<PAGE>
[LOGO]
-----------------
COLONIAL
INTERNATIONAL
HORIZONS FUND
-----------------
SEMIANNUAL REPORT
APRIL 30, 1997
NOT FDIC- | MAY LOSE VALUE
INSURED | NO BANK GUARANTEE
<PAGE>
================================================================================
COLONIAL INTERNATIONAL HORIZONS FUND HIGHLIGHTS
NOVEMBER 1, 1996 - APRIL 30, 1997
INVESTMENT OBJECTIVE: Colonial International Horizons Fund seeks preservation of
capital purchasing power and long-term growth.
THE FUND IS DESIGNED TO OFFER:
o Preservation of purchasing power
o Growth potential
o Diversification to help reduce risk
PORTFOLIO MANAGER COMMENTARY: "Our investment strategy emphasizes a core
portfolio of natural resource stocks that we believe should protect shareholders
against inflation. Additional investments in consumer oriented stocks enhance
the Fund's ability to participate in the dynamic global expansion." -- Gita Rao
<TABLE>
COLONIAL INTERNATIONAL HORIZONS FUND PERFORMANCE
<CAPTION>
CLASS A CLASS B
Inception date 6/8/92 6/8/92
- --------------------------------------------------------------------------------
<S> <C> <C>
Six-month distributions declared per share $1.395 $1.385
- --------------------------------------------------------------------------------
Six-month total returns, assuming 5.26% 4.83%
reinvestment of all distributions
and no sales charge or contingent
deferred sales charge (CDSC)
- --------------------------------------------------------------------------------
Net asset values per share on 4/30/97 $13.68 $13.54
- --------------------------------------------------------------------------------
</TABLE>
TOP FIVE HOLDINGS* TOP FIVE COUNTRIES*
(as of 4/30/97) (as of 4/30/97)
- --------------------------------- ----------------------------------
1. Oryx Energy Company ..... 2.4% 1. United States ........... 41.7%
2. Helmerich & Payne ....... 2.1% 2. Canada .................. 17.0%
3. PanEnergy Corp .......... 2.0% 3. Netherlands ............. 4.7%
4. Fort Howard Corp ........ 1.9% 4. Switzerland ............. 4.3%
5. Petro Canada ............ 1.8% 5. United Kingdom .......... 3.6%
*Country and holdings breakdowns are calculated as a percent of total net
assets. Because the Fund is actively managed, there can be no guarantee the Fund
will continue to hold these securities or invest in these countries and sectors
in the future.
================================================================================
2
<PAGE>
================================================================================
PRESIDENT'S MESSAGE
TO FUND SHAREHOLDERS
I am pleased to present the semiannual report for Colonial [Photo]
International Horizons Fund. This report reflects on the
investment environment for the six months ended April 30, 1997
and on the performance of your Fund.
The Fund's investment in stocks of established non-U.S. companies offered
shareholders a way to participate in a dynamic market sector. International
market conditions have been improving amid numerous signs of economic pick-ups
in many parts of the world. Lower interest rates in Europe have stimulated those
economies. Revived export activity and improved political stability in the
Pacific Rim nations should result in an acceleration of earnings growth. Strong
economic development created increased demand for every type of resource, from
steel and concrete for building construction to copper for electric wiring to
pesticides for agriculture. A number of the stocks held by the Fund,
particularly those in the core natural resource sector, represent companies that
benefited from this trend.
In addition to providing attractive growth prospects, an international fund
offers an opportunity to diversify your core portfolio. World stock markets
frequently do not move in step with the domestic stock market. Over 10 years
international markets have outperformed the U.S. We believe that a high level of
U.S. stock prices relative to the rest of the world should result in investors
shifting their attention to more attractively priced international markets. When
that shift occurs, investors could be rewarded by rising prices and values in
international stocks.
The following report will provide you with specific information on your Fund's
performance as well as an in-depth report from your portfolio manager, including
a discussion of the Fund's increased investment flexibility and the outlook for
the international stock markets. As always, we thank you for the opportunity to
help you meet your investment goals through Colonial.
Respectfully,
/s/ Harold W. Cogger
Harold W. Cogger
President
June 13, 1997
================================================================================
3
<PAGE>
================================================================================
PORTFOLIO MANAGEMENT REPORT
GITA RAO is portfolio manager of Colonial International Horizons Fund, formerly
Colonial Global Natural Resources Fund. She is a Vice President of Colonial
Management Associates, Inc. NICOLAS GHAJAR is an Associate Portfolio Manager for
the Fund.
NEW FUND NAME HIGHLIGHTS INCREASED INVESTMENT FLEXIBILITY
The Colonial International Horizons Fund -- is the new name of the Colonial
Global Natural Resources Fund. The Fund's objective remains unchanged - seeking
preservation of capital purchasing power and long-term growth. However, the Fund
is now managed as a broader-based, more diversified international fund and can
pursue its objectives with greater investment flexibility.
With a broader array of investment options available, shareholders may be
protected against the pronounced market cycles and large swings in total return
that are common in a pure natural resources fund. The Fund's shift from a global
to an international category means that a greater proportion of assets must be
invested in overseas stocks: U.S. stockholdings will be limited to 35% of Fund
assets. We believe that there is more value to be found in markets that are not
as far along in their business cycle as the U.S. In our view, foreign stocks
with more reasonable prices than U.S. stocks may offer investors larger
potential price gains over the next several years. By April 30, U.S. stocks
represented 46% of Fund assets, a decrease from 62% at the beginning of the
period.
CORE NATURAL RESOURCE HOLDINGS PROVIDE INFLATION PROTECTION
The Fund will continue to hedge against inflation by retaining a core natural
resources component. Currently at 40% of Fund assets, this concentration remains
unchanged. This percentage of natural resource stocks is substantially greater
than the 5% held by the average international fund that is not focused on
providing an inflation hedge. To increase the portfolio's proportion of
international stocks, we focused on selling U.S. stocks that did not represent
the core natural resource sector.
We replaced these holdings with foreign stocks that offer investors a
non-interest rate sensitive way to participate in worldwide growth trends. We
purchased YPF, S.A., the largest oil producer in Argentina. This company
supplies oil to most of Latin America and the Caribbean. The commodity nature of
YPF's primary business fit well with our investment objective. We also purchased
Novartis Corp. (the successor of the Ciba-Geigy/Sandoz merger), the world's
largest producer and marketer of agricultural chemicals. These commodities are
in great demand as higher global standards of living have increased the need for
food production.
FUND REPOSITIONING TO BE COMPLETED BY JUNE 30, 1997
The Fund continues to reduce its holdings of U.S. stocks. We will be looking for
additional country diversification in Japan, where we have targeted consumer
oriented companies. We believe that there is good value in Scandinavia and
Southern Europe. In those nations, we will be looking for cyclical, basic
industry stocks such as specialty chemicals. We will continue to avoid the
financial and
================================================================================
4
<PAGE>
================================================================================
utility sectors worldwide as their interest rate-sensitive nature does not fit
well with the Fund's objectives.
COLONIAL INTERNATIONAL HORIZONS FUND'S INVESTMENT PERFORMANCE
VS. MORGAN STANLEY CAPITAL INTERNATIONAL EAFE (GDP) &
THE STANDARD & POOR'S 500 INDEX
Change in Value of $10,000 from 6/30/92 - 4/30/97
Based on NAV and MOP for Class A Shares
[Graph]
<TABLE>
<CAPTION>
Label A B C D
- -----------------------------------------------------------------------------------
Label CIHF A NAV MOP S&P MSCI EAFE GDF
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 Jun 30, 92 10000 9425 10000 10000
2 Jul 31, 92 10268.12 9677.706 10408 9646
3 Aug 31, 92 10039.72 9462.438 10196 10126
4 Sep 30, 92 10009.93 9434.359 10315 9754
5 Oct 31, 92 9682.225 9125.497 10351 9358
6 Nov 30, 92 9285.005 8751.117 10702 9404
7 Dec 31, 92 9431.813 8889.483 10834 9402
8 Jan 31, 93 9421.8 8880.046 10924 9511
9 Feb 28, 93 9852.339 9285.829 11073 9844
10 Mar 31, 93 10513.17 9908.659 11306 10516
11 Apr 30, 93 11043.83 10408.81 11033 11485
12 May 31, 93 11684.63 11012.77 11328 11664
13 Jun 30, 93 11625.92 10957.43 11361 11462
14 Jul 31, 93 12128.33 11430.96 11315 11807
15 Aug 31, 93 12218.77 11516.19 11743 12673
16 Sep 30, 93 11716.35 11042.66 11653 12407
17 Oct 31, 93 12218.77 11516.19 11894 12748
18 Nov 30, 93 11897.22 11213.13 11781 11732
19 Dec 31, 93 12616.19 11890.76 11923 12558
20 Jan 31, 94 13308.05 12542.83 12328 13518
21 Feb 28, 94 12870.55 12130.49 11994 13444
22 Mar 31, 94 12575.49 11852.4 11472 13251
23 Apr 30, 94 12646.71 11919.53 11619 13920
24 May 31, 94 12941.77 12197.62 11809 13601
25 Jun 30, 94 12700.96 11970.66 11520 13594
26 Jul 31, 94 13058.88 12307.99 11898 13910
27 Aug 31, 94 13427.02 12654.97 12384 14146
28 Sep 30, 94 13416.8 12645.33 12082 13648
29 Oct 31, 94 13457.7 12683.88 12353 14063
30 Nov 30, 94 12394.17 11681.51 11904 13437
31 Dec 31, 94 12499.45 11780.73 12080 13538
32 Jan 31, 95 11849.86 11168.49 12393 13192
33 Feb 28, 95 12237.52 11533.86 12875 13177
34 Mar 31, 95 12729.95 11997.98 13255 13773
35 Apr 30, 95 13149.04 12392.97 13645 14389
36 May 31, 95 13348.11 12580.6 14189 14257
37 Jun 30, 95 13448.87 12675.56 14518 14091
38 Jul 31, 95 13985.14 13181 14999 15012
39 Aug 31, 95 13848.44 13052.16 15037 14385
40 Sep 30, 95 13711.75 12923.32 15671 14556
41 Oct 31, 95 13070.32 12318.78 15615 14134
42 Nov 30, 95 13627.63 12844.04 16300 14432
43 Dec 31, 95 14132.42 13319.8 16614 15049
44 Jan 31, 96 14597.59 13758.23 17179 15240
45 Feb 29, 96 14708.34 13862.62 17338 15286
46 Mar 31, 96 15262.12 14384.55 17505 15489
47 Apr 30, 96 15605.46 14708.15 17763 15971
48 May 31, 96 15616.54 14718.59 18220 15735
49 Jun 30, 96 15305.28 14425.23 18290 15859
50 Jul 31, 96 14538.91 13702.92 17482 15403
51 Aug 31, 96 15138.68 14268.21 17852 15395
52 Sep 30, 96 15327.5 14446.16 18855 15818
53 Oct 31, 96 15905.05 14990.51 19375 15645
54 Nov 30, 96 16749.18 15786.1 20839 16313
55 Dec 31, 96 17047.31 16067.09 20426 16197
56 Jan 31, 97 17304.3 16309.3 21701 15892
57 Feb 28, 97 16814.79 15847.94 21872 16003
58 Mar 31, 97 16704.65 15744.13 20975 16308
59 Apr 30, 97 16741.36 15778.73 22226 16268
</TABLE>
Based on NAV and Maximum CDSC for Class B Shares
[Graph]
<TABLE>
<CAPTION>
Label A B C D
- ---------------------------------------------------------------------------------
Label CIHF B NAV MOP MSCI EAFE GDF
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 Jun 30, 92 10000 10000 10000 10000
2 Jul 31, 92 10268.39 10268.39 10408 9646
3 Aug 31, 92 10029.82 10029.82 10196 10126
4 Sep 30, 92 10000 10000 10315 9754
5 Oct 31, 92 9662.028 9662.028 10351 9358
6 Nov 30, 92 9254.474 9254.474 10702 9404
7 Dec 31, 92 9397.543 9397.543 10834 9402
8 Jan 31, 93 9377.591 9377.591 10924 9511
9 Feb 28, 93 9806.565 9806.565 11073 9844
10 Mar 31, 93 10464.99 10464.99 11306 10516
11 Apr 30, 93 10973.78 10973.78 11033 11485
12 May 31, 93 11602.27 11602.27 11328 11664
13 Jun 30, 93 11547.88 11547.88 11361 11462
14 Jul 31, 93 12036.95 12036.95 11315 11807
15 Aug 31, 93 12116.79 12116.79 11743 12673
16 Sep 30, 93 11617.75 11617.75 11653 12407
17 Oct 31, 93 12106.81 12106.81 11894 12748
18 Nov 30, 93 11777.44 11777.44 11781 11732
19 Dec 31, 93 12478.89 12478.89 11923 12558
20 Jan 31, 94 13163.77 13163.77 12328 13518
21 Feb 28, 94 12720.62 12720.62 11994 13444
22 Mar 31, 94 12418.46 12418.46 11472 13251
23 Apr 30, 94 12478.89 12478.89 11619 13920
24 May 31, 94 12770.98 12770.98 11809 13601
25 Jun 30, 94 12513.38 12513.38 11520 13594
26 Jul 31, 94 12856.48 12856.48 11898 13910
27 Aug 31, 94 13219.78 13219.78 12384 14146
28 Sep 30, 94 13209.68 13209.68 12082 13648
29 Oct 31, 94 13229.87 13229.87 12353 14063
30 Nov 30, 94 12180.36 12180.36 11904 13437
31 Dec 31, 94 12273.94 12273.94 12080 13538
32 Jan 31, 95 11624.69 11624.69 12393 13192
33 Feb 28, 95 12006 12006 12875 13177
34 Mar 31, 95 12480.05 12480.05 13255 13773
35 Apr 30, 95 12881.97 12881.97 13645 14389
36 May 31, 95 13067.47 13067.47 14189 14250
37 Jun 30, 95 13160.22 13160.22 14518 14091
38 Jul 31, 95 13675.5 13675.5 14999 15012
39 Aug 31, 95 13531.22 13531.22 15037 14385
40 Sep 30, 95 13397.25 13397.25 15671 14556
41 Oct 31, 95 12758.3 12758.3 15615 14134
42 Nov 30, 95 13283.89 13283.89 16300 14432
43 Dec 31, 95 13772.34 13772.34 16614 15049
44 Jan 31, 96 14226.73 14226.73 17179 15240
45 Feb 29, 96 14313.28 14313.28 17338 15286
46 Mar.31, 96 14843.4 14843.4 17505 15489
47 Apr 30, 96 15178.78 15178.78 17763 15971
48 May 31, 96 15167.96 15167.96 18220 15735
49 Jun 30, 96 14858.15 14858.15 18290 15859
50 Jul 31, 96 14111.45 14111.45 17482 15403
51 Aug 31, 96 14674.18 14674.18 17852 15395
52 Sep 30, 96 14858.15 14858.15 18855 15818
53 Oct 31, 96 15399.23 15399.23 19375 15645
54 Nov 30, 96 16210.86 16210.86 20839 16313
55 Dec 31, 96 16477.47 16477.47 20426 16197
56 Jan 31, 97 16727.85 16727.85 21701 15892
57 Feb 28, 97 16250.93 16250.93 21872 16003
58 Mar 31, 97 16131.71 16131.71 20975 16308
59 Apr 30, 97 16143.63 15943.63 22226 16268
</TABLE>
The Fund's performance has been compared to the Standard and Poor's 500 (S&P
500) in the past. Now that the Fund has an international focus, it is more
appropriate to compare it to a broad-based international index.
The Morgan Stanley Capital International EAFE (GDP) Index is an unmanaged index
that tracks the performance of international stocks. The S&P 500 Index is an
unmanaged index that tracks the performance of the U.S. stock market. Unlike
mutual funds, an index does not incur fees or charges and it is not possible to
invest in an index.
<TABLE>
AVERAGE ANNUAL TOTAL RETURNS
As of 3/31/97 (Most Recent Quarter End)
- --------------------------------------------------------------------------------
<CAPTION>
CLASS A SHARES CLASS B SHARES
INCEPTION 6/8/92 6/8/92
NAV MOP NAV w/CDSC
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 year 9.45% 3.16% 8.68% 3.75%
- --------------------------------------------------------------------------------
Since inception 11.40 10.04 10.58 10.29
- --------------------------------------------------------------------------------
</TABLE>
Past performance cannot predict future results. Returns 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) returns do not
include sales charges or contingent deferred sales charges (CDSC). Maximum
offering price (MOP) returns include the maximum sales charge of 5.75%. The CDSC
returns reflect charges of: one year, 5%; since inception, 2%. Performance for
different share classes will vary based on differences in sales charges and fees
associated with each class.
================================================================================
5
<PAGE>
INVESTMENT PORTFOLIO
APRIL 30, 1997 (UNAUDITED, IN THOUSANDS)
<TABLE>
<CAPTION>
COMMON STOCKS - 90.3% COUNTRY SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
CONSTRUCTION - 1.6%
HEAVY CONSTRUCTION - NON BUILDING CONSTRUCTION
Koninklijke Boskalis Westminster NV Ne 29 $ 580
Stork NV Ne 9 390
------
970
------
- --------------------------------------------------------------------------------
FINANCE, INSURANCE & REAL ESTATE - 0.2%
REAL ESTATE
Bandar Raya Developments Berhad Ma 86 127
------
- --------------------------------------------------------------------------------
MANUFACTURING - 37.6%
CHEMICALS & ALLIED PRODUCTS - 8.8%
BASF AG G 19 733
DSM NV Ne 8 757
E.I. DuPont De Nemours & Co. 8 860
Fuller (H.B.) Co. 12 644
Norsk Hydro AS No 15 750
Smith International, Inc. 19 914
Zeneca Group UK 21 634
------
5,292
------
ELECTRONIC & ELECTRICAL EQUIPMENT - 3.0%
Matsushaita Electric Industrial Co. Ja 56 895
Siemens AG G 17 919
------
1,814
------
FOOD & KINDRED PRODUCTS - 1.6%
Nestle AG Sz 1 942
LUMBER & WOOD PRODUCTS - 1.8%
Donohue, Inc., Class A Ca 25 519
Pacific Forest Products Ltd. (a) Ca 32 532
------
1,051
------
PAPER PRODUCTS - 3.8%
Fort Howard Corp. (a) 33 1,136
Potlatch Corp. 11 431
Stone-Consolidated Corp. (a) Ca 36 598
Tembec, Inc., Class A (a) Ca 18 141
------
2,306
------
PETROLEUM REFINING - 14.0%
Amerada Hess Corp. 21 1,026
Atlantic Richfield Co. 4 565
</TABLE>
6
<PAGE>
Investment Portfolio/April 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
British Petroleum Co., PLC ADR UK 4 $ 503
Chevron Corp. 7 486
Mobil Corp. 4 546
Murphy Oil Corp. 21 922
OMV Handels AG Aus 6 614
Pennzoil Co. 22 1,088
Phillips Petroleum Co. 8 319
Repsol SA ADS Sp 19 783
Shell Canada Ltd. Ca 12 476
Tosco Corp. 22 649
Unocal Corp. 13 477
------
8,454
------
PRIMARY METAL - 1.7%
Acerinox SA Sp 3 416
Alumax, Inc. (a) 9 321
KM Europa Metal AG (a) G 3 273
------
1,010
------
PRIMARY SMELTING - 0.4%
Capral Aluminum Ltd. (a) Au 73 266
------
STONE, CLAY, GLASS & CONCRETE - 2.5%
Cemex SA Me 262 863
Holderbank Financiere Glaris AG Sz 1 642
------
1,505
------
- --------------------------------------------------------------------------------
MINING & ENERGY - 37.6%
CRUDE PETROLEUM & NATURAL GAS - 4.8%
Anadarko Petroleum Corp. 10 554
Apache Corp. 11 377
Occidental Petroleum Corp. 35 777
Ranger Oil Ltd. Ca 90 899
Triton Energy Corp. (a) 8 283
------
2,890
------
GOLD & SILVER MINING - 5.3%
Ashanti Goldfields Co., Ltd. GDS Gh 10 116
Barrick Gold Corp. Ca 29 660
Cambior, Inc. Ca 36 427
Newmont Mining Corp. 16 548
Placer Dome, Inc. Ca 26 431
Sons of Gwalia Ltd. Au 136 601
TVX Gold, Inc. Ca 70 388
------
3,171
------
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
Investment Portfolio/April 30, 1997
- --------------------------------------------------------------------------------
COMMON STOCKS - CONT. COUNTRY SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
MINING & ENERGY - CONT.
METAL MINING - 3.8%
Acacia Resources Ltd. (a) Au 130 $ 193
Elandsrand Gold Mining Co. Ltd. SA 27 117
Franco-Nevada Mining Corporation Ltd. Ca 16 753
Freeport-McMoRan Copper & Gold, Inc.,
Class A 17 462
Northgate Exploration, Ltd. (a) 4 3
Prime Resource Group, Inc. (a) Ca 100 770
------
2,298
------
NONMETALLIC, EXCEPT FUELS - 2.2%
De Beers Consolidated Mines Ltd., ADR (a) SA 16 572
Potash Corp. of Saskatchewan, Inc. Ca 2 155
Vulcan Materials Co. 9 601
------
1,328
------
OIL & GAS EXTRACTION - 19.2%
Chauvco Resources Ltd., Class A (a) Ca 73 1,014
Elan Energy, Inc. (a) Ca 57 409
Elf Gabon SA Fr 1 385
ENSCO International, Inc. (a) 16 760
Falcon Drilling Co. (a) 25 937
Global Marine, Inc. (a) 15 306
Helmerich & Payne 27 1,275
Noble Drilling Corp. (a) 32 553
Oryx Energy Co. 72 1,446
Parker and Parsley Petroleum 33 1,082
Petro Canada Ca 69 1,113
Pioneer International Ltd. Au 192 631
Reading & Bates Corp. (a) 12 257
Rowan Companies, Inc. (a) 27 490
Santa Fe Energy Resources, Inc. 19 271
YPF Sociedad Anonima Ar 22 609
-------
11,538
-------
Oil & Gas Field Services - 2.3%
Petroleum Geo-Services A/S (a) No 18 687
Schlumberger Ltd. 7 720
-------
1,407
-------
- --------------------------------------------------------------------------------
SERVICES - 3.5%
Business Services - 1.8%
Baan Co., N.V. (a) Ne 21 1,101
-------
Health Services - 1.7%
Novartis Sz 1 1,022
-------
</TABLE>
8
<PAGE>
Investment Portfolio/April 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES - 9.8%
<S> <C> <C> <C>
COMMUNICATIONS - 1.6%
Nippon Telegraph & Telephone Corp. Ja (b) $ 951
-------
ELECTRIC, GAS & SANITARY SERVICES - 4.7%
NGC Corp. 29 515
PanEnergy Corp. 27 1,186
Philip Environmental, In Ca 33 514
Wessex Water PLC UK 31 185
Westcoast Energy, Inc. Ca 23 391
-------
2,791
-------
ELECTRIC SERVICES - 2.2%
Allegheny Power System, Inc. 32 840
Texas Utilities Co. 15 500
-------
1,340
-------
SANITARY SERVICES - 1.3%
Severn Trent Water PLC UK 64 785
-------
TOTAL COMMON STOCKS (cost of $43,800) 54,359
-------
PREFERRED STOCK - 0.1%
- --------------------------------------------------------------------------------
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES - 0.1%
ELECTRIC, GAS, & SANITARY SERVICES
Hyder PLC, 7.875% (cost of $41) UK 30 50
-------
CORPORATE FIXED - INCOME
BONDS & NOTES - 0.0% CURRENCY PAR
- --------------------------------------------------------------------------------
MANUFACTURING - 0.0%
LUMBER & WOOD PRODUCTS
Donohue, Inc.,
Series B (cost of $27)03/01/98 CD 37 27
-------
TOTAL INVESTMENTS - 90.4% (cost of $43,868)(c) 54,436
-------
</TABLE>
9
<PAGE>
Investment Portfolio/April 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHORT-TERM OBLIGATIONS - 9.3% PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
Repurchase agreement with
Chase Securities, Inc., dated
04/30/97, due 05/01/97 at
5.340%, collateralized by U.S.
Treasury notes with various
maturities to 2016, market
value $5,770 (repurchase
proceeds $5,610) $ 5,609 $ 5,609
-------
OTHER ASSETS & LIABILITIES, NET - 0.3% 155
- --------------------------------------------------------------------------------
NET ASSETS - 100.0% $60,200
=======
</TABLE>
NOTES TO INVESTMENT PORTFOLIO:
- --------------------------------------------------------------------------------
(a) Non-income producing.
(b) Rounds to less than one.
(c) Cost for federal income tax purposes is approximately the same.
<TABLE>
<CAPTION>
Summary of Securities by Country/
Country/Currency Currency Value % of Total
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
United States $25,127 46.2%
Canada Ca/CD 10,217 18.8%
Netherlands Ne 2,828 5.2%
Switzerland Sz 2,606 4.8%
United Kingdom UK 2,157 4.0%
Germany G 1,925 3.5%
Japan Ja 1,846 3.4%
Australia Au 1,691 3.1%
Norway No 1,437 2.6%
Spain Sp 1,199 2.2%
Mexico Me 863 1.6%
South Africa SA 689 1.3%
Austria Aus 614 1.1%
Argentina Ar 609 1.1%
France Fr 385 0.7%
Malaysia Ma 127 0.2%
Ghana Gh 116 0.2%
------- -----
$54,436 100.0%
======= =====
</TABLE>
Certain securities are listed by country of underlying exposure but may trade
predominantly on other exchanges.
Acronym Name
------- --------------
ADR American Depository Receipt
ADS American Depository Shares
GDS Global Depository Shares
See notes to financial statements.
10
<PAGE>
<TABLE>
STATEMENT OF ASSETS & LIABILITIES
APRIL 30, 1997 (UNAUDITED)
(in thousands except for per share amounts and footnotes)
<S> <C> <C>
ASSETS
Investments at value (cost $43,868) $54,436
Short-term obligations 5,609
-------
60,045
Cash including foreign currencies (cost $40) $ 41
Receivable for:
Fund shares sold 218
Dividends 44
Foreign tax reclaims 10
Interest 1
Deferred organization expenses 1
Other 13 328
---- -------
Total Assets 60,373
LIABILITIES
Payable for:
Fund shares repurchased 171
Accrued Deferred Trustees fees 2
----
Total Liabilities 173
-------
NET ASSETS $60,200
=======
Net asset value & redemption price per share -
Class A ($34,205/2,501) $ 13.68
=======
Maximum offering price per share - Class A
($13.68/0.9425) $ 14.51 (a)
=======
Net asset value & offering price per share -
Class B ($25,995/1,919) $ 13.54 (b)
=======
COMPOSITION OF NET ASSETS
Capital paid in $48,234
Overdistributed net investment income (12)
Accumulated net realized gain 1,413
Net unrealized appreciation (depreciation) on:
Investments 10,568
Foreign currency transactions (3)
-------
$60,200
=======
</TABLE>
(a) On sales of $50,000 or more the offering price is reduced.
(b) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
See notes to financial statements.
11
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30, 1997
(UNAUDITED)
(in thousands)
<S> <C> <C>
INVESTMENT INCOME
Dividends $ 488
Interest 115
------
Total investment income (net of nonrebatable
foreign taxes withheld at source which
amounted to $26) 603
EXPENSES
Management fee $ 234
Service fee 78
Distribution fee - Class B 100
Transfer agent 105
Bookkeeping fee 16
Registration fee 14
Custodian fee 17
Audit fee 17
Trustees fee 6
Reports to shareholders 4
Legal fee 4
Amortization of deferred
organization expenses 7
Other 5 607
------ ------
Net Investment Loss (4)
------
NET REALIZED & UNREALIZED GAIN (LOSS) ON PORTFOLIO POSITIONS
Net realized gain on:
Investments 1,432
Foreign currency transactions 6
------
Net Realized Gain 1,438
Net unrealized appreciation (depreciation) during
the period on:
Investments 1,589
Foreign currency transactions (5)
------
Net Unrealized Appreciation 1,584
------
Net Gain 3,022
------
Net Increase in Net Assets from Operations $3,018
======
</TABLE>
See notes to financial statements.
12
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
(Unaudited)
Six months
ended Year ended
(in thousands) April 30 October 31
-------- --------
INCREASE (DECREASE) IN NET ASSETS 1997 1996
Operations:
<S> <C> <C>
Net investment income (loss) $ (4) $ 142
Net realized gain 1,438 5,758
Net unrealized appreciation 1,584 4,835
-------- --------
Net Increase from Operations 3,018 10,735
Distributions:
From net investment income - Class A -- (199)
In excess of net investment income - Class A (24) --
From net realized gains - Class A (3,340) (1,554)
From net investment income - Class B -- --
From net realized gains - Class B (2,449) (1,048)
-------- --------
(2,795) 7,934
-------- --------
Fund Share Transactions:
Receipts for shares sold - Class A 12,583 10,375
Value of distributions reinvested - Class A 2,926 1,543
Cost of shares repurchased - Class A (16,432) (11,267)
-------- --------
(923) 651
-------- --------
Receipts for shares sold - Class B 6,491 10,576
Value of distributions reinvested - Class B 2,048 897
Cost of shares repurchased - Class B (6,758) (10,149)
-------- --------
1,781 1,324
-------- --------
Net Increase from Fund
Share Transactions 858 1,975
-------- --------
Total Increase (Decrease) (1,937) 9,909
NET ASSETS
Beginning of period 62,137 52,228
-------- --------
End of period (net of overdistributed
net investment income of $12 and
$1, respectively) $ 60,200 $ 62,137
======== ========
NUMBER OF FUND SHARES
Sold - Class A 904 754
Issued for distributions reinvested - Class A 214 122
Repurchased - Class A (1,177) (834)
-------- --------
(59) 42
-------- --------
Sold - Class B 465 784
Issued for distributions reinvested - Class B 150 71
Repurchased - Class B (487) (755)
-------- --------
128 100
-------- --------
</TABLE>
See notes to financial statements
13
<PAGE>
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1997 (UNAUDITED)
NOTE 1. INTERIM FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
In the opinion of management of Colonial International Horizons Fund (the Fund),
formerly Colonial Global Natural Resources 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, 1997, 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 non-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's investment objective
is to seek preservation of capital purchasing power and long-term growth. 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 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 that are consistently followed by the Fund in
the preparation of its financial statements.
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. Notes to Financial
14
<PAGE>
Notes to Financial Statements/April 30, 1997
- --------------------------------------------------------------------------------
Security transactions are accounted for on the date the securities are
purchased, sold or mature.
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 expenses of $71,295 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. Reclassifications are made to the Fund's capital accounts
to reflect income and gains available for distribution (or available capital
loss carryforwards) under income tax regulations.
15
<PAGE>
Notes to Financial Statements/April 30, 1997
- --------------------------------------------------------------------------------
NOTE 2. ACCOUNTING POLICIES - CONT.
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSACTIONS: Net realized and unrealized gains (losses) on
foreign currency transactions includes the fluctuation in exchange rates on
gains (losses) between trade and settlement dates on securities transactions,
gains (losses) arising from the disposition of foreign currency and currency
gains (losses) between the accrual and payment dates on dividends and interest
income and foreign withholding taxes.
The Fund does not distinguish that portion of gains (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 (losses) on 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 (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 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.
16
<PAGE>
Notes to Financial Statements/April 30, 1997
- --------------------------------------------------------------------------------
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 reimbursement
for certain out of pocket expenses.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES: Colonial Investment
Services, Inc. (the Distributor), an affiliate of the Adviser, is the Fund's
principal underwriter. For the six months ended April 30, 1997, the Fund has
been advised that the Distributor retained net underwriting discounts of $3,214
on sales of the Fund's Class A shares and received contingent deferred sales
charges (CDSC) of $39,899 on Class B share redemptions.
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 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% annually of the average net assets attributable to
Class B shares only.
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
- --------------------------------------------------------------------------------
INVESTMENT ACTIVITY: During the six months ended April 30, 1997,
purchases and sales of investments, other than short-term obligations,
were $13,697,510 and $20,883,205, respectively.
17
<PAGE>
Notes to Financial Statements/April 30, 1997
- -------------------------------------------------------------------------------
NOTE 4. PORTFOLIO INFORMATION - CONT.
- -------------------------------------------------------------------------------
Unrealized appreciation (depreciation) at April 30, 1997, based on cost of
investments for federal income tax purposes was:
Gross unrealized appreciation $12,077,719
Gross unrealized depreciation (1,510,145)
-----------
Net unrealized appreciation $10,567,574
===========
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. LINE OF CREDIT
- --------------------------------------------------------------------------------
The Fund may borrow up to 10% of its net assets under a line of credit for
temporary or emergency purposes. Any borrowings bear interest at one of the
following options determined at the inception of the loan: (1) federal funds
rate plus 1/2 of 1%, (2) the lending bank's base rate or (3) IBOR offshore loan
rate plus 1/2 of 1%. There were no borrowings under the line of credit during
the six months ended April 30, 1997.
18
<PAGE>
FINANCIAL HIGHLIGHTS
Selected data for a share of each class outstanding throughout each period are
as follows:
<TABLE>
<CAPTION>
(Unaudited)
Six months ended
April 30
----------------------
1997
Class A Class B
------- -------
<S> <C> <C>
Net asset value -
Beginning of period $14.32 $14.23
------ ------
INCOME FROM
INVESTMENT OPERATIONS:
Net investment income (loss) (a) 0.021 (0.03)
Net realized and
unrealized gain (loss) (a) 0.734 0.726
------ ------
Total from Investment
Operations 0.755 0.695
------ ------
LESS DISTRIBUTIONS
DECLARED TO SHAREHOLDERS:
In excess of net investment income (0.01) --
From net realized gains (1.385) (1.385)
------ ------
Total Distributions Declared
to Shareholders (1.395) (1.385)
------ ------
Net asset value -
End of period $13.68 $13.54
------ ------
Total return (b)(c) 5.26% 4.83%
------ ------
RATIOS TO AVERAGE NET ASSETS
Expenses 1.62%(d)(e) 2.37%(d)(e)
Net investment income 0.31%(d)(e) (0.44)%(d)(e)
Portfolio turnover (c) 24% 24%
Average commission rate (f) $0.0398 $0.0398
Net assets at end
of period (000) $34,205 $25,995
</TABLE>
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(c) Not annualized.
(d) The benefits derived from custody credits and directed brokerage
arrangements had no impact. Prior years' ratios are net of benefits
received, if any.
(e) Annualized.
(f) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for trades on
which commissions are charged.
19
<PAGE>
FINANCIAL HIGHLIGHTS - continued
Selected data for a share of each class outstanding throughout each period are
as follows:
<TABLE>
<CAPTION>
Year ended October 31
----------------------------------------------
1996 1995
Class A Class B Class A Class B
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value -
Beginning of period $12.430 $12.380 $13.160 $13.110
------- ------- ------- -------
INCOME FROM
INVESTMENT OPERATIONS:
Net investment income (loss) (a) 0.075 (0.026) 0.102 0.009
Net realized and
unrealized gain (loss) (a) 2.525 2.506 (0.496) (0.489)
------- ------- ------- -------
Total from Investment
Operations 2.600 2.480 (0.394) (0.480)
------- ------- ------- -------
LESS DISTRIBUTIONS
DECLARED TO SHAREHOLDERS:
From net
investment income (0.080) -- (0.106) (0.020)
From net realized gains (0.630) (0.630) (0.230) (0.230)
------- ------- ------- -------
Total Distributions Declared
to Shareholders (0.710) (0.630) (0.336) (0.250)
------- ------- ------- -------
Net asset value -
End of period $14.320 $14.230 $12.430 $12.380
======= ======= ======= =======
Total return (c) 21.69% 20.70% (2.88)% (3.56)%
======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS
Expenses 1.61%(e) 2.36%(e) 1.66%(e) 2.41%(e)
Net investment income 0.56%(e) (0.19)%(e) 0.82%(e) 0.07%(e)
Portfolio turnover 84% 84% 65% 65%
Average
commission rate (g) $0.0268 $0.0268 -- --
Net assets at end
of period (000) $36,655 $25,482 $31,297 $20,931
</TABLE>
(a) Per share data was calculated using average shares outstanding during the
period.
(b) The Fund commenced investment operations on June 8, 1992.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(d) Not annualized.
(e) The benefits derived from custody credits and directed brokerage
arrangements had no impact. Prior years' ratios are net of benefits
received, if any.
(f) Annualized.
(g) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for trades on
which commissions are charged.
20
<PAGE>
FINANCIAL HIGHLIGHTS - continued
<TABLE>
<CAPTION>
Period ended
Year ended October 31 October 31
- ----------------------------------------------- --------------------------
1994 1993 1992 (b)
Class A Class B Class A Class B Class A Class B
- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$12.160 $12.130 $ 9.750 $ 9.720 $10.000 $10.000
- ------- ------- ------- ------- ------- -------
0.114 0.019 0.099 0.018 0.042 0.012
1.104 1.097 2.429 2.431 (0.292) (0.292)
- ------- ------- ------- ------- ------- -------
1.218 1.116 2.528 2.449 (0.250) (0.280)
- ------- ------- ------- ------- ------- -------
(0.118) (0.036) (0.118) (0.039) -- --
(0.100) (0.100) -- -- -- --
- ------- ------- ------- ------- ------- -------
(0.218) (0.136) (0.118) (0.039) -- --
- ------- ------- ------- ------- ------- -------
$13.160 $13.110 $12.160 $12.130 $ 9.750 $ 9.720
======= ======= ======= ======= ======= =======
10.14% 9.28% 26.20% 25.30% (2.50)%(d) (2.80)%(d)
======= ======= ======= ======= ======= =======
1.70% 2.45% 1.88% 2.63% 2.45(f) 3.20(f)
0.90% 0.15% 0.92% 0.17% 1.07(f) 0.32(f)
15% 15% 14% 14% 89%(f) 89%(f)
-- -- -- -- -- --
$36,830 $22,458 $31,098 $ 7,179 $27,790 $ 4,444
</TABLE>
21
<PAGE>
SHAREHOLDER SERVICES
TO MAKE INVESTING EASIER
Colonial has one of the most extensive selections of shareholder services
available. Your financial adviser can help you arrange for any of these
services, or you can call Colonial directly at 1-800-345-6611.
AFFORDABLE ADDITIONAL INVESTMENTS: Add to your account with as little as $50 on
most funds; $25 for an IRA account.
FREE EXCHANGES*: Exchange all or part of your account into the same share class
of another Colonial fund, by phone or mail.
EASY ACCESS TO YOUR MONEY*: Make withdrawals from your account by phone, by mail
or, for certain funds, by check.
ONE-YEAR REINSTATEMENT PRIVILEGE: If you need access to your money, but then
choose to return it to Colonial within one year, you can reinvest in any
Colonial fund of the same share class without any penalty or sales charge.
FUNDAMATIC: Make periodic investments as low as $50 from your checking account
to your Colonial account.
SYSTEMATIC WITHDRAWAL PLAN (SWP): Receive monthly, quarterly or semiannual
payments via check or bank transmission. There is a $5,000 account value
required, but no minimum for the payment amount. The maximum annual withdrawal
is 12% of account balance at time SWP is established. SWPs by check are
processed on the 10th calendar day of each month unless the 10th falls on a
non-business day or the first business day of the week. If this occurs, the
payable date will be the previous business day. Dividends and capital gains must
be reinvested.
AUTOMATED DOLLAR COST AVERAGING: Transfer money on a monthly basis from any
Colonial fund with a balance of $5,000 into the same share class of up to four
other Colonial funds. Minimum for each transfer is $100.
COLONIAL RETIREMENT PLANS: Choose from a broad range of retirement plans,
including IRAs.
* Redemptions and exchanges are made at the next determined net asset value
after the request is received by Colonial. Proceeds may be more or less than
your original cost. The exchange privilege may be terminated at any time.
Exchanges are not available on all funds. Investors who purchase Class B or
Class D shares (for applicable funds), or $1 million or more of Class A shares,
may be subject to a contingent deferred sales charge.
22
<PAGE>
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Colonial International Horizons Fund is:
Colonial Investors Service Center, Inc.
P.O. Box 1722
Boston, MA 02105-1722
1-800-345-6611
Colonial International Horizons Fund mails one shareholder report to each
shareholder address. If you would like more than one report, please call
Colonial at 1-800-426-3750 and additional reports will be sent to you.
This report has been prepared for shareholders of Colonial International
Horizons 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.
23
<PAGE>
[Logo]
COLONIAL
MUTUAL FUNDS
Mutual Funds for
Planned Portfolios
- --------------------------------------------------------------------------------
TRUSTEES
ROBERT J. BIRNBAUM
Retired (formerly Special Counsel, Dechert, Price & Rhoads; President and Chief
Operating Officer, New York Stock Exchange, Inc.)
TOM BLEASDALE
Retired (formerly Chairman of the Board and Chief Executive Officer, Shore Bank
& Trust Company)
LORA S. COLLINS
Attorney (formerly Attorney, Kramer, Levin, Naftalis, Nessen, Kamin & Frankel)
JAMES E. GRINNELL
Private Investor (formerly Senior Vice President-Operations, The Rockport
Company)
WILLIAM D. IRELAND, JR.
Retired (formerly Chairman of the Board, Bank of New England-Worcester)
RICHARD W. LOWRY
Private Investor (formerly Chairman and Chief Executive Officer, U.S. Plywood
Corporation)
WILLIAM E. MAYER
Partner, Development Capital, L.L.C. (formerly Dean, College of Business and
Management, University of Maryland; Dean, Simon Graduate School of Business,
University of Rochester; Chairman and Chief Executive Officer, C. S. First
Boston Merchant Bank; and President and Chief Executive Officer, The First
Boston Corporation)
JAMES L. MOODY, JR.
Retired (formerly Chairman of the Board and Chief Executive Officer, Hannaford
Bros. Co.)
JOHN J. NEUHAUSER
Dean, Boston College School of Management
GEORGE L. SHINN
Financial Consultant (formerly Chairman, Chief Executive Officer and Consultant,
The First Boston Corporation)
ROBERT L. SULLIVAN
Retired Partner, Peat Marwick Main & Co. (formerly Management Consultant,
Saatchi and Saatchi Consulting Ltd. and Principal and International Practice
Director, Management Consulting, Peat Marwick Main & Co.)
SINCLAIR WEEKS, JR.
Chairman of the Board, Reed & Barton Corporation
COLONIAL INVESTMENT SERVICES, INC., Distributor (C) 1997
A Liberty Financial Company (NYSE: L)
One Financial Center, Boston, Massachusetts 02111-2621, 617-426-3750
HZ-03/664D-0497 M (6/97)
- --------------------------------------------------------------------------------
