<PAGE>
[COLONIAL LOGO]
================================================================================
TAX-EXEMPT FUND
================================================================================
ANNUAL REPORT
NOVEMBER 30, 1995
<PAGE>
COLONIAL TAX-EXEMPT FUND HIGHLIGHTS
DECEMBER 1, 1994 - NOVEMBER 30, 1995
INVESTMENT OBJECTIVE: Colonial Tax-Exempt Fund seeks as high a level of
after-tax total return, as is consistent with prudent risk, by pursuing current
income exempt from federal income tax and opportunities for long-term
appreciation from a portfolio primarily invested in investment-grade municipal
bonds.
THE FUND IS DESIGNED TO OFFER:
- Potential for high monthly tax-free income and long-term growth
- Diversification
- Emphasis on quality
PORTFOLIO MANAGER COMMENTARY: "Declining interest rates during the Fund's
fiscal year had a favorable impact on performance. Your Fund, which maintains
a relatively high quality portfolio, especially benefited as interest rates
moved lower."
COLONIAL TAX-EXEMPT FUND PERFORMANCE
<TABLE>
<CAPTION>
Class A Class B
<S> <C> <C>
Inception date 11/21/78 5/5/92
Distributions declared per share* $ 0.766 $0.667
SEC Yield on November 30, 1995** 4.97% 4.47%
Taxable-equivalent SEC yield*** 8.23% 7.40%
Total returns, assuming reinvestment
of all distributions and no sales charge or
contingent deferred sales charge (CDSC) --
12 months 19.35% 18.47%
Net asset value per share at 11/30/95 $ 13.72 $13.72
</TABLE>
*A portion of the Fund's income may be subject to the alternative minimum tax.
**The 30-day SEC yield on November 30, 1995, reflects the portfolio's earning
power, net of expenses, expressed as an annualized percentage of the maximum
offering price per share at the end of the period.
***Taxable-equivalent SEC yield is based on the maximum federal income tax
rate of 39.6%.
<TABLE>
<CAPTION>
QUALITY BREAKDOWN MATURITY BREAKDOWN
<S> <C> <C> <C> <C> <C>
AAA 47.8% 0-1 year 0.3% 10-15 years 7.4%
AA 15.7% 1-3 years 0.9% 15-20 years 22.3%
A 9.6% 3-5 years 1.8% 20-25 years 28.2%
BBB 8.7% 5-7 years 1.7% 25 years+ 36.2%
BB 0.7% 7-10 years 1.2%
Non-rated 17.5%
</TABLE>
Because the Fund is actively managed, quality and maturity weightings will
change.
2
<PAGE>
PRESIDENT'S MESSAGE
TO FUND SHAREHOLDERS
[PHOTO OF JOHN A. MCNEICE, JR.]
In general, conditions in the municipal bond market were favorable during the
12 months ended November 30, 1995. Those investors who stayed the course
through 1994's difficult environment were amply rewarded.
The impasse between President Clinton and the Congress over the federal
government's debt ceiling produced some volatility in the fixed-income markets.
Although this problem did not have a significant impact on bond prices, the
tax-exempt market has been focusing on this issue as well as on tax-reform,
which may have much larger implications for this market.
Of course, while these political issues have commanded our attention, it must
be pointed out that, over the past 12 months, the positive impact of declining
interest rates overcame almost all of the market's other concerns. This
favorable trend reflects the Federal Reserve Board's success at slowing the
economy and keeping inflation under control. The federal government's stated
resolve to balance the budget added further downward momentum to interest
rates.
With this update, I encourage you to read the following report on your Fund,
including an interview with the Fund's Portfolio Manager. We appreciate the
opportunity to help you meet your investment goals.
Respectfully,
/s/ John A. McNeice, Jr.
- ------------------------
John A. McNeice, Jr.
President
January 12, 1996
3
<PAGE>
PORTFOLIO MANAGEMENT REPORT
BONNY BOATMAN is a Senior Vice President of Colonial Management Associates,
Inc., and Portfolio Manager of Colonial Tax-Exempt Fund. Bonny also directs
Colonial's tax-exempt bond group. ROBERT WAAS, Vice President of Colonial
Management Associates, Inc., co-manages the Fund.
WHAT WAS YOUR INVESTMENT STRATEGY DURING THE PERIOD? "We took advantage of the
declining interest rate environment by upgrading the credit quality of the
portfolio. As interest rates moved lower, the difference in yields available
from higher and lower quality bonds narrowed, allowing us to improve quality
without sacrificing income or returns."
HOW DID THE FUND PERFORM RELATIVE TO THE LEHMAN BROTHERS MUNICIPAL BOND INDEX?
"The total return for the Fund's Class A shares was 19.35%, based on net asset
value. The Fund outperformed the Lehman Brothers Municipal Bond Index, a broad
based, unmanaged Index that tracks the performance of the municipal bond
market. The Index posted a return of 18.90%.
"The Fund and the Index benefited as interest rates moved lower during the
period. However, because the average maturity of the securities in the Fund's
portfolio was longer than the average maturity of the securities tracked by the
Index, declining rates had a more positive impact on the Fund than on the
Index. Another factor that influenced the Fund's performance was its
investment in non-callable bonds -- these made up approximately 23% of the
portfolio. Whereas most municipal bonds lose value as they approach their call
date (especially in a declining interest rate environment) non-callable bonds
tend to retain their value because the income they generate is more secure than
income produced by callable bonds."
WHAT INFLUENCED THE FUND'S PERFORMANCE DURING THE PERIOD? "The biggest impact
came from the downward move in interest rates. From the beginning to the end
of the period, long-term interest rates, as represented by the 30-year Treasury
bond, declined from 8.01% to 6.14%. Another factor was the favorable
supply/demand dynamic within the municipal bond market. The supply of
municipal bonds has been declining for several years, and this trend is
expected to continue. From January through November 1995, approximately $136
billion in new bonds were issued, a decline of 11.8% from calendar 1994. At
the same time, demand remained strong, despite ongoing tax reform discussions
in Washington. The combination of declining supply and continued interest in
municipal bonds has enhanced the value of these securities.
"Although we avoid large bets on individual issues, there were some investments
that especially contributed to performance. Among the Fund's non-rated
holdings, T.L. Systems, a manufacturer of medical instruments and measuring
devices, produced a return of 34%, when it was acquired by
4
<PAGE>
Bosch Company. Rated investments included bonds issued by the San Joaquin
Hills Transportation Corridor Agency, which realized a price gain after the
successful resolution of concerns about the project's environmental impact."
WHAT IS YOUR OUTLOOK FOR THE TAX-EXEMPT BOND MARKET? "Tax reform will remain a
source of concern. However, barring a radical change in the tax code, the
combination of low supply and strong demand should produce attractive returns
over the long term."
COLONIAL TAX-EXEMPT FUND'S PERFORMANCE VS.
THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
Change in Value of $10,000 from 11/85-11/95
Based on NAV and MOP for Class A Shares
<TABLE>
CTEF MOP NAV LEHMAN
- ---- --- --- ------
<S> <C> <C> <C>
9/30/85 9525 10000 10000
9708 10192 10088
10477 11000 11110
10449 10970 11041
10894 11437 11635
11248 11809 12037
11531 12106 12328
11189 11747 11993
10940 11485 11695
11299 11863 12217
11663 12245 12638
11957 12553 12882
12230 12840 13213
12474 13096 13457
12569 13196 13547
13108 13761 14349
13136 13791 14358
13482 14154 14909
13554 14230 14975
13841 14531 15325
13903 14596 15334
14350 15065 15996
14686 15418 16358
15005 15753 16706
15564 16340 17356
16034 16833 17939
16112 16916 17993
16671 17503 18675
17100 17953 19171
17359 18225 19520
17935 18829 20244
18413 19331 20907
19011 19959 21613
19223 20181 21916
18191 19098 20713
18271 19182 20943
18350 19265 21086
18018 18916 20783
19415 20383 22253
19695 20677 22790
20116 21120 23445
20946 21991 24180
</TABLE>
A $10,000 investment in Class B shares made on 5/5/92 at net asset value (NAV)
would have been valued at $12,554 on 11/30/95. The same investment based on
CDSC would have grown to $12,254 on 11/30/95.
AVERAGE ANNUAL TOTAL RETURNS
As of 12/31/95 (Most Recent Quarter End)
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
Inception 11/21/78 Inception 5/5/92
NAV MOP NAV W/CDSC
<S> <C> <C> <C> <C>
1 YEAR 17.64% 12.05% 16.77% 11.77%
5 YEARS 8.11% 7.07% -- --
10 YEARS 8.12% 7.60% -- --
SINCE INCEPTION -- -- 6.74% 6.04%
</TABLE>
The Lehman Brothers Municipal Bond Index is a broad-based, unmanaged index that
tracks the performance of the municipal bond market. The performance of the
Index does not reflect fees or expenses associated with an actual investment.
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. NAV return does not include sales charges
or CDSC. MOP return includes the maximum sales charge of 4.75%. The CDSC return
reflects the maximum 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.
5
<PAGE>
INVESTMENT PORTFOLIO
NOVEMBER 30, 1995 (IN THOUSANDS)
<TABLE>
<CAPTION>
MUNICIPAL BONDS - 98.2% PAR VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
CERTIFICATES OF PARTICIPATION - 0.8%
AZ Apache County School District
Number 010 Round Valley
Project of 1987, Series 1990-C:
9.875% 07/01/05 $ 1,500 $ 1,676
10.800% 07/01/96 800 822
10.800% 07/01/97 800 858
10.800% 07/01/98 1,000 1,114
10.800% 07/01/99 1,000 1,084
AZ Maricopa County School District,
Number 028 Kyrene Elementary,
Series 1993 C:
(a) 07/01/07 4,000 2,235
(a) 07/01/08 4,000 2,100
(a) 01/01/09 2,000 1,015
(a) 01/01/10 2,000 952
(a) 01/01/11 6,000 2,670
MA Health and Educational Facilities,
Independent Living Bonds,
Series 1993-A,
8.100% 07/01/18 1,295 1,314
SC Charleston County:
6.000% 12/01/07(b) 3,110 3,335
6.000% 12/01/08(b) 3,295 3,509
6.000% 12/01/09(b) 3,495 3,692
6.000% 12/01/10(b) 3,710 3,886
-------
30,262
-------
........................................................................................
EDUCATION - 5.9%
FL State Board of Education,
Series 1993 D,
5.125% 06/01/22 14,500 13,721
IL Chicago Board Education:
Series 1992-A:
6.000% 01/01/20(c) 4,000 4,215
6.250% 01/01/15(c) 4,400 4,791
IL State Educational Facilities Authority,
Northwestern University,
5.375% 12/01/21 6,500 6,354
IN Purdue University,
Student Fee,
Series B,
6.700% 07/01/15 1,100 1,225
</TABLE>
6
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<S> <C> <C>
IN Indiana University,
Student Fee,
7.000% 08/01/09 $ 2,680 $ 2,982
LA State Public Facilities Authority,
Tulane University,
6.625% 11/15/21 1,545 1,667
MA Health and Educational Facilities Authority:
Amherst College,
Series E,
6.750% 11/01/15 1,000 1,088
Berklee College of Music,
Series C,
6.875% 10/01/21 4,380 4,807
MA State College Building Authority Project,
Series A,
7.500% 05/01/11 1,500 1,849
NY State Dormitory Authority:
City University System:
Series 1990-C:
7.000% 07/01/14 2,050 2,276
7.500% 07/01/10 13,000 15,519
Series 1993-A,
5.750% 07/01/13 5,000 5,006
Series A,
5.625% 07/01/16(b) 5,500 5,417
Cornell University,
6.875% 07/01/14 1,355 1,398
Court Facilities Lease, City of New York:
Series C,
5.400% 05/15/23 16,000 15,020
Series F,
5.000% 07/01/14 4,700 4,265
State University Educational
Facilities, Series 1993-B:
5.250% 05/15/19 12,230 11,404
5.750% 05/15/24 7,000 6,912
State University of New York:
Series 1990-A,
7.500% 05/15/13 8,000 9,580
Series 1990-B,
7.000% 05/15/16 1,000 1,074
Series 1993-A:
5.500% 05/15/08 6,000 6,000
5.500% 05/15/13 33,805 33,044
5.875% 05/15/17 33,240 33,988
Upstate Community Colleges, Series
1994-A,
5.625% 07/01/14 11,500 11,256
</TABLE>
7
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- ---------------------------------------------------------------------------------
<S> <C> <C>
EDUCATION - CONT.
TX Texas Southern University,
Series A,
5.000% 08/01/13 $ 5,000 $ 4,775
--------
209,633
--------
.................................................................................
FINANCE/INSURANCE/REAL ESTATE - 0.1%
REAL ESTATE
MD Baltimore,
Economic Development,
Park Charles Project, Series 1986,
8.000% 01/01/10 1,695 1,820
--------
.................................................................................
GENERAL OBLIGATION - 5.3%
CA San Jose Redevelopment Agency,
5.000% 08/01/21 30,000 27,975
FL State Board of Education,
Series 1993 D,
5.200% 06/01/23 10,140 9,696
GA De Kalb County,
5.250% 01/01/20 5,000 4,900
IL Chicago Public Commerce Building,
Series 1990 A,
7.125% 01/01/15 4,010 4,461
MA State Bonds,
Consolidated Loan:
Series 1989 C,
7.000% 06/01/04 6,500 7,207
Series 1991 B,
(a) 06/01/07 5,500 3,135
Series 1991 C:
6.750% 08/01/09 3,865 4,228
7.000% 08/01/12 2,000 2,290
MA Holyoke,
School Project Loan,
7.650% 08/01/09 1,250 1,367
MA Lawrence,
4.750% 02/15/14 6,250 5,641
MA City of Lowell:
8.000% 01/15/00 1,385 1,555
8.400% 01/15/09 1,000 1,167
MI Brighton Area School District,
General Obligation Bonds,
Series 1992-II,
(a) 05/01/16 8,695 2,793
</TABLE>
8
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<S> <C> <C>
MI City of Detroit:
Series 1990-A,
8.700% 04/01/10 $10,000 $11,875
Series 1990-B,
8.250% 04/01/10 5,000 5,444
NV State,
Colorado River Commission,
6.600% 10/01/16 5,000 5,387
NY New York City, General Obligation,
Series 1991-D:
8.000% 08/01/16 60 70
8.000% 08/01/18 75 87
NY State,
Series E,
5.500% 02/15/08 10,000 9,638
NY State Various Purpose,
3.000% 03/15/01 405 369
PA Westmoreland County Municipal
Authority, Municipal Services, Series
1993-C:
(a) 08/15/15 8,380 2,776
(a) 08/15/16 10,880 3,359
TN Metropolitan Government Nashville
& Davidson County,
6.150% 05/15/25 17,220 17,844
TN Shelby County School, General Obligation
School Series 1992-A:
(a) 05/01/10 7,065 3,135
(a) 05/01/13 2,500 900
TN Shelby County, Public Improvement,
Series 1992-A:
(a) 05/01/12 15,130 5,844
(a) 05/01/13 5,000 1,800
TX Hurst Euless Bedford
Independent School District,
6.500% 08/15/24 20,000 21,250
TX Ysleta Independent School District,
Series 1993,
(a) 08/15/12 6,240 2,519
VA Fairfax County Economic Development,
Ogden Martin Systems,
Series 1987 A,
7.750% 02/01/11 1,000 1,103
VT State Student Assistance Financing
Program, Series B,
6.700% 12/15/12 2,000 2,138
</TABLE>
9
<PAGE>
Investment Portfolio/November 30,1995
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------------------
<S> <C> <C>
GENERAL OBLIGATION - CONT.
WA State:
Series A,
6.250% 02/01/11 $ 6,400 $ 6,960
Series B,
5.500% 05/01/18 12,130 12,160
--------
191,073
--------
...................................................................................
HEALTH - 14.2%
HOSPITALS - 7.9%
AL Alabama Special Care Facilities Authority,
Montgomery Healthcare,
Series 1989,
11.000% 00/01/19 15,760 15,524
CT State Health & Educational
Facilities Authority, New Britain
Hospital, Series 1991 A,
7.750% 07/01/22 905 974
DE State Economic Development,
Riverside Hospital Series 1992 A,
9.500% 01/01/22 1,165 1,341
FL Lee County Hospital Board,
6.350% 03/26/20 12,500 13,078
FL St. Petersburg Health Facilities
Authority, Allegany Health System,
St. Joseph's Hospital, Inc., Series 1985-A,
7.000% 12/01/15 2,000 2,252
GA Clayton Hospital Authority,
The Woodlands Foundation Inc.,
Series 1991 A,
9.750% 05/01/21 6,680 5,678
IL Health Facilities Authority:
Edgewater Medical Center,
Series A,
9.250% 07/01/24 8,435 8,899
Edward Hospital Association Project:
Series 1992,
7.000% 02/15/22 1,000 1,073
RIB (variable rate),
Series 1992 B,
9.467% 05/01/21 4,800 5,550
IL Naperville Economic Development,
Series 81,
13.000% 08/01/08 5,658 6,047
IL State Health Facilities Authority,
Mercy Center for Health Services,
6.650% 10/01/22 1,350 1,360
</TABLE>
10
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<S> <C> <C>
LA Louisiana Public Facilities Authority,
RIB, (variable rate),
6.250% 11/28/14 $26,000 $26,910
MA Health and Educational Facilities,
Lowell General Hospital,
Series 1991-A,
8.400% 06/01/11 2,500 2,809
MI State Hospital Finance Authority,
Central Michigan Community Hospital,
Series 1993-A,
6.000% 10/01/08 1,500 1,539
MO Hannibal Industrial Development,
Medical Systems of Northeast Missouri,
Series 1992,
9.500% 03/01/22 4,250 4,967
MS Hospital Equipment & Facilities
Authority, Pooled Loan Program,
7.500% 08/01/16 18,900 19,987
MT State Health Facility Authority,
Hospital Facilities, Series 1994,
6.345% 02/15/25 6,000 5,445
NC Lincoln County, Lincoln County Hospital,
9.000% 05/01/07 530 664
NJ Health Care Facilities Financing
Authority, Raritan Bay Medical Center,
7.250% 07/01/14 4,000 4,050
NM Grant County Hospital Facility,
Gila Regional Medical Center,
Series 1986,
10.000% 02/01/12 2,185 2,304
NV Reno Hospital, St. Mary's Regional
Medical Center, Series 1991-A,
6.700% 07/01/21 1,700 1,840
NY State Medical Care Facilities
Finance Agency, Presbyterian
Hospital, Series 1994-A,
5.375% 02/15/25 10,000 9,587
OK Oklahoma City Industrial and Cultural
Facilities Trust, Hillcrest Health Center,
6.400% 08/01/14 4,320 4,498
PA Erie's County Hospital Authority,
Metro Health Center, Series 1992
7.375% 07/01/22 5,000 5,063
PA Philadelphia Hospital & Higher
Educational Facilities Authority,
Chestnut Hill Hospital,
6.500% 11/15/22 2,000 2,067
</TABLE>
11
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------------------------
<S> <C> <C>
HEALTH - CONT.
HOSPITALS - CONT.
PA Westmoreland County Redevelopment
Authority, First Mortgage, Harmon
House, Series A,
(a) 08/15/28 $ 37,300 $ 3,124
TN Chattanooga Health Education
and Housing Facilities Board,
North Park Hospital Project, Series 1993,
8.500% 02/01/23 42,795 44,346
TN Metropolitan Government, Nashville
and Davidson Counties:
Meharry Medical College,
6.875% 12/01/24 29,750 32,985
Volunteer Healthcare Systems,
Series 1988-A,
10.750% 06/01/18(d) 18,880 4,154
TX Harris County Health Facilities
Development Corp.,
Hermann Hospital Project,
6.375% 10/01/24 18,000 19,035
TX Tarrant County, Health Facilities
Development Corporation,
10.125% 04/01/21 9,200 6,900
VA Dickenson County Industrial,
Development, Volunteer Healthcare
Systems Inc., Series 1988 A,
10.750% 06/01/18(d) 2,500 550
VA Norfolk Industrial Development
Authority,
Sentara Hospital, Series A,
6.500% 11/01/13 2,500 2,722
VA Southampton County Industrial
Authority, Medical Facility of
America XLIII Project, Series 1986,
8.375% 12/15/26 3,035 3,183
VT Educational and Health Buildings
Financing Agency, Springfield Hospital,
7.750% 01/01/13 2,020 2,106
WA Washington State Health Care
Facility, Grays Harbor Community
Hospital, Series 1993:
7.200% 07/01/03 1,185 1,274
8.025% 07/01/20 6,380 6,930
WI State Health and Educational
Facilities Authority, St. Luke's
Medical Center Project, Series 1991,
7.100% 08/15/19 2,550 2,818
--------
283,633
--------
</TABLE>
12
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<S> <C> <C>
HUMAN SERVICES PROVIDERS - 1.4%
AZ Tucson Industrial Development
Authority, Villa Maria Care Center,
10.125% 11/01/21 $ 635 $ 595
CA San Diego Industrial Development,
Carmel Mountain Healthcare Center,
8.750% 12/01/16 5,500 5,940
CO Health Facility,
American Housing Foundation I,
Series 1990,
10.250% 12/01/20 2,500 2,803
CT State Development Authority,
Waterbury Health Care Center,
Series 1984,
13.500% 11/01/14 1,965 2,004
DE State Economic Development Healthcare
Facility,
10.000% 03/01/21 7,245 8,522
DE Sussex County, Healthcare Facility,
Delaware Health Corporation, Series
1994-A,
7.600% 01/01/24 14,230 13,910
IL Champaign First Mortgage,
Hoosier Care Inc., Series 1989-A,
9.750% 08/01/19 1,485 1,594
IN Wabash First Mortgage, Hoosier
Care, Inc., Series 1989-A,
9.750% 08/01/19 5,900 6,335
TN Shelby County, Health, Education,
and Housing Facilities Board, Open Arms
Development Center:
Series 1992-A
9.750% 08/01/19 4,295 5,025
Series 1992-C
9.750% 08/01/19 4,290 5,019
-------
51,747
-------
NURSING HOMES - 4.9%
FL Collier County Industrial
Development Authority, Beverly
Enterprises, Series 1991,
10.750% 03/01/03 1,120 1,317
FL Flagler County Industrial,
Redevelopment Authority,
South Florida Properties, Series 1988,
10.500% 12/01/18 8,925 8,981
</TABLE>
13
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------------------------
<S> <C> <C>
HEALTH - CONT.
FL Gadsden County Industrial Development,
Florida Housing Properties, Inc.,
Series 1988-A,
10.450% 10/01/18 $ 6,135 $ 6,366
FL Palm Beach County:
Hillcrest Manor Project,
10.250% 12/01/16 3,190 3,339
Beverly Enterprises, Series 1984-1,
10.000% 06/01/11 2,735 3,087
FL Volusia County Industrial
Development Authority, Beverly
Enterprises, Series 1987,
9.800% 12/01/07 915 963
IA Finance Authority Healthcare Facility,
Mercy Health Initiatives, Series 1989,
9.950% 07/01/19 7,600 7,752
IA Marion,
Kentucky Iowa Corporation Project,
Series 1990,
10.250% 01/01/20 1,000 1,050
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 (e) 315 349
MA State Industrial Finance Agency:
American Health Foundation Inc.,
Series 1989,
10.125% 03/01/19 3,250 3,437
Belmont Home Care Project,
Series A:
7.970% 01/01/99 290 297
9.270% 01/01/25 10,405 11,029
GF/Massachusetts Inc.,
Series 1994,
8.300% 07/01/23 13,000 12,821
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 5,477
</TABLE>
14
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<S> <C> <C>
MO St. Charles County Industrial
Development Authority, Health Care
Properties of St. Charles County, Ltd.,
8.700% 06/01/11 (f) $ 2,680 $ 2,700
MO St. Louis County Industrial Development,
Authority, Cardinal Carberry
Health, Series 1991,
7.125% 03/20/23 2,000 2,190
NM Albuquerque Industrial Development
Authority, Manor Nursing Home,
12.000% 05/15/14 3,203 3,796
OH Alliance First Mortgage Medical
Facility, McCrea Nursing Center,
10.125% 02/01/13 2,410 2,517
OH Ashtabula County,
Village Square Nursing Center, Inc.,
12.000% 12/01/15 1,275 1,325
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 2,935
OH Montgomery County,
Grafton Oaks Project,
Series 1986,
9.750% 12/01/16 695 660
OH Perry County, New
Lexington Health,
9.875% 09/01/10 2,545 2,644
OH Trumbull County, Horizon Healthcare,
12.000% 12/01/15 2,215 2,302
OH Washington County Industrial
Development, Marie Antoinette Care
Center, Series 1983,
6.867% 12/01/13 5,370 4,900
PA Cambria County Industrial Development,
Beverly Enterprises,
10.000% 06/18/12 2,000 2,507
PA Chester County Industrial Development,
Pennsylvania Nursing Home, Inc.,
Series 1989,
10.125% 05/01/19 10,730 11,159
PA Delaware County Authority,
Main Line and Haverford Nursing,
Series 1992,
9.000% 08/01/22 9,420 10,209
</TABLE>
15
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------------------------
<S> <C> <C>
HEALTH - CONT.
NURSING HOMES - CONT.
PA Lackawanna County Industrial Authority,
Greenridge Nursing Center, Inc.,
10.500% 12/01/10 $ 1,950 $ 2,072
PA Luzerna County Industrial
Development Authority:
Beverly Enterprises,
Pennsylvania, Series 1983,
10.125% 11/01/08 870 978
First Mortgage, Millville Nursing Center,
10.500% 12/01/12 3,870 3,676
PA Montgomery County Higher Education
and Health Authority, AHF/Roslyn-
Hatboro, Incorporated Project,
9.000% 11/15/22 12,465 12,948
PA Philadelphia Authority For
Industrial Development:
The Care Pavilion, Series 1988,
10.250% 02/01/18 5,950 6,137
Nursing Home,
Series 1988,
10.250% 11/01/18 9,460 9,834
PA Warren County Housing Finance
Corporation, Allegheny Manor,
7.500% 02/01/21 1,423 1,482
PA Washington County Industrial
Development Authority, Central
States, Series 1989,
10.250% 11/01/19 3,440 3,337
PA Wilkins Area Industrial Development
Authority, Oakmont Nursing Center,
Series 1984,
10.000% 07/01/11 1,150 1,318
SC Charleston County,
Driftwood Health Care Center, Series 1984,
12.500% 12/01/14 1,410 1,445
TN Metropolitan Government, Nashville
and Davidson Counties Health and
Education Facilities, Central States, Series 1989
10.250% 11/01/19 770 747
TN Sullivan County, Health, Education,
and Housing Facilities Board,
10.250% 04/01/15 2,820 3,091
</TABLE>
16
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<S> <C> <C>
TN Sumner County, Health, Education,
and 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 Corporation, Oak Brook
Health Care Center, Series 1989,
10.000% 12/01/19 1,815 1,858
VA Beach Development Authority,
Beverly Enterprises, Series 1985,
10.000% 04/01/10 960 1,080
--------
175,749
--------
.........................................................................................
HOUSING - 13.3%
ASSISTED LIVING/SENIOR - 1.0%
AZ Mohave County Industrial Development
Authority, Multifamily, Kingman
Station Apartments,
8.125% 10/01/26 2,875 3,080
CO Health Facility,
Birchwood Manor,
Series 1991 A,
7.625% 04/01/26 1,835 1,920
DE Quaker Hill Housing Corporation,
Multi-family Housing, Quaker Hill
Apartments, Series A,
7.550% 08/01/21 6,225 6,738
IL State Development Finance Authority,
Care Institute, Inc.,
8.250% 06/01/25 10,000 10,300
MN Roseville,
Care Institute, Inc., Series 1993
7.750% 11/01/23 2,975 2,767
PA Montgomery County Industrial
Development Authority, Assisted
Living Facility, Series 1993-A,
8.250% 05/01/23 1,470 1,486
TX Bell County Health Facilities
Development Corp., Care Institutes, Inc.
9.000% 11/01/24 7,585 8,125
--------
34,416
--------
</TABLE>
17
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------------------------
<S> <C> <C>
HOUSING - CONT.
MULTI - FAMILY - 5.3%
AK State Housing Finance Corp.:
First Series 1991,
7.800% 12/01/30 $ 2,430 $ 2,570
Series A,
5.400% 12/01/13 7,400 7,058
Series 1992-A,
6.600% 12/01/23 11,750 13,042
AL State Housing Finance Authority,
Series 1990-C,
7.550% 04/01/16 730 776
AZ Phoenix Industrial Development
Authority, Chris Ridge Village
Project, Series 1992:
6.750% 11/01/12 650 678
6.800% 11/01/25 2,750 2,857
CA Housing Finance Agency,
Home Mortgage, Series 1984 B,
(a) 08/01/16 325 33
CO El Paso County Home Mortgage:
Series 1987 C,
8.300% 09/20/18 2,589 2,919
Series 1987 D,
8.150% 09/20/14 1,329 1,464
Series 1988 A,
8.375% 03/25/19 2,419 2,749
CT State Housing Finance Authority,
Housing Mortgage Finance Program,
Series B-1,
7.550% 11/15/08 75 81
FL Clearwater,
Hampton Apartments,
8.250% 05/01/24 3,475 3,692
FL Hialeah Housing Authority,
Series 1991,
9.500% 11/01/21 10,600 11,130
FL State Housing Finance Agency,
Windsong Apartments, Series 1993-C,
9.250% 01/01/19 1,230 1,250
GA Augusta Housing Authority Mortgage,
Mountain Ridge Holdings II,
Series A,
8.960% 09/01/24 3,620 2,715
</TABLE>
18
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<S> <C> <C>
GA Savannah Housing Authority,
Multi-family Housing, Plantation Oaks
Apartments Project, Series 1986,
9.625% 02/01/27 $ 2,905 $ 3,116
IL Carbondale Mortgage Revenue,
Mill Street Apartments, Series 1979,
7.375% 09/01/20 855 899
IL Charleston Non-Profit Corporation,
Cougills Manor Project,
6.875% 07/01/20 1,807 1,934
IL Chicago Multi-family Housing,
Jeffery Apartments,
Series 1987,
8.125% 08/01/30 2,395 2,491
IL Housing Development Authority,
Series 1990 A,
8.000% 06/01/26 680 704
IL Rockford:
8.700% 08/20/07 635 658
8.700% 08/20/26 4,455 4,619
KY Louisville Residential,
Series 1984,
(a) 07/01/16 1,135 116
LA Jefferson Housing Development,
Corporation Multi-family,
Concordia Project, Series A,
7.700% 08/01/22 2,570 2,792
LA New Orleans Housing Development
Corporation, Multi-family Housing
Mortgage, Southwood Patio, Series 1990-A,
7.700% 02/01/22 2,375 2,506
MN Washington County Housing and
Redevelopment Authority, Cottages of
Aspen Project,
9.250% 06/01/22 1,950 2,006
MN White Bear Lake,
Birch Lake Townhomes Project;
Series 1988 A,
9.750% 07/15/19 2,185 2,210
Series 1989 B,
(g) 07/15/19 310 489
MO St. Louis Area Housing Finance
Corporation, Wellington Arms III,
Series 1979,
7.500% 01/01/21 2,075 2,111
</TABLE>
19
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------------------------
<S> <C> <C>
HOUSING - CONT.
MULTI - FAMILY - CONT.
MS Biloxi Urban Renewal
Biloxi Apartments Project,
Series 1985:
9.500% 12/01/05 $ 1,185 $ 1,225
9.500% 12/01/10 1,235 1,278
9.500% 12/01/15 1,970 2,039
NC Eastern Carolina Regional Housing
Authority, Jacksonville New River
Apartments,
8.250% 09/01/14 2,915 2,970
NE Omaha Housing Development
Corporation, Mortgage Notes, North
Omaha Homes,
7.375% 03/01/21 1,435 1,494
NY Nyack Housing Assistance
Corp., Plaza Apartments,
7.375% 06/01/21 (f) 3,070 3,072
NY Yorktown Housing Corp.,
Beaveridge Apartments,
7.375% 06/01/21 (f) 3,453 3,461
Pass Through Certificates, Series
1993-A,
8.500% 12/01/16 (f) 61,712 63,795
TN Knox County Industrial Board,
Multi-family Redevelopment,
Waterford Village Project, Series 1986:
8.750% 03/01/96 15 15
8.750% 03/01/05 525 542
8.750% 03/01/15 1,320 1,364
8.750% 03/01/26 3,590 3,712
TN Knoxville Community Development,
Corporation Multi-family Housing,
Maple Oak Apartment Project, Series 1992,
6.375% 10/15/08 2,510 2,610
TX Galveston Pass Health Facilities Center,
8.000% 08/01/23 1,850 1,929
TX Laredo Cherry Hills Apartment Project,
Housing Development Corp., Number 1,
7.375% 03/05/21 2,130 2,192
VA Alexandria Redevelopment
and Housing Authority, Courthouse
Commons Apartments:
Series 1990-A,
10.000% 01/01/21 760 772
Series 1990-B,
(a) 01/01/21 979 1,661
</TABLE>
20
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<S> <C> <C>
VA Harrisonburg Redevelopment and
Multi-family Housing Authority,
Series 1991 A,
7.375% 11/20/28 $ 1,750 $ 1,862
VA Norfolk Redevelopment and Housing
Authority, Multi-family Housing,
Dockside, Series 1991-A:
7.300% 12/01/16 1,315 1,399
7.375% 12/01/28 1,940 2,068
VA Roanoke Redevelopment and Housing
Authority, Mountain Ridge,
9.250% 11/01/22 1,800 1,854
VA State Housing Authority Commonwealth
Mortgage,
Series B, Sub Series B-4,
6.850% 07/01/17 5,180 5,394
WA Washington State Housing Finance
Commission, Multi-family Housing,
Series 1988-A,
7.900% 07/01/30 1,460 1,522
WI Milwaukee Housing Authority
Mortgage, Windsor Court Project,
Series 1986,
8.700% 08/21/21 1,985 2,068
--------
189,963
--------
SINGLE - FAMILY - 7.0%
AZ Maricopa County Industrial Development,
Single-family, Series 1984,
(a) 02/01/16 10,055 3,054
CA Riverside County, Series 1988-A,
8.300% 11/01/12 10,000 13,225
CO Housing Finance Authority,
Single-family Housing:
Series 1991-A,
7.500% 05/01/29 4,745 5,024
Series 1991 C-1:
7.200% 02/01/18 870 923
7.650% 12/01/25 5,000 5,606
Series A,
7.150% 11/01/14 2,350 2,479
Series D-1,
7.375% 06/01/26 5,000 5,531
FL Brevard County,
Housing Finance Authority,
Single-family Mortgage, Series 1985,
(a) 04/01/17 8,055 906
</TABLE>
21
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------------------------
<S> <C> <C>
HOUSING - CONT.
SINGLE - FAMILY - CONT.
GA Atlanta Urban Residential Finance
Authority, Single-family Housing
Mortgage, Series 1988,
8.250% 10/01/21 $ 1,220 $ 1,287
GA State Residential Finance Authority,
Home Ownership Mortgage:
Series C,
7.500% 01/01/18 755 804
Series 1989,
7.800% 06/01/21 5,950 6,359
IA Finance Authority Single-family,
Series 1992 B,
6.950% 07/01/24 10,000 10,475
IA State Finance Authority,
Single-family Mortgage Revenue,
Series A,
7.250% 07/01/16 1,075 1,137
IL East Moline Housing Finance Corp.,
Deerfield Woods Apartments,
7.500% 08/01/21 2,416 2,458
IL Rockford,
9.250% 02/01/00 1,075 1,111
IL State Housing Development Authority:
Series B,
7.250% 08/01/17 1,290 1,377
Series C,
7.500% 08/01/17 220 232
IN State Housing Finance Authority:
Single-family Housing,
Series 1987 C,
9.125% 07/01/18 4,075 4,294
GNMA Collateral Mortgage Program:
Series A-1,
7.850% 07/01/16 160 172
Series B-1,
7.600% 01/01/16 1,015 1,078
LA Housing Financing Agency,
Series 1988,
8.300% 11/01/20 2,780 2,908
LA Calcasieu Parish:
Series 1987-A,
8.125% 12/01/12 1,409 1,448
Series 1988-B,
8.250% 06/01/12 3,543 3,676
</TABLE>
22
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<S> <C> <C>
LA Jefferson Parish Home Mortgage
Authority, Single-family,
Series 1988 A,
8.300% 04/01/20 $ 2,380 $ 2,526
MA State Housing Finance Agency:
Series 1987-A,
9.000% 12/01/18 1,595 1,675
Series 1988-A,
8.400% 08/01/21 740 768
Series 1988-B,
8.100% 08/01/23 840 883
MD State Community Development Administration,
Department of Housing and Community
Development, Single-family Program:
1st Series,
7.300% 04/01/17 450 478
3rd Series,
7.250% 04/01/27 960 1,013
ME State Health and Higher Educational
Facilities Authority,
Maine Medical Center, Series C,
5.000% 11/15/13 16,500 15,448
MN State Housing Finance Agency:
Series 1988 D,
8.250% 08/01/20 1,950 2,057
Single-family Mortgage,
Series C,
7.100% 07/01/11 675 721
MO State Housing Development Commission,
Series C,
6.900% 07/01/18 870 913
MS Canton Housing,
8.400% 08/15/21 1,551 1,590
MS Home Corporation Residual,
Series 1990-C,
(a) 09/01/13 20,000 7,125
MS Lamar County Wesley Manor II:
8.750% 08/01/20 1,000 1,054
8.750% 02/01/29 1,610 1,697
NE Investment Finance Authority,
Single-family Mortgage:
Series 1988-1,
8.125% 08/15/38 5,355 5,616
Series 1990-B,
10.892% 03/15/22 8,000 9,230
Series 1990-2,
11.134% 09/10/30 4,000 4,655
</TABLE>
23
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------------------------
<S> <C> <C>
HOUSING - CONT.
SINGLE - FAMILY - CONT.
NH State Housing Finance Authority,
Single-family Resources Mortgage,
Series 1989-B,
7.700% 07/01/29 $ 2,705 $ 2,833
NJ State Housing and Mortgage Finance
Agency,
6.950% 11/01/13 5,090 5,383
NY State Mortgage Agency:
Series BB-2,
7.950% 10/01/15 1,395 1,461
Home Owner Mortgage:
Series H-2,
7.850% 04/01/22 1,500 1,599
Series 46,
6.650% 10/01/25 10,000 10,400
OH Housing Finance Agency,
Series 1988 C,
8.125% 03/01/20 1,025 1,088
OH Housing Finance Agency Single-
family Mortgage, RIB (variable rate),
Series A-2,
9.517% 03/24/31 6,550 7,189
PA Pittsburgh Urban Redevelopment
Authority, Sidney Square Project,
7.800% 08/01/28 5,290 5,473
PA State Housing Finance Authority,
Series 39B,
6.750% 04/01/16 5,700 6,013
SC State Housing Authority,
Homeownership Mortgage, Series 1988-A,
8.500% 07/01/08 2,000 2,088
TX Bexar County Housing Finance Corp.
GNMA Collateralized Mortgage,
Series 1989-A,
8.200% 04/01/22 4,055 4,405
TX Corpus Christi Housing Finance Corp.
Single-family Mortgage,
Lomas and Nettleton, Series C,
10.000% 10/01/07 1,145 1,178
TX Harris County Housing Finance,
Corporation Single-family,
Series 1987,
8.875% 12/01/17 2,595 2,705
</TABLE>
24
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<S> <C> <C>
TX Lubbock Housing Finance Corporation,
Single-family Series:
Series 1988 C,
8.375% 12/01/20 $ 6,370 $ 6,545
Series 1988 D,
8.375% 12/01/20 1,165 1,206
TX State Department Housing and
Community Affairs, Collateralized
Home Mortgage, Series 1992-B2,
9.511% 06/18/23 9,000 10,102
TX State Housing Agency Mortgage,
Single-family,
Series A,
7.150% 09/01/12 900 960
UT State Housing Finance Agency,
Single-family Mortgage:
Series A,
7.200% 07/01/13 190 197
Series A-1,
6.900% 07/01/12 1,065 1,125
Series B-1,
7.500% 07/01/16 195 205
Series B-2:
7.000% 07/01/16 380 400
7.700% 07/01/15 40 42
Series D-2,
7.250% 07/01/11 530 566
Series E-1,
6.950% 07/01/11 1,740 1,842
Series F-1,
7.400% 07/01/09 510 530
Series 1990-C2,
7.950% 07/01/10 430 464
VA State Housing Authority, Commonwealth
Mortgage:
Series A,
7.100% 01/01/17 1,000 1,068
Series C2,
8.000% 01/01/38 1,000 1,056
Series 1988-C,
7.800% 01/01/38 11,500 12,061
VT Housing Finance Agency, Home
Mortgage Purchase, Series 1989-A,
7.850% 12/01/29 3,920 4,145
WA Washington Housing Development
Corporation, Parkview Apartments
Project,
7.500% 04/01/21 1,701 1,752
</TABLE>
25
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------------------------
<S> <C> <C>
HOUSING - CONT.
SINGLE-FAMILY - CONT.
WI State Housing and Economic
Development Authority,
Series A,
7.000% 09/01/09 $ 985 $ 1,055
WV State Housing Development Fund,
Series 1992-B,
7.200% 11/01/20 10,000 10,600
WY Community Development Authority,
Single-family Mortgage:
Series 1987-A,
7.875% 06/01/18 2,255 2,371
Series 1988-G,
7.250% 06/01/21 4,500 4,792
WY Rock Springs Housing Finance
Corporation, Bicentennial Association II,
7.500% 05/01/20 1,159 1,227
--------
249,139
--------
.........................................................................................
MANUFACTURING - 2.0%
FOOD & KINDERED PRODUCTS - 0.0%
VA Halifax County Industrial Development
Authority, O'Sullivan Industries Project,
Series 1988,
8.250% 10/01/08 1,000 1,100
--------
MEASURING & ANALYZING INSTRUMENTS - 0.0%
MN Brooklyn Park,
TL Systems Corp., Series 1991,
10.000% 09/01/16 325 387
--------
PAPER PRODUCTS - 1.7%
GA Rockdale County Development
Authority, Solid Waste Disposal, Visy
Paper, Inc., Series 1993,
7.500% 01/01/26 14,000 14,350
IA Cedar Rapids Industrial Development,
Weyerhaeuser Company Project,
9.000% 08/01/14 1,000 1,411
LA De Soto Parish,
International Paper Company,
Series A,
7.700% 11/01/18 1,250 1,448
MI State Strategic Fund,
Blue Water Fiber Project, Series 1994,
8.000% 01/01/12 16,200 15,612
</TABLE>
26
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<S> <C> <C>
MI Strategic Fund Limited,
Great Lakes Pulp & Fibre Project,
10.250% 12/01/16 $ 28,000 $ 29,505
-------
62,326
-------
PETROLEUM REFINING 0.1%
TX Lower Neches Valley Authority,
Mobil Oil Refining Corp.,
6.850% 05/01/12 3,570 3,766
-------
PRIMARY METAL - 0.2%
PA Bucks County,
Industrial Development:
Hechinger Company, Series 1984,
11.375% 11/15/04 2,420 2,506
Jorgensen Steel,
9.000% 06/01/05 4,000 4,105
-------
6,611
-------
TRANSPORTATION EQUIPMENT - 0.0%
MN Buffalo, Ruden Manufacturing Inc.,
10.500% 09/01/14 1,445 1,557
-------
.........................................................................................
MINING - 0.1%
METAL MINING
CO Mesa County Industrial Development
Joy Technologies Inc.,
Series 1992,
8.500% 09/15/06 1,000 1,075
OH Cuyahoga County,
Joy Technologies, Inc.,
8.750% 09/15/07 1,340 1,457
-------
2,532
-------
..........................................................................................
POLLUTION CONTROL REVENUE - 4.0%
FL Pinellas County,
Florida Power Corp.,
7.200% 12/01/14 1,000 1,111
FL State Municipal Power Agency,
Series 1993,
5.100% 10/01/25(c) 38,150 35,956
GA Bartow County Development Authority,
State Power Company Bowen Plant,
7.250% 07/01/21 1,000 1,028
GA Wayne County Development Authority,
Solid Waste Disposal, ITT Royonier
Incorporated, Series 1990,
8.000% 07/01/15 2,500 2,803
</TABLE>
27
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------------------------
<S> <C> <C>
POLLUTION CONTROL REVENUE - CONT.
IL State Development Finance Authority,
Central Illinois Public Service Co.:
Series A,
7.600% 03/01/14 $ 750 $ 842
Series B,
7.600% 09/01/13 750 845
IN Petersburg,
Indiana Power and Light Co.,
Series B,
5.400% 08/01/17 5,000 4,831
KY Louisville and Jefferson County,
Metropolitan Sewer District,
7.350% 05/01/19 500 569
MO State Environmental Improvement and
Energy Resources Pollution Control,
Authority:
Series 1984-G1,
8.250% 11/15/14 4,890 5,128
Series 1984-G4,
8.250% 11/15/14 5,460 5,726
MS Claiborne County Pollution Control,
Middle South Energy, Inc.,
Series 1984 C,
9.875% 12/01/14 1,250 1,448
ND Mercer County,
Basin Electric Power,
Series 2,
6.050% 01/01/19 10,000 10,350
NV Humboldt County Pollution Control
Revenue, Idaho Power Co. Project,
8.300% 12/20/14 1,875 2,257
NY State Environmental Facilities
Corporation, Pollution Control, New
York City Municipal Water Finance Authority:
Series 2,
5.750% 06/15/12 19,260 20,006
Series E,
6.875% 06/15/10 15,000 16,706
NY Suffolk County Water Authority,
7.375% 06/01/12 180 199
OK Muskogee,
Oklahoma Gas and Electric Project,
Series A,
7.000% 03/01/17 1,300 1,357
</TABLE>
28
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<S> <C> <C>
TX Brazos River Authority,
Collateralized Pollution Control Bonds,
Texas Utilities Electric Co., Series 1989 C,
8.250% 01/01/19 $ 13,000 $ 14,284
TX San Antonio,
Series B,
6.000% 02/01/14 15,355 15,681
TX San Antonio Electric & Gas Revenue,
Series 1988,
8.000% 02/01/16 175 192
WV Mason County Pollution Control,
Appalachian Power Co.,
Series G,
7.400% 01/01/14 400 440
WY Sweetwater County, Pollution Control
Revenue, Idaho Power Company:
Series A,
7.625% 12/01/13 350 368
Series B,
7.625% 12/01/13 400 420
--------
142,547
--------
.........................................................................................
PUBLIC ADMINISTRATION - 0.2%
AK State Industrial Development
Authority, Series 1986:
8.625% 04/01/02 2,525 2,714
8.750% 04/01/07 2,965 3,191
--------
5,905
--------
.........................................................................................
PUBLIC FACILITIES IMPROVEMENT - 5.9%
CA Riverside County Transportation
Commission, Series A,
6.500% 06/01/09 6,500 7,028
FL Orange County, Series 1993-B,
5.375% 01/01/24 20,600 20,214
IL Chicago O'Hare International Airport
Special Facility, Senior Lien,
Series A,
5.000% 01/01/16(c) 15,000 14,156
IL Metropolitan Pier and Exposition
Authority, McCormick Place Expansion
Project:
Series 1992 A:
(a) 06/15/11 20,000 8,500
6.500% 06/15/27 2,500 2,619
</TABLE>
29
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------------------------
<S> <C> <C>
PUBLIC FACILITIES IMPROVEMENT - CONT.
MI Detroit Economic Development,
District Court Madison Center,
Series 1984,
10.625% 02/01/11 $ 5,000 $ 5,166
MN Mille Lacs Capital Improvement
Infrastructure, Band of Chippewa,
Series 1992-A,
9.250% 11/01/12 1,485 1,687
NY State Dormitory Authority:
Series 1991-A,
5.625% 05/15/13 8,000 7,860
6.000% 07/01/20 27,990 29,094
9.500% 04/15/14 9,000 10,582
NY State Urban Development:
5.700% 04/01/10 11,225 11,309
5.750% 04/01/11 2,000 2,020
Correctional Facility:
Series A:
6.500% 01/01/10 14,595 16,474
6.500% 01/01/11 8,500 9,552
Series 4,
5.375% 01/01/23 10,000 9,375
Series 1993 A,
5.500% 01/01/14 10,000 9,787
State Facilities, Series 1991,
7.500% 04/01/20 4,950 5,748
NY Urban Development Revenue
Corporation, Correctional Facilities,
Series 1993-A,
5.250% 01/01/21 15,000 13,837
PA Convention Center Authority, Series
1989-A,
6.000% 09/01/19 5,000 5,463
PR Commonwealth of Puerto Rico,
Infrastructure Finance Authority,
Series 1988-A,
7.900% 07/01/07 2,500 2,747
SC State Public Service Authority,
Series C,
5.000% 01/01/18 10,000 9,450
TN Shelby County, Public Improvement,
Series 1992-A,
(a) 05/01/10 15,750 6,989
</TABLE>
30
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<S> <C> <C>
UT West Jordan Industrial Development,
7.875% 12/15/11 $ 2,000 $ 2,115
--------
211,772
--------
.........................................................................................
PUBLIC INFRASTRUCTURE - 5.0%
AIRPORTS - 2.0%
CA Los Angeles Regional Airport
Improvement Corp., Los Angeles
International Airport:
Series 1985,
11.250% 11/01/25 10,000 10,544
Series 1991,
6.800% 01/01/27 1,400 1,442
CA Los Angeles Transportation Authority,
Series B,
5.250% 07/01/23 10,000 9,662
CA Foothill Eastern Transportation
Corridor Agency, State Toll Road,
Senior Lien, Series A,
5.000% 01/01/35 4,865 4,081
CA San Joaquin Hills Transportation
Corridor Agency:
Series C,
(a) 01/01/20 4,600 995
Senior Lien Road, Series 1993,
6.750% 01/01/32 4,500 4,674
CO Denver City & County Airport Revenue:
6.500% 11/15/12 10,625 11,741
Series 1991 A,
8.750% 11/15/23 5,485 6,424
Series 1992 B,
7.250% 11/15/23 5,500 5,919
Stapleton International Airport,
Series 1990 A,
8.500% 11/15/23 5,000 5,694
FL Hillsborough County Aviation Authority,
Tampa International Airport,
Series A,
6.900% 10/01/11 1,500 1,629
IN Airport Authority,
7.100% 01/15/17 2,000 2,175
IN Indianapolis Airport Authority,
9.000% 07/01/15 250 262
IN Transportation Finance Authority,
Series A,
6.750% 11/01/11 2,000 2,153
TX Dallas-Fort Worth Regional Airport,
Series A,
7.375% 11/01/11 5,000 5,794
--------
73,189
--------
</TABLE>
31
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------------------------
<S> <C> <C>
PUBLIC INFRASTRUCTURE - CONT.
TURNPIKES/TOLL ROADS/BRIDGES - 3.0%
FL Orlando & Orange County Expressway,
Series A
5.125% 07/01/20 $ 10,455 $ 9,893
FL State Mid-Bay Bridge Authority,
Series A,
6.875% 10/01/22 2,000 2,350
MA State Turnpike Authority,
Series A,
5.000% 01/01/20 30,765 28,881
NV Clark County Passenger Facility,
Las Vegas McCarran International Airport,
Series B,
6.500% 07/01/12 3,000 3,139
NY State Thruway Authority Service
Contract, Local Highway
5.250% 04/01/13 10,000 9,388
NY Triborough Bridge and Tunnel
Authority, General Purpose:
Series A:
5.000% 01/01/24 12,000 11,250
5.200% 01/01/20 15,095 14,604
Series L,
8.000% 01/01/07 300 328
TX Harris County:
Series 1994,
5.375% 08/15/20 16,250 15,925
Toll Road Revenue,
5.000% 08/15/16 11,000 10,409
--------
106,167
--------
.........................................................................................
REFUNDED/ESCROW/SPECIAL OBLIGATION(h) - 5.7%
FL Dade County,
7.375% 07/01/19 500 562
FL Jacksonville Electric Authority,
Series 3-A,
6.875% 10/01/12 1,000 1,054
FL State Board of Education,
Public Education,
Series B,
7.750% 06/01/16 300 323
GA State Municipal Electric Authority,
7.875% 01/01/18 700 716
IA Ottumwa Hospital Facilities,
Ottumwa Regional Health Center,
Series 1985,
9.625% 11/01/10 3,025 3,250
</TABLE>
32
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<S> <C> <C>
IL Du Pager Water Commission:
Series 1986,
7.875% 03/01/11 $ 375 $ 386
Series 1987,
6.875% 05/01/14 3,775 3,997
IL Health Facility Authority:
Lutheran Healthcare Systems,
Series 1989 B,
7.375% 04/01/08 5,055 5,630
United Medical Center-Formerly,
Series 1991:
8.125% 07/01/06 3,175 3,798
8.375% 07/01/12 1,500 1,851
IL State,
7.125% 04/01/08 1,000 1,031
IL State Sales Tax:
Series C,
6.875% 06/15/15 3,500 3,719
Series N,
6.900% 06/15/13 1,000 1,138
IN Hamilton County Public Building
Corp.,
7.000% 02/01/12 2,525 2,819
IN St. Joseph County Hospital Authority,
South Bend Memorial Hospital,
9.400% 06/01/10 3,190 4,283
KY State Turnpike Authority:
Series A:
7.250% 05/15/10 1,500 1,695
7.875% 01/01/04 200 209
KY Trimble County,
Louisville Gas & Electric Co.,
Series B,
6.550% 11/01/20 130 146
LA State Public Facilities Authority,
Tulane University,
6.625% 11/15/21 455 518
MA Bay Transportation Authority:
General Transportation System:
Series 1990-A,
7.000% 03/01/10 1,500 1,658
Series 1990-B,
7.800% 03/01/10 3,300 3,882
Series 1991-A,
7.000% 03/01/11 1,000 1,139
</TABLE>
33
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<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(c) $ 12,000 $ 13,905
MA General Obligation Bonds:
Series 1989 C,
7.000% 06/01/09 500 554
Series 1990 C,
7.000% 12/01/10 2,700 3,031
Series 1991 A,
7.625% 06/01/08 5,000 5,869
MA State Water Resources Authority,
Series 1990 A,
7.625% 04/01/14 2,000 2,297
MI Huron Valley School District,
Series 1991,
(a) 05/01/20 95,750 20,945
MN University of Minnesota,
Series 1986-A,
7.750% 02/01/10 250 257
MO State Health and Educational
Facilities Authority, Series 1988-A,
7.750% 06/01/16 2,000 2,215
NC Municipal Power Agency,
5.500% 01/01/13 24,430 25,224
NV State,
Series A,
6.800% 07/01/12 2,500 2,831
NY New York City General Obligation,
Series 1991-D,
8.000% 08/01/18 5,085 6,070
NY State Dormitory Authority, State
University of New York:
Series 1989-B,
7.250% 05/15/15 4,150 4,725
Series 1990-B,
7.375% 05/15/14 2,790 3,191
NY Triborough Bridge and Tunnel Authority:
Series I,
7.625% 01/01/14 600 614
Series T,
7.000% 01/01/11 750 853
</TABLE>
34
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<S> <C> <C>
PA Lehigh County,
Healtheast Inc.,
Series 1987 B,
9.000% 07/01/15 $ 4,000 $ 4,380
PA Philadelphia Hospital and Higher
Educational Facilities Authority:
Children's Hospital Project:
Series A,
6.500% 02/15/21 1,000 1,122
MR Project, Series 1986,
8.625% 08/01/11 1,000 1,051
PA State Industrial Development
Authority, Economic Development,
Series A,
7.000% 01/01/11 5,595 6,378
PA State University:
6.750% 07/01/09 750 824
6.750% 07/01/14 2,750 3,022
PA Westmoreland County Municipal
Authority, Special Obligation, Series
1985,
9.125% 07/01/10 5,000 6,294
PA York County Industrial Development
Authority, Fairview Village
Associates, Series 1986,
10.750% 06/01/16 700 743
SC State Public Service Authority,
Electric System Expansion Revenue,
Santee Cooper Project, Series 1986-A,
8.000% 07/01/19 500 527
TN Jackson Water and Sewer Revenue,
Series 1984,
10.375% 07/01/12 910 1,110
TN Shelby County, Public Improvement,
Series 1992-A,
(a) 05/01/11 10,000 4,125
TX Austin Utilities System Revenue:
Series A,
7.800% 11/15/12 200 223
Series 1985-A,
9.500% 05/15/15 6,000 7,245
Series 1986,
7.750% 11/15/12 200 208
TX Hidalgo County Health Services,
Mission Hospital Inc.,
Series A,
10.250% 02/01/25 4,785 6,053
</TABLE>
35
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------------------------
<S> <C> <C>
REFUNDED/ESCROW/SPECIAL OBLIGATION - CONT.
TX Houston Water & Sewer System Revenue,
Series A,
7.125% 12/01/16 $ 850 $ 894
TX San Antonio Water System Revenue,
Series 1990-A,
7.350% 05/01/07 525 572
UT Intermountain Power Agency,
State Power Supply,
Series A:
7.000% 07/01/21 1,000 1,109
7.750% 07/01/17 1,000 1,043
UT Salt Lake City Housing Authority,
Multi-family Mortgage, Hartland
Apartments Project, Series 1987-A-B,
8.875% 12/20/27 7,720 8,029
UT Uintah County Pollution Control,
Series 1984-F2,
10.500% 06/15/14 6,900 8,927
WV State's Parkways Economic
and Tourism Authority, Series 1989,
7.125% 07/01/19 1,990 2,216
--------
202,480
--------
.........................................................................................
RETAIL TRADE - 0.3%
HOME FURNISHINGS & EQUIPMENT - 0.1%
PA Philadelphia Authority for
Industrial Development, Hechinger
Company, Series 1983,
11.375% 12/01/04 3,875 4,000
--------
MISCELLANEOUS RETAIL - 0.2%
DE Sussex County, Economic Development,
Rehoboth Mall Project,
7.250% 10/15/12 4,885 5,447
--------
.........................................................................................
SALES & EXCISE TAX - 1.4%
CA Los Angeles County Transportation,
Authority Proposition A, Series 1993 A,
5.000% 06/01/21 42,555 39,683
NY State Dormitory Authority:
City University, Series B,
5.000% 05/15/18 12,920 11,612
--------
51,295
--------
</TABLE>
36
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<S> <C> <C>
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 $ 3,204
-------
HOTELS, CAMPS & LODGING - 0.1%
MN Burnsville Commercial Development,
Holiday Inn Project,
10.600% 06/01/06 1,400 1,439
MN Minneapolis Commercial Development,
Hometel Associates, Limited,
Series 1988,
10.500% 06/01/03 1,500 1,518
-------
2,957
-------
.........................................................................................
SOLID WASTE - 0.8%
LAND FILL - 0.3%
WA Walla Walla Public Corp.,
Ponderosa Fibers Project,
9.125% 01/01/26 10,000 10,438
-------
MISCELLANEOUS DISPOSAL - 0.2%
CT State Development Authority,
Pfizer Inc. Project,
7.000% 07/01/25 3,000 3,398
MA Boston,
Industrial Development Financing,
Solid Waste Disposal,
10.500% 01/01/11 1,500 1,704
SC Richland County, Solid Waste
Disposal Facilities Revenue,
Union Camp Corp.,
6.750% 05/01/22 3,500 3,763
-------
8,865
-------
RESOURCE RECOVERY - 0.3%
CO Student Obligation Authority,
Series II-B,
6.200% 12/01/08 4,000 4,120
WA Spokane Regional Solid Waste
Management System, Series 1989-A:
7.750% 01/01/11 3,000 3,304
7.875% 01/01/07 2,500 2,734
-------
10,158
-------
</TABLE>
37
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------------------------
<S> <C> <C>
STUDENT LOAN - 0.2%
LA State Public Facility Authority,
Series A,
6.750% 09/01/06 $ 2,000 $ 2,143
NM State Educational Assistance
Foundation, Series II-A:
5.400% 12/01/06 1,000 1,019
5.500% 12/01/07 1,000 1,019
VA State Education Loan Guaranteed,
Senior Series D,
5.600% 03/01/03 3,200 3,296
-------
7,477
-------
.........................................................................................
TAX ALLOCATION - 4.1%
AK State Industrial Development
Authority, Series 1986:
8.625% 04/01/02 585 630
8.750% 04/01/07 915 987
AL Daphine Special Care Facilities
Financing Authority
Presbyterian Hospital,
(a) 07/01/18 (i) 200,000 28,250
AL Selma Special Care Facilities
Finance Authority, Vaughan Regional
Medical Center, Series 1987,
9.400% 06/01/07 4,000 4,425
AL State University Revenue,
Auburn University,
7.000% 06/01/12 1,000 1,114
AZ State University:
6.625% 06/01/09 1,000 1,093
7.300% 06/01/11 500 519
7.500% 07/01/16 200 208
CA Los Angeles County Transportation,
Series 1988 A,
8.000% 07/01/18 3,500 3,903
CO Mesa County,
(a) 12/01/11 5,905 2,347
DC District Columbia Hospital,
Washington Hospital Center Corp.,
Series 1990-A:
8.750% 01/01/15 10,000 11,975
9.000% 01/01/08 1,860 2,253
DE Wilmington, Riverside Hospital,
Series 1988A,
10.000% 10/01/03 300 351
</TABLE>
38
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<S> <C> <C>
HI State Department Budget and Finance,
RIB (variable rate),
Series 1993 B,
6.584% 12/15/23 $ 10,000 $ 9,125
IL Development Finance Authority,
City of Marion Project,
Series 1991,
9.625% 09/15/21 5,755 5,978
IL Metropolitan Pier and Exposition
Authority, McCormick Place Expansion
Project, Series A,
(a) 06/15/16 15,250 4,708
IL State Sales Tax, Series N,
6.900% 06/15/09 1,000 1,090
NY State Energy Research and Development
Authority, Series 1993-B, RIB (variable rate),
8.295% 04/01/20 13,000 14,739
NY State Local Assistance Corp.,
Series D,
5.000% 04/01/23 36,425 33,557
NY State Local Government Assistance
Corp., Series 1993-C,
5.500% 04/01/17 18,475 18,452
--------
145,704
--------
.........................................................................................
TRANSPORTATION/COMMUNICATION/ELECTRIC/GAS & SANITATION - 3.7%
AIR TRANSPORTATION - 1.3%
CO Denver City and County Airport,
Series D,
7.750% 11/15/21 15,000 17,156
HI State Airport System,
Series 2,
7.000% 07/01/18 8,770 9,647
IL Chicago O'Hare International Airport
Special Facility,
International Terminal, Series A,
6.500% 01/01/18 17,500 17,981
TN Memphis-Shelby County, Airport
Authority Special Facilities, Express
Airlines I, Inc., Series 1986,
10.000% 12/01/16 750 764
--------
45,548
--------
</TABLE>
39
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------------------------
<S> <C> <C>
TRANSPORTATION/COMMUNICATION/ELECTRIC/GAS & SANITATION - CONT.
TRANSPORTATION - 2.4%
IN Indianapolis Local Public
Improvement Bond Bank,
United Airlines Maintenance Facility,
6.700% 01/01/17 $ 4,000 $ 4,270
NJ State Transportation Trust Fund
Authority,
Series B,
7.000% 06/15/12 47,000 56,048
NY Metro Transportation Authority,
Series O,
6.000% 07/01/24 5,500 5,672
NY Port Authority, Series 1992,
4.750% 01/15/29 21,320 18,682
PA Erie-Western Port Authority,
Series 1990,
8.625% 06/15/10 1,850 2,007
-------
86,679
-------
.........................................................................................
UTILITY - 16.6%
CO-GENERATION - 0.2%
FL Martin County Industrial
Development Authority, Indiantown
Co-Generation Project,
7.875% 12/15/25 7,500 8,569
-------
INDIVIDUAL POWER PRODUCER - 0.9%
CA Southern Public Power Authority,
Power Project Revision,
5.210% 07/01/12 14,200 13,969
NY State Energy Consolidated Edison,
7.250% 11/01/24 7,000 7,516
PA Economic Development Finance
Authority, Colver Project, Series D,
7.150% 12/01/18 10,000 10,563
-------
32,048
-------
JOINT POWER AUTHORITY - 3.3%
AZ Salt River Project, Agricultural
Improvement & Power District
Electric System:
Series 1991-A,
6.625% 01/01/12 1,500 1,616
Series 1993-B,
5.250% 01/01/19 18,500 17,853
</TABLE>
40
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<S> <C> <C>
CA Los Angeles Department of Water and Power,
5.250% 11/15/26 $ 7,000 $ 6,702
CA Southern California Public Power
Authority, Southern Transmission
Project, Series 1993,
5.250% 07/01/20 10,000 9,675
FL State Municipal Power Agency,
St. Lucie Project,
5.250% 10/01/21(c) 12,000 11,685
GA State Municipal Electric Authority,
Series O,
8.125% 01/01/17 10,000 10,900
MA Municipal Wholesale Electric
Power Supply System, Series 1994 A,
5.447% 07/01/16 22,900 20,639
SC Piedmont Municipal Power Agency,
Electric System:
Series 1986-A,
7.250% 01/01/22 2,000 2,044
Series 1988,
(a) 01/01/13 44,455 17,393
Series 1993,
5.375% 01/01/25 14,055 13,756
TX State Municipal Power Agency,
(a) 09/01/13 12,440 4,634
--------
116,897
--------
MUNICIPAL ELECTRIC - 12.2%
CA Fresno,
Series 1993 A,
5.250% 09/01/19 10,065 9,876
CA Los Angeles County Sanitation
District's Finance Authority,
Series A,
5.250% 10/01/19 10,000 9,688
CA Los Angeles Wastewater Systems,
Series 1993 D,
5.200% 11/01/21 10,000 9,600
FL Jacksonville Electric Authority,
St. John's River Power Park System,
Issue 2 SE,
5.250% 10/01/21 10,750 10,333
FL Orlando Utilities Commission:
Series 1993-A,
5.250% 10/01/23 11,525 11,107
Series 1993-B,
5.250% 10/01/23 14,835 14,297
RIB (variable rate), Series 1993-B,
6.838% 10/06/13 5,000 5,050
</TABLE>
41
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------------------------
<S> <C> <C>
UTILITY - CONT.
MUNICIPAL ELECTRIC - CONT.
GA Municipal Electric Authority Power:
Series 1993 C,
5.700% 01/01/19 $ 20,000 $ 20,625
Series O,
7.400% 01/01/01 1,675 1,801
Series Z,
5.500% 01/01/20(c) 39,000 39,439
IL State Development Finance Authority,
Commonwealth Edison Co. Project:
Series D,
6.750% 03/01/15 3,400 3,727
Series 1991,
7.250% 06/01/11 5,625 6,089
IN Sullivan Pollution Control, Merom
Station, Hoosier Energy Rural Electric
Power Loop, Inc., Series 1991,
7.100% 04/01/19 10,000 10,863
KY Jefferson County Pollution Control
Revenue, Louisville Gas and Electric Co.,
Series A,
7.450% 06/15/15 750 834
KY Trimble County,
Louisville Gas and Electric Co.,
Series B,
6.550% 11/01/20 870 936
NE Omaha Public Power System, Electric
System, Series 1993-C,
5.500% 02/01/14 20,000 20,300
NV Clark County Industrial Development,
Nevada Power Company, Series 1990,
7.800% 06/01/20 4,250 4,861
NY State Energy Research and
Development Authority,
Consolidated Edison Co.:
6.750% 01/15/27 4,265 4,489
7.500% 01/01/26 4,250 4,680
Edison Project,
5.250% 08/15/20 23,500 22,413
Rochester Gas and Electric Project, Series B,
6.500% 05/15/32 7,800 8,151
NY State Power Authority,
Series V,
8.000% 01/01/17 400 439
</TABLE>
42
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<S> <C> <C>
OH State Air Quality Development Authority,
Ohio Power Co. Project,
Series B,
7.400% 08/01/09 $ 450 $ 485
SC State Public Service Authority:
Series C,
5.125% 01/01/21 23,300 22,193
Series 1986-C,
7.300% 07/01/21 1,950 2,028
Series 1993 C:
5.000% 01/01/25 10,000 9,313
5.125% 01/01/32 27,150 25,250
SD Heartland Consumer's Power District,
Series 1992,
6.000% 01/01/12 3,650 3,896
TX Austin Utilities System Revenue,
6.750% 05/15/12(c) 3,500 3,741
TX Brazos River Authority,
Houston Light and Power Co.,
Series A:
6.700% 03/01/17 12,140 13,354
7.625% 05/01/19 900 992
TX Brownsville, Series 1995,
5.250% 09/01/15 7,345 7,152
TX San Antonio Electric and Gas System,
Series 1989-A,
(a) 02/01/05 5,850 3,729
5.000% 02/01/12 25,000 24,313
TX State Municipal Power Agency,
5.000% 09/01/11 17,675 16,902
UT Intermountain Power Agency,
State Power Supply:
Series A,
(a) 07/01/17 19,000 5,629
Series B,
7.625% 07/01/08 100 109
VA Alexandria Industrial Development
Authority, Potomac Electric Project,
5.375% 02/15/24 24,250 23,250
WA Chelan County Public Utilities
District Number 001 Consolidate,
Series 1989-A Division I,
7.750% 07/01/21 4,500 4,967
WA State Public Power Linked Aces,
5.400% 07/01/12 14,000 13,230
</TABLE>
43
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------------------------
<S> <C> <C>
UTILITY - CONT.
MUNICIPAL ELECTRIC - CONT.
WA State Public Power Supply, Series B,
5.625% 07/01/12 $ 13,030 $ 12,835
WA Tacoma Electric System:
RIB (variable rate):
6.514% 01/02/15 12,000 12,720
8.790% 01/02/15 10,000 11,238
--------
436,924
--------
.........................................................................................
WATER & SEWER - 8.4%
FL Orlando Utilities Commission, Series A,
5.000% 10/01/20 15,000 13,969
FL Reedy Creek Improvement District,
Series 1,
5.000% 10/01/19 23,190 21,886
GA De Kalb County Water & Sewer
Redevelopment, Series 1993,
5.250% 10/01/23 30,905 29,939
ID State Water Resource Board,
Boise Water Corporation Series 1991,
7.250% 12/01/21 6,000 6,533
IL Southwestern Illinois Development
Authority, Sewer Facilities, Monsanto
Company, Series 1991,
7.300% 07/15/15 3,000 3,431
LA Public Facility Belmont Water,
Authority,
9.000% 03/15/24 1,460 1,538
MA State Water Resources Authority:
Series B:
5.000% 03/01/22 36,200 33,847
5.250% 03/01/13 12,500 12,188
Series C:
4.750% 12/01/23 15,680 14,014
5.250% 12/01/15 24,825 24,297
MS Five Lakes Utility District,
8.250% 07/15/24 760 789
NJ Union County Utilities Authority,
Solid Waste System, Series 1991-A,
7.200% 06/15/14 8,350 8,872
</TABLE>
44
<PAGE>
Investment Portfolio/November 30,1995
................................................................................
<TABLE>
<S> <C> <C>
NY New York City Municipal Water
Finance Authority, Water and Sewer System:
Series 1986-A,
6.000% 06/15/25 $ 16,000 $ 16,500
Series 1991 C,
5.500% 06/15/15 10 10
Series 1992-C,
6.500% 06/15/21 7,955 8,243
Series 1994-B,
5.375% 06/15/19 10,350 10,156
NY State Energy Research and
Development Authority,
6.100% 05/15/20 5,000 5,225
NY Suffolk County Water Authority,
7.375% 06/01/12 20 22
TN Jackson Water and Sewer Revenue,
Series 1984,
10.375% 07/01/12 1,090 1,315
TX Coastal Industrial Water Authority,
Bayport Water System, Series 1978,
7.000% 12/15/03 2,400 2,400
TX Houston Water and Sewer System Revenue:
1991-B,
6.750% 12/01/08 2,155 2,354
1992-B:
5.000% 12/01/18 24,755 22,929
6.375% 12/01/14 17,000 18,020
1992-C,
(a) 12/01/12 32,000 12,400
1995-A,
6.200% 12/01/20 8,700 9,135
UT Associated Municipal Power System,
Hunter Project, Series A,
5.500% 07/01/12 8,000 7,999
VA Roanoke County Water System,
5.000% 07/01/21 10,000 9,363
WA Seattle Water System,
5.250% 12/01/23 5,000 4,800
----------
302,174
----------
TOTAL MUNICIPAL BONDS (cost of $3,273,766) 3,516,158
----------
</TABLE>
45
<PAGE>
INVESTMENT PORTFOLIO/NOVEMBER 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
OPTIONS - 0.0% CONTRACTS VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
December 1995 Municipal Bond Puts,
Strike price 116, expiration 12-19-95, (cost of $798) 100,000 $ 516
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS - 98.2% (cost of $3,274,564)(j) 3,516,674
----------
OTHER ASSETS & LIABILITIES, NET- 1.8% 63,343
- --------------------------------------------------------------------------------
NET ASSETS - 100.0% $3,580,017
==========
</TABLE>
NOTES TO INVESTMENT PORTFOLIO:
- --------------------------------------------------------------------------------
(a) Zero coupon bond.
(b) This security has been purchased on a delayed delivery basis for
settlement at a future date beyond the customary settlement time.
(c) These securities, or a portion thereof, with a total market value of
$129,903 are being used to collateralize open futures contracts.
(d) Non-income producing.
(e) 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
November 30, 1995.
(f) Security is exempt from registration under rule 144-A of the Securities
Act of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At year end, the
value of these securities amounted to $73,028 or 2.0% of net assets.
(g) Accrued interest accumulates in the value of the security and is payable
at redemption.
(h) The Fund has been informed that each issuer has placed direct obligations
of the U.S. Government in an irrevocable trust, solely for the payment of
the interest and principal.
(i) This security is being used to collateralize the delayed delivery
purchases indicated in note (b) above.
(j) Cost for federal income tax purposes is $3,275,991.
Acronym Name
------- ----
RIB Residual Interest Bond
Short futures contracts open at November 30, 1995:
<TABLE>
<CAPTION>
Par value Unrealized
covered by Expiration depreciation
Type contracts month at 11/30/95
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Municipal bond $ 84,000 March $ 6,020
</TABLE>
See notes to financial statements.
46
<PAGE>
STATEMENT OF ASSETS & LIABILITIES
NOVEMBER 30, 1995
(In thousands except for per share amounts and footnotes)
<TABLE>
<S> <C> <C>
ASSETS
Investments at value (cost $3,274,564) ...................................... $3,516,674
Receivable for:
Interest ................................................ $67,444
Investments sold ........................................ 38,470
Fund shares sold ........................................ 886
Other ................................................... 88 106,888
------- ----------
Total Assets ............................................................ 3,623,562
LIABILITIES
Payable for:
Investments purchased ................................... 19,874
Distributions ........................................... 16,425
Fund shares repurchased ................................. 3,575
Variation margin on futures ............................. 630
Payable to custodian bank ................................. 2,867
Accrued:
Management fee .......................................... 16
Deferred Trustees fees .................................. 17
Other ................................................... 141
-------
Total Liabilities ....................................................... 43,545
----------
NET ASSETS .................................................................. $3,580,017
----------
Net asset value & redemption price per share -
Class A ($3,110,773/226,745) ................................................ $13.72
==========
Maximum offering price per share - Class A
($13.72/0.9525) ............................................................. $14.40 (a)
----------
Net asset value & offering price per share -
Class B ($469,244/34,196) ................................................... $13.72 (b)
==========
COMPOSITION OF NET ASSETS
Capital paid in ............................................................. $3,423,001
Undistributed net investment income ......................................... 2,504
Accumulated net realized loss ............................................... (81,578)
Net unrealized appreciation (depreciation) on:
Investments ............................................................... 242,110
Open futures contracts .................................................... (6,020)
----------
$3,580,017
==========
</TABLE>
(a) On sales of $50,000 or more the offering price is reduced.
(b) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
See notes to financial statements.
47
<PAGE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED NOVEMBER 30, 1995
(in thousands)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Interest ............................................................................ $239,927
EXPENSES
Management fee ................................................. $19,170
Service fee .................................................... 8,770
Distribution fee - Class B ..................................... 3,436
Transfer agent ................................................. 5,668
Bookkeeping fee ................................................ 765
Trustees fee ................................................... 142
Custodian fee .................................................. 167
Audit fee ...................................................... 89
Legal fee ...................................................... 306
Registration fee ............................................... 55
Reports to shareholders ........................................ 46
Other .......................................................... 208 38,822
------- --------
Net Investment Income ........................................................ 201,105
========
NET REALIZED & UNREALIZED GAIN (LOSS) ON PORTFOLIO POSITIONS
Net realized gain (loss) on:
Investments .................................................... 26,341
Closed futures contracts ....................................... (43,520)
--------
Net realized loss ............................................................. (17,179)
Net unrealized appreciation (depreciation)
during the period on:
Investments .................................................... 429,047
Open futures contracts ......................................... (5,640)
--------
Net Unrealized Gain ........................................................... 423,407
--------
Net Gain ................................................................ 406,228
--------
Net Increase in Net Assets from Operations .......................................... $607,333
========
</TABLE>
See notes to financial statements.
48
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year ended
(in thousands) November 30
-----------------------------
INCREASE (DECREASE) IN NET ASSETS 1995 1994
<S> <C> <C>
Operations:
Net investment income ............................... $ 201,105 $ 216,397
Net realized loss ................................... (17,179) (59,241)
Net unrealized appreciation (depreciation) .......... 423,407 (420,951)
---------- ---------
Net Increase (Decrease) from Operations ......... 607,333 (263,795)
Distributions:
From net investment income - Class A ................ (177,765) (190,943)
From net investment income - Class B ................ (23,492) (24,339)
---------- ---------
406,076 (479,077)
---------- ---------
Fund Share Transactions:
Receipts for shares sold - Class A .................. 395,136 325,549
Receipts for shares issued in the acquisition
of Liberty Financial Tax-Free Bond Fund ............ 224,575 ----
Value of distributions reinvested - Class A ......... 98,351 107,226
Cost of shares repurchased - Class A ................ (817,386) (515,463)
---------- ---------
(99,324) (82,688)
---------- ---------
Receipts for shares sold - Class B .................. 34,958 122,043
Value of distributions reinvested - Class B ......... 13,028 13,678
Cost of shares repurchased - Class B ................ (72,909) (62,729)
---------- ---------
(24,923) 72,992
---------- ---------
Net Decrease from
Fund Share Transactions ...................... (124,247) (9,696)
---------- ---------
Total Increase (Decrease) ................... 281,829 (488,773)
NET ASSETS
Beginning of period ................................. 3,298,188 3,786,961
---------- ---------
End of period (including undistributed net
investment income of $2,504 and $1,059,
respectively) ..................................... $3,580,017 $3,298,188
========== ==========
NUMBER OF FUND SHARES
Sold - Class A ...................................... 30,093 24,361
Issued in the acquisition of Liberty
Financial Tax-Free Bond Fund ....................... 17,000 ----
Issued for distributions reinvested - Class A ....... 7,510 8,084
Repurchased - Class A ............................... (62,434) (39,148)
---------- ---------
(7,831) (6,703)
---------- ---------
Sold - Class B ...................................... 2,673 9,017
Issued for distributions reinvested - Class B ....... 996 1,033
Repurchased - Class B ............................... (5,573) (4,820)
---------- ---------
(1,904) 5,230
---------- ---------
</TABLE>
See notes to financial statements.
49
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1995
NOTE 1. ACCOUNTING POLICIES
ORGANIZATION: Colonial Tax-Exempt Fund (the Fund), a series of Colonial Trust
IV, is a diversified portfolio of a Massachusetts business trust, registered
under the Investment Company Act of 1940, as amended, as an open-end management
investment company. The Fund 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.
Options are valued at the last reported sale price, or in the absence of a sale,
the mean between the last quoted bid and asking price.
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, sold or mature.
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 annualized distribution fee applicable to Class B shares only.
FEDERAL INCOME TAXES: Consistent with the Fund' 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.
50
<PAGE>
NOTES TO FINANCIAL STATEMENTS/NOVEMBER 30, 1995
INTEREST INCOME, DEBT DISCOUNT AND PREMIUM: Interest income is recorded on the
accrual basis. Original issue discount is accreted to interest income over the
life of a security with a corresponding increase in the cost basis; market
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 character of income and gains to be distributed are determined in accordance
with income tax regulations which may differ from generally accepted accounting
principles. Reclassifications are made to the Fund's capital accounts to
reflect income and gains available for distribution (or available capital loss
carryovers) under income tax regulations.
- --------------------------------------------------------------------------------
NOTE 2. FEES AND COMPENSATION PAID TO AFFILIATES
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:
<TABLE>
<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>
Effective July, 1, 1995 the management fee applicable to the Fund was reduced by
0.05% annually of the average net assets of the Fund between $2 billion and $3
billion.
In addition, a further reduction will be made based on the following schedule:
<TABLE>
<CAPTION>
Cumulative Annualized
Effective Date Reduction
-------------- ---------------------
<S> <C>
January 1, 1996........................... 0.01%
April 1, 1996............................. 0.02%
July 1, 1996.............................. 0.03%
October 1, 1996........................... 0.04%
</TABLE>
BOOKKEEPING FEE: The Adviser provides bookkeeping and pricing services for
$27,000 per year plus a percentage of the Funds average net assets as follows:
<TABLE>
<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>
51
<PAGE>
NOTES TO FINANCIAL STATEMENTS/NOVEMBER 30, 1995
NOTE 2. FEES AND COMPENSATION PAID TO AFFILIATES - CONT.
TRANSFER AGENT: Colonial Investors Service Center, Inc. (the Transfer Agent),
an affiliate of the Adviser, provides shareholder services for a monthly fee
equal to 0.14% annually of the Funds average net assets and receives a
reimbursement for certain out of pocket expenses.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES: Colonial Investment
Services, Inc. (the Distributor), an affiliate of the Adviser, is the Funds
principal underwriter. During the year ended November 30, 1995, the Fund
has been advised that the Distributor retained net underwriting discounts of
$242,944 on sales of the Funds Class A shares and received contingent
deferredred sales charges (CDSC) of $1,471,600 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.
- --------------------------------------------------------------------------------
NOTE 3. PORTFOLIO INFORMATION
INVESTMENT ACTIVITY: During the year ended November 30, 1995, purchases and
sales of investments, other than short-term obligations, were $1,398,255,135 and
$1,804,419,689, respectively.
Unrealized appreciation (depreciation) at November 30, 1995, based on cost of
investments for federal income tax purposes was:
<TABLE>
<S> <C>
Gross unrealized appreciation... $ 270,462,739
Gross unrealized depreciation... (29,780,191)
-------------
Net unrealized appreciation... $ 240,682,548
=============
</TABLE>
CAPITAL LOSS CARRYFORWARDS: At November 30, 1995, capital loss carryforwards
available (to the extent provided in regulations) to offset future realized
gains were approximately as follows:
<TABLE>
<CAPTION>
Year of Capital loss
expiration carryforward
---------- ------------
<S> <C>
1999................... $ 3,641,000
2001................... 1,897,000
2002................... 61,394,000
2003................... 4,486,000
-----------
$71,418,000
===========
</TABLE>
52
<PAGE>
NOTES TO FINANCIAL STATEMENTS/NOVEMBER 30, 1995
Of the loss carryforwards expiring in 2001 and 2002, $1,897,000 and $3,200,000,
respectively, were acquired in the merger with Liberty Financial Tax-Free Bond
Fund. Their availability may be limited in a given year.
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 November 30, 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 may invest in municipal and Treasury bond futures contracts and
purchase and write options on futures. The Fund will invest in these
instruments to hedge against the effects of changes in value of portfolio
securities due to anticipated changes in interest rates and/or market
conditions, for duration management, or when the transactions are economically
appropriate to the reduction of risk inherent in the mangement of the Fund and
not for trading purposes. The use of futures contracts and options involves
certain risks, which include (1) imperfect correlation between the price
movement of the instruments 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 instrument 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 amount recognized in the
Fund's Statement of Assets and Liabilities at any given time.
- --------------------------------------------------------------------------------
NOTE 4. MERGER INFORMATION
On March 24, 1995 Liberty Financial Tax-Free Bond Fund (LFTFBF) was merged into
the Fund by a non-taxable exchange of 17,000,007 Class A shares of the Fund
(value at $224,575,100) for 21,866,611 of LFTFBF shares then outstanding. The
assets of LFTFBF acquired included unrealized appreciation of $7,546,857. The
aggregate net assets of the Fund and LFTFBF immediately after the merger were
$3,663,697,413.
53
<PAGE>
FINANCIAL HIGHLIGHTS
Selected data for a share of each class outstanding throughout each period are
as follows:
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 30
----------------------------------------------------------
1995 1994
CLASS A CLASS B CLASS A CLASS B
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net asset value --
Beginning of period .............. $ 12.180 $ 12.180 $ 13.920 $ 13.920
--------- --------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .............. 0.771 0.673 0.795 0.695
Net realized and unrealized
gain (loss) ...................... 1.535 1.535 (1.744) (1.744)
--------- --------- --------- ---------
Total from Investment
Operations .................. 2.306 2.208 (0.949) (1.049)
--------- --------- --------- ---------
LESS DISTRIBUTIONS DECLARED TO
SHAREHOLDERS:
From net investment income ......... (0.766) (0.668) (0.791) (0.691)
From capital paid in ............... ---- ---- ---- ----
--------- --------- --------- ---------
Total from distributions
declared to shareholders ......... (0.766) (0.668) (0.791) (0.691)
--------- --------- --------- ---------
Net asset value --
End of period .................... $ 13.720 $ 13.720 $ 12.180 $ 12.180
--------- --------- --------- ---------
Total return (b) ................... 19.35% 18.47% (7.08%) (7.78%)
--------- --------- --------- ---------
RATIOS TO AVERAGE NET ASSETS
Expenses ........................... 1.01%(c) 1.76%(c) 1.01% 1.76%
Net investment income .............. 5.82%(c) 5.07%(c) 6.00% 5.25%
Portfolio turnover ................. 41% 41% 56% 56%
Net assets at end of period
(in millions) .................... $ 3,111 $ 469 $ 2,858 $ 440
</TABLE>
(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 contingent deferred sales charge.
(c) The benefits derived from custody credits and directed brokerage
arrangements had no impact. Prior year ratios are net of benefits
received, if any.
(d) Not annualized.
(e) Annualized.
(f) Because of differences between book and tax basis accounting, there was no
return of capital for federal income tax purposes.
54
<PAGE>
FINANCIAL HIGHLIGHTS - continued
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 30
- -------------------------------------------------------------------------------
1993 1992 1991
CLASS A CLASS B CLASS A CLASS B(a) CLASS A
- ------- ------- ------- ---------- --------
<S> <C> <C> <C> <C>
$13.480 $13.480 $13.190 $13.230 $12.890
- ------- ------- ------- ------- -------
0.842 0.740 0.913 0.462 0.955
0.451 0.451 0.277 0.248 0.305
- ------- ------- ------- ------- -------
1.293 1.191 1.190 0.710 1.260
- ------- ------- ------- ------- -------
(0.853) (0.751) (0.900) (0.460) (0.955)
---- ---- ---- ---- (0.005)(f)
- ------- ------- ------- ------ -------
(0.853) (0.751) (0.900) (0.460) (0.960)
- ------- ------- ------- ------- -------
$13.920 $13.920 $13.480 $13.480 $13.190
- ------- ------- ------- ------- -------
9.80% 9.00% 9.29% 9.29% (d) 10.12%
- ------- ------- ------- ------- --------
1.02% 1.77% 1.05% 1.80% (e) 1.03%
6.06% 5.31% 6.81% 6.06% (e) 7.29%
28% 28% 14% 14% 10%
$ 3,357 $ 430 $ 2,899 $ 137 $ 2,486
- -----------------------------------------------------------------------------
</TABLE>
Federal income tax information (unaudited)
All of the distributions will be treated as exempt
income for federal income tax purposes.
55
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE TRUSTEES OF COLONIAL TRUST IV AND SHAREHOLDERS OF
COLONIAL TAX-EXEMPT FUND
In our opinion, the accompanying statement of assets and liabilities,
including the investment portfolio, and the related statements of operations and
of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Colonial Tax-Exempt Fund (a series
of Colonial Trust IV) at November 30, 1995, the results of its operations, the
changes in its net assets and the financial highlights for the periods
indicated, in conformity with generally accepted accounting principles. These
financial statements and the financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of portfolio positions
at November 30, 1995 by correspondence with the custodian and brokers, and the
application of alternative auditing procedures where confirmations from brokers
were not received, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
January 12, 1996
56
<PAGE>
SHAREHOLDER SERVICES
TO MAKE INVESTING EASIER
Colonial has one of the most extensive selections of shareholder services
available. Your financial adviser can help you arrange for any of these
services, or you can call Colonial directly at 1-800-345-6611.
AFFORDABLE ADDITIONAL INVESTMENTS: Add to your account with as little as $50;
$25 for an IRA account.
FREE EXCHANGES*: Exchange all or part of your account into the same share class
of another Colonial fund, by phone or mail, as your needs change over time.
EASY ACCESS TO YOUR MONEY*: Make withdrawals from your account by phone, by
mail or, for certain funds, by check.
ONE-YEAR REINSTATEMENT PRIVILEGE: If you need access to your money, but then
choose to return it to Colonial within one year, you can reinvest in any
Colonial fund of the same share class without any penalty or sales charge.
FUNDAMATIC: Make periodic investments as low as $50 from your checking account
to your Colonial account.
SYSTEMATIC WITHDRAWAL PLAN (SWP): Receive monthly, quarterly, or
semiannual payments via check or bank transmission. There is a $5,000
account value required, but no minimum for the payment amount. The maximum
annual withdrawal is 12% of account balance at time SWP is established. SWPs
by check are processed on the 10th of each month.
AUTOMATED DOLLAR COST AVERAGING: Transfer money on a monthly basis from
any Colonial fund with a balance of $5,000 into the same share class of up to
four other Colonial funds. Minimum for each transfer is $100.
LOW COST IRAS: Choose from a broad range of retirement plans, including IRAs.
* Redemptions and exchanges are made at the next determined net asset value
after the request is received by Colonial. Proceeds may be more or less than
your original cost. The exchange privilege may be terminated at any time.
Investors who purchase Class B or Class D shares (for applicable funds), or $1
million or more of Class A shares, may be subject to a contingent deferred
sales charge.
57
<PAGE>
HOW TO REACH COLONIAL
BY PHONE OR BY MAIL
BY TELEPHONE
COLONIAL CUSTOMER CONNECTION - 1-800-345-6611
For 24-hour account information, call from your touch-tone phone. (Rotary
callers will be automatically connected to a representative during business
hours.) A recorded message will guide you through the menu:
<TABLE>
<S> <C>
For fund prices, dividends, and capital gains information ........ press 1
For account information .......................................... press 2
To speak to a Colonial representative ............................ press 3
For yield and total return information ........................... press 4
For duplicate statements or new supply of checks ................. press 5
To order duplicate tax forms and year-end statements ............. press 6
(February through May)
To review your options at any time during your call .............. press *
</TABLE>
To speak with a shareholder services representative about your account, call
Monday to Friday, 8:00 am to 8:00 pm ET, and Saturdays from February through
mid-April, 10:00 am to 2:00 pm ET.
COLONIAL TELEPHONE TRANSACTION DEPARTMENT - 1-800-422-3737
To purchase, exchange, or sell shares by telephone, call Monday to Friday, 9:00
am to 8:00 pm ET. Transactions received after the close of the New York Stock
Exchange will receive the next business day's closing price.
COLONIAL LITERATURE DEPARTMENT - 1-800-248-2828
To request literature on any Colonial fund, call Monday to Friday, 8:30 am to
6:30 pm ET.
BY MAIL
COLONIAL INVESTORS SERVICE CENTER, INC.
P.O. BOX 1722
BOSTON, MA 02105-1722
58
<PAGE>
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Colonial Tax-Exempt Fund is:
Colonial Investors Service Center, Inc.
P.O. Box 1722
Boston, MA 02105-1722
1-800-345-6611
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.
This report has been prepared for shareholders of Colonial Tax-Exempt Fund.
This report may also be used as sales literature when preceded or accompanied
by the current prospectus which provides details of sales charges, investment
objectives and operating policies of the Fund.
59
<PAGE>
[COLONIAL MUTUAL FUNDS LOGO]
Mutual Funds for
Planned Portfolios
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)
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
COLONIAL INVESTMENT SERVICES, INC. (C)1995
One Financial Center, Boston, Massachusetts 02111-2621, 617-426-3750
TE-02/492B-1195 (1/96)
[Logo] Printed on recycled paper
