<PAGE>
LETTER FROM THE PRESIDENT
- --------------------------------------------------------------------------------
Dear Shareholder:
Following is the combined semiannual report for Colonial Short-Term
Tax-Exempt Fund and Colonial Intermediate Tax-Exempt Fund for the period ended
May 31, 1995. Both funds seek, primarily, current income exempt from federal
income tax, and, secondarily, preservation of capital.*
ECONOMIC/MARKET OVERVIEW
It appears that the U.S. economy may be coming in for the "soft landing"
that has been the Federal Reserve Board's goal for the last two years.
Annualized gross domestic product for the first three months of 1995 was 2.8%,
down significantly from the annualized GDP of 5.1% for the final quarter of
1994. Among other factors, this reflects a slowdown in consumer spending and
residential construction.
COLONIAL SHORT-TERM TAX-EXEMPT FUND
In a declining interest rate environment, short-term securities can provide
conservative investors with returns that may be more attractive than those
available from some other investments. During the semiannual period, these
highly stable securities benefited from improving prices, reflected in the
Fund's positive total return.
The price improvement enjoyed by short-term municipal securities was
demonstrated by declining yields in this market. For example, the yield for a
sample municipal bond with a maturity of three years and a AAA rating -- the
highest quality rating available -- declined by 0.74 percentage points, from
5.02% to 4.28%.(1)
FUND PERFORMANCE (12/1/94 - 5/31/95)(2)
<TABLE>
<CAPTION>
CLASS A
INCEPTION 2/1/93
- --------------------------------------------------------------------------------
<S> <C>
Distributions declared per share $0.134
- --------------------------------------------------------------------------------
SEC yield on 5/31/95 3.98%
- --------------------------------------------------------------------------------
Taxable-equivalent yield on 5/31/95 6.59%
- --------------------------------------------------------------------------------
Six-month total return, assuming reinvestment of all distributions
and no sales charge or CDSC 3.04%
- --------------------------------------------------------------------------------
Net asset value per share on 5/31/95 $7.51
- --------------------------------------------------------------------------------
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS AS OF 5/31/95
<TABLE>
<CAPTION>
CLASS A
NAV MOP
<S> <C> <C>
1 year 3.90% 2.86%
Since inception 3.15% 2.70%
</TABLE>
[PHOTO OF JOHN A. MCNEICE, JR., PRESIDENT]
INVESTMENT STRATEGY
The Fund pursues its objective by investing in a diversified portfolio of
short-term municipal bonds -- bonds with maturities of less than three years. On
May 31, 1995, the Fund owned 42 individual issues in 13 public sectors. The top
five public sectors in the portfolio were general obligation (53.8% of
investments), water & sewer (9.2%), hospital (6.8%), education (5.6%), and
pollution control (5.4%). Investments in general obligation bonds were increased
significantly, from 45.7% to 53.8% of total investments. This reflected the
overall improvement in economic conditions across the country. Another
significant change was the decrease in municipal electric bonds, from 11.1% to
3.3% of investments. Concerns about the introduction of competition to this
sector made investments here less attractive.
COLONIAL INTERMEDIATE TAX-EXEMPT FUND
Intermediate-term securities benefited as interest rates declined during
the period. Even more important, however, are the future prospects for this
group of securities. As the economy slowed, interest rates at all levels
declined. Although long-term interest rates have shown the most significant
declines thus far, intermediate- and short-term rates have declined as well.
This trend may reverse over the second half of 1995, with short-term interest
rates declining faster than long-term rates. Should the yield curve steepen,
intermediate-term bonds may benefit.
FUND PERFORMANCE (12/1/94 - 5/31/95)(3)
<TABLE>
<CAPTION>
CLASS A CLASS B
INCEPTION 2/1/93 2/1/93
- --------------------------------------------------------------------------------
<S> <C> <C>
Distributions declared per share $0.197 $0.173
- --------------------------------------------------------------------------------
SEC yield on 5/31/95 5.14% 4.66%
- --------------------------------------------------------------------------------
Taxable-equivalent yield 8.51% 7.72%
- --------------------------------------------------------------------------------
Six-month total return, assuming reinvestment of all
distributions and no sales charge or CDSC 9.07% 8.72%
- --------------------------------------------------------------------------------
Net asset value per share on 5/31/95 $7.66 $7.66
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
AVERAGE ANNUAL TOTAL RETURNS AS OF 5/31/95
<TABLE>
<CAPTION>
CLASS A CLASS B
NAV MOP NAV W/CDSC
<S> <C> <C> <C> <C>
1 year 6.85% 3.38% 6.16% 2.16%
Since inception 5.94% 4.45% 5.26% 4.45%
</TABLE>
INVESTMENT STRATEGY
During the semiannual period, your Fund Manager maintained a diversified
portfolio of primarily investment grade securities. On May 31, 1995, almost 60%
of holdings were rated AAA, the highest quality rating available. 15.5% were
rated AA, 13% were rated A, 7.0% were rated BBB, and 2.3% were non-rated. The
top five public sectors represented in the portfolio were general obligation
(24.3% of investments), hospital (11.5%), water & sewer (9.7%), public
facilities improvement (9.5%), and turnpike/toll road/bridge (8.6%).
SUPPLY AND DEMAND
Although interest rates have declined in recent months, there has not been
a significant increase in refinancing activity. At the same time, the new issue
supply of municipal bonds remains limited. Colonial management believes that
the supply of new issue bonds may go as low as $114 billion by the end of 1995,
down from a high of $292 billion in 1993.
OUTLOOK
Management believes that over the second half of 1995 the economy may
continue to slow and that inflation should remain under control. This should
help create even more favorable conditions for short- and intermediate-term
municipal bonds.
If you would like additional information about these or other Colonial
funds, please contact your full-service financial adviser or call Colonial at
1-800-426-3750.
Sincerely,
/s/John A. McNeice, Jr.
--------------------------------
John A. McNeice, Jr.
President
July 10, 1995
*Effective May 31, 1995, the Intermediate Fund's objective will be to seek as
high a level of after-tax total return, as is consistent with moderate
volatility, by pursuing current income exempt from federal income tax and
opportunities for appreciation from a portfolio primarily invested in
investment-grade, intermediate-term municipal bonds. Also, the Short-Term Fund's
objective will be to seek as high a level of current income exempt from federal
income tax as is consistent with relatively low volatility by investing
primarily in investment-grade short-term municipal securities.
(1) Yields for three-year general obligation bonds provided by Bloomberg.
(2) A portion of the Fund's income may be subject to the alternative minimum
tax. The 30-day SEC yield on May 31, 1995, of 3.98% for Class A shares reflects
the portfolio's earning power, net of expenses, and does not include changes in
Fund price. If the adviser had not borne certain Fund expenses, total returns
would have been lower and the yield for Class A shares would have been 3.04%.
Taxable-equivalent yield is based on the maximum 39.6% federal income tax rate.
Past performance cannot predict future results. Return 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. Maximum offering price (MOP) return includes the maximum
sales charge of 1.00%.
(3) A portion of the Fund's income may be subject to the alternative minimum
tax. The 30-day SEC yield on May 31, 1995, of 5.14% for Class A shares and 4.66%
for Class B shares reflects the portfolio's earning power, net of expenses, and
does not include changes in Fund price. If the adviser had not borne certain
Fund expenses, total returns would have been lower and yields for Class A and
Class B shares would have been 3.98% and 3.46%, respectively. Taxable-equivalent
yields are based on the maximum 39.6% federal income tax rate.
Past performance cannot predict future results. Return 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). Maximum
offering price (MOP) return includes the maximum sales charge of 3.25%. The CDSC
return reflects the applicable contingent deferred sales charge (1 year 4.00%,
since inception 2.00%). Performance for different share classes will vary based
on differences in sales charges and fees associated with each class.
2
<PAGE>
CITEF INVESTMENT PORTFOLIO (UNAUDITED, IN THOUSANDS) MAY 31, 1995
<TABLE>
<CAPTION>
MUNICIPAL BONDS - 101.9% PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
CONSTRUCTION - 0.3%
BUILDING CONSTRUCTION
IA State Finance Authority,
Mason City Shopping Center:
6.000% 12/01/95................................... $ 40 $ 40
8.000% 12/01/04................................... 50 53
------
93
- --------------------------------------------------------------------------------
EDUCATION - 4.4%
CA State Public Works,
Various Projects, University of
California Series, 1993-B,
5.100% 06/01/04 (a)............................... 500 486
CT State,
Higher Education Supplemental Loan,
Series 1993-A,
5.375% 11/15/03................................... 380 377
TX Brazos Higher Educational
Facilities Authority,
Series 1992-A,
6.600% 03/01/00................................... 360 378
------
1,241
- --------------------------------------------------------------------------------
GENERAL OBLIGATION - 24.3%
AZ Phoenix General Obligation,
6.125% 07/01/03................................... 500 541
DC District Columbia,
General Obligation, Series 1993-D,
4.700% 12/01/99 (a)............................... 500 489
IL Joliet,
General Obligation,
Series 1993-A,
5.300% 01/01/02................................... 65 65
IN Pike Township Industrial School Building,
First Mortgage Bonds, Series 1992-A,
5.500% 02/01/97................................... 45 46
LA New Orleans,
(b) 09/01/16................................... 2,000 1,082
LA State General Obligation,
Series 1993-A,
5.300% 08/01/04................................... 145 147
MA General Obligation Bonds,
Series C,
4.800% 08/01/03................................... 500 491
MA Haverhill,
Series A,
5.900% 06/15/02................................... 200 210
NJ State, General Obligation,
Series D,
(b) 02/15/04................................... 90 58
OH Big Walnut Local School District,
Delaware County, Series 1993,
5.200% 06/01/02 (a)............................... 585 592
OH Olmstead Falls Local School District,
6.850% 12/15/11................................... 550 610
OH State Higher Education Commission,
Series II-B,
5.750% 11/01/04................................... 500 524
OH Trumbull County,
5.100% 12/01/03................................... 500 500
TX State, Series A,
5.800% 10/01/04................................... 1,000 1,064
WI Racine General Obligation,
TIF Number 8,
5.400% 12/01/03................................... 375 373
------
6,792
- --------------------------------------------------------------------------------
HEALTH - 12.3%
HOSPITAL - 11.5%
AL East Health Care Authority,
Health Care Facilities and Tax
Anticipation, Series 1993,
5.625% 09/01/04................................... 50 52
HI State Department Budget and Finance,
Special Purpose Mortgage,
Kapiolani Health Care System, Series 1993,
5.500% 07/01/01................................... 110 111
MA Health and Educational Facilities,
North Shore Medical Center,
Series A,
5.300% 07/01/06................................... 1,000 1,001
MI Dickinson County,
Memorial Hospital System,
7.625% 11/01/05................................... 300 312
MN Brainerd Health Care Facilities,
St. Joseph Medical Center, Series 1993-D,
5.300% 02/15/02................................... 50 51
NJ Health Care Facilities Financing
Authority,
5.800% 07/01/97................................... 100 100
OH Cuyahoga County,
Meridia Health System,
6.300% 08/15/06................................... 890 941
OH Franklin County Hospital,
Riverside United Methodist Hospital,
Series 1993-A,
5.300% 05/15/02................................... 300 301
OH Green Springs Health Care
Facilities, St. Francis Health Care
Center, Series A,
7.000% 05/15/04................................... 100 106
</TABLE>
See notes to investment portfolio.
3
<PAGE>
INVESTMENT PORTFOLIO - CONTINUED
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
HEALTH - CONT.
HOSPITAL - CONT.
PA Philadelphia Hospitals and Higher
Educational Facilities, Temple
University Hospital, Series 1993,
5.750% 11/15/99................................... $ 100 $ 101
TX Health Facilities Development
Corp. Hospital, All Saints
Episcopal Hospitals, Series 1993-A,
5.800% 08/15/04................................... 80 84
TX Tarrant County Health Facilities
Development Corp. Hospital, Fort
Worth Osteopathic Hospital, Series 1993,
5.800% 05/15/04................................... 50 53
------
3,213
------
NURSING HOMES - 0.8%
KY Jefferson County Health Facilities,
Beverly Enterprises, Inc., Series 1985-B,
9.750% 08/01/07................................... 100 111
MA State Industrial Finance Agency,
Belmont Home Care Project,
Series A,
7.970% 01/01/99................................... 100 102
------
213
- --------------------------------------------------------------------------------
HOUSING - 3.7%
MULTI-FAMILY - 2.8%
CT State Housing Finance Authority,
Series 1993-B,
5.200% 05/15/02................................... 75 75
MA State Housing Finance Agency,
Series 1992-C,
6.350% 05/15/03................................... 200 212
MI State Housing Development Authority,
Rental Housing, Series 1992-A,
6.200% 04/01/03................................... 165 172
RI Housing and Mortgage Finance
Corp., Homeownership
Opportunity, Series 6-B:
6.500% 04/01/03................................... 100 106
6.500% 10/01/03................................... 200 212
------
777
------
SINGLE FAMILY - 0.9%
NH State Housing Finance Authority,
Single Family Mortgage, Series 1990-A,
6.850% 07/01/98................................... 165 171
NJ State Housing and Mortgage Finance
Agency,
6.500% 05/01/03................................... 85 91
------
262
- --------------------------------------------------------------------------------
POLLUTION CONTROL REVENUE - 1.8%
IN Bond Bank Special Program,
Series 1993-B,
5.500% 02/01/01................................... 500 496
- --------------------------------------------------------------------------------
PUBLIC FACILITIES IMPROVEMENT - 9.5%
FL Homestead,
Special Insurance Assessment:
4.900% 09/01/00................................... 65 66
5.125% 09/01/02................................... 425 437
KS State Development Authority,
Lease Juvenile Detention Facility
Project, Series 1992-H,
5.750% 06/01/02................................... 60 63
LA State Correctional Facilities,
Corp. Lease Series 1993,
5.400% 12/15/01................................... 65 67
LA Sulphur Public Import Sales and Use
Tax, Series 1993-ST,
5.650% 04/01/04................................... 50 52
MA Bossier City
Public Improvement Sales & Use Tax,
Series ST-1992,
5.750% 11/01/01................................... 100 105
MA State Industrial Finance Agency,
Resource Recovery, Refusetech,
Series 1993-A,
5.350% 07/01/00................................... 100 102
OH State Building Authority,
5.750% 10/01/05................................... 750 787
SC Rock Hill Tax Increment Revenue,
Manchester Redevelopment Project,
Series 1992-B,
5.500% 05/01/03................................... 450 467
VA State Public Building Authority,
5.625% 08/01/02................................... 500 519
------
2,665
- --------------------------------------------------------------------------------
PUBLIC INFRASTRUCTURE - 12.8%
AIRPORT - 4.2%
AZ Tucson Airport Authority Inc.,
Series 1993,
5.300% 06/01/03................................... 425 432
</TABLE>
See notes to investment portfolio.
4
<PAGE>
INVESTMENT PORTFOLIO - CONTINUED
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
PUBLIC INFRASTRUCTURE - CONT.
AIRPORT - CONT.
CO Denver City and County Airport:
Airport System, Series 1992-C,
6.250% 11/15/00................................... $ 50 $ 51
Series D,
(b) 11/15/06................................... 1,000 480
NV Washoe County Airport Authority System,
Series 1993-B,
5.000% 07/01/01................................... 225 226
------
1,189
------
TURNPIKE/TOLL ROAD/BRIDGE - 8.6%
KY State Turnpike Authority, Economic
Development Revitalization Projects,
Series 1992,
5.500% 01/01/01................................... 50 52
KY State Turnpike Authority,
Revitalization Projects,
6.500% 07/01/08................................... 1,000 1,108
NV Clark County Highway,
5.700% 07/01/03 (a)............................... 500 510
NY Triborough Bridge and Tunnel
Authority, Series A,
5.000% 01/01/07................................... 750 726
------
2,396
- --------------------------------------------------------------------------------
REFUND/ESCROW/SPECIAL OBLIGATIONS - 0.4%
NY New York Dormitory Authority,
State University of New York,
Series 1989-B,
7.100% 05/15/01................................... 100 109
- --------------------------------------------------------------------------------
RETAIL TRADE - 0.6%
MISCELLANEOUS RETAIL
OH Lake County,
North Madison Properties,
8.069% 09/01/01................................... 95 96
VA Virginia Beach Development Authority,
SC Diamond Associates, Inc.,
8.000% 12/01/10................................... 75 76
------
172
- --------------------------------------------------------------------------------
SOLID WASTE - 5.4%
LAND FILL - 0.4%
MA State Industrial Finance Agency,
Peabody Monofill Associates, Inc., Project,
9.000% 09/01/05................................... 100 105
------
RESOURCE RECOVERY - 5.0%
MA State Industrial Finance Agency,
Resource Recovery, Refusetech,
Series 1993-A,
5.450% 07/01/01................................... 300 307
NJ Bergen County Utilities Authority,
Series A,
6.250% 06/15/07................................... 1,000 1,090
------
1,397
- --------------------------------------------------------------------------------
STUDENT LOAN - 5.0%
MA New England Educational Loan Marketing
Corp. Student Loan, Series 1985-A,
5.800% 03/01/02................................... 500 520
OH State Student Loan Funding Corp.,
Series A,
5.750% 08/01/03................................... 800 817
SC State Education Assistance Authority,
Student Loan Revenue Bonds, Series 1991,
6.200% 09/01/99................................... 50 52
------
1,389
- --------------------------------------------------------------------------------
TAX ALLOCATION - 1.9%
FL Lake County Resources Industrial
Development, NRG/Recovery Group,
Series 1993-A,
5.400% 10/01/03................................... 500 474
LA Baton Rouge Sales and Use Tax
Series 1992-A,
6.000% 08/01/03................................... 50 53
------
527
- --------------------------------------------------------------------------------
TRANSPORTATION - 1.1%
MA State Port Authority,
Series 1993-B,
5.300% 07/01/04................................... 300 303
- --------------------------------------------------------------------------------
UTILITY - 3.0%
CO-GENERATION - 1.8%
CA Sacramento Cogeneration Authority,
Procter & Gamble Project,
6.500% 07/01/14................................... 500 504
------
JOINT POWER AUTHORITY - 0.7%
NC Municipal Power Agency Number 1
Catawba Revenue Bonds, Series 1993,
4.900% 01/01/03................................... 200 198
------
MUNICIPAL ELECTRIC - 0.5%
WA Grant County Public Utilities
District Number 002
Electric System, Series 1993-E,
5.300% 01/01/03................................... 50 50
WA Snohomish County Washington Public Utilities
Generation System Revenue Bonds,
District Number 001, Series 1993,
5.250% 01/01/02................................... 80 81
------
131
- --------------------------------------------------------------------------------
</TABLE>
See notes to investment portfolio.
5
<PAGE>
INVESTMENT PORTFOLIO - CONTINUED
<TABLE>
<CAPTION>
MUNICIPAL BONDS -CONT. PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
WATER & SEWER - 9.8%
AZ Phoenix Civic Improvement Corp.,
Waste Water Lease, Series 1993,
5.750% 07/01/04................................... $ 50 $ 53
OH Montgomery County,
Greater Moraine-Beavercreek,
5.250% 11/15/06................................... 500 506
PA Center Township Sewer Authority,
Series A,
6.000% 04/15/03................................... 1,035 1,109
TX Houston Water & Sewer System,
Series C,
5.900% 12/01/05................................... 1,000 1,063
-------
2,731
- --------------------------------------------------------------------------------
OTHER - 5.6%
MI Berkley,
City School District,
7.000% 01/01/09 (c)............................... 500 574
MN West St. Paul,
Independent School District No. 197,
(b) 02/01/04................................... 1,585 1,004
-------
1,578
- --------------------------------------------------------------------------------
Total investments (cost $27,827) (d) 28,481
- --------------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS - 2.8%
- --------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES (E)
LA East Baton Rouge,
1.750% 12/01/11 800 800
- --------------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES, NET - (4.7)% (1,322)
- --------------------------------------------------------------------------------
NET ASSETS - 100.0% $27,959
- --------------------------------------------------------------------------------
<FN>
Notes to investment portfolio:
(a) These securities, or a portion thereof, with a total market value of
$1,990, are being used to collateralize delayed delivery purchases
indicated in note (c) below.
(b) Zero coupon bond.
(c) This security has been purchased on a delayed delivery basis, for
settlement at a future date beyond the customary settlement time.
(d) Cost for federal income tax purposes is the same.
(e) Variable rate demand notes are considered short-term obligations. Interest
rates change periodically on specified dates. These securities are payable
on demand and are secured by either letters of credit or other credit
support agreements from banks. The rates listed are as of May 31,1995.
</TABLE>
See notes to financial statements.
6
<PAGE>
CSTTEF INVESTMENT PORTFOLIO (UNAUDITED, IN THOUSANDS) MAY 31, 1995
<TABLE>
<CAPTION>
MUNICIPAL BONDS - 99.8% PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
CERTIFICATES OF PARTICIPATION - 3.4%
CA Los Angeles Unified School District,
Multiple Properties Project,
Series B,
5.000% 12/01/95................................... $400 $ 402
- --------------------------------------------------------------------------------
CONSTRUCTION - 4.6%
BUILDING CONSTRUCTION
IA Economic Development Finance Authority,
Mason City Shopping Center,
6.250% 12/01/96................................... 50 51
CT State,
Series B,
4.100% 09/15/97................................... 500 497
------
548
- --------------------------------------------------------------------------------
EDUCATION - 5.6%
FL Brevard County
Educational Facilities,
Florida Institute of Technology Series 1992,
5.750% 11/01/95................................... 45 45
OH State Public Facilities Commission,
Higher Education Facilities, Series II-A,
5.200% 05/01/97................................... 415 420
PA State University Project,
Series A,
5.500% 12/21/95................................... 200 202
------
667
- --------------------------------------------------------------------------------
GENERAL OBLIGATIONS - 53.8%
AK North Slope Boro General Obligation
Series 1990,
6.550% 06/30/95................................... 55 55
CT State:
Series A,
5.500% 06/15/96................................... 400 406
Series 1993-B,
3.500% 09/15/95................................... 95 95
DC District of Columbia
General Obligation Series 1993-A,
4.000% 06/01/95................................... 200 200
IL Cook County High School District 225,
Northfield Township,
5.200% 12/01/97................................... 450 460
IN Clay School Building Corporation,
First Mortgage Series 1993,
4.000% 07/01/95................................... 60 60
LA State General Obligation,
Series 1993-A,
3.750% 08/01/95................................... 125 125
MI Keansburg New Jersey School District,
5.800% 01/15/96................................... 45 45
MN Bloomington,
4.650% 12/01/97................................... 500 503
NM Albuquerque, Series A,
4.600% 07/01/97................................... 500 503
OH Olmstead Falls Local School District,
5.000% 12/15/97................................... 225 227
OH Trumbull County,
4.600% 12/01/97................................... 500 503
OR Salem, General Obligation,
Water and Sewer, Series 1993-B,
3.300% 11/01/96................................... 400 395
PA General Obligation, Series Second,
4.700% 07/01/96................................... 300 302
PA Pleasant Valley School District,
General Obligations, Series 1992-A,
4.350% 09/01/95................................... 60 60
RI Newport General Obligation
Series 1993-B,
3.600% 05/15/96................................... 500 497
TX State Public Finance Authority,
Series A,
5.000% 10/01/97................................... 500 508
UT Washington County,
St. George School District,
6.250% 09/01/97................................... 490 510
VA Richmond,
5.250% 01/15/97................................... 500 506
WA Everett
Ltd., Tax Levy General Obligation
Series 1993,
3.800% 12/01/95................................... 65 65
WI State General Obligation Bonds
Series 1994-B,
4.500% 05/01/97................................... 400 400
------
6,425
- --------------------------------------------------------------------------------
HEALTH - 7.1%
HOSPITAL - 6.8%
AL Lauderdale County & Florence Public
Hospital Board of Education, Elizabeth
Coffee Memorial Hospital Series 1991-A,
5.800% 07/01/95................................... 65 65
IL Health Facilities Authority
Hinsdale Hospital, Series 1993-A,
5.000% 11/15/95................................... 50 50
OH Cuyahoga County,
Meridia Health System,
5.450% 08/15/97................................... 540 548
SC Richland County Hospital Facilities
Richland Memorial Hospital,
Series 1993-A,
3.900% 06/01/96................................... 150 150
------
813
------
</TABLE>
See notes to investment portfolio.
7
<PAGE>
INVESTMENT PORTFOLIO - CONTINUED
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
HEALTH - CONT.
NURSING HOMES - 0.3%
MA State Industrial Finance Agency,
Belmont Home Care Project,
Series A,
7.570% 01/01/97................................... $ 35 $ 35
- --------------------------------------------------------------------------------
POLLUTION CONTROL REVENUE - 5.4%
MO State Environmental Improvement and
Energy Resources Authority,
Series A,
5.400% 07/01/97................................... 530 541
OH Air Quality Development Authority,
4.250% 08/01/96................................... 100 100
-------
641
- --------------------------------------------------------------------------------
PUBLIC FACILITIES IMPROVEMENT - 3.2%
FL Homestead,
Special Insurance Assesment,
3.850% 09/01/95................................... 50 50
LA State Correctional Facilities
Corporation Lease, Series 1993,
4.100% 12/15/95................................... 60 60
ME Municipal Series 1990-A&B,
6.500% 11/01/95................................... 270 273
-------
383
- --------------------------------------------------------------------------------
PUBLIC INFRASTRUCTURE - 2.9%
AIRPORT - 1.7%
FL Dade County Aviation
Miami International Airport
Series 1993-Y,
3.700% 10/01/95................................... 200 200
-------
TURNPIKE/TOLL ROAD/BRIDGE - 1.2%
AZ Phoenix Street and Highway User,
Junior Lien Street, Series 1992,
5.450% 07/01/96................................... 140 142
- --------------------------------------------------------------------------------
TRANSPORTATION - 0.5%
CA Riverside County Transportation
Sales Tax Revenue, Series 1993-A,
4.100% 06/01/95................................... 60 60
- --------------------------------------------------------------------------------
UTILITY - 4.1%
JOINT POWER AUTHORITY - 0.8%
WA State Public Power Supply System
Nuclear Project Number 1,
Series 1993-A,
4.200% 07/01/96................................... 100 99
-------
MUNICIPAL ELECTRIC - 3.3%
NE Public Power Distribution Formerly
Consumers, Power Supply System,
Series 1993-C,
3.700% 01/01/97................................... 400 396
- --------------------------------------------------------------------------------
WATER & SEWER - 9.2%
OH Clyde Waterworks,
5.600% 05/01/97................................... 580 593
TX Water Development Board,
Senior Lien,
4.900% 07/15/97................................... 500 505
-------
1,098
- --------------------------------------------------------------------------------
Total investments (cost $11,861)(a) 11,909
- --------------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES, NET - 0.2% 18
- --------------------------------------------------------------------------------
NET ASSETS - 100.0% $11,927
- --------------------------------------------------------------------------------
<FN>
Note to investment portfolio:
(a) Cost for federal income tax purposes is the same.
</TABLE>
See notes to financial statements.
8
<PAGE>
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
STATEMENT OF ASSETS & LIABILITIES (UNAUDITED)
May 31, 1995
(in thousands except for per share amounts and footnotes)
- -------------------------------------------------------------------------------------------------
Colonial Colonial
Intermediate Short-Term
Tax-Exempt Tax-Exempt
Fund Fund
------------ ----------
<S> <C> <C>
ASSETS
Investments at cost.............................................. $27,827 $11,861
Unrealized appreciation.......................................... 654 48
------- -------
Investments at value............................................. 28,481 11,909
Short-term obligations .......................................... 800 --
Cash............................................................. 42 --
Receivable for:
Interest...................................................... 422 166
Fund shares sold.............................................. 5 --
Variation margin on futures................................... 1 --
Expense reimbursement due from adviser........................... 13 4
Deferred organization expenses................................... 40 24
Other............................................................ --- 2
------- -------
Total assets............................................ 29,804 12,105
------- -------
LIABILITIES
Payable for:
Investments purchased......................................... 1,569 --
Fund shares repurchased....................................... 151 --
Distributions................................................. 114 40
Payable to custodian bank........................................ --- 137
Accrued:
Deferred Trustees fees........................................ 1 1
Other......................................................... 10 --
------- -------
Total liabilities....................................... 1,845 178
======= =======
Net assets....................................................... $27,959 $11,927
------- -------
Net assets - Class A............................................. $13,127 $11,927
======= =======
Net assets - Class B............................................. $14,832 N/A
======= =======
Shares of beneficial interest outstanding - Class A.............. 1,713 1,589
======= =======
Shares of beneficial interest outstanding - Class B.............. 1,935 N/A
======= =======
Net asset value & redemption price per share - Class A........... $ 7.66 $7.51
======= =======
Maximum offering price per share - Class A
($7.66/0.9675 and $7.51/0.9900, respectively).................... $ 7.92* $ 7.59**
======= =======
Net asset value & offering price
per share - Class B ........................................... $ 7.66 N/A
======= =======
COMPOSITION OF NET ASSETS
Capital paid in............................................... $28,278 $11,973
Undistributed net investment income........................... 39 27
Accumulated net realized loss................................. (1,012) (121)
Net unrealized appreciation................................... 654 48
------- -------
$27,959 $11,927
======= =======
<FN>
* On sales of $100,000 or more the offering price is reduced.
** On sales of $1,000,000 or more the offering price is reduced.
</TABLE>
See notes to financial statements.
9
<PAGE>
FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS (UNAUDITED)
Six months ended May 31, 1995
(in thousands)
- -------------------------------------------------------------------------------------------------
Colonial Colonial
Intermediate Short-Term
Tax-Exempt Tax-Exempt
Fund Fund
------------ ----------
<S> <C> <C>
INVESTMENT INCOME
Interest......................................................... $ 789 $ 245
------- ------
EXPENSES
Management fee................................................... 79 31
Service fee...................................................... 28 6
Distribution fee - Class B....................................... 47 --
Transfer agent................................................... 27 9
Bookkeeping fee.................................................. 14 14
Trustees fees.................................................... 5 6
Custodian fee.................................................... 2 (a)
Audit fee........................................................ 6 5
Legal fee........................................................ 3 3
Registration fees................................................ 15 4
Reports to shareholders.......................................... 3 2
Amortization of deferred organization expenses................... 8 5
Other............................................................ 3 3
-------- ------
240 88
Fees and expenses waived or borne by the adviser................. (165) (58)
-------- ------
75 30
-------- ------
Net investment income.................................. 714 215
-------- ------
NET REALIZED & UNREALIZED GAIN (LOSS)
ON PORTFOLIO POSITIONS
Net realized loss on:
Investments.................................................... (445) (95)
Closed futures contracts....................................... (300) --
-------- ------
Net realized loss........................................ (745) (95)
Net unrealized appreciation (depreciation) during the -------- ------
period on:
Investments.................................................... 2,555 231
Open futures contracts......................................... (37) --
-------- ------
Net unrealized appreciation.............................. 2,518 231
-------- ------
Net gain............................................... 1,773 136
-------- ------
Net increase in net assets from
operations..................................................... $ 2,487 $ 351
======== ======
<FN>
(a) Rounds to less than one.
</TABLE>
See notes to financial statements.
10
<PAGE>
FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
(in thousands)
- --------------------------------------------------------------------------------------------------------------------------------
Colonial Intermediate Colonial Short-Term
Tax-Exempt Fund Tax-Exempt Fund
----------------------------- -----------------------------
(unaudited) (unaudited)
Six months Year Six months Year
ended ended ended ended
May 31 November 30 May 31 November 30
----------- ----------- ----------- -----------
1995 1994 1995 1994
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income.................................. $ 714 $ 1,353 $ 215 $ 375
Net realized loss...................................... (745) (266) (95) (20)
Net unrealized appreciation (depreciation)............. 2,518 (2,168) 231 (190)
-------- -------- -------- --------
Net increase (decrease) from operations............ 2,487 (1,081) 351 165
Distributions
From net investment income - Class A..................... (380) (818) (217) (372)
From net investment income - Class B................... (335) (543)
-------- -------- -------- --------
1,772 (2,442) 134 (207)
Fund share transactions
Receipts for shares sold - Class A..................... 2,858 6,586 1,616 29,830
Value of distributions reinvested - Class A............ 262 578 177 295
Cost of shares repurchased - Class A................... (7,676) (3,713) (3,763) (21,116)
-------- -------- -------- --------
(4,556) 3,451 (1,970) 9,009
-------- -------- -------- --------
Receipts for shares sold - Class B..................... 1,215 7,656
Value of distributions reinvested - Class B............ 221 338
Cost of shares repurchased - Class B................... (1,622) (2,170)
-------- -------- -------- --------
(186) 5,824
-------- -------- -------- --------
Net increase (decrease) from Fund share
transactions..................................... (4,742) 9,275 (1,970) 9,009
-------- -------- -------- --------
Total increase (decrease)....................... (2,970) 6,833 (1,836) 8,802
NET ASSETS
Beginning of period.................................... 30,929 24,096 13,763 4,961
-------- -------- -------- --------
End of period.......................................... $ 27,959 $ 30,929 $ 11,927 $ 13,763
======== ========= ======== ========
Undistributed net investment income at end of period..... $ 39 $ 33 $ 27 $ 24
======== ========= ======== ========
NUMBER OF FUND SHARES
Sold - Class A......................................... 387 862 216 3,954
Issued for distributions reinvested - Class A.......... 35 76 24 39
Repurchased - Class A.................................. (1,038) (492) (505) (2,798)
-------- -------- -------- --------
(616) 446 (265) 1,195
-------- -------- -------- --------
Sold - Class B......................................... 163 1,004
Issued for distributions reinvested - Class B.......... 30 45
Repurchased - Class B.................................. (219) (291)
-------- -------- -------- --------
(26) 758
-------- -------- -------- --------
Net increase (decrease) in shares outstanding...... (642) 1,204 (265) 1,195
-------- -------- -------- --------
Outstanding at
Beginning of period................................. 4,290 3,086 1,854 659
-------- -------- -------- --------
End of period....................................... 3,648 4,290 1,589 1,854
======== ======== ======== ========
</TABLE>
See notes to financial statements.
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 1. INTERIM FINANCIAL STATEMENTS
In the opinion of management of Colonial Intermediate Tax-Exempt Fund
(CITEF) and Colonial Short-Term Tax-Exempt Fund (CSTTEF)(the Funds), each a
series of Colonial Trust IV, the accompanying financial statements contain all
normal and recurring adjustments necessary for the fair presentation of the
financial position of the Funds at May 31, 1995, and the results of their
operations, the changes in their net assets and the financial highlights for the
six months then ended.
- --------------------------------------------------------------------------------
NOTE 2. ACCOUNTING POLICIES
The Funds are Massachusetts business trusts, registered under the
Investment Company Act of 1940, as amended, as diversified, open-end, management
investment companies. The Funds may issue an unlimited number of shares. CITEF
offers Class A shares sold with a front-end sales charge and Class B shares
which 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. CSTTEF offers Class A shares with a
front-end sales charge. The following significant accounting policies are
consistently followed by the Funds in the preparation of their financial
statements and conform to generally accepted accounting principles.
- --------------------------------------------------------------------------------
SECURITY VALUATION AND TRANSACTIONS
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.
Futures contracts are valued based on the difference between the last sale
price and the opening price of the contract.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
Portfolio positions which cannot be valued as set forth above are valued at
fair value under procedures approved by the Trustees.
Security transactions are accounted for on the date the securities are
purchased or sold.
Cost is determined and gains and losses are based upon the specific
identification method for both financial statement and federal income tax
purposes.
The Funds may trade securities on other than normal settlement terms. This
may increase the risk if the other party to the transaction fails to deliver and
causes the Funds to subsequently invest at less advantageous prices.
- --------------------------------------------------------------------------------
DETERMINATION OF CLASS NET ASSET VALUES AND FINANCIAL HIGHLIGHTS
For CITEF, all income, expenses (other than the Class B distribution fee),
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.
Class B per share data and ratios are calculated by adjusting the expense
and net investment income per share data and ratios for the entire period by the
distribution fee applicable to Class B shares only.
- --------------------------------------------------------------------------------
FEDERAL INCOME TAXES
Consistent with each Fund's policy to qualify as a regulated investment
company and to distribute all of its taxable and tax-exempt income, no federal
income tax has been accrued.
- --------------------------------------------------------------------------------
DEFERRED ORGANIZATION EXPENSES
CITEF and CSTTEF incurred $75,021 and $45,089 of expenses, respectively, in
connection with their organization, initial registration with the Securities and
Exchange Commission and with various states, and the initial public offering of
their shares. These expenses were deferred and are being amortized on a
straight-line basis over five years.
- --------------------------------------------------------------------------------
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; market
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS--CONTINUED
- --------------------------------------------------------------------------------
discount is not accreted. Premium is amortized against interest income with a
corresponding decrease in the cost basis.
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
The Funds declare and record distributions daily and pay monthly.
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.
- --------------------------------------------------------------------------------
NOTE 3. FEES AND COMPENSATION PAID TO AFFILIATES
MANAGEMENT FEE
Colonial Management Associates, Inc. (the Adviser) is the investment
adviser of the Funds and furnishes accounting and other services and office
facilities for a monthly fee based on the average net assets of each Fund as
follows:
<TABLE>
<CAPTION> Annual
Fund Percentage
---- ----------
<S> <C>
Colonial Intermediate Tax-Exempt Fund........... 0.55%
Colonial Short-Term Tax-Exempt Fund............ 0.55%
</TABLE>
- --------------------------------------------------------------------------------
BOOKKEEPING FEE
The Adviser provides bookkeeping and pricing services for $27,000 per year,
per Fund, plus 0.035% of each Fund's average net assets over $50 million.
- --------------------------------------------------------------------------------
TRANSFER AGENT
Colonial Investors Service Center, Inc. (the Transfer Agent), an affiliate
of the Adviser, provides shareholder services for a monthly fee equal to 0.14%
annually of each Fund's average net assets, and receives a reimbursement for
certain out of pocket expenses.
- --------------------------------------------------------------------------------
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES
The Adviser, through Colonial Investment Services, Inc. (the Distributor),
is each Fund's principal underwriter. During the six months ended May 31, 1995,
the Distributor retained net underwriting discounts on CITEF and CSTTEF of
$2,157 and $367, respectively. The Distributor received contingent deferred
sales charges (CDSC) of $19,879 on CITEF's Class B share redemptions.
CITEF and CSTTEF have adopted a 12b-1 plan which requires each to pay the
Distributor a service fee equal to 0.20% and 0.10%, respectively, annually of
each Fund's net assets as of the 20th of each month. CITEF's plan also re
quires the payment of a distribution fee to the Distributor equal to 0.65% of
the average net assets attributable to Class B 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.
- --------------------------------------------------------------------------------
EXPENSE LIMITS
The Adviser has agreed to reimburse CITEF for all expenses and has agreed
to waive fees and bear certain CSTTEF expenses to the extent that total expenses
exceed 0.40% annually of CSTTEF's average net assets, until further notice. Both
Funds' expense limit is exclusive of service fees, distribution fees, brokerage
commissions, interest, taxes and extraordinary expenses, if any.
- --------------------------------------------------------------------------------
OTHER
The Funds pay no compensation to their officers, all of whom are employees
of the Adviser.
Each 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 each Fund's assets.
- --------------------------------------------------------------------------------
NOTE 4. PORTFOLIO INFORMATION
During the six months ended May 31, 1995, purchases and sales of
investments, other than short-term obligations, were as follows:
<TABLE>
<CAPTION>
Purchases Sales
--------- -----
<S> <C> <C>
Colonial Intermediate
Tax-Exempt Fund............... $11,368,293 $ 13,600,926
----------- ------------
Colonial Short-Term
Tax-Exempt Fund............... $ 9,314,614 $10,162,767
----------- -----------
</TABLE>
13
<PAGE>
NOTES TO FINANCIAL STATEMENTS--CONTINUED
- --------------------------------------------------------------------------------
Unrealized appreciation (depreciation) at May 31, 1995, based on cost of
investments for both financial statement and federal income tax purposes were as
follows:
<TABLE>
<CAPTION>
Colonial Colonial
Intermediate Short-Term
Tax-Exempt Tax-Exempt
Fund Fund
------------ ----------
<S> <C> <C>
Gross unrealized
appreciation............. $ 722,128 $ 67,739
Gross unrealized
depreciation............. (68,578) (19,571)
---------- ---------
Net unrealized
appreciation........ $ 653,550 $ 48,168
========== =========
</TABLE>
- --------------------------------------------------------------------------------
CAPITAL LOSS CARRYFORWARDS
At November 30, 1994, capital loss carryforwards available (to the extent
provided in regulations) to offset future realized gains were approximately as
follows:
Colonial Intermediate Tax-Exempt Fund:
<TABLE>
<CAPTION>
YEAR OF CAPITAL LOSS
EXPIRATION CARRYFORWARD
---------- ------------
<S> <C>
2002................ $151,000
========
Colonial Short Term Tax-Exempt Fund:
YEAR OF CAPITAL LOSS
EXPIRATION CARRYFORWARD
2001................ $ 1,000
2002................ 1,000
---------
$ 2,000
=========
</TABLE>
Expired capital loss carryforwards, if any, are recorded as a reduction of
capital paid in.
To the extent loss carryforwards are used to offset any future realized
gains, it is unlikely that such gains would be distributed since they may be
taxable to shareholders as ordinary income.
- --------------------------------------------------------------------------------
OTHER
At May 31, 1995, CITEF had greater than 10% of its net assets invested in
Massachusetts and Ohio. CSTTEF had greater than 10% of its net assets invested
in Ohio.
There are certain risks arising from geographic concentration in any
state. Certain revenue or tax related events in a state may impair the ability
of certain issuers of municipal securities to pay principal and interest on
their obligations.
The Funds may focus their investments in certain industries, subjecting
them to greater risk than a fund that is more diversified.
The Fund sells municipal and Treasury bond futures contracts to manage
overall portfolio interest rate exposure and not for trading purposes. The use
of futures contracts involves certain risks, which include (1) imperfect
correlation between the price movement of the contracts and the underlying
securities, (2) inability to close out positions due to different trading
hours, or the temporary absence of a liquid market, for either the contract
or the underlying securities, or (3) an inaccurate prediction by the Adviser
of the future direction of interest rates. Any of these risks may involve
amounts exceeding the initial or variation margin recorded in the Fund's
Statement of Assets and Liabilities at any given time.
- --------------------------------------------------------------------------------
NOTE 5. OTHER RELATED PARTY TRANSACTIONS
At May 31, 1995, CITEF and CSTTEF each had one shareholder who owned
greater than 5% of the Funds' shares outstanding.
- --------------------------------------------------------------------------------
NOTE 6. RESULTS OF SPECIAL SHAREHOLDERS MEETING
On February 15, 1995, a special meeting of shareholders was held and a new
Management Agreement between the Trust and Colonial Management Associates, Inc.
was approved that became effective upon the completion of the merger of The
Colonial Group, Inc. and Apple Merger Corporation, a subsidiary of Liberty
Financial Companies, Inc. on March 24, 1995. Out of the shares of beneficial
interest outstanding on December 9, 1994 for CITEF and CSTTEF, 3,162,701 and
1,504,615, respectively,
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- --------------------------------------------------------------------------------
voted for the new Management Agreement, 65,191 and 9,839, respectively, voted
against and 76,452 and 10,670, respectively, abstained. Of the shares of
beneficial interest outstanding that abstained, 6,932 and none, respectively,
represented broker non-votes.
15
<PAGE>
Financial Highlights
Selected data for a share of each class outstanding throughout each period are
as follows:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COLONIAL INTERMEDIATE TAX-EXEMPT FUND
----------------------------------------------------------------------------
(UNAUDITED)
SIX MONTHS
ENDED YEAR ENDED PERIOD ENDED
MAY 31 NOVEMBER 30 NOVEMBER 30
1995 1994 1993 (b)
----------------------------------------------------------------------------
Class A Class B Class A Class B Class A Class B
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value - Beginning of period.............. $ 7.210 $ 7.210 $ 7.810 $ 7.810 $ 7.500 $ 7.500
------- ------- ------- ------- ------- -------
Income (loss) from investment operations:
Net investment income(a)....................... 0.198 0.174 0.366 0.317 0.305 0.263
Net realized and
unrealized gain (loss) on investments......... 0.449 0.449 (0.596) (0.596) 0.302 0.302
------- ------- ------- ------- ------- -------
Total from investment operations...... 0.647 0.623 (0.230) (0.279) 0.607 0.565
------- ------- ------- ------- ------- -------
Less distributions declared to shareholders:
From net investment income..................... (0.197) (0.173) (0.370) (0.321) (0.297) (0.255)
------- ------- ------- ------- ------- -------
Net asset value - End of period.................... $ 7.660 $ 7.660 $ 7.210 $ 7.210 $ 7.810 $ 7.810
======= ======= ======= ======= ======= =======
Total return(c)(d)................................ 9.07%(e) 8.72%(e) (3.05)% (3.68)% 8.18%(e) 7.61%(e)
======= ======= ======= ======= ======= =======
Ratios to average net assets:
Expenses....................................... 0.20%(f) 0.85%(f) 0.20% 0.85% 0.20%(f) 0.85%(f)
Fees and expenses waived or
borne by the adviser......................... 1.15%(f) 1.15%(f) 1.07% 1.07% 1.33%(f) 1.33%(f)
Net investment income.......................... 5.28%(f) 4.63%(f) 4.85% 4.20% 4.53%(f) 3.88%(f)
Portfolio turnover................................. 82%(f) 82%(f) 26% 26% 5%(f) 5%(f)
Net assets at end of period (000).................. $13,127 $14,832 $16,791 $14,138 $14,700 $ 9,396
<FN>
(a) Net of fees and expenses waived or borne by
the adviser which amounted to............... $ 0.043 $ 0.043 $ 0.081 $ 0.080 $ 0.090 $ 0.090
(b) The Fund commenced investment operations on February 1, 1993.
(c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or CDSC.
(d) Had the adviser not waived or reimbursed a portion of expenses, total return would have been reduced.
(e) Not annualized.
(f) Annualized.
</TABLE>
16
<PAGE>
FINANCIAL HIGHLIGHTS
Selected data for a share of each class outstanding throughout each period are
as follows:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COLONIAL SHORT-TERM TAX EXEMPT FUND
----------------------------------------------
(UNAUDITED)
SIX MONTHS
ENDED YEAR ENDED PERIOD ENDED
MAY 31 NOVEMBER 30 NOVEMBER 30
-------- ----------- -----------
1995 1994 1993(b)
-------- ----------- -----------
CLASS A CLASS A CLASS A
-------- ----------- -----------
<S> <C> <C> <C>
Net asset value - Beginning of period...................... $ 7.420 $ 7.530 $ 7.500
-------- ----------- -----------
Income from investment operations:
Net investment income(a)................................. 0.135 0.215 0.196
Net realized and unrealized gain (loss) on investments... 0.089 (0.105) 0.012
-------- -------- -----------
Total from investment operations......................... 0.224 0.110 0.208
-------- -------- -----------
Less distributions declared to shareholders:
From net investment income............................... (0.134) (0.220) (0.178)
========= ======== ===========
Net asset value - End of period............................ $ 7.510 $ 7.420 $ 7.530
========= ======== ===========
Total return(c)(d)......................................... 3.04% (e) 1.48% 2.80%
========= ======== ===========
Ratios to average net assets:
Expenses................................................. 0.50% (f) 0.50% 0.50%
Fees and expenses waived or borne by the adviser......... 0.96% (f) 0.85% 1.92%
Net investment income.................................... 3.53% (f) 2.97% 2.85%
Portfolio turnover......................................... 170% (f) 16% 22%
Net assets at end of period (000).......................... $ 11,927 $ 13,763 $ 4,961
(a) Net of fees and expenses waived or borne
by the adviser which amounted to..................... $ 0.037 $ 0.063 $ 0.132
<FN>
(b) The Fund commenced investment operations on February 1, 1993.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge.
(d) Had the adviser not waived or reimbursed a portion of expenses, total
return would have been reduced.
(e) Not annualized.
(f) Annualized.
</TABLE>
17
<PAGE>
TRUSTEES
- -------------------------------------------------------------------------------
ROBERT J. BIRNBAUM
Trustee (formerly Special Counsel, Dechert, Price & Rhoads; President and Chief
Operating Officer, New York Stock Exchange, Inc.)
TOM BLEASDALE
Trustee (formerly Chairman of the Board and Chief Executive Officer, Shore Bank
& Trust Company)
LORA S. COLLINS
Attorney, Kramer, Levin, Naftalis, Nessen, Kamin & Frankel
JAMES E. GRINNELL
Private Investor (formerly Senior Vice President-Operations, The Rockport
Company)
WILLIAM D. IRELAND, JR.
Trustee (formerly Chairman of the Board, Bank of New England-Worcester)
RICHARD W. LOWRY
Private Investor (formerly Chairman and Chief Executive Officer, U.S. Plywood
Corporation)
WILLIAM E. MAYER
Dean, College of Business and Management, University of Maryland (formerly Dean,
Simon Graduate School of Business, University of Rochester; Chairman and Chief
Executive Officer, C.S. First Boston Merchant Bank; and President and Chief
Executive Officer, The First Boston Corporation)
JOHN A. MCNEICE, JR.
Chairman of the Board and Director, The Colonial Group, Inc. and Colonial
Management Associates, Inc. (formerly Chief Executive Officer, The Colonial
Group, Inc. and Colonial Management Associates, Inc.)
JAMES L. MOODY, JR.
Chairman of the Board, Hannaford Bros. Co. (formerly Chief Executive Officer,
Hannaford Bros. Co.)
JOHN J. NEUHAUSER
Dean, Boston College School of Management
GEORGE L. SHINN
Financial Consultant (formerly Chairman, Chief Executive Officer and Consultant,
The First Boston Corporation)
ROBERT L. SULLIVAN
Management Consultant (formerly Management Consultant, Saatchi and Saatchi
Consulting Ltd. and Principal and International Practice Director, Management
Consulting, Peat Marwick Main & Co.)
SINCLAIR WEEKS, JR.
Chairman of the Board, Reed & Barton Corporation
18
<PAGE>
[PICTURE OF CAPITOL BUILDING]
===============================================================================
ABOUT OUR COVER...
The symbol on the cover of this Report represents each Fund's primary investment
focus on municipal bonds.
===============================================================================
Colonial Intermediate Tax-Exempt Fund & Colonial Short-Term Tax-Exempt Fund mail
one shareholder report to each shareholder address. If you would like more than
one report, please call our Literature Department at 1-800-248-2828 and
additional reports will be sent to you.
SHAREHOLDER SERVICES AND TRANSFER AGENT
Colonial Investors Service Center, Inc.
P.O. Box 1722
Boston, MA 02105-1722
1-800-345-6611
This material may be used with potential investors if it is preceded or
accompanied by a current Fund prospectus containing more complete information
including fees, risks, and expenses.
19
<PAGE>
[COLONIAL MUTUAL FUNDS LOGO]
Printed on recycled paper.
IS-03/-058B-0595
COLONIAL INVESTMENT SERVICES, INC. (C)1995
[COLONIAL MUTUAL FUNDS LOGO]
[PICTURE OF CAPITAL BUILDING]
COLONIAL INTERMEDIATE
TAX-EXEMPT FUND
COLONIAL SHORT-TERM
TAX-EXEMPT FUND
================================================================================
SEMIANNUAL REPORT
MAY 31, 1995
