--------------------------------------------------------------------------------
COLONIAL INTERNATIONAL HORIZONS FUND Semiannual Report
--------------------------------------------------------------------------------
April 30, 2000
[COVER PHOTO]
<PAGE>
President's Message
Dear Shareholder:
Over much of the past six months, telecommunications, technology and media
stocks dominated global markets. Fueled by a growing demand for voice, data,
Internet and wireless services, tech and telecom companies around the world
posted strong gains. The success of those industry groups came at the expense of
most "Old Economy" sectors, which generally languished. Although leadership of
the market shifted away from New Economy stocks beginning in mid-March, they
remained the period's top performers.
Colonial International Horizons Fund benefited from its stake in technology and
telecommunications stocks, and was well-positioned within those sectors.
However, the Fund was positioned to benefit from stronger commodity prices and
an expected acceleration of economic growth in Europe and Japan with a
relatively large weighting in cyclical stocks. Unfortunately, commodity prices
-- other than oil -- remained flat, the European and Japanese economies proved
more sluggish than anticipated and cyclical stocks proved disappointing.
Effective March 15, 2000, Charles R. Roberts, Michael Ellis and Deborah F. Snee
became co-managers of the Fund. In the following report, your fund managers will
provide you with more specific information about your Fund's performance and
their investment strategy during the period.
As always, we thank you for choosing Colonial International Horizons Fund and
for giving us the opportunity to serve your investment needs.
Sincerely,
/s/ Stephen E. Gibson
Stephen E. Gibson
President
June 15, 2000
---------------------------
Not FDIC May Lose Value
Insured No Bank Guarantee
---------------------------
Because economic and market trends change frequently, there can be no assurance
that the trends described in this report will continue or come to pass.
<PAGE>
--------------------------------------------------------------------------------
Highlights
--------------------------------------------------------------------------------
o Market volatility was a worldwide trend
Historically, U.S. markets have responded differently to economic events
than countries elsewhere in the world. During the period, however,
uncertainty about interest rates and inflation created volatility in U.S.
markets. This U.S. trend spilled over into European and Japanese stock
markets as well.
o Commodity and cyclical stock prices remained flat
European and Japanese economic growth was slower than anticipated during
the period. Stocks that benefit from infrastructure improvements like
cyclicals and commodities remained flat, with the notable exception of
oil.
o Technology and telecommunications led global markets
Growth in international markets was driven by a narrow group of technology
and telecommunications stocks during the six-month period. These sectors
led both Japanese and European stock markets by a wide margin.
Colonial International Horizons Fund
11/1/99 - 4/30/00
[The following information was depicted as a bar graph in the printed material.]
CIHF Class A shares
(without
sales charge) 5.65%
MSCI EAFE 7.58%
Past performance cannot predict future investment results.
The Morgan Stanley Capital International (MSCI) EAFE (GDP) Index is an unmanaged
index that tracks the performance of equity securities of developed countries
outside North America. Unlike mutual funds, indexes are not investments and do
not incur fees or expenses. It is not possible to invest in an index.
Net asset value per share
as of 4/30/00 vs. 10/31/99
Class A $14.06 $13.38
------------------------------
Class B $13.85 $13.19
------------------------------
Class C $13.97 $13.30
------------------------------
Class Z $14.11 $13.40
------------------------------
Distributions declared per
share from 11/1/99 to 4/30/00
Class A $.079
------------------------------
Class B $.052
------------------------------
Class C $.052
------------------------------
Class Z $.089
------------------------------
1
<PAGE>
--------------------------------------------------------------------------------
Portfolio Managers' Report
--------------------------------------------------------------------------------
Top five holdings as of 4/30/00
Nokia 3.1%
-------------------------------
Murata Manufacturing 2.8%
-------------------------------
NTT DoCoMo 2.4%
-------------------------------
Vodafone Airtouch 2.3%
-------------------------------
Canon 1.8%
-------------------------------
Portfolio holding breakdowns are calculated as a percentage of net assets.
Because the Fund is actively managed, there can be no guarantee the Fund will
continue to hold these securities in the future.
HELD
--------------------------------------------------------------------------------
NTT DoCoMo (2.4% of net assets) is the Japanese creator of the I-mode phone,
which provides Internet access.
KPN (1.6% of net assets) provides a wide range of telecom services, including
fixed line and mobile telephony, business communications and corporate
networking to the Netherlands and other countries.
Focus on cyclicals hampers portfolio
In anticipation of higher commodity prices and strengthening European and
Japanese economies, the Fund invested heavily in cyclical companies -- paper,
housing and other economically sensitive sectors. Most commodity prices,
however, continued to languish largely because expected economic rebounds in
Europe and Japan did not materialize. Despite positive performance from many of
the Fund's holdings, its overweighting in cyclical industries caused the Fund to
turn in disappointing performance over the past six months.
Telecom and tech stocks fuel gains
The Fund was well-positioned in telecommunications and technology stocks, which
led the world's markets during much of the period as the demand for voice, data,
Internet and wireless products and services continued to mushroom. One of the
brightest spots for the Fund was Japanese telecommunications company NTT DoCoMo,
Inc., which was one of the Fund's largest holdings. The company's gains were
driven in large measure by the burgeoning demand for its I-mode service, which
provides Internet access through cellular phones. Dutch phone company KPN was
also one of our larger holdings as well as our best performers. Over the last
several years, KPN has done a terrific job of transforming itself from a
state-owned, fixed line telephone company into a dynamic communications company
delivering cellular, fiber optics and Internet services. Other strong performers
included France Telecom (1.6% of net assets).
Fund industry exposure to broaden
As the new managers of the Fund, we feel that it is important to explain our
investment approach. In selecting stocks for the Fund, we look for quality
growth companies with strong balance sheets, a track record of earnings, and
sound management. We currently focus on six industry sectors which we believe
offer the most attractive opportunities for growth. In addition to the
telecommunications and technology groups, these sectors are:
o business services, which we feel will continue to be a prime beneficiary
of the trend toward outsourcing various business functions
o consumer growth, concentrating in companies that have strong brands and
expanding market share
2
<PAGE>
--------------------------------------------------------------------------------
Portfolio Managers' Report (continued)
--------------------------------------------------------------------------------
o financial services, which we believe will benefit from the aging of the
world's population, and privatization of pension funds
o health care, which should benefit from the aging of the population as well
as increasing incomes
Outlook calls for optimism
The correlation between Wall Street and overseas markets over the longer term
remains low, but over the shorter term, is likely to be quite high. Factors that
cause volatility here also create ripples worldwide. Currently, the Federal
Reserve Board is progressively raising interest rates in an attempt to cool the
fast pace of economic expansion and preempt inflationary pressure.
Higher interest rates tend to equate to lower price-earnings ratios (PEs). PEs
are currently high by historical standards and the combination of rising rates
and high valuations has led to considerable volatility -- particularly among
NASDAQ stocks -- through the first four months of this year.
Although the major overseas markets of Europe and Japan are at different stages
of their cycle, they have felt the short-term effects of these trends. We
believe, however, that the rationale for worldwide diversification is strong at
this point. Japan's problems are well known and its economy is showing signs of
life after a long period of recession. In Europe, the benefits of economic,
fiscal and monetary union are beginning to be felt and, after a decade,
unemployment is beginning to fall. Given that backdrop, we plan to position the
Fund in large and high-quality companies that are leaders in the segments
driving growth over the next few years.
Charles R. Roberts, Michael Ellis, Deborah F. Snee
Mr. Roberts, Mr. Ellis and Ms. Snee have co-managed the Fund since March 2000.
Mr. Roberts and Mr. Ellis are senior vice presidents of the Advisor, and Ms.
Snee is an analyst with the Advisor.
International investing offers significant, long-term growth potential, but also
involves certain risks. The Fund may be affected by political, business and
economic conditions in the countries in which it invests.
Because the Fund is allowed to invest a percentage of its total assets in the
securities of a single issuer, it may have an increased risk of loss compared to
a similar diversified fund.
Top five countries as of 4/30/00
Japan 23.4%
--------------------------------
United Kingdom 17.5%
--------------------------------
France 14.7%
--------------------------------
Netherlands 7.0%
--------------------------------
Sweden 5.5%
--------------------------------
Country breakdowns are calculated as a percentage of total investments. Because
the Fund is actively managed, there can be no guarantee the Fund will continue
to invest in these countries in the future.
3
<PAGE>
--------------------------------------------------------------------------------
Performance Information
--------------------------------------------------------------------------------
Average Annual Total Returns as of 4/30/00
<TABLE>
<CAPTION>
Share class A B C Z
Inception date 6/8/92 6/8/92 8/1/97 2/16/99
----------------------------------------------------------------------------------------
Without With Without With Without With Without
Sales Sales Sales Sales Sales Sales Sales
Charge Charge Charge Charge Charge Charge Charge
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Six months 5.65% (0.43)% 5.38% 0.38% 5.41% 4.41% 5.93%
(cumulative)
----------------------------------------------------------------------------------------
One year 11.13 4.74 10.40 5.40 10.39 9.39 11.51
----------------------------------------------------------------------------------------
Five years 11.89 10.57 11.09 10.82 11.15 11.15 11.89
----------------------------------------------------------------------------------------
Life of Fund 11.25 10.42 10.44 10.44 10.48 10.48 11.25
----------------------------------------------------------------------------------------
</TABLE>
Average Annual Total Returns as of 3/31/00
<TABLE>
<CAPTION>
Share class A B C Z
----------------------------------------------------------------------------------------
Without With Without With Without With Without
Sales Sales Sales Sales Sales Sales Sales
Charge Charge Charge Charge Charge Charge Charge
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Six months 17.71% 10.94% 17.33% 12.33% 17.26% 16.26% 17.91%
(cumulative)
----------------------------------------------------------------------------------------
One year 25.16 17.96 24.34 19.34 24.20 23.20 25.56
----------------------------------------------------------------------------------------
Five years 14.31 12.97 13.48 13.24 13.53 13.53 14.29
----------------------------------------------------------------------------------------
Life of Fund 12.45 11.60 11.63 11.63 11.66 11.66 12.43
----------------------------------------------------------------------------------------
</TABLE>
Past performance cannot predict future investment results. Returns and value of
an investment will vary, resulting in a gain or loss on sale. All results shown
assume reinvestment of distributions. The "with sales charge" returns include
the maximum 5.75% sales charge for Class A shares, the appropriate Class B
contingent deferred sales charge for the holding period after purchase as
follows: through first year-5%, second year-4%, third year-3%, fourth year
-3%, fifth year-2%, sixth year-1%, thereafter-0% and the Class C
contingent deferred sales charge of 1% for the first year only. Performance
results reflect any voluntary waivers or reimbursement of Fund expenses by the
Advisor or its affiliates. Absent these waivers or reimbursement arrangements,
performance would have been lower.
Performance for different share classes will vary based on differences in share
charges and fees associated with each class.
Class C share performance information includes returns of the Fund's Class B
shares (the oldest existing fund class with a similar expense structure) for
periods prior to its inception date. These Class A share returns are not
restated to reflect any expense differential between Class B and Class C shares.
Class Z share performance information includes returns of the Fund's Class A
shares (as its expense structure more closely resembles that of the newer class)
for periods prior to its inception date. These Class B share returns are not
restated to reflect any expense differential (e.g. Rule 12b-1 fees) between
Class A shares and Class Z shares. Had the expense differential been reflected,
the returns for the periods prior to the inception of the newer class shares
would have been higher.
4
<PAGE>
--------------------------------------------------------------------------------
Investment Portfolio
--------------------------------------------------------------------------------
April 30, 2000 (Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Common Stocks - 92.0% COUNTRY SHARES VALUE
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Construction - 1.4%
Building Construction - 0.5%
Daiwa House Industry Co., Ltd. Ja 96 $ 639
--------
Heavy Construction-
Non Building Construction - 0.9%
Vivendi Fr 10 1,010
--------
--------------------------------------------------------------------------------------------------
FINANCE, INSURANCE & REAL ESTATE - 14.3%
Depository Institutions - 8.4%
Banca Nazionale del Lavoro It 90 293
Banco Bilbao Vizcaya Argentaria SA Sp 30 408
Banco Pinto & Sotto Mayor SA Pt 40 833
Bank of Montreal Ca 5 192
Bayerische HypoVereinsbank G 6 379
Commerzbank AG G 8 299
DenNorske Bank ASA No 57 200
Deutsche Bank AG G 13 858
Generale Banque, STRIP VVPR (a) Be (b) (b)
Lloyds TSB Group plc UK 70 696
Nordic Baltic Holding AB Sw 172 1,087
Standard Chartered PLC UK 62 859
Svenska Handelsbanken Sw 62 820
The Bank of Tokyo Mitsubishi Ja 81 1,044
UBS AG Sz 2 509
UniCredito Italiano SPA It 159 650
Westpac Banking Corp. Au 130 832
--------
9,959
--------
Financial Services - 0.7%
Halifax plc UK 86 789
--------
Holding & Other Investment Offices - 0.5%
Fortis - CVG (a) Be 5 31
Fortis, STRIP VVPR Be 41 (b)
Zurich Allied AG Sz 1 532
--------
563
--------
Holding Companies - 0.9%
CGU PLC UK 35 501
Fortis (NL) NV Ne 22 558
--------
1,059
--------
Insurance Carriers - 1.4%
AXA Fr 6 935
Assurances Generales De France Fr 15 744
--------
1,679
--------
Nondepository Credit Institutions - 1.3%
Promise Co., Ltd. Ja 19 1,545
--------
Real Estate - 1.1%
Cheung Kong (Holdings) Ltd. HK 85 1,015
New World Development Co., Ltd. HK 205 276
--------
1,291
--------
--------------------------------------------------------------------------------------------------
MANUFACTURING - 43.6%
Chemicals & Allied Products - 10.9%
Akzo Nobel NV Ne 12 $ 508
Aventis S.A. Fr 18 996
Aventis S.A. (a) Fr 10 568
BASF AG G 13 582
Bayer AG G 13 520
Celanese AG G 1 27
Christian Dior SA Fr 5 1,243
Glaxo Holdings PLC UK 35 1,074
Kao Corp. Ja 44 1,338
L'Oreal Fr 2 1,197
Roche Holding AG Sz (b) 1,768
SmithKline Beecham PLC UK 83 1,125
Takeda Chemical Industries Ltd. Ja 16 1,052
Yamanouchi Pharmaceutical Co. Ja 18 950
--------
12,948
--------
Communications Equipment - 4.2%
Northern Telecom Ltd. 12 1,319
SONY Corp. (New) (a) Ja 8 925
SONY Corp. Ja 8 918
Telefonaktiebolaget LM Ericsson,
Class B Sw 21 1,874
--------
5,036
--------
Electronic & Electrical Equipment - 1.4%
Bowthorpe PLC UK 89 1,639
--------
Electronic Components - 6.3%
Alcatel Alsthom (Cie Gen El) Fr 6 1,419
Murata Manufacturing Co., Ltd. Ja 17 3,301
Royal Philips Electronics NV, NY Shares Ne 35 1,544
Samsung Electronics GDS Ko 8 1,263
--------
7,527
--------
Food & Kindred Products - 2.8%
Carrefour SA Fr 19 1,212
Diageo PLC UK 30 249
Groupe Danone Fr 3 722
Nestle AG, Registered Shares Sz 1 1,166
--------
3,349
--------
Household Appliances - 0.4%
Electrolux AB, Series B Sw 26 448
--------
Machinery & Computer Equipment - 4.9%
Canon, Inc. Ja 46 2,101
Equant NV (a) Ne 6 488
Fujitsu Ltd. Ja 35 990
Hitachi Ltd. Ja 110 1,312
Sumitomo Heavy Industries, Ltd. Ja 435 981
--------
5,872
--------
Measuring & Analyzing Instruments - 0.4%
Fuji Photo Film Co., Ltd. Ja 11 440
--------
Miscellaneous Manufacturing - 1.0%
Secom Co., Ltd. Ja 14 1,173
--------
</TABLE>
See notes to investment portfolio.
5
<PAGE>
--------------------------------------------------------------------------------
Investment Portfolio (continued)
--------------------------------------------------------------------------------
April 30, 2000 (Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Common Stocks (Continued) COUNTRY SHARES VALUE
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MANUFACTURING (Continued)
Paper Products - 3.1%
Holmen AB Sw 17 408
Jefferson Smurfit Group PLC UK 98 210
Koninklijke KPN NT Ne 19 1,932
Stora Enso Oyj, Class R Fi 69 710
TNT Post Group NV Ne 18 388
--------
3,648
--------
Petroleum Refining - 1.7%
Compagnie Francaise de Petroleum,
Total B Shares Fr 5 825
ENI SPA It 45 223
Repsol SA Sp 23 467
Royal Dutch Petroleum Co. Ne 8 467
--------
1,982
--------
Primary Metal - 0.8%
Acerinox SA Sp 18 718
Pirelli SPA It 101 244
--------
962
--------
Printing & Publishing - 0.6%
Arnoldo Mondadori Editore SPA It 30 728
--------
Rubber & Plastic - 0.6%
Bridgestone Corp. Ja 34 737
--------
Stone, Clay, Glass & Concrete - 2.3%
CRH PLC Ir 35 561
Cemex SA Mx 119 518
Cimentos de Portugal SA Pt 28 417
Holderbank Financiere Glaris AG Sz (b) 538
Lafarge SA Fr 8 660
--------
2,694
--------
Tobacco Products - 0.2%
Allied Zurich PLC UK 29 284
--------
Transportation Equipment - 2.0%
DaimlerChrysler AG G 6 320
GKN PLC UK 78 1,055
Toyota Motor Corp. Ja 21 1,043
--------
2,418
--------
--------------------------------------------------------------------------------------------------
MINING & ENERGY - 0.6%
Oil & Gas Field Services - 0.6%
Petroleum Geo-Services (a) No 44 691
--------
--------------------------------------------------------------------------------------------------
RETAIL TRADE - 4.8%
Apparel & Accessory Stores - 1.1%
Hennes & Mauritz AB, Class B Sw 51 1,354
--------
Food Stores - 1.9%
Koninklijke Ahold NV Ne 10 222
Numico NV Ne 31 1,159
Tesco PLC UK 138 464
Vendex International NV Ne 26 407
--------
2,252
--------
General Merchandise Stores - 0.9%
Ito-Yokado Co., Ltd. Ja 9 657
Metro AG G 10 380
--------
1,037
--------
Miscellaneous Retail - 0.9%
Centros Comerciales Continente SA Sp 20 314
Pinault-Printemps SA Fr 4 800
--------
1,114
--------
--------------------------------------------------------------------------------------------------
SERVICES - 4.7%
Amusement & Recreation - 0.7%
Hilton Group PLC UK 194 814
--------
Computer Related Services - 1.7%
Cap Gemini SA Fr 6 1,160
Dixons Group PLC UK 211 867
--------
2,027
--------
Computer Software - 1.8%
Logica PLC UK 25 747
Olivetti SPA (a) It 175 578
SAP AG G 2 822
--------
2,147
--------
Hotels, Camps & Lodging - 0.5%
Accor SA Fr 16 600
--------
--------------------------------------------------------------------------------------------------
TRANSPORTATION, COMMUNICATIONS, ELECTRIC,
GAS & SANITARY SERVICES - 22.6%
Broadcasting - 0.7%
Mediaset SPA It 48 785
--------
Communications - 2.3%
Vodafone AirTouch PLC UK 597 2,726
--------
Electric Services - 0.7%
Endesa SA Sp 22 486
Korea Electric Power Corp., ADR Ko 18 290
--------
776
--------
Gas Services - 1.6%
BG PLC UK 143 866
Centrica PLC UK 299 1,069
--------
1,935
--------
Telecommunication - 17.3%
British Telecommunications PLC UK 60 1,073
COLT Telecom Group PLC UK 46 1,886
Cable & Wireless HKT Ltd. HK 146 339
France Telecom SA Fr 13 1,950
NTT DoCoMo, Inc. Ja (b) 2,837
Nippon Telegraph and Telephone Corp. Ja (b) 1,673
Nokia Oyj (a) Fi 64 3,676
SK Telecom Co., Ltd., ADR Ko 57 1,843
Telecel-Comunicacaoes Pessoais SA (a) Pt 68 1,077
Telecom Italia SPA It 153 960
Telecomunicacoes Brasileiras SA Bz 11 1,300
Telefonica de Espana Sp 20 1,352
Telefonos de Mexico SA Mx 217 630
--------
20,596
--------
TOTAL COMMON STOCKS
(cost of $78,211) 109,273
</TABLE>
See notes to investment portfolio.
6
<PAGE>
--------------------------------------------------------------------------------
Investment Portfolio (continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Preferred Stock - 0.1% COUNTRY SHARES VALUE
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CONSTRUCTION - 0.1%
Heavy Construction - Non Building Construction
Hyder PLC, 7.875% UK 30 $ 43
--------
TOTAL PREFERRED STOCK
(cost of $41) 43
--------
Warrants - 0.0%
--------------------------------------------------------------------------------------------------
CONSTRUCTION - 0.0%
Heavy Construction - Non Building Construction
Cemex SA Mx 7 4
Compagnie Generale
des Eaux-Vivendi (a) Fr 9 40
--------
44
--------
--------------------------------------------------------------------------------------------------
FINANCE, INSURANCE & REAL ESTATE - 0.0%
Depository Institutions
Siam Commercial Bank
Public Co., Ltd. (c) Th 37 8
--------
TOTAL WARRANTS - 0.0%
(cost of $8) 52
--------
Corporate Fixed Income Bonds - 0.1% PAR
--------------------------------------------------------------------------------------------------
MINING & ENERGY - 0.1%
Oil & Gas Extraction BG Transco Holdings PLC:
4.19% 12/14/22 UK 20 30
7.00% 12/16/24 UK 20 31
7.06% 12/14/09 UK 20 31
--------
TOTAL CORPORATE FIXED-INCOME BONDS
(cost of $98) 92
--------
TOTAL INVESTMENTS
(cost of $78,358) (d) 109,460
--------
Short Term Obligations - 9.0%
--------------------------------------------------------------------------------------------------
Repurchase agreement with
SBC Warburg Ltd., dated 04/28/00,
due 05/01/00 at 5.710%,
collateralized by U.S. Treasury
notes with various maturities to 2025,
market value $10,933
(repurchase proceeds $10,692) $ 10,687 $ 10,687
--------
Other Assets and Liabilities, Net - (1.2)% (1,396)
--------------------------------------------------------------------------------------------------
NET ASSETS - 100% $118,751
========
</TABLE>
Notes to Investment Portfolio:
--------------------------------------------------------------------------------
(a) Non-income producing.
(b) Rounds to less than one.
(c) Represents fair market value as determined in good faith under the
direction of the Trustees.
(d) Cost for federal income tax purposes is the same.
<TABLE>
<CAPTION>
Summary of
Securities by Country Country Value % of Total
---------------------------------------------------------------------------------
<S> <C> <C> <C>
Japan Ja $25,656 23.4
United Kingdom UK 19,128 17.5
France Fr 16,081 14.7
Netherlands Ne 7,673 7.0
Sweden Sw 5,991 5.5
Switzerland Sz 4,513 4.1
Italy It 4,461 4.1
Finland Fi 4,386 4.0
Germany G 4,187 3.8
Spain Sp 3,745 3.4
Hong Kong HK 1,630 1.5
Portugal Pt 2,327 2.1
Korea Ko 3,396 3.1
United States 1,319 1.2
Brazil Bz 1,300 1.2
Mexico Mx 1,152 1.1
Norway No 891 0.8
Australia Au 832 0.8
Ireland Ir 561 0.5
Canada Ca 192 0.2
Belgium Be 31 0.0
Thailand Th 8 0.0
-------- -----
$109,460 100.0
-------- -----
</TABLE>
Acronym Name
--------- ------------------------------
ADR American Depositary Receipt
STRIP Separately Traded Receipt of
Interest and Principal
See notes to financial statements.
7
<PAGE>
--------------------------------------------------------------------------------
Statement of Assets and Liabilities
--------------------------------------------------------------------------------
April 30, 2000 (Unaudited)
(In thousands except for per share amounts and footnotes)
<TABLE>
<S> <C> <C>
Assets
Investments at value (cost $78,358) $109,460
Short-term obligations 10,687
--------
120,147
Cash including foreign currencies $ 1,853
Receivable for:
Investments sold 4,085
Fund shares sold 2,427
Dividends 340
Interest 7
Other 344 9,056
------- --------
Total Assets 129,203
Liabilities
Cash including foreign currencies
(cost of $2,759) 2,685
Payable for:
Investments purchased 3,515
Fund shares repurchased 1,777
Accrued:
Management fee 76
Transfer agent fee 27
Bookkeeping fee 4
Service fee - Class A 3
Deferred Trustees' fees 4
Other 2,361
-------
Total Liabilities 10,452
--------
Net Assets $118,751
--------
Net asset value & redemption price per share
- Class A ($58,865/4,185) $ 14.06(a)
--------
Maximum offering price per share
- Class A ($14.06/0.9425) $ 14.92(b)
--------
Net asset value & offering price per share
- Class B ($52,900/3,820) $ 13.85(a)
--------
Net asset value & offering price per share
- Class C ($1,267/91) $ 13.97(a)
--------
Net asset value, offering & redemption price
per share - Class Z ($5,719/405) $ 14.11
--------
Composition of Net Assets
Capital paid in $ 92,221
Overdistributed net investment income (1,004)
Accumulated net realized loss (3,421)
Net unrealized appreciation (depreciation) on:
Investments 31,102
Foreign currency transactions (147)
--------
$118,751
========
</TABLE>
(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, 2000 (Unaudited)
(In thousands)
<TABLE>
<S> <C> <C>
Investment Income
Dividends $ 1,221
Interest 247
-------
Total Investment Income
(net of nonreclaimable foreign taxes withheld
at source which amounted to $127) 1,468
Expenses
Management fee $ 469
Service fee - Class A, Class B, Class C 150
Distribution fee - Class B 208
Distribution fee - Class C 5
Transfer agent fee 205
Bookkeeping fee 27
Registration fee 50
Custodian fee 47
Audit fee 11
Trustees' fee 6
Reports to shareholders 7
Legal fee 3
Other 52 1,240
------- -------
Net Investment Income 228
-------
Net Realized & Unrealized Gain (Loss)
on Portfolio Positions
Net realized gain (loss) on:
Investments 3,385
Foreign currency transactions (27)
-------
Net Realized Gain 3,358
Net change in unrealized appreciation/depreciation
during the period on:
Investments 7,292
Foreign currency transactions (127)
-------
Net Change in Unrealized
Appreciation/Depreciation 7,165
-------
Net Gain 10,523
-------
Increase in Net Assets from Operations $10,751
=======
</TABLE>
8
<PAGE>
--------------------------------------------------------------------------------
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
(In thousands)
<TABLE>
<CAPTION>
(Unaudited)
Six months Year
ended ended
April 30, October 31,
----------------------------
Increase (Decrease) in Net Assets 2000 1999 (a)
----------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income (loss) $ 228 $ (172)
Net realized gain (loss) 3,358 (6,600)
Net unrealized appreciation (depreciation) 7,165 26,281
--------- --------
Net Increase from Operations 10,751 19,509
Distributions:
From net investment income - Class A (301) --
From net realized gains - Class A -- (4,278)
From net investment income - Class B (199) --
From net realized gains - Class B -- (4,151)
From net investment income - Class C (5) --
From net realized gains - Class C -- (85)
From net investment income - Class Z (37) --
From net realized gains - Class Z -- --
--------- --------
10,209 10,995
--------- --------
Fund Share Transactions:
Receipts for shares sold - Class A 374,564 168,531
Value of distributions reinvested - Class A 270 3,628
Cost of shares repurchased - Class A (380,958) (178,536)
--------- --------
(6,124) (6,377)
--------- --------
Receipts for shares sold - Class B 11,374 15,544
Value of distributions reinvested - Class B 178 3,730
Cost of shares repurchased - Class B (13,244) (29,662)
--------- --------
(1,692) (10,388)
--------- --------
Receipts for shares sold - Class C 231 598
Value of distributions reinvested - Class C 5 80
Cost of shares repurchased - Class C (344) (654)
--------- --------
(108) 24
--------- --------
Receipts for shares sold - Class Z 337 5,585
Value of distributions reinvested - Class Z 37 --
Cost of shares repurchased - Class Z (380) (560)
--------- --------
(6) 5,025
--------- --------
Net Decrease from Fund
Share Transactions (7,930) (11,716)
--------- --------
Total Increase (Decrease) 2,279 (721)
Net Assets
Beginning of period 116,472 117,193
--------- --------
End of period (net of overdistributed
net investment income of
$1,004 and $690, respectively) $ 118,751 $116,472
========= ========
Number of Fund Shares
Sold - Class A 25,514 13,331
Issued for distributions reinvested
- Class A 18 303
Repurchased - Class A (25,668) (14,061)
--------- --------
(136) (427)
--------- --------
Sold - Class B 782 1,251
Issued for distributions reinvested
- Class B 12 314
Repurchased - Class B (910) (2,391)
--------- --------
(116) (826)
--------- --------
Sold - Class C 16 48
Issued for distributions reinvested
- Class C (b) 7
Repurchased - Class C (23) (53)
(7) 2
Sold - Class Z 24 448
Issued for distributions reinvested - Class Z 2 --
Repurchased - Class Z (26) (43)
(b) 405
</TABLE>
(a) Class Z shares were initially offered on February 16, 1999.
(b) Rounds to less than one.
See notes to financial statements.
9
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements
--------------------------------------------------------------------------------
April 30, 2000 (Unaudited)
Note 1. Interim Financial Statements
In the opinion of management of Colonial International Horizons Fund (the Fund),
a series of Liberty Funds 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, 2000, and the results of its
operations, the changes in its net assets and the financial highlights for the
six months then ended.
Organization
The Fund is a non-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
preservation of capital, purchasing power and long-term growth. The Fund may
issue an unlimited number of shares. The Fund offers four classes of shares:
Class A, Class B, Class C and Class Z. Class A shares are sold with a front-end
sales charge. A 1.00% contingent deferred sales charge is assessed 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. Effective February 1, 2000, Class B shares
will convert to Class A shares as follows:
Converts to
Original purchase Class A shares
----------------- --------------
Less than $250,000 8 years
$250,000 to less than $500,000 4 years
$500,000 to less than $1,000,000 3 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. Class Z
shares are offered continuously at net asset value. There are certain
restrictions on the purchase of Class Z shares, please refer to the Fund's
prospectus.
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 that are 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.
Debt securities generally are valued by a pricing service based upon market
transactions for normal, institutional-size trading units of similar securities.
When management deems it appropriate, an over-the-counter or exchange bid
quotation is used.
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 is
translated into U.S. dollars at that day's exchange rates. In certain countries,
the Fund may hold portfolio positions for which market quotations are not
readily available. Such securities 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 Class A, Class B and Class C service fees and
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.
The per share data was calculated using average shares outstanding during the
period. In addition, Class A, Class B and Class C net investment income per
share data reflects the service fee per share applicable to Class A, Class B and
Class C shares and the distribution fee applicable to Class B and Class C shares
only.
Class A, 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 service
fee applicable to Class A, Class B and Class C shares and 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.
10
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
April 30, 2000 (Unaudited)
Foreign currency transactions
Net realized and unrealized gains (losses) on foreign currency transactions
includes the 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) from 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 is opened, the actual 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 the 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 0.75% annually of the Fund's average net assets.
Bookkeeping fee
The Advisor provides bookkeeping and pricing services for a monthly fee equal to
$27,000 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.
Effective January 1, 2000, the Transfer Agent fee was changed to a fee comprised
of 0.07% anually of average net assets plus charges based on the number of
shareholder accounts and transactions.
Underwriting discounts, service and distribution fees
Liberty Funds Distributor, Inc. (the Distributor), a subsidiary of the Advisor,
is the Fund's principal underwriter. During the six months ended April 30, 2000,
the Fund has been advised that the Distributor retained net underwriting
discounts of $14,924 on sales of the Fund's Class A shares and received
contingent deferred sales charges (CDSC) of $467, $71,707 and $256 on Class A,
Class B and Class C share redemptions, respectively.
The Fund has adopted a 12b-1 plan which requires the payment of a service fee to
the Distributor equal to 0.25% annually on Class A, Class B and Class C 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% of the average net assets
attributable to Class B and Class C shares.
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.
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.
11
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
April 30, 2000 (Unaudited)
Note 4. Portfolio Information
Investment activity
During the six months ended April 30, 2000, purchases and sales of investments,
other than short-term obligations, were $12,462,395 and $23,276,404,
respectively.
Unrealized appreciation (depreciation) at April 30, 2000, based on cost of
investments for federal income tax purposes was:
Gross unrealized appreciation $ 37,659,868
Gross unrealized depreciation (6,557,764)
------------
Net unrealized appreciation $ 31,102,104
============
Capital loss carryforwards
At October 31, 1999, capital loss carryforwards available (to the extent
provided in regulations) to offset future realized gains were approximately as
follows:
Year of Capital loss
expiration carryforward
---------- ------------
2005 $ 4,354,000
2007 6,775,000
------------
$ 11,129,000
============
The capital loss carryforward expiring in 2005 was acquired in the merger with
Colonial International Fund for Growth. The availability for use in offsetting
any future gains may be limited in a given year.
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 currency exchange or 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, 2000.
12
<PAGE>
--------------------------------------------------------------------------------
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, 2000
----------------------------------------------------
Class A Class B Class C Class Z
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value - Beginning of Period $13.380 $13.190 $13.300 $13.400
------- ------- ------- -------
Income from Investment Operations:
Net investment income (loss) (a) 0.050 (0.003) (0.004) 0.069
Net realized and unrealized gain 0.709 0.715 0.726 0.729
------- ------- ------- -------
Total from Investment Operations 0.759 0.712 0.722 0.798
------- ------- ------- -------
Less Distributions Declared to Shareholders:
From net investment income (0.079) (0.052) (0.052) (0.089)
------- ------- ------- -------
Net Asset Value, End of Period $14.060 $13.850 $13.970 $14.110
------- ------- ------- -------
Total return (b) (c) 5.65% 5.38% 5.41% 5.93%
------- ------- ------- -------
Ratios to Average Net Assets
Expenses (d) (e) 1.65% 2.40% 2.40% 1.40%
Net investment income (d) (e) 0.70% (0.05)% (0.05)% 0.95%
Portfolio turnover (c) 11% 11% 11% 11%
Net assets at end of period (000) $58,865 $52,900 $ 1,267 $ 5,719
</TABLE>
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(c) Not annualized.
(d) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
(e) Annualized.
<TABLE>
<CAPTION>
Year ended October 31, 1999
----------------------------------------------------
Class A Class B Class C Class Z (a)
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value - Beginning of Period $12.260 $12.140 $12.240 $11.950
------- ------- ------- -------
Income from Investment Operations:
Net investment income (loss) (b) 0.027 (0.067) (0.068) 0.076
Net realized and unrealized gain 2.041 2.015 2.036 1.374
------- ------- ------- -------
Total from Investment Operations 2.068 1.948 1.968 1.450
------- ------- ------- -------
Less Distributions Declared to Shareholders:
From net realized gains (0.948) (0.898) (0.908) --
------- ------- ------- -------
Net Asset Value, End of Period $13.380 $13.190 $13.300 $13.400
------- ------- ------- -------
Total return (c) 17.77% 16.85% 16.90% 12.13%(d)
------- ------- ------- -------
Ratios to Average Net Assets
Expenses (e) 1.64% 2.39% 2.39% 1.37%(f)
Net investment income (e) 0.21% (0.54)% (0.54)% 0.85%(f)
Portfolio turnover 43% 43% 43% 43%
Net assets at end of period (000) $57,814 $51,930 $ 1,299 $ 5,429
</TABLE>
(a) Class Z shares were initially offered on February 16, 1999. Per share
amounts reflect activity from that date.
(b) Per share data was calculated using 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) Not annualized.
(e) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
(f) Annualized.
13
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights (continued)
--------------------------------------------------------------------------------
Selected data for a share of each class outstanding throughout each period are
as follows:
<TABLE>
<CAPTION>
Year ended October 31, 1998
-------------------------------------
Class A Class B Class C
--------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value - Beginning of Period $15.260 $15.070 $15.220
------- ------- -------
Income from Investment Operations:
Net investment income (loss) (a) 0.032 (0.062) (0.061)
Net realized and unrealized loss (0.222) (0.208) (0.181)
------- ------- -------
Total from Investment Operations (0.190) (0.270) (0.242)
------- ------- -------
Less Distributions Declared to Shareholders:
Net investment income (0.074) -- (0.039)
In excess of net investment income (0.076) -- (0.039)
From net realized gains (2.660) (2.660) (2.660)
------- ------- -------
Total Distributions Declared to Shareholders (2.810) (2.660) (2.738)
------- ------- -------
Net Asset Value, End of Period $12.260 $12.140 $12.240
------- ------- -------
Total return (b) (1.14)% (1.76)% (1.53)%
------- ------- -------
Ratios to Average Net Assets
Expenses (c) (d) 1.68% 2.43% 2.43%
Net investment income (c) (d) 0.24% (0.51)% (0.51)%
Portfolio turnover 100% 100% 100%
Net assets at end of period (000) $58,213 $57,809 $ 1,171
</TABLE>
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(c) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
(d) Annualized.
<TABLE>
<CAPTION>
Year ended October 31, 1997
-------------------------------------
Class A Class B Class C (a)
--------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value - Beginning of Period $14.320 $14.230 $15.910
------- ------- -------
Income from Investment Operations:
Net investment income (loss) (b) 0.098 (0.011) (0.017)
Net realized and unrealized gain (loss) 2.296 2.275 (0.673)(c)
------- ------- -------
Total from Investment Operations 2.394 2.264 (0.690)
------- ------- -------
Less Distributions Declared to Shareholders:
Net investment income (0.030) -- --
From net realized gains (1.424) (1.424) --
Total Distributions Declared to Shareholders (1.454) (1.424) --
Net Asset Value, End of Period $15.260 $15.070 $15.220
Total return (d) 17.87% 16.98% (4.34)%(e)
Ratios to Average Net Assets
Expenses (f) 1.62% 2.37% 2.39%(g)
Net investment income (loss) (f) 0.67% (0.08)% (0.42)%(g)
Portfolio turnover 67% 67% 67%
Net assets at end of period (000) $34,645 $26,817 $ 103
</TABLE>
(a) Class C shares were initially offered on August 1, 1997. Per share amounts
reflect activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) The amount shown for a share outstanding 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.
(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) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
(g) Annualized.
14
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights (continued)
--------------------------------------------------------------------------------
Selected data for a share of each class outstanding throughout each period are
as follows:
<TABLE>
<CAPTION>
Year ended October 31
----------------------------------------------
1996 1995
-------------------- --------------------
Class A Class B Class A Class B
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value - Beginning of Period $12.430 $12.380 $13.160 $13.110
------- ------- ------- -------
Income from Investment Operations:
Net investment income (loss) (a) 0.075 (0.026) 0.102 0.009
Net realized and unrealized gain (loss) 2.525 2.506 (0.496) (0.489)
------- ------- ------- -------
Total from Investment Operations 2.600 2.480 (0.394) (0.480)
------- ------- ------- -------
Less Distributions Declared to Shareholders:
Net investment income (0.080) -- (0.106) (0.020)
------- ------- ------- -------
From net realized gains (0.630) (0.630) (0.230) (0.230)
------- ------- ------- -------
Total Distributions Declared to Shareholders (0.710) (0.630) (0.336) (0.250)
------- ------- ------- -------
Net Asset Value - End of Period $14.320 $14.230 $12.430 $12.380
======= ======= ======= =======
Total return (b) 21.69% 20.70% (2.88)% (3.56)%
======= ======= ======= =======
Ratios to Average Net Assets
Expenses (c) 1.61% 2.36% 1.66% 2.41%
Net investment income (loss) (c) 0.56% (0.19)% 0.82% 0.07%
Portfolio turnover 84% 84% 65% 65%
Net assets at end of period (000) $36,655 $25,482 $31,297 $20,931
</TABLE>
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(c) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
15
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
Trustees & Transfer Agent
--------------------------------------------------------------------------------
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
Academic Vice President and Dean of Faculties, Boston College (formerly Dean,
Boston College School of Management)
Thomas E. Stitzel
Professor of Finance, College of Business, Boise State University; Business
Consultant and Author
Anne-Lee Verville
Consultant (formerly General Manager, Global Education Industry, and President,
Applications Solutions Division, IBM Corporation)
--------------------------------------------------------------------------------
Important Information About This Report
The Transfer Agent for Colonial International Horizons Fund is:
Liberty Funds Services, Inc.
P.O. Box 1722
Boston, MA 02105-1722
800-345-6611
The Fund mails one shareholder report to each shareholder address. If you would
like more than one report, please call 800-426-3750 and additional reports will
be sent to you.
This report has been prepared for shareholders of Colonial International
Horizons 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 Funds Distributor, Inc. Performance Update.
Semiannual Report:
Colonial International Horizons Fund
<PAGE>
Liberty offers the independent thinking and collective strength of six financial
specialists. Our distinguished product line helps financial advisors and their
clients build diversified investment portfolios for long-term financial goals.
--------------------------------------------------------------------------------
L I B E R T Y
-------------
F U N D S
--------------------------------------------------------------------------------
ALL-STAR Institutional money management approach for individual investors.
--------------------------------------------------------------------------------
COLONIAL Fixed income and value style equity investing.
--------------------------------------------------------------------------------
CRABBE
HUSON A contrarian approach to fixed income and equity investing.
--------------------------------------------------------------------------------
NEWPORT A leader in international investing.(SM)
--------------------------------------------------------------------------------
STEIN ROE
ADVISOR Solutions for growth and income investing.
--------------------------------------------------------------------------------
KEYPORT A leading provider of innovative annuity products.
--------------------------------------------------------------------------------
Liberty's mutual funds are offered by prospectus through Liberty Funds
Distributor, Inc.
Before you invest, consult your financial advisor.
Your financial advisor can help you develop a long-term plan for reaching your
financial goals.
--------------------------------------------------------------------------------
COLONIAL INTERNATIONAL HORIZONS FUND Semiannual Report
--------------------------------------------------------------------------------
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FUNDS
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