<PAGE>
COLONIAL GLOBAL UTILITIES FUND SEMIANNUAL REPORT
April 30, 1998
Not FDIC May Lose Value
Insured No Bank Guarantee
[Image of the Earth from Outer Space]
<PAGE>
COLONIAL GLOBAL UTILITIES FUND HIGHLIGHTS
NOVEMBER 1, 1997 -- APRIL 30, 1998
INVESTMENT OBJECTIVE: Colonial Global Utilities Fund seeks current income and
long-term growth of capital and income.
THE FUND IS DESIGNED TO OFFER:
[checkmark] Long-term growth potential
[checkmark] Worldwide diversification
[checkmark] Experienced professional management
PORTFOLIO MANAGER COMMENTARY: "The Fund maintained its conservative focus on a
diversified group of well-managed utility companies with good growth prospects
in a variety of countries. This strategy protected shareholders from much of the
negative effects of the 'Asian flu' without curtailing their ability to
participate in the growing demand for utility services worldwide."
- Ophelia Barsketis and Deborah Jansen
COLONIAL GLOBAL UTILITIES FUND PERFORMANCE
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Inception dates 10/15/91 3/27/95 3/27/95
Six-month distributions declared $1.063 $1.008 $1.008
per share
Six-month total returns, assuming 21.98% 21.44% 21.52%
reinvestment of all distributions and
no sales charge or contingent deferred
sales charge (CDSC)
Net asset value per share on 4/30/98 $15.52 $15.51 $15.52
</TABLE>
TOP FIVE COMMON STOCK HOLDINGS
(as of 4/30/98)
1. Lucent Technologies, Inc. ....... 2.6%
2. Nokia Oy Ab...................... 2.6%
3. AirTouch Communications.......... 2.4%
4. Iberdrola SA..................... 2.2%
5. USA Waste Services, Inc. ........ 2.2%
TOP FIVE COUNTRIES
(as of 4/30/98)
1. United States .................. 51.0%
2. United Kingdom ................. 6.7%
3. Mexico ......................... 5.5%
4. Brazil ......................... 4.8%
5. Spain .......................... 4.2%
Countries and holdings are shown as a percentage 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 in the future.
2
<PAGE>
PRESIDENT'S MESSAGE
To Fund Shareholders
[Photo of Harold W. Cogger]
I am pleased to present the semiannual report for Colonial Global Utilities
Fund. This report reflects on the investment environment for the six months
ended April 30, 1998 and on the performance of your Fund.
Markets in the Pacific Rim continued to dominate headlines during the early part
of the period as the currency crisis in Southeast Asia generated a negative
spillover effect on many stock markets worldwide. During the "sorting out"
period, the Fund's emphasis on a diversified portfolio of fundamentally strong,
value-oriented utility stocks in well-established markets served to stabilize
returns and shield investors from much of this volatility. During the second
half of the period, many markets, particularly in Europe and the U.S., recovered
and went on to post strong gains.
Prospects for utility stocks are attractive. Many of the world's economies are
less mature than the U.S. economy. Significant unmet needs for basic utility
services provide international utility stocks with considerable opportunities
for price gains. In the U.S., utility investments should benefit from positive
economic and industry fundamentals. These include low inflation, low interest
rates and significant progress towards restructuring in the face of utility
deregulation and increased competition. In addition, increased merger activity
in the utility sector may have a positive effect on stock prices.
A global fund provides attractive growth prospects as well as an opportunity to
diversify your core portfolio by adding international investments. World stock
markets do not always move in step with the U.S. stock market, and international
markets can provide opportunities to outperform the U.S. market. Looking ahead,
economic growth prospects worldwide remain attractive and point to opportunities
for future gains.
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. Thank you
for giving us the opportunity to serve your investment needs.
Respectfully,
/s/ Harold W. Cogger
- -----------------------
Harold W. Cogger
President
June 9, 1998
Because market conditions change frequently, there can be no assurance that the
trends described will continue.
3
<PAGE>
PORTFOLIO MANAGEMENT REPORT
OPHELIA BARSKETIS and DEBORAH JANSEN are portfolio co-managers of Colonial
Global Utilities Fund. Ms. Barsketis and Ms. Jansen are also senior vice
presidents of Stein Roe & Farnham Incorporated, the portfolio's advisor.
IMPROVING INVESTMENT ENVIRONMENT DURING THE PERIOD
Investors continued to focus on the economies of the Pacific Rim during the
period. A Thai currency collapse last summer resulted in currency devaluations
throughout the region, exposing credit problems and a widespread need for
financial restructuring. During the first part of the period, shaken investor
confidence and the "Asian flu" spread to other markets around the world.
Concerns about further currency devaluations, reduced competitiveness and
economic vitality resulted in declining values for many stocks worldwide,
particularly in Latin America and other less developed economies. However, the
U.S. and European stock markets experienced fewer negative effects because their
economies are characterized by well-developed fiscal and monetary policies which
created a "safe haven" for investors. Because the Fund had over 75% of its
assets invested in the U.S. and Europe, shareholders were shielded from the
worst of the declines.
The second half of the period saw a significant improvement in many global
markets. The European markets have risen over 20% since the first of the year
and the U.S. markets have risen 15%. These markets continued to benefit from
low, or falling, inflation and good economic growth, conditions that are also
positive for utility stocks. While many Latin American markets remain weak, an
enormous unmet demand for utility services continues. We believe utility
companies that can efficiently meet this pent-up demand should do well. In
addition, many countries are still in the process of privatizing their utility
providers.
DEREGULATION AND DEMOGRAPHICS DRIVE GROWTH PROSPECTS FOR UTILITIES
In the U.S., utility sector performance continued to reflect the deregulatory
progress. Companies which have cut costs and restructured in advance of
increased competition remain poised for good stock price performance.
Restructuring has been accompanied by increased merger activity as utility
companies seek to increase their market presence. Utilities that have global
business interests are also attractive. One such stock that has performed well
is AES Corp. (1.8% of the Fund) is the world's largest independent power
producer. This conservative and well-capitalized company invests for the long
term and continues to win large contracts in Asia and South America. The stock's
price doubled in 1997 and is off to a good start in 1998. Other U.S. utilities
have benefited from strong domestic economic activity, particularly in the
southern region. The Fund has concentrated its U.S. investments in Southern
4
<PAGE>
and Southwestern states that have experienced population growth, increased job
opportunities and strong residential and commercial construction activity, all
of which point to increased utility demand.
Elsewhere, the potential for utility stock price increases is even greater. As
it has done in the U.S., the Fund has concentrated on foreign regions where
economic trends should result in strong growth in utility services. For example,
in southern Europe we have emphasized investments in Italy, Spain and Portugal.
These countries are enjoying an economic revitalization, helped in part by the
impending European Monetary Union. Two of the Fund's holdings in this region,
Telefonica de Espana (Spain) and Electricidad de Portugal, (2.0% and 1.1% of the
Fund, respectively), are up over 30% calendar year to date. Northern Europe also
offered good opportunities. For example, Nokia, a Finnish telecommunications
company, (2.6% of the Fund) is up 90% calendar year to date. This company
operates worldwide and manufactures equipment for telephone companies as well as
cellular phones and pagers. In Latin America, the overall market environment is
less positive but we believe that the enormous demand for basic electric, gas,
water and telecommunication services points towards improved performance for
utility stocks in these markets.
FUND'S STRONG PERFORMANCE REFLECTS CONSERVATIVE INVESTMENT STRATEGY
The Fund generated a six-month total return of 21.98% for Class A shares, based
on net asset value. The Fund outperformed both the Standard & Poor's Utilities
Index and the Morgan Stanley Capital International World Index which posted
total returns of 19.3% and 18.7%, respectively.
We attribute this performance to the Fund's concentration of assets in markets
that performed well during the period as exemplified by period-end weightings in
Europe (27%) and the U.S. (51%). We also believe that shareholders benefited
from the Fund's conservative investment strategy that emphasizes a variety of
stocks across markets and utility sectors.
UTILITY FUNDAMENTALS REMAIN POSITIVE
Looking ahead, we anticipate that worldwide utility demand will continue to
grow. Domestically, we expect that utility stock prices will continue to be
driven by deregulation and merger activity. We believe many U.S. utility stocks
are cheap relative to their growth opportunities and we view these as buying
candidates. Overseas, utility demand growth is even higher than in the U.S. As a
result, we will continue to emphasize international utility stocks as well as
U.S. utility stocks that operate on a global basis. Privatization and
deregulation should continue to present new opportunities worldwide as should
the huge need for basic utility services in many developing nations. We continue
to believe that the Fund offers shareholders a conservative opportunity to
participate in worldwide growth and economic development.
5
<PAGE>
COLONIAL GLOBAL UTILITIES FUND'S INVESTMENT PERFORMANCE VS.
MORGAN STANLEY CAPITAL INTERNATIONAL WORLD INDEX ND AND
THE STANDARD & POOR'S UTILITIES INDEX
Change in Value of $10,000 from 10/31/91 - 4/30/98
Class A Shares
Based on NAV and POP
[Graph]
VALUE OF A $10,000 INVESTMENT
MADE ON 10/31/91 AT 4/30/98
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
NAV POP NAV W/CDSC NAV W/CDSC
--- --- --- ------ --- ------
<S> <C> <C> <C> <C> <C>
$22,378 $21,091 $21,853 $21,853 $21,867 $21,867
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS
As of 4/30/98
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
INCEPTION 10/15/91 3/27/95 3/27/95
NAV POP NAV W/CDSC NAV W/CDSC
--- --- --- ------ --- ------
<S> <C> <C> <C> <C> <C> <C>
1 YEAR 29.46% 22.01% 28.40% 23.40% 28.49% 27.49%
5 YEARS 12.32 11.00 11.79 11.53 11.80 11.80
LIFE 13.07 12.05 12.66 12.66 12.67 12.67
</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 charge (CDSC). Public
offering price (POP) returns include the maximum sales charges of 5.75% for
Class A shares. The CDSC returns reflect the maximum applicable charges of 5%
for 1 year and 2% for 5 years for Class B shares and 1% for 1 year for Class C
shares. Performance for different share classes will vary based on differences
in sales charges and fees associated with each class.
The Fund initially commenced operations as the Liberty Financial Utilities Fund
on 10/15/91. Performance shown is based, in part, on the performance of the
Liberty Financial Utilities Fund which had a different expense structure than
the Fund.
Class B and Class C share (newer class shares) performance information includes
returns of the Fund's Class A shares (the oldest existing fund class) for
periods prior to the inception dates of the newer class shares. These Class A
share returns are not restated to reflect any expense differential (e.g., Rule
12b-1 fees) between Class A shares and the newer class shares. Had the expense
differential been reflected, the returns for periods prior to the inception date
of the newer class shares would have been lower.
The Morgan Stanley Capital International World Index ND is an unmanaged index
that tracks the performance of global stocks. The Standard & Poor's Utilities
Index is an unmanaged index that tracks the performance of domestic utility
stocks. Unlike mutual funds, indexes are not investments, do not incur fees or
expenses and are not professionally managed.
6
<PAGE>
<TABLE>
<CAPTION>
Label CGUF Class A sh
<S> <C> <C> <C> <C>
AS OF DATE NAV POP MSCI World IX N S&P Utilities
Oct 31, 91 10000 10000 10000 10000
Nov 30, 91 10048 9470 9561 9908
Dec 31, 91 10508 9904 10254 10635
Jan 31, 92 10356 9760 10061 10063
Feb 29, 92 10315 9722 9885 9782
Mar 31, 92 10203 9616 9416 9643
Apr 30, 92 10367 9771 9544 10269
May 31, 92 10636 10024 9921 10254
Jun 30, 92 10688 10073 9585 10394
Jul 31, 92 11137 10496 9607 11222
Aug 31, 92 11199 10555 9837 11132
Sep 30, 92 11199 10555 9744 11213
Oct 31, 92 11083 10445 9477 11113
Nov 30, 92 11243 10596 9643 11092
Dec 31, 92 11596 10930 9718 11496
Jan 31, 93 11855 11174 9748 11674
Feb 28, 93 12311 11603 9976 12510
Mar 31, 93 12605 11880 10551 12736
Apr 30, 93 12517 11797 11037 12475
May 31, 93 12517 11798 11289 12463
Jun 30, 93 12893 12151 11191 13038
Jul 31, 93 13026 12277 11419 13340
Aug 31, 93 13571 12790 11939 13986
Sep 30, 93 13615 12832 11716 13951
Oct 31, 93 13660 12874 12036 13927
Nov 30, 93 13153 12397 11352 13224
Dec 31, 93 13341 12574 11905 13156
Jan 31, 94 13643 12859 12688 13241
Feb 28, 94 13278 12515 12521 12493
Mar 31, 94 12772 12038 11978 12070
Apr 30, 94 12812 12075 12345 12372
May 31, 94 12559 11837 12374 12037
Jun 30, 94 12422 11707 12337 12067
Jul 31, 94 12719 11987 12569 12472
Aug 31, 94 12805 12069 12945 12434
Sep 30, 94 12537 11816 12602 12124
Oct 31, 94 12647 11920 12957 12219
Nov 30, 94 12424 11710 12392 12044
Dec 31, 94 12427 11713 12509 12111
Jan 31, 95 12698 11968 12319 13054
Feb 28, 95 12799 12063 12495 13029
Mar 31, 95 12827 12089 13094 12946
Apr 28, 95 13088 12336 13548 13430
May 31, 95 13536 12758 13661 13849
</TABLE>
<PAGE>
LABEL A B C D
Jun 30, 95 13564 12784 13653 13908
Jul 31, 95 13766 12974 14333 14266
Aug 31, 95 13708 12920 14011 14556
Sep 29, 95 14012 13206 14416 15468
Oct 31, 95 13953 13150 14186 15797
Nov 30, 95 14222 13404 14675 15969
Dec 29, 95 14670 13826 15101 17092
Jan 31, 96 14889 14033 15371 17316
Feb 29, 96 14815 13963 15462 16638
Mar 29, 96 14677 13833 15716 16279
Apr 30, 96 14937 14078 16082 16473
May 31, 96 15142 14272 16093 16436
Jun 28, 96 15181 14308 16171 17100
Jul 31, 96 14687 13843 15596 15993
Aug 30, 96 15058 14192 15772 16366
Sep 30, 96 15223 14347 16387 16523
Oct 31, 96 15626 14727 16498 17345
Nov 29, 96 16433 15488 17419 17733
Dec 31, 96 16531 15580 17137 17626
Jan 31, 97 17090 16107 17340 17712
Feb 28, 97 17082 16100 17536 17564
Mar 31, 97 16940 15966 17186 17032
Apr 30, 97 17286 16292 17745 16746
May 30, 97 18016 16980 18837 17492
Jun 30, 97 18561 17494 19773 18032
Jul 31, 97 19070 17973 20680 18426
Aug 29, 97 18008 16972 19294 18118
Sep 30, 97 19038 17943 20339 18898
Oct 31, 97 18345 17290 19265 19062
Nov 28, 97 19353 18240 19603 20436
Dec 31, 97 20245 19080 19838 21970
Jan 30, 98 20015 18864 20388 21067
Feb 27, 98 21032 19823 21764 21812
Mar 31, 98 22439 21149 22679 23205
Apr 30, 98 22378 21091 22898 22739
<PAGE>
LFC UTILITIES TRUST
INVESTMENT PORTFOLIO
APRIL 30, 1998 (UNAUDITED, IN THOUSANDS)
<TABLE>
<CAPTION>
COMMON STOCKS - 87.2% COUNTRY SHARES VALUE
----------------------------------------------------------------------------------------
<S> <C> <C> <C>
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES - 77.3%
COMMUNICATIONS - 34.2%
AirTouch Communications(a) 86 $ 4,553
Ameritech Corp. 83 3,541
AT&T 63 3,802
Cable & Wireless ADR UK 59 2,062
COLT Telecom Group ADR(a) UK 45 3,876
Grupo Iusacell SP ADR(a) Mx 153 2,964
Lucent Technologies, Inc. 66 4,994
Nokia Oy Ab ADR Fi 74 4,962
Portugal Telecom S.A. ADR Pt 72 3,870
SBC Communications 93 3,862
Smartone Telecommunications HK 783 2,057
Sprint 58 3,955
Telebras ADR Bz 25 3,045
Telecom Italia (Saving shares) It 675 3,559
Telefonica de Espana ADR Sp 30 3,711
Telefonica de Espana Rights(a) Sp 30 67
Telefonos de Mexico ADS Mx 72 4,094
Tellabs, Inc.(a) 35 2,466
WorldCom, Inc.(a) 91 3,893
------
65,333
------
ELECTRIC SERVICES - 28.3%
AES Corp.(a) 62 3,433
Beijing Datang Power Generation Cn 4,680 1,903
Edison International 121 3,619
Electricade de Portugal ADR Pt 41 2,142
FPL Group, Inc. 65 4,034
Hong Kong Electric ADR HK 914 2,808
Iberdrola SA Sp 260 4,179
Light-Servicos de Eletricidade S.A. Bz 4,250 1,625
National Power PLC ADR UK 78 3,024
New Century Energies 77 3,653
NIPSCO Industries, Inc. 141 3,781
Pinnacle West Capital Corp. 89 3,947
Scottish Power UK 411 3,780
Sierra Pacific Resources 50 1,764
</TABLE>
7
<PAGE>
Investment Portfolio/April 30, 1998
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - CONT. COUNTRY SHARES VALUE
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES - CONT.
ELECTRIC SERVICES - CONT.
Texas Utilities Co. 83 $ 3,320
VEBA AG G 53 3,514
Viag AG G 7 3,371
-------
53,897
-------
GAS SERVICES - 14.8%
CMS Energy Corp. 87 3,814
Columbia Energy Group 43 3,494
Kinder Morgan Energy Partners, L.P. 97 3,468
MCN Energy Group 90 3,413
Questar Corp. 84 3,644
UGI Corp. 127 3,524
Williams Cos. 124 3,906
YPF SA ADR Ar 85 2,964
-------
28,227
-------
---------------------------------------------------------------------------------------------------------------------------
SERVICES - 9.9%
CONGLOMERATES AND MISCELLANEOUS SERVICES - 5.0%
Grupo Carso S.A. de CV Mx 530 3,371
Liberty Property Trust 75 1,927
USA Waste Services, Inc.(a) 85 4,170
-------
9,468
-------
WATER SERVICES - 4.9%
American Water Works Co., Inc. 115 3,443
Compagnie Generale des Eaux Fr 22 4,162
SABESP Bz 8,100 1,813
-------
9,418
-------
TOTAL COMMON STOCKS (cost of $118,935) 166,343
-------
CONVERTIBLE PREFERRED STOCKS - 4.4%
---------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES - 4.4%
COMMUNICATIONS
LM Ericsson 4.250% Sw 626 4,457
Nortel Inversora S.A. 10.000% Ar 61 3,843
-------
TOTAL CONVERTIBLE PREFERRED STOCKS (cost of $3,196) 8,300
-------
</TABLE>
8
<PAGE>
Investment Portfolio/April 30, 1998
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS - 1.4%
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES - 1.4%
ELECTRIC SERVICES
CEMIG, preference shares
(cost of $3,223) Bz 55 $ 2,663
-------
</TABLE>
<TABLE>
<CAPTION>
CORPORATE FIXED-INCOME BONDS - 4.6% CURRENCY PAR
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES - 4.6%
ELECTRICAL SERVICES
Financiera Energetica,(b)
9.000% 11/8/99 Co $ 4,000 4,115
Hydro-Quebec,
8.050% 7/7/24 Ca 4,000 4,661
--------
TOTAL CORPORATE FIXED-INCOME BONDS (cost of $8,454) 8,776
--------
SHORT-TERM OBLIGATIONS - 1.5%
---------------------------------------------------------------------------------------------------------------------------
Associates Corp. of North America,
(cost of $2,800) 6.050% 4/1/98 2,800 2,800
--------
TOTAL INVESTMENTS - 99.1% (cost of $136,608)(c) 188,882
--------
OTHER ASSETS & LIABILITIES, NET - 0.9% 1,786
---------------------------------------------------------------------------------------------------------------------------
NET ASSETS - 100% $190,668
--------
</TABLE>
NOTES TO INVESTMENT PORTFOLIO:
--------------------------------------------------------------------------
(a) Non-income producing security.
(b) Financiera Energetica is a restricted security which was
acquired on June 1, 1995, at a cost of $4,126. This security
represents 2.2% of the Portfolio's net assets at April 30,
1998.
(c) Cost for federal income tax purposes is the same.
<TABLE>
<CAPTION>
Summary of Securities by Country/
Country/Currency Currency Value % of Total
------------------------------------------------------------------------------------
<S> <C> <C> <C>
United States $ 96,220 51.0
United Kingdom UK 12,742 6.7
Mexico Mx 10,429 5.5
Brazil Bz 9,146 4.8
Spain Sp 7,957 4.2
Germany G 6,885 3.6
Argentina Ar 6,807 3.6
Portugal Pt 6,012 3.2
</TABLE>
9
<PAGE>
Investment Portfolio/April 30, 1998
<TABLE>
<CAPTION>
Summary of Securities by Country/
Country/Currency Currency Value % of Total
----------------------------------------------------------------------------
<S> <C> <C> <C>
Finland Fi 4,962 2.6
Hong Kong HK 4,865 2.6
Canada Ca 4,661 2.5
Sweden Sw 4,457 2.4
France Fr 4,162 2.2
Colombia Co 4,115 2.2
Italy It 3,559 1.9
China Cn 1,903 1.0
-------- -----
$188,882 100.0
======== =====
</TABLE>
Certain securities are listed by country of underlying exposure but may
trade predominantly on other exchanges.
Acronym Name
------- ----
ADR American Depository Receipts
ADS American Depository Shares
See notes to financial statements.
10
<PAGE>
LFC UTILITIES TRUST
STATEMENT OF ASSETS & LIABILITIES
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
(in thousands)
<S> <C> <C>
ASSETS
Investments at value (cost $136,608) $ 188,882
Cash 50
Receivable for:
Investments sold $ 1,003
Dividends 537
Interest 275
Other 14 1,829
------- ---------
Total Assets 190,761
LIABILITIES
Payable for:
Management, accounting
and transfer agent fees 90
Other 3
-------
Total Liabilities 93
---------
NET ASSETS applicable to
investors' beneficial interest $ 190,668
=========
</TABLE>
See notes to financial statements.
11
<PAGE>
LFC UTILITIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
(in thousands)
<S> <C> <C>
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $85) $ 1,819
Interest 664
--------
Total Investment Income 2,483
EXPENSES
Management fee $ 491
Accounting fees 14
Audit & legal fees 7
Transfer agent fees 4
Custodian & other fees 20 536
------ --------
Net Investment Income 1,947
--------
NET REALIZED & UNREALIZED GAIN (LOSS) ON PORTFOLIO POSITIONS
Net realized gain (loss) on:
Investments 10,468
Foreign currency transactions (60)
------
Net realized gain from investments
and foreign currency transactions 10,408
Net unrealized appreciation (depreciation)
during the period on:
Investments 23,674
Translation of other assets and liabilities (6)
------
Net unrealized appreciation from
investments and foreign currency
translations 23,668
--------
Net gain 34,076
--------
Increase in Net Assets from Operations $ 36,023
========
</TABLE>
See notes to financial statements.
12
<PAGE>
LFC UTILITIES TRUST
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
(Unaudited) Year
Six months ended ended
(in thousands) April 30 October 31
---------------- ----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS 1998 1997
Operations:
Net investment income $ 1,947 $ 5,561
Net realized gain from investments
and foreign currency transactions 10,408 12,294
Change in unrealized appreciation from
investments and foreign currency
translations 23,668 11,781
-------- --------
Increase from Operations 36,023 29,636
-------- --------
Transactions in investors' beneficial interest:
Contributions 89 120
Withdrawals (11,985) (35,537)
-------- ---------
Net transactions in investors' beneficial
interest (11,896) (35,417)
-------- ---------
Total Increase (Decrease) 24,127 (5,781)
-------- ---------
NET ASSETS
Beginning of period 166,541 172,322
-------- --------
End of period $190,668 $166,541
======== ========
</TABLE>
See notes to financial statements.
13
<PAGE>
LFC UTILITIES TRUST
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
(Unaudited)
Six months
ended
April 30 Year ended October 31
--------------- ---------------------
1998 1997 1996
<S> <C> <C> <C>
RATIOS TO AVERAGE NET ASSETS
Expenses 0.60%(a) 0.60% 0.60%
Net investment income 2.18%(a) 3.16% 4.47%
Portfolio turnover 17% 48% 34%
Average broker commission(b) $0.0008 $0.0035 $0.0214
</TABLE>
<TABLE>
<CAPTION>
Year ended October 31
-----------------------------------------
1995 1994 1993
<S> <C> <C> <C>
RATIOS TO AVERAGE NET ASSETS
Expenses 0.63%(c) 0.61% 0.64%
Net investment income 5.97%(d) 5.48% 5.29%
Portfolio turnover 46% 34% 41%
Average broker commission(b) -- -- --
</TABLE>
(a) Annualized.
(b) 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.
(c) If the Portfolio had paid all of its expenses and there had
been no reimbursement from the Investment Adviser, this ratio
would have been 0.64%.
(d) Computed giving effect to the Investment Adviser's expense
limitation undertaking.
See notes to financial statements.
14
<PAGE>
LFC UTILITIES TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1998 (UNAUDITED)
NOTE 1. ORGANIZATION AND ACCOUNTING POLICIES
ORGANIZATION: LFC Utilities Trust (the Portfolio) was organized on August 14,
1991 as a trust under Massachusetts law and is registered under the Investment
Company Act of 1940 as an open-end investment company. The Declaration of Trust
permits the Trustees to issue non-transferable interests in the Portfolio. The
Portfolio commenced operations on August 23, 1991.
The following is a summary of significant accounting policies followed by the
Portfolio in the preparation of its financial statements. The policies are in
conformity with generally accepted accounting principles. 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
increases and decreases in net assets from operations during the reporting
period. Actual results could differ from those estimates.
VALUATION OF INVESTMENTS: All securities are valued as of April 30, 1998.
Domestic securities traded on national securities exchanges are valued at the
last reported sales price or, if there are no sales, at the latest bid
quotation. Each domestic over-the-counter security for which the last sales
price is available from Nasdaq is valued at that price. All other domestic
over-the-counter securities for which reliable quotations are available are
valued at the latest bid quotation. Domestic securities convertible into equity
securities and long-term debt obligations are valued at a fair value using a
procedure determined in good faith by the Board of Trustees, which has
authorized the use of valuations provided by a pricing service. Foreign security
valuations are generally based upon market quotations which, depending upon
local convention or regulation, may be last sale price, last bid or asked price,
or the mean between last bid and asked prices as of, in each case, the close of
the appropriate exchange or other designated time.
Other assets and securities of the Portfolio are valued by a method that the
Board of Trustees believes represents fair value.
FEDERAL INCOME TAXES: The Portfolio has complied and intends to comply with the
applicable provisions of the Internal Revenue Service Code. Accordingly, no
provisions for federal income taxes is considered necessary.
15
<PAGE>
Notes to Financial Statements/April 30, 1998
NOTE 1. ORGANIZATION AND ACCOUNTING POLICIES - CONT.
FOREIGN CURRENCY TRANSLATIONS: The books and records of the Portfolio are
maintained in U.S. dollars. All assets and liabilities of the Portfolio
denominated in foreign currencies are translated into U.S. dollar amounts using
a rate that represents the mid-point between bid and asked market rates for such
currencies. Purchases and sales of foreign securities and income derived from
foreign securities are converted at the prevailing rate of exchange on the
respective dates of such transactions. The Portfolio may enter into "forward
currency contracts" for purchases and sales of securities denominated in foreign
currency.
OTHER: Investment transactions are accounted for on the trade date. Interest
income and expenses are recorded on the accrual basis. Dividend income is
recorded on the ex-dividend date.
NOTE 2. INVESTMENT TRANSACTIONS
Realized gains and losses are computed on the identified cost basis for both
financial reporting and federal income tax purposes. The cost of investments
purchased and proceeds from investments sold, excluding short-term investments,
for the six months ended April 30, 1998 were $29,618,894 and $44,648,160,
respectively.
Unrealized appreciation (depreciation) at April 30, 1998, based on cost of
investments for both financial statement and federal income tax purposes was:
<TABLE>
<S> <C>
Gross unrealized appreciation $54,252,190
Gross unrealized depreciation (1,978,496)
-----------
Net unrealized appreciation $52,273,694
-----------
</TABLE>
NOTE 3. TRANSACTIONS WITH AFFILIATED INVESTMENT MANAGEMENT
The Portfolio has a management agreement with Stein Roe & Farnham, Inc. (Stein
Roe), an indirect majority-owned subsidiary of Liberty Mutual Insurance Company
(Liberty Mutual) under which Stein Roe provides investment management and
administrative services. The investment management fee paid to Stein Roe is
accrued daily and paid monthly at an annual rate of 0.55 percent of the
Portfolio's average daily net assets up to $400 million and 0.50 percent of its
average daily net assets thereafter.
The transfer agent fees are paid to Stein Roe Services, Inc., an indirect,
majority-owned subsidiary of Liberty Mutual. For the six months ended April 30,
1998, the Portfolio incurred charges of $3,750.
Stein Roe also provides the Portfolio with certain accounting services. For the
six months ended April 30, 1998, the Portfolio incurred charges of $14,123.
16
<PAGE>
COLONIAL GLOBAL UTILITIES FUND
STATEMENT OF ASSETS & LIABILITIES
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C>
(in thousands except for per share amounts and footnotes)
ASSETS
Investments in LFC Utilities Trust, at value $ 190,665
Receivable for Fund shares sold 123
-----------
Total Assets 190,788
LIABILITIES
Payable for:
Fund shares repurchased $ 88
Distributions 21
Accrued:
Administration fee 16
Distribution fee 3
Bookkeeping fee 4
Service fee 40
Transfer agent fee 32
Deferred Trustee fees 2
Other 38
------
Total Liabilities 244
-----------
NET ASSETS $ 190,544
-----------
Net asset value & redemption price per share -
Class A ($185,029/11,925) $ 15.52
-----------
Maximum offering price per share - Class A
($15.52/0.9425) $ 16.47(a)
-----------
Net asset value & offering price per share -
Class B ($4,335/279) $ 15.51(b)
-----------
Net asset value & offering price per share -
Class C ($1,180/76) $ 15.52(b)
-----------
COMPOSITION OF NET ASSETS
Capital paid in $ 127,927
Overdistributed net investment income (66)
Accumulated net realized gain 10,417
Net unrealized appreciation (depreciation) on:
Investments 52,274
Foreign currency transactions (8)
-----------
$ 190,544
===========
</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.
17
<PAGE>
COLONIAL GLOBAL UTILITIES FUND
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30, 1998
(UNAUDITED)
<TABLE>
<S> <C> <C>
(in thousands)
INVESTMENT INCOME
Dividend income from LFC Utilities Trust $ 1,820
Interest income from LFC Utilities Trust 664
Expenses allocated from LFC Utilities Trust (537)
--------
Investment Income from LFC Utilities Trust
(net of nonreclaimable foreign taxes withheld
at source which amounted to $83) 1,947
EXPENSES
Administration fee $ 90
Service fee 227
Distribution fee - Class B 14
Distribution fee - Class C 3
Audit fee 5
Transfer agent fee 180
Bookkeeping fee 24
Trustees fee 8
Custodian fee 3
Legal fee 2
Registration fee 15
Other 96 667
-------- --------
Net Investment Income 1,280
--------
NET REALIZED & UNREALIZED GAIN (LOSS) ON PORTFOLIO POSITIONS
Net realized gain (loss) on:
Investments 10,467
Foreign currency transactions (60)
--------
Net Realized Gain 10,407
Net unrealized appreciation during
the period on:
Investments 23,674
Foreign currency transactions (6)
--------
Net Unrealized Appreciation 23,668
--------
Net Gain 34,075
--------
Increase in Net Assets from Operations $ 35,355
========
</TABLE>
See notes to financial statements.
18
<PAGE>
COLONIAL GLOBAL UTILITIES FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
(Unaudited)
Six months
ended Year ended
April 30 October 31
(in thousands) ------------ -------------
INCREASE (DECREASE) IN NET ASSETS 1998 1997(a)
<S> <C> <C>
Operations:
Net investment income $ 1,280 $ 4,290
Net realized gain 10,407 12,293
Net unrealized appreciation 23,668 11,781
--------- ---------
Net Increase from Operations 35,355 28,364
Distributions:
From net investment income - Class A (1,634) (4,558)
In excess of net investment income - Class A (64) --
From net realized gains - Class A (10,711) --
From net investment income - Class B (21) (45)
In excess of net investment income - Class B (1) --
From net realized gains - Class B (224) --
From net investment income - Class C (6) (13)
In excess of net investment income - Class C (b) --
From net realized gains - Class C (58) --
--------- ---------
22,636 23,748
--------- ---------
Fund Share Transactions:
Receipts for shares sold - Class A 2,078 4,239
Value of distributions reinvested - Class A 11,878 4,093
Cost of shares repurchased - Class A (13,231) (39,270)
--------- ---------
725 (30,938)
--------- ---------
Receipts for shares sold - Class B 576 2,324
Value of distributions reinvested - Class B 221 37
Cost of shares repurchased - Class B (177) (950)
--------- ---------
620 1,411
--------- ---------
Receipts for shares sold - Class C 235 306
Value of distributions reinvested - Class C 54 10
Cost of shares repurchased - Class C (54) (171)
--------- ---------
235 145
--------- ---------
Net Increase (Decrease) from Fund Share
Transactions 1,580 (29,382)
--------- ---------
Total Increase (Decrease) 24,216 (5,634)
NET ASSETS
Beginning of period 166,328 171,962
--------- ---------
End of period (net of overdistributed and
including undistributed net investment
income of $66 and $440, respectively) $ 190,544 $ 166,328
========= =========
</TABLE>
(a) Effective July 1, 1997, Class D shares were redesignated Class C
shares.
(b) Rounds to less than one.
Statement of Changes in Net Assets continued on following page.
See notes to financial statements.
19
<PAGE>
COLONIAL GLOBAL UTILITIES FUND
STATEMENT OF CHANGES IN NET ASSETS - CONT.
<TABLE>
<CAPTION>
(Unaudited)
Six months
ended Year ended
April 30 October 31
(in thousands) ------------- -------------
NUMBER OF FUND SHARES 1998 1997(a)
<S> <C> <C>
Sold - Class A 142 317
Issued for distributions reinvested - Class A 870 313
Repurchased - Class A (912) (2,954)
------ ------
100 (2,324)
------ ------
Sold - Class B 39 175
Issued for distributions reinvested - Class B 16 3
Repurchased - Class B (12) (70)
------ ------
43 108
------ ------
Sold - Class C 16 23
Issued for distributions reinvested - Class C 4 1
Repurchased - Class C (4) (13)
------ ------
16 11
------ ------
</TABLE>
(a) Effective July 1, 1997, Class D shares were redesigned Class C shares.
See notes to financial statements.
20
<PAGE>
COLONIAL GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1998 (UNAUDITED)
NOTE 1. INTERIM FINANCIAL STATEMENTS
In the opinion of management of Colonial Global Utilities 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, 1998, and the results of its
operations, the changes in its net assets and the financial highlights for the
six months then ended.
NOTE 2. ACCOUNTING POLICIES
ORGANIZATION: The Fund is a diversified portfolio of a Massachusetts business
trust registered under the Investment Company Act of 1940, as amended, as an
open-end management investment company. The Fund invests all of its assets in
interests in the LFC Utilities Trust (the Portfolio), a Massachusetts business
trust, having the same investment objective as the Fund. The Fund records its
share of the investment income, expenses and realized and unrealized gains and
losses recorded by the Portfolio on a daily basis. The investment income,
expenses and realized and unrealized gains and losses are allocated daily to
investors in the Portfolio based upon the value of their investments in the
Portfolio. Such investments are adjusted on a daily basis. The value of the
Fund's investment in the Portfolio reflects the Fund's proportionate interest in
the net assets of the Portfolio (99.9% at April 30, 1998). The performance of
the Fund is directly affected by the performance of the Portfolio.
The financial statements of the Portfolio, including the portfolio of
investments are included elsewhere in this report and should be read in
conjunction with the Fund's financial statements. The Fund may issue an
unlimited number of shares. The Fund offers three classes of shares: Class A,
Class B and Class C. Class A shares are sold with a front-end sales charge, and
Class B shares are subject to an annual distribution fee and a contingent
deferred sales charge. Class B shares will convert to Class A shares when they
have been outstanding approximately eight years. Class C shares are subject to a
contingent deferred sales charge on redemptions made within one year after
purchase and a continuing distribution fee.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the period. Actual results
could differ from those estimates. The following is a summary of accounting
policies that are consistently followed by the Fund in the preparation of its
financial statements.
21
<PAGE>
Notes to Financial Statements/April 30, 1998
NOTE 2. ACCOUNTING POLICIES - CONT.
SECURITY VALUATION AND TRANSACTIONS: Valuation of securities by the Portfolio is
discussed in Note 1 of the Portfolio's Notes to Financial Statements which are
included elsewhere in this report.
DETERMINATION OF CLASS NET ASSET VALUES AND FINANCIAL HIGHLIGHTS: All income,
expenses (other than the Class B and Class C distribution fees), 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 and Class C net investment income per share
data reflects the distribution fee per share applicable to Class B and Class C
shares only.
Class B and Class C 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 and Class C shares only.
FEDERAL INCOME TAXES: Consistent with the Fund's policy to qualify as a
regulated investment company and to distribute all of its taxable income, no
federal income tax has been accrued.
DISTRIBUTIONS TO SHAREHOLDERS: 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.
NOTE 3. FEES AND COMPENSATION PAID TO AFFILIATES
ADMINISTRATOR FEE: Colonial Management Associates, Inc. (the Administrator),
an affiliate of Stein Roe, is the administrator of the Fund and furnishes
accounting and other services and office facilities for a monthly fee equal to
0.10% annually of the Fund's average net assets.
BOOKKEEPING FEE: The Administrator provides bookkeeping and pricing services for
$18,000 per year plus 0.0233% of the Fund's average net assets over $50 million.
TRANSFER AGENT FEE: Colonial Investors Service Center, Inc. (the Transfer
Agent), an affiliate of the Administrator, provides shareholder services for a
monthly fee equal to 0.20% annually of the Fund's average net assets and
receives reimbursement for certain out-of-pocket expenses.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES: Liberty Financial
Investments, Inc. (the Distributor), a subsidiary of the Administrator, is the
Fund's principal underwriter. For the six months ended April 30, 1998, the Fund
has been advised that the Distributor
22
<PAGE>
Notes to Financial Statements/April 30, 1998
retained net underwriting discounts of $8,666 on sales of the Fund's Class A
shares and received $1,988 and none of contingent deferred sales charge (CDSC)
on Class B and Class C redemptions, respectively.
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.
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 and Class C shares.
OTHER: The Fund pays no compensation to its officers, all of whom are employees
of the Administrator.
The Fund's Trustees may participate in a deferred compensation plan which may be
terminated at any time. Obligations of the plan will be paid solely out of the
Fund's assets.
NOTE 4. 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 off-shore loan
rate plus 1/2 of 1%. There were no borrowings under the line of credit during
the six months ended April 30, 1998.
23
<PAGE>
COLONIAL GLOBAL UTILITIES FUND
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
--------------------------------------------
1998
Class A Class B Class C
------------ ---------- ----------
<S> <C> <C> <C>
Net asset value -
Beginning of period $ 13.720 $ 13.720 $ 13.720
--------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income(b)(c) 0.106 0.052 0.059
Net realized and unrealized gain 2.757 2.746 2.749
--------- -------- --------
Total from Investment Operations 2.863 2.798 2.808
--------- -------- --------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.138) (0.085) (0.085)
In excess of net investment income (0.005) (0.003) (0.003)
From net realized gains (0.920) (0.920) (0.920)
--------- -------- --------
Total Distributions
Declared to Shareholders (1.063) (1.008) (1.008)
--------- -------- --------
Net asset value -
End of period $ 15.520 $ 15.510 $ 15.520
--------- -------- --------
Total return(d) 21.98%(e) 21.44%(e) 21.52%(e)
--------- -------- --------
RATIOS TO AVERAGE NET ASSETS
Expenses(c) 1.32%(f) 2.07%(f) 2.07%(f)
Net investment income(c) 1.44%(f) 0.69%(f) 0.69%(f)
Net assets at end of period (000) $ 185,029 $ 4,335 $ 1,180
</TABLE>
(a) Effective July 1, 1997, Class D shares were redesignated Class C shares.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) The per share amounts and ratios reflect income and expenses assuming
inclusion of the Fund's proportionate share of the income and expenses of
LFC Utilities Trust.
(d) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(e) Not annualized.
(f) Annualized.
24
<PAGE>
COLONIAL GLOBAL UTILITIES FUND
FINANCIAL HIGHLIGHTS - CONT.
<TABLE>
<CAPTION>
Year ended October 31
---------------------------------------------
1997
Class A Class B Class C(a)
-------------- ----------- -----------
<S> <C> <C>
$ 12.000 $ 12.010 $ 12.000
------------ ------------ ------------
0.328 0.225 0.225
1.740 1.732 1.742
------------ ------------ ------------
2.068 1.957 1.967
------------ ------------ ------------
(0.348) (0.247) (0.247)
-- -- --
-- -- --
------------ ------------ ------------
(0.348) (0.247) (0.247)
------------ ------------ ------------
$ 13.720 $ 13.720 $ 13.720
------------ ------------ ------------
17.40% 16.43% 16.53%
------------ ------------ ------------
1.31% 2.06% 2.06%
2.46% 1.71% 1.71%
$ 162,267 $ 3,243 $ 818
</TABLE>
25
<PAGE>
COLONIAL GLOBAL UTILITIES FUND
FINANCIAL HIGHLIGHTS - CONT.
Selected data for a share of each class outstanding throughout each period are
as follows:
<TABLE>
<CAPTION>
Year ended October 31
---------------------------------------------------------
1996
Class A Class B Class C(b)
---------------- ------------ -------------
<S> <C> <C> <C>
Net asset value -
Beginning of period $ 11.080 $ 11.080 $ 11.080
------------ ------------ ------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income(a)(c)(d) 0.427 0.340 0.340
Net realized and unrealized gain (loss) 0.878 0.889 0.879
------------ ------------ ------------
Total from Investment Operations 1.305 1.229 1.219
------------ ------------ ------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.385) (0.299) (0.299)
From net realized gains -- -- --
------------ ------------ ------------
Total Distributions
Declared to Shareholders (0.385) (0.299) (0.299)
------------ ------------ ------------
Net asset value -
End of period $ 12.000 $ 12.010 $ 12.000
------------ ------------ ------------
Total return(f) 11.99% 11.25% 11.16%
------------ ------------ ------------
RATIOS TO AVERAGE NET ASSETS
Expenses 1.38%(c) 2.13%(c) 2.13%(c)
Net investment income 3.70%(c) 2.95%(c) 2.95%(c)
Fees and expenses waived or borne by
Liberty Securities and LFC Utilities Trust -- -- --
Net assets at end
of period (000) $ 169,840 $ 1,538 $ 584
-- -- --
</TABLE>
(a) Net of fees and expenses waived or borne by Liberty Securities which
amounted to
(b) Effective July 1, 1997, Class D shares were redesignated Class C shares.
(c) Per share data was calculated using average shares outstanding during the
period.
(d) The per share amounts and ratios reflect income and expenses assuming
inclusion of the Fund's proportionate share of the income and expenses of
LFC Utilities Trust.
(e) Class B and Class C shares were initially offered on March 27, 1995. Per
share data reflects activity from that date.
(f) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(g) Total return would have been lower had Liberty Securities and LFC
Utilities Trust not waived certain expenses.
(h) Not annualized.
(i) Annualized.
26
<PAGE>
COLONIAL GLOBAL UTILITIES FUND
FINANCIAL HIGHLIGHTS - CONT.
<TABLE>
<CAPTION>
Year ended October 31
-----------------------------------------------------------------------------------------------
1995 1994 1993
Class A Class B(e) Class C(b)(e) Class A Class A
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
$ 10.610 $ 10.420 $ 10.420 $ 12.150 $ 10.430
------------ ------------ ------------ ------------ ------------
0.536 0.248 0.248 0.550 0.570
0.520 0.665 0.665 (1.430) 1.790
------------ ------------ ------------ ------------ ------------
1.056 0.913 0.913 (0.880) 2.360
------------ ------------ ------------ ------------ ------------
(0.517) (0.253) (0.253) (0.500) (0.610)
(0.069) -- -- (0.160) (0.030)
------------ ------------ ------------ ------------ ------------
(0.586) (0.253) (0.253) (0.660) (0.640)
------------ ------------ ------------ ------------ ------------
$ 11.080 $ 11.080 $ 11.080 $ 10.610 $ 12.150
------------ ------------ ------------ ------------ ------------
10.32%(g) 8.82%(h) 8.82%(h) (7.40)% 23.30%
------------ ------------ ------------ ------------ ------------
1.29%(d) 2.05%(d)(i) 2.05%(d)(i) 1.20% 1.13%
5.14%(d) 3.73%(d)(i) 3.73%(d)(i) 4.90% 4.80%
0.03% 0.02%(i) 0.02%(i) -- --
$ 211,916 $ 745 $ 307 $ 260,450 $ 304,500
$ 0.002 -- -- -- --
</TABLE>
27
<PAGE>
SHAREHOLDER SERVICES
TO MAKE INVESTING EASIER
Your Fund has one of the most extensive selections of shareholder services
available. Your financial advisor can help you arrange for any of these
services, or you can call Colonial Investors Service Center 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(1): Exchange all or part of your account into the same
share class of another fund distributed by Liberty Financial Investments,
Inc. by phone or mail.
EASY ACCESS TO YOUR MONEY(1): 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 within one year, you can reinvest in any fund
distributed by Liberty Financial Investments 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 Fund 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 processing 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
fund with a balance of $5,000 into the same share class of up to four other
funds distributed by Liberty Financial Investments. Minimum for each transfer
is $100.
RETIREMENT PLANS: Choose from a broad range of retirement plans,
including IRAs.
(1) Redemptions and exchanges are made at the next determined net asset value
after the request is received by the Transfer Agent. 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 C shares, or $1 million or more of Class A shares, may
be subject to a contingent deferred sales charge.
28
<PAGE>
HOW TO REACH COLONIAL
BY PHONE OR BY MAIL
BY TELEPHONE
CUSTOMER CONNECTION - 1-800-345-6611
For 24-hour account information, call from your touch-tone phone. (Rotary
callers will be automatically connected to a representative during business
hours.) A recorded message will guide you through the menu:
For fund prices, dividends and capital gains information . . . . . . press 1
For account information . . . . . . . . . . . . . . . . . . . . . . . .press 2
To speak to a service representative . . . . . . . . . . . . . . . . . press 3
For yield and total return information . . . . . . . . . . . . . . . . press 4
For duplicate statements or new supply of checks . . . . . . . . . . . press 5
To order duplicate tax forms and year-end statements . . . . . . . . . press 6
(February through May)
To review your options at any time during your call . . . . . . . . . press *
To speak with a shareholder services representative about your account, call
Monday to Friday, 8:00 a.m. to 8:00 p.m. ET, and Saturdays from February
through mid-April, 10:00 a.m. to 2:00 p.m. ET.
COLONIAL TELEPHONE TRANSACTION DEPARTMENT - 1-800-422-3737
To purchase, exchange or sell shares by telephone, call Monday to Friday,
9:00 a.m. to 7:00 p.m. ET. Transactions received after the close of the New
York Stock Exchange will receive the next business day's closing price.
LITERATURE - 1-800-426-3750
To request literature on any fund distributed by Liberty Financial
Investments, call Monday to Friday, 8:30 a.m. to 6:30 p.m. ET.
BY MAIL
COLONIAL INVESTORS SERVICE CENTER, INC.
P.O. BOX 1722
BOSTON, MA 02105-1722
29
<PAGE>
SHAREHOLDER COMMUNICATIONS
TO KEEP YOU INFORMED
To make recordkeeping easy and keep you up-to-date on the performance of your
investments, you can expect to receive the following information about your
account:
TRANSACTION CONFIRMATIONS: Each time you make a purchase, sale or exchange,
you receive a confirmation statement within just a few days.
QUARTERLY STATEMENTS: Every three months, if any transactions are made that
affect your share balance, this statement reports on your account activity
during the quarter (including any reinvestment of dividends). This
statement also provides year-to-date information.
LIBERTY FINANCIAL INVESTMENTS INVESTOR OPPORTUNITIES: Mailed with your
quarterly account statements, this newsletter highlights timely investment
strategies, portfolio manager commentary and shareholder service updates.
TAX FORMS AND YEAR-END TAX GUIDE: Easy-to-use forms and timely information
are designed to make tax reporting simpler. (Usually mailed in January.)
AVERAGE COST BASIS STATEMENTS: If you sold or exchanged shares during the
year, this statement may help you calculate your gain/loss for tax purposes.
(Usually mailed in February.)
30
<PAGE>
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Colonial Global Utilities Fund is:
Colonial Investors Service Center, Inc.
P.O. Box 1722
Boston, MA 02105-1722
1-800-345-6611
Colonial Global Utilities Fund mails one shareholder report to each shareholder
address. If you would like more than one report, please call 1-800-426-3750 and
additional reports will be sent to you.
This report has been prepared for shareholders of Colonial Global Utilities
Fund. This report may also be used as sales literature when preceded or
accompanied by the current prospectus which provides details of sales charges,
investment objectives and operating policies of the Fund and with the most
recent copy of the Liberty Financial Investments Performance Update.
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TRUSTEES
ROBERT J. BIRNBAUM
Consultant (formerly Special Counsel, Dechert, Price & Rhoads; President and
Chief Operating Officer, New York Stock Exchange, Inc.; President, American
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, & Frankel)
JAMES E. GRINNELL
Private Investor (formerly Senior Vice President-Operations, The Rockport
Company)
RICHARD W. LOWRY
Private Investor (formerly Chairman and Chief Executive Officer, U.S. Plywood
Corporation)
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, CS First
Boston Merchant Bank; and President and Chief Executive Officer, The First
Boston Corporation)
JAMES L. MOODY, JR.
Retired (formerly Chairman of the Board and Chief Executive Officer,
Hannaford Bros. Co.)
JOHN J. NEUHAUSER
Dean, Boston College School of Management
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.)
[LIBERTY LOGO]
LIBERTY FINANCIAL INVESTMENTS, INC.(C)1998
Distributor for Colonial Funds, Stein, Roe Advisor Funds and Newport Funds
One Financial Center, Boston, MA 02111-2621, 1-800-426-3750
Visit us at www.libertyfunds.com
GU-03/253F-0498 (6/98) 98/560
