COLONIAL INTERNATIONAL HORIZONS FUND
Supplement to the February 27, 1998 Prospectus
(Replacing Supplement dated October 30, 1998)
The Fund's Prospectus is amended as follows:
(1) A new paragraph is added to the front cover of the Prospectus below the
Table of Contents as follows:
This Prospectus is also available on-line at 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) A new sub-caption is added under the caption HOW THE FUND PURSUES ITS
OBJECTIVE AND CERTAIN RISK FACTORS as follows:
Emerging Markets. The Fund may invest up to 35% of its total assets in foreign
securities issued or guaranteed by companies or governments located in countries
whose economies or securities markets are not yet highly developed. Special
risks associated with these investments (in addition to those of foreign
investments generally) may include, among others, greater political
uncertainties, and economy's dependence on revenues from particular commodities
or on international aid or development assistance, extreme or volatile debt
burdens or inflation rates, highly limited number of potential buyers for such
securities, heightened volatility of security prices, restrictions on
repatriation of capital invested abroad and delays and disruptions in securities
settlement procedures.
(3) The 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.
(4) 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.
(5) 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.
(6) 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.
(7) 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.
(8) 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.
(9) 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.
(10) 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.
(11) 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.
(12) 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.
(13) 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.
(14) The Fund's custodian is The Chase Manhattan Bank, 270 Park Avenue,
New York, NY 10017-2070.
HZ-36/446G-1298 December 31, 1998
