COLONIAL INTERNATIONAL HORIZONS FUND
Supplement to the February 27, 1998 Prospectus
(Replacing Supplement dated March 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 our Web site
(http://www.libertyfunds.com). The Securities and Exchange Commission 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) The last sentence of the paragraph Temporary/Defensive Investments and the
paragraph Borrowing of Money under the caption HOW THE FUND PURSUES ITS
OBJECTIVE AND CERTAIN RISK FACTORS are revised in their entireties as follows:
(a) Not more than 15% of the Fund's net assets will be invested in repurchase
agreements maturing in more than seven days and other illiquid assets.
(b) 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.
(3) The fourth paragraph under the caption HOW THE FUND IS MANAGED is revised
in its entirety as follows:
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.
(4) A new caption is added after the caption 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.
(5) The last sentence under the caption HOW THE FUND VALUES ITS SHARES is
revised 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.
(6) The last sentence of the first paragraph 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.
(7) 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.
(8) 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 their clients
or customers. The commission will be made directly by the Distributor from its
assets and will not effect the expenses paid by Fund shareholders. Financial
service firms may waive receipt of all or any portion of these payments.
(9) Under the caption TELEPHONE TRANSACTIONS, the first sentence is revised in
its entirety and new second and third sentences are added as follows:
All shareholders and/or their financial advisors are automatically eligible to
exchange Fund shares and 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 its 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.
(10) Liberty Financial Investments, Inc., the Fund's distributor, changed its
name to Liberty Funds Distributor, Inc. (Distributor). The new name does not
affect the investment management of, or service 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.
(11) Colonial Investors Service Center, Inc., the Fund's transfer agent, changed
its name to Liberty Funds Services, Inc. (Transfer Agent). The new name will not
affect the services the Transfer Agent provides to the Fund.
(12) Price Waterhouse LLP, the Fund's independent accountants, changed its name
to PricewaterhouseCoopers LLP. The new name will not affect the services
PricewaterhouseCoopers LLP provides to the Fund.
(13) The Fund's custodian is The Chase Manhattan Bank, 270 Park Avenue,
New York, NY 10017-2070.
HZ-36/227G-1198 October 30, 1998
<PAGE>
COLONIAL INTERNATIONAL HORIZONS FUND
Supplement to the February 27, 1998
Statement of Additional Information
(Replacing Supplement dated June 22, 1998)
The Fund's Statement of Additional Information (SAI) is amended as follows:
(1) At a Special Meeting of Shareholders of the Fund held on October 30, 1998,
the Fund's shareholders approved a number of proposals. As a result of these
approvals, the Fund's SAI is amended as follows:
(a) The third fundamental investment policy under the caption FUNDAMENTAL
INVESTMENT POLICIES is deleted.
(b) The first and sixth fundamental investment policies under the caption
FUNDAMENTAL INVESTMENT POLICIES are revised in their entirety as follows:
The Fund may:
1. Borrow from banks, other affiliated funds and other entities to the
extent permitted by applicable law, provided that the Fund's
borrowings shall not exceed 33 1/3% of the value of its total assets
(including the amount borrowed) less liabilities (other than
borrowings) or such other percentage permitted by law;
5. Make loans (a) through lending of securities, (b) through the purchase
of debt instruments or similar evidences of indebtedness typically
sold privately to financial institutions, (c) through an interfund
lending program with other affiliated funds provided that no such loan
may be made if, as a result, the aggregate of such loans would exceed
33 1/3% of the value of its total assets (taken at market value at the
time of such loans) and (d) through repurchase agreements;
(c) The following policy is added as a new non-fundamental investment policy
under the caption OTHER INVESTMENT POLICIES:
The Fund may not:
4. Invest more than 15% of its net assets in illiquid assets.
(d) The following policy is added after the non-fundamental investment policies:
Nothwithstanding the investment policies of the Fund, the Fund may invest
substantially all of its investable assets in another investment company that
has substantially the same investment objective, policies and restrictions as
the Fund.
(e) John Carberry, Salvatore Macera, Thomas E. Stitzel and Anne-Lee Verville are
new trustees. As a result, the following information is added to the section
MANAGEMENT OF THE FUNDS:
John Carberry*, Age 51, is a Senior Vice President of Liberty Financial
Companies, Inc. (formerly Managing Director, Salomon Brothers (investment
banking) from January 1988 to January 1998).
Salvatore Macera, Age 67, is a Private Investor (formerly Executive Vice
President of Itek Corp. and President of Itek Optical &
Electronic Industries, Inc. (electronics)). Trustee: Liberty Variable
Investment Trust, Stein Roe Variable Investment Trust.
Thomas E. Stitzel, Age 58, is a Professor of Finance, College of Business,
Boise State University (higher education); Business
consultant and author. Trustee: Liberty Variable Investment Trust,
Stein Roe Variable Investment Trust.
Anne-Lee Verville, Age 51, is a Consultant (formerly General Manager, Global
Education Industry from 1994 to 1997, and President, Applications Solutions
Division from 1991 to 1994, IBM Corporation (global education and global
applications)).
- -----------------------
*Mr. Carberry is an "interested person," as defined in the Investment Company
Act of 1940 (1940 Act), because of his affiliations with Liberty Financial
Companies, Inc., an indirect majority-owned subsidiary of Liberty Mutual
Insurance Company.
The following table sets forth the compensation paid to Mr. Macera and Dr.
Stitzel in their capacities as Trustees of Liberty Variable Investment Trust
(LVIT), which offers nine funds: Colonial Growth and Income Fund, Variable
Series; Stein Roe Global Utilities Fund, Variable Series; Colonial International
Fund for Growth, Variable Series; Colonial U.S. Stock Fund, Variable Series;
Colonial Strategic Income Fund, Variable Series; Newport Tiger Fund, Variable
Series, Liberty All-Star Equity Fund, Variable Series; Colonial Small Cap Value
Fund, Variable Series and Colonial High Yield Securities Fund, Variable Series,
for serving during the fiscal year ended December 31, 1997:
Total Compensation From LVIT and
Aggregate 1997 Investment Companies which are
Trustee Compensation Series of LVIT in 1997(b)
- ------- -------------- -------------------------------
Salvatore Macera $12,500 $33,500
Thomas E. Stitzel 12,500 33,500
- -------------------------------
(a) Consists of Trustee fees in the amount of (i) a $5,000 annual
retainer, (ii) a $1,500 meeting fee for each meeting attended in
person and (iii) a $500 meeting fee for each telephone meeting.
(b) Includes Trustee fees paid by LVIT and Stein Roe Variable Investment
Trust.
(2) Stephen E. Gibson is President of the Funds. He replaces Harold W. Cogger.
He is 45 years old and has been President of the Funds since June, 1998,
Chairman of the Board since July, 1998, Chief Executive Officer and President
since December 1996, and; Director, since July 1996 of the Advisor (formerly
Executive Vice President from July, 1996 to December, 1996); Director, Chief
Executive Officer and President of TCG since December, 1996 (formerly Managing
Director of Marketing of Putnam Investments, June, 1992 to July, 1996).
(3) Nancy L. Conlin is Secretary of the Funds. She replaces Michael H. Koonce.
She is 44 years old and has been Secretary of the Funds since April, 1998
(formerly Assistant Secretary from July, 1994 to April, 1998), is Director,
Senior Vice President, General Counsel, Clerk and Secretary of the Advisor since
April, 1998 (formerly Vice President, Counsel, Assistant Secretary and Assistant
Clerk from July, 1994 to April, 1998), Vice President - Legal, General Counsel
and Clerk of TCG since April, 1998 (formerly Assistant Clerk from July, 1994 to
April, 1998).
(4) The following paragraph is added to the MANAGEMENT OF THE FUNDS section:
The Trustees have the authority to convert the Funds into a master fund/feeder
fund structure. Under this structure, a Fund may invest all or a portion of its
investable assets in investment companies with substantially the same investment
objectives, policies and restrictions as the Fund. The primary reason to use the
master fund/feeder fund structure is to provide a mechanism to pool, in a single
master fund, investments of different investor classes, resulting in a larger
portfolio, investment and administrative efficiencies and economies of scale.
(5) William D. Ireland, Jr., George L. Shinn and Sinclair Weeks, Jr., retired as
Trustees of the Trust effective April 24, 1998.
(6) Liberty Financial Investments, Inc., the Fund's distributor, changed its
name to Liberty Funds Distributor, Inc. (LFDI). The new name does not affect the
investment management of, or service to, the Fund. LFDI continues to offer
selected investment products managed by subsidiaries of Liberty Financial
Companies, Inc. (NYSE:L), the indirect parent of LFDI.
(7) Colonial Investors Service Center, Inc., the Funds' transfer agent, changed
its name to Liberty Funds Services, Inc. (LFSI). The new name will not affect
the services that LFSI provides to the Fund.
(8) Price Waterhouse LLP, the Fund's independent accountants, changed its name
to PricewaterhouseCoopers LLP. The new name will not affect the services that
PricewaterhouseCoopers LLP provides to the Fund.
(9) The Fund's custodian is The Chase Manhattan Bank, 270 Park Avenue,
New York, NY 10017-2070.
(10) The following is added as the last paragraphs under the caption PERFORMANCE
MEASURES:
General. From time to time, the fund may discuss or quote its current portfolio
manager as well as other investment personnel, including such person's views on:
the economy; securities markets; portfolio securities and their issuers;
investment philosophies, strategies, techniques and criteria used in the
selection of securities to be purchased or sold for the fund, including the New
ValueTM investment strategy that expands upon the principles of traditional
value investing; the fund's portfolio holdings; the investment research and
analysis process; the formulation and evaluation of investment recommendations;
and the assessment and evaluation of credit, interest rate, market and economic
risks and similar or related matters.
The fund may also quote evaluations mentioned in independent radio or television
broadcasts, and use charts and graphs to illustrate the past performance of
various indices such as those mentioned in Appendix II and illustrations using
hypothetical rates of return to illustrate the effects of compounding and
tax-deferral. The fund may advertise examples of the effects of periodic
investment plans, including the principle of dollar cost averaging. In such a
program, an investor invests a fixed dollar amount in a fund at periodic
intervals, thereby purchasing fewer shares when prices are high and more shares
when prices are low.
From time to time, the fund may also discuss or quote the views of its
distributor, its investment advisor and other financial planning, legal, tax,
accounting, insurance, estate planning and other professionals, or from surveys,
regarding individual and family financial planning. Such views may include
information regarding: retirement planning; general investment techniques (e.g.,
asset allocation and disciplined saving and investing); business succession;
issues with respect to insurance (e.g., disability and life insurance and
Medicare supplemental insurance); issues regarding financial and health care
management for elderly family members; and similar or related matters.
HZ-39/249G-1198 October 30, 1998