<PAGE>
COLONIAL
TAX-EXEMPT FUND
SEMIANNUAL REPORT
MAY 31, 1997
[PHOTO]
NOT FDIC-INSURED MAY LOSE VALUE
NO BANK GUARANTEE
<PAGE>
COLONIAL TAX-EXEMPT FUND HIGHLIGHTS
DECEMBER 1, 1996 - MAY 31, 1997
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: "Rising interest rates were a negative factor for
all fixed-income investments during the period. Municipal bonds fared better
than Treasurys due to low supply and high demand. Looking forward, we believe
that the trend will be for lower interest rates as economic growth slows. If
that comes to pass, investors with a long-term perspective will benefit."
- Bonny Boatman, William Loring and Brian Hartford
COLONIAL TAX-EXEMPT FUND PERFORMANCE
<TABLE>
<CAPTION>
CLASS A CLASS B
<C> <C> <C>
Inception dates 11/21/78 5/5/92
Six-month distributions declared per share (1) $0.375 $0.325
SEC Yields on 5/31/97 (2) 5.38% 4.88%
Taxable-equivalent SEC yields (3) 8.91% 8.08%
Six-month total returns, assuming reinvestment 1.18% 0.80%
of all distributions and no sales charge or
contingent deferred sales charge (CDSC)
Net asset value per share on 5/31/97 $13.33 $13.33
</TABLE>
(1) A portion of the Fund's income may be subject to the alternative minimum
tax.
(2) The 30-day SEC yields on May 31, 1997, reflect 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.
(3) Taxable-equivalent SEC yields are based on the maximum federal income tax
rate of 39.6%. The Fund may at times purchase tax-exempt securities at a
discount, and some or all of this discount may be included in the Fund's
ordinary income which will be taxable when distributed.
<TABLE>
<CAPTION>
QUALITY BREAKDOWN MATURITY BREAKDOWN
(as of 5/31/97) (as of 5/31/97)
- ----------------------------------------------- -------------------------------------------------
<S> <C> <C>
AAA ......................................58.7% 0-1 year ........0.1% 10-15 years ......10.2%
AA .......................................11.1% 1-3 years .......0.9% 15-20 years ......30.8%
A ........................................ 6.7% 3-5 years .......2.4% 20-25 years ......29.0%
BBB ...................................... 5.2% 5-7 years .......0.5% 25 years+ ........23.2%
BB ....................................... 0.5% 7-10 years ......2.1% Cash &
B ........................................ 0.2% Equiv ............ 0.8%
Non-rated ................................16.8%
Cash & Equiv ............................. 0.8%
</TABLE>
Quality and maturity breakdowns are calculated as a percentage of total net
assets. Because the Fund is actively managed, there can be no guarantee the Fund
will continue to maintain these quality and maturity breakdowns in the future.
2
<PAGE>
PRESIDENT'S MESSAGE
TO FUND SHAREHOLDERS
[PHOTO OF HAROLD W. COGGER]
I am pleased to present your Fund's semiannual report for the six months ending
May 31, 1997.
During the period, the economy was strong, corporate profits continued to grow,
unemployment was at a 25-year low, and inflation remained low. For investors in
the stock market, the environment couldn't have been much better.
But people who invest in bonds saw it differently. They saw stronger than
expected economic growth in the first part of 1997, creating fears of renewed
inflation. They saw the Federal Reserve Board raising short-term interest rates
in an attempt to slow down the economy. And they saw long-term interest rates
rise steadily.
Between December 1 and mid-April, yields on the benchmark 30-year U.S. Treasury
bond rose from 6.86% to 7.17%. Interest rates on all other bond categories, such
as tax-exempt bonds, rose too.
Fortunately, by late April, the environment began to improve for bond investors.
Interest rates eased downward. The economy was slowing, inflation was still low
and the Federal Reserve Board decided against boosting short-term rates a second
time in two months.
But when the dust settled, interest rates were still moderately higher on May
31, 1997 compared to December 1, 1996. That means that the prices of
fixed-income securities already in your portfolio declined somewhat.
The best news is that your tax-exempt income remains very strong, particularly
compared to inflation. And that's a main attraction of fixed-income investing.
This report provides you with a closer look at your Fund's performance as well
as the portfolio manager's investment strategy. In addition, the report lists
every security in the portfolio as of May 31, 1997, organized by categories such
as education, healthcare and housing.
Thank you for the opportunity to help you meet your investment goals.
Sincerely,
/s/ Harold W. Cogger
Harold W. Cogger
President
July 16, 1997
Because market conditions change frequently, there can be no assurance that the
trends described here will continue, come to pass or affect Fund performance.
3
<PAGE>
PORTFOLIO MANAGEMENT REPORT
BONNY BOATMAN, WILLIAM LORING AND BRIAN HARTFORD are portfolio co-managers of
Colonial Tax-Exempt Fund. Ms. Boatman is senior vice president of Colonial
Management Associates, Inc. and Director of the Municipal Bond Department. Mr.
Loring and Mr. Hartford are Vice Presidents of the Adviser.
RISING INTEREST RATES UNTIL MID-APRIL
Spurred by stronger growth in the housing, manufacturing and auto sectors,
interest rates rose steadily until mid-April. But once it became clear that the
economy was slowing and inflation was still microscopic, interest rates began to
fall and bond prices started to rebound.
FINALLY, A BALANCED BUDGET AGREEMENT
During May, Congress and the President agreed to a balanced budget plan which
helped calm the bond markets, setting the stage for even lower interest rates.
The balanced budget agreement was easier to make in 1997 because the federal
budget deficit for Fiscal 1997 had already shrunk to about $70 billion from $300
billion a few years ago. Lower government spending ultimately means downward
pressure on interest rates, since the demand for money is diminished. Like any
commodity, the "price" of money - interest rates - falls when there's less
demand for it.
MUNIS OUTPERFORM TREASURIES
The pickup in interest rates earlier in 1997 generated increased demand for
municipal bonds by retail investors, boosting municipal bond prices in relation
to U.S. Treasury bonds. At one point, munis were offering a 6% tax-exempt yield,
which is a psychological barrier for many buyers.
At the same time, the supply of new tax-exempt issues fell. A large component of
new issues comes from refinancing of old bonds originally issued at higher
interest rates. Just like your home mortgage, muni issuers want to refinance
when interest rates fall. But when interest rates rise, refinancing volume drops
off. Another reason munis are performing so well is that there is no current
talk of changes in the tax law that could curtail the tax advantages of
municipal bonds.
TOTAL RETURN MAY BE MODEST, BUT INCOME IS STRONG
Because interest rates were somewhat higher at May 31, 1997 compared to November
30, 1996, municipal bond prices were somewhat lower at the end of the period. As
a result, the total return for Class A Shares, based on net asset value, was
1.18%.
As of May 31, 1997, your Fund's 30-day SEC yield was 5.38% on Class A Shares.
For those of you in the maximum 39.6% effective federal tax bracket, that's
equivalent to a taxable yield of 8.91%. So even though total return was modest,
shareholders were well-rewarded on an income basis.
A DEFENSIVE BIAS
During most of the period, the portfolio had a "defensive" bias in the rising
interest rate environment. One way to be defensive is to own bonds with higher
coupon payments. The market will assume that the issuer will want to "call" or
redeem the bonds at the call date, which is much sooner than maturity. Bonds
with shorter lifespans are less volatile in a rising interest rate environment.
In addition, the premium coupons generate higher current income.
We also have an overweighting in higher yielding non-rated securities compared
to our benchmark. Non-rated bonds tend to be less sensitive to movements in
4
<PAGE>
interest rates and more sensitive to credit developments. At the same time,
about 59% of the portfolio is invested in AAA securities. We would consider
investing in lower rated bonds, but we currently don't believe these securities
adequately compensate us for the additional risk.
OUR OUTLOOK: MORE POSITIVE FOR THE NEXT SIX MONTHS
As economic growth slows, we expect interest rates to decline over the next six
months. As a result, we will increase our position in noncallable securities
that tend to outperform in a market rally. Even though total return will
fluctuate with interest rates, municipal bonds will likely continue to offer
substantial tax-free income in the months ahead.
COLONIAL TAX-EXEMPT FUND'S PERFORMANCE VS.
THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
Change in Value of $10,000 from 5/31/87 - 5/31/97
Based on NAV and MOP for Class A Shares
<TABLE>
<CAPTION>
5/97
<S> <C>
LEHMAN $22,345
NAV $20,234
MOP $19,273
</TABLE>
<TABLE>
<CAPTION>
CTEF Class A
AS OF DATE NAV MOP Lehman Muni Bond IX Tr
<S> <C> <C> <C> <C>
5/31/87 0:00 10000 9525 5/31/87 $10,000
8/31/87 0:00 10355.46 9863.576 8/31/87 10,422
11/30/87 0:00 10248.2 9761.411 11/30/87 10,336
2/29/88 0:00 10783.97 10271.74 2/29/88 10,975
5/31/88 0:00 10762.4 10251.18 5/31/88 10,898
8/31/88 0:00 11020.77 10497.28 8/31/88 11,139
11/30/88 0:00 11275.97 10740.37 11/30/88 11,435
2/28/89 0:00 11492.89 10946.98 2/28/89 11,656
5/31/89 0:00 11840.95 11278.5 5/31/89 12,152
8/31/89 0:00 11993.07 11423.4 8/31/89 12,362
11/30/89 0:00 12215.17 11634.95 11/30/89 12,694
2/28/90 0:00 12374.93 11787.12 2/28/90 12,852
5/31/90 0:00 12529.1 11933.97 5/31/90 13,041
8/31/90 0:00 12683.37 12080.91 8/31/90 13,156
11/30/90 0:00 13063.53 12443.01 11/30/90 13,672
2/28/91 0:00 13380.03 12744.48 2/28/91 14,036
5/31/91 0:00 13712.96 13061.6 5/31/91 14,355
8/31/91 0:00 14063.24 13395.23 8/31/91 14,707
11/30/91 0:00 14385.73 13702.41 11/30/91 15,074
2/29/92 0:00 14708.43 14009.78 2/29/92 15,438
5/31/92 0:00 15004.87 14292.13 5/31/92 15,765
8/31/92 0:00 15518.99 14781.84 8/31/92 16,349
11/30/92 0:00 15721.88 14975.09 11/30/92 16,586
2/28/93 0:00 16518.23 15733.61 2/28/93 17,563
5/31/93 0:00 16587.47 15799.57 5/31/93 17,651
8/31/93 0:00 17191.28 16374.69 8/31/93 18,344
11/30/93 0:00 17262.63 16442.66 11/30/93 18,425
2/28/94 0:00 17332.86 16509.55 2/28/94 18,536
5/31/94 0:00 16805.13 16006.89 5/31/94 18,087
8/31/94 0:00 17021.33 16212.82 8/31/94 18,370
11/30/94 0:00 16039.81 15277.92 11/30/94 17,457
2/28/95 0:00 17564.46 16730.15 2/28/95 18,885
5/31/95 0:00 18292.73 17423.83 5/31/95 19,735
8/31/95 0:00 18269.36 17401.56 8/31/95 19,998
11/30/95 0:00 19142.34 18233.07 11/30/95 20,756
2/29/96 0:00 19254.55 18339.96 2/29/96 20,971
5/31/96 0:00 18868.99 17972.71 5/31/96 20,636
8/31/96 0:00 19171.82 18261.16 8/31/96 21,045
11/30/96 0:00 19998.63 19048.7 11/30/96 21,976
2/28/97 0:00 20074.82 19121.26 2/28/97 22,126
5/31/97 0:00 20249.4 19287.55 5/31/97 $22,345
</TABLE>
A $10,000 Investment in Class B Shares made on May 5, 1992, at net asset value
(NAV) would have been valued at $13,122 on May 31, 1997. The same investment
based on CDSC would have grown to $12,922 on May 31, 1997. The Lehman Brothers
Municipal Bond Index is a broad-based, unmanaged index that tracks the
performance of the municipal bond market. Unlike mutual funds, indexes are not
investments, do not incur fees or expenses, and it is not possible to invest in
an index.
AVERAGE ANNUAL TOTAL RETURNS
As of 6/30/97 (Most Recent Quarter End)
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
INCEPTION 11/21/78 5/5/92
NAV MOP NAV W/CDSC
<S> <C> <C> <C> <C>
1 YEAR 7.37% 2.27% 6.57% 1.57%
5 YEARS 6.06 5.03 5.31 4.98
10 YEARS 7.18 6.65 -- --
SINCE INCEPTION -- -- 5.61 5.45
</TABLE>
Returns and value of an investment will vary, resulting in a gain or loss on
sale. All results shown assume reinvestment of distributions. NAV returns do not
include sales charges or CDSC. Maximum offering price (MOP) returns include the
maximum sales charge of 4.75%. The CDSC returns reflect the maximum charges of
5% for one year, 2% for five years and 1% since inception. Past performance
cannot predict future results.
Effective August 1, the Fund will offer Class C Shares.
5
<PAGE>
INVESTMENT PORTFOLIO
MAY 31, 1997 (UNAUDITED, IN THOUSANDS)
<TABLE>
<CAPTION>
MUNICIPAL BONDS - 98.4% PAR VALUE
- --------------------------------------------------------------------------
<S> <C> <C>
EDUCATION - 6.8%
EDUCATION - 4.8%
AL State University Revenue,
Auburn University,
7.000% 06/01/11 $ 1,000 $ 1,094
IL Chicago Board Education,
Series 1992 A:
6.000% 01/01/20 4,000 4,165
6.250% 01/01/15 4,400 4,730
IL De Paul University,
5.500% 10/01/19 4,500 4,359
IN Purdue University, Student Fee, Series B,
6.700% 07/01/15 1,100 1,203
MA Health and Educational Facilities Authority:
Amherst College, Series E,
6.750% 11/01/15 1,000 1,080
Berklee College of Music, Series C,
6.875% 10/01/21 4,380 4,747
MA State College Building Authority Project,
Series A,
7.500% 05/01/11 1,500 1,826
NY State Dormitory Authority,
City University of New York:
5.750% 07/01/13 8,565 8,822
Series 1993 A,
6.000% 07/01/20 13,350 13,650
Series 1990 C:
7.000% 07/01/14 2,050 2,240
7.500% 07/01/10 19,875 23,353
State University of New York:
Series A,
5.875% 05/15/17 33,240 34,029
Series B,
5.000% 05/15/18 11,500 10,293
Series 1990 A,
7.500% 05/15/13 8,000 9,540
Series 1990 B,
7.000% 05/15/16 1,000 1,068
Series 1993 A:
5.500% 05/15/13 12,000 12,135
6.000% 07/01/20 6,140 6,508
--------
144,842
--------
</TABLE>
6
<PAGE>
Investment Portfolio/May 31, 1997
- -----------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
SCHOOL DISTRICT GENERAL OBLIGATION - 1.9%
AZ Apache County School District,
Number 010 Round Valley
Project of 1987, Series 1990 C:
9.875% 07/01/05 $ 1,500 $ 1,639
10.800% 07/01/97 800 804
10.800% 07/01/98 1,000 1,062
10.800% 07/01/99 1,000 1,112
CO Larimer, Weld & Boulder Counties
School District, Series 1996,
(a) 12/15/10 4,000 1,945
FL State Board of Education,
Series 1993 D:
5.125% 06/01/22 14,500 13,413
5.200% 06/01/23 10,140 9,468
IL Chicago Board of Education,
Series 1996:
6.250% 12/01/11 2,830 3,085
6.250% 12/01/12 1,500 1,629
IL Lake County School District,
9.000% 01/01/17 10,440 14,498
TX Houston Independent School District,
Series 1997,
(a) 08/15/15 6,355 2,288
TX Hurst Euless Bedford
Independent School District,
Series 1994,
6.500% 08/15/24 6,355 6,760
-------
57,703
-------
STUDENT LOAN - 0.1%
LA State Public Facility Authority,
Series A,
6.750% 09/01/06 2,000 2,107
VT State Student Assistance Financing
Program, Series B,
6.700% 12/15/12 2,000 2,122
-------
4,229
-------
- -----------------------------------------------------------------------------
HEALTH - 12.4%
HOSPITALS - 5.8%
AL Alabama Special Care Facilities Authority,
Montgomery Healthcare, Series 1989,
11.000% 10/01/19 15,655 15,968
CA Eden Township Hospital District,
Eden Township Hospital, Series 1989,
7.400% 11/01/19 5,000 5,294
</TABLE>
7
<PAGE>
Investment Portfolio/May 31, 1997
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
MUNICIPAL BONDS - CONT. PAR VALUE
- ----------------------------------------------------------------------------
<S> <C> <C>
HEALTH - CONT
HOSPITALS - CONT
CA Statewide Communities Development
Authority, Cedars-Sinai Medical Center,
Series 1993,
5.400% 11/01/15 $12,500 $11,641
CT State Health & Educational Facilities
Authority, New Britain Hospital,
Series 1991 A,
7.750% 07/01/22 905 971
DE State Economic Development Authority,
Riverside Hospital, Series 1992 A,
9.500% 01/01/22 1,155 1,496
FL St. Petersburg Health Facilities
Authority, Allegheny Health System,
St. Joseph's Hospital, Inc., Series 1985-A,
7.000% 12/01/15 2,000 2,197
GA Clayton Hospital Authority,
The Woodlands Foundation, Inc.,
Series 1991 A,
9.750% 5/1/2021(b) 6,680 4,342
IL Health Facilities Authority,
Series 1992 B, RIB (variable rate),
9.446% 05/01/21 4,800 5,496
IL Naperville Economic Development,
Series 81,
13.000% 08/01/08 5,354 5,629
IL State Health Facilities Authority,
Edgewater Medical Center, Series A,
9.250% 07/01/24 8,435 9,953
MA State Health & Educational Facilities
Authority, Lowell General Hospital,
Series 1991 A,
8.400% 06/01/11 2,500 2,888
ME State Health & Higher Educational
Facilities Authority, Maine Medical Center,
Series C,
5.000% 11/15/13 3,850 3,585
MN Rochester Mayo Health,
6.250% 11/15/21 5,900 6,202
MS Hospital Equipment & Facilities
Authority, Pooled Loan Program,
7.500% 08/01/16 18,900 19,869
MT State Health Facility Authority,
Hospital Facilities, Series 1994,
RIB (variable rate),
6.364% 02/15/25 6,000 5,093
</TABLE>
8
<PAGE>
Investment Portfolio/May 31, 1997
- ------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
NJ Health Care Facilities Financing
Authority, Raritan Bay Medical Center,
7.250% 07/01/14 $ 4,300 $ 4,531
NV Reno Hospital, St. Mary's Regional
Medical Center, Series 1991 A,
6.700% 07/01/21 1,700 1,817
OK Oklahoma City Industrial & Cultural
Facilities Trust, Hillcrest Health Center,
6.400% 08/01/14 4,320 4,347
TN Chattanooga Health Education
and Housing Facilities Board, North
Park Hospital Project, Series 1993,
8.500% 02/01/23 41,930 43,607
TN Metropolitan Government, Nashville
& Davidson Counties, Volunteer
Healthcare Systems, Series 1988 A,
10.750% 6/1/2018(b) 14,744 4,423
VA Dickenson County Industrial Development
Authority, Volunteer Healthcare Systems, Inc.,
Series 1988 A,
10.750% 6/1/2018(b) 1,950 585
VA Norfolk Industrial Development
Authority, Sentara Hospital, Series A,
6.500% 11/01/13 2,500 2,666
VT State Educational & Health Buildings
Financing Agency, Springfield Hospital, Series A,
7.750% 01/01/13 1,890 2,048
WA State Health Care Facilities Authority,
Grays Harbor Community Hospital, Series 1993:
7.200% 7/1/2003(c) 1,050 1,150
8.025% 7/1/2020(c) 6,380 7,178
WI State Health & Educational
Facilities Authority, St. Luke's
Medical Center Project, Series 1991,
7.100% 08/15/19 2,550 2,764
--------
175,740
--------
INTERMEDIATE CARE FACILITIES - 0.6%
IL Champaign, Hoosier Care, Inc., Series 1989 A,
9.750% 08/01/19 1,465 1,568
IN Wabash First Mortgage, Hoosier
Care, Inc., Series 1989 A,
9.750% 08/01/19 5,835 6,243
MA State Health & Educational
Facilities Authority, Corporation
for Independent Living,
8.100% 07/01/18 1,280 1,371
</TABLE>
9
<PAGE>
Investment Portfolio/May 31, 1997
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------------
<S> <C> <C>
HEALTH - CONT
INTERMEDIATE CARE FACILITIES - CONT
TN Shelby County, Health, Education,
& Housing Facilities Board,
Open Arms Development Center:
Series 1992 A,
9.750% 08/01/19 $ 4,245 $ 4,887
Series 1992 C,
9.750% 08/01/19 4,240 4,881
-------
18,950
-------
NURSING HOMES - 6.0%
CA San Diego Industrial Development,
8.750% 12/01/16 5,400 5,873
CO State Health Facilities Authority,
American Housing Foundation, Inc.,
Series 1990 A,
10.250% 12/01/20 2,500 2,500
DE State Economic Development Authority,
Churchman Village Project, Series A,
10.000% 03/01/21 7,170 8,461
DE Sussex County, Healthcare Facility,
Delaware Health Corporation,
Series 1994 A,
7.600% 01/01/24 14,230 14,266
FL Collier County Industrial Development
Authority, Beverly Enterprises, Inc.,
Series 1991,
10.750% 03/01/03 990 1,127
FL Flagler County Industrial Development
Authority, South Florida Properties,
Series 1988,
10.500% 12/01/18 8,815 7,945
FL Gadsden County Industrial
Development Authority, Florida
Properties, Inc., Series 1988 A,
10.450% 10/01/18 6,065 6,237
FL Palm Beach County,
Beverly Enterprises-Florida, Inc., Series 1984,
10.000% 06/01/11 2,630 2,896
FL Volusia County Industrial
Development Authority, Beverly
Enterprises-Florida, Inc., Series 1987,
9.800% 12/01/07 840 864
IA Marion, Kentucky Iowa
Corporation Project, Series 1990,
10.250% 01/01/20 975 1,010
</TABLE>
10
<PAGE>
Investment Portfolio/May 31, 1997
- ----------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
IN Gary Industrial Economic Development,
West Side Health Care Center,
Series 1987 A,
11.500% 10/01/17 $ 1,985 $ 2,051
KS Washington County Industrial
Development Authority, Central
States, Series 1989,
10.250% 11/01/19 3,355 3,355
MA Boston,
St. Joseph Nursing Care Center, Inc.,
Series 1990,
10.000% 1/1/2020(d) 305 332
MA State Industrial Finance Agency:
American Health Foundation, Inc.,
Series 1989,
10.125% 03/01/19 3,180 2,862
Belmont Home Care Project:
Series A,
7.970% 01/01/99 290 297
Series 1995 A,
9.270% 01/01/25 10,405 11,537
GF/Massachusetts, Inc., Series 1994,
8.300% 07/01/23 12,870 12,934
Seacoast Nursing Home, Series 1991,
9.625% 12/01/21 4,945 5,446
MO St. Louis County Industrial
Development Authority, Nursing Home,
Cardinal Carberry Health Center, Series 1991,
7.125% 03/20/23 2,000 2,148
NM Albuquerque Industrial Development
Authority, Manor Nursing Home,
12.000% 05/15/14 3,126 3,501
OH Ashtabula County,
First Mortgage, Village Square Nursing
Center, Inc., Series 1985,
12.000% 12/01/15 1,255 1,299
OH Franklin County,
Columbus West Health Care Co.,
Series 1986,
10.000% 09/01/16 3,015 2,864
OH Lucas County,
Gericare, Inc., Series 1988 B,
10.500% 06/01/18 2,995 3,025
OH Montgomery County,
Grafton Oaks Limited Partners,
Series 1986,
9.750% 12/01/16 695 660
</TABLE>
11
<PAGE>
Investment Portfolio/May 31, 1997
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
MUNICIPAL BONDS - CONT. PAR VALUE
- ----------------------------------------------------------------------------
<S> <C> <C>
HEALTH - CONT.
NURSING HOMES - CONT.
OH Trumbull County,
12.000% 12/01/15 $ 2,185 $ 2,253
PA Cambria County Industrial Development
Authority, Beverly Enterprises,
10.000% 06/18/12 1,800 2,243
PA Chester County Industrial Development,
Pennsylvania Nursing Home, Inc., Series 1989,
10.125% 05/01/19 10,480 10,166
PA Delaware County Authority,
Main Line and Haverford Nursing,
Series 1992,
9.000% 08/01/22 9,420 10,338
PA Lackawanna County Industrial Authority,
Greenridge Nursing Center,
10.500% 12/01/10 1,890 2,060
PA Luzerne County Industrial
Development Authority:
Beverly Enterprises,
Pennsylvania, Series 1983,
10.125% 11/01/08 835 913
Millville Nursing Center,
10.500% 12/01/12 3,780 3,591
PA Montgomery County Higher
Education & Health Authority,
Roslyn-Hatboro, Inc. Project,
9.000% 11/15/22 12,340 12,448
PA Philadelphia Authority For
Industrial Development:
First Mortgage, The Care Pavillion,
Series 1988,
10.250% 02/01/18 5,865 5,843
RHA/Philadelphia Project,
10.250% 11/01/18 9,345 9,310
PA Wilkins Area Industrial Development
Authority, Oakmont Nursing Center,
Series 1984,
10.000% 07/01/11 1,100 1,235
TN Metropolitan Government, Nashville
& Davidson Counties Health & Education
Facilities, Central States, Series 1989,
10.250% 11/01/19 770 770
TX Whitehouse Health Facilities
Development Corp., Oak Brook
Health Care Center, Series 1989,
10.000% 12/01/19 1,795 1,849
</TABLE>
12
<PAGE>
Investment Portfolio/May 31, 1997
- -----------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
VA Southampton County Industrial
Authority, Medical Facility of
America XLIII Project, Series 1986,
8.375% 12/15/26 $ 2,985 $ 3,088
VA Virginia Beach Development Authority,
Beverly Enterprises, Series 1985,
10.000% 04/01/10 905 993
WA Kitsap County Housing Authority,
Martha & Mary Nursing Home,
7.100% 02/20/36 10,000 10,887
--------
181,477
--------
- -----------------------------------------------------------------------------
HOUSING - 13.2%
ASSISTED LIVING/SENIOR - 1.0%
FL Clearwater Housing Authority,
Hampton Apartments, Series 1994,
8.250% 05/01/24 3,475 3,640
IL State Development Finance Authority,
Care Institute, Inc.,
8.250% 06/01/25 10,000 10,475
MN Roseville, Care Institute, Inc., Series 1993,
7.750% 11/01/23 2,975 2,834
MS Lamar County Wesley Manor II:
8.750% 08/01/20 1,000 1,032
8.750% 02/01/29 1,610 1,661
PA Montgomery County Industrial
Development Authority, Assisted
Living Facility, Series 1993 A,
8.250% 05/01/23 1,450 1,503
TX Bell County Health Facilities
Development Corp., Care Institutions, Inc.,
9.000% 11/01/24 7,585 8,258
--------
29,403
--------
MULTI-FAMILY - 5.6%
AZ Maricopa County Industrial
Development Authority,
Advantage Point, Series 1996 A,
6.625% 07/01/26 2,750 2,812
AZ Mohave County Industrial Development
Authority, Kingman Station Apartments,
8.125% 10/01/26 2,840 3,102
AZ Phoenix Industrial Development
Authority, Chris Ridge Village Project,
Series 1992:
6.750% 11/01/12 650 674
6.800% 11/01/25 4,250 4,383
</TABLE>
13
<PAGE>
Investment Portfolio/May 31, 1997
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
MUNICIPAL BONDS - CONT. PAR VALUE
- ----------------------------------------------------------------------------
<S> <C> <C>
HOUSING - CONT.
MULTI-FAMILY - CONT.
CO State Health Facilities Authority,
Birchwood Manor, Series 1991 A,
7.625% 04/01/26 $ 1,835 $ 1,902
DE Quaker Hill Housing Corporation,
Multifamily Housing, Quaker Hill
Apartments, Series A,
7.550% 08/01/21 6,225 6,614
FL Hialeah Housing Authority,
Series 1991,
9.500% 11/01/21 10,600 10,070
FL State Housing Finance Agency,
Windsong Apartments,
Series 1993 C,
9.250% 01/01/19 1,230 1,238
GA Augusta Housing Authority,
Mountain Ridge Holdings II Project,
Series A,
8.960% 9/1/2024(b) 3,620 2,353
GA Savannah Housing Authority,
Plantation Oaks Apartments
Project, Series 1986,
9.625% 02/01/27 2,890 3,063
IL Carbondale,
Mill Street Apartments,
Series 1979,
7.375% 09/01/20 835 854
IL East Moline Housing Finance Corp.,
Deerfield Woods Apartments,
7.500% 8/1/2021(c) 2,367 2,437
IL Rockford:
8.700% 08/20/07 615 628
8.700% 08/20/26 4,455 4,551
IL State Housing Development Authority,
Series 1990 A,
8.000% 06/01/26 680 706
LA Jefferson Housing Development
Corp., Concordia Project, Series A,
7.700% 08/01/22 2,570 2,737
LA New Orleans Housing Development
Corp., Southwood Patio, Series 1990 A,
7.700% 02/01/22 2,375 2,467
MA State Housing Finance Agency,
Series 1988 A,
8.400% 08/01/21 740 771
</TABLE>
14
<PAGE>
Investment Portfolio/May 31, 1997
- ----------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
MN Washington County Housing &
Redevelopment Authority,
Cottages of Aspen, Series 1992,
9.250% 06/01/22 $ 1,935 $ 2,099
MN White Bear Lake,
Birch Lake Townhomes Project,
Series 1989 A,
9.750% 07/15/19 2,185 2,180
MO St. Louis Area Housing Finance
Corp., Wellington Arms III, Series 1979,
7.500% 01/01/21 2,030 2,052
MS Biloxi Urban Renewal,
Biloxi Apartments Project,
Series 1985:
9.500% 12/01/05 1,145 1,187
9.500% 12/01/10 1,235 1,283
9.500% 12/01/15 1,970 2,046
NC Eastern Carolina Regional Housing
Authority, New River Apartments -
Jacksonville, Series 1994,
8.250% 09/01/14 2,810 2,880
NE Omaha Housing Development Corp.,
Mortgage Notes, North Omaha Homes,
7.375% 03/01/21 1,383 1,420
NJ Housing & Mortgage Finance Agency,
6.950% 11/01/13 5,090 5,332
NY Nyack Housing Assistance Corp.,
Nyack Plaza Apartments,
7.375% 06/01/21 2,908 2,909
PA Warren County Housing Finance Corp.,
Allegheny Manor,
7.500% 02/01/21 1,365 1,404
Pass Through Certificates, Series 1993 A,
8.500% 12/1/2016(c) 61,712 64,181
TN Franklin Industrial Board,
Landings Apartment Project,
Series 1996 B,
8.750% 04/01/27 3,600 3,582
TN Knoxville Community Development
Corp., Maple Oak Apartment Project,
Series 1992,
6.375% 10/15/08 2,510 2,585
TX Galveston Pass Health Facilities Center,
Pass Through Certificates,
8.000% 08/01/23 1,850 1,899
TX Laredo Housing Development Corp., No. 1,
7.375% 3/5/2021(c) 2,076 2,075
</TABLE>
15
<PAGE>
Investment Portfolio/May 31, 1997
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
MUNICIPAL BONDS - CONT. PAR VALUE
- ------------------------------------------------------------------------------
<S> <C> <C>
HOUSING - CONT.
MULTI-FAMILY - CONT.
UT Salt Lake City Housing Authority,
Hartland Apartments Project, Series 1987 A,
8.875% 12/20/27 $ 7,720 $ 7,923
VA Alexandria Redevelopment
& Housing Authority, Courthouse
Commons Apartments, Series 1990 A,
10.000% 01/01/21 760 766
VA Norfolk Redevelopment & Housing
Authority, Dockside, Series 1991 A:
7.300% 12/01/16 1,315 1,382
7.375% 12/01/28 1,940 2,042
WA Washington Housing Development
Corp., Parkview Apartments Project,
7.500% 04/01/21 1,666 1,714
WA State Housing Finance
Commission, Series 1988 A,
7.900% 07/01/30 1,450 1,498
WI Milwaukee Housing Authority
Mortgage, Windsor Court Project,
Series 1986,
8.700% 08/21/21 1,985 2,031
WY Rock Springs Housing Finance
Corp., Bicentennial Association II,
7.500% 05/01/20 1,132 1,163
--------
168,995
--------
SINGLE FAMILY - 6.6%
AK State Housing Finance Corp.:
First Series 1991,
7.800% 12/01/30 2,200 2,206
Series 1992 A,
6.600% 12/01/23 11,750 12,837
AL State Housing Finance Authority,
Series 1990 C,
7.550% 04/01/16 620 649
CA State Housing Finance Authority,
Series 1984 B,
(a) 08/01/16 325 39
CO El Paso County Home Mortgage:
Series 1987 C,
8.300% 09/20/18 1,819 2,026
Series 1987 D,
8.150% 09/20/14 786 863
Series 1988 A,
8.375% 03/25/19 1,874 2,106
</TABLE>
16
<PAGE>
Investment Portfolio/May 31, 1997
- ---------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
CO State Housing Finance Authority:
7.150% 11/01/14 $ 805 $ 851
Series 1991 A,
7.500% 05/01/29 4,745 4,947
Series 1996 B1,
7.650% 11/01/26 2,750 3,035
Series 1997 A2,
7.250% 05/01/27 3,200 3,492
CT State Housing Finance Authority,
Housing Mortgage Finance Program,
Series B1, Sub B1,
7.550% 11/15/08 5 5
FL Brevard County,
Housing Finance Authority,
Series 1985,
(a) 04/01/17 4,675 619
FL Lee County Housing Finance Authority,
Series 1996 A1,
7.350% 03/01/27 6,680 7,306
GA Atlanta, Urban Residential
Finance Authority, Series 1988,
8.250% 10/01/21 1,040 1,052
IA Finance Authority, Series 1992 B,
6.950% 07/01/24 9,915 10,386
ID State Housing Agency,
Senior Series,
6.700% 07/01/27 6,000 6,285
IL Chicago:
Series 1996 B,
7.625% 09/01/27 4,250 4,702
Series 1997 A,
7.250% 09/01/28 4,000 4,410
IL State Housing Development Authority:
Series B,
7.250% 08/01/17 1,290 1,350
Series C,
7.500% 08/01/17 220 229
IN State Housing Finance Authority:
GNMA Collateral Mortgage Program,
Series A1,
7.850% 07/01/16 15 16
Single Family Housing,
Series 1987 C,
9.125% 07/01/18 2,495 2,577
KY Louisville Residential,
Series 1984,
(a) 07/01/16 175 21
</TABLE>
17
<PAGE>
Investment Portfolio/May 31, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
MUNICIPAL BONDS - CONT. PAR VALUE
- ---------------------------------------------------------------------------
<S> <C> <C>
HOUSING - CONT.
SINGLE-FAMILY - CONT.
LA Calcasieu Parish:
Series 1987 A,
8.125% 12/01/12 $1,254 $ 1,262
Series 1988 B,
8.250% 06/01/12 3,063 3,107
LA Housing Financing Agency, Series 1988,
8.300% 11/01/20 2,315 2,387
LA Jefferson Parish Home Mortgage
Authority, Series 1988 A,
8.300% 04/01/20 2,160 2,255
MA State Housing Finance Agency:
Series 21,
7.125% 06/01/25 6,000 6,352
Series 1987 A,
9.000% 12/01/18 1,595 1,639
Series 1988 B,
8.100% 08/01/23 840 877
MD State Community Development Administration,
Department of Housing and Community
Development Program:
1st Series,
7.300% 04/01/17 450 471
3rd Series,
7.250% 04/01/27 960 997
MN State Housing Finance Agency:
Series C,
7.100% 07/01/11 675 713
Series 1988 D,
8.250% 08/01/20 1,950 2,038
MO State Housing Development Commission:
Homeownership Loan Program, Series 1996 A,
7.200% 09/01/26 7,795 8,643
Series 1996 B,
7.550% 09/01/27 8,875 10,018
Series C:
6.900% 07/01/18 845 879
7.250% 09/01/26 4,590 5,089
NE Investment Finance Authority:
Series 1990 2, RIB (variable rate),
11.257% 09/10/30 3,200 3,572
Series 1990 B, RIB (variable rate),
10.882% 03/15/22 6,500 7,207
NH State Housing Finance Authority, Single
Family Resources Mortgage, Series 1989 B,
7.700% 07/01/29 2,380 2,496
</TABLE>
18
<PAGE>
Investment Portfolio/May 31, 1997
- --------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
NY State Mortgage Agency:
Series BB 2,
7.950% 10/01/15 $1,395 $1,429
Home Owner Mortgage, Series HH-2,
7.850% 04/01/22 1,500 1,569
OH State Housing Finance Agency:
Series A2, RIB (variable rate),
9.567% 03/24/31 6,000 6,532
Series 1988 C,
8.125% 03/01/20 785 820
SC State Housing Authority,
Homeownership Mortgage, Series 1988 A,
8.500% 07/01/08 2,000 2,059
TX Bexar County Housing Finance Corp.,
GNMA Collateralized Mortgage, Series 1989 A,
8.200% 04/01/22 3,500 3,679
TX Corpus Christi Housing Finance Corp.,
Lomas and Nettleton, Series C,
10.000% 10/01/07 565 578
TX Harris County Housing Finance Corp.,
Series 1987,
8.875% 12/01/17 2,260 2,322
TX Lubbock Housing Finance Corp.:
Series 1988 C,
8.375% 12/01/20 5,210 5,275
Series 1988 D,
8.375% 12/01/20 955 971
TX State Department Housing & Community
Affairs, Collateralized Home Mortgage,
Series 1992 B2, RIB (variable rate),
9.511% 06/18/23 9,000 9,855
TX State Housing Agency Mortgage,
Single Family, Series A,
7.150% 09/01/12 630 664
UT State Housing Finance Agency,
Single Family Mortgage:
Senior A 1,
6.900% 07/01/12 770 807
Senior Issue B 1,
7.500% 07/01/16 125 132
Senior Issue B 2:
7.700% 07/01/15 20 21
7.000% 07/01/16 320 334
Series 1990 C 2,
7.950% 07/01/10 240 253
Senior Issue D 2,
7.250% 07/01/11 365 385
</TABLE>
19
<PAGE>
Investment Portfolio/May 31, 1997
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------------
<S> <C> <C>
HOUSING - CONT.
SINGLE-FAMILY - CONT.
UT State Housing Finance Agency,
Single Family Mortgage:
Series E 1,
6.950% 07/01/11 $ 1,355 $ 1,419
Senior Series F 1,
7.400% 07/01/09 305 313
VA State Housing Authority
Commonwealth Mortgage:
Series A,
7.100% 01/01/17 1,000 1,042
Series B, Sub Series B 4,
6.850% 07/01/17 5,180 5,355
VA State Housing Development Authority,
Commonwealth Mortgage,
Series 1988 C, Subseries C 1,
7.800% 01/01/38 465 482
VT State Housing Finance Agency, Series 1989 A,
7.850% 12/01/29 3,920 4,077
WI State Housing & Economic Development
Authority, Series A,
7.000% 09/01/09 985 1,042
WV State Housing Development Fund, Series 1992 B,
7.200% 11/01/20 10,000 10,513
WY Community Development Authority,
Series 1988 G,
7.250% 06/01/21 4,500 4,793
--------
198,732
--------
- -----------------------------------------------------------------------------
OTHER - 13.9%
PUBLIC FACILITIES IMPROVEMENT - 3.0%
CA Los Angeles Convention & Exhibition
Authority, Series 1993 A,
6.125% 08/15/11 5,000 5,431
CA Los Angeles County Public Works
Financing Authority:
5.125% 06/01/17 11,000 10,381
Multiple Facilities Project IV,
4.750% 12/01/13 10,000 9,037
CA San Francisco Building Authority,
San Francisco Civic Center Complex, Series 1996 A,
5.250% 12/01/16 22,075 21,302
NJ Hudson County, Series 1992,
6.600% 12/01/21 16,665 17,727
OH Cleveland Stadium Project Co.,
5.250% 11/15/2022(e) 12,500 11,922
</TABLE>
20
<PAGE>
Investment Portfolio/May 31, 1997
- -----------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
SC Charleston County,
Charleston Public Facilities Corp.,
Series 1995:
6.000% 12/01/07 $ 3,110 $ 3,339
6.000% 12/01/09 3,495 3,700
6.000% 12/01/10 3,710 3,900
VA Chesapeake Industrial Development
Authority,
5.250% 06/01/17 4,445 4,223
-------
90,962
-------
PUBLIC INFRASTRUCTURE - 1.9%
CA San Diego County,
Series 1993,
5.625% 09/01/12 13,000 13,114
PA Philadelphia Municipal Authority,
Series B,
6.400% 11/15/16 40,260 42,776
-------
55,890
-------
REFUNDED/ESCROW/SPECIAL OBLIGATION (f) - 9.0%
AZ Pima County Industrial Development
Authority,
8.200% 09/01/21 12,370 16,035
CA Palmdale Community Redevelopment
Agency, Single Family Mortgage Revenue,
8.000% 04/01/16 7,000 8,977
CA Perris Community Facilities District,
Series 2-90,
8.750% 10/01/21 6,165 8,562
CA Pomona, Series A,
7.600% 05/01/23 10,000 12,625
CA Riverside County,
8.300% 11/01/12 10,000 12,875
CO Mesa County,
(a) 12/01/11 5,905 2,642
DC District Columbia Hospital,
Washington Hospital Center Corp.,
Series 1990 A:
8.750% 01/01/15 10,000 11,462
9.000% 01/01/08 1,690 1,954
DE Wilmington, Riverside Hospital,
Series 1988A,
10.000% 10/01/03 300 325
IL Chicago Public Building Commission,
Series 1990 A,
7.125% 01/01/15 4,010 4,276
</TABLE>
21
<PAGE>
Investment Portfolio/May 31, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
MUNICIPAL BONDS - CONT. PAR VALUE
- ---------------------------------------------------------------------------
<S> <C> <C>
OTHER - CONT.
REFUNDED/ESCROW/SPECIAL OBLIGATION (f) - CONT
IL Health Facility Authority,
United Medical Center:
Series 1991,
8.125% 07/01/06 $2,985 $3,332
Series 1991,
8.375% 07/01/12 1,500 1,781
IN Indianapolis Local Public Improvement
Bond Bank:
Series 1992 D,
6.750% 02/01/14 5,000 5,663
United Airlines Maintenance Facility,
6.700% 01/01/17 4,000 4,405
IN St. Joseph County Hospital Authority,
South Bend Memorial Hospital,
9.400% 06/01/10 3,085 3,891
IN State University,
Student Fee,
7.000% 08/01/09 2,680 2,881
KY State Turnpike Authority:
7.250% 05/15/10 215 234
7.250% 05/15/10 1,285 1,401
KY Trimble County,
Louisville Gas & Electric Co.,
Series B,
6.550% 11/01/20 130 142
LA State Public Facilities Authority,
Tulane University,
6.625% 11/15/21 455 504
MA Bay Transportation Authority,
General Transportation System:
Series A,
7.000% 03/01/11 1,000 1,102
Series 1990 B,
7.800% 03/01/10 3,300 3,717
MA General Obligation Bonds, Series 1991 A,
7.625% 06/01/08 5,000 5,650
MA State Consolidated Loan, Series C,
7.000% 08/01/12 2,000 2,217
MA State Industrial Finance Agency,
Mary Ann Morse Nursing Home, Inc.,
Series 1991 I,
10.000% 01/01/21 1,715 2,062
MA State Water Resources Authority,
Series 1990 A,
7.625% 04/01/14 2,000 2,205
</TABLE>
22
<PAGE>
Investment Portfolio/May 31, 1997
- -----------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
MI Detroit, Series 1990 A,
8.700% 04/01/10 $10,000 $11,312
MN Mille Lacs Capital Improvement Authority,
Mille Lacs Band of Chippewa,
Series 1992 A,
9.250% 11/01/12 1,445 1,792
MN White Bear Lake,
Birch Lake Townhomes Project,
Series 1989 B,
(g) 07/15/19 288 526
MO Hannibal Industrial Development Authority,
Regional Healthcare Systems,
Series 1992,
9.500% 03/01/22 4,250 5,243
NC Lincoln County,
Lincoln County Hospital,
9.000% 05/01/07 475 562
NV State, Series A,
6.800% 07/01/12 2,440 2,690
NY New York City General Obligation,
Series 1991 D,
8.000% 08/01/18 5,085 5,822
NY State Dormitory Authority,
State University of New York,
Series 1989 B,
7.250% 05/15/15 425 466
NY State Power Authority,
Series V,
8.000% 01/01/17 400 417
NY State Urban Development Corp.,
State Facilities, Series 1991,
7.500% 04/01/20 4,950 5,550
NY Suffolk County Water Authority,
7.375% 06/01/12 180 191
NY Triborough Bridge & Tunnel Authority,
Series T,
7.000% 01/01/11 750 825
PA Convention Center Authority,
Series 1989 A,
6.000% 09/01/19 5,000 5,312
PA Philadelphia Hospitals & Higher
Educational Facilities Authority,
Presbyterian Medical Center, Series 1993,
6.500% 12/01/11 5,155 5,748
PA State Industrial Development Authority,
Economic Development, Series A,
7.000% 01/01/11 5,595 6,182
</TABLE>
23
<PAGE>
Investment Portfolio/May 31, 1997
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
MUNICIPAL BONDS - CONT. PAR VALUE
- ------------------------------------------------------------------------------
<S> <C> <C>
OTHER - CONT.
REFUNDED/ESCROW/SPECIAL OBLIGATION (f) - CONT
PA State University,
6.750% 07/01/09 $ 750 $ 800
PA Westmoreland County Municipal
Authority, Series 1985,
9.125% 07/01/10 4,710 5,593
SC Piedmont Municipal Power Agency,
Series 1988,
(a) 01/01/13 18,570 7,892
TN Jackson Water and Sewer Revenue,
Series 1984,
10.375% 07/01/12 910 1,035
TN Metropolitan Government, Nashville &
Davidson Counties, Meharry Medical College,
6.875% 12/01/24 29,750 34,064
TN Shelby County, Public Improvement:
Series 1992-A,
(a) 05/01/10 15,750 7,914
Series 1992-A,
(a) 05/01/12 15,130 6,638
TX Austin Utilities System Revenue:
6.750% 05/15/12 3,500 3,824
Series A,
7.800% 11/15/12 200 214
TX Hidalgo County Health Services,
Mission Hospital Inc., Series A,
10.250% 02/01/25 4,785 5,634
TX San Antonio Electric & Gas Revenue,
Series 1988,
8.000% 02/01/16 175 183
TX State Research Laboratory Commission
Finance Authority, Superconducting
Super Collider, Series 1991,
6.950% 12/01/12 10,000 11,475
UT Uintah County Pollution Control,
Series 1984 F2,
10.500% 06/15/14 6,900 8,383
VA Alexandria Redevelopment
& Housing Authority, Courthouse
Commons Apartments, Series 1990-B,
(g) 01/01/21 959 1,840
WV States Parkways Economic
& Tourism Authority, Series 1989,
7.125% 07/01/19 1,990 2,137
--------
271,184
--------
</TABLE>
24
<PAGE>
Investment Portfolio/May 31, 1997
- ----------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
OTHER REVENUE - 6.7%
AMUSEMENTS & RECREATION - 0.1%
NM Red River Sports Facility, Red
River Ski Area, Series 1985,
12.000% 06/01/07 $2,865 $ 2,890
-------
CHEMICALS - 0.4%
IL Southwestern Illinois Development Authority,
Sewer Facilities, Monsanto Co., Series 1991,
7.300% 07/15/15 3,000 3,360
TN Humphreys County Industrial Development
Board, E.I. DuPont de Nemours & Co., Series 1994,
6.700% 05/01/24 9,000 9,652
-------
13,012
-------
HOTELS/CAMPS/LODGING - 0.1%
MN Burnsville Commercial Development,
Holiday Inn Project,
10.600% 06/01/06 1,400 1,419
MN Minneapolis Commercial Development,
Hometel Associates Ltd., Series 1988,
10.500% 06/01/03 1,500 1,517
-------
2,936
-------
MANUFACTURING - 1.0%
CO Mesa County Industrial Development,
Joy Technologies, Inc., Series 1994,
8.500% 09/15/06 1,000 1,110
CT State Development Authority,
Pfizer, Inc. Project, Series 1994,
7.000% 07/01/25 3,000 3,341
GA Wayne County Development Authority,
Solid Waste Disposal, ITT Royonier, Inc.,
Series 1990,
8.000% 07/01/15 2,500 2,725
IL Charleston Non-Profit Corp.,
Cougills Manor Project,
6.875% 07/01/20 1,762 1,778
IL Rockford,
9.250% 02/01/00 705 720
MN Brooklyn Park,
TL Systems Corp., Series 1991,
10.000% 09/01/16 320 392
MN Buffalo, Von Ruden
Manufacturing, Inc., Series 1989,
10.500% 09/01/14 1,415 1,558
</TABLE>
25
<PAGE>
Investment Portfolio/May 31, 1997
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------------
<S> <C> <C>
OTHER REVENUE - CONT.
MANUFACTURING - CONT.
OH Cuyahoga County,
Joy Technologies, Inc., Series 1992,
8.750% 09/15/07 $ 1,340 $ 1,501
PA Bucks County Industrial Development,
Jorgensen Steel,
9.000% 06/01/05 4,000 4,041
-------
17,166
-------
MISCELLANEOUS RETAIL - 0.4%
DE Sussex County, Economic Development,
Rehoboth Mall Project,
7.250% 10/15/12 4,885 5,367
PA Bucks County Industrial Development,
Hechinger Co., Series 1984,
11.375% 11/15/04 2,320 2,400
PA Philadelphia Authority for
Industrial Development, Hechinger Co.,
Series 1983,
11.375% 12/01/04 3,715 3,784
VA Halifax County Industrial Development,
Authority O'Sullivan Industries Project,
Series 1988,
8.250% 10/01/08 1,000 1,064
-------
12,615
-------
OTHER REVENUE - 0.1%
MD Baltimore,
Park Charles Project, Series 1986,
8.000% 01/01/10 1,570 1,652
-------
PAPER PRODUCTS - 0.7%
IA Cedar Rapids,
Weyerhaeuser Company Project,
9.000% 08/01/14 1,000 1,387
LA De Soto Parish, International
Paper Co., Series A,
7.700% 11/01/18 1,250 1,416
MI State Strategic Fund,
Blue Water Fiber Project,
Series 1994,
8.000% 01/1/2012(b) 16,200 10,854
MI State Strategic Fund,
Great Lakes Pulp & Fibre Project,
Series 1994,
10.250% 12/1/2016(b) 13,250 6,029
</TABLE>
26
<PAGE>
Investment Portfolio/May 31, 1997
- ----------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
WA Walla Walla Public Corp.,
Ponderosa Fibres Project, Series 1995,
9.125% 01/01/26 $ 3,080 $ 2,703
-------
22,389
-------
PETROLEUM REFINING - 1.1%
CA Los Angeles Regional Airport
Improvement Corp., Los Angeles
International Airport,
6.800% 01/01/27 1,400 1,444
PA State Economic Development
Financing Authority, Sun Co., Inc.,
Series 1994 A,
7.600% 12/01/24 27,500 30,628
-------
32,072
-------
STATE APPROPRIATED - 2.8%
CA State Public Works Board,
Various State Prisons Projects,
Series 1993 A,
5.250% 12/01/13 6,400 6,264
CO Douglas County School District,
No. RE-1, Series 1996,
7.000% 12/15/12 6,000 7,027
CO El Paso County School District, No. 11:
7.125% 12/01/20 7,350 8,866
Series 1996,
7.100% 12/01/16 2,105 2,505
IN Transportation Finance Authority,
Series A,
6.750% 11/01/11 2,000 2,228
NY Metropolitan Transportation Authority,
Transit Facilities, Series 5,
6.900% 07/01/06 3,015 3,234
NY State Dormitory Authority,
Judicial Facilities, Series 1991 A,
9.500% 04/15/14 9,000 10,516
NY State Urban Development
Correctional Facility:
5.375% 04/01/16 5,590 5,443
Series A,
6.500% 01/01/10 14,595 16,346
Series A,
6.500% 01/01/11 8,500 9,541
Series 1993 A,
5.500% 01/01/14 12,500 12,438
-------
84,408
-------
</TABLE>
27
<PAGE>
Investment Portfolio/May 31, 1997
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------------
<S> <C> <C>
RESOURCE RECOVERY - 0.3%
MISCELLANEOUS DISPOSAL - 0.1%
MA Boston Industrial
Development
Finance Authority, Jet-A-Way, Inc.,
10.500% 01/01/11 $ 1,500 $ 1,659
-------
RESOURCE RECOVERY - 0.2%
VA Fairfax County Economic Development,
Ogden Martin Systems,
Series 1987 A,
7.750% 02/01/11 4,395 4,719
-------
TAX-BACKED - 10.6%
General Obligations - 4.6%
AK North Slope Borough,
Series 1996 B,
(a) 6/30/2007(h) 45,000 26,606
CA State, Series 1996,
5.250% 06/01/17 4,200 4,053
CT City of Bridgeport,
Series 1996 A,
6.500% 09/01/08 1,435 1,600
HI Hawaii State,
5.250% 03/1/2015(h) 22,535 21,859
MA City of Boston, Series 1992 A,
6.500% 07/01/12 4,400 4,719
MA City of Holyoke,
School Project Loan,
7.650% 08/01/09 1,250 1,356
MA City of Lawrence,
4.750% 02/15/14 6,250 5,562
MA City of Lowell:
8.000% 01/15/00 825 856
8.400% 01/15/09 1,000 1,129
MA General Obligation Bonds,
Series 1991 C,
6.750% 08/01/09 2,865 3,101
MA State, Series 1991 C,
6.750% 08/01/09 1,000 1,101
MI City of Detroit, Series 1990 B,
8.250% 04/01/10 5,000 5,400
NV State:
Series A,
6.800% 07/01/12 60 65
Colorado River Commission,
Hoover Dam Project, Series 1992,
6.600% 10/01/16 5,000 5,356
</TABLE>
28
<PAGE>
Investment Portfolio/May 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
NY New York City:
Series 1995 B,
6.950% 08/15/12 $ 4,000 $ 4,460
Series 1997 A:
7.000% 08/01/06 5,000 5,544
7.000% 08/01/07 4,725 5,268
NY State,
3.000% 03/15/01 405 378
PR Municipal Finance Agency:
5.000% 07/01/09 11,540 11,309
5.250% 07/01/10 8,420 8,367
TX Harris County,
Series 1996:
(a) 10/01/14 9,630 3,671
(a) 10/01/17 9,630 3,021
TX State, Veterans Land,
Series 1989,
7.625% 12/01/13 5,375 5,771
WA State,
Series 1992 A,
6.250% 02/01/11 6,400 7,048
--------
137,600
--------
SALES & EXCISE TAX - 5.4%
CA Los Angeles County Transportation Authority,
Series 1993 A,
5.000% 07/01/21 27,555 24,868
FL State Jacksonville Transportation,
5.000% 7/1/2013 (e) 10,265 9,777
FL State Division of Bond Financing,
Department of Natural Resources,
5.000% 07/01/13 10,000 9,538
IL State Development Finance Authority,
City of Marion Project, Series 1991,
9.625% 09/15/21 5,705 5,876
IL State Sales Tax, Series N,
6.900% 06/15/09 1,000 1,089
NJ State Transportation Trust Fund Authority:
5.000% 06/15/17 6,750 6,311
5.250% 06/15/16 7,000 6,799
Series B,
7.000% 06/15/12 47,000 55,284
NY State Local Government Assistance Corp.:
Series D,
5.000% 04/01/23 26,425 23,650
Series 1993 C,
5.500% 04/01/17 13,475 13,256
</TABLE>
29
<PAGE>
Investment Portfolio/May 31, 1997
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
MUNICIPAL BONDS - CONT. PAR VALUE
- ----------------------------------------------------------------------------------
<S> <C> <C>
TAX-BACKED - CONT.
SALES & EXCISE TAX - CONT.
PA Pennsylvania Convention Center Authority,
6.750% 09/01/19 $ 5,000 $ 5,488
--------
161,936
--------
TAX ALLOCATION - 0.6%
CA Anaheim Public Finance Authority,
5.250% 2/1/2018 (e) 6,000 5,783
CA San Jose Redevelopment Agency,
Merged Area Redevelopment Project,
Series 1993,
5.000% 08/01/21 15,000 13,631
--------
19,414
--------
TRANSPORTATION - 6.9%
AIR TRANSPORTATION - 3.6%
TN Memphis-Shelby County, Airport
Authority Special Facilities, Express
Airlines I, Inc., Series 1986,
10.000% 12/01/16 750 761
CO Denver City & County Airport:
Series C,
6.500% 11/15/12 10,625 11,847
Series 1991 A,
8.750% 11/15/23 5,485 6,411
Series 1992 B,
7.250% 11/15/23 5,500 5,961
Series 1992 B,
7.250% 11/15/23 6,375 7,036
Stapleton International Airport, Series 1990 A,
8.500% 11/15/23 5,000 5,606
HI State,
Airport System Revenue:
Series 1991,
6.900% 07/01/12 4,250 4,813
Series 2,
7.000% 07/01/18 14,770 15,822
IL Chicago:
O'Hare International Airport,
Series A,
5.000% 01/01/16 15,000 13,763
Series 1994 A,
6.375% 01/01/12 4,980 5,322
TX Dallas-Fort Worth Regional Airport,
Series A,
7.375% 11/01/11 6,000 6,885
</TABLE>
30
<PAGE>
Investment Portfolio/May 31, 1997
- ------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
VA Capital Region Airport Commission,
Series B,
8.125% 07/01/14 $17,200 $ 20,877
VA Metropolitan Washington D.C
Airports Authority, Series 1990 A,
7.600% 10/01/14 3,400 3,693
--------
108,797
--------
TRANSPORTATION - 1.6%
CA Long Beach, Series 1993,
5.125% 05/15/13 4,500 4,269
MA Massachusetts Bay Transportation
Authority,
5.250% 03/01/20 5,000 4,750
NY Port Authority of New York & New Jersey,
Series 91,
5.200% 11/15/20 32,800 30,873
PA Erie-Western Port Authority,
Series 1990,
8.625% 06/15/10 1,850 2,037
SC State Ports Authority,
Series 1991,
6.750% 07/01/21 4,250 4,526
WA Port of Seattle, Series 1990 B,
7.700% 12/01/11 3,000 3,293
--------
49,748
--------
TURNPIKE/TOLLROAD/BRIDGE - 1.7%
FL State Mid-Bay Bridge Authority,
Series A,
6.875% 10/01/22 2,000 2,325
MA State Turnpike Authority:
Series A,
5.000% 01/01/20 15,765 14,484
Series 1993 A,
5.125% 01/01/23 5,000 4,581
NJ State Turnpike Authority:
Series C,
6.500% 01/01/16 3,500 3,911
Series 1991 C,
6.500% 01/01/16 7,000 7,884
NY State Thruway Authority,
Series 1997 D,
5.250% 01/01/21 7,410 7,067
NY Triborough Bridge & Tunnel Authority,
Series L,
8.000% 01/01/07 300 312
</TABLE>
31
<PAGE>
Investment Portfolio/May 31, 1997
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
MUNICIPAL BONDS - CONT. PAR VALUE
- ----------------------------------------------------------------------------
<S> <C> <C>
TRANSPORTATION - CONT
TURNPIKE/TOLLROAD/BRIDGE - CONT
TX Harris County, Series 1991,
6.750% 08/01/14 $10,000 $10,838
-------
51,402
-------
- ----------------------------------------------------------------------------
UTILITY - 27.6%
INDIVIDUAL POWER PRODUCER - 0.9%
FL Martin County Industrial Development
Authority, Indiantown Cogeneration Project,
Series 1994 A,
7.875% 12/15/25 7,500 8,419
NY Port Authority of New York & New Jersey,
KIAC Partners, Series 1996 IV:
6.750% 10/01/19 7,000 7,280
6.750% 10/01/11 1,500 1,579
PA Economic Development Finance
Authority, Colver Project, Series D,
7.150% 12/01/18 10,000 10,538
-------
27,816
-------
INVESTOR OWNED - 8.7%
AZ Pima County Industrial Development
Authority, Tucson Electric Power Co.,
Series 1988 A,
7.250% 07/15/10 11,630 12,851
CA California Pollution Control Financing
Authority, Pacific Gas & Electric Co.,
Series 1992 A,
6.625% 06/01/09 5,350 5,704
DE State Economic Development Authority,
Delmarva Power & Light Co.,
Series 1990 A,
7.600% 03/01/20 5,000 5,406
FL Pinellas County,
Florida Power Corp.,
7.200% 12/01/14 1,000 1,088
GA Burke County Development Authority,
Oglethorpe Power Corp.,
Series 1992,
8.000% 01/01/22 11,000 12,884
HI State Department Budget and Finance:
RIB (variable rate), Series 1993 B,
6.665% 12/15/23 10,000 8,875
Hawaiian Electric Co., Series 1990 C,
7.375% 12/01/20 5,965 6,472
</TABLE>
32
<PAGE>
Investment Portfolio/May 31, 1997
- ----------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
IL Development Financial Authority,
Pollution Control, Series 1991,
7.250% 06/01/11 $ 5,625 $ 6,047
IL State Deveolpment Finance Authority,
Commonwealth Edison Co. Project,
Series D,
6.750% 03/01/15 3,400 3,702
IN Mt. Vernon,
Southern Indiana Gas & Electric Co.,
Series 1984 A,
7.250% 03/01/14 4,500 4,877
IN Petersburg, Indiana Power &
Light Co., Series B,
5.400% 08/01/17 5,000 4,763
IN Sullivan Pollution Control, Merom
Station Project, Series 1991,
7.100% 04/01/19 10,000 10,688
KY Trimble County,
Louisville Gas & Electric Co.,
Series 1990 A,
7.625% 11/01/20 7,555 8,282
LA De Soto Parish,
Southwestern Electric Power Co.,
Series 1992,
7.600% 01/01/19 6,000 6,795
MI Monroe County,
Detroit Edison Co. Monroe & Fermi Project,
Series 1990 I,
7.650% 09/01/20 8,000 8,770
MI St. Clair County Economic Development
Corp., Detroit Edison Co., Series 1933 AA,
6.400% 08/01/24 7,000 7,516
MT Forsyth, The Washington
Power Co., Series 1989,
7.125% 12/01/13 8,000 8,590
NJ Cape May County Industrial Pollution
Control Financing Authority, Atlantic City
Electric Co., Series 1994 A,
7.200% 11/01/29 5,000 5,631
NM Farmington Southern California Edison,
7.200% 04/01/21 8,000 8,740
NV Clark County,
Nevada Power Co., Series 1992 A,
6.700% 06/01/22 25,895 27,352
NV Clark County Industrial Development,
Nevada Power Company, Series 1990,
7.800% 06/01/20 4,250 4,702
</TABLE>
33
<PAGE>
Investment Portfolio/May 31, 1997
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
MUNICIPAL BONDS - CONT. PAR VALUE
- ------------------------------------------------------------------------------
<S> <C> <C>
UTILITY - CONT
INVESTOR OWNED - CONT
NV Humboldt County Pollution Control Revenue,
Idaho Power Co. Project,
8.300% 12/20/14 $ 1,875 $ 2,201
NY State Energy Research & Development Authority:
Brooklyn Union Gas Co.,
Series 1993 A, RIB (variable rate),
8.001% 04/01/20 13,000 14,560
Consolidated Edison Co.:
7.500% 01/01/26 4,250 4,563
Series 1991 A,
7.500% 01/01/26 4,000 4,270
Series 1992 A,
6.750% 01/15/27 4,265 4,478
Series 1994 A,
7.125% 12/01/29 5,000 5,556
Series 1993 B,
5.250% 08/15/20 13,500 12,623
Long Island Lighting Co.,
7.150% 12/01/20 11,075 11,726
OH State Air Quality Development Authority,
The Cleveland Electric Illuminating Co.,
Series 1992,
8.000% 12/01/13 6,545 7,568
OK Muskogee, Oklahoma Gas & Electric
Project, Series A,
7.000% 03/01/17 1,300 1,332
TX Brazos River Authority,
Houston Light & Power Co.,
Series A:
6.700% 03/01/17 13,015 13,991
7.625% 05/01/19 900 965
TX Matagorda County,
Houston Light & Power Co.,
6.700% 03/01/27 7,200 7,749
WV Mason County Pollution Control,
Applachian Power Co.,
Series G,
7.400% 01/01/14 400 429
--------
261,746
--------
JOINT POWER AUTHORITY - 6.7%
AZ Salt River Project, Agricultural
Improvement & Power District
Electric System,
Series A, 1,500 1,583
</TABLE>
34
<PAGE>
Investment Portfolio/May 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
FL State Municipal Power Agency,
Series 1993,
5.100% 10/01/25 $38,150 $ 34,812
GA Municipal Electric Authority Power:
Series Z,
5.500% 1/1/2020(h) 24,000 23,820
Series 1993 C,
5.700% 1/1/2019(h) 20,000 20,350
MA State Municipal Wholesale Electric Co.,
Series 1994 A,
6.228% 07/01/16 22,900 18,978
MN Southern Minnesota Municipal
Power Agency,
Series A,
5.000% 01/01/16 6,000 5,528
SC Piedmont Municipal Power Agency:
Series 1988,
(a) 01/01/13 25,885 10,775
Series 1993,
5.375% 01/01/25 9,055 8,760
SC State Public Service Authority:
5.125% 01/01/32 26,150 23,895
Series C:
5.000% 01/01/18 5,000 4,606
5.125% 01/01/21 18,000 16,785
Series 1993 C,
5.000% 01/01/25 9,000 8,134
TX State Municipal Power Agency,
(a) 09/01/13 12,440 5,007
UT Intermountain Power Agency,
State Power Supply,
Series B,
7.625% 07/01/08 100 105
WA State,
Public Power Supply System,
Nuclear Project No. 3,
Series 1993 C,
5.400% 07/01/12 14,000 13,528
WI Public Power, Inc.,
Series 1993 B,
5.440% 07/01/14 5,400 5,184
--------
201,850
--------
MUNICIPAL ELECTRIC - 4.6%
AZ Mesa,
Series 1997,
5.375% 07/01/15 12,800 12,720
</TABLE>
35
<PAGE>
Investment Portfolio/May 31, 1997
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - CONT. PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
UTILITY - CONT.
MUNICIPAL ELECTRIC - CONT.
FL Orlando Utilities Commission:
RIB (variable rate), Series 1993-B,
6.633% 10/06/13 $ 5,000 $ 4,956
Series A,
5.000% 10/01/20 15,000 13,650
Series 1993-A,
5.250% 10/01/23 11,525 10,805
Series 1989 D,
5.000% 10/01/23 6,200 5,611
LA De Soto Parish,
Southwestern Electric Power Co.,
7.600% 01/01/19 5,000 5,663
OH Cleveland Public Power,
5.125% 11/15/18 15,000 14,081
PR Electric Power Authority:
5.250% 07/01/16 3,500 3,395
6.000% 07/01/11 4,195 4,515
6.000% 07/01/12 6,680 7,189
6.250% 07/01/10 6,000 6,608
SD Heartland Consumers Power District,
Series 1992,
6.000% 01/01/12 3,650 3,910
TN Metropolitan Government,
Nashville & Davidson Counties, Series 1996 A,
(a) 05/15/09 8,500 4,494
TX San Antonio:
Series 1992,
5.000% 02/01/17 9,000 8,336
Series 1989 B,
5.000% 02/01/16 10,000 9,288
WA Chelan County Public Utilities District:
(a) 06/01/09 5,000 2,606
(a) 06/01/11 5,000 2,281
WA Chelan County Public Utilities
District Number 001 Consolidate,
Series 1989-A Division I,
7.750% 07/01/21 4,500 4,826
WA Tacoma Electric System,
RIB (variable rate), Series 1991 C,
8.698% 01/02/15 10,000 11,613
--------
136,547
--------
WATER & SEWER - 6.7%
CA Los Angeles Wastewater Systems, Series 1993 D,
5.200% 11/01/21 10,000 9,288
</TABLE>
36
<PAGE>
Investment Portfolio/May 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
FL Hillsborough County, Series 1991 A,
7.000% 08/01/14 $ 5,000 $ 5,469
FL Reedy Creek Improvement District,
Series 1994-1,
5.000% 10/01/19 23,190 21,190
ID State Water Resource Board,
Boise Water Corp., Series 1991,
7.250% 12/01/21 6,000 6,398
LA Public Facility Belmont Water Authority,
9.000% 03/15/2024(c) 1,350 1,215
MA State Water Resources Authority:
Series B,
5.000% 03/01/22 21,200 19,054
Series C,
4.750% 12/01/23 15,680 13,485
MS V Lakes Utility District,
8.250% 07/15/24 760 743
NJ Ocean County Utilities Authority,
5.000% 01/01/13 2,190 2,102
NJ State Economic Development Authority,
American Water Co., Inc.:
6.500% 04/01/22 4,900 5,170
Series 1994 A,
6.875% 11/01/34 10,590 11,570
NY State Environmental Facilities Corp.,
New York City Municipal Water Finance Authority:
Pollution Control,
5.750% 06/15/12 19,260 19,982
Series 1991 E,
6.500% 06/15/14 3,000 3,214
NY Suffolk County Water Authority,
7.375% 06/01/12 20 21
PA Philadelphia, Water & Waste
Water Revenue, Series 1993,
5.000% 06/15/16 15,000 13,800
TN Jackson Water and Sewer Revenue,
Series 1984,
10.375% 07/01/12 1,090 1,232
TX Houston Water & Sewer Lien:
5.375% 12/01/18 15,000 14,606
Series C,
(a) 12/01/12 42,000 17,693
TX Houston Water & Sewer System Revenue,
5.000% 12/01/18 24,755 22,836
TX State Coastal Industrial Water Authority,
Bayport Water System, Series 1978,
7.000% 12/15/03 2,200 2,200
</TABLE>
37
<PAGE>
Investment Portfolio/May 31, 1997
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
MUNICIPAL BONDS - CONT. PAR VALUE
- -------------------------------------------------------------------------------
<S> <C> <C>
UTILITY - CONT.
WATER & SEWER - CONT.
VA Roanoke County,
Water System Revenue, Series 1993,
5.000% 07/01/21 $10,000 $ 9,088
----------
200,356
----------
TOTAL MUNICIPAL BONDS (cost of $2,845,038) 2,950,837
----------
<CAPTION>
OPTIONS - 0.1% CONTRACTS
- -------------------------------------------------------------------------------
<S> <C> <C>
July 1997 Treasury Bond Put,
Strike price 107, Expiration 06/20/97 100 141
July 1997 Treasury Bond Put,
Strike price 108, Expiration 06/21/97 100 344
July 1997 Treasury Bond Call,
Strike price 110, Expiration 06/21/97 100 718
July 1997 Treasury Bond Call,
Strike price 112, Expiration 06/21/97 100 156
----------
TOTAL OPTIONS (cost of $1,864) 1,359
----------
TOTAL INVESTMENTS (cost of $2,846,902) (i) 2,952,196
----------
<CAPTION>
SHORT-TERM OBLIGATIONS - 0.8% PAR
- -------------------------------------------------------------------------------
<S> <C> <C>
VARIABLE RATE DEMAND NOTES (j)
CA Newport Beach Hoag Hospital,
3.950% 10/01/22 $ 3,400 3,400
FL Pinellas County Health
Facilities Authority,
Series 1985,
4.100% 12/01/15 200 200
IN Portage Economic Development
Revision, Pedcor Investments,
Series A,
4.050% 08/01/30 5,800 5,800
IN State Health Facilities
Financing Authority,
Series 1992,
4.000% 12/01/02 2,300 2,300
MI Farmington Hills Hospital Finance
Authority, Botsford General Hospital,
Series 1991 B,
4.100% 02/15/16 1,700 1,700
MI Flint Hospital Building Authority,
Hurley Medical Center,
Series 1995 B,
3.950% 07/01/15 900 900
</TABLE>
38
<PAGE>
Investment Portfolio/May 31, 1997
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
MS Perry County,
Leaf River Forest Project,
4.000% 03/01/02 $ 8,300 $ 8,300
NY Niagara Mohawk Series 1985-A,
4.200% 07/01/15 100 100
SC Charleston County Shell,
4.000% 01/01/07 2,100 2,100
----------
TOTAL SHORT-TERM OBLIGATIONS 24,800
----------
OTHER ASSETS & LIABILITIES, NET - 0.7% 22,004
- -------------------------------------------------------------------------------
NET ASSETS - 100.0% $2,999,000
----------
</TABLE>
NOTES TO INVESTMENT PORTFOLIO:
- -------------------------------------------------------------------------------
(a) Zero coupon bond.
(b) This issuer is in default of certain debt covenants. Income is not being
accrued.
(c) Securities 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 May 31,
1997, the value of these securities amounted to $78,236 or 2.6% of net
assets.
(d) This is a restricted security which was acquired on April 2, 1990 at a
cost of $320. This security represents 0.0% of the Fund's net assets at
May 31, 1997.
(e) These securities have been purchased on a delayed delivery basis for
settlement at a future date beyond the customary settlement date.
(f) 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 principal and interest.
(g) Accrued interest accumulates in the value of the security and is
payable at redemption.
(h) These securities, or a portion thereof, are being used to collateralize
the delayed delivery purchase indicated in note (e) above.
(i) Cost for federal income tax purposes is $2,846,967.
(j) Variable rate demand notes are considered short-term obligations.
Interest rates change periodically on specified dates. These securities
are payable on demand and are secured by either letters of credit or
other credit support agreements from banks. The rates listed are as of
May 31, 1997.
<TABLE>
<CAPTION>
Acronym Name
------- ----
<S> <C>
RIB Residual Interest Bond
</TABLE>
39
<PAGE>
STATEMENT OF ASSETS & LIABILITIES
MAY 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
(in thousands except for per share amounts and footnotes)
ASSETS
<S> <C> <C>
Investments at value (cost $2,846,902) $ 2,952,196
Short-term obligations 24,800
------------
2,976,996
Receivable for:
Interest $ 58,241
Investments sold 23,767
Fund shares sold 664
Other 137 82,809
--------- ------------
Total Assets 3,059,805
LIABILITIES
Payable for:
Investments purchased 41,564
Distributions 13,493
Fund shares repurchased 5,251
Accrued:
Deferred Trustees fees 31
Other 466
---------
Total Liabilities 60,805
------------
NET ASSETS $ 2,999,000
------------
Net asset value & redemption price per share -
Class A ($2,604,779/195,341) $ 13.33
------------
Maximum offering price per share - Class A
($13.33/0.9525) $ 13.99 (a)
------------
Net asset value & offering price per share -
Class B ($394,221/29,564) $ 13.33 (b)
------------
COMPOSITION OF NET ASSETS
Capital paid in $ 2,947,361
Undistributed net investment income 1,851
Accumulated net realized loss (55,506)
Net unrealized appreciation 105,294
------------
$ 2,999,000
------------
</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.
40
<PAGE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED MAY 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
(in thousands)
INVESTMENT INCOME
<S> <C> <C>
Interest $ 100,049
EXPENSES
Management fee $ 7,712
Service fee 3,844
Distribution fee - Class B 1,524
Transfer agent 2,462
Bookkeeping fee 380
Registration fee 38
Custodian fee 44
Audit fee 37
Trustees fee 95
Reports to shareholders 24
Legal fee 274
Other 134 16,568
---------- --------------
Net Investment Income 83,481
--------------
NET REALIZED & UNREALIZED GAIN (LOSS) ON PORTFOLIO POSITIONS
Net realized gain (loss) on:
Investments 565
Closed futures contracts (3,215)
----------
Net Realized Loss (2,650)
Net unrealized depreciation
during the period (48,502)
--------------
Net Loss (51,152)
--------------
Net Increase in Net Assets from Operations $ 32,329
--------------
</TABLE>
See notes to financial statements.
41
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
(Unaudited)
Six months
ended Year ended
(in thousands) May 31 November 30
----------- -----------
INCREASE (DECREASE) IN NET ASSETS 1997 1996
<S> <C> <C>
Operations:
Net investment income $ 83,481 $ 184,838
Net realized gain (loss) (2,650) 36,263
Net unrealized depreciation (48,502) (82,294)
----------- -----------
Net Increase from Operations 32,329 138,807
Distributions:
From net investment income - Class A (75,319) (164,142)
From net investment income - Class B (9,921) (21,619)
----------- -----------
(52,911) (46,954)
----------- -----------
Fund Share Transactions:
Receipts for shares sold - Class A 161,352 420,494
Value of distributions reinvested - Class A 42,183 91,754
Cost of shares repurchased - Class A (371,133) (764,164)
----------- -----------
(167,598) (251,916)
----------- -----------
Receipts for shares sold - Class B 6,822 22,446
Value of distributions reinvested - Class B 5,475 11,854
Cost of shares repurchased - Class B (38,328) (69,907)
----------- -----------
(26,031) (35,607)
----------- -----------
Net Decrease from Fund Share
Transactions (193,629) (287,523)
----------- -----------
Total Decrease (246,540) (334,477)
NET ASSETS
Beginning of period 3,245,540 3,580,017
----------- -----------
End of period (including undistributed
net investment income of $1,851 and $2,545,
respectively.) $ 2,999,000 $ 3,245,540
=========== ===========
NUMBER OF FUND SHARES
Sold - Class A 12,142 31,534
Issued for distributions reinvested - Class A 3,159 6,835
Repurchased - Class A (27,883) (57,191)
----------- -----------
(12,582) (18,822)
----------- -----------
Sold - Class B 513 1,673
Issued for distributions reinvested - Class B 410 883
Repurchased - Class B (2,880) (5,231)
----------- -----------
(1,957) (2,675)
----------- -----------
</TABLE>
See notes to financial statements.
42
<PAGE>
NOTES TO FINANCIAL STATEMENTS
May 31, 1997 (UNAUDITED)
NOTE 1. INTERIM FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
In the opinion of management of Colonial Tax-Exempt Fund (the Fund), a series of
Colonial Trust IV, the accompanying financial statements contain all normal and
recurring adjustments necessary for the fair presentation of the financial
position of the Fund at May 31, 1997, and the results of its operations, the
changes in its net assets and the financial highlights for the six months then
ended.
NOTE 2. ACCOUNTING POLICIES
- --------------------------------------------------------------------------------
ORGANIZATION: The Fund 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's investment objective is to
seek 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 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 preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. The following is a summary of
significant accounting policies that are consistently followed by the Fund in
the preparation of its financial statements.
SECURITY VALUATION AND TRANSACTIONS: 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.
43
<PAGE>
Notes to Financial Statements/May 31, 1997
- --------------------------------------------------------------------------------
NOTE 2. ACCOUNTING POLICIES - CONT.
- --------------------------------------------------------------------------------
Security transactions are accounted for on the date the securities are
purchased, sold or mature.
Cost is determined and gains (losses) are based upon the specific identification
method for both financial statement and federal income tax purposes.
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's policy to qualify as a
regulated investment company and to distribute all of its taxable and tax-exempt
income, no federal income tax has been accrued.
INTEREST INCOME, DEBT DISCOUNT AND PREMIUM: Interest income is recorded on the
accrual basis. Original issue discount is accreted to interest income over the
life of a security with a corresponding increase in the cost basis; market
discount is not accreted. Premium is amortized against interest income with a
corresponding decrease in the cost basis.
DISTRIBUTIONS TO SHAREHOLDERS: The Fund declares and records distributions daily
and pays monthly.
The amount and character of income and gains to be distributed are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles. Reclassifications are made to the Fund's capital accounts
to reflect income and gains available for distribution (or available capital
loss carryforwards) under income tax regulations.
NOTE 3. 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:
44
<PAGE>
Notes to Financial Statements/May 31, 1997
- --------------------------------------------------------------------------------
<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 was 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 Fund's 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>
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 Fund's average net assets and receives a reimbursement
for certain out of pocket expenses.
Effective January 1, 1997 and continuing through calender year 1997, the
Transfer Agent fee will be reduced by 0.01% in cumulative monthly increments,
resulting in a decrease in the fee from 0.14% to 0.13% annually.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES: Colonial Investment
Services, Inc. (the Distributor), an affiliate of the Adviser, is the Fund's
principal underwriter. During the six months ended May 31, 1997, the Fund has
been advised that the Distributor retained net underwriting discounts of $75,265
on sales of the Fund's Class A shares and received contingent deferred sales
charges (CDSC) of $588,813, on Class B share redemptions.
45
<PAGE>
Notes to Financial Statements/May 31, 1997
- --------------------------------------------------------------------------------
NOTE 3. FEES AND COMPENSATION PAID TO AFFILIATES - CONT.
- --------------------------------------------------------------------------------
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% annually 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 4. PORTFOLIO INFORMATION
- --------------------------------------------------------------------------------
INVESTMENT ACTIVITY: For the six months ended May 31, 1997, purchases and sales
of investments, other than short-term obligations, were $702,782,518 and
$868,760,557, respectively.
Unrealized appreciation (depreciation) at May 31, 1997, based on cost of
investments for federal income tax purposes was approximately:
<TABLE>
<CAPTION>
<S> <C>
Gross unrealized appreciation $ 146,062,000
Gross unrealized depreciation (40,833,000)
-------------
Net unrealized appreciation $ 105,229,000
=============
</TABLE>
CAPITAL LOSS CARRYFORWARDS: At November 30, 1996, 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>
2002 28,967,000
2003 4,478,000
---------------
$ 33,445,000
===============
</TABLE>
Expired capital loss carryforwards, if any, are recorded as a reduction of
capital paid in.
To the extent loss carryforwards are used to offset any future realized gains,
it is unlikely that such gains would be distributed since they may be taxable to
shareholders as ordinary income.
OTHER: The Fund has greater than 10% of its net assets at May 31,
1997 invested in New York.
46
<PAGE>
Notes to Financial Statements/May 31, 1997
- --------------------------------------------------------------------------------
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 purchase or sell 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 management 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 5. LINE OF CREDIT
- --------------------------------------------------------------------------------
The Fund may borrow up to $200,000,000 of its net assets under a line of credit
for temporary or emergency purposes. Any borrowings bear interest at one of the
following options determined at the inception of the loan: (1) federal funds
rate plus 1/2 of 1%, (2) the lending bank's base rate or (3) IBOR offshore loan
rate plus 1/2 of 1%. There were no borrowings under the line of credit during
the six months ended May 31, 1997.
47
<PAGE>
FINANCIAL HIGHLIGHTS
Selected data for a share of each class outstanding throughout each period are
as follows:
<TABLE>
<CAPTION>
(Unaudited)
Six
months ended
May 31 Year ended November 30
-------------------------- ------------------------
1997 1996
Class A Class B Class A Class B
------- ------- -------- -------
<S> <C> <C> <C> <C>
Net asset value -
Beginning of period $13.550 $13.550 $ 13.720 $13.720
------- ------- -------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.372 0.322 0.756 0.656
Net realized and
unrealized gain (loss) (0.217) (0.217) (0.171) (0.171)
------- ------- -------- -------
Total from Investment
Operations 0.155 0.105 0.585 0.485
------- ------- -------- -------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment
income (0.375) (0.325) (0.755) (0.655)
------- ------- -------- -------
Net asset value -
End of period $13.330 $13.330 $ 13.550 $13.550
======= ======= ======== =======
Total return (a) 1.18%(b) 0.80(b) 4.47% 3.70%
======= ======= ======== =======
RATIOS TO AVERAGE NET ASSETS
Expenses 0.97%(c)(d) 1.72%(c)(d) 0.99%(c) 1.74%(c)
Net investment income 5.48%(c)(d) 4.73%(c)(d) 5.61%(c) 4.86%(c)
Portfolio turnover 23% 23% 40% 40%
Net assets at end
of period (in millions) $ 2,605 $ 394 $ 2,818 $ 427
</TABLE>
(a) Total return at net asset value assuming all distributions reinvested and no
initial sales charge or contingent deferred sales charge.
(b) Not annualized.
(c) The benefits derived from custody credits and directed brokerage
arrangements had no impact. Prior years' ratios are net of benefits
received, if any.
(d) Annualized.
48
<PAGE>
FINANCIAL HIGHLIGHTS - CONT.
<TABLE>
<CAPTION>
Year ended November 30
- -----------------------------------------------
1995 1994
Class A Class B Class A Class B
- -------- -------- -------- --------
<S> <C> <C> <C>
$ 12.180 $ 12.180 $ 13.920 $ 13.920
- -------- -------- -------- --------
0.771 0.673 0.795 0.695
1.535 1.535 (1.744) (1.744)
- -------- -------- -------- --------
2.306 2.208 (0.949) (1.049)
- -------- -------- -------- --------
(0.766) (0.668) (0.791) (0.691)
- -------- -------- -------- --------
$ 13.720 $ 13.720 $ 12.180 $ 12.180
======== ======== ======== ========
19.35% 18.47% (7.08%) (7.78%)
======== ======== ======== ========
1.01% 1.76% 1.01% 1.76%
5.82% 5.07% 6.00% 5.25%
41% 41% 56% 56%
$ 3,111 $ 469 $ 2,858 $ 440
</TABLE>
49
<PAGE>
FINANCIAL HIGHLIGHTS - CONT.
Selected data for a share of each class outstanding throughout each period are
as follows:
<TABLE>
<CAPTION>
Year ended November 30
----------------------------------------------------
1993 1992
Class A Class B Class A Class B (a)
-------- -------- -------- -----------
<S> <C> <C> <C> <C>
Net asset value -
Beginning of period $ 13.480 $ 13.480 $ 13.190 $ 13.230
-------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.842 0.740 0.913 0.462
Net realized and
unrealized gain 0.451 0.451 0.277 0.248
-------- -------- -------- --------
Total from Investment
Operations 1.293 1.191 1.190 0.710
-------- -------- -------- --------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment
income (0.853) (0.751) (0.900) (0.460)
-------- -------- -------- --------
Net asset value -
End of period $ 13.920 $ 13.920 $ 13.480 $ 13.480
-------- -------- -------- --------
Total return (b) 9.80% 9.00% 9.29% 9.29%
-------- -------- -------- --------
RATIOS TO AVERAGE NET ASSETS
Expenses 1.02% 1.77% 1.05% 1.80%
Net investment income 6.06% 5.31% 6.81% 6.06%
Portfolio turnover 28% 28% 14% 14%
Net assets at end
of period (in millions) $ 3,357 $ 430 $ 2,899 $ 137
</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) Not annualized.
(d) Annualized.
50
<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 Colonial at
1-800-426-3750 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.
51
<PAGE>
[COLONIAL Mutual Funds LOGO]
Mutual Funds for
Planned Portfolios
TRUSTEES
ROBERT J. BIRNBAUM
Retired (formerly Special Counsel, Dechert, Price & Rhoads; President and
Chief Operating Officer, New York Stock Exchange, Inc.)
TOM BLEASDALE
Retired (formerly Chairman of the Board and Chief Executive Officer, Shore
Bank & Trust Company)
LORA S. COLLINS
Attorney (formerly Attorney, Kramer, Levin, Naftalis, Nessen, Kamin &
Frankel)
JAMES E. GRINNELL
Private Investor (formerly Senior Vice President-Operations, The Rockport
Company)
WILLIAM D. IRELAND, JR.
Retired (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
Partner, Development Capital, L.L.C. (formerly Dean, College of Business and
Management, University of Maryland; 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.
Retired (formerly Chairman of the Board and 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
Retired Partner, Peat Marwick Main & Co. (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., Distributor (C) 1997
A Liberty Financial Company (NYSE: L)
One Financial Center, Boston, Massachusetts 02111-2621, 617-426-3750
TE-03/772D-0597 M (7/97)
