Ltd.
CRA Ltd. Au 41 592
Pasminco Ltd. (a) Au 309 332
-------
1,619
-------
OIL & GAS EXTRACTION - 6.6%
Alberta Energy Co. Ltd. Ca 31 476
Energy Service Co., Inc. (a) 24 397
Global Marine, Inc. (a) 73 318
Lasmo PLC ADR UK 69 552
Oryx Energy Co. 32 440
Rowan Companies, Inc. (a) 39 271
Santos Ltd. (a) Au 152 419
Snyder Oil Corp. 27 393
Talisman Energy, Inc. (a) Ca 24 464
-------
3,730
-------
OIL & GAS FIELD SERVICES - 1.0%
Parker Drilling Co. (a) 55 261
Schlumberger Ltd. 5 295
-------
556
- --------------------------------------------------------------------------
TRANSPORTATION, COMMUNICATION,
ELECTRIC, GAS & SANITARY SERVICES - 6.2%
ELECTRIC, GAS & SANITARY SERVICES - 0.6%
Welsh Water PLC UK 33 $ 326
-------
ELECTRIC SERVICES - 0.8%
EVN Energie-Versorgung
Niederoesterreich AG Aus 4 468
-------
GAS SERVICES - 3.8%
Coastal Corp. 15 446
Enron Corp. 14 490
MCN Corp. 18 350
New Jersey Resources Corp. 10 234
Panhandle Eastern Corp. 27 643
-------
2,163
-------
Railroad - 1.0%
Santa Fe Pacific Corp. 24 561
- --------------------------------------------------------------------------
WHOLESALE TRADE - 0.9%
DURABLE GOODS
CSR Ltd. Au 159 508
- --------------------------------------------------------------------------
Total common stocks (cost $46,587) 53,826
- --------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CONVERTIBLE CURRENCY
BONDS & NOTES - 1.4% ABBREV. PAR
- --------------------------------------------------------------------------
<S> <C> <C> <C>
MINING - 1.4%
METAL MINING - 0.7%
Dayton Mining Corp.
7.000% 01/31/99 C$ 300 408
MISCELLANEUOS METAL ORES - 0.7%
Renison Goldfields Consolidated
Ltd., 8.000% 11/30/96 A$ 58 398
- --------------------------------------------------------------------------
Total convertible bonds & notes (cost $775) 806
- --------------------------------------------------------------------------
Total investments - 95.8% (cost $47,362)(b) 54,632
- --------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS - 4.4%
- --------------------------------------------------------------------------
Repurchase agreement with Bankers
Trust Securities Corp., dated 04/28/95,
due 05/01/95 at 5.92%, collateralized
by U.S. Treasury notes with various
maturities to 1998, market value $2,741
(repurchase proceeds $2,496) $2,495 $ 2,495
- --------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES, NET - (0.2)% (113)
- --------------------------------------------------------------------------
NET ASSETS - 100.0% $57,014
- --------------------------------------------------------------------------
<FN>
Notes to investment portfolio:
(a) Non-income producing.
(b) Cost for federal income tax purposes
is approximately the same.
</TABLE>
3
<PAGE>
INVESTMENT PORTFOLIO - CONTINUED
Notes to investment portfolio - cont.
<TABLE>
SUMMARY OF SECURITIES BY COUNTRY/CURRENCY
<CAPTION>
Country/ % of total
Currency securities
Country abbrev. Value at value
------- -------- ------- ----------
<S> <C> <C> <C>
United States.... $31,873 58.4
Australia........ Au/A$ 8,408 15.4
Canada........... Ca/C$ 6,502 11.9
United Kingdom... UK 1,973 3.6
Norway........... No 1,158 2.1
Austria.......... Aus 1,052 1.9
Malysia.......... M 781 1.4
France........... Fr 1,155 2.1
New Zealand...... Nz 486 0.9
Belgium.......... Be 484 0.9
Switzerland...... Sz 402 0.7
Singapore........ S 358 0.7
------- -----
$54,632 100.0
------- -----
</TABLE>
<TABLE>
<CAPTION>
ACRONYM NAME
------------ -------------------------------
<S> <C>
ADR American Depository Receipt
</TABLE>
Certain securities are listed by country of underlying exposure but may trade
predominantly on other exchanges.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 1. INTERIM FINANCIAL STATEMENTS
In the opinion of management of Colonial Global Natural Resources Fund (the
Fund), a series of Colonial Trust III, the accompanying financial statements
contain all normal and recurring adjustments necessary for the fair presentation
of the financial position of the Fund at April 30, 1995, and the results of its
operations and the changes in its net assets, and financial highlights for the
six months then ended.
- --------------------------------------------------------------------------------
NOTE 2. ACCOUNTING POLICIES
The Fund is a Massachusetts business trust, registered under the Investment
Company Act of 1940, as amended, as a non-diversified, open end, management
investment company. The Fund offers Class A shares sold with a front-end sales
charge and Class B shares which 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. The following
significant accounting policies are consistently followed by the Fund in the
preparation of its financial statements and conform to generally accepted
accounting principles.
- --------------------------------------------------------------------------------
SECURITY VALUATION AND TRANSACTIONS
Equity securities are valued at the last sale price or, in the case of
unlisted or listed securities for which there were no sales during the day, at
current quoted bid prices.
Debt securities generally are valued by a pricing service based upon market
transactions for normal, institutional-size trading units of similar securities.
When management deems it appropriate, an over-the-counter or exchange bid
quotation is used.
Forward currency contracts are valued based on the weighted value of the
exchange traded contracts with similar durations.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
The value of all assets and liabilities quoted in foreign currencies are
translated into U.S. dollars at that day's exchange rates.
Portfolio positions which cannot be valued as set forth above are valued at
fair value under procedures approved by the Trustees.
Security transactions are accounted for on the date the securities are
purchased or sold.
Cost is determined and gains and losses are based upon the specific
identification method for both financial statement and federal income tax
purposes.
- --------------------------------------------------------------------------------
DETERMINATION OF CLASS NET ASSET VALUES AND
FINANCIAL HIGHLIGHTS
All income, expenses (other than the Class B distribution fee), realized
and unrealized gains (losses) are allocated to each class proportionately on a
daily basis for purposes of
Continued on page 7.
4
<PAGE>
FINANCIAL STATEMENTS
STATEMENT OF ASSETS & LIABILITIES (UNAUDITED)
April 30, 1995
(in thousands except for per share amounts and footnote)
<TABLE>
- --------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments at value (cost $47,362)............ $ 54,632
Short-term obligations......................... 2,495
----------
57,127
Cash held in foreign banks (cost $1)........... $ 1
Receivable for:
Dividends.................................... 160
Fund shares sold............................. 135
Interest..................................... 11
Foreign tax reclaims......................... 6
Deferred organization expenses................. 30
Other.......................................... 13 356
------- ----------
Total assets.......................... 57,483
LIABILITIES
Payable for:
Fund shares repurchased...................... 305
Investments purchased........................ 163
Accrued deferred Trustees fees................. 1
-------
Total liabilities..................... 469
----------
NET ASSETS..................................... $ 57,014
----------
Net asset value & redemption price per share -
Class A ($34,107/2,717)...................... $ 12.55
----------
Maximum offering price per share - Class A
($12.55/0.9425).............................. $ 13.32*
----------
Net asset value & offering price per share -
Class B ($22,907/1,832)...................... $ 12.50
----------
Composition of net assets
Capital paid in............................. $ 49,373
Undistributed net investment income......... 29
Accumulated net realized gain............... 342
Net unrealized appreciation................. 7,270
----------
$ 57,014
----------
</TABLE>
STATEMENT OF OPERATIONS (UNAUDITED)
Six months April 30, 1995
(in thousands)
<TABLE>
- ----------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Dividends...................................... $ 559
Interest....................................... 123
----------
Total investment income (net of nonrebatable
foreign taxes withheld at source which
amounted to $25)........................... 682
EXPENSES
Management fee................................. $ 208
Service fee.................................... 69
Distribution fee - Class B..................... 83
Transfer agent................................. 96
Bookkeeping fee................................ 14
Trustees fees.................................. 6
Custodian fee.................................. 12
Audit fee...................................... 21
Legal fee...................................... 3
Registration fees.............................. 15
Reports to shareholders........................ 4
Amortization of deferred
organization expenses........................ 7
Other.......................................... 5 543
------- ----------
Net investment income...................... 139
----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON PORTFOLIO POSITIONS
Net realized loss on:
Investments.................................. (101)
Foreign currency transactions................ (10)
-------
Net realized loss.......................... (111)
Net unrealized appreciation (depreciation)
during the period on:
Investments.................................. (1,580)
Forward currency contracts................... 2
Foreign currency transactions................ (2)
-------
Net unrealized depreciation............... (1,580)
----------
Net loss................................ (1,691)
----------
Net decrease in net assets from
operations................................... $ (1,552)
----------
<FN>
* On sales of $50,000 or more the offering price is reduced.
</TABLE>
See notes to financial statements.
5
<PAGE>
FINANCIAL STATEMENTS - CONTINUED
STATEMENT OF CHANGES IN NET ASSETS
(in thousands)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
(unaudited)
Six months Year ended
ended April 30 October 31
-------------- ----------
1995 1994
-------------- ----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income.............................. $ 139 $ 321
Net realized gain (loss)........................... (111) 1,152
Net unrealized appreciation (depreciation)......... (1,580) 2,748
------- --------
Net increase (decrease) from operations........ (1,552) 4,221
Distributions
From net investment income - Class A............... (167) (308)
From net realized gains - Class A.................. (643) (256)
From net investment income - Class B............... (38) (34)
From net realized gains - Class B.................. (424) (63)
------- --------
(2,824) 3,560
------- --------
Fund share transactions
Receipts for shares sold - Class A................. 3,223 16,099
Value of distributions reinvested - Class A........ 704 491
Cost of shares repurchased - Class A............... (4,882) (13,429)
------- --------
(955) 3,161
------- --------
Receipts for shares sold - Class B................. 5,209 18,207
Value of distributions reinvested - Class B........ 413 91
Cost of shares repurchased - Class B............... (4,117) (4,008)
------- --------
1,505 14,290
------- --------
Net increase from Fund share transactions...... 550 17,451
------- --------
Total increase (decrease)............... (2,274) 21,011
NET ASSETS
Beginning of period................................ 59,288 38,277
------- --------
End of period (including undistributed net
investment income of $29 and $56, respectively).. $57,014 $ 59,288
------- --------
Number of Fund shares
Sold - Class A..................................... 268 1,268
Issued for distributions reinvested - Class A...... 60 40
Repurchased - Class A.............................. (409) (1,066)
------- --------
(81) 242
------- --------
Sold - Class B..................................... 431 1,431
Issued for distributions reinvested - Class B...... 35 7
Repurchased - Class B.............................. (347) (317)
------- --------
119 1,121
------- --------
Net increase in shares outstanding 38 1,363
Outstanding at
Beginning of year................................ 4,511 3,148
------- --------
End of year...................................... 4,549 4,511
------- --------
</TABLE>
See notes to financial statements.
6
<PAGE>
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- --------------------------------------------------------------------------------
determining the net asset value of each class.
The per share data was calculated using the average shares outstanding
during the period. In addition, Class B net investment income per share data
reflects the distribution fee applicable to Class B shares only.
Class B ratios are calculated by adjusting the expense and net investment
income ratios for the Fund for the entire period by the distribution fee
applicable to Class B 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.
- --------------------------------------------------------------------------------
INTEREST INCOME, DEBT DISCOUNT AND PREMIUM
Interest income is recorded on the accrual basis. Original issue discount
is accreted to interest income over the life of a security with a corresponding
increase in the cost basis; premium and market discount are not amortized or
accreted.
- --------------------------------------------------------------------------------
DEFERRED ORGANIZATION EXPENSES
The Fund incurred $71,295 of expenses in connection with its organization
and initial registration with the Securities and Exchange Commission and with
various states and the initial public offering of its shares. These expenses
were deferred and are being amortized on a straight-line basis over five
years.
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded on the ex-date.
The amount and character of income and gains to be distributed are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles.
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSACTIONS
The Fund has adopted Statement of Position 93-4, Foreign Currency
Accounting and Financial Statement Presentation for Investment Companies.
Accordingly, net realized and unrealized gain (loss) on foreign currency
transactions includes the fluctuation in exchange rates on gains and losses
between trade and settlement dates on securities transactions, gains and losses
arising from the disposition of foreign currency, and currency gains and losses
between the accrual and payment dates on dividend and interest income and
foreign withholding taxes.
The Fund does not distinguish that portion of gains and losses on
investments which is due to changes in foreign exchange rates from that which is
due to changes in market prices of the investments. Such fluctuations are
included with the net realized and unrealized gains and losses from investments.
- --------------------------------------------------------------------------------
FORWARD CURRENCY CONTRACTS
The Fund may enter into forward currency contracts to purchase or sell
foreign currencies at predetermined exchange rates in connection with the
settlement of purchases and sales of securities. The Fund may also enter into
forward currency contracts to hedge certain other foreign currency denominated
assets. The contracts are used to minimize the exposure to foreign exchange
rate fluctuations during the period between trade and settlement date of the
contracts. All contracts are marked-to-market daily, resulting in unrealized
gains or losses which become realized at the time the forward currency contracts
are closed or mature. Realized and unrealized gains (losses) arising from such
transactions are included in net realized and unrealized gains (losses) on
foreign currency transactions. Forward currency contracts do not eliminate
fluctuations in the prices of the Fund's portfolio securities. While the
maximum potential loss from such contracts is the aggregate face value in U.S.
dollars at the time the contract was opened, the actual exposure is typically
limited to the change in value of the contract (in U.S. dollars) over the period
it remains open. Risks may also arise if counterparties fail to perform their
obligations under the contracts.
- --------------------------------------------------------------------------------
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- --------------------------------------------------------------------------------
OTHER
Corporate actions are recorded on the ex-date (except for certain foreign
securities which are recorded as soon after the ex-date as the Fund becomes
aware of such), net of nonrebatable tax withholdings. Where a high level of
uncertainty as to collection exists, income on securities is recorded net of all
tax withholdings with any rebates recorded when received.
The Fund's custodian takes possession through the federal book-entry system
of securities collateralizing repurchase agreements. Collateral is
marked-to-market daily to ensure that the market value of the underlying
assets remains sufficient to protect the Fund. The Fund may experience costs and
delays in liquidating the collateral if the issuer defaults or enters
bankruptcy.
- --------------------------------------------------------------------------------
NOTE 3. FEES AND COMPENSATION PAID TO AFFILIATES
MANAGEMENT FEE
Colonial Management Associates, Inc., (the Adviser) is the investment
adviser of the Fund and furnishes accounting and other services and office
facilities for a monthly fee equal to 0.75% annually of the Fund's average net
assets.
- --------------------------------------------------------------------------------
BOOKKEEPING FEE
The Adviser provides bookkeeping and pricing services for $27,000 per year
plus 0.035% of the Fund's average net assets over $50 million.
- --------------------------------------------------------------------------------
TRANSFER AGENT
Colonial Investors Service Center, Inc., (the Transfer Agent), an affiliate
of the Adviser, provides shareholder services for a monthly fee equal to 0.25%
annually of the Fund's average net assets and receives a reimbursement for
certain out of pocket expenses.
- --------------------------------------------------------------------------------
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES
The Adviser, through Colonial Investment Services, Inc., (the Distributor),
is the Fund's principal underwriter. During the six months ended April 30, 1995,
the Distributor retained net underwriting discounts of $5,834 on sales of the
Fund's Class A shares and received contingent deferred sales charges (CDSC) of
$48,295 on Class B share redemptions.
The Fund has adopted a 12b-1 plan which requires it to pay the Distributor
a service fee equal to 0.25% annually of the Fund's 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% of the average net assets attributable to Class B
shares.
The CDSC and the fees received from the 12b-1 plan are used principally as
repayment to the Distributor for amounts paid by the Distributor to dealers who
sold such shares.
- --------------------------------------------------------------------------------
OTHER
The Fund pays no compensation to its officers, all of whom are employees of
the Adviser.
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. PORTFOLIO INFORMATION
During the six months ended April 30, 1995, purchases and sales of
investments, other than short-term obligations, were $13,419,471 and
$11,906,442, respectively.
Unrealized appreciation (depreciation) at April 30, 1995, based on cost of
investments for both financial statement and federal income tax purposes was:
<TABLE>
<S> <C>
Gross unrealized appreciation................ $ 8,824,446
Gross unrealized depreciation................ (1,554,386)
------------
Net unrealized appreciation................ $ 7,270,060
------------
</TABLE>
- --------------------------------------------------------------------------------
OTHER
There are certain additional risks involved when investing in foreign
securities that are not inherent with investments in domestic securities. These
risks may involve foreign
- --------------------------------------------------------------------------------
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS - continued
- --------------------------------------------------------------------------------
currency exchange rate fluctuations, adverse political and economic developments
and the possible prevention of currency exchange or other foreign governmental
laws or restrictions.
The Fund may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
- --------------------------------------------------------------------------------
NOTE 5. RESULTS OF SPECIAL SHAREHOLDERS MEETING
On February 15, 1995, a special meeting of shareholders was held and a new
Management Agreement between the Trust and Colonial Management Associates, Inc.
was approved that became effective upon the completion of the merger of The
Colonial Group, Inc. and Apple Merger Corporation, a subsidiary of Liberty
Financial Companies, Inc. on March 24, 1995. Out of the shares of beneficial
interest outstanding on December 9, 1994, 2,815,161 voted for the new Management
Agreement, 85,333 voted against, and 160,321 abstained. Of the shares of
beneficial interest outstanding that abstained, 42,530 represented broker
non-votes.
- --------------------------------------------------------------------------------
9
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
Selected data for a share of each class outstanding throughout each period are
as follows:
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
(UNAUDITED)
SIX MONTHS
ENDED APRIL 30 YEAR ENDED OCTOBER 31
--------------------- ------------------------------------------
1995 1994 1993
--------------------- ------------------- ------------------
CLASS A CLASS B CLASS A CLASS B CLASS A CLASS B
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value - Beginning of period............ $13.160 $13.110 $12.160 $12.130 $ 9.750 $ 9.720
------- ------- ------- ------- ------- -------
Income (loss) from investment operations:
Net investment income.......................... (0.048) (0.003) 0.114 0.019 0.099 0.018
Net realized and unrealized gain (loss)
on investments............................... (0.368) (0.363) 1.104 1.097 2.429 2.431
------- ------- ------- ------- ------- -------
Total from investment operations.......... (0.320) (0.360) 1.218 1.116 2.528 2.449
------- ------- ------- ------- ------- -------
Less distributions declared to shareholders:
From net investment income..................... (0.060) (0.020) (0.118) (0.036) (0.118) (0.039)
From net realized gains........................ (0.230) (0.230) (0.100) (0.100) -- --
------- ------- ------- ------- ------- -------
Total distributions declared
to shareholders......................... (0.290) (0.250) (0.218) (0.136) (0.118) (0.039)
------- ------- ------- ------- ------- -------
Net asset value - End of period.................. $12.550 $12.500 $13.160 $13.110 $12.160 $12.130
------- ------- ------- ------- ------- -------
Total return (b)................................. (2.29)%(c) (2.63)%(c) 10.14% 9.28% 26.20% 25.30%
------- ------- ------- ------- ------- -------
Ratios to average net assets:
Expenses....................................... 1.66%(d) 2.41%(d) 1.70% 2.45% 1.88% 2.63%
Net investment income.......................... 0.80%(d) 0.05%(d) 0.90% 0.15% 0.92% 0.17%
Portfolio turnover............................... 46%(d) 46%(d) 15% 15% 14% 14%
Net assets at end of period (000)................ $34,107 $22,907 $36,830 $22,458 $31,098 $ 7,179
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
PERIOD ENDED
OCTOBER 31
---------------------
1992 (A)
---------------------
CLASS A CLASS B
------- -------
<S> <C> <C>
Net asset value - Beginning of period............ $10.000 $10.000
------- -------
Income (loss) from investment operations:
Net investment income.......................... 0.042 0.012
Net realized and unrealized gain (loss)
on investments............................... (0.292) (0.292)
------- -------
Total from investment operations.......... (0.250) (0.280)
------- -------
Less distributions declared to shareholders:
From net investment income.................... -- --
From net realized gains....................... -- --
------- -------
Total distributions declared
to shareholders........................ -- --
------- -------
Net asset value - End of period.................. $ 9.750 $ 9.720
------- -------
Total return (b)................................. (2.50)%(c) (2.80)%(c)
------- -------
Ratios to average net assets
Expenses....................................... 2.45%(d) 3.20%(d)
Net investment income.......................... 1.07%(d) 0.32%(d)
Portfolio turnover............................... 89%(d) 89%(d)
Net assets at end of period (000)................ $27,790 $ 4,444
<FN>
(a) The Fund commenced investment operations on June 8, 1992.
(b) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or CDSC.
(c) Not annualized.
(d) Annualized.
</TABLE>
- --------------------------------------------------------------------------------
10
<PAGE>
- --------------------------------------------------------------------------------
ABOUT OUR COVER...
[GRAPHIC] The symbol on the cover of this Report represents the
Fund's primary investment focus on common stocks.
- --------------------------------------------------------------------------------
Colonial Global Natural Resources Fund mails one shareholder report to each
shareholder address. If you would like more than one report, please call our
Literature Department at 1-800-248-2828 and additional reports will be sent to
you.
SHAREHOLDER SERVICES AND TRANSFER AGENT
Colonial Investors Service Center, Inc.
P.O. Box 1722
Boston, MA 02105-1722
1-800-345-6611
This material may be used with potential investors if it is preceded or
accompanied by a current Fund prospectus containing more complete information
including fees, risks, and expenses.