<PAGE>
LETTER FROM THE PRESIDENT
- --------------------------------------------------------------------------------
Dear Shareholder:
Following is Colonial Global Equity Fund's semiannual report for the
six months ended April 30, 1995. Your Fund strives to provide long-term
growth by investing primarily in global equities.
<TABLE>
FUND PERFORMANCE (11/1/94 - 4/30/95)
<CAPTION>
CLASS A CLASS B
INCEPTION 6/8/92 6/8/92
- ---------------------------------------------------------------
<S> <C> <C>
Distributions declared
per share $1.044 $0.999
- ---------------------------------------------------------------
Six-month total return, assuming
reinvestment of all distributions
and no sales charge or CDSC 2.09% 1.78%
- ---------------------------------------------------------------
Net asset value per share
on 4/30/95 $11.84 $11.79
- ---------------------------------------------------------------
</TABLE>
ECONOMIC/MARKET OVERVIEW
Throughout 1994, investors were concerned that the U.S. economy's
vigorous growth would reignite inflation. However, it now appears the Federal
Reserve Board's monetary policy has reduced growth and kept inflation under
control. As a result, U.S. stocks have continued to improve, despite a
decline in the value of the dollar. In fact, the United States has had one of
the world's strongest stock markets during 1995.
European interest rates have moved lower, as have their U.S.
counterparts. This has been reflected in improving conditions for most
economies, although the European economies are at an earlier phase of the
recovery cycle than the U.S. market. The exception is the United Kingdom,
which has more closely tracked the U.S. economy. Japan had been showing signs
of a recovery toward the end of 1994. However, negative pressures, resulting
from the unexpected strength of the yen and the impact of the Kobe earthquake,
have stifled economic activity.
INVESTMENT STRATEGY
During the semiannual period, Colonial Global Equity Fund remained
fully invested in a diverse selection of U.S. and foreign stocks. At the end
of the period, the Fund owned 185 stocks in 27 countries and 9 industries.
Management saw economic weakness in Japan as a buying opportunity.
Japanese investments were increased from 9.7% to 15.6% of the portfolio, with
Japan replacing Germany as the largest country position in the portfolio.
Although investments in many European countries have been increased, there has
been a bias toward the northern part of the continent, which is improving
faster than the southern region.
[PICTURE OF JOHN A. MCNEICE, JR. PRESIDENT]
U.S. investments were maintained at approximately 28% of the portfolio.
Investments in South American markets were given a lower profile, with Mexican
investments reduced sharply in response to the devaluation of the peso.
Brazilian investments were eliminated altogether. The portfolio remains
broadly diversified in Far Eastern countries, including Malaysia, Singapore,
and Thailand.
Global equities should continue to provide attractive returns in the
months ahead, especially as foreign markets gradually catch up with the U.S.
market. Investments in most regions will likely be maintained at current
levels, although management will be looking for new opportunities in South
America and the Far East.
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. Performance
for different share classes will vary based on differences in sales charges
and fees associated with each class.
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO (UNAUDITED, IN THOUSANDS) APRIL 30, 1995
- ---------------------------------------------------------------------
<CAPTION>
COUNTRY
COMMON STOCKS - 95.6% ABBREV. SHARES VALUE
- ---------------------------------------------------------------------
<S> <C> <C> <C>
AGRICULTURE, FORESTRY & FISHING - 0.6%
CROPS - 0.2%
Perils Plantations Berhad Ma 35 $ 113
------
FISHING, HUNTING & TRAPPING - 0.4%
Sanford Ltd. NZ 110 263
- ---------------------------------------------------------------------
CONSTRUCTION - 2.9%
Building construction - 1.1%
Hollandsche Beton Groep NV Ne 1 221
Koninklijke Volker Stevin NV Ne 9 545
------
766
------
HEAVY CONSTRUCTION-NON BUILDING CONSTRUCTION - 1.8%
Cubiertas y Mzov SA Sp 7 449
Dai Nippon Construction Ja 9 68
Koninklijke Boskalis
Westminster NV Ne 7 93
Kydenko Co. Ja 16 222
Strabag Oesterreich AG Aus 2 246
Yondenko Corp. Ja 16 165
------
1,243
- ---------------------------------------------------------------------
FINANCE, INSURANCE & REAL ESTATE - 24.5%
DEPOSITORY INSTITUTIONS - 10.6%
Allied Irish Bank UK 17 78
Banco Atlantico SA Sp 2 49
Banco de Santander SA Sp 4 131
Bank of Montreal Ca 9 174
BankAmerica Corp. 5 262
Bil GT Gruppe AG Sz (a) 70
Citicorp 7 311
Commonwealth Bank Au 18 124
Credito Fondiario It 19 54
CS Holdings Sz 1 419
Deposit Guaranty Corp. 6 208
Hong Leong Finance Ltd. Si 57 181
HSBC Holdings PLC HK 83 965
IKB Deutsche
Industriebank AG G 3 458
Jyske Bank De 13 949
Kita Nippon Bank Ja 2 134
Krung Thai Bank Ltd. Th 45 127
Lloyds Bank PLC UK 13 133
National Westminster
Bank PLC UK 30 262
Republic New York Corp. 16 756
Thai Military Bank Ltd. Th 90 289
United Overseas Bank Si 31 322
Westpac Banking Corp. Au 264 973
------
7,429
------
HOLDING & OTHER INVESTMENT COMPANIES - 6.7%
Asia Tiger Funds (b) 21 202
Clemente Global Growth
Fund, Inc. (b) 40 320
Emerging Germany Fund, Inc. G 24 $ 171
Emerging Tiger Funds (b) 18 209
Eurafrance Fr 1 242
First Australia Fund, Inc. Au 58 509
First Phillipine Fund, Inc. Ph 41 642
France Growth Fund, Inc. Fr 14 151
Irish Investment Fund, Inc. Ir 46 458
Korean Investment Fund, Inc. Kr (a) 5
Pakistan Investment Fund Pa 53 351
Templeton Dragon Fund, Inc. (b) 63 778
Thai Fund Th 8 191
Thai Investment and Securities Th 5 129
The India Fund, Inc. In 35 372
------
4,730
------
INSURANCE CARRIERS - 6.3%
AON Corp. 9 336
CIGNA Corp. 21 1,518
Fremont General Corp. 12 257
International Nederlanden
Groep Ne 26 1,371
St. Paul Companies 17 804
Topdanmark AS De 1 127
------
4,413
------
REAL ESTATE - 0.9%
Cheung Kong Holdings Ltd. HK 142 598
Sun Hung Kai Properties Ltd. HK 1 6
------
604
- ---------------------------------------------------------------------
MANUFACTURING - 48.5%
APPAREL - 0.0%
Stefanel SPA It 17 28
------
CHEMICALS - 7.1%
Andreae-Noris Zahn AG G 1 179
BASF AG G 2 545
Bayer AG G 3 738
Dai-ichi Seiyaku Ja 6 97
Dow Chemical Co. 8 556
DSM NV Ne 5 385
Glaxo Holdings PLC UK 3 34
Helene Curtis Industries, Inc. 1 34
Rhone-Poulenc Rorer, Inc. 5 188
Shiseido Co. Ltd. Ja 40 485
Sterling Chemicals, Inc. 59 739
Union Carbide Corp. 12 384
Wellman, Inc. 8 221
Yamanouchi
Pharmaceutical Co. Ja 18 404
------
4,989
------
ELECTRONIC & ELECTRICAL EQUIPMENT - 2.3%
Philips Electronics NV Ne 24 935
ROHM Co. Ltd. Ja 12 552
Taiyo Yuden Co. Ltd. Ja 12 128
------
1,615
------
</TABLE>
See notes to investment portfolio.
2
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO - CONTINUED
- ---------------------------------------------------------------------
<CAPTION>
COUNTRY
COMMON STOCKS - CONT. ABBREV. SHARES VALUE
- ---------------------------------------------------------------------
<S> <C> <C> <C>
FABRICATED METAL - 0.8%
GFI Industries SA Fr 4 $ 301
Oerlikon-Buehrle Holding AG Sz 1 76
Oriental Holdings Berhad Ma 43 205
------
582
------
FOOD & KINDRED PRODUCTS - 5.4%
Associated British Foods PLC UK 38 398
Eridania Beghin-Say SA
(Italian Certificates) It 1 106
Fraser & Neave Ltd. Si 30 329
IBP, Inc. 23 833
Kinki Coca Cola Bottling Co. Ja 55 791
Kulim Berhad Si 50 66
Malaysian Tobacco Company Si 24 38
Oesterreichische Brau-
Beteiligungs Aus 2 97
Saint Louis Bouchon Fr 3 797
Tate and Lyle PLC UK 52 363
------
3,818
------
LUMBER & WOOD PRODUCTS - 0.6%
Noranda, Inc. Ca 25 444
------
MACHINERY & COMPUTER EQUIPMENT - 12.0%
Apple Computer, Inc. 15 562
Cummins Engine Co., Inc. 4 175
De Dietrich et Cie Fr 1 449
Fujitsu Ltd. Ja 147 1,501
Hewlett-Packard Co. 2 159
Hitachi Ltd. Ja 122 1,239
Indresco, Inc. 48 673
IBM Corp. 15 1,440
Kaydon Corp. 11 297
NEC Corp. Ja 28 309
Oki Electric Industry Co. Ja 56 397
Seagate Technology, Inc. (c) 16 513
Svedala Industries AB-Free Sw 19 502
Tandem Computers, Inc. 20 259
------
8,475
------
MEASURING & ANALYZING INSTRUMENTS - 2.7%
Amsco International, Inc. 20 252
Avimo Singapore Ltd. Si 109 75
Fuji Photo Film Co. Ltd. Ja 64 1,567
------
1,894
------
PAPER & PAPER MILLS - 1.5%
Champion International Corp. 20 858
Willamette Industries, Inc. 5 231
------
1,089
------
PETROLEUM REFINING - 1.4%
Lyondell Petroleum 28 696
YPF Sociedad Anonima Ar 15 312
------
1,008
------
PRIMARY METAL - 3.0%
Acerinox SA Sp 13 $1,436
Interprovincial Steel Ca 14 243
Texas Industries, Inc. 8 301
Titan Wheel International 5 116
------
2,096
------
PRIMARY SMELTING - 1.5%
Phelps Dodge Corp. 19 1,087
------
RUBBER & PLASTIC - 1.0%
CGIP Fr 3 696
------
STONE, CLAY, GLASS & CONCRETE - 1.2%
Cementos de Mexico SA Mx 14 44
Dyckerhoff & Widmann AG G 1 213
Industrie Zignago It 36 200
Radex Heraklith Industries Aus 4 127
Semen Cibinong In 72 192
UAC Berhad Ma 28 51
------
827
------
TEXTILE MILL PRODUCTS - 0.1%
Winsor Industrial Corp. Ltd. HK 30 37
Tobacco products - 1.7%
B.A.T. Industries PLC UK 51 390
Imasco Ltd. Ca 22 778
------
1,168
------
TRANSPORTATION EQUIPMENT - 6.2%
Equipements et Composants
pour l'Industrie Automobile Fr 2 335
Futaba Industrial Ja 19 330
Honda Motor Company Ltd. Ja 40 646
Kanto Auto Works Ja 25 183
Lockheed Martin Corp. 6 370
McDonnell Douglas Corp. 26 1,618
Peugeot SA Fr 3 401
Toyota Auto Body Co. Ja 36 368
Varlen Corp. 5 113
------
4,364
- ---------------------------------------------------------------------
MINING - 2.7%
METAL MINING - 0.3%
Weinerberger Baustof Aus 1 201
------
NONMETALLIC, EXCEPT FUELS - 1.5%
Potash Corp. Saskatchewan,
Inc. Ca 10 555
Sungei Way Holdings Berhad Ma 125 494
------
1,049
------
OIL & GAS EXTRACTION - 0.9%
Goal Petroleum Group PLC UK 140 165
Petro Canada Ca 22 209
Santos Ltd. Au 85 234
------
608
- ---------------------------------------------------------------------
</TABLE>
See notes to investment portfolio.
3
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO - CONTINUED
- ---------------------------------------------------------------------
<CAPTION>
COUNTRY
COMMON STOCKS - CONT. ABBREV. SHARES VALUE
- ---------------------------------------------------------------------
<S> <C> <C> <C>
RETAIL TRADE - 2.0%
APPAREL & ACCESSORY STORES - 0.6%
Christian Dior SA Fr 5 $ 454
-------
AUTO DEALERS & GAS STATIONS - 0.2%
Sime Darby Ltd. HK 100 110
-------
GENERAL MERCHANDISE STORES - 1.2%
Federated Department Stores, Inc. 17 359
Hudson's Bay Company Ca 10 192
Jardine Strategic Holdings HK 90 304
-------
855
- ---------------------------------------------------------------------
SERVICES - 2.8%
Amusement & recreation - 0.1%
Furama Hotel Enterprises HK 50 58
Genting International Ltd. (a) (a)
-------
58
-------
BUSINESS SERVICES - 1.3%
Central Security Patrols Ja 43 451
News Corp. Ltd. Au 30 131
Ing C. Olivetti & C SPA It 105 79
Orix Corp. Ja 7 229
-------
890
-------
HEALTH SERVICES - 0.7%
Maxicare Health Plan 34 519
-------
HOTELS, CAMPS, & LODGING - 0.7%
New World Development HK 203 527
- ---------------------------------------------------------------------
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES - 10.1%
Air transportation - 1.3%
Air Canada Corp. Ca 22 101
British Airways PLC UK 17 108
Lufthansa G 4 523
Malaysian Airline System BHD Ma 55 170
-------
902
-------
COMMUNICATIONS - 0.9%
Southern New England
Telecommunications Corp. 12 407
Teleglobe, Inc. Ca 7 108
Voksel El In 90 111
-------
626
-------
ELECTRIC, GAS & SANITARY SERVICES - 0.5%
Empresa Sp 15 382
-------
ELECTRIC SERVICES - 3.1%
Berliner Kraft & Licht G 3 712
China Light & Power Co. Ltd. HK (a) 1
Compania Sevillana de
Electricidad Sp 6 28
Hidroel Cantabrico Sp 4 115
Iberdrola SA Sp 27 177
Lech-Elektrizitaetswerke G (a) 90
Pinnacle West Capital Corp. 17 361
Tohoku Electric Power Ja 11 312
Union Electrica-Fenosa Sp 95 $ 397
-------
2,193
-------
GAS SERVICES - 0.2%
BC Gas, Inc. Ca 16 167
-------
SANITARY SERVICES - 3.6%
North West Water PLC UK 40 356
Northumbrian Water
Group PLC UK 80 1,141
Severn Trent Water PLC UK 40 340
Southern Water PLC UK 38 362
Yorkshire Water PLC UK 40 351
-------
2,550
-------
WATER TRANSPORTATION - 0.5%
DFDS De (a) 263
Neptune Orient Lines Ltd. Si 78 90
-------
353
- ---------------------------------------------------------------------
WHOLESALE TRADE - 1.5%
DURABLE GOODS - 1.4%
Handleman Company 16 171
Lagardere Groupe Fr 25 561
SA D'ieteren NV Be 3 229
-------
961
-------
NONDURABLE GOODS - 0.1%
Dalgety PLC UK 12 83
- ---------------------------------------------------------------------
Total common stocks (cost $61,431) 67,266
- ---------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CURRENCY
BONDS (d) - 0.6% ABBREV. PAR VALUE
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
GOVERNMENT AGENCIES - 0.6%
- ---------------------------------------------------------------------
Federal Farm Credit Bank,
11.900% 10/20/97 $ 100 111
Government National Mortgage
Association,
10.500% 05/15/20 $ 119 130
Obligations Assimibiable Du Tresor,
9.800% 01/30/96 FF 1,000 207
- ---------------------------------------------------------------------
Total government agencies (cost $398) 448
- ---------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
COUNTRY
PREFERRED STOCKS - 0.2% ABBREV. SHARES
- ---------------------------------------------------------------------
<S> <C> <C> <C>
CIC Union Europe (cost $118) Fr 1 107
- ---------------------------------------------------------------------
RIGHTS (C) - 0.00%
- ---------------------------------------------------------------------
Jardine Strategic Holdings,
expires 6/1/95 (cost (a)) Si (a) (a)
- ---------------------------------------------------------------------
Total investments - 96.4%(cost $61,947) (e) 67,821
- ---------------------------------------------------------------------
SHORT-TERM OBLIGATIONS - 3.3% PAR
- ---------------------------------------------------------------------
Repurchase agreement with Bankers Trust
Securities Corp., dated 4/28/95, due
5/01/95 at 5.92%, collateralized by
U.S. Treasury notes with various
maturities to 1998, market value $2,522
(repurchase proceeds $2,297) $2,296 2,296
- ---------------------------------------------------------------------
OTHER ASSETS & LIABILITIES, NET - 0.3% 237
- ---------------------------------------------------------------------
NET ASSETS - 100% $70,354
- ---------------------------------------------------------------------
</TABLE>
See notes to investment portfolio.
4
<PAGE>
INVESTMENT PORTFOLIO - CONTINUED
- --------------------------------------------------------------------------------
Notes to investment portfolio:
(a) Rounds to less than one.
(b) This security is subject to the risks of the various countries in which
the issuer is investing. (see notes to Financial Statements:
Note 4 - Other).
(c) Non-income producing.
(d) Par of each bond is shown in its issued currency according to the
abbreviations shown below. Value of all securities is shown in U.S.
dollars.
(e) Cost for federal income tax purposes is $61,949.
<TABLE>
SUMMARY OF SECURITIES BY COUNTRY/CURRENCY
<CAPTION>
Country/ % of total
Currency securities
Country abbrev. Value at value
- ------------------------------------------------------------------------
<S> <C> <C> <C>
United States $ $19,185 28.3
Japan Ja 10,578 15.6
France Fr/FF 4,701 6.9
United Kingdom UK 4,564 6.7
Germany G 3,629 5.4
Netherlands Ne 3,550 5.2
Spain Sp 3,164 4.7
Canada Ca 2,971 4.4
Hong Kong HK 2,606 3.8
Australia Au 1,971 2.9
Multi-national (b) 1,509 2.2
Denmark De 1,339 2.0
Singapore Si 1,101 1.6
Malaysia Ma 1,033 1.5
Thailand Th 736 1.1
Indonesia In 675 1.0
Austria Aus 671 1.0
Phillipines Ph 642 1.0
Switzerland Sz 565 0.8
Sweden Sw 502 0.7
Italy It 467 0.7
Ireland Ir 458 0.7
Pakistan Pa 351 0.5
Argentina Ar 312 0.5
New Zealand NZ 263 0.4
Belgium Be 229 0.3
Mexico Mx 44 0.1
Korea Kr 5 0.0
------- -----
$67,821 100.0
------- -----
</TABLE>
Certain securities are listed by country of underlying exposure but may trade
predominately on other exchanges.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 1. INTERIM FINANCIAL STATEMENTS
In the opinion of management of Colonial Global Equity 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, the changes in its net assets and the selected 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 diversified, open-end,
management investment company. The Fund may issue an unlimited number of
shares. 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.
Continued on page 8.
5
<PAGE>
FINANCIAL STATEMENTS
- -----------------------------------------------------------------------
<TABLE>
STATEMENT OF ASSETS & LIABILITIES (UNAUDITED)
April 30, 1995
(in thousands except for per share amounts and footnote)
- -----------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments at value (cost $61,947)......................... $67,821
Short-term obligations ..................................... 2,296
-------
70,117
Cash held in foreign
banks (cost $31)................................ $ 31
Receivable for:
Dividends....................................... 227
Foreign tax reclaims............................ 82
Fund shares sold................................ 12
Interest........................................ 8
Expense reimbursement due
from adviser.................................. 23
Deferred organization expenses..................... 18
Other.............................................. 10 411
---- -------
Total assets....................................... 70,528
LIABILITIES
Payable for:
Fund shares repurchased......................... 149
Investments purchased........................... 19
Accrued:
Deferred Trustees fees.......................... 1
Other........................................... 5
----
Total liabilities.................................. 174
-------
NET ASSETS.................................................. $70,354
=======
Net asset value & redemption price per share -
Class A ($10,711/904)................................... $ 11.84
=======
Maximum offering price per share - Class A
($11.84/0.9425).......................................... $ 12.56*
=======
Net asset value & offering price per share -
Class B ($59,643/5,061)................................. $ 11.79
=======
COMPOSITION OF NET ASSETS
Capital paid in.......................................... $62,957
Undistributed net investment income...................... 148
Accumulated net realized gain............................ 1,374
Net unrealized appreciation on:
Investments........................................... 5,874
Foreign currency transactions......................... 1
-------
$70,354
=======
<FN>
* On sales of $50,000 or more the offering price is reduced.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS (UNAUDITED)
Six months ended April 30, 1995
(in thousands)
- ------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Dividends............................................................ $ 912
Interest............................................................. 125
------
Total investment income (net of nonrebatable
foreign taxes withheld at source which
amounted to $74).............................................. 1,037
EXPENSES
Management fee............................................ 261
Service fee............................................... 86
Distribution fee - Class B................................ 223
Transfer agent............................................ 124
Bookkeeping fee........................................... 17
Trustees fees............................................. 6
Custodian fee............................................. 26
Audit fee................................................. 17
Legal fee................................................. 3
Registration fees......................................... 16
Reports to shareholders................................... 3
Amortization of deferred
organization expenses................................... 4
Other..................................................... 7
-----
793
Fees waived by the adviser................................ (136) 657
----- ------
Net investment income........................................ 380
------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON PORTFOLIO POSITIONS
Net realized gain (loss) on:
Investments............................................. 1,379
Foreign currency transactions........................... (16)
-----
Net realized gain................................................ 1,363
Net unrealized depreciation
during the period on:
Investments............................................. (652)
Foreign currency transactions........................... (23)
-----
Net unrealized depreciation...................................... (675)
------
Net gain..................................................... 688
------
Net increase in net assets from
operations......................................................... $1,068
======
</TABLE>
See notes to financial statements.
6
<PAGE>
FINANCIAL STATEMENTS - CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
(in thousands)
- ------------------------------------------------------------------------------------------------
<CAPTION>
(unaudited)
Six months
ended Year ended
April 30 October 31
--------- ----------
1995 1994
--------- ----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income............................................... $ 380 $ 439
Net realized gain................................................... 1,363 5,468
Net unrealized depreciation......................................... (675) (1,535)
------- --------
Net increase from operations................................. 1,068 4,372
Distributions
From net investment income - Class A................................ (86) (80)
From net realized gains - Class A................................... (809) (11)
From net investment income - Class B................................ (270) (361)
From net realized gains - Class B................................... (4,674) (163)
------- --------
(4,771) 3,757
------- --------
Fund share transactions
Receipts for shares sold - Class A.................................. 1,985 11,660
Value of distributions reinvested - Class A......................... 833 79
Cost of shares repurchased - Class A................................ (1,951) (3,294)
------- --------
867 8,445
------- --------
Receipts for shares sold - Class B.................................. 5,259 32,682
Value of distributions reinvested - Class B......................... 4,643 485
Cost of shares repurchased - Class B................................ (9,308) (14,311)
------- --------
594 18,856
------- --------
Net increase from Fund share transactions.................... 1,461 27,301
------- --------
Total increase (decrease)............................... (3,310) 31,058
NET ASSETS
Beginning of period................................................. 73,664 42,606
------- --------
End of period (including undistributed net investment
income of $148 and $96, respectively)............................. $70,354 $ 73,664
======= ========
NUMBER OF FUND SHARES
Sold - Class A...................................................... 171 937
Issued for distributions reinvested - Class A....................... 75 7
Repurchased - Class A............................................... (171) (265)
------- --------
75 679
------- --------
Sold - Class B...................................................... 453 2,643
Issued for distributions reinvested - Class B....................... 420 40
Repurchased - Class B............................................... (810) (1,170)
------- --------
63 1,513
------- --------
Net increase in shares outstanding........................... 138 2,192
Outstanding at
Beginning of year............................................... 5,827 3,635
------- --------
End of year..................................................... 5,965 5,827
======= ========
</TABLE>
See notes to financial statements.
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- --------------------------------------------------------------------------------
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 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 $43,895 of expenses in connection with its
organization, 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
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
OTHER
Corporate actions are recorded on the ex-date (except for certain
foreign securities which are recorded as soon after 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 reim-
bursement 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 $3,732
on sales of the Fund's Class A shares and received contingent deferred sales
charges (CDSC) of $90,679 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.
- --------------------------------------------------------------------------------
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- --------------------------------------------------------------------------------
EXPENSE LIMITS
The Adviser has agreed, until further notice, to waive fees and bear
certain Fund expenses to the extent that total expenses (exclusive of service
fees, distribution fees, brokerage commissions, interest, taxes and
extraordinary expenses, if any) exceed 1.00% annually of the Fund's average net
assets.
- --------------------------------------------------------------------------------
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
For the six months ended April 30, 1995, purchases and sales of
investments, other than short-term obligations, were $30,541,023 and
$31,255,601, respectively, of which none and $30,626, respectively, were U.S.
government securities.
<TABLE>
Unrealized appreciation (depreciation) at April 30, 1995, based on cost
of investments for federal income tax purposes was:
<S> <C>
Gross unrealized appreciation.............. $ 8,382,946
Gross unrealized depreciation.............. (2,510,763)
-----------
Net unrealized appreciation............. $ 5,872,183
</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 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, 3,804,463 voted for the new Management
Agreement 36,958 voted against and 171,992 abstained. Of the shares of
beneficial interest outstanding that abstained, 42,062 represent broker
non-votes.
- --------------------------------------------------------------------------------
ABOUT OUR COVER...
[GRAPHIC] The symbol on the cover of this Report
represents the Fund's primary investment
focus on common stocks.
- --------------------------------------------------------------------------------
Colonial Global Equity 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.
10
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS (B)
Selected data for a share of each class outstanding throughout each period are as follows:
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
(UNAUDITED)
SIX MONTHS ENDED PERIOD ENDED
APRIL 30 YEAR ENDED OCTOBER 31 OCTOBER 31
------------------- -------------------------------------------------------
1995 1994 1993 1992 (C)
------------------- ---------------- ---------------- -------------------
CLASS A CLASS B CLASS A CLASS B CLASS A CLASS B CLASS A CLASS B
------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value - Beginning of period........... $12.690 $12.630 $11.760 $11.720 $ 9.340 $ 9.310 $10.000 $10.000
------- ------- ------- ------- ------- ------- ------- -------
Income from investment operations:
Net investment income (a)..................... 0.099 0.056 0.170 0.077 0.182 0.104 0.088 0.059
Net realized and unrealized gain (loss)
on investments............................... 0.095 0.103 0.969 0.959 2.461 2.447 (0.748) (0.749)
------- ------- ------- ------- ------- ------- ------- -------
Total from investment operations............. 0.194 0.159 1.139 1.036 2.643 2.551 (0.660) (0.690)
------- ------- ------- ------- ------- ------- ------- -------
Less distributions declared to shareholders:
From net investment income.................... (0.100) (0.055) (0.166) (0.083) (0.223) (0.141) -- --
From net realized gains....................... (0.944) (0.944) (0.043) (0.043) -- -- -- --
------- ------- ------- ------- ------- ------- ------- -------
Total distributions declared
to shareholders........................... (1.044) (0.999) (0.209) (0.126) (0.223) (0.141) -- --
------- ------- ------- ------- ------- ------- ------- -------
Net asset value - End of period................. $11.840 $11.790 $12.690 $12.630 $11.760 $11.720 $ 9.340 $ 9.310
======= ======= ======= ======= ======= ======= ======= =======
Total return (d) (e)............................ 2.09%(f) 1.78%(f) 9.76% 8.88% 28.77% 27.70 (6.59)%(f) (6.90)%(f)
Ratios to average net assets
Operating expenses............................ 1.25%(g) 2.00%(g) 1.25% 2.00% 1.25% 2.00% 1.25%(g) 2.00%(g)
Interest expense.............................. -- -- -- -- 0.01% 0.01% -- --
Fees and expenses waived or borne
by the adviser............................. 0.39%(g) 0.39%(g) 0.36% 0.36% 0.51% 0.51% 0.67%(g) 0.67%(g)
Net investment income......................... 1.73%(g) 0.98%(g) 1.38% 0.63% 1.75% 1.00% 2.25%(g) 1.50%(g)
Portfolio turnover.............................. 93%(g) 93%(g) 52% 52% 58% 58% 14%(g) 14%(g)
Net assets at end of period (000)............... $10,711 $59,643 $10,525 $63,139 $ 1,769 $40,837 $ 164 $32,099
<FN>
(a) Net of fees and expenses waived or borne by the adviser
which amounted to.......................... $ 0.022 $ 0.022 $ 0.045 $ 0.045 $ 0.053 $ 0.053 $ 0.026 $ 0.026
(b) Per share data was calculated using average shares outstanding during the period.
(c) The Fund commenced investment operations on June 8, 1992.
(d) Total return at net asset value assuming all distributions reinvested and no initial sales
charge or CDSC.
(e) Had the adviser not waived or reimbursed a portion of expenses total return would have
been reduced.
(f) Not annualized.
(g) Annualized.
</TABLE>
11
<PAGE>
[LOGO] COLONIAL
MUTUAL FUNDS
[GRAPHIC]
COLONIAL
GLOBAL EQUITY
FUND
---------------------
SEMIANNUAL REPORT
APRIL 30, 1995
- --------------------------------------------------------------------------------
[LOGO] COLONIAL
MUTUAL FUNDS
[RECYCLE LOGO] Printed on recycled paper.
GE-03/900A-0495
COLONIAL INVESTMENT SERVICES, INC. [COPYRIGHT] 1995
