COLONIAL STRATEGIC BALANCED FUND
Supplement to the February 27, 1998 Prospectus
(Replacing Supplement dated October 30, 1998)
The Fund's Prospectus is amended as follows:
(1) A new paragraph is added to the front cover of the Prospectus below the
Table of Contents as follows:
This Prospectus is also available on-line at the Web site
http://www.libertyfunds.com. The Securities and Exchange Commission (SEC)
maintains a Web site (http://www.sec.gov) that contains the Statement of
Additional Information, materials that are incorporated by reference into
this Prospectus and the Statement of Additional Information, and other
information regarding the Fund.
(2) A new paragraph is added as the eighth paragraph under the caption HOW THE
FUND PURSUES ITS OBJECTIVE AND CERTAIN RISK FACTORS as follows:
Emerging Markets. The Fund may invest up to 35% of its total assets in
foreign securities issued or guaranteed by companies or
governments located in countries whose economies or securities markets are
not yet highly developed. Special risks associated with
these investments (in addition to those of foreign investments generally)
may include, among others, greater political uncertainties, an economy's
dependence on revenues from particular commodities or on international aid
or development assistance, extreme or volatile debt burdens or inflation
rates, highly limited numbers of potential buyers for such securities,
heightened volatility of security prices, restrictions on repatriation of
capital invested abroad and delays and disruptions in securities settlement
procedures.
(3) The paragraph Other Investment Companies under the caption HOW THE FUND
PURSUES ITS OBJECTIVE AND CERTAIN RISK FACTORS is deleted in its entirety.
(4) The paragraph Borrowing of Money under the caption HOW THE FUND PURSUES ITS
OBJECTIVE AND CERTAIN RISK FACTORS is revised in its entirety as follows:
Borrowing of Money. The Fund may borrow money from banks, other affiliated
funds and other entities to the extent permitted by law for temporary or
emergency purposes up to 33 1/3% of its total assets.
(5) A new caption is added after the HOW THE FUND IS MANAGED entitled YEAR 2000
as follows:
The Fund's Advisor, Distributor and Transfer Agent (Liberty Companies) are
actively managing Year 2000 readiness for the Fund. The Liberty Companies
are taking steps that they believe are reasonably designed to address the
Year 2000 problem and are communicating with vendors who provide services,
software and systems to the Fund to provide that date-related information
and data can be properly processed and calculated on and after January 1,
2000. Many Fund service providers and vendors, including the Liberty
Companies, are in the process of making Year 2000 modifications to their
software and systems and believe that such modifications will be completed
on a timely basis prior to January 1, 2000. The Fund will not pay the cost
of these modifications. However, no assurances can be given that all
modifications required to ensure proper data processing and calculation on
and after January 1, 2000 will be timely made or that services to the Fund
will not be adversely affected.
(6) Gita Rao, a Vice President of the Advisor, co-manages the Fund. Ms. Rao has
managed various other Colonial funds since 1995. Prior to joining the
Advisor, she was a global equity research analyst at Fidelity Management &
Research Company from 1994 to 1995 and a Vice President in the domestic
equity research group at Kidder, Peabody and Company from 1991 to 1994.
James P. Haynie no longer co-manages the Fund.
(7) Liberty Financial Investments, Inc., the Fund's distributor, has changed
its name to Liberty Funds Distributor, Inc. (Distributor). The new name
does not affect the investment management of, or services to, the Fund. The
Distributor continues to offer selected investment products managed by
subsidiaries of Liberty Financial Companies, Inc. (NYSE:L), the indirect
parent of the Distributor.
(8) Colonial Investors Service Center, Inc. (Transfer Agent), the Fund's
transfer agent, has changed its name to Liberty Funds Services, Inc. The
new name does not affect the services that the Transfer Agent provides to
the Fund.
(9) The last sentence under the caption HOW THE FUND VALUES ITS SHARES is
changed in its entirety as follows:
In addition, if the values of foreign securities have been materially
affected by events occurring after the closing of a foreign market, the
foreign securities may be valued at their fair value.
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(10) The Distributor pays an additional 1% commission (total commission of 5%)
to financial service firms on sales of Class B shares of the Fund to its
clients or customers. The commission is paid directly by the Distributor
from its assets and does not effect the expenses paid by Fund shareholders.
Financial service firms may waive receipt of all or any portion of these
payments.
(11) The last sentence under the caption HOW TO SELL SHARES is revised in its
entirety as follows:
To avoid delay in payment, investors are advised to purchase shares
unconditionally, such as by federal fund wire or other immediately
available funds.
(12)The following sentence is added to the paragraph Class A Shares under the
caption HOW TO EXCHANGE SHARES:
Exchanges of Class A shares are not subject to a contingent deferred sales
charge. However, in determining whether a contingent deferred sales charge
is applicable to redemptions, the schedule of the fund into which the
original investment was made should be used.
(13) Under the caption TELEPHONE TRANSACTIONS the first sentence in the first
paragraph is revised in its entirety and a new second and third sentence
are added as follows:
All shareholders and/or their financial advisors are automatically eligible
to exchange Fund shares and to redeem up to $100,000 of Fund shares by
calling 1-800-422-3737 toll-free any business day between 9:00 a.m. Eastern
time and the time at which the Fund values it shares. Telephone redemptions
are limited to a total of $100,000 in a 30-day period. Redemptions that
exceed $100,000 may be done by placing a wire order trade through a broker
or furnishing a signature guaranteed request.
(14) Price Waterhouse LLP, the Fund's independent accountants, changed its name
to PricewaterhouseCoopers LLP. The new name will not affect the services
provided by PricewaterhouseCoopers LLP to the Fund.
SB-36/958F-0998 December 31, 1998
