<PAGE>
LETTER FROM THE PRESIDENT
Dear Shareholder:
I am pleased to present Colonial Tax-Exempt Fund's semiannual report for
the six months ended May 31, 1995. During this period, your Fund provided
investors with tax-exempt income and competitive total return.
<TABLE>
FUND PERFORMANCE (12/1/94 - 5/31/95)[1]
<CAPTION>
CLASS A CLASS B
INCEPTION 9/30/84 5/5/92
- ---------------------------------------------------------------
<S> <C> <C>
Distributions declared per share $0.383 $0.335
- ---------------------------------------------------------------
SEC yield on 5/31/95[2] 5.26% 4.77%
- ---------------------------------------------------------------
Taxable-equivalent yield
on 5/31/95[3] 8.71% 7.90%
- ---------------------------------------------------------------
Six-month total return, based
on net asset value, assuming
reinvestment of all
distributions[4] 14.05% 13.63%
- ---------------------------------------------------------------
Net asset value per share
at 5/31/95 $13.49 $13.49
</TABLE>
<TABLE>
- ---------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 5/31/954
<CAPTION>
CLASS A CLASS B
NAV MOP NAV W/CDSC
<S> <C> <C> <C> <C>
1 year 8.86% 3.69% 8.05% 3.05%
5 years 7.86% 6.82% -- --
10 years 8.49% 7.96% -- --
Since inception 9.36% 8.87% 6.23% 5.36%
- ---------------------------------------------------------------
</TABLE>
ECONOMIC/MARKET OVERVIEW
Municipal bond investors benefited from favorable bond market conditions
during the six months ended May 31, 1995. In response to indications that the
economy was slowing to a more sustainable pace, the Federal Reserve Board raised
rates only one time during the period in an effort to moderate growth and keep
inflation under control. This represented a significant change in monetary
policy compared to 1994 when rates rose six times. Municipal bonds responded
positively to these developments. Yields declined and prices rose, erasing the
negative returns of the previous six months.
The market events of the past year, including a favorable supply/demand
dynamic, provide a textbook example of the value of maintaining a long-term
outlook on investing. Investors who were able to stay the course in the face of
difficult market conditions reaped their rewards when conditions improved.
Colonial management continues to position Colonial Tax-Exempt Fund to take
advantage of the market.
[PICTURE]
John A. McNeice, Jr.
President
INVESTMENT STRATEGY
The Fund remained fully invested in a broadly diversified portfolio. On
May 31, the Fund held 623 individual issues representing more than 16 public
sectors. The largest holdings were electric (14.1%), housing (12.1%),
water/sewer (9.6%), and hospital (8.8%). The Fund continued to use a "barbell"
credit strategy to take advantage of higher returns available from good quality
non-rated bonds. About 17% of the Fund's holdings were invested in non-rated
issues, and this position was balanced with bonds of the highest quality --
rated AAA (about 42% of the portfolio) to enhance Fund stability.
Colonial Tax-Exempt Fund has continued to provide investors with
attractive tax-free income and price appreciation. For further information
about this or any other Colonial fund, please contact your full-service
financial adviser or call Colonial at 1-800-426-3750.
Respectfully,
/s/ John A. McNeice, Jr.
John A. McNeice, Jr.
President
July 10, 1995
[1]A portion of the Fund's income may be subject to the alternative minimum tax.
[2]SEC yield reflects the portfolio's earning power, net of expenses, and does
not include changes in Fund price.
[3]Based on the 39.6% federal income tax rate.
[4]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) return does not
include sales charges or contingent deferred sales charges (CDSC). Maximum
offering price (MOP) return includes the maximum sales charge of 4.75%. The CDSC
return reflects the applicable charge of 5.00% for one year and 3.00% since
inception. Performance for different share classes will vary based on
differences in sales charges and fees associated with each class.
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO (UNAUDITED, IN THOUSANDS) MAY 31, 1995
<CAPTION>
MUNICIPAL BONDS - 97.5% PAR VALUE
- -----------------------------------------------------------------------
<S> <C> <C>
CERTIFICATES OF PARTICIPATION - 0.0%
MA Health and Educational Facilities,
Independent Living Bonds,
Series 1993-A,
8.100% 07/01/18. . . . . . . . . . $ 1,300 $ 1,300
- -----------------------------------------------------------------------
EDUCATION - 6.7%
AL State University Revenue,
Auburn University,
7.000% 06/01/11. . . . . . . . . . 1,000 1,084
AZ State University,
6.625% 06/01/09. . . . . . . . . . 1,000 1,076
FL State Board of Education,
Series 1993 D,
5.125% 06/01/22. . . . . . . . . . 14,500 13,159
IL Chicago Board Education,
General Obligation Lease Certificates,
Series 1992-A,
6.250% 01/01/15. . . . . . . . . . 4,400 4,631
IL State Educational Facilities Authority,
Northwestern University,
5.375% 12/01/21. . . . . . . . . . 6,500 6,094
IN Purdue University, Student Fee,
Series B,
6.700% 07/01/15. . . . . . . . . . 1,100 1,194
IN State University, Student Fee,
7.000% 08/01/09. . . . . . . . . . 2,680 2,868
LA State Public Facility Authority,
Tulane University,
6.625% 11/15/21. . . . . . . . . . 2,000 2,110
MA Health and Educational Facilities Authority:
Amherst College, Series E,
6.750% 11/01/15. . . . . . . . . . 1,000 1,064
Hillcrest Hospital,
13.000% 07/01/18. . . . . . . . . . 2,800 2,884
MA State College Building Authority Project,
7.500% 05/01/11. . . . . . . . . . 1,500 1,796
NY State Dormitory Authority:
City University System, Series 1990-C:
7.000% 07/01/14. . . . . . . . . . 2,050 2,234
7.500% 07/01/10. . . . . . . . . . 13,000 15,145
Cornell University,
6.875% 07/01/14. . . . . . . . . . 1,355 1,399
State University of New York:
6.000% 07/01/20. . . . . . . . . . 21,850 21,713
Series A,
5.875% 05/15/17. . . . . . . . . . 22,000 21,532
Series B,
5.750% 05/15/24. . . . . . . . . . 12,000 11,415
Series C,
5.400% 05/15/23. . . . . . . . . . 20,625 18,666
Series 1990-A,
7.500% 05/15/13. . . . . . . . . . 8,000 9,420
Series 1990-B,
7.000% 05/15/16. . . . . . . . . . 1,000 1,062
Series 1991-A,
9.500% 04/15/14. . . . . . . . . . 9,000 10,541
Series 1993-A:
5.500% 05/15/08. . . . . . . . . . 6,000 5,835
5.500% 05/15/13. . . . . . . . . . 33,805 32,115
5.625% 05/15/13. . . . . . . . . . 8,000 7,620
5.750% 07/01/13. . . . . . . . . . 5,000 4,856
6.000% 07/01/20. . . . . . . . . . 6,140 6,317
Series 1993-B,
5.250% 05/15/19. . . . . . . . . . 12,230 10,992
Series 1994-A,
5.625% 07/01/14. . . . . . . . . . 11,500 10,954
OH Cincinnati Student Loan, Series A,
5.500% 12/01/01. . . . . . . . . . 2,500 2,528
PA State University,
5.500% 08/15/16. . . . . . . . . . 15,145 14,520
--------
246,824
- -----------------------------------------------------------------------
FINANCE/INSURANCE/REAL ESTATE - 0.1%
REAL ESTATE - 0.1%
MD Baltimore, Economic Development,
Park Charles Project, Series 1986,
8.000% 01/01/10. . . . . . . . . . 1,725 1,820
PA Erie-Western Port Authority,
Series 1990,
8.625% 06/15/10. . . . . . . . . . 1,850 2,000
--------
3,820
- -----------------------------------------------------------------------
GENERAL OBLIGATION - 6.8%
AL Jefferson County Board of Education,
Series 1993,
5.875% 02/15/20(a) . . . . . . . . 22,615 22,417
AZ Apache County School District
Number 010, Round Valley
Project of 1987, Series 1990-C:
9.875% 07/01/05. . . . . . . . . . 1,500 1,682
10.800% 07/01/96. . . . . . . . . . 800 839
10.800% 07/01/97. . . . . . . . . . 800 872
10.800% 07/01/98. . . . . . . . . . 1,000 1,126
10.800% 07/01/99. . . . . . . . . . 1,000 1,085
10.850% 07/01/95. . . . . . . . . . 300 301
</TABLE>
See notes to investment portfolio
2
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO - CONTINUED
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------
<S> <C> <C>
GENERAL OBLIGATION - CONT.
AZ Maricopa County School District,
Number 028, Kyrene Elementary,
Series 1993 C:
(b) 07/01/07. . . . . . . . . . $ 4,000 $ 2,050
(b) 07/01/08. . . . . . . . . . 4,000 1,930
(b) 01/01/09. . . . . . . . . . 2,000 922
(b) 01/01/10. . . . . . . . . . 2,000 865
(b) 01/01/11. . . . . . . . . . 6,000 2,437
CA State of California,
5.750% 03/01/19. . . . . . . . . . 27,320 26,432
FL State Board of Education,
Series 1993 D,
5.200% 06/01/23. . . . . . . . . . 10,140 9,291
GA De Kalb County,
5.250% 01/01/20. . . . . . . . . . 5,000 4,681
IL Chicago Board of Education,
General Obligation Leases Certificates,
Series 1992-A,
6.000% 01/01/20. . . . . . . . . . 4,000 4,050
IL Chicago Public Commerce Building,
Series 1990 A,
7.125% 01/01/15. . . . . . . . . . 4,010 4,446
IL Du Page County, Series 1993,
5.600% 01/01/21. . . . . . . . . . 5,000 4,887
IL State Health Facilities Authority,
Evangelical Hospitals, Series A,
6.250% 04/15/22. . . . . . . . . . 2,500 2,519
MA General Obligation Bonds,
Consolidated Loan:
Series 1989 C,
7.000% 06/01/04. . . . . . . . . . 6,500 7,199
Series 1991-A,
6.000% 06/01/11. . . . . . . . . . 8,750 8,838
Series 1991-B,
(b) 06/01/07. . . . . . . . . . 5,500 2,915
Series 1991 C,
6.750% 08/01/09. . . . . . . . . . 3,865 4,189
MA Holyoke, General Obligation,
School Project Loan,
7.650% 08/01/09. . . . . . . . . . 1,250 1,353
MA Lowell:
8.000% 01/15/00. . . . . . . . . . 1,385 1,549
8.400% 01/15/09. . . . . . . . . . 1,000 1,164
MA Springfield, Series B,
7.100% 09/01/11. . . . . . . . . . 3,000 3,161
MA State Consolidated Loan, Series C,
7.000% 08/01/12. . . . . . . . . . 2,000 2,267
MI Brighton Area School District,
General Obligation Bonds,
Series 1992-II,
(b) 05/01/16. . . . . . . . . . 8,695 2,565
MI Detroit:
Series 1990-A,
8.700% 04/01/10. . . . . . . . . . 10,000 11,063
Series 1990-B,
8.250% 04/01/10. . . . . . . . . . 5,000 5,444
NY New York City General Obligation:
Series 1991-D,
8.000% 08/01/16. . . . . . . . . . 60 70
8.000% 08/01/18. . . . . . . . . . 75 82
NY State Various Purpose,
3.000% 03/15/01. . . . . . . . . . 405 360
PA Westmoreland County Municipal
Authority, Municipal Services,
Series 1993-C:
(b) 08/15/15. . . . . . . . . . 8,380 2,577
(b) 08/15/16. . . . . . . . . . 10,880 3,114
(b) 08/15/17. . . . . . . . . . 10,880 2,938
SD Sioux Falls School District Number
49-5, Capital Outlay Certificates of
1992, Series 1992-B,
5.750% 07/01/12. . . . . . . . . . 5,640 5,626
TN Metropolitan Government Nashville
& Davidson County,
6.150% 05/15/25. . . . . . . . . . 52,220 53,526
TN Shelby County, General Obligation,
School, Series 1992-A:
(b) 05/01/10. . . . . . . . . . 7,065 2,958
(b) 05/01/13. . . . . . . . . . 2,500 856
TN Shelby County, Public Improvement,
Series 1992-A:
(b) 05/01/12. . . . . . . . . . 15,130 5,541
(b) 05/01/13. . . . . . . . . . 5,000 1,713
TX Grapevine Colleyville Independent,
School District, Series 1994,
5.125% 08/15/22. . . . . . . . . . 10,000 9,050
TX Ysleta Independent School District,
Series 1993,
(b) 08/15/12. . . . . . . . . . 6,240 2,317
VA Fairfax County Economic Development,
Ogden Martin Systems, Series 1987 A,
7.750% 02/01/11. . . . . . . . . . 1,000 1,086
VT State Student Assistance Financing
Program, Series B,
6.700% 12/15/12. . . . . . . . . . 2,000 2,105
WA State, General Obligation,
Series B,
5.500% 05/01/18. . . . . . . . . . 12,130 11,705
--------
250,163
- -----------------------------------------------------------------------
</TABLE>
See notes to investment portfolio
3
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO - CONTINUED
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------
<S> <C> <C>
HEALTH - 15.0%
HOSPITAL - 8.8%
AL Alabama Special Care Facilities Authority,
Montgomery Heatlhcare, Series 1989,
11.000% 10/01/19. . . . . . . . . . $15,840 $15,602
CT State Health & Educational
Facilities Authority, New Britain
Hospital, Series 1991 A,
7.750% 07/01/22. . . . . . . . . . 905 957
DE State Economic Development,
Riverside Hospital, Series 1992 A,
9.500% 01/01/22. . . . . . . . . . 1,175 1,320
FL Brevard County Health Facilities
Authority, Holmes Regional Medical
Center,
5.750% 10/01/13. . . . . . . . . . 1,250 1,219
FL St. Petersburg Health Facilities
Authority, Alleghany Health System,
St. Joseph's Hospital, Inc., Series 1985-A,
7.000% 12/01/15. . . . . . . . . . 2,000 2,220
GA Clayton Hospital Authority,
The Woodlands Foundation Inc.,
Series 1991 A,
(b) 05/01/21(c). . . . . . . . 6,680 4,676
IL Alton Health Facilities Revenue,
Barnes-Jewish Inc.,
Series 1993-B,
5.500% 05/15/21. . . . . . . . . . 5,000 4,725
IL Health Facilities Authority:
Edgewater Medical Center,
Series A,
9.250% 07/01/24. . . . . . . . . . 8,435 8,530
Edward Hospital Association Project,
Series 1992,
7.000% 02/15/22. . . . . . . . . . 1,000 1,054
RIB (variable rate), Series 1992 B,
9.274% 05/01/21. . . . . . . . . . 4,800 5,430
IL Naperville Economic Development,
Series 81,
13.000% 08/01/08. . . . . . . . . . 5,747 6,156
IL State Health Facilities Authority:
Lutheran General Health Center,
6.000% 04/01/18. . . . . . . . . . 3,000 3,023
Mercy Center for Health Care Services:
6.400% 10/01/07. . . . . . . . . . 1,000 1,035
6.625% 10/01/12. . . . . . . . . . 850 865
6.650% 10/01/22. . . . . . . . . . 1,350 1,362
MA Boston, Boston City Hospital,
Series B:
5.750% 02/15/13. . . . . . . . . . 8,000 7,850
5.750% 02/15/23. . . . . . . . . . 2,000 1,935
MA Health and Educational Facilities Authority:
Massachusetts General Hospital,
Series F,
6.250% 07/01/20. . . . . . . . . . 2,300 2,360
Lowell General Hospital,
Series 1991-A,
8.400% 06/01/11. . . . . . . . . . 2,500 2,784
MI State Hospital Finance Authority:
Central Michigan Community Hospital,
Series 1993-A,
6.000% 10/01/08. . . . . . . . . . 1,500 1,496
Henry Ford Health System, Series 1992-A,
5.750% 09/01/17. . . . . . . . . . 5,000 4,994
MO Hannibal Industrial Development,
Medical Systems of Northeast Missouri,
Series 1992,
9.500% 03/01/22. . . . . . . . . . 4,250 4,951
MS Hospital Equipment & Facilities
Authority, Pooled Loan Program,
7.500% 08/01/16. . . . . . . . . . 18,900 19,774
MT State Health Facility Authority,
Hospital Facilities, RIB (variable rate),
Series 1994,
5.939% 02/15/25. . . . . . . . . . 6,000 5,093
NC Lincoln County,
9.000% 05/01/07. . . . . . . . . . 530 588
NJ Health Care Facilities Financing
Authority, Raritan Bay Medical Center,
7.250% 07/01/14. . . . . . . . . . 4,000 3,990
NM Grant County Hospital Facility,
Gila Regional Medical Center,
Series 1986,
10.000% 02/01/12. . . . . . . . . . 2,235 2,377
NV Reno Hospital, St. Mary's Regional
Medical Center, Series 1991-A,
6.700% 07/01/21. . . . . . . . . . 1,700 1,821
NY State Medical Care Facilities Finance Agency:
Mental Health Facilities Improvement,
Series 1993-F-REF,
5.375% 02/15/14. . . . . . . . . . 15,000 13,894
Presbyterian Hospital,
Series 1994-A,
5.375% 02/15/25. . . . . . . . . . 35,485 32,912
St. Luke's-Roosevelt Hospital,
5.625% 08/15/18. . . . . . . . . . 8,500 8,192
</TABLE>
See notes to investment portfolio
4
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO - CONTINUED
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------
<S> <C> <C>
HEALTH - CONT.
HOSPITAL - CONT.
OK Oklahoma City Industrial & Cultural
Facilities Trust, Hillcrest Health Center,
6.400% 08/01/14. . . . . . . . . . $ 4,320 $ 4,342
PA Eries County Hospital Authority,
Metro Health Center, Series 1992
7.375% 07/01/22. . . . . . . . . . 5,000 5,050
PA Philadelphia Hospital & Higher
Educational Facilities Authority,
Chestnut Hill Hospital,
6.500% 11/15/22. . . . . . . . . . 2,000 2,020
PA Somerset County Hospital Authority,
Somerset Community Hospital,
Series 1991,
7.500% 03/01/17. . . . . . . . . . 2,085 2,119
PA Westmoreland County Redevelopment
Authority, First Mortgage, Harmon
House, Series A,
(b) 08/15/28. . . . . . . . . . 37,300 2,984
RI Housing & Mortgage Finance Corp.,
Homeownership Opportunity,
Series 1-B-1,
8.400% 10/01/21. . . . . . . . . . 2,865 2,983
SC Greenwood County Hospital,
Self Memorial Hospital Series 1993,
5.875% 10/01/17. . . . . . . . . . 5,000 5,019
TN Chattanooga Health Education
& Housing Facilities Board,
North Park Hospital Project, Series 1993,
8.500% 02/01/23. . . . . . . . . . 42,795 43,865
TN Metropolitan Government, Nashville
& Davidson Counties:
Meharry Medical College,
6.875% 12/01/24. . . . . . . . . . 29,750 32,428
Volunteer Healthcare Systems, Series 1988-A,
10.750% 06/01/18(c). . . . . . . . 18,690 5,607
TX Edinburg Hospital Authority,
Edinburg General Hospital,
Series 1986,
10.000% 07/01/11. . . . . . . . . . 5,300 5,459
TX Montgomery County Health Facilities
Development Corp., Heritage
Manor-Woodlands Project, Series 1990,
(b) 07/15/23. . . . . . . . . . 30,000 4,162
TX Tarrant County, Health Facilities
Development Corp.,
10.125% 04/01/21. . . . . . . . . . 9,200 9,706
VA Dickenson County Industrial,
Development, Volunteer Healthcare
Systems Inc., Series 1988 A,
10.750% 06/01/18(c) . . . . . . . . 2,400 720
VA Norfolk Industrial Development
Authority, Sentara Hospital,
Series A,
6.500% 11/01/13. . . . . . . . . . 2,500 2,650
VA Southampton County Industrial
Development, Medical Facility,
Series 1986,
8.375% 12/15/26. . . . . . . . . . 3,035 3,187
VT Educational & Health Buildings
Financing Agency,
7.750% 01/01/13. . . . . . . . . . 2,020 1,962
WA Washington State Health Care
Facility, Grays Harbor Community
Hospital, Series 1993:
7.200% 07/01/03. . . . . . . . . . 1,285 1,362
8.025% 07/01/20. . . . . . . . . . 6,380 6,739
WI State Health & Educational
Facilities Authority, St. Luke's
Medical Center Project, Series 1991,
7.100% 08/15/19. . . . . . . . . . 2,550 2,776
WV State Hospital Finance Authority,
West Virginia University Medical Corp.,
6.100% 01/01/18. . . . . . . . . . 5,000 5,069
--------
323,394
--------
HUMAN SERVICES PROVIDERS - 0.5%
IL Champaign First Mortgage,
Hoosier Care Inc., Series 1989-A,
9.750% 08/01/19. . . . . . . . . . 1,500 1,605
IN Wabash First Mortgage, Hoosier
Care, Inc., Series 1989-A,
9.750% 08/01/19. . . . . . . . . . 5,960 6,377
TN Shelby County, Health, Education,
& Housing Facilities Board, Open Arms
Development Center, Series 1992-A,
9.750% 08/01/19. . . . . . . . . . 8,675 10,009
--------
17,991
--------
NURSING HOME - 5.7%
AZ Tucson Industrial Development
Authority, Villa Maria Care Center,
10.125% 11/01/21. . . . . . . . . . 640 608
CA San Diego Industrial Development,
8.750% 12/01/16. . . . . . . . . . 5,600 5,950
CO Health Facility, American Housing
Foundation I, Series 1990,
10.250% 12/01/20. . . . . . . . . . 2,500 2,691
</TABLE>
See notes to investment portfolio
5
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO - CONTINUED
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------
<S> <C> <C>
HEALTH - CONT.
NURSING HOME - CONT.
CT State Development Authority:
Greenwich Health Care Project,
Series 1985,
12.500% 05/01/15. . . . . . . . . . $ 1,320 $ 1,363
Waterbury Health Care Center,
Series 1984,
13.500% 11/01/14. . . . . . . . . . 1,965 2,021
DE State Economic Development
Healthcare Facility,
10.000% 03/01/21. . . . . . . . . . 7,245 8,160
DE Sussex County, Healthcare Facility,
Delaware Health Corp., Series
1994-A,
7.600% 01/01/24. . . . . . . . . . 14,230 13,519
FL Collier County Industrial
Development Authority, Beverly
Enterprises, Series 1991,
10.750% 03/01/03. . . . . . . . . . 1,120 1,316
FL Flagler County Industrial,
Redevelopment Authority,
South Florida Properties, Series 1988,
10.500% 12/01/18. . . . . . . . . . 9,030 9,041
FL Gadsden County Industrial Development,
Florida Housing Properties, Inc.,
Series 1988-A,
10.450% 10/01/18. . . . . . . . . . 6,205 6,414
FL Palm Beach County:
Beverly Enterprises,
Series 1984 1,
10.000% 06/01/11. . . . . . . . . . 2,735 3,080
Hillcrest Manor Project,
10.250% 12/01/16. . . . . . . . . . 3,235 3,397
FL Volusia County Industrial
Development Authority, Beverly
Enterprises, Series 1987,
9.800% 12/01/07. . . . . . . . . . 915 969
IA Finance Authority Healthcare Facility,
Mercy Health Initiatives, Series 1989,
9.950% 07/01/19. . . . . . . . . . 7,600 7,448
IA Marion, Kentucky Iowa Corp. Project,
Series 1990,
10.250% 01/01/20. . . . . . . . . . 1,000 1,039
IN Gary Industrial Economic Development,
West Side Health Care Center,
Series 1987 A,
11.500% 10/01/17. . . . . . . . . . 1,985 1,886
KS Washington County Industrial
Development Authority, Central
States, Series 1989,
10.250% 11/01/19. . . . . . . . . . 3,440 3,337
MA Boston,
St. Joseph Nursing Care Center, Inc.
10.000% 01/01/20(d) . . . . . . . . 315 348
MA State Industrial Finance Agency:
American Health Foundation Inc.,
Series 1989,
10.125% 03/01/19. . . . . . . . . . 3,250 3,408
Belmont Home Care Project,
Series A:
7.970% 01/01/99. . . . . . . . . . 290 296
9.270% 01/01/25. . . . . . . . . . 10,405 10,795
GF/Massachusetts Inc.,
Series 1994,
8.300% 07/01/23. . . . . . . . . . 13,000 12,431
Mary Ann Morse Nursing Home,
Series 1991 I,
10.000% 01/01/21. . . . . . . . . . 1,715 2,184
Seacoast Nursing Home,
Series 1991,
9.625% 12/01/21. . . . . . . . . . 4,945 5,427
MO St. Charles County Industrial
Development Authority,
8.700% 06/01/11. . . . . . . . . . 2,680 2,720
MO St. Louis County Industrial
Development Authority, Nursing Home,
Cardinal Carberry Health Center, Series 1991,
7.125% 03/20/23. . . . . . . . . . 2,000 2,163
NM Albuquerque Industrial Development
Authority, Manor Nursing Home,
12.000% 05/15/14. . . . . . . . . . 3,226 3,847
OH Alliance First Mortgage Medical
Facility,
10.125% 02/01/13. . . . . . . . . . 2,410 2,534
OH Ashtabula County, First Mortgage,
Village Square Nursing Center, Inc.,
Series 1985,
12.000% 12/01/15. . . . . . . . . . 1,290 1,348
OH Franklin County,
Columbus West Health Care Co.,
Series 1986,
10.000% 09/01/16. . . . . . . . . . 3,015 2,864
OH Lucas County,
Villa North Nursing Home,
Series 1988-B,
10.500% 06/01/18. . . . . . . . . . 2,995 2,696
</TABLE>
See notes to investment portfolio
6
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO - CONTINUED
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- ------------------------------------------------------------------------
<S> <C> <C>
HEALTH - CONT.
NURSING HOME - CONT.
OH Montgomery County,
Grafton Oaks Project, Series 1986,
9.750% 12/01/16(c). . . . . . . . $ 695 $ 660
OH Perry County First Mortgage, New
Lexington Health,
9.875% 09/01/10. . . . . . . . . . 2,545 2,650
OH Trumbull County,
12.000% 12/01/15. . . . . . . . . . 2,240 2,366
OH Washington County Industrial
Development, Marie Antoinette Care
Center, Series 1983,
6.867% 12/01/13. . . . . . . . . . 5,370 4,752
OH Wayne County Nursing Home, First
Mortgage, D & M Realty, Series 1985,
12.250% 12/01/15. . . . . . . . . . 2,510 2,614
PA Cambria County Industrial Development,
Beverly Enterprises,
10.000% 06/18/12. . . . . . . . . . 2,000 2,458
PA Chester County Industrial Development,
Pennsylvania Nursing Home, Inc.,
Series 1989,
10.125% 05/01/19. . . . . . . . . . 10,730 11,052
PA Delaware County Authority,
Main Line and Haverford Nursing,
Series 1992,
9.000% 08/01/22. . . . . . . . . . 9,420 10,021
PA Lackawanna County Industrial Authority,
10.500% 12/01/10. . . . . . . . . . 2,005 2,108
PA Luzerne County Industrial
Beverly Enterprises, Pennsylvania,
Series 1983,
10.125% 11/01/08. . . . . . . . . . 905 1,017
Development Authority,
First Mortgage,
10.500% 12/01/12. . . . . . . . . . 3,955 4,069
PA Montgomery County Higher Education
& Health Authority, AHF/Roslyn-Hatboro,
Inc. Project,
9.000% 11/15/22. . . . . . . . . . 12,580 12,800
PA Philadelphia Authority for
Industrial Development, First Mortgage:
The Care Pavilion, Series 1988,
10.250% 02/01/18. . . . . . . . . . 5,950 6,158
Nursing Home, Series 1988,
10.250% 11/01/18. . . . . . . . . . 9,560 9,942
PA Warren County Housing Finance
Corp., Allegheny Manor,
7.500% 02/01/21. . . . . . . . . . 1,441 1,488
PA Wilkins Area Industrial Development
Authority, Oakmont Nursing Center,
Series 1984,
10.000% 07/01/11. . . . . . . . . . 1,175 1,341
SC Charleston County, First Mortgage Gross,
Driftwood Health Care Center, Series 1984,
12.500% 12/01/14. . . . . . . . . . 1,425 1,473
TN Metropolitan Government, Nashville
& Davidson Counties, Health & Education
Facilities, Central States, Series 1989
10.250% 11/01/19. . . . . . . . . . 770 747
TN Sullivan County, Health, Education,
& Housing Facilities Board,
10.250% 04/01/15. . . . . . . . . . 2,820 3,074
TN Sumner County, Health, Education,
& Housing Facilities Board, Gallatin
Health Care, Series 1986:
9.750% 12/01/03. . . . . . . . . . 160 136
9.750% 12/01/04. . . . . . . . . . 175 149
9.750% 12/01/05. . . . . . . . . . 225 191
9.750% 12/01/06. . . . . . . . . . 220 187
10.250% 12/01/16. . . . . . . . . . 2,400 2,040
TX Whitehouse Health Facilities
Development Corp., Oak Brook
Health Care Center, Series 1989,
10.000% 12/01/19. . . . . . . . . . 1,830 1,848
VA Beach Development Authority,
Beverly Enterprises, Series 1985,
10.000% 04/01/10. . . . . . . . . . 960 1,079
---------
211,720
- ------------------------------------------------------------------------
HOUSING - 12.0%
ASSISTED LIVING/SENIOR - 0.3%
MN Roseville, Care Institute, Inc.,
Series 1993
7.750% 11/01/23. . . . . . . . . . 2,975 2,681
TX Bell County Health Facilities
Development Corp., Care Institutions, Inc.
9.000% 11/01/24. . . . . . . . . . 7,585 8,012
---------
10,693
---------
MULTI-FAMILY - 4.9%
AZ Mohave County Industrial Development
Authority, Multi-family, Kingman
Station Apartments,
8.125% 10/01/26. . . . . . . . . . 2,885 3,062
CO Health Facility, Birchwood Manor,
Series 1991 A,
7.625% 04/01/26. . . . . . . . . . 1,835 1,911
</TABLE>
See notes to investment portfolio
8
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO - CONTINUED
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------
<S> <C> <C>
HOUSING - CONT.
MULTI-FAMILY - CONT.
CO Housing Finance Authority,
General Obligation Bonds,
Series 1991 A,
7.500% 05/01/29. . . . . . . . . . $ 4,745 $ 4,994
CT Church Street Housing Authority,
South Apartments,
Section 8, Series 1983,
11.000% 03/01/01(c) . . . . . . . . 2,020 808
DE Quaker Hill Housing Corporation,
Multi-family Housing, Quaker Hill
Apartments, Series A,
7.550% 08/01/21. . . . . . . . . . 6,225 6,692
FL Clearwater,
Hampton Apartments,
8.250% 05/01/24. . . . . . . . . . 3,475 3,653
FL Hialeah Housing Authority,
Series 1991,
9.500% 11/01/21. . . . . . . . . . 10,600 11,050
FL Housing Finance Agency,
10.000% 10/01/20. . . . . . . . . . 915 732
FL Windsong Apartments Project,
Series 1993-C,
9.250% 01/01/19. . . . . . . . . . 1,230 1,241
GA Augusta Housing Authority Mortgage,
Mountain Ridge Holdings II, Series A,
8.960% 09/01/24. . . . . . . . . . 3,620 3,439
GA Savannah Housing Authority,
Multi-family Housing, Plantation Oaks
Apartments Project, Series 1986,
9.625% 02/01/27. . . . . . . . . . 2,905 3,105
IL Carbondale Mortgage Revenue,
Mill Street Apartments, Series 1979,
7.375% 09/01/20. . . . . . . . . . 860 888
IL Charleston Non-Profit Corp.
Cougills Manor Project,
6.875% 07/01/20. . . . . . . . . . 1,821 1,871
IL Chicago Multiple Family Housing,
Jeffery Apartments, Series 1987,
8.125% 08/01/30. . . . . . . . . . 2,400 2,493
IL Housing Development Authority,
Series 1990 A,
8.000% 06/01/26. . . . . . . . . . 810 832
IL Rockford:
8.700% 08/20/07. . . . . . . . . . 635 660
8.700% 08/20/26. . . . . . . . . . 4,455 4,628
KY Louisville Residential,
Series 1984,
(b) 07/01/16. . . . . . . . . . 1,745 168
LA Jefferson Housing Development Corp.,
Multiple Family, Concordia Project,
Series A,
7.700% 08/01/22. . . . . . . . . . 2,570 2,776
LA New Orleans Housing Development
Corp., Multi-family Housing Mortgage,
Southwood Patio, Series 1990-A,
7.700% 02/01/22. . . . . . . . . . 2,375 2,488
MN White Bear Lake,
Birch Lake Townhomes Project:
Series 1988-A,
9.750% 07/15/19. . . . . . . . . . 2,185 2,199
Series 1989 B,
(b) 07/15/19(e) . . . . . . . . 310 450
MO St. Louis Area Housing Finance
Corp., Wellington Arms III,
Series 1979,
7.500% 01/01/21. . . . . . . . . . 2,088 2,086
MS Biloxi Urban Renewal
Biloxi Apartments Project,
Series 1985:
9.500% 12/01/05. . . . . . . . . . 1,185 1,213
9.500% 12/01/10. . . . . . . . . . 1,235 1,266
9.500% 12/01/15. . . . . . . . . . 1,970 2,019
NC Eastern Carolina Regional Housing
Authority, Jacksonville New River
Apartments,
8.250% 09/01/14. . . . . . . . . . 2,915 2,948
NE Omaha Housing Development
Corp., Mortgage Notes, North
Omaha Homes,
7.375% 03/01/21. . . . . . . . . . 1,445 1,504
NY Nyack Housing Assistance
Corp., Plaza Apartments,
7.375% 06/01/21. . . . . . . . . . 3,120 3,105
NY Yorktown Housing Corp.,
Beaveridge Apartments,
7.375% 06/01/21. . . . . . . . . . 3,476 3,480
PA Montgomery County Industrial
Development Authority, Assisted
Living Facility, Series 1993-A,
8.250% 05/01/23. . . . . . . . . . 1,470 1,431
PA Philadelphia Redevelopment
Authority, Multi-family Housing,
School Lane House Apartments, Series 1988:
9.375% 10/01/18. . . . . . . . . . 3,915 2,936
</TABLE>
See notes to investment portfolio
8
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO - CONTINUED
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- ----------------------------------------------------------------------
<S> <C> <C>
HOUSING - CONT.
MULTI-FAMILY - CONT
Pass Through Certificates,
Series 1993-A,
8.500% 12/01/16(f) . . . . . . . . $61,712 $ 63,563
TX Brazos River Authority,
Collateralized Pollution Control Bonds,
Texas Utilities Electric Co., Series 1989 C,
8.250% 01/01/19. . . . . . . . . . 13,000 14,137
TX Galveston Health Facilities Center,
8.000% 08/01/23. . . . . . . . . . 1,850 1,894
TX Laredo Housing Development Corp.,
Number 1,
7.375% 03/05/21. . . . . . . . . . 2,147 2,169
VA Alexandria Redevelopment
& Housing Authority, Courthouse
Commons Apartments:
Series 1990 A,
10.000% 01/01/21. . . . . . . . . . 760 768
Series 1990 B,
10.000% 01/01/21. . . . . . . . . . 982 1,529
VA Harrisonburg Redevelopment and
Multiple Family Housing Authority,
Series 1991 A,
7.375% 11/20/28. . . . . . . . . . 1,750 1,851
VA Norfolk Redevelopment & Housing
Authority, Multi-family Housing,
Dockside, Series 1991-A:
7.300% 12/01/16. . . . . . . . . . 1,315 1,391
7.375% 12/01/28. . . . . . . . . . 1,940 2,056
VA Roanoke Redevelopment & Housing
Authority, First Mortgage, Mountain
Ridge,
9.250% 11/01/22. . . . . . . . . . 1,800 1,838
VA State Housing Authority Commonwealth
Mortgage,
Series B, Sub Series B-4,
6.850% 07/01/17. . . . . . . . . . 5,180 5,355
WA Washington State Housing Finance
Commission, Multi-family Housing,
Series 1988-A,
7.900% 07/01/30. . . . . . . . . . 1,465 1,527
WI Milwaukee Housing Authority
Mortgage, Windsor Court Project,
Series 1986,
8.700% 08/21/21. . . . . . . . . . 1,985 2,082
--------
182,288
--------
SINGLE-FAMILY - 6.8%
AK State Housing Finance Corp.:
Series 1991,
7.800% 12/01/30. . . . . . . . . . 2,430 2,555
Series 1992 A,
6.600% 12/01/23. . . . . . . . . . 11,750 12,793
AL State Housing Finance Authority,
Single-family Housing, Series 1990-C,
7.550% 04/01/16. . . . . . . . . . 755 799
AZ Maricopa County Industrial Development,
Single Family, Series 1984,
(b) 02/01/16. . . . . . . . . . 10,055 2,878
AZ Phoenix Industrial Development
Authority, Chris Ridge Village
Project, Series 1992:
6.750% 11/01/12. . . . . . . . . . 650 673
6.800% 11/01/25. . . . . . . . . . 2,750 2,829
CA Housing Finance Agency,
Home Mortgage, Series 1984 B,
(b) 08/01/16. . . . . . . . . . 325 31
CO El Paso County Home Mortgage:
Series 1987 C,
8.300% 09/20/18. . . . . . . . . . 2,940 3,260
Series 1987 D,
8.150% 09/20/14. . . . . . . . . . 1,425 1,547
Series 1988 A,
8.375% 03/25/19. . . . . . . . . . 2,624 2,933
CO Housing Finance Authority,
Single-family Housing:
Series A,
7.150% 11/01/14. . . . . . . . . . 2,350 2,456
Series 1991 C-1,
7.200% 02/01/18. . . . . . . . . . 885 931
CT State Housing Finance Authority,
Housing Mortgage Finance Program:
Series B-1, Sub B-1,
7.550% 11/15/08. . . . . . . . . . 120 130
Series E,
8.750% 11/15/18. . . . . . . . . . 170 177
FL Brevard County, Housing Finance Authority,
Single-Family Mortgage, Series 1985,
(b) 04/01/17. . . . . . . . . . 9,785 1,052
GA Atlanta, Urban Residential Finance Authority,
Single-family Housing Mortgage, Series 1988,
8.250% 10/01/21. . . . . . . . . . 1,335 1,405
GA State Residential Finance Authority,
Home Ownership Mortgage:
Series C,
7.500% 01/01/18. . . . . . . . . . 755 800
Series 1989 C Sub Series C-3,
7.800% 06/01/21. . . . . . . . . . 5,950 6,337
</TABLE>
See notes to investment portfolio
10
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO - CONTINUED
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------
<S> <C> <C>
HOUSING - CONT.
SINGLE-FAMILY - CONT.
IA Finance Authority Single-family,
Series 1992 B,
6.950% 07/01/24. . . . . . . . . . $ 10,000 $10,375
IA State Finance Authority,
Single-family Mortgage Revenue,
Series A,
7.250% 07/01/16. . . . . . . . . . 1,075 1,127
IL Development Finance Authority,
Retirement Housing Redevelopment,
Regency Park at Lincolnwood,
(b) 07/15/25. . . . . . . . . . 178,540 22,094
IL East Moline Housing Finance Corp.,
Deerfield Woods Apartments,
7.500% 08/01/21. . . . . . . . . . 2,431 2,428
IL Rockford,
9.250% 02/01/00. . . . . . . . . . 1,075 1,105
IL State Housing Development Authority:
Series B,
7.250% 08/01/17. . . . . . . . . . 1,290 1,367
Series C,
7.500% 08/01/17. . . . . . . . . . 220 230
IN State Housing Finance Authority:
GNMA Collateral Mortgage Program,
Series A-1,
7.850% 07/01/16. . . . . . . . . . 170 182
Series B-1,
7.600% 01/01/16. . . . . . . . . . 1,015 1,076
Single-family Housing,
Series 1987 C,
9.125% 07/01/18. . . . . . . . . . 4,410 4,658
LA Housing Financing Agency,
Series 1988,
8.300% 11/01/20. . . . . . . . . . 2,930 3,058
LA Jefferson Parish Home Mortgage,
Authority Single-family,
Series 1988 A,
8.300% 04/01/20. . . . . . . . . . 2,435 2,581
MA State Housing Finance Agency:
Series A,
9.000% 12/01/18. . . . . . . . . . 1,595 1,681
Series B,
8.100% 08/01/23. . . . . . . . . . 840 880
Series 1988-A,
8.400% 08/01/21. . . . . . . . . . 740 765
MD Frederick, Willowdale Garden Apartments,
Series 1993 A,
6.300% 04/01/26. . . . . . . . . . 1,850 1,850
MD State Community Development Administration,
Department of Housing and Community
Development Single-family Program:
1st Series,
7.300% 04/01/17. . . . . . . . . . 450 475
3rd Series,
7.250% 04/01/27. . . . . . . . . . 1,000 1,046
MN State Housing Finance Agency:
Series C,
7.100% 07/01/11. . . . . . . . . . 675 715
Series 1988 D,
8.250% 08/01/20. . . . . . . . . . 1,950 2,028
MN Washington County Housing &
Redevelopment Authority, Cottages of
Aspen Project,
9.250% 06/01/22. . . . . . . . . . 1,955 1,965
MO State Housing Development Commission,
Single-family Mortgage, Series C,
6.900% 07/01/18. . . . . . . . . . 885 940
MS Canton Housing,
8.400% 08/15/21. . . . . . . . . . 1,559 1,598
MS Home Corp. Residual,
Series 1990-C,
(b) 09/01/13. . . . . . . . . . 20,000 6,675
MS Lamar County Wesley Manor II:
8.750% 08/01/20. . . . . . . . . . 1,000 1,056
8.750% 02/01/29. . . . . . . . . . 1,610 1,701
NE Investment Finance Authority,
Single-family Mortgage:
Series 1988-1,
8.125% 08/15/38. . . . . . . . . . 5,655 5,931
Series 1990-B,
10.507% 03/15/22. . . . . . . . . . 8,500 9,573
Series 1990-2,
10.771% 09/10/30. . . . . . . . . . 4,200 4,793
NH State Housing Finance Authority,
Single-family Resources Mortgage,
Series 1989-B,
7.700% 07/01/29. . . . . . . . . . 2,745 2,858
NJ State Housing & Mortgage Finance
Agency,
6.950% 11/01/13. . . . . . . . . . 5,090 5,332
NY State Mortgage Agency:
Series BB-2,
7.950% 10/01/15. . . . . . . . . . 1,395 1,463
Home Owner Mortgage,
Series HH-2,
7.850% 04/01/22. . . . . . . . . . 1,500 1,590
</TABLE>
See notes to investment portfolio
10
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO - CONTINUED
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------
<S> <C> <C>
HOUSING - CONT.
SINGLE-FAMILY - CONT.
OH Housing Finance Agency
Single-family Mortgage:
RIB (variable rate), Series A-2,
9.215% 03/24/31. . . . . . . . . . $ 6,550 $ 7,099
Series 1988 C,
8.125% 03/01/20. . . . . . . . . . 1,075 1,140
PA Pittsburgh Urban Redevelopment
Authority, Sidney Square Project,
7.800% 08/01/28. . . . . . . . . . 5,315 5,508
SC State Housing Authority,
Homeownership Mortgage, Series 1988-A,
8.500% 07/01/08. . . . . . . . . . 2,000 2,088
TN Knox County Industrial Board,
Multiple Family Redevelopment,
Waterford Village Project, Series 1986:
8.750% 03/01/96. . . . . . . . . . 35 35
8.750% 03/01/05. . . . . . . . . . 525 546
8.750% 03/01/15. . . . . . . . . . 1,320 1,373
8.750% 03/01/26. . . . . . . . . . 3,590 3,738
Maple Oak Apartment Project, Series 1992,
6.375% 10/15/08. . . . . . . . . . 2,510 2,582
TX Bexar County Housing Finance Corp.
GNMA Collateralized Mortgage,
Series 1989-A,
8.200% 04/01/22. . . . . . . . . . 4,055 4,283
TX Corpus Christi Housing Finance Corp.
Single-family Mortgage,
Lomas and Nettleton, Series C,
10.000% 10/01/07. . . . . . . . . . 1,225 1,265
TX Harris County Housing Finance
Corp., Single-family,
Series 1987,
8.875% 12/01/17. . . . . . . . . . 2,780 2,891
TX Housing Agency, Single-family
Mortgage:
Series 1985-A,
9.375% 09/01/16. . . . . . . . . . 2,120 2,168
Series 1985-B,
9.375% 09/01/15. . . . . . . . . . 160 164
TX Lubbock Housing Finance Corp.,
Single-family:
Series 1988 C,
8.375% 12/01/20. . . . . . . . . . 6,770 6,956
Series 1988 D,
8.375% 12/01/20. . . . . . . . . . 1,260 1,304
TX Montgomery County Housing Finance
Corp., Multi-family Holly Creek
II Development, Series 1993-A,
5.900% 07/01/25. . . . . . . . . . 2,500 2,509
TX Panhandle Regional Housing Finance
Corp., Single-family Mortgage,
Series 1984,
11.375% 04/01/05. . . . . . . . . . 100 103
TX State Department Housing &
Community Affairs, Collateralized
Home Mortgage, Series 1992-B2,
9.147% 06/18/23. . . . . . . . . . 9,000 10,035
TX State Housing Agency Mortgage,
Single-family, Series A,
7.150% 09/01/12. . . . . . . . . . 1,000 1,059
UT State Housing Finance Agency,
Single-family Mortgage:
Senior Issue A,
7.200% 07/01/13. . . . . . . . . . 215 223
Senior A-1,
6.900% 07/01/12. . . . . . . . . . 1,090 1,140
Senior Issue B-1,
7.500% 07/01/16. . . . . . . . . . 200 209
Senior Issue B-2:
7.700% 07/01/15. . . . . . . . . . 45 47
7.000% 07/01/16. . . . . . . . . . 385 402
Series 1990-C2,
7.950% 07/01/10. . . . . . . . . . 445 479
Senior Issue D-2,
7.250% 07/01/11. . . . . . . . . . 545 579
Series E-1,
6.950% 07/01/11. . . . . . . . . . 1,775 1,862
Senior Series F-1,
7.400% 07/01/09. . . . . . . . . . 520 538
VA State Housing Development Authority:
Series A,
7.100% 01/01/17. . . . . . . . . . 1,000 1,059
Series B,
7.625% 07/01/09. . . . . . . . . . 185 195
Series 1988-C, Sub series C-1,
7.800% 01/01/38. . . . . . . . . . 11,500 12,003
Series C2,
8.000% 01/01/38. . . . . . . . . . 1,000 1,054
VT Housing Finance Agency, Home
Mortgage Purchase, Series 1989-A,
7.850% 12/01/29. . . . . . . . . . 3,920 4,141
WA Washington Housing Development
Corp., Parkview Apartments Project,
7.500% 04/01/21. . . . . . . . . . 1,712 1,735
</TABLE>
See notes to investment portfolio
11
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO - CONTINUED
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------
<S> <C> <C>
HOUSING - CONT.
SINGLE-FAMILY - CONT.
WI State Housing & Economic
Development Authority, Series A,
7.000% 09/01/09. . . . . . . . . . $ 985 $ 1,048
WV State Housing Development Fund,
Series 1992-B,
7.200% 11/01/20. . . . . . . . . . 10,000 10,500
WY Community Development Authority,
Single-family Mortgage:
Series 1987-A,
7.875% 06/01/18. . . . . . . . . . 2,465 2,582
Series 1988-G,
7.250% 06/01/21. . . . . . . . . . 4,500 4,747
WY Rock Springs Housing Finance
Corp., Bicentennial Association ll,
7.500% 05/01/20. . . . . . . . . . 1,167 1,213
--------
251,384
- -----------------------------------------------------------------------
MANUFACTURING - 2.1%
FOOD & KINDRED PRODUCTS - 0.0%
IA Ellsworth Industrial Development,
Bagel Works Project, Series 1990,
7.500% 01/15/12. . . . . . . . . . 1,590 1,552
--------
MEASURING & ANALYZING INSTRUMENTS - 0.0%
MN Brooklyn Park,
TL Systems Corp., Series 1991,
10.000% 09/01/16. . . . . . . . . . 330 339
--------
PAPER PRODUCTS - 1.7%
GA Rockdale County Development
Authority, Solid Waste Disposal, Visy
Paper, Inc., Series 1993,
7.500% 01/01/26. . . . . . . . . . 14,000 14,245
IA Cedar Rapids Industrial Development,
Weyerhaeuser Co. Project,
9.000% 08/01/14. . . . . . . . . . 1,000 1,349
LA De Soto Parish,
International Paper Co.,
Series A,
7.700% 11/01/18. . . . . . . . . . 1,250 1,411
MI State Strategic Fund:
Blue Water Fiber Project, Series 1994,
8.000% 01/01/12. . . . . . . . . . 16,200 15,471
Great Lakes Pulp & Fibre Project,
10.250% 12/01/16. . . . . . . . . . 28,000 29,505
--------
61,981
--------
PETROLEUM REFINING - 0.2%
RI State Industrial Facilities
Corporate Marine Terminal,
Mobil Oil Refining,
6.000% 11/01/14. . . . . . . . . . 3,500 3,574
TX Lower Neches Valley Authority,
Mobil Oil Refining Corp.,
6.850% 05/01/12. . . . . . . . . . 3,570 3,704
--------
7,278
--------
PRIMARY METAL - 0.2%
PA Bucks County
Industrial Development:
Hechinger Company, Series 1984,
11.375% 11/15/04. . . . . . . . . . 2,500 2,584
Jorgensen Steel,
9.000% 06/01/05. . . . . . . . . . 4,000 4,095
--------
6,679
- -----------------------------------------------------------------------
MINING - 0.0%
METAL MINING - 0.0%
CO Mesa County Industrial Development
Joy Technologies Inc., Series 1992,
8.500% 09/15/06. . . . . . . . . . 1,000 1,063
OH Cuyahoga County,
Joy Technologies, Inc.,
8.750% 09/15/07. . . . . . . . . . 1,340 1,442
--------
2,505
- -----------------------------------------------------------------------
POLLUTION CONTROL REVENUE - 3.5%
FL Pinellas County,
Florida Power Corp.,
7.200% 12/01/14. . . . . . . . . . 1,000 1,093
FL State Municipal Power Agency,
Series 1993,
5.100% 10/01/25(a) . . . . . . . . 38,150 34,573
GA Barton County, Development Authority
Power Plant,
7.250% 07/01/21. . . . . . . . . . 1,000 1,031
GA Wayne County Development Authority,
Solid Waste Disposal, ITT Royonier
Inc., Series 1990,
8.000% 07/01/15. . . . . . . . . . 2,500 2,772
IL State Development Finance Authority,
Central Illinois Public Service Co.:
Series A,
7.600% 03/01/14. . . . . . . . . . 750 833
Series B,
7.600% 09/01/13. . . . . . . . . . 750 837
IN Petersburg,
Indiana Power & Light Co.,
Series B,
5.400% 08/01/17. . . . . . . . . . 5,000 4,694
KY Jefferson County Pollution Control,
Louisville Gas and Electric Co.,
Series 1993 B,
5.625% 08/15/19. . . . . . . . . . 26,010 25,262
</TABLE>
See notes to investment portfolio
12
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO - CONTINUED
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------
<S> <C> <C>
POLLUTION CONTROL REVENUE - CONT.
KY Louisville and Jefferson County,
Metropolitan Sewer District,
7.350% 05/01/19. . . . . . . . . . $ 500 $ 566
MO State Environmental Improvement &
Energy Resources Pollution Control,
Authority:
Series 1984-G1,
8.250% 11/15/14. . . . . . . . . . 4,975 5,280
Series 1984-G4,
8.250% 11/15/14. . . . . . . . . . 5,545 5,885
NV Humboldt County Pollution Control Revenue,
Idaho Power Co. Project,
8.300% 12/20/14. . . . . . . . . . 1,875 2,208
NY State Environmental Facilities
Corp., Pollution Control, New York City
Municipal Water Finance Authority,
5.750% 06/15/12. . . . . . . . . . 19,260 19,549
NY Suffolk County Water Authority,
7.375% 06/01/12. . . . . . . . . . 180 200
OK Muskogee, Oklahoma Gas & Electric Project,
Series A,
7.000% 03/01/17. . . . . . . . . . 1,300 1,355
TX San Antonio Electric & Gas Revenue,
Series 1988
8.000% 02/01/16. . . . . . . . . . 175 194
VA Alexandria Industrial Development
Authority, Potomac Electric Project,
5.375% 02/15/24. . . . . . . . . . 24,250 22,522
WV Mason County Pollution Control,
Appalachian Power Co., Series G,
7.400% 01/01/14. . . . . . . . . . 400 431
WY Sweetwater County Pollution Control
Revenue, Idaho Power Co.:
Series A,
7.625% 12/01/13. . . . . . . . . . 350 369
Series B,
7.625% 12/01/13. . . . . . . . . . 400 421
--------
130,075
- -----------------------------------------------------------------------
PUBLIC ADMINISTRATION - 0.2%
ECONOMIC PROGRAMS - 0.2%
AK State Industrial Development
Authority, Series 1986:
8.625% 04/01/02. . . . . . . . . . 2,525 2,743
8.750% 04/01/07. . . . . . . . . . 2,990 3,252
--------
5,995
- -----------------------------------------------------------------------
PUBLIC FACILITIES IMPROVEMENTS - 5.4%
CA San Jose Redevelopment Tax Allocation,
Series A,
5.000% 08/01/21. . . . . . . . . . 30,000 26,737
FL Orange County Tax Revenue,
Series B,
5.375% 01/01/24. . . . . . . . . . 20,600 19,570
FL Tampa Capital Improvement Program,
Series 1988-B,
8.375% 10/01/18. . . . . . . . . . 3,260 3,480
IL Chicago O'Hare Airport,
Series A,
5.000% 01/01/16(a) . . . . . . . . 15,000 13,406
IL Kendall County, Public Building Commission,
Series 1993 B,
5.875% 12/01/12. . . . . . . . . . 3,000 3,007
IL Metropolitan Pier & Exposition
Authority, McCormick Place
Expansion Project:
Series A,
6.500% 06/15/27. . . . . . . . . . 2,500 2,559
Series 1992-A,
(b) 06/15/11. . . . . . . . . . 20,000 7,825
IN Bond Bank, State Revolving Fund Program,
Series 1993 A,
6.000% 02/01/15. . . . . . . . . . 10,715 10,661
MI Detroit Economic Development,
District Court Madison Center,
Series 1984,
10.625% 02/01/11. . . . . . . . . . 5,000 5,188
MN Mille Lacs Capital Improvement
Infrastructure, Band of Chippewa,
Series 1992-A,
9.250% 11/01/12. . . . . . . . . . 1,520 1,714
MS Claiborne County Pollution Control,
Middle South Energy, Inc.,
Series 1984 C,
9.875% 12/01/14. . . . . . . . . . 1,250 1,433
NY State Urban Development
Corp., Correctional Facilities:
Series 4,
5.375% 01/01/23. . . . . . . . . . 19,375 17,438
Series 1991,
7.500% 04/01/20. . . . . . . . . . 4,950 5,470
Series 1993 A:
5.250% 01/01/21. . . . . . . . . . 39,000 34,661
5.500% 01/01/14. . . . . . . . . . 10,000 9,413
5.500% 01/01/16. . . . . . . . . . 10,000 9,288
</TABLE>
See notes to investment portfolio
13
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO - CONTINUED
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------
<S> <C> <C>
PUBLIC FACILITIES IMPROVEMENTS - CONT.
PA Convention Center Authority,
Series 1989-A,
6.000% 09/01/19. . . . . . . . . . $ 5,000 $ 5,363
PA Philadelphia Redevelopment
Authority, Multi-family Housing,
Series 1988,
9.375% 10/01/04. . . . . . . . . . 1,495 1,121
PR Commonwealth of Puerto Rico,
Infrastructure Finance Authority,
Series 1988-A,
7.900% 07/01/07. . . . . . . . . . 2,500 2,728
SC State Public Service Authority,
Series C,
5.000% 01/01/18. . . . . . . . . . 10,000 8,900
TN Shelby County, Public Improvement,
Series 1992-A,
(b) 05/01/10. . . . . . . . . . 15,750 6,595
UT West Jordan Industrial Development,
7.875% 12/15/11. . . . . . . . . . 2,000 2,130
--------
198,687
- -----------------------------------------------------------------------
PUBLIC INFRASTRUCTURE - 5.1%
AIRPORT - 1.8%
CA Los Angeles Regional Airport
Improvement Corp., Los Angeles
International Airport:
6.800% 01/01/27. . . . . . . . . . 1,400 1,442
Series 1985,
11.250% 11/01/25. . . . . . . . . . 10,000 10,525
CA Los Angeles Transportation Authority,
Series B,
5.250% 07/01/23. . . . . . . . . . 10,000 9,225
CO Denver City and County Airport:
Series 1992 B,
7.250% 11/15/23. . . . . . . . . . 5,500 5,720
Stapleton International Airport:
Series 1990 A,
8.500% 11/15/23. . . . . . . . . . 5,000 5,613
Series 1991 A,
8.750% 11/15/23. . . . . . . . . . 5,485 6,315
FL Hillsborough County Aviation Authority,
Tampa International Airport,
Series A,
6.900% 10/01/11. . . . . . . . . . 1,500 1,614
IN Indianapolis Airport Authority,
9.000% 07/01/15. . . . . . . . . . 250 266
IN Transportation Finance Authority:
Series A,
6.750% 11/01/11. . . . . . . . . . 2,000 2,110
Airport Facility, Series A,
6.250% 11/01/16. . . . . . . . . . 6,675 6,733
IN Airport Authority
7.100% 01/15/17. . . . . . . . . . 2,000 2,112
TN Metropolitan Nashville Airport Authority,
Special Facilities,
9.875% 10/01/05. . . . . . . . . . 10,000 10,338
TX Dallas-Fort Worth Regional Airport,
Series A,
7.375% 11/01/11. . . . . . . . . . 5,000 5,706
--------
67,719
--------
TURNPIKE/TOLL ROAD/BRIDGE - 3.3%
CA San Joaquin Hills Transportation
Corridor Agency:
(b) 01/01/20. . . . . . . . . . 4,600 834
Series 1993,
6.750% 01/01/32. . . . . . . . . . 4,500 4,528
FL Orlando & Orange County Expressway,
Series A,
5.125% 07/01/20. . . . . . . . . . 10,455 9,684
FL State Mid-Bay Bridge Authority,
Series A,
6.875% 10/01/22. . . . . . . . . . 2,000 2,320
MA State Turnpike Authority,
Series A,
5.000% 01/01/20. . . . . . . . . . 30,765 27,689
NV Clark County Passenger Facility,
Las Vegas McCarran International Airport,
Series B,
6.500% 07/01/12. . . . . . . . . . 3,000 3,086
NY State Thruway Authority Service
Contract, Local Highway,
5.250% 04/01/13. . . . . . . . . . 10,000 9,137
NY Triborough Bridge & Tunnel Authority:
Series A:
5.000% 01/01/24. . . . . . . . . . 12,000 10,635
5.200% 01/01/20. . . . . . . . . . 15,095 13,831
Series L,
8.000% 01/01/07. . . . . . . . . . 300 328
Series 1993-B,
(b) 01/01/21. . . . . . . . . . 11,000 2,420
PR Commonwealth of Puerto Rico
Highway & Transportation Authority,
Series W,
5.500% 07/01/17. . . . . . . . . . 13,000 12,610
TX Harris County:
Series 1994,
5.375% 08/15/20(a) . . . . . . . . 16,250 15,356
Toll Road Revenue,
5.000% 08/15/16. . . . . . . . . . 11,000 9,941
--------
122,399
- -----------------------------------------------------------------------
</TABLE>
See notes to investment portfolio
14
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO - CONTINUED
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------
<S> <C> <C>
REFUNDED/ESCROW/SPECIAL OBLIGATIONS (g) - 8.9%
AK State Industrial Development
Authority, Series 1986:
8.625% 04/01/02. . . . . . . . . . $ 585 $ 638
8.750% 04/01/07. . . . . . . . . . 915 1,000
AL Daphine Special Care Facilities
Financing Authority, Presbyterian Hospital,
(b) 07/01/18(a) . . . . . . . . 200,000 27,250
AL Selma Special Care Facilities
Finance Authority, Vaughan Regional
Medical Center, Series 1987,
9.400% 06/01/07. . . . . . . . . . 4,000 4,490
AZ State University Revenue,
Arizona State University:
7.300% 06/01/11. . . . . . . . . . 500 524
7.500% 07/01/16. . . . . . . . . . 200 211
CA Los Angeles County Transportation,
Series 1988 A,
8.000% 07/01/18. . . . . . . . . . 3,500 3,924
DC District Columbia Hospital,
Washington Hospital Center Corp.,
Series 1990 A:
8.750% 01/01/15. . . . . . . . . . 10,000 11,988
9.000% 01/01/08. . . . . . . . . . 1,860 2,262
DE State Transportation Authority,
6.500% 07/01/11. . . . . . . . . . 3,650 4,061
DE Wilmington, Riverside Hospital,
Series 1988A,
10.000% 10/01/03. . . . . . . . . . 300 360
FL Dade County,
7.375% 07/01/19. . . . . . . . . . 500 563
FL Jacksonville Electric Authority:
St. John's River Power Park System,
Issue 2,
5.250% 10/01/21. . . . . . . . . . 10,750 10,065
Series 3-A,
6.875% 10/01/12. . . . . . . . . . 1,000 1,061
FL State Board of Education,
Public Education, Series B,
7.750% 06/01/16. . . . . . . . . . 300 326
GA State Municipal Electric Authority,
7.875% 01/01/18. . . . . . . . . . 700 728
IA Ottumwa Hospital Facilities,
Ottumwa Regional Health Center,
Series 1985,
9.625% 11/01/10. . . . . . . . . . 3,025 3,304
IL Du Page Water Commission:
7.875% 03/01/11. . . . . . . . . . 375 392
Series 1987,
6.875% 05/01/14. . . . . . . . . . 3,775 4,025
Lutheran General Healthcare Systems:
Series 1989 A,
7.375% 04/01/08. . . . . . . . . . 3,000 3,345
Series 1989 B,
7.375% 04/01/08. . . . . . . . . . 5,055 5,617
United Medical Center,
Series 1991:
8.125% 07/01/06. . . . . . . . . . 3,350 3,966
8.375% 07/01/12. . . . . . . . . . 1,500 1,841
IL Metropolitan Pier & Exposition
Authority, McCormick Place Expansion
Project, Series A,
(b) 06/15/15. . . . . . . . . . 15,250 4,365
IL State Sales Tax:
Series C,
6.875% 06/15/15. . . . . . . . . . 3,500 3,741
Series N,
6.900% 06/15/13. . . . . . . . . . 1,000 1,129
IL State Toll Highway Authority,
7.375% 01/01/09. . . . . . . . . . 1,000 1,038
IL State of Illinois,
7.125% 04/01/08. . . . . . . . . . 1,000 1,043
IN Hamilton County Public Building
Corp.,
7.000% 02/01/12. . . . . . . . . . 2,525 2,800
IN Purdue University, Dormitory
System,
7.000% 07/01/14. . . . . . . . . . 3,500 3,973
KY State Turnpike Authority:
Series A,
7.250% 05/15/10. . . . . . . . . . 1,500 1,688
7.875% 01/01/04. . . . . . . . . . 200 212
KY Trimble County,
Louisville Gas & Electric Co.,
Series B,
6.550% 11/01/20. . . . . . . . . . 130 144
MA Bay Transportation Authority,
General Transportation System:
Series A,
7.000% 03/01/11. . . . . . . . . . 1,000 1,133
Series 1990 A,
7.000% 03/01/10. . . . . . . . . . 1,500 1,652
Series 1990-B,
7.800% 03/01/10. . . . . . . . . . 3,300 3,869
</TABLE>
See notes to investment portfolio
15
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO - CONTINUED
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------
<S> <C> <C>
REFUNDED/ESCROW/SPECIAL OBLIGATION - CONT.
MA Boston,
Boston City Hospital Facilities,
Series 1990-A,
7.625% 02/15/21(a) . . . . . . . . $12,000 $13,845
MA General Obligation Bonds:
Series 1990-C,
7.000% 12/01/10. . . . . . . . . . 2,700 3,011
Series 1991 A,
7.625% 06/01/08. . . . . . . . . . 5,000 5,844
Series 1989 C,
7.000% 06/01/09. . . . . . . . . . 500 554
MA State Water Resources Authority,
Series 1990 A,
7.625% 04/01/14. . . . . . . . . . 2,000 2,290
MI Huron Valley School District,
Series 1991,
(b) 05/01/20(a) . . . . . . . . 95,750 20,227
MN Buffalo, Ruden Manufacturing Inc.,
10.500% 09/01/14. . . . . . . . . . 1,475 1,573
MN University of Minnesota,
Series 1986-A,
7.750% 02/01/10. . . . . . . . . . 250 261
MO State Health & Educational
Facilities Authority, Series 1988-A,
7.750% 06/01/16. . . . . . . . . . 2,000 2,223
MO State Regional Convention & Sports
Complex Project, Series 1991-A,
6.900% 08/15/21. . . . . . . . . . 3,000 3,431
NC Municipal Power Agency,
5.500% 01/01/13. . . . . . . . . . 24,430 24,827
NV State, Series A,
6.800% 07/01/12. . . . . . . . . . 2,500 2,803
NY New York City General Obligation:
Series 1991-D,
8.000% 08/01/18. . . . . . . . . . 5,085 6,051
NY State Dormitory Authority:
City University:
Series 1990-A,
7.625% 07/01/20. . . . . . . . . . 11,500 13,268
Series 1990-F,
7.500% 07/01/20. . . . . . . . . . 6,615 7,591
Court Facilities, Series A,
5.500% 05/15/23. . . . . . . . . . 5,000 4,575
State University of New York:
Series 1989-B,
7.250% 05/15/15. . . . . . . . . . 4,150 4,705
Series 1990-B,
7.375% 05/15/14. . . . . . . . . . 2,790 3,167
NY State Medical Care Facilities
Finance Agency, St. Luke's-Roosevelt
Hospital Center, Series 1989-B,
7.450% 02/15/29. . . . . . . . . . 5,000 5,687
NY Triborough Bridge & Tunnel Authority:
Series I,
7.625% 01/01/14. . . . . . . . . . 600 624
Series T,
7.000% 01/01/11. . . . . . . . . . 750 849
PA Lehigh County, Healtheast Inc.,
Series 1987 B,
9.000% 07/01/15. . . . . . . . . . 12,000 13,320
PA Philadelphia Hospital & Higher
Educational Facilities Authority:
Children's Hospital Project, Series A,
6.500% 02/15/21. . . . . . . . . . 1,000 1,116
Series 1986,
8.625% 08/01/11. . . . . . . . . . 1,000 1,070
PA State Industrial Development
Authority, Economic Development,
Series A,
7.000% 01/01/11. . . . . . . . . . 5,595 6,336
PA State University:
6.750% 07/01/09. . . . . . . . . . 750 821
6.750% 07/01/14. . . . . . . . . . 2,750 3,011
PA Westmoreland County Municipal
Authority, Special Obligation,
Series 1985,
9.125% 07/01/10. . . . . . . . . . 5,000 6,156
PA York County Industrial Development
Authority, Fairview Village
Associates, Series 1986,
10.750% 06/01/16. . . . . . . . . . 700 763
SC State Public Service Authority,
Electric System Expansion Revenue,
Santee Cooper Project, Series 1986-A,
8.000% 07/01/19. . . . . . . . . . 500 534
TN Jackson Water and Sewer Revenue,
Series 1984,
10.375% 07/01/12. . . . . . . . . . 910 1,120
TN Shelby County, Public Improvement,
Series 1992-A,
(b) 05/01/11. . . . . . . . . . 10,000 3,912
TX Austin Utilities System Revenue:
7.750% 11/15/12. . . . . . . . . . 200 210
Series A,
7.800% 11/15/12. . . . . . . . . . 200 224
Series 1985-A,
9.500% 05/15/15(a) . . . . . . . . 6,000 7,260
</TABLE>
See notes to investment portfolio
16
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO - CONTINUED
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------
<S> <C> <C>
REFUNDED/ESCROW/SPECIAL OBLIGATION - CONT.
TX Hidalgo County Health Services,
Mission Hospital Inc.,
Series A,
10.250% 02/01/25. . . . . . . . . . $4,785 $ 6,083
TX Houston Water & Sewer System Revenue,
Series A,
7.125% 12/01/16. . . . . . . . . . 850 902
TX San Antonio Water System Revenue,
Series 1990-A,
7.350% 05/01/07. . . . . . . . . . 525 573
UT Intermountain Power Agency,
State Power Supply, Series A,
7.000% 07/01/21. . . . . . . . . . 1,000 1,106
7.750% 07/01/17. . . . . . . . . . 1,000 1,056
UT Salt Lake City Housing Authority,
Multi-family Mortgage, Hartland
Apartments Project, Series 1987
8.875% 12/20/27. . . . . . . . . . 7,720 8,000
UT Uintah County Pollution Control,
Series 1984-F2,
10.500% 06/15/14. . . . . . . . . . 6,900 8,953
VA Halifax County Industrial Development,
Authority O'Sullivan Industries Project,
Series 1988,
8.250% 10/01/08. . . . . . . . . . 1,000 1,096
VA Pittsylvania County Industrial
Development Authority,
Series A,
7.300% 01/01/04. . . . . . . . . . 4,200 4,347
WI Milwaukee County, General
Obligation, Corporate Purpose,
Series 1992-A,
6.500% 12/01/11. . . . . . . . . . 3,375 3,700
WV States Parkways Economic
& Tourism Authority, Series 1989,
7.125% 07/01/19. . . . . . . . . . 1,990 2,211
--------
330,014
- -----------------------------------------------------------------------
RETAIL TRADE - 0.2%
HOME FURNISHINGS & EQUIPMENT - 0.1%
PA Philadelphia Authority for
Industrial Development, Hechinger Company,
Series 1983,
11.375% 12/01/04. . . . . . . . . . 4,000 4,155
--------
MISCELLANEOUS RETAIL - 0.1%
DE Sussex County, Economic Development,
Rehoboth Mall Project,
7.250% 10/15/12. . . . . . . . . . 4,885 5,032
- -----------------------------------------------------------------------
SERVICES - 0.2%
AMUSEMENT & RECREATION - 0.1%
NM Red River Sports Facility, Red
River Ski Area, Series 1985,
12.000% 06/01/07. . . . . . . . . . 3,145 3,231
--------
HOTELS, CAMPS & LODGING - 0.1%
MN Burnsville Commercial Development,
Holiday Inn Project,
10.600% 06/01/06. . . . . . . . . . 1,400 1,447
MN Minneapolis Commercial Development,
Hometel Associates, Limited,
Series 1988,
10.500% 06/01/03. . . . . . . . . . 1,500 1,524
--------
2,971
- -----------------------------------------------------------------------
SOLID WASTE - 0.6%
MISCELLANEOUS DISPOSAL - 0.3%
IL Development Financial Authority,
Solid Waste Disposal, Ford Heights
Waste Project, Series 1994,
7.875% 04/01/11. . . . . . . . . . 3,000 2,981
MA Boston,
Industrial Development Financing,
Solid Waste Disposal,
10.500% 01/01/11. . . . . . . . . . 1,500 1,699
MT Anaconda-Deer County Solid Waste
Facilities Revenue, Atlantic Richfield Co.
Anaconda Smelter Site Project,
6.375% 10/01/16. . . . . . . . . . 2,500 2,534
SC Richland County, Solid Waste
Disposal Facilities Revenue,
Union Camp Corp.,
6.750% 05/01/22. . . . . . . . . . 3,500 3,636
--------
10,850
--------
RESOURCE RECOVERY - 0.3%
CT State Development Authority,
Pfizer Inc. Project,
7.000% 07/01/25. . . . . . . . . . 3,000 3,293
MA State Industrial Finance Agency,
Refusetech, Series 1993 A,
6.300% 07/01/05. . . . . . . . . . 2,000 2,060
WA Spokane Regional Solid Waste
Management System, Series 1989-A:
7.750% 01/01/11. . . . . . . . . . 3,000 3,274
7.875% 01/01/07. . . . . . . . . . 2,500 2,734
--------
11,361
- -----------------------------------------------------------------------
</TABLE>
See notes to investment portfolio
17
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO - CONTINUED
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------
<S> <C> <C>
STUDENT LOAN - 0.3%
LA State Public Facility Authority,
Series A,
6.750% 09/01/06. . . . . . . . . . $ 2,000 $ 2,130
ME State Educational Loan Marketing Corp.,
Series A-4:
5.950% 11/01/03. . . . . . . . . . 1,000 1,035
6.050% 11/01/04. . . . . . . . . . 1,500 1,556
NM State Educational Assistance
Foundation, Series II-A,
5.400% 12/01/06. . . . . . . . . . 1,000 998
5.500% 12/01/07. . . . . . . . . . 1,000 997
VA State Educational Loan
Series D,
5.600% 03/01/03. . . . . . . . . . 3,200 3,268
--------
9,984
- -----------------------------------------------------------------------
TAX ALLOCATION - 5.3%
CA Los Angeles County Transportation
Authority Proposition A:
Series A,
5.500% 07/01/13. . . . . . . . . . 14,385 14,043
5.625% 07/01/18. . . . . . . . . . 12,500 12,281
Series 1993 A,
5.000% 07/01/21(a) . . . . . . . . 42,555 38,193
HI State Department Budget and Finance,
RIB (variable rate), Series 1993 B,
6.381% 12/15/23. . . . . . . . . . 10,000 8,775
IL Development Finance Authority,
City of Marion Project, Series 1991,
9.625% 09/15/21. . . . . . . . . . 5,800 5,909
IL State Sales Tax, Series N,
6.900% 06/15/09. . . . . . . . . . 1,000 1,081
NY State Energy Research & Development
Authority, Series 1993-B, RIB, (variable rate),
8.133% 04/01/20. . . . . . . . . . 13,000 13,910
NY State Local Assistance Corp.:
Series C,
5.000% 04/01/21. . . . . . . . . . 14,500 12,869
Series D,
5.000% 04/01/23. . . . . . . . . . 57,425 50,462
NY State Local Government Assistance Corp.:
Series 1993-C,
5.500% 04/01/17. . . . . . . . . . 18,475 17,782
Series 1993-E,
5.000% 04/01/21. . . . . . . . . . 22,745 20,328
--------
195,633
- -----------------------------------------------------------------------
TRANSPORTATION - 1.3%
IN Indianapolis Local Public
Improvement Bond Bank,
United Airlines Maintenance Facility,
6.700% 01/01/17. . . . . . . . . . 4,000 4,150
LA Calcasieu Parish:
Series 1987-A,
8.125% 12/01/12. . . . . . . . . . 1,476 1,520
Series 1988-B,
8.250% 06/01/12. . . . . . . . . . 3,900 4,051
MI State Trunk Line,
Series A,
5.500% 10/01/21. . . . . . . . . . 21,520 20,525
NY Port Authority, Cons-Ninety-Second
4.750% 01/15/29. . . . . . . . . . 21,320 17,616
--------
47,862
- -----------------------------------------------------------------------
TRANSPORTATION/COMMUNICATION/
ELECTRIC/GAS/SANITATION - 0.0%
AIR TRANSPORTATION - 0.0%
TN Memphis-Shelby County, Airport
Authority Special Facilities, Express
Airlines I, Inc., Series 1986,
10.000% 12/01/16. . . . . . . . . . 750 768
- -----------------------------------------------------------------------
UTILITY - 14.2%
CO-GENERATION - 0.2%
FL Martin County Industrial
Development Authority, Indiantown
Cogeneration Project,
7.875% 12/15/25. . . . . . . . . . 7,500 8,231
--------
INDIVIDUAL POWER PRODUCER - 0.3%
PA Economic Development Finance
Authority, Colver Project, Series D,
7.150% 12/01/18. . . . . . . . . . 10,000 10,313
--------
JOINT POWER AUTHORITY - 2.7%
CA Northern California Power Agency
Public Power, Hydroelectric Project
No. 1, Series 1993-A,
5.500% 07/01/24. . . . . . . . . . 10,000 9,562
CA Southern California Public Power
Authority, Palo Verde Power Project,
Series 1993-A,
5.500% 07/01/12. . . . . . . . . . 7,000 6,746
FL State Municipal Power Agency,
St. Lucie Project,
5.250% 10/01/21. . . . . . . . . . 12,000 11,250
GA State Municipal Electric Authority,
Series O,
8.125% 01/01/17. . . . . . . . . . 10,000 10,963
MA Municipal Wholesale Electric
Power Supply System, Series 1994 A,
5.447% 07/01/16. . . . . . . . . . 22,900 19,322
</TABLE>
See notes to investment portfolio
18
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO - CONTINUED
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------
<S> <C> <C>
UTILITY - CONT.
JOINT POWER AUTHORITY - CONT.
SC Piedmont Municipal Power Agency,
Electric System:
Series 1986-A,
7.250% 01/01/22. . . . . . . . . . $ 2,000 $ 2,065
Series 1988,
(b) 01/01/13. . . . . . . . . . 44,455 16,115
Series 1993,
5.375% 01/01/25. . . . . . . . . . 14,055 13,317
TX Municipal Power Agency, Series 1993,
(b) 09/01/16. . . . . . . . . . 32,095 9,027
-------
98,367
-------
MUNICIPAL ELECTRIC - 11.0%
AZ Salt River Project, Agricultural
Improvement & Power District
Electric System:
Series A,
6.625% 01/01/12. . . . . . . . . . 1,500 1,598
Series 1992-D,
5.500% 01/01/25. . . . . . . . . . 17,615 16,866
Series 1993-B,
5.250% 01/01/19. . . . . . . . . . 18,500 17,205
CA Los Angeles Department of
Water & Power, Series 2,
5.400% 11/15/31. . . . . . . . . . 14,500 13,322
CA Southern California Public Power
Authority, Southern Transmission
Project, Series 1993,
5.250% 07/01/20. . . . . . . . . . 10,000 9,325
FL Orlando Utilities Commission:
Series 1993-A,
5.250% 10/01/23. . . . . . . . . . 11,525 10,776
Series 1993-B:
5.250% 10/01/23. . . . . . . . . . 14,835 13,871
RIB (variable rate)
6.655% 10/06/13. . . . . . . . . . 5,000 4,769
GA Municipal Electric Authority Power:
Series O,
7.400% 01/01/01. . . . . . . . . . 1,675 1,799
Series Z,
5.500% 01/01/20 (a). . . . . . . . 39,000 38,220
Series 1993 C,
5.700% 01/01/19 (a). . . . . . . . 20,000 20,125
IL Development Financial Authority:
Pollution Control, Series 1991,
7.250% 06/01/11. . . . . . . . . . 5,625 5,977
Commonwealth Edison Co. Project,
Series D,
6.750% 03/01/15. . . . . . . . . . 3,400 3,655
IN Sullivan County, Hoosier Energy
Station Project, Series 1991,
7.100% 04/01/19. . . . . . . . . . 10,000 10,688
KY Jefferson County Pollution Control
Revenue, Louisville Gas & Electric Co.,
Series A,
7.450% 06/15/15. . . . . . . . . . 750 825
KY Trumble County,
Louisville Gas & Electric Co.,
Series B,
6.550% 11/01/20. . . . . . . . . . 870 911
NE Omaha Public Power System, Electric
System, Series 1993-C,
5.500% 02/01/14. . . . . . . . . . 20,000 19,675
NV Clark County Industrial Development,
Nevada Power Company, Series 1990,
7.800% 06/01/20. . . . . . . . . . 4,250 4,760
NY State Energy Research &
Development Authority, Consolidated
Edison Project,
5.250% 08/15/20. . . . . . . . . . 23,500 21,649
NY State Power Authority, Series V,
8.000% 01/01/17. . . . . . . . . . 400 442
OH State Air Quality Development Authority,
Ohio Power Co. Project, Series B,
7.400% 08/01/09. . . . . . . . . . 450 479
SC Public Service Authority:
Series A,
5.500% 07/01/21. . . . . . . . . . 12,900 12,303
Series C:
5.125% 01/01/21. . . . . . . . . . 23,300 20,970
5.125% 01/01/32. . . . . . . . . . 27,150 23,519
7.300% 07/01/21. . . . . . . . . . 1,950 2,011
Series 1993 C,
5.000% 01/01/25. . . . . . . . . . 10,000 8,763
SD Heartland Consumers Power District,
Series 1992,
6.000% 01/01/12. . . . . . . . . . 3,650 3,764
TX Austin Utilities System Revenue:
6.750% 05/15/12. . . . . . . . . . 3,500 3,710
Series 1992,
(b) 11/15/12. . . . . . . . . . 18,200 6,529
TX Brazos River Authority:
Houston Light & Power Co.,
Series A,
7.625% 05/01/19. . . . . . . . . . 900 970
Collateralized Pollution Control Bonds,
Texas Utilities Electric Co. Series 1988-A,
9.250% 03/01/18. . . . . . . . . . 9,200 10,281
</TABLE>
See notes to investment portfolio
19
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO - CONTINUED
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------
<S> <C> <C>
UTILITY - CONT.
MUNICIPAL ELECTRIC - CONT.
TX San Antonio Electric & Gas System:
Series 1989-A,
(b) 02/01/05. . . . . . . . . . $ 5,850 $ 3,495
5.000% 02/01/12. . . . . . . . . . 25,000 23,156
UT Intermountain Power Agency,
State Power Supply:
Series A,
(b) 07/01/17. . . . . . . . . . 19,000 5,154
5.500% 07/01/20. . . . . . . . . . 31,365 29,914
Series B,
7.625% 07/01/08. . . . . . . . . . 100 109
WA Chelan County Public Utilities
District Number 001 Consolidate,
Series 1989-A Division I,
7.750% 07/01/21. . . . . . . . . . 4,500 4,939
WA Lewis County Public Utilities District
No. 001, Cowlitz Falls Hydroelectric Project,
5.500% 10/01/22. . . . . . . . . . 12,600 11,639
WA State Public Power Supply System,
Nuclear Project No. 1, Series A,
6.500% 07/01/15. . . . . . . . . . 6,000 6,157
WA Tacoma Electric System,
RIB (variable rate), Series 1991 C
Series 1991 C,
8.414% 01/02/15. . . . . . . . . . 10,000 10,787
--------
405,107
- -----------------------------------------------------------------------
WATER & SEWER - 9.6%
CA Fresno,
Series 1993 A,
5.250% 09/01/19. . . . . . . . . . 10,065 9,398
CA Los Angeles County Sanitation,
Series 1993 A,
5.250% 10/01/19. . . . . . . . . . 10,000 9,150
CA Los Angeles Wastewater Systems,
Series 1993 D,
5.200% 11/01/21. . . . . . . . . . 10,000 9,175
CA Metropolitan Water District:
Series B,
5.550% 03/01/20. . . . . . . . . . 13,000 12,529
Southern California Waterworks,
Series 1992,
5.500% 07/01/19. . . . . . . . . . 14,000 13,405
CA State Department Water Resources,
Central Valley Project,
5.500% 12/01/23. . . . . . . . . . 23,835 22,554
FL Orlando Utilities Commission,
Series A,
5.000% 10/01/20. . . . . . . . . . 15,000 13,556
FL Reedy Creek Improvement District,
Series 1,
5.000% 10/01/19. . . . . . . . . . 23,190 20,987
GA De Kalb County Water & Sewer
Redevelopment, Series 1993,
5.250% 10/01/23. . . . . . . . . . 30,905 28,896
ID State Water Resource Board,
Boise Water Corp. Series 1991,
7.250% 12/01/21. . . . . . . . . . 6,000 6,428
IL Southwestern Illinois Development
Authority, Sewer Facilities, Monsanto
Co., Series 1991,
7.300% 07/15/15. . . . . . . . . . 3,000 3,341
LA Public Facility Belmont Water
Authority,
9.000% 03/15/24. . . . . . . . . . 1,460 1,517
MA State Water Resources Authority,
Series B,
5.250% 03/01/13. . . . . . . . . . 12,500 11,875
MA State Water Resources Authority:
Series B:
5.000% 03/01/22. . . . . . . . . . 36,200 32,082
5.500% 03/01/17. . . . . . . . . . 10,150 9,769
Series C:
4.750% 12/01/23. . . . . . . . . . 15,680 13,308
5.250% 12/01/15. . . . . . . . . . 24,825 23,336
MD Northeast Maryland Waste Disposal
Authority, Solid Waste, Montgomery
County Resource Recovery Project,
Series 1993-A,
6.300% 07/01/16. . . . . . . . . . 7,000 7,044
MS Five Lakes Utility District,
8.250% 07/15/24. . . . . . . . . . 760 774
NC Charlotte General Obligation Bonds,
Series 1994,
5.900% 02/01/18. . . . . . . . . . 5,765 5,945
NJ Union County Utilities Authority,
Solid Waste System, Series 1991-A,
7.200% 06/15/14. . . . . . . . . . 8,350 8,673
NY New York City Municipal Water Finance
Authority, Water & Sewer System:
Series B,
5.500% 06/15/19. . . . . . . . . . 30,975 29,775
Series 1994-B,
5.375% 06/15/19. . . . . . . . . . 10,350 9,781
NY Suffolk County Water Authority,
7.375% 06/01/12. . . . . . . . . . 20 22
</TABLE>
See notes to investment portfolio
20
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO - CONTINUED
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- --------------------------------------------------------------------------
<S> <C> <C>
WATER & SEWER - CONT.
TN Jackson Water and Sewer Revenue,
Series 1984,
10.375% 07/01/12. . . . . . . . . . $ 1,090 $ 1,326
TX Coastal Industrial Water Authority,
Bayport Water System, Series 1978,
7.000% 12/15/03. . . . . . . . . . 2,590 2,590
TX Houston Water & Sewer System Revenue,
Series B,
5.000% 12/01/18 (a). . . . . . . . 24,755 22,125
6.750% 12/01/08. . . . . . . . . . 2,155 2,325
UT Associated Municipal Power System,
Hunter Project, Series A,
5.500% 07/01/12. . . . . . . . . . 8,000 7,860
VA Roanoke County Water System,
5.000% 07/01/21. . . . . . . . . . 10,000 9,038
WA Seattle Water System,
5.250% 12/01/23. . . . . . . . . . 5,000 4,519
----------
353,103
- --------------------------------------------------------------------------
Total investments (cost $3,389,308) (h) 3,601,768
- --------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS - 0.6%
- --------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES (i)
ID Health Facilities Authority Revenue,
4.300% 05/01/22. . . . . . . . . . 8,000 8,000
IL Health Franciscan Hospital,
4.300% 01/01/18. . . . . . . . . . 3,850 3,850
IL Health Facilities Authority:
Elmhurst Hospital,
4.300% 01/01/20. . . . . . . . . . 3,640 3,640
NY New York City Water and Sewer,
Series G,
4.000% 06/15/24. . . . . . . . . . 4,700 4,700
Series 1991-D,
4.750% 08/15/23. . . . . . . . . . 2,700 2,700
NY Triborough Bridge & Tunnel Authority,
3.300% 01/01/24. . . . . . . . . . 1,300 1,300
- --------------------------------------------------------------------------
Total short-term obligations 24,190
- --------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES, NET - 1.9% 68,722
- --------------------------------------------------------------------------
NET ASSETS - 100% $3,694,680
- --------------------------------------------------------------------------
<FN>
Notes to investment portfolio:
(a) These securities, or a portion thereof, with a total market value of
$261,618 are being used to collateralize open futures contracts.
(b) Zero coupon bond.
(c) Non-income producing.
(d) This is a restricted security which was acquired on April 2, 1990, at a
cost of $320. This security represents 0.0% of the Fund's net assets at
May 31, 1995.
(e) Accrued interest accumulates in the value of the security and is payable
at redemption.
(f) This is a restricted security which was acquired on August 30, 1993, at a
cost of $68,854. This security represents 1.7% of the Fund's net assets
at May 31, 1995.
(g) The Fund has been informed that each issuer has placed direct obligation
of the U.S. Government in an irrevocable trust, solely for the payment of
the interest and principal.
(h) Cost for federal income tax purposes is $3,390,733.
(i) 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>
<TABLE>
<CAPTION>
ACRONYM NAME
------- -------------------------
<S> <C>
RIB Residual Interest Bond
</TABLE>
<TABLE>
Short futures contracts open at
May 31, 1995:
<CAPTION>
Par value Unrealized
covered Expiration depreciation
Type by contracts month at 5/31/95
-----------------------------------------------------------------
<S> <C> <C> <C>
Treasury bond $127,000 September $ 3,411
-----------------------------------------------------------------
</TABLE>
21
<PAGE>
FINANCIAL STATEMENTS
<TABLE>
STATEMENT OF ASSETS & LIABILITIES (UNAUDITED)
May 31, 1995
(in thousands except for per share amounts and footnote)
- -------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments at value (cost $3,389,308)............................. $3,601,768
Short-term obligations............................................. 24,190
----------
3,625,958
Receivable for:
Interest.................................. $70,887
Investments sold.......................... 35,326
Fund shares sold.......................... 1,468
Other........................................ 256 107,937
------- ----------
Total assets.............................................. 3,733,895
LIABILITIES
Payable for:
Distributions............................. 17,201
Investments purchased..................... 14,569
Fund shares repurchased................... 7,112
Variation margin on futures............. 136
Accrued:
Deferred Trustees fees.................... 36
Other..................................... 161
-------
Total liabilities......................................... 39,215
----------
NET ASSETS ........................................................ $3,694,680
==========
Net asset value & redemption price per share -
Class A ($3,218,993/238,557)................................... $ 13.49
==========
Maximum offering price per share - Class A
($13.49/0.9525)................................................. $ 14.16*
==========
Net asset value & offering price per share -
Class B ($475,687/35,253)...................................... $ 13.49
==========
COMPOSITION OF NET ASSETS
Capital paid in................................................. $3,595,192
Undistributed net investment income............................. 1,634
Accumulated net realized loss................................... (111,195)
Net unrealized appreciation (depreciation) on:..................
Investments................................................ 212,460
Open futures contracts...................................... (3,411)
----------
$3,694,680
==========
<FN>
* On sales of $50,000 or more the offering price is reduced.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS (UNAUDITED)
Six months ended May 31, 1995
(in thousands)
- --------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Interest........................................................ $120,695
EXPENSES
Management fee..................................... $ 9,579
Service fee........................................ 4,343
Distribution fee - Class B......................... 1,697
Transfer agent..................................... 2,823
Bookkeeping fee.................................... 382
Trustees fees...................................... 90
Custodian fee...................................... 70
Audit fee.......................................... 41
Legal fee.......................................... 60
Registration fees.................................. 145
Reports to shareholders............................ 24
Other.............................................. 120 19,374
-------- --------
Net investment income................................... 101,321
--------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON PORTFOLIO POSITIONS
Net realized loss on:
Investments...................................... (12,252)
Closed futures contracts......................... (35,972)
--------
Net realized loss........................................... (48,224)
Net unrealized appreciation (depreciation)
during the period on:
Investments...................................... 399,397
Open futures contracts........................... (3,031)
--------
Net unrealized appreciation................................. 396,366
--------
Net gain................................................ 348,142
--------
Net increase in net assets from
operations................................................... $449,463
========
</TABLE>
See notes to financial statements.
22
<PAGE>
<TABLE>
FINANCIAL STATEMENTS - CONTINUED
- ------------------------------------------------------------------------------------------------------------
Statement of changes in net assets
(in thousands)
- ------------------------------------------------------------------------------------------------------------
<CAPTION>
(unaudited)
Six months
ended Year ended
May 31 November 30
---------- ----------
1995 1994
---------- ----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income................................................... $ 101,321 $ 216,397
Net realized loss....................................................... (48,224) (59,241)
Net unrealized appreciation (depreciation).............................. 396,366 (420,951)
---------- ----------
Net increase (decrease) from operations.......................... 449,463 (263,795)
Distributions
From net investment income - Class A.................................... (89,003) (190,943)
From net investment income - Class B.................................... (11,931) (24,339)
---------- ----------
348,529 (479,077)
---------- ----------
Fund share transactions
Receipts for shares sold - Class A...................................... 220,143 325,549
Receipts for shares issued in the acquisition ..........................
of Liberty Financial Tax-Free Bond Fund................................ 224,575
Value of distributions reinvested - Class A............................. 48,619 107,226
Cost of shares repurchased - Class A.................................... (434,528) (515,463)
---------- ----------
58,809 (82,688)
---------- ----------
Receipts for shares sold - Class B...................................... 20,993 122,043
Value of distributions reinvested - Class B............................. 6,637 13,678
Cost of shares repurchased - Class B.................................... (38,476) (62,729)
---------- ----------
(10,846) 72,992
---------- ----------
Net increase (decrease) from Fund share transactions............. 47,963 (9,696)
---------- ----------
Total increase (decrease)................................. 396,492 (488,773)
NET ASSETS
Beginning of period..................................................... 3,298,188 3,786,961
---------- ----------
End of period (including undistributed net investment
income of $1,634 and $1,059, respectively)............................. $3,694,680 $3,298,188
========== ==========
NUMBER OF FUND SHARES
Sold - Class A.......................................................... 16,985 24,361
Issued in the acquisition of Liberty Financial..........................
Tax-Free Bond Fund..................................................... 17,000
Issued for distributions reinvested - Class A........................... 3,790 8,084
Repurchased - Class A................................................... (33,794) (39,148)
---------- ----------
3,981 (6,703)
---------- ----------
Sold - Class B.......................................................... 1,628 9,017
Issued for distributions reinvested - Class B........................... 518 1,033
Repurchased - Class B................................................... (2,993) (4,820)
---------- ----------
(847) 5,230
---------- ----------
Net increase (decrease) in shares outstanding.................... 3,134 (1,473)
========== ==========
</TABLE>
See notes to financial statements.
23
<PAGE>
NOTES TO FINANCIAL STATEMENTS - (UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 1. INTERIM FINANCIAL STATEMENTS
In the opinion of management of Colonial Tax Exempt Fund (the Fund), 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 Fund at May 31, 1995, and the results of its
operations, the changes in its net assets, and the selected financial
highlights for the six months then ended
- --------------------------------------------------------------------------------
NOTE 2. ACCOUNTING POLICIES
The Fund is a Massachusetts business trust, registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end,
management investment company. The Fund may issue an unlimited number of
shares. The Fund 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. The following significant
accounting policies are consistently followed by the Fund in the preparation of
its 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.
Equity securities 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.
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 Fund 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 Fund to subsequently invest at less advantageous prices.
- --------------------------------------------------------------------------------
DETERMINATION OF CLASS NET ASSET VALUES AND FINANCIAL HIGHLIGHTS
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 Fund for
the entire period by the distribution fee applicable to Class B 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 and tax-exempt 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
24
<PAGE>
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- --------------------------------------------------------------------------------
interest income over the life of a security with a corresponding increase in
the cost basis; market discount is not accreted. Premium is amortized against
interest income with a corresponding decrease in the cost basis.
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
The Fund declares and records distributions daily and pays 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
<TABLE>
MANAGEMENT FEE
Colonial Management Associates, Inc. (the Adviser) is the investment
adviser of the Fund and furnishes accounting and other services and office
facilities for a monthly fee based on each fund's pro rata portion of the
combined average net assets of the Fund, Colonial Tax-Exempt Insured Fund and
Colonial High Yield Municipal Fund as follows:
<CAPTION>
Average Net Assets Annual Fee Rate
- ------------------ ---------------
<S> <C>
First $1 billion........ 0.60%
Next $2 billion......... 0.55%
Next $1 billion......... 0.50%
Over $4 billion......... 0.45%
</TABLE>
<TABLE>
- --------------------------------------------------------------------------------
BOOKKEEPING FEE
The Adviser provides bookkeeping and pricing services for $27,000 per
year plus a percentage of the Fund's average net assets as follows:
<CAPTION>
<CAPTION>
Average Net Assets Annual Fee Rate
- ------------------ ---------------
<S> <C>
First $50 million........ No charge
Next $950 million....... 0.035%
Next $1 billion......... 0.025%
Next $1 billion......... 0.015%
Over $3 billion......... 0.001%
</TABLE>
- --------------------------------------------------------------------------------
TRANSFER AGENT
Colonial Investors Service Center, Inc. (the Transfer Agent), an
affiliate of the Adviser, provides shareholder services and receives a monthly
fee equal to 0.14% annually of the the 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 the Fund's principal underwriter. During the six months ended
May 31, 1995, the Distributor retained net underwriting discounts of $107,345
on sales of the Fund's Class A shares and received contingent deferred sales
charges (CDSC) of $761,274 on Class B share redemptions.
The Fund has adopted a 12b-1 plan which requires it to pay the
Distributor a service fee equal to 0.25% annually of the Fund's net assets as
of the 20th of each month. The plan also requires the payment of a distribution
fee to the Distributor equal to 0.75% 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.
- --------------------------------------------------------------------------------
OTHER
The Fund pays no compensation to its officers, all of whom are
employees of the Adviser.
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.
- --------------------------------------------------------------------------------
26
<PAGE>
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- --------------------------------------------------------------------------------
NOTE 4. PORTFOLIO INFORMATION
During the six months ended May 31, 1995, purchases and sales of
investments, other than short-term obligations, were $632,054,523 and
$883,605,634, respectively.
<TABLE>
Unrealized appreciation (depreciation) at May 31, 1995, based on cost
of investments for federal income tax purposes was:
<S> <C>
Gross unrealized appreciation........... $251,004,059
Gross unrealized depreciation........... (39,969,518)
------------
Net unrealized appreciation............. $211,034,541
============
</TABLE>
<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:
<CAPTION>
Year of Capital loss
expiration carryforward
---------- ------------
<S> <C>
1999......... $ 3,641,000
2002......... 58,218,000
-----------
$61,859,000
===========
</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
The Fund has greater than 10% of its net assets at May 31, 1995
invested in New York.
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 Fund may focus its investments in certain industries, subjecting it
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. 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 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, 191,281,858 voted for the
new Management Agreement, 3,129,132 voted against and 10,416,175 abstained. Of
the shares of beneficial interest outstanding that abstained, 316,535
represented broker non-votes
- --------------------------------------------------------------------------------
26
<PAGE>
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- --------------------------------------------------------------------------------
NOTE 6. MERGER INFORMATION
On March 24, 1995 Liberty Tax-Free Bond Fund (LTFBF) was merged into the
Fund by a non-taxable exchange of 17,000,007 shares of the Fund (valued at
$224,575,100) for 21,866,611 of LTFBF shares then outstanding. The assets of
LTFBF acquired included unrealized appreciation of $7,546,857. The aggregate net
assets of the Fund and LTFBF immediately after the merger were $3,663,697,413.
- --------------------------------------------------------------------------------
27
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
Selected data for a share of each class outstanding throughout each period are as follows:
- -------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
(UNAUDITED)
SIX MONTHS
ENDED
MAY 31 YEAR ENDED NOVEMBER 30
--------------------- -------------------------------------------------------------
1995 1994 1993 1992
--------------------- ------------------ ------------------- ------------------
CLASS A CLASS B CLASS A CLASS B CLASS A CLASS B(A) CLASS A CLASS B
------- ------- ------- ------- ------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value - Beginning
of period.......................... $12.180 $12.180 $13.920 $13.920 $13.480 $13.480 $13.190 $13.230
------- ------- ------- ------- ------- ------- ------- -------
Income (loss) from investment
operations:
Net investment income.............. 0.384 0.336 0.795 0.695 0.842 0.740 0.913 0.462
Net realized and
unrealized gain (loss)........... 1.309 1.309 (1.744) (1.744) 0.451 0.451 0.277 0.248
------- ------- ------- ------- ------- ------- ------- -------
Total from investment
operations....................... 1.693 1.645 (0.949) (1.049) 1.293 1.191 1.190 0.710
------- ------- ------- ------- ------- ------- ------- -------
Less distributions declared
to shareholders:
From net investment income......... (0.383) (0.335) (0.791) (0.691) (0.853) (0.751) (0.900) (0.460)
------- ------- ------- ------- ------- ------- ------- -------
Net asset value - End of period...... $13.490 $13.490 $12.180 $12.180 $13.920 $13.920 $13.480 $13.480
======= ======= ======= ======= ======= ======= ======= =======
Total return (b)..................... 14.05% (c) 13.63% (c) (7.08)% (7.78)% 9.80% 9.00% 9.29% 9.29%(c)
======= ======= ======= ======= ======= ======= ======= =======
Ratios to average net assets
Expenses........................... 1.02% (d) 1.77% (d) 1.01% 1.76% 1.02% 1.77% 1.05% 1.80%(d)
Net investment income.............. 5.93% (d) 5.18% (d) 6.00% 5.25% 6.06% 5.31% 6.81% 6.06%(d)
Portfolio turnover................... 37% (d) 37% (d) 56% 56% 28% 28% 14% 14%
Net assets at end of period
(in millions)...................... $ 3,219 $ 476 $ 2,858 $ 440 $ 3,357 $ 430 $ 2,899 $ 137
<FN>
(a) Class B shares were initially offered on May 5, 1992. Per share amounts reflect activity from that date.
(b) Total return at net asset value assuming all distributions reinvested and no initial sales charge or CDSC.
(c) Not annualized.
(d) Annualized.
</TABLE>
28
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS - CONT.
Selected data for a share of each class outstanding throughout each period are as follows:
- ------------------------------------------------------------------------------------------
<CAPTION>
YEAR ENDED NOVEMBER 30
------------------------------------
1991 1990
------- -------
CLASS A CLASS A
------- -------
<S> <C> <C>
Net asset value - Beginning
of period.............................. $12.890 $13.020
------- -------
Income from investment
operations:
Net investment income.................. 0.955 0.986
Net realized and
unrealized gain (loss)............... 0.305 (0.120)
------- -------
Total from investment
operations........................... 1.260 0.866
------- -------
Less distributions declared
to shareholders:
From net investment income............. (0.955) (0.996)
From capital paid in (a)............... (0.005) ----
------- -------
Total from distributions
declared to shareholders............. (0.960) (0.996)
------- -------
Net asset value - End of period.......... $13.190 $12.890
======= =======
Total return (b)......................... 10.12% 6.95%
======= =======
Ratios to average net assets
Expenses............................... 1.03% 1.05%
Net investment income.................. 7.29% 7.64%
Portfolio turnover....................... 10% 10%
Net assets at end of period
(in millions).......................... $ 2,486 $ 1,886
<FN>
(a) Because of differences between book and tax basis accounting, there was no return of
capital for federal income tax purposes.
(b) Total return at net asset value assuming all distributions reinvested and no initial
sales charge or CDSC.
</TABLE>
29
<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
30
<PAGE>
- ---------------------------------------------------------
[LOGO] ABOUT OUR COVER...
The symbol on the cover of this Report
represents the Fund's primary investment
focus on municipal bonds.
- ---------------------------------------------------------
Colonial Tax-Exempt Fund mails 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.
<PAGE>
[LOGO] COLONIAL
MUTUAL FUNDS
[GRAPHIC]
COLONIAL
TAX-EXEMPT
FUND
------------------------------------
SEMIANNUAL REPORT
MAY 31, 1995
[LOGO] COLONIAL
MUTUAL FUNDS
[LOGO] Printed on recycled paper.
TE-03/059B-0595
COLONIAL INVESTMENT SERVICES, INC. [COPYRIGHT]1995
