[graphic omitted]
- -------------------------------------------------------------------------------
COLONIAL
MUNICIPAL
MONEY MARKET
FUND
- -------------------------------------------------------------------------------
ANNUAL REPORT
JUNE 30, 1997
-------------------------------
NOT FDIC- | MAY LOSE VALUE
INSURED | NO BANK GUARANTEE
-------------------------------
<PAGE>
COLONIAL MUNICIPAL MONEY MARKET FUND HIGHLIGHTS
JULY 1, 1996 - JUNE 30, 1997
INVESTMENT OBJECTIVE: Colonial Municipal Money Market Fund seeks maximum current
income exempt from Federal income tax by investing principally in a diversified
portfolio of short-term municipal securities.
STRATEGY: The Fund pursues its objective by investing in the Stein Roe & Farnham
Municipal Money Market Portfolio (Portfolio), which invests primarily in
variable rate demand notes, commercial paper and other short-term, tax-exempt
securities.
PORTFOLIO MANAGER COMMENTARY: "Over the past 12 months, the Federal Reserve's
rein on short-term interest rates shifted from a neutral to a tightening mode.
Due to increased market volatility throughout the year, we held a large
percentage of the Portfolio in daily and weekly variable rate demand notes. This
strategy allowed us to respond quickly to market irregularities and lock in
attractive rates on longer notes and bonds when the opportunities arose. This
proved especially beneficial at the Portfolio's fiscal year end when certain
market factors kept rates on variable rate instruments unusually high." --
Ronnie Wallace
COLONIAL MUNICIPAL MONEY MARKET FUND PERFORMANCE
- -------------------------------------------------------------------------------
CLASS A CLASS B
Inception dates 6/16/87 5/5/92
- -------------------------------------------------------------------------------
Distributions declared per share $0.029 $0.021
- -------------------------------------------------------------------------------
Seven-day yields on 6/30/97 1.93% 1.35%
- -------------------------------------------------------------------------------
Seven-day taxable-equivalent yields on 6/30/97(1) 3.20% 2.24%
- -------------------------------------------------------------------------------
30-day yields on 6/30/97 2.84% 1.93%
- -------------------------------------------------------------------------------
PORTFOLIO BREAKDOWN(2) PORTFOLIO MATURITY(2)
(as of 6/30/97) (as of 6/30/97)
- -------------------------------------------------------------------------------
Variable Rate Notes ...........67.6% 0-29 days ....................73.4%
Tax-Exempt Bonds ..............10.8% 30-59 days ....................4.4%
Other Tax Exempts ..............8.0% 60-89 days ....................5.5%
Tax and Revenue 90-179 days ...................4.7%
Anticipation Notes .............5.9% 180-375 days .................12.0%
Put Bonds ......................3.9%
Commercial Paper ...............3.8%
(1) Taxable-equivalent yields are based on the 39.6% Federal income tax rate.
(2) Portfolio breakdown and maturity weightings are calculated as a percentage
of the total market value of the investment portfolio. Because it is
actively managed, there can be no guarantee the portfolio will continue to
hold or invest in these securities in the future.
An investment in the Fund is not insured or guaranteed by the U.S. Government.
There can be no assurance that the $1.00 net asset value per share will be
maintained.
As of August 1, 1997, the Fund offers Class C shares.
<PAGE>
PRESIDENT'S MESSAGE
TO FUND SHAREHOLDERS
[Photo of Harold W. Cogger]
I am pleased to present your Fund's annual report for the fiscal year ended June
30, 1997. This report reflects on the investment environment of the past 12
months and the performance of your Fund.
In the beginning of the period, the environment was favorable to the bond
market. The economy slowed without major Federal Reserve Board (FED)
intervention, inflation remained idle and the federal budget deficit was less
than expected. A slight increase in wage rates was offset by slowing benefits
growth and rising productivity. The growth of retail sales and consumer credit
slowed. Household liabilities, as a percentage of household net worth, were at
the high end of their historic range, and banks were increasingly reluctant to
extend credit to an already leveraged consumer. Consumer confidence, reflecting
continued growth in real take-home pay, was at the highest level since the
fourth quarter of 1989. The market remained sound and offered relatively
attractive yields when interest rates declined.
The economy has continued to grow at a healthy pace in 1997. A firm job market
buoyed consumer confidence, resulting in strong retail, auto and housing sales.
In March, the Fed raised short-term interest rates in response to growing
concern about future wage and price inflation.
In anticipation of a Fed increase, the Portfolio has held a high percentage in
variable rate demand notes. This helped performance as reduced demand for daily
and weekly variable rate notes kept yields on these securities higher than
normal throughout the period. The Portfolio has been positioned so that if the
Fed raises interest rates, the rates of the Portfolio's securities would follow.
Although the market seems too volatile at this time to anticipate another Fed
tightening, our strategy is to maintain a more neutral maturity profile
positioned to respond appropriately to the outcome of the next Federal Reserve
Board meeting.
Thank you for the opportunity to help you meet your investment goals.
Sincerely,
/s/ Harold W. Cogger
Harold W. Cogger
President
August 12, 1997
Because market conditions change frequently, there can be no assurance that the
trends described here will continue.
<PAGE>
---------------------------------------------------------------------------
SR&F MUNICIPAL MONEY MARKET PORTFOLIO
---------------------------------------------------------------------------
INVESTMENT PORTFOLIO
JUNE 30, 1997 (IN THOUSANDS)
MUNICIPAL SECURITIES - (103.8%) PAR VALUE
---------------------------------------------------------------------------
---------------------------------------------------------------------------
ARIZONA - 0.9%
* Maricopa County I.D.A. Multi-family Housing
Revenue (Vista Ventana Apartments Project gtd.
by Federal National Mortgage Association Securities)
V.R.D.B. 4.250% $ 1,200 $ 1,200
---------------------------------------------------------------------------
ARKANSAS - 4.7%
* Arkansas Development Finance Authority
Revenue Refunding Series C (ADFA Guaranty
Project) (AMBAC Insured)
3.950% 12/01/97 185 185
* Clark County Solid Waste Disposal Revenue
(Reynolds Metals Co. L.O.C. Sun Trust Company Bank)
V.R.D.B. 4.200% 3,000 3,000
Paragould Sales Tax Revenue (AMBAC Insured)
4.750% 7/01/97 550 550
* Pulaski County Public Facilities Board
(Chenel Park Apartments Project L.O.C. PNC
Bank, Kentucky) V.R.D.B. 4.350% 2,750 2,750
---------
6,485
---------
---------------------------------------------------------------------------
CALIFORNIA - 5.4%
City of Orange I.D.A. I.D.R. Series A
(Control Air Conditioning Project L.O.C.
California State Teachers)
V.R.D.B. 4.350% 1,000 1,000
California School Cash Reserve Program
Authority Pool Series A
(MBIA Insured) 4.750% 7/02/97 2,000 2,000
(AMBAC Insured) 4.750% 7/02/98 1,000 1,009
California Statewide Community Development
Authority T.R.A.N. Series A (FSA Insured)
4.500% 6/30/98 2,000 2,013
Los Angeles County G.O. T.R.A.N.
Series A 4.500% 6/30/98 1,000 1,006
Los Angeles Unified School District G.O. T.R.A.N.
1997-98 4.500% 7/01/98 500 503
---------
7,531
---------
---------------------------------------------------------------------------
COLORADO - 0.5%
Arvada Urban Renewal Authority Revenue
Refunding Series A (Arvada City Center)
(MBIA Insured) 3.650% 9/01/97 705 705
---------------------------------------------------------------------------
DELAWARE - 0.7%
Delaware G.O. Revenue Refunding
Series A 5.600% 8/15/97 1,000 1,002
---------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 0.7%
District of Columbia Revenue
(American University L.O.C. National
Westminister Bank) V.R.D.B. 4.200% 1,100 1,100
---------------------------------------------------------------------------
FLORIDA - 2.2%
* Collier County Housing Financial Authority
(Saxon Manor Isles L.O.C. PNC Bank of
Kentucky) V.R.D.B. 4.400% 2,600 2,600
Port of St. Lucie Special Assessment Revenue
(Assessment District No. 1-Phase II)
(MBIA Insured) 3.600% 10/01/97 500 500
---------
3,100
---------
---------------------------------------------------------------------------
GEORGIA - 2.0%
* Gwinnett County Development Authority I.D.R.
(Price Companies, Inc. L.O.C. NationsBank of Georgia)
V.R.D.B. 4.200% 2,800 2,800
---------------------------------------------------------------------------
HAWAII - 0.5%
Hawaii Highway Revenue 3.850% 7/01/97 750 750
---------------------------------------------------------------------------
IDAHO - 0.7%
Idaho T.A.N. 4.625% 6/30/98 1,000 1,007
---------------------------------------------------------------------------
ILLINOIS - 8.1%
Chicago Revenue (De La Salle Institute
Project L.O.C. Northern Trust, Chicago)
V.R.D.B. 4.250% 1,000 1,000
Chicago Tax Increment Refunding Allocation
Series A (Stockyards L.O.C. Northern Trust,
Chicago) V.R.D.B. 4.250% 1,500 1,500
Illinois Development Finance Authority
(Rest Haven, Illinois L.O.C. Federal Home
Loan Bank and South Holland Trust & Savings Bank)
V.R.D.B. 4.150% 1,000 1,000
* Illinois Development Finance Authority
Sewage Facilities Revenue (Nutrasweet Co.
Project gtd. by Monsanto Co.) V.R.D.B. 4.400% 4,100 4,100
Illinois Health Facilities Authority Revenue
(University of Chicago Project) 3.550%
Mandatory Put 7/02/97 1,500 1,500
* Illinois Student Assistance Student Loan Revenue
Series 1996 A (L.O.C. Bank of America)
V.R.D.B. 4.200% 1,900 1,900
* Southwestern Illinois Development Authority
Solid Waste Disposal Revenue (Wood River
Project) (Shell Oil Co.) V.R.D.B. 4.250% 200 200
---------
11,200
---------
---------------------------------------------------------------------------
INDIANA - 6.5%
* Crawfordsville Economic Development Revenue
(Pedcor Investments Shady Knoll Project L.O.C.
Federal Home Loan Bank)
V.R.D.B. 4.250% 1,575 1,575
Fort Wayne Hospital Authority Revenue (Parkview
Memorial Hospital L.O.C. Bank of America) V.R.D.B.:
4.150% Series B 1,000 1,000
4.150% Series C 1,000 1,000
* Franklin Economic Development Revenue
Refunding (Pedcor Investments - Lakeview I
Apartments Project L.O.C. Federal Home Loan
Bank) V.R.D.B. 4.2500% 2,927 2,927
Gary Environmental Improvement Revenue (U.S.
Steel Corp. Project L.O.C. Bank of Nova Scotia)
V.R.D.B. 4.100% 500 500
* LaPorte County Economic Development Revenue
(Woodland Project L.O.C. Federal Home Loan
Bank) V.R.D.B. 4.250% 2,000 2,000
---------
9,002
---------
---------------------------------------------------------------------------
IOWA - 5.4%
* Clinton I.D.R. (Sethness Products Project)
V.R.D.B. 4.350% 2,500 2,500
Iowa Higher Education Loan Authority Revenue
Refunding Series 1996 (Private College Facilities)
(MBIA Insured) 4.250% 8/01/97 600 600
Iowa School Corporations Cash Anticipation
Program Warrant Certificates (FSA Insured)
Series 1996-97 B 4.250% 1/30/98 1,000 1,004
Series 1997-98 B 4.500% 6/26/98 3,000 3,020
Muscatine County Iowa P.C.R.
(Monsanto Co. Project) V.R.D.B. 4.250% 400 400
---------
7,524
---------
---------------------------------------------------------------------------
KENTUCKY - 5.9%
Clark County P.C.R. Series J-1 (Eastern
Kentucky Power gtd. by National Rural
Utilities Cooperative Finance Corp.)
3.750% Optional Put 10/15/97 1,010 1,010
* Covington I.D.R. Series 1991 (White Castle
Distributing L.O.C. Bank One, Columbus)
V.R.D.B. 4.300% 3,685 3,685
Kentucky Economic Development Finance
Authority Hospital Facilities Revenue
(Baptist Healthcare System L.O.C. Canadian
Imperial Bank) V.R.D.B. 4.100% 500 500
* Pulaski County Solid Waste Disposal Revenue
Series B (Eastern Kentucky Power gtd. by
National Rural Utilities Cooperative Finance
Corp.) 3.550% Optional Put 8/15/97 1,100 1,100
* Shelby County Industrial Building Revenue
(Roll Form Corp. L.O.C. Bank One of Kentucky)
V.R.D.B. 4.300% 1,865 1,865
---------
8,160
---------
---------------------------------------------------------------------------
LOUISIANA - 1.1%
Lake Charles Harbor & Terminal District P.C.R.
(Conoco Inc. gtd by E.I. Dupont)
V.R.D.B. 4.100% 400 400
City of Shreveport G.O. (MBIA Insured)
8.000% 6/01/98 685 709
St. Mary Parish Consolidated School
District No. 1 (FSA Insured)
10.000% 3/01/98 345 358
---------
1,467
---------
---------------------------------------------------------------------------
MASSACHUSETTS - 0.9%
Massachusetts Industrial Finance Agency
Revenue Series A (Babson College)
(MBIA Insured) 3.750% 10/01/97 250 250
Massachusetts Water Reserve Authority
(Morgan Guaranty) 3.750% 9/30/97 1,000 1,000
---------
1,250
---------
---------------------------------------------------------------------------
MICHIGAN - 3.6%
Detroit City School District Aid Notes
4.500% 5/01/98 2,000 2,010
Michigan Job Development Authority P.C.R.
Series 1985 (Mazda Motor Manufacturing USA
Corp. L.O.C. Sumitomo Bank, Ltd.)
V.R.D.B. 4.375% 3,000 3,000
---------
5,010
---------
---------------------------------------------------------------------------
MINNESOTA - 0.7%
* Minnesota Housing Finance Authority Single
Family Mortgage Series J 3.650% Mandatory
Put 12/11/97 1,000 1,000
---------------------------------------------------------------------------
MISSISSIPPI - 0.3%
Mississippi State University Educational Building
Corporation Revenue (MBIA Insured)
3.700% 8/01/97 350 350
---------------------------------------------------------------------------
MISSOURI - 4.2%
Clay County G.O. (FSA Insured)
4.000% 3/01/98 1,645 1,645
* Jefferson County I.D.A. Revenue Series A
(GHF Holdings LLC Project L.O.C. Bank
One, Indianapolis) V.R.D.B. 4.300% 4,185 4,185
---------
5,830
---------
---------------------------------------------------------------------------
NEBRASKA - 0.3% Omaha G.O.
6.700% 12/01/97 350 354
---------------------------------------------------------------------------
NEW HAMPSHIRE - 4.0%
New Hampshire Business Finance Authority
P.C.R. Series 1992 D (Public Service Company
Project L.O.C. Barclays Bank PLC)
V.R.D.B. 4.300% 600 600
New Hampshire Capital Improvement Board
Series B 5.450% 11/01/97 500 503
* New Hampshire Industrial Development P.C.R.
(New England Power Co.)
3.650% Mandatory Put 7/10/97 1,500 1,500
3.850% Mandatory Put 7/10/97 450 450
3.850% Mandatory Put 8/22/97 1,500 1,500
3.850% Mandatory Put 9/25/97 1,000 1,000
---------
5,553
---------
---------------------------------------------------------------------------
NEW YORK - 1.0%
New York Medical Care Facilities
Finance Agency Revenue (Escrowed in
U.S. Treasury Securities) (pre-refunded
to 8/15/97) 8.875% 1,350 1,385
---------------------------------------------------------------------------
NORTH DAKOTA - 0.7%
* Mercer County Solid Waste Disposal
Series 1993 U (gtd. by National Rural
Utilities Cooperative Finance Corp.) 3.800%
Optional Put 12/01/97 1,000 1,000
---------------------------------------------------------------------------
OHIO - 0.7%
Cuyahoga County Hospital Revenue
(Metrohealth Systems) (MBIA Insured)
5.000% 2/15/98 510 514
Ohio Environmental Improvement Revenue
(U.S. Steel Corp. Project L.O.C. Pittsburgh
National Bank)
V.R.D.B. 3.900% 400 400
---------
914
---------
---------------------------------------------------------------------------
OKLAHOMA - 1.1%
Lawton Water Authority Sales Tax & Utility
System Revenue (AMBAC Insured)
5.375% 7/01/97 1,585 1,585
---------------------------------------------------------------------------
OREGON - 0.7%
Eugene Oregon Electric Utilities Revenue
(FSA Insured) 4.000% 8/01/97 420 420
Salem Water & Sewage Revenue
(FGIC Insured) 4.000% 5/01/98 540 540
---------
960
---------
---------------------------------------------------------------------------
PENNSYLVANIA - 4.1%
* Pennsylvania Higher Education Assistance Agency
Student Loan Revenue Series A (L.O.C. Student
Loan Marketing Association)
V.R.D.B. 4.250% 2,000 2,000
Philadelphia Redevelopment Authority Notes
Series 1996 (Southwark Plaza Project)
(FGIC Insured) 3.850% 12/30/97 1,500 1,500
Quakertown General Authority Revenue
Series 1996A (L.O.C. PNC Bank, N.A.)
V.R.D.B. 4.250% 2,200 2,200
---------
5,700
---------
---------------------------------------------------------------------------
SOUTH CAROLINA - 2.2%
* South Carolina Jobs Economic Development
Authority Hospital Facilities Revenue
(Specialty Equipment Companies L.O.C.
Bank of America, Illinois)
V.R.D.B. 4.300% 3,000 3,000
---------------------------------------------------------------------------
SOUTH DAKOTA - 0.7%
Yankton I.D.R. (Alumax Project)
(L.O.C. Bank of America, NT & SA)
V.R.D.B. 4.100% 1,000 1,000
---------------------------------------------------------------------------
TENNESSEE - 3.6%
* McMinn County Industrial Development Board
I.D.R. (Creative Fabrication Corp.)
(L.O.C. NBD Bank) V.R.D.B. 4.200% 3,700 3,700
Metropolitan Government Nashville & Davidson
County Health & Educational Facilities Board
Revenue Series 1993 (Richland Place Inc. Project
L.O.C. Societe Generale)
V.R.D.B. 4.200% 1,300 1,300
---------
5,000
---------
---------------------------------------------------------------------------
TEXAS - 9.1%
* Gulf Coast Waste Disposal Authority (Amoco
Oil Co. Project gtd. by Amoco Corp.)
V.R.D.B. 4.300%
Series 1994 700 700
Series 1996 200 200
Harlandale Independent School District
Refunding (gtd. by PSF)
4.000% 2/01/98 450 450
* Harris County Industrial Development Corp. I.D.R.
(Precision General Project L.O.C.
Morgan Guaranty) V.R.D.B. 4.300% 2,060 2,060
* North Texas Higher Education Authority
Student Loan Revenue Refunding Series A
(L.O.C. Student Loan Marketing Association)
V.R.D.B. 4.250% 1,100 1,100
* Robertson County Industrial Development Corp.
Series 1995 (Sanderson Farms Inc.
Project
L.O.C. Harris Trust and Savings Bank)
V.R.D.B. 4.350% 1,900 1,900
Texas State T.R.A.N. Series 1996
4.750% 8/29/97 5,000 5,006
Tyler G.O. (Escrowed in U.S. Treasury Securities)
8.500% 9/01/97 1,200 1,209
---------
12,625
---------
---------------------------------------------------------------------------
VERMONT - 2.9%
* Vermont I.D.A. Revenue (RyeGate Wood
Energy Co. Project L.O.C. ABN AMRO
Bank, N.V.) V.R.D.B. 4.300% 4,000 4,000
---------------------------------------------------------------------------
VIRGINIA - 0.7%
Bedford County I.D.A. I.D.R. Refunding
(Nekoosa Packaging Project L.O.C.
Canadian Imperial Bank)
V.R.D.B. 4.200% 1,000 1,000
---------------------------------------------------------------------------
WASHINGTON - 3.1%
* Washington Multi-family Housing Finance
Commission Revenue Series A (Hamilton
Place Project L.O.C. U.S. Bank of
Washington) V.R.D.B. 4.300%
1,140 1,140
* Yakima County Public Corp. I.D.R. (John I.
Haas Inc. Project L.O.C. Bayerische
Vereinsbank AG)
V.R.D.B. 4.400% 3,150 3,150
---------
4,290
---------
---------------------------------------------------------------------------
WISCONSIN - 13.9%
* Carlton P.C.R. Series 1988 (Wisconsin
Power and Light Co.) V.R.D.B. 4.300% 6,500 6,500
* Fond Du Lac I.D.R. (Brenner Tank Inc. L.O.C.
Bank One, Milwaukee) V.R.D.B. 4.300% 3,400 3,400
* Holland I.D.R. (White Clover Dairy, Inc.
Project L.O.C. Bank One, Milwaukee) V.R.D.B. 4.300% 2,600 2,600
* Kenosha I.D.R. (Monarch Plastics, Inc. L.O.C.
Bank One, Milwaukee) V.R.D.B. 4.300% 2,260 2,260
Milwaukee County G.O. Series A
(AMBAC Insured) 5.000% 10/01/97 500 502
* Oak Creek I.D.R. Series 1995 (McAdams Graphics
Inc. L.O.C. Bank One, Milwaukee)
V.R.D.B. 4.300% 1,800 1,800
Wisconsin State Health Facility Authority Revenue
Series A-2 (Franciscan Health Care)
(L.O.C. Toronto Dominion Bank)
V.R.D.B. 4.150% 1,700 1,700
Wisconsin State Health & Educational Facilities
Authority Revenue Series A (United Health
Group, Inc.) (AMBAC Insured)
4.000% 12/15/97 550 550
---------
19,312
---------
TOTAL MUNICIPAL SECURITIES - 103.8%
(Amortized Cost $144,151)
144,151
---------
OTHER ASSETS & LIABILITIES, NET- (-3.8%)
(5,223)
---------------------------------------------------------------------------
NET ASSETS (100.0%) $ 138,928
---------
* These securities are subject to Alternative Minimum Tax. At June 30,
1997, these securities represented 60.8 percent of net assets.
SR&F MUNICIPAL MONEY MARKET PORTFOLIO
STATEMENT OF ASSETS & LIABILITIES
JUNE 30, 1997
(in thousands)
ASSETS
Investments at value (cost $144,151) $144,151
Receivable for:
Investments sold $3,009
Interest 1,068
Cash 22 4,099
------- --------
Total Assets 148,250
LIABILITIES
Payable for investments purchased 9,274
Payable to investment adviser 31
Other liabilities 17
-------
Total Liabilities 9,322
--------
NET ASSETS applicable to investors' beneficial interests $138,928
========
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 1997
(in thousands)
INVESTMENT INCOME
Interest income $ 5,182
EXPENSES
Management fee 352
Custodian fees 27
Accounting fees 16
Audit and legal fees 14
Trustees fees 13
Other 32
------- ---------
454
Net Investment Income $ 4,728
---------
See notes to financial statements.
<PAGE>
SR&F MUNICIPAL MONEY MARKET PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
Year ended Period ended
(in thousands) June 30 June 30
---------------------------
INCREASE (DECREASE) IN NET ASSETS 1997 1996(a)
Operations:
Net investment income $ 4,728 $ 4,054
--------- --------
Transactions in investors' beneficial interests:
Contributions 118,114 241,616
Withdrawals (126,842) (102,742)
--------- --------
Net transactions in investors'
beneficial interest (8,728) 138,874
--------- --------
Net increase (decrease) in net assets (4,000) 142,928
NET ASSETS
Beginning of period 142,928 -
--------- --------
End of period $ 138,928 $142,928
========= ========
FINANCIAL HIGHLIGHTS
Year ended Period ended
June 30 June 30 (a)
---------------------------
RATIOS TO AVERAGE NET ASSETS 1997 1996
Expenses 0.32% 0.30% (b)
Net investment income 3.36% 3.50% (b)
(a) The Portfolio commenced operations September 28, 1995.
(b) Annualized.
<PAGE>
SR&F MUNICIPAL MONEY MARKET
PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997
NOTE 1. ORGANIZATION OF THE SR&F MUNICIPAL MONEY MARKET PORTFOLIO
- -------------------------------------------------------------------------------
The SR&F Municipal Money Market Portfolio (the "Portfolio") is a separate series
of the SR&F Base Trust, a Massachusetts common trust organized under an
Agreement and Declaration of Trust dated August 23, 1993. The Declaration of
Trust permits the Trustees to issue non-transferable interests in the portfolio.
The Portfolio allocates net asset value, income and expenses based on respective
percentage ownership of each investor on a daily basis. At June 30, 1997, Stein
Roe Municipal Money Market Fund and Colonial Municipal Money Market Fund owned
85.8 percent and 14.2 percent, respectively.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
- -------------------------------------------------------------------------------
The following are the significant accounting policies of the Portfolio. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assump- tions
that affect the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of increases and decreases in net assets from operations
during the reporting period. Actual results could differ from those estimates.
SECURITY VALUATIONS:
All securities are valued as of June 30, 1997. Municipal securities are valued
at amortized cost, which approximates market value. This method involves valuing
an instrument at cost on the purchase date and thereafter assuming a constant
amortization to maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the instrument and does not
take into account unrealized securities gains or losses. Other assets and
securities are valued by a method that the Board of Trustees believes represents
a fair value.
FEDERAL INCOME TAXES:
No provision is made for federal income taxes, because the Portfolio is treated
as a partnership for federal income tax purposes and all of its income is
allocated to its owners based on respective percentages of ownership.
OTHER INFORMATION:
Realized gains or losses from sales of securities are determined on the specific
identified cost basis.
A maturity date is not shown for municipal securities bearing variable or
floating interest rates that are adjusted periodically to minimize fluctuations
in the value of such securities. All amounts are shown in thousands.
NOTE 3. PORTFOLIO COMPOSITION
- -------------------------------------------------------------------------------
The Portfolio invests in municipal securities including, but not limited to,
general obligation bonds, revenue bonds and escrowed bonds (which are bonds that
have been refinanced, the proceeds of which have been invested in U.S.
Government or agency obligations and set aside to pay off the original issue at
the first call date or maturity). The Portfolio's investments included certain
municipal securities that are insured by private insurers who guarantee the
payment of principal and interest in the event of default.
The Portfolio's investments included certain short-term securities that are
backed by bank letters of credit used to provide liquidity to the issuer and/or
additional security in the event of default by the issuer. At June 30, 1997,
54.3 percent of the Portfolio was backed by bank letters of credit. See
Portfolio's schedule of investments for additional information on portfolio
composition.
NOTE 4. TRUSTEES FEES AND TRANSACTIONS WITH AFFILIATES
- -------------------------------------------------------------------------------
The Portfolio pays monthly management fees to Stein Roe & Farnham Incorporated
(the "Adviser"), an indirect, majority-owned subsidiary of Liberty Mutual
Insurance Company, for its services as investment adviser and manager. The
management fee for the Portfolio is computed at an annual rate of .25 of 1
percent of average daily net assets. The Adviser also provides accounting
services.
Certain officers and trustees of the Trust are also officers of the Adviser.
Compensation is paid to trustees not affiliated with the Adviser. No
remuneration was paid to any other trustee or officer of the Trust for the year
ended June 30, 1997.
NOTE 5. SHORT-TERM DEBT
- -------------------------------------------------------------------------------
To facilitate portfolio liquidity, the Portfolio maintains borrowing
arrangements under which they can borrow against Portfolio securities. There
were no borrowings by the Portfolio during the period ended June 30, 1997.
NOTE 6. INVESTMENT TRANSACTIONS
- -------------------------------------------------------------------------------
At June 30, 1997, the cost of investments for financial reporting purposes and
for federal income tax purposes were equal.
<PAGE>
REPORT OF INDEPENDENT AUDITORS
TO THE HOLDERS OF INVESTORS' BENEFICIAL INTERESTS OF SR&F
MUNICIPAL MONEY MARKET PORTFOLIO AND THE BOARD OF
TRUSTEES OF THE SR&F BASE TRUST
We have audited the accompanying statement of assets and liabilities,
including the schedule of investments, of SR&F Municipal Money Market Portfolio
as of June 30, 1997 and the related statements of operations for the year then
ended and the changes in net assets for the year ended June 30, 1997 and the
period September 28, 1995 to June 30, 1996, and financial highlights for each of
the fiscal periods since 1996. These financial statements and financial
highlights are the responsibility of the Portfolio's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatements. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 1997, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
SR&F Municipal Money Market Portfolio at June 30, 1997, and the results of its
operations, the changes in its net assets, and its financial highlights for the
fiscal period referred to above, in conformity with generally accepted
accounting principles.
Ernst & Young LLP
Chicago, Illinois
August 12, 1997
<PAGE>
COLONIAL MUNICIPAL MONEY MARKET FUND
STATEMENT OF ASSETS & LIABILITIES
JUNE 30, 1997
(in thousands except for per share amounts)
ASSETS
Investment in SR&F Municipal Money Market
Portfolio $19,778
Receivable for:
Fund shares sold $ 24
Other 7 31
------ -------
Total Assets 19,809
LIABILITIES
Payable for:
Fund shares repurchased 76
Distributions 49
Payable to Adviser 27
Accrued:
Deferred Trustees fees 1
Other 3
------
Total Liabilities 156
------
NET ASSETS $19,653
=======
Net asset value:
Class A ($18,450/18,454) $1.00
=======
Class B ($1,203/1,203) $1.00(a)
=======
COMPOSITION OF NET ASSETS
Capital paid in $19,656
Overdistributed net investment income (2)
Accumulated net realized loss (1)
-------
$19,653
=======
(a) Redemption price per share is equal to net asset value less any
applicable contingent deferred sales charge.
See notes to financial statements.
<PAGE>
COLONIAL MUNICIPAL MONEY MARKET FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 1997
(in thousands)
INVESTMENT INCOME
Interest income from
SR&F Municipal Money Market Portfolio $ 756
Expenses allocated from
SR&F Municipal Money Market Portfolio (66)
------
690
EXPENSES
Administration fee $ 50
Service fee - Class B 4
Distribution fee - Class B 11
Transfer agent 46
Bookkeeping fee 18
Trustees fee 12
Audit fee 12
Legal fee 7
Registration fee 24
Reports to shareholders 3
Other 10
-----
197
Fees and expenses waived or borne
by the Administrator (94) 103
----- ------
Net Investment Income $ 587
------
See notes to financial statements.
<PAGE>
COLONIAL MUNICIPAL MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
(in thousands) Year ended June 30
-------------------
INCREASE (DECREASE) IN 1997 1996
NET ASSETS
Operations:
Net investment income $ 587 $ 677
------- ------
Distributions:
From net investment income - Class A (554) (628)
In excess of net investment income - Class A (1) -
From net investment income - Class B (34) (49)
In excess of net investment income - Class B (a) -
------- ------
(2) -
Fund Share Transactions:
Receipts for shares sold - Class A 38,030 58,417
Value of distributions reinvested - Class A 496 550
Cost of shares repurchased - Class A (39,750) (63,966)
------- ------
(1,224) (4,999)
------- ------
Receipts for shares sold - Class B 9,278 3,838
Value of distributions reinvested - Class B 22 36
Cost of shares repurchased - Class B (9,332) (5,750)
------- ------
(32) (1,876)
------- ------
Net Decrease from Fund
Share Transactions (1,256) (6,875)
------- ------
Total Decrease (1,258) (6,875)
NET ASSETS
Beginning of period 20,911 27,786
------- ------
End of period (net of overdistributed
net investment income of $2 and none
respectively) $19,653 $20,911
======= =======
NUMBER OF FUND SHARES
Sold - Class A 38,030 58,417
Issued for distributions reinvested - Class A 496 550
Repurchased - Class A (39,750) (63,966)
------- ------
(1,224) (4,999)
------- ------
Sold - Class B 9,278 3,839
Issued for distributions reinvested - Class B 22 36
Repurchased - Class B (9,332) (5,750)
------- ------
(32) (1,875)
------- ------
(a) Rounds to less than one.
See notes to financial statements.
<PAGE>
COLONIAL MUNICIPAL MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997
NOTE 1. ACCOUNTING POLICIES
- -------------------------------------------------------------------------------
ORGANIZATION: Colonial Municipal Money Market Fund (the Fund), a series of
Colonial Trust IV, is a non-diversified portfolio of a Massachusetts business
trust registered under the Investment Company Act of 1940, as amended, as an
open-end, management investment company. The Fund invests all of its investable
assets in interests in the SR&F Municipal Money Market Portfolio (the
Portfolio), a Massachusetts common trust, having the same investment objective
as the Fund. The value of the Fund's investment in the Portfolio reflects the
Fund's proportionate interest in the net assets of the Portfolio (14.2% at June
30, 1997). The performance of the Fund is directly affected by the performance
of the Portfolio.
The financial statements of the Portfolio, including the portfolio of
investments, are included elsewhere in this report and should be read in
conjunction with the Fund's financial statements. The Fund may issue an
unlimited number of shares and offers Class A and Class B shares. Class B shares
are identical to Class A shares except for an annual service and 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 followed by the Fund in the preparation of its
financial statements.
SECURITY VALUATION AND TRANSACTIONS: Valuation of securities by the Portfolio is
discussed in Note 1 of the Portfolio's Notes to Financial Statements which are
included elsewhere in this report.
Determination of class net asset values and financial highlights:
All income, expenses (other than the Class B service and distribution fee), and
realized and unrealized gains (losses), are allocated to each class
proportionately on a daily basis for purposes of determining the net asset value
of each class.
Class B per share data and ratios are calculated by adjusting the net investment
income per share data and ratios for the Fund for the entire period by the
service fee and 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 income, no
federal income tax has been accrued.
DISTRIBUTIONS TO SHAREHOLDERS: The Fund declares and records distributions daily
and pays monthly.
NOTE 2. FEES AND COMPENSATION PAID TO AFFILIATES
- -------------------------------------------------------------------------------
ADMINISTRATOR: Colonial Management Associates, Inc. (the Administrator) provides
accounting and other services and office facilities for a monthly fee equal to
0.25% annually of the Fund's average net assets.
BOOKKEEPING FEE: The Administrator provides bookkeeping and pricing services for
$18,000 per year plus 0.0233% of the Fund's average net assets over $50 million.
TRANSFER AGENT: Colonial Investors Service Center, Inc. (the Transfer Agent), an
affiliate of the Administrator, provides shareholder services for a monthly fee
equal to 0.20% annually of the Fund's average net assets and receives
reimbursement for certain out of pocket expenses.
Underwriting discounts, service and distribution fees: Colonial Investment
Services, Inc. (the Distributor), an affiliate of the Administrator, is the
Fund's principal underwriter. During the year ended June 30, 1997, the Fund has
been advised that the Distributor received contingent deferred sales charges
(CDSC) of $15,960 on Class B share redemptions.
The Fund has adopted a 12b-1 plan which requires the payment of a service fee to
the Distributor equal to 0.25% annually of Class B'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 only.
The CDSC and the fees received from the 12b-1 plan are used principally as
repayment to the Distributor for amounts paid by the Distributor to dealers who
sold such shares.
EXPENSE LIMITS: The Administrator has agreed, until further notice, to waive
fees and bear certain Fund expenses to the extent that total expenses (inclusive
of the Fund's proportionate share of the Portfolio's expenses and exclusive of
service and distribution fees, commissions, taxes, and extraordinary expenses,
if any) exceed 0.75% annually of the Fund's average net assets.
OTHER: The Fund pays no compensation to its officers, all of whom are employees
of the Administrator.
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.
<PAGE>
COLONIAL MUNICIPAL MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
Selected data for a share of each class outstanding throughout each period are
as follows:
<TABLE>
<CAPTION>
Year ended Year ended
June 30 June 30(e)
------------------------- -------------------------
1997 1996
Class A Class B Class A Class B
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value -
Beginning of period $1.000 $1.000 $1.000 $1.000
------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (a)(b) 0.029 0.021 0.030 0.020
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.029) (0.021) (0.030) (0.020)
In excess of net investment income -- -- -- --
------ ------ ------ ------
Total Distributions Declared
to Shareholders (0.029) (0.021) (0.030) (0.020)
------ ------ ------ ------
Net asset value -
End of period $1.000 $1.000 $1.000 $1.000
====== ====== ====== ======
Total return (c)(d) 2.98% 2.12% 3.04% 2.02%
====== ====== ====== ======
RATIOS TO AVERAGE NET ASSETS
Expenses (b) 0.75% 1.66% 0.75% 1.75%
Fees and expenses waived or
borne by the Adviser/ Administrator (b) 0.46% 0.46% 0.84% 0.84%
Net investment income (b) 2.94% 2.03% 3.00% 2.00%
Net assets at end
of period (000) 18,450 $1,203 19,676 $1,235
(a) Net of fees and expenses waived or borne by
the Adviser/Administrator which amounted to $0.005 $0.005 $0.008 $0.008
(b) The per share amounts and ratios reflect income and expenses assuming
inclusion of the Fund's proportionate share of the income and expenses of
SR&F Municipal Money Market Portfolio.
(c) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge.
(d) Had the Adviser/Administrator not waived or reimbursed a portion of expenses total return would have been reduced.
(e) Effective September 28, 1995, SR&F became the investment Adviser of the Fund.
</TABLE>
<PAGE>
COLONIAL MUNICIPAL MONEY MARKET FUND
FINANCIAL HIGHLIGHTS - CONTINUED
Selected data for a share of each class outstanding throughout each period are
as follows:
<TABLE>
<CAPTION>
Period ended Year ended
June 30(b) November 30
------------------------- -------------------------
1995 1994
Class A Class B Class A Class B
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value -
Beginning of period $ 1.000 $ 1.000 $ 1.000 $ 1.000
------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (a) 0.018 0.012 0.020 0.010
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.018) (0.012) (0.020) (0.010)
------- ------- ------- -------
Net asset value -
End of period $ 1.000 $ 1.000 $ 1.000 $ 1.000
======= ======= ======= =======
Total return (c)(d) 1.80%(e) 1.20%(e) 2.00% 1.01%
======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS
Expenses 0.75%(f) 1.75%(f) 0.60% 1.60%
Fees and expenses waived or
borne by the Adviser 0.36%(f) 0.36%(f) 0.59% 0.59%
Net investment income 3.05%(f) 2.05%(f) 2.05% 1.05%
Net assets at end
of period (000) $24,675 $ 3,111 $28,808 $ 3,867
(a) Net of fees and expenses waived or borne by
the Adviser which
amounted to $ 0.002 $ 0.002 $ 0.006 $ 0.006
(b) The Fund changed its fiscal year end from November 30 to June 30 in 1995.
(c) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge.
(d) Had the Adviser not waived or reimbursed a portion of expenses total return would have been reduced.
(e) Not annualized.
(f) Annualized.
</TABLE>
<PAGE>
COLONIAL MUNICIPAL MONEY MARKET FUND
FINANCIAL HIGHLIGHTS - continued
Selected data for a share of each class outstanding throughout each period are
as follows:
Year ended
November 30
---------------------------
1993
Class A Class B
------------ ------------
Net asset value -
Beginning of period $ 1.000 $ 1.000
------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (a) 0.017 0.009
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.017) (0.009)
------- --------
Net asset value -
End of period $ 1.000 $ 1.000
======= ========
Total return (b)(c) 1.73% 0.93%
======= ========
RATIOS TO AVERAGE NET ASSETS
Expenses 0.75% 1.75%
Fees and expenses waived or
borne by the Adviser 0.50% 0.50%
Net investment income 1.69% 0.69%
Net assets at end
of period (000) $18,618 $ 908
(a) Net of fees and expenses waived or borne by
the Adviser which amounted to $ 0.005 $ 0.005
(b) Total return at net asset value assuming all distributions reinvested
and no contingent deferred sales charge.
(c) Had the Adviser not waived or reimbursed a portion of expenses total
return would have been reduced.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE TRUSTEES OF COLONIAL TRUST IV AND THE SHAREHOLDERS OF
COLONIAL MUNICIPAL MONEY MARKET FUND
In our opinion, the accompanying statement of assets and liabilities 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 Municipal Money Market Fund (the "Fund") (a series of Colonial Trust
IV) at June 30, 1997, 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 investments owned at June 30, 1997,
provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
August 12, 1997
<PAGE>
SHAREHOLDER SERVICES
TO MAKE INVESTING EASIER
Colonial has one of the most extensive selections of shareholder services
available. Your financial advisor 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 on
most funds; $25 for an IRA account.
FREE EXCHANGES(1): Exchange all or part of your account into the same share
class of another Colonial fund, by phone or mail.
EASY ACCESS TO YOUR MONEY(1): 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 calendar day of each month unless the 10th falls on a
non-business day or the first business day of the week. If this occurs, the
payable date will be the previous business day. Dividends and capital gains must
be reinvested.
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.
COLONIAL RETIREMENT PLANS: Choose from a broad range of retirement plans,
including IRAs.
(1) 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.
Exchanges are not available on all funds. Investors who purchase Class B or
Class C shares (for applicable funds), or $1 million or more of Class A shares,
may be subject to a contingent deferred sales charge.
<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:
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 [*]
To speak with a shareholder services representative about your account, call
Monday to Friday, 8:00 a.m. to 8:00 p.m. ET, and Saturdays from February through
mid-April, 10:00 a.m. to 2:00 p.m. ET.
COLONIAL TELEPHONE TRANSACTION DEPARTMENT - 1-800-422-3737
To purchase, exchange or sell shares by telephone, call Monday to Friday, 9:00
a.m. to 7:00 p.m. ET. Transactions received after the close of the New York
Stock Exchange will receive the next business day's closing price.
LITERATURE - 1-800-426-3750
To request literature on any Colonial fund, call Monday to Friday, 8:30 a.m. to
6:30 p.m. ET.
BY MAIL
COLONIAL INVESTORS SERVICE CENTER, INC.
P.O. BOX 1722
BOSTON, MA 02105-1722
<PAGE>
SHAREHOLDER COMMUNICATIONS
TO KEEP YOU INFORMED
To make recordkeeping easy and keep you up-to-date on the performance of your
investments, you can expect to receive the following information about your
Colonial account:
TRANSACTION CONFIRMATIONS: Each time you make a purchase, sale or exchange, you
receive a confirmation statement within just a few days.
QUARTERLY STATEMENTS: Every three months, if any transactions are made that
affect your share balance, this statement reports on your account activity
during the quarter (including any reinvestment of dividends). This statement
also provides year-to-date information.
COLONIAL SHAREHOLDER NEWS: Mailed with your quarterly account statements, this
newsletter highlights timely investment strategies, portfolio manager commentary
and shareholder service updates.
TAX FORMS AND YEAR-END TAX GUIDE: Easy-to-use forms and timely information are
designed to make tax reporting simpler. (Usually mailed in January.)
AVERAGE COST BASIS STATEMENTS: If you sold or exchanged shares during the year,
this statement may help you calculate your gain/loss for tax purposes. (Usually
mailed in February.)
<PAGE>
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Colonial Municipal Money Market Fund is:
Colonial Investors Service Center, Inc.
P.O. Box 1722
Boston, MA 02105-1722
1-800-345-6611
Colonial Municipal Money Market 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 Municipal Money
Market 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.
<PAGE>
[graphic omitted] COLONIAL
MUTUAL FUNDS
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, CS First Boston
Merchant Bank; and President and Chief Executive Officer, The First Boston
Corporation)
JAMES L. MOODY, JR.
Retired (formerly Chairman of the Board 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
TM-02/835D-0697 M (8/97)
