COLONIAL TAX-EXEMPT FUND
COLONIAL TAX-EXEMPT INSURED FUND
COLONIAL INTERMEDIATE TAX-EXEMPT FUND
Supplement to Prospectus dated
March 31, 1997
The second paragraph under the sub-caption Options and Futures on page 11 of the
Prospectus is revised in its entirety as follows:
Each Fund may buy or write options that are not traded on national securities
exchanges and not protected by the Options Clearing Corporation. These
transactions are effected directly with a broker-dealer, and each Fund bears the
risk that the broker-dealer will fail to meet its obligations. The market value
of such options and other illiquid assets will not exceed 10% (for the
Tax-Exempt Fund and the Insured Fund) or 15% (for the Intermediate Fund) of each
Fund's net assets.
Effective May 1, 1997, Robert S Waas no longer co-manages the Tax-Exempt Fund.
The fourth and fifth paragraphs under the caption How the Funds are Managed of
the Prospectus are combined and are revised in their entirety as follows:
Bonny E. Boatman, Senior Vice President and Director of the Adviser and head of
the Adviser's Tax-Exempt Group, has managed the Tax-Exempt Fund since 1993 and
has managed various other Colonial tax-exempt funds since 1985. William C.
Loring, Vice President of the Adviser, has managed the Tax-Exempt Fund, the
Insured Fund and the Intermediate Fund since May 1997, 1987 and 1993,
respectively, and various other Colonial tax-exempt funds since 1986. Brian M.
Hartford, Vice President of the Adviser, has managed the Tax-Exempt Fund since
May 1997, and various other Colonial tax-exempt funds since 1993. Mr. Hartford
was a Senior Municipal Trader of the Adviser from 1991 until 1993.
TE-36/580D-0497 June 6, 1997
