THE COLONIAL FUND
Supplement to the February 27, 1998 Class Z Share Prospectus
(Replacing Supplement dated October 30, 1998)
The Fund's Prospectus is amended as follows:
(1) The seventh paragraph on the cover page of the Prospectus is revised in
its entirety as follows:
The following eligible institutional investors may purchase Class Z shares:
(i) any retirement plan with aggregate assets of at least $5 million at the
time of purchase of Class Z shares and which purchases shares directly from
Liberty Funds Distributor, Inc. (Distributor) or through a third party
broker-dealer; (ii) any insurance company, trust company or bank purchasing
shares for its own account; and (iii) any endowment, investment company or
foundation. In addition, Class Z shares may be purchased directly or by
exchange by any (i) investors who were Class I shareholders of the SoGen
International Fund, SoGen Overseas Fund or SoGen Gold Fund as of the
reorganization of these funds into Colonial Trust II and (ii) clients of
investment advisory affiliates of the Distributor, provided that these
clients meet certain criteria established by the Distributor and its
affiliates.
(2) To the front cover of the Prospectus, a new paragraph is added below the
Table of Contents as follows:
The SEC maintains a Web site (http://www.sec.gov) that contains the
Statement of Additional Information, materials that are incorporated by
reference into this Prospectus and the Statement of Additional Information,
and other information regarding the Fund.
(3) The sub-caption "Borrowing of Money" under the caption HOW THE FUND PURSUES
ITS OBJECTIVE AND CERTAIN RISK FACTORS is revised in its entirety as
follows:
Borrowing of Money. The Fund may borrow money from banks, other affiliated
funds and other entities to the extent permitted by law for temporary or
emergency purposes up to 33 1/3% of its total assets.
(4) A new caption and paragraph is added after the last paragraph of the
caption HOW THE FUND IS MANAGED as follows:
YEAR 2000
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. 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) A new sentence is added as the last sentence under the caption HOW THE
FUND VALUES ITS SHARES 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) 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 to redeem up to $100,000 of Fund shares by
calling 1-800-422-3737 toll-free any business day between 9:00 a.m.
(Eastern time) and the time at which the Fund values its shares. Telephone
redemptions are limited to a total of $100,000 in a 30-day period.
Redemptions that exceed $100,000 may be accomplished by placing a wire
order trade through a broker or furnishing a signature guaranteed request.
(7) Liberty Financial Investments, Inc. (Transfer Agent), the Fund's
distributor, changed its name to Liberty Funds Distributor, Inc.
(Distributor). The new name will not affect the services the Distributor
provides to the Fund. The Distributor continues to offer selected
investment products managed by subsidiaries of its indirect parent company,
Liberty Financial Companies, Inc. (NYSE:L).
(8) Colonial Investors Service Center, Inc. (Transfer Agent), the Fund's
transfer agent, changed its name to Liberty Funds Services, Inc. The new
name will not affect the services the Transfer Agent provides to the Fund.
(9) Price Waterhouse LLP, the Fund's independent accountants, changed its name
to PricewaterhouseCoopers LLP. The new name will not affect the services
the independent accountants provide to the Fund.
TF-32/424G-1298 December 31, 1998
