<PAGE>
[graphic omitted]
COLONIAL GLOBAL EQUITY FUND SEMIANNUAL REPORT
APRIL 30, 1999
-------------------------------
NOT FDIC May Lose Value
Insured No Bank Guarantee
-------------------------------
<PAGE>
COLONIAL GLOBAL EQUITY FUND HIGHLIGHTS
NOVEMBER 1, 1998 - APRIL 30, 1999
INVESTMENT OBJECTIVE: Colonial Global Equity Fund seeks long-term growth by
investing primarily in global equities.
THE FUND IS DESIGNED TO OFFER:
|X| Opportunities for long-term growth of capital
|X| International investment exposure
|X| Global diversification to help reduce risk
|X| Experienced professional management
PORTFOLIO MANAGER COMMENTARY: "Global economies improved during the period,
benefiting in part from higher commodity prices and rising stock markets. The
U.S. economy remained strong. Adjustments to the portfolio during the period
were designed to help it benefit from a more favorable global economic
environment."
- Gita Rao & Nicolas Ghajar
COLONIAL GLOBAL EQUITY FUND PERFORMANCE(1)
CLASS A CLASS B CLASS C
- --------------------------------------------------------------------------------
Inception date 6/8/92 6/8/92 8/1/97
- --------------------------------------------------------------------------------
Six-month distributions declared per share $0.793 $0.693 $0.733
- --------------------------------------------------------------------------------
Six-month total returns, assuming 11.09% 10.75% 10.75%
reinvestment of all distributions
and no sales charge or contingent
deferred sales charge (CDSC)
- --------------------------------------------------------------------------------
Net asset value per share on 4/30/99 $14.90 $14.76 $14.85
- --------------------------------------------------------------------------------
TOP FIVE HOLDINGS(2) TOP FIVE COUNTRIES(2)
(as of 4/30/99) (as of 4/30/99)
- ------------------------------------ ------------------------------------
1. S&P 500 Depository. . 2.8% 1. United States 42.5%
2. Wal-Mart Stores, Inc. 1.4% 2. United Kingdom 13.9%
3. Intl. Bus. Machines 1.4% 3. Japan 7.4%
4. Potash Corp. 1.4% 4. France 5.5%
5. Lucent Technologies 1.4% 5. Germany 4.8%
(1) Performance results reflect any voluntary waivers or reimbursement of Fund
expenses by the Advisor or its affiliates. Absent these waivers or
reimbursement arrangements, performance results would have been lower.
(2) Holdings and country 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 in
the future.
<PAGE>
PRESIDENT'S MESSAGE
TO FUND SHAREHOLDERS
[Photo of Stephen E. Gibson]
During the six-month period ended April 30, 1999, global equity markets
benefited from improving economic conditions and rising stock markets. Although
several critical world economies - including Southeast Asia, Japan and Europe -
have further steps to take before they can achieve sustained economic growth, it
has been encouraging to see improvement.
During this reporting period, investors appeared to develop a more positive
outlook for the global economy. Last November, concerns about recessions in
Southeast Asia and Japan, and about the ability of U.S. companies to maintain
profits, created a degree of uncertainty. Despite steadily declining interest
rates in a number of countries throughout the world, investors remained worried
about the direction of the global economy. However, during the first quarter of
1999, rising commodity prices and a steady stream of positive economic news
helped create a more favorable outlook for global growth. In response, stocks of
economically sensitive U.S. companies rallied sharply late in the period, as did
stocks in the developing markets of a number of oil-producing countries.
As we've seen over the past two years - both in the U.S. and
abroad - political, financial and economic factors can have a dramatic impact on
stock prices. The shift in sentiment that appeared late in the period signaled a
more optimistic outlook among investors about the growth prospects of several
important global economies. We continue to believe that a long-term approach
combined with broad diversification among countries and industries remains one
of the best strategies for balancing the risks and rewards of global investing.
The following report will provide you with more specific information about your
Fund's performance and the strategies used during the period. As always, we
thank you for choosing Colonial Global Equity Fund and for giving us the
opportunity to serve your investment needs.
Respectfully,
/s/ Stephen E. Gibson
Stephen E. Gibson
President
June 9, 1999
Because market and economic conditions change, there can be no assurance that
the trends described above or on the following pages will continue.
<PAGE>
PORTFOLIO MANAGEMENT REPORT
GITA RAO is portfolio manager of Colonial Global Equity Fund and is a senior
vice president of Colonial Management Associates, Inc. (CMA).
NICOLAS GHAJAR is associate portfolio manager of the Fund and an assistant vice
president of CMA. What follows is a discussion of the Fund's performance for the
six months ended April 30, 1999.
SHIFT IN INVESTOR SENTIMENT OCCURRED DURING THE PERIOD
In the early part of the period, investors remained uncertain about the
prospects for economic growth in the U.S. and abroad. Several factors
contributed to this uncertainty. World equity markets declined sharply in the
late summer and fall of 1998 primarily in response to the devaluation of
Russia's currency. In addition, slower-than-expected growth in Europe, the
continued recession in Asia, and concern about potentially lower corporate
earnings in the U.S. lingered through the final months of 1998 and into early
1999.
In the first quarter of 1999, evidence of economic strengthening began to
appear. Brazil's currency devaluation in January 1999 had much less of an impact
on the global economy than was anticipated. Several struggling Asian economies
appeared to stabilize and turn upward. Finally, the U.S. economy remained strong
with increasing productivity and low inflation.
In early 1999, an agreement was reached among the Organization of Petroleum
Exporting Countries (OPEC) and non-OPEC oil producers to cut production, and oil
prices climbed significantly during the period. Rising oil prices helped improve
the economies of oil-exporting nations as well as U.S. energy companies. The
stronger global economy helped U.S. companies in cyclical industries to post
solid first-quarter results. In April, cyclical, value-oriented stocks in the
U.S. outperformed high-priced growth stocks by a wide margin. Collectively,
these factors became the catalyst for a more favorable global economic outlook
late in the period.
DEFENSIVE STANCE HAMPERED PERFORMANCE
Based on the relatively weak global economic outlook through the third quarter
of 1998 and into the fourth, the portfolio was positioned defensively as we
entered the period. For example, the Fund was underweighted in emerging markets,
as well as in cyclical industries such as energy - an area that remained
relatively weak throughout 1998. When expectations of global economic growth
shifted late in the period, prices of emerging market stocks and cyclical U.S.
stocks rose sharply. Our underweighting in these areas limited our ability to
fully participate in the rally.
For the six-month period ending April 30, 1999, Colonial Global Equity Fund
posted a total return of 11.09% for Class A shares, based on net asset value.
ADJUSTMENTS MADE TO POSITION THE PORTFOLIO FOR FUTURE GROWTH
Based on the shift in investor sentiment and the strength exhibited by select
markets and sectors during April, we made some changes to the structure of the
portfolio. We reallocated our country and industry weightings, increasing our
weightings in the U.K from 9.2% to 13.9% and in the U.S. from 30.9% to 42.5%. We
increased allocation to cyclical industries such as capital equipment, which has
benefited from increased demand abroad. In addition, we reduced our allocation
to the retail sector, particularly in Europe, where growth has slowed. Although
stocks in emerging markets have risen dramatically over a few short months, we
do not anticipate making substantial reallocations to these markets until we see
more evidence of stable economic growth.
NEW ADDITIONS WITH GROWTH POTENTIAL
We added several holdings to the Fund during the period that we believe can
provide growth potential. Two examples are Texaco (1.2% of total net assets) and
Daimler-Chrysler Corp. (1.1% of total net assets). Texaco is a strong addition
in the energy sector that should benefit from rising oil prices. As a global
company, Texaco is involved in exploration, production, transportation, refining
and marketing of crude oil, natural gas and petroleum products. Daimler-Chrysler
- - the German-owned manufacturer of Chrysler and Mercedes-Benz automobiles - is
the largest industrial concern in Europe, possessing vast experience in auto and
truck manufacturing, as well as many other traffic and transportation systems
and services.
FAVORABLE FORECAST FOR GLOBAL ECONOMIES
Our global economic outlook has become more positive for several reasons. The
rise in commodity prices should continue to help strengthen those economies that
depend on their exports. In addition, after almost 10 years of recession,
Japan's economy appears to be in the early stages of recovery. A stronger
Japanese economy - the third largest in the world - will help the overall global
economy, particularly in Southeast Asia. Japan historically has been a large
investor in emerging Asian nations. In Europe, the economy has been hindered by
the crisis in Kosovo, but interest rates are declining and stronger growth has
been forecasted. Economic growth in the U.K. has been reasonable, and we remain
positive on its ability to strengthen.
We are cautiously optimistic about the economic trends overseas, and believe the
U.S. should continue to show solid growth in 1999, provided that inflation
remains in check and interest rates do not spike. As we move into the second and
third quarters of 1999, investors will have a much better idea whether a
strengthening global economy is sustainable. Going forward, we believe the
adjustments made to the portfolio during the period should enable it to benefit
from the current economic scenario.
AVERAGE ANNUAL TOTAL RETURNS
As of 4/30/99
- --------------------------------------------------------------------------------
CLASS A SHARES CLASS B SHARES CLASS C SHARES
INCEPTION 6/8/92 6/8/92 8/1/97
NAV POP NAV W/CDSC NAV W/CDSC
- --------------------------------------------------------------------------------
1 YEAR 2.38% (3.51)% 1.60% (3.25)% 1.55% 0.58%
- --------------------------------------------------------------------------------
5 YEARS 13.75 12.41 12.84 12.59 12.86 12.86
- --------------------------------------------------------------------------------
LIFE 13.70 12.73 12.79 12.79 12.80 12.80
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). Public
offering price (POP) returns include the maximum sales charge of 5.75% for Class
A shares. The CDSC returns reflect the maximum charges of 5% for one year and 2%
for five years for Class B shares; and 1% for one year for Class C shares.
Performance results reflect any voluntary waivers or reimbursement of Fund
expenses by the Advisor. Absent these waivers or reimbursement arrangements,
performance results would have been lower.
Performance for different share classes will vary based on differences in sales
charges and fees associated with each class. Class C share performance includes
returns of the fund's Class B shares (the oldest existing fund class) for
periods prior to 8/1/97. These class B share returns are not restated to reflect
any expense differential (e.g., rule 12b-1 fees) between Class B shares and
Class C shares.
<PAGE>
INVESTMENT PORTFOLIO
APRIL 30, 1999 (UNAUDITED, IN THOUSANDS)
COMMON STOCKS - 99.0% COUNTRY SHARES VALUE
- -------------------------------------------------------------------------------
CONSTRUCTION - 0.1%
SPECIAL TRADE CONTRACTORS
Tomkins PLC (a) UK 23 $ 95
--------
...............................................................................
FINANCE, INSURANCE & REAL ESTATE - 22.5%
DEPOSITORY INSTITUTIONS - 9.4%
Allied Irish Banks PLC Ir 45 734
Bayerische Vereinsbank G 7 456
Chase Manhattan Corp. 17 1,390
Cie Financiere de Paribas Fr 6 650
Commerzbank AG G 15 481
Corporacion Bancaria de Espana SA Sp 27 641
First American Corp. 29 1,114
Grupo Financiero Banamex SA (a) Mx 223 565
HSBC Holdings PLC HK 20 745
Lloyds Bank PLC UK 46 741
Standard Chartered PLC UK 39 705
Svenska Handelsbanken, Class A Sw 15 567
The Bank of Tokyo Mitsubishi Ja 95 1,401
Unicredito Italiano It 145 736
Union Bank of Switzerland Sz 2 680
Washington Mutual, Inc. 32 1,324
--------
12,930
--------
HOLDING COMPANIES - 0.4%
Cheung Kong (Holdings) Ltd. HK 64 582
--------
INSURANCE CARRIERS - 6.3%
Allstate Corp. 44 1,608
American International Group, Inc. 13 1,550
AXA Fr 9 1,115
CIGNA Corp. 16 1,360
International Nederlanden Groep Ne 18 1,111
Storebrand ASA No 72 522
Toro Assicurazioni It 34 509
Zurich Allied AG (a) Sz 1 854
--------
8,629
--------
INVESTMENT COMPANIES - 4.2%
Irish Investment Fund, Inc. Ir 46 841
Korea Fund, Inc. Ko 82 1,020
Standard and Poor's Depositary Receipts 29 3,883
--------
5,744
--------
NONDEPOSITORY CREDIT INSTITUTIONS - 2.0%
Associates First Capital Corp. 32 1,396
Nichiei Co., Ltd. Ja 4 303
Promise Co., Ltd. Ja 17 968
--------
2,667
--------
REAL ESTATE - 0.2%
New World Development Co., Ltd. HK 116 287
--------
...............................................................................
MANUFACTURING - 48.3%
CHEMICALS & ALLIED PRODUCTS - 10.6%
Akzo Nobel NV Ne 16 742
BASF AG G 16 704
Clorox Co. 14 1,558
E.I. DuPont de Nemours & Co. 22 1,561
Glaxo Holdings PLC UK 34 1,005
Kao Corp. Ja 60 1,522
Merck & Co., Inc. 17 1,166
Novartis Sz (b) 587
Pharmacia & Upjohn, Inc. 27 1,484
Rhone Poulenc, Class A Fr 17 810
Schering-Plough Corp. 29 1,382
Warner-Lambert Co. 19 1,291
Yamanouchi Pharmaceutical Co. Ja 23 728
--------
14,540
--------
COMMUNICATIONS EQUIPMENT - 5.0%
LM Ericsson ADR Sw 42 1,139
Lucent Technologies, Inc. 31 1,852
Philips Electronics NV Ne 12 1,018
Racal Electronics PLC UK 240 1,657
Sony Corp. Ja 13 1,213
--------
6,879
--------
ELECTRICAL INDUSTRIAL EQUIPMENT - 1.1%
General Electric Co. 14 1,477
--------
ELECTRONIC COMPONENTS - 0.3%
Alcatel Alsthom (Cie Gen El) Fr 4 442
--------
FOOD & KINDRED PRODUCTS - 4.8%
Bass PLC UK 76 1,202
Bass PLC, Class B UK 80 120
Carlton Communications PLC UK 86 833
Diageo PLC UK 52 600
Groupe Danone Fr 3 852
Kellogg Co. 38 1,391
Parmalat Finanziara Spa It 290 418
PepsiCo, Inc. 32 1,167
--------
6,583
--------
HOUSEHOLD APPLIANCES - 0.5%
Electrolux AB, Series B Sw 34 691
--------
MACHINERY & COMPUTER EQUIPMENT - 5.5%
BTR Siebe PLC UK 228 1,164
Canon, Inc. Ja 39 953
EMC Corp. (a) 16 1,700
Hewlett-Packard Co. 9 710
International Business Machines Corp. 9 1,966
Mannesmann AG G 9 1,147
--------
7,640
--------
MEASURING & ANALYZING INSTRUMENTS - 0.5%
Fuji Photo Film Co., Ltd. Ja 17 642
--------
PAPER PRODUCTS - 1.5%
Aracruz Celulose SA ADR Bz 50 1,000
Royal Koninklijke PTT Nederland NV Ne 15 615
TNT Post Group NV Ne 15 397
--------
2,012
--------
PETROLEUM REFINING - 4.4%
Amerada Hess Corp. 27 1,539
BP Amoco PLC ADR UK 8 906
Compagnie Francaise de Petroleum,
Total B Fr 6 776
ENI It 95 622
Royal Dutch Petroleum Co. Ne 10 589
Texaco, Inc. 27 1,663
--------
6,095
--------
PRIMARY METALS - 1.1%
Acerinox SA Sp 32 956
Pirelli SPA It 188 574
--------
1,530
--------
PRINTING & PUBLISHING - 0.5%
Mondadori (Arnoldo) Editore SPA It 39 684
--------
RUBBER & PLASTIC - 1.0%
Premark International, Inc. 36 1,329
--------
STONE, CLAY, GLASS & CONCRETE - 3.0%
Cemex SA Mx 197 910
Cimentos de Portugal SA Pt 24 655
Hanson PLC UK 127 1,258
Holderbank Financiere Glaris AG Sz 1 633
Lafarge SA Fr 7 666
--------
4,122
--------
TOBACCO PRODUCTS - 0.6%
Allied Zurich PLC (a) UK 35 474
B.A.T. Industries PLC UK 35 300
--------
774
--------
TRANSPORTATION EQUIPMENT - 7.9%
DaimlerChrysler AG G 15 1,459
Dana Corp. 17 782
Ford Motor Co. 24 1,541
General Dynamics Corp. 13 885
GKN PLC UK 74 1,264
Honda Motor Co., Ltd. Ja 27 1,189
MAN AG G 36 1,124
Textron, Inc. 9 802
United Technologies Corp. 12 1,796
--------
10,842
--------
...............................................................................
MINING & ENERGY - 3.9%
NONMETALLIC, EXCEPT FUELS - 1.4%
Potash Corp. of Saskatchewan, Inc. Ca 31 1,888
--------
OIL & GAS EXTRACTION - 0.9%
YPF SA Ar 30 1,239
--------
OIL & GAS FIELD SERVICES - 1.6%
Petroleum Geo-Services (a) No 29 482
Schlumberger Ltd. 27 1,731
--------
2,213
--------
...............................................................................
RETAIL TRADE - 5.6%
APPAREL & ACCESSORY STORES - 0.6%
Hennes & Mauritz AB Sw 10 856
--------
FOOD STORES - 2.4%
Safeway, Inc. (a) 23 1,262
Tesco PLC UK 312 927
Vedior NV Ne 20 445
Vendex International NV Ne 27 671
--------
3,305
--------
GENERAL MERCHANDISE STORES - 1.4%
Wal-Mart Stores, Inc. 43 1,978
--------
MISCELLANEOUS RETAIL - 0.7%
Imasco Ltd. Ca 16 359
Rite Aid Corp. 27 632
--------
991
--------
RESTAURANTS - 0.5%
TelePizza SA (a) Sp 94 597
--------
...............................................................................
SERVICES - 5.0%
AMUSEMENT & RECREATION - 0.8%
Ladbroke Group PLC UK 215 1,047
--------
COMPUTER RELATED SERVICES - 0.7%
Cap Gemini SA Fr 6 930
--------
COMPUTER SOFTWARE - 3.2%
Compuware Corp. (a) 40 980
Microsoft Corp. (a) 17 1,399
Misys PLC UK 92 858
Momentum Business Applications, Inc. (a) (b) 2
SAP AG G 4 1,203
--------
4,442
--------
HOTELS, CAMPS & LODGING - 0.3%
Accor SA Fr 1 364
--------
...............................................................................
TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS &
SANITARY SERVICES - 13.6%
COMMUNICATIONS - 1.4%
Viacom, Inc., Class B (a) 20 826
Vodafone Group PLC UK 59 1,087
--------
1,913
--------
ELECTRIC SERVICES - 1.3%
Empresa Nacional de Electricidad Sp 26 570
Texas Utilities Co. 29 1,153
--------
1,723
--------
GAS SERVICES - 1.4%
BG PLC UK 115 645
NICOR, Inc. 36 1,295
--------
1,940
--------
TELECOMMUNICATIONS - 9.5%
Bell Atlantic Corp. 23 1,348
British Telecommunications PLC UK 56 940
COLT Telecom Group PLC (a) UK 66 1,233
France Telecom SA Fr 11 927
Hong Kong Telecommunications Ltd. HK 244 651
MCI WorldCom, Inc. (a) 23 1,849
Nippon Telegraph & Telephone Corp. Ja (b) 1,197
Nokia Oyj, Class A Fi 21 1,610
Telecel-Comunicacaoes Pessoais SA Pt 3 375
Telecom Italia SPA It 65 691
Telecomunicacoes Brasileiras SA ADR (a) Bz 12 1,094
Telecomunicacoes Brasileiras SA ADR Bz 6 (b)
Telefonos de Mexico SA Mx 290 1,098
--------
13,013
--------
TOTAL COMMON STOCKS (cost of $110,011)(c) 135,655
--------
FORWARD CURRENCY CONTRACTS - 0.0% (d) 10
- -------------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES, NET - 1.0% 1,429
- -------------------------------------------------------------------------------
NET ASSETS - 100.0% $137,094
========
NOTES TO INVESTMENT PORTFOLIO:
- -------------------------------------------------------------------------------
(a) Non-income producing.
(b) Rounds to less than one.
(c) Cost for federal income tax purposes is $110,018.
(d) As of April 30, 1999, the Fund had entered into the following forward
currency exchange contracts:
Net Unrealized
Contracts In Exchange Settlement Appreciation
to Deliver For Date (US$)
------------ --- ---- -----
MP 3,298 US$ 355 05/03/1999 $ 1
eu 309 US$ 327 05/05/1999 (b)
eu 409 US$ 433 05/06/1999 1
JY 90,557 US$ 759 05/07/1999 1
KB 539 US$ 867 05/07/1999 1
JY 42,617 US$ 357 05/10/1999 (b)
eu 1,531 US$ 1,624 06/01/1999 6
------
$ 10
======
Summary of Securities by Country Country Value % of Total
- ------------------------------------------------------------------------------
United States $ 58,216 42.9
United Kingdom UK 19,061 14.1
Japan Ja 10,116 7.5
France Fr 7,532 5.5
Germany G 6,574 4.8
Netherlands Ne 5,588 4.1
Italy It 4,234 3.1
Sweden Sw 3,253 2.4
Spain Sp 2,764 2.0
Switzerland Sz 2,754 2.0
Mexico Mx 2,573 1.9
Hong Kong HK 2,265 1.7
Canada Ca 2,247 1.7
Finland Fi 1,610 1.2
Ireland Ir 1,575 1.2
Argentina Ar 1,239 0.9
Portugal Pt 1,030 0.8
Korea Ko 1,020 0.8
Norway No 1,004 0.7
Brazil Bz 1,000 0.7
-------- --------
$135,655 100.0
======== =====
Certain securities are listed by country of underlying exposure but may trade
predominantly on other exchanges.
Acronym Name
------- ----
ADR American Depositary Receipt
eu euro
JY Japanese Yen
KB British Pounds
MP Mexican Pesos
See notes to financial statements.
<PAGE>
STATEMENT OF ASSETS & LIABILITIES
APRIL 30, 1999 (UNAUDITED)
(in thousands except for per share amounts and footnotes)
ASSETS
Investments at value (cost $110,011) $ 135,655
Unrealized appreciation on forward
currency contracts $ 10
Receivable for:
Investments sold 8,760
Dividends 335
Fund shares sold 176
Foreign tax reclaims 60
Receivable due from Advisor 7
Other 3 9,351
------- ---------
Total Assets 145,006
LIABILITIES
Foreign currencies (cost $938) 937
Payable for:
Investments purchased 5,136
Payable to custodian bank 1,545
Fund shares repurchased 263
Accrued:
Deferred Trustees fees 4
Other 27
-------
Total Liabilities 7,912
---------
NET ASSETS $ 137,094
=========
Net asset value & redemption price per share -
Class A ($50,853/3,413) $ 14.90 (a)
=========
Maximum offering price per share - Class A
($14.90/0.9425) $ 15.81 (b)
=========
Net asset value & offering price per share -
Class B ($84,257/5,707) $ 14.76 (a)
=========
Net asset value & offering price per share -
Class C ($1,984/134) $ 14.85 (a)
=========
(a) Redemption price per share is equal to net asset value less any
applicable contingent deferred sales charge.
(b) On sales of $50,000 or more the offering price is reduced.
See notes to financial statements.
<PAGE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30, 1999
(UNAUDITED)
(in thousands)
INVESTMENT INCOME
Dividends $ 878
Interest 147
--------
Total investment income (net of nonreclaimable
foreign taxes withheld at source which
amounted to $59) 1,025
EXPENSES
Management fee $ 645
Service fee 170
Distribution fee - Class B 314
Distribution fee - Class C 8
Transfer agent 210
Bookkeeping fee 28
Trustees fee 7
Custodian fee 52
Audit fee 16
Legal fee 2
Registration fee 18
Reports to shareholders 7
Other 29
--------
1,506
Fees and expenses waived
by the Advisor (67) 1,439
-------- --------
Net Investment Loss (414)
--------
NET REALIZED & UNREALIZED GAIN (LOSS) ON PORTFOLIO POSITIONS
Net realized gain on:
Investments 578
Foreign currency transactions 7
--------
Net Realized Gain 585
Net change in unrealized appreciation (depreciation)
during the period on:
Investments 13,839
Foreign currency transactions (23)
--------
Net Change in Unrealized Appreciation 13,816
--------
Net Gain 14,401
--------
Increase in Net Assets from Operations $ 13,987
========
See notes to financial statements.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
(Unaudited)
Six months ended Year ended
(in thousands) April 30 October 31
---------------- ----------
INCREASE (DECREASE) IN NET ASSETS 1999 1998
Operations:
Net investment income (loss) $ (414) $ 49
Net realized gain 585 10,072
Net unrealized appreciation 13,816 559
--------- ---------
Net Increase from Operations 13,987 10,680
Distributions:
From net investment income - Class A -- (241)
In excess of ne---nvestment income - Class A (155)
From net realized gains - Class A (2,535) (3,875)
From net investment income - Class B -- (99)
In excess of ne---nvestment income - Class B (63)
From net realized gains - Class B (3,928) (7,785)
From net investment income - Class C -- (3)
In excess of ne---nvestment income - Class C (2)
From net realized gains - Class C (100) (97)
--------- ---------
7,424 (1,640)
--------- ---------
Fund Share Transactions:
Receipts for shares sold - Class A 55,012 42,663
Value of distributions reinvested - Class A 2,378 3,967
Cost of shares repurchased - Class A (55,732) (35,088)
--------- ---------
1,658 11,542
--------- ---------
Receipts for shares sold - Class B 12,145 29,295
Value of distributions reinvested - Class B 3,597 7,331
Cost of shares repurchased - Class B (14,625) (29,964)
--------- ---------
1,117 6,662
--------- ---------
Receipts for shares sold - Class C 460 2,404
Value of distributions reinvested - Class C 96 97
Cost of shares repurchased - Class C (604) (1,230)
--------- ---------
(48) 1,271
--------- ---------
Net Increase from
Fund Share Transactions 2,727 19,475
--------- ---------
Total Increase 10,151 17,835
NET ASSETS
Beginning of period 126,943 109,108
--------- ---------
End of period (net of overdistributed
net investment income of $443
and $346, respectively) $ 137,094 $ 126,943
========= =========
See notes to financial statements.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS - CONT.
(Unaudited)
Six months ended Year ended
(in thousands) April 30 October 31
---------------- ----------
NUMBER OF FUND SHARES 1999 1998
Sold - Class A 3,799 3,003
Issued for distributions reinvested - Class A 167 296
Repurchased - Class A (3,827) (2,489)
--------- ---------
139 810
--------- ---------
Sold - Class B 842 2,007
Issued for distributions reinvested - Class B 254 555
Repurchased - Class B (1,015) (2,117)
--------- ---------
81 445
--------- ---------
Sold - Class C 32 163
Issued for distributions reinvested - Class C 7 7
Repurchased - Class C (42) (85)
--------- ---------
(3) 85
--------- ---------
<PAGE>
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1999 (UNAUDITED)
NOTE 1. INTERIM FINANCIAL STATEMENTS
...............................................................................
In the opinion of management of Colonial Global Equity Fund (the Fund), a series
of Liberty Funds Trust III, formerly 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, 1999,
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's investment objective is to
seek long-term growth by investing primarily in global equities. 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 a 1.00% contingent deferred sales charge on redemptions made within
eighteen months on an original purchase of $1 million to $5 million. 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 an annual 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 reporting period.
Actual results could differ from those estimates. The following is a summary of
significant accounting policies consistently followed by the Fund in the
preparation of its financial statements.
SECURITY VALUATION AND TRANSACTIONS: Equity securities generally 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.
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 for which market quotations are not readily available are
valued at fair value under procedures approved by the Trustees.
Security transactions are accounted for on the date the securities are
purchased, sold or mature.
Cost is determined and gains (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 and Class C distribution fees), and 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.
Per share data is 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 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.
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.
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.
FOREIGN CURRENCY TRANSACTIONS: Net realized and unrealized gains (losses) on
foreign currency transactions includes gains (losses) arising from the
fluctuations in exchange rates 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,
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.
NOTE 3. FEES AND COMPENSATION PAID TO AFFILIATES
...............................................................................
MANAGEMENT FEE: Colonial Management Associates, Inc. (the Advisor)
is the investment Advisor of the Fund and furnishes accounting and other
services and office facilities for a monthly fee equal to 0.95% annually of the
Fund's average net assets.
BOOKKEEPING FEE: The Advisor 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 FEE: Liberty Funds Services, Inc. (the Transfer Agent),
an affiliate of the Advisor, provides shareholder services for a monthly fee
equal to 0.236% annually of the Fund's average net assets and receives
reimbursement for certain out-of-pocket expenses.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES: Liberty Funds
Distributor, Inc. (the Distributor), a subsidiary of the Advisor, is the Fund's
principal underwriter. For the six months ended April 30, 1999, the Fund has
been advised that the Distributor retained net underwriting discounts of $36,729
on sales of the Fund's Class A shares and received contingent deferred sales
charges (CDSC) of $5,786, $121,581 and $859 on Class A, Class B and Class C
share redemptions, respectively.
The Fund has adopted a 12b-1 plan which requires it to pay the Distributor a
service fee equal to 0.25% annually of the Fund's net assets as of the 20th of
each month. The plan also requires the payment of a distribution fee to the
Distributor equal to 0.75% annually of the average net assets attributable to
Class B and Class C 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.
EXPENSE LIMITS: The Advisor has agreed, until further notice, to waive fees and
bear certain Fund expenses to the extent that total expenses (exclusive of
service and distribution fees, brokerage commissions, interest, taxes and
extraordinary expenses, if any) exceed 1.40% annually of the Fund's average net
assets.
OTHER: The Fund pays no compensation to its officers, all of whom are
employees of the Advisor.
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, 1999, purchases and
sales of investments, other than short term obligations, were $53,884,073 and
$54,410,966, respectively.
Unrealized appreciation (depreciation) at April 30, 1999, based on cost of
investments for federal income tax purposes was:
Gross unrealized appreciation $29,152,053
Gross unrealized depreciation (3,515,898)
-----------
Net unrealized appreciation $25,636,155
===========
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 foreign currency
exchange or the imposition of 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 33 1/3% 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, 1999.
NOTE 6. COMPOSITION OF NET ASSETS
...............................................................................
At April 30, 1999, net assets consisted of:
Capital paid in $ 111,321
Overdistributed net investment income (443)
Accumulated net realized gain 584
Net unrealized appreciation (depreciation) on:
Investments 25,643
Foreign currency transactions (11)
---------
$ 137,094
=========
<PAGE>
FINANCIAL HIGHLIGHTS
Selected data for a share of each class outstanding throughout each period are
as follows:
(Unaudited)
Six months ended April 30
-----------------------------------
1999
Class A Class B Class C
------- ------- -------
Net asset value Beginning of period $ 14.160 $ 13.980 $14.100
-------- -------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (a)(b) (0.010) (0.064) (0.064)
Net realized and unrealized gain 1.543 1.537 1.547
-------- -------- -------
Total from Investment Operations 1.533 1.473 1.483
-------- -------- -------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net realized gains (0.793) (0.693) (0.733)
-------- -------- -------
Net asset value End of period $ 14.900 $ 14.760 $14.850
======== ======== =======
Total return (c)(d)(e) 11.09% 10.75% 10.75%
======== ======== =======
RATIOS TO AVERAGE NET ASSETS
Expenses (f)(g) 1.65% 2.40% 2.40%
Fees and expenses waived by the
Advisor (f)(g) 0.10% 0.10% 0.10%
Net investment loss (f)(g) (0.14)% (0.89)% (0.89)%
Portfolio turnover (e) 42% 42% 42%
Net assets at end of period (000) $ 50,853 $ 84,257 $ 1,984
(a) Net of fees and expenses waived or borne by the Advisor which amounted to:
$ 0.007 $ 0.007 $ 0.007
(b) Per share data was calculated using the average shares outstanding during
the period.
(c) Total return at net asset value assuming all distributions reinvested and no
initial sales charge or contingent deferred sales charge.
(d) Had the Advisor not waived or reimbursed a portion of expenses, total return
would have been reduced.
(e) Not annualized
(f) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
(g) Annaulized.
<PAGE>
FINANCIAL HIGHLIGHTS - CONT.
Selected data for a share of each class outstanding throughout each period are
as follows:
Year ended October 31
----------------------------------
1998
Class A Class B Class C
------- ------- -------
Net asset value Beginning of period $ 14.280 $ 14.130 $14.260
-------- -------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(a)(b) 0.075 (0.032) (0.033)
Net realized and unrealized gain (loss) 1.478 1.444 1.474
-------- -------- -------
Total from Investment Operations 1.553 1.412 1.441
-------- -------- -------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.087) (0.020) (0.043)
In excess of investment income (0.056) (0.012) (0.028)
From net realized gains (1.530) (1.530) (1.530)
-------- -------- -------
Total Distributions Declared
to Shareholders (1.673) (1.562) (1.601)
-------- -------- -------
Net asset value End of period $ 14.160 $ 13.980 $14.100
======== ======== =======
Total return (e)(f) 11.62% 10.64% 10.77%
======== ======== =======
RATIOS TO AVERAGE NET ASSETS
Expenses (h) 1.65% 2.40% 2.40%
Fees and expenses waived or
borne by Advisor (h) 0.11% 0.11% 0.11%
Net investment income (loss) (h) 0.53% (0.22)% (0.22)%
Portfolio turnover 42% 42% 42%
Net assets at end of period (000) $ 46,344 $ 78,668 $1,931
(a) Net of fees and expenses waived or borne by the Advisor which amounted to:
$ 0.015 $ 0.015 $ 0.015
(b) Per share data was calculated using the average shares outstanding during
the period.
(c) Class C shares were intially offered on August 1, 1997. Per share amounts
reflect activity from that date.
(d) The amount shown for a share oustanding does not correspond with the
aggregate net gain on investments for the period due to the timing of sales
and repurchases of fund shares in relation to fluctuating market values of
the investments of the Fund.
(e) Total return at net asset value assuming all distributions reinvested and no
initial sales charge or contingent deferred sales charge.
(f) Had the Advisor not waived or reimbursed a portion of expenses, total return
would have been reduced.
(g) Not annualized.
<PAGE>
FINANCIAL HIGHLIGHTS - CONT.
Year ended October 31
-------------------------------------------------------------------
1997 1996
Class A Class B Class C (c) Class A Class B
$ 13.440 $ 13.350 $ 15.390 $ 12.450 $12.390
-------- -------- -------- -------- -------
0.169 0.065 (0.025) 0.123 0.027
2.179 2.158 (1.105)(d) 1.664 1.634
-------- -------- -------- -------- -------
2.348 2.223 (1.130) 1.787 1.661
-------- -------- -------- -------- -------
(0.065) -- -- (0.098) (0.027)
-- -- -- (0.035) (0.010)
(1.443) (1.443) -- (0.664) (0.664)
-------- -------- -------- -------- -------
(1.508) (1.443) -- (0.797) (0.701)
-------- -------- -------- -------- -------
$ 14.280 $ 14.130 $ 14.260 $ 13.440 $13.350
======== ======== ======== ======== =======
18.92% 18.02% (7.34)(g) 15.10% 14.04%
======== ======== ======== ======== =======
1.58% 2.33% 2.44% (i) 1.58% 2.33%
-- -- -- -- --
1.22% 0.47% (0.68)(i) 0.96% 0.21%
90% 90% 90% 125% 125%
$ 35,181 $ 73,188 $ 739 $ 19,092 $65,714
-- -- -- -- --
(h) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
(i) Annualized.
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS - CONT.
Selected data for a share of each class outstanding throughout each
period are as follows:
<CAPTION>
Year ended October 31
---------------------------------------------------
1995 1994
Class A Class B Class A Class B
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value - Beginning of period $ 12.690 $ 12.630 $11.760 $11.720
-------- -------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (a)(b) 0.167 0.076 0.170 0.077
Net realized and unrealized gain 0.735 0.735 0.969 0.959
-------- -------- ------- -------
Total from Investment Operations 0.902 0.811 1.139 1.036
-------- -------- ------- -------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.198) (0.107) (0.166) (0.083)
From net realized gains (0.944) (0.944) (0.043) (0.043)
-------- -------- ------- -------
Total Distributions Declared to
Shareholders (1.142) (1.051) (0.209) (0.126)
-------- -------- ------- -------
Net asset value - End of period $ 12.450 $ 12.390 $12.690 $12.630
======== ======== ======= =======
Total return (c)(d) 8.23% 7.43% 9.76% 8.88%
======== ======== ======= =======
RATIOS TO AVERAGE NET ASSETS
Expenses 1.36% (e) 2.11% (e) 1.25% 2.00%
Fees and expenses waived or borne by Advisor 0.26% (e) 0.26% (e) 0.36% 0.36%
Net investment income 1.40% (e) 0.65% (e) 1.38% 0.63%
Portfolio turnover 74% 74% 52% 52%
Net assets at end of period (000) $ 11,501 $ 59,131 $10,525 $63,139
(a) Net of fees and expenses waived or borne by the Advisor which amounted to:
$ 0.031 $ 0.031 $ 0.045 $ 0.045
(b) Per share data was calculated using the average shares outstanding during the period.
(c) Total return at net asset value assuming all distributions reinvested and no initial sales
charge or contingent deferred sales charge.
(d) Had the Advisor not waived or reimbursed a portion of expenses, total return would have been
reduced.
(e) The benefits derived from custody credits and directed brokerage arrangements had no impact.
Prior years' ratios are net of benefits received, if any.
</TABLE>
<PAGE>
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Colonial Global Equity Fund is:
Liberty Funds Services, Inc.*
P.O. Box 1722
Boston, MA 02105-1722
1-800-345-6611
Colonial Global Equity 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 Equity 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 the most recent copy of the
Liberty Funds Distributor, Inc. Performance Update.
* Effective October 1, 1998, Colonial Investors Service Center, Inc. - the
Transfer Agent for Colonial, Crabbe Huson, Newport and Stein Roe Advisor funds
- changed its name to Liberty Funds Services, Inc.
<PAGE>
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)
JOHN V. CARBERRY
Senior Vice President of Liberty Financial Companies, Inc. (formerly Managing
Director, Salomon Brothers)
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)
SALVATORE MACERA
Private Investor (formerly Executive Vice President of Itek Corp. and President
of Itek Optical & Electronic Industries, Inc.)
WILLIAM E. MAYER
Partner, Development Capital, LLC (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, Chief Executive Officer and Director,
Hannaford Bros. Co.)
JOHN J. NEUHAUSER
Dean, Boston College School of Management
THOMAS E. STITZEL
Professor of Finance, College of Business, Boise State University; Business
Consultant and Author
ROBERT L. SULLIVAN
Retired Partner, KPMG LLP (formerly Management Consultant, Saatchi and Saatchi
Consulting Ltd. and Principal and International Practice Director, Management
Consulting, Peat Marwick Main & Co.)
ANNE-LEE VERVILLE
Consultant (formerly General Manager, Global Education Industry, and President,
Applications Solutions Division, IBM Corporation)
[logo] L I B E R T Y
COLONIAL o CRABBE HUSON o NEWPORT o STEIN ROE ADVISOR
Liberty Funds Distriburtor, Inc. (C)1999
One Financial Center, Boston, MA 02111-2621, 1-800-426-3750
Visit us at www.libertyfunds.com
GE-03/138H-0599 (6/99) 99/699
