COLONIAL MUNICIPAL MONEY MARKET FUND Annual report
June 30, 1998
[Picture of building]
NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE
<PAGE>
COLONIAL MUNICIPAL MONEY MARKET FUND HIGHLIGHTS
JULY 1, 1997 - JUNE 30,1998
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 all of its assets in the
SR&F Municipal Money Market Portfolio (Portfolio), a municipal money market fund
with the same investment objective as the Fund.
PORTFOLIO MANAGER COMMENTARY: "Without a significant change in the economy
warranting an increase in interest rates by the Federal Reserve Board, we
maintained the Portfolio's neutral stance. Early in the period we invested in
some longer-maturity securities, particularly tax-exempt bonds, that had
maturities of nearly one year. Attractive one-year notes were more difficult to
find this year since municipal issuers had less of a need to borrow due to the
strong economy. Consequently, the restricted supply drove up prices and
decreased the yield offered by these issues. Since the issues were so expensive,
we did not purchase as many as we would have liked. We were able, however, to
take advantage of attractive rates on longer-term notes and bonds while keeping
the average maturity short enough to provide flexibility in an uncertain
climate."
-- Ronnie Wallace
COLONIAL MUNICIPAL MONEY MARKET FUND PERFORMANCE
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Inception dates 6/16/87 5/5/92 8/1/97
Distributions declared per share $0.030 $0.023 $0.024
7-day yields on 6/30/98(1) 2.87% 1.86% 2.47%
7-day taxable-equivalent yields on 6/30/98(2) 4.75% 3.08% 4.09%
30-day yields on 6/30/98(1) 2.96% 1.94% 2.55%
</TABLE>
PORTFOLIO BREAKDOWN(3)
(as of 6/30/98)
Variable Rate Notes ......... 68.9%
Tax-Exempt Bonds ............ 15.5%
Other Tax Exempts ........... 5.2%
Tax Anticipation Notes ...... 4.6%
Put Bonds ................... 4.3%
Commercial Paper ............ 1.5%
PORTFOLIO MATURITY(3)
(as of 6/30/98)
0 - 29 days .............. 71.5%
30 - 89 days .............. 3.7%
90 - 179 days ............. 6.5%
180 - 299 days ............. 7.3%
300 - 375 days ............. 11.0%
(1)If the Distributor or Administrator had not waived or borne certain Fund
expenses, the 7-day and 30-day yields would have been 2.30% and 2.05% for Class
A shares, 1.29% and 1.04% for Class B shares and 1.30% and 1.05% for Class C
shares, respectively.
(2)Taxable-equivalent yields are based on the 39.6% federal income tax rate.
(3)Portfolio breakdown and maturity weightings are calculated as a percentage of
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.
2
<PAGE>
PRESIDENT'S MESSAGE [PHOTO]
TO FUND SHAREHOLDERS
In June 1998, Harold Cogger retired as president of Colonial Municipal Money
Market Fund. I would like to take this opportunity to thank him for his guidance
over the past few years and wish him well. As the new president of the Fund, I
am pleased to present the annual report for Colonial Municipal Money Market Fund
for the 12-month period ended June 30, 1998.
A variety of factors caused interest rates to seesaw during the period, as
different sectors of the economy provided mixed signals to investors. The
economic turmoil in Southeast Asia, its potential to slow U.S. economic growth
and the possibility of interest rate increases by the Federal Reserve Board
(Fed) were strong contributors to volatility. With hints that growth might slow,
investors' fear of inflation was reduced. As interest rates dropped, money
market securities finished on a positive note.
The tax-exempt market in which the Fund invests showed a similar pattern. In
addition to the trends mentioned above, supply and demand factors contributed
towards rising and declining prices during the period. The yield spread among
different money market instruments was narrow, and investors did not benefit by
assuming the additional risk. In this environment, the Fund maintained its
neutral position.
Overall, our long-term economic outlook remains positive. We expect that low
inflation and modest economic growth will continue. Unresolved issues in the
Pacific Rim should keep the U.S. economy from growing too fast. We believe that
short-term interest rates will remain unchanged until the Fed is convinced the
economy is slowing.
For investors seeking a relatively stable environment for their investment
dollars and the potential for competitive, tax-exempt income, Colonial Municipal
Money Market Fund remains a sensible option for their investment portfolio.
Thank you for choosing Colonial Municipal Money Market Fund and for giving us
the opportunity to serve your investment needs.
Respectfully,
/s/ Stephen E. Gibson
- -------------------------------
Stephen E. Gibson
President
August 11, 1998
Because economic and market conditions change frequently, there can be no
assurance that the trends described here will continue.
[Picture of Stephen E. Gibson]
3
<PAGE>
SR&F MUNICIPAL MONEY MARKET PORTFOLIO
INVESTMENT PORTFOLIO
JUNE 30, 1998 (IN THOUSANDS)
<TABLE>
<CAPTION>
MUNICIPAL SECURITIES - 102.6% PAR VALUE
--------------------------------------------------------------------------------------------------------
<S> <C> <C>
ARIZONA - 0.9%
Maricopa County Industrial Development Authority
Multi-Family Housing Revenue (Vista Ventana
Apartments Project, gtd. by FNMA)
VRDB 3.650% (a) $ 1,200 $ 1,200
---------
--------------------------------------------------------------------------------------------------------
ARKANSAS - 5.6%
Clark County Solid Waste Disposal Revenue
(Reynolds Metals Project, LOC SunTrust
Bank) VRDB 3.650% (a) 3,000 3,000
Pulaski County Public Facilities Board Multi-Family
Revenue (Chenel Park Apartments Project,
LOC PNC Bank Kentucky) VRDB 3.800% (a) 4,400 4,400
---------
7,400
---------
--------------------------------------------------------------------------------------------------------
CALIFORNIA - 1.5%
California Schools Cash Reserve Program Authority
Revenue Notes Series A (AMBAC Insured, gtd.
by Trinity Funding GIC) 4.750% 7/2/98 500 500
Los Angeles County GO TRAN Series 98-99A
4.500% 6/30/99 1,000 1,008
Los Angeles Unified School District GO TRAN
Series 97-98 4.500% 7/1/98 500 500
---------
2,008
---------
--------------------------------------------------------------------------------------------------------
COLORADO - 1.7%
Colorado Health Facilities Authority Revenue
(AMC Cancer Research Center, LOC U.S. Bank)
Series B Variable Rate 3.750% Optional Put 1/15/99 1,000 1,000
Denver Airport Revenue Series A (LOC Bayerische
Landesbank Girozentrale) Variable Rate
3.850% Mandatory Put 7/13/98 (a) 1,000 1,000
East Grand County School District No. 2 GO
(AMBAC Insured) 3.700% 12/1/98 230 230
---------
2,230
---------
--------------------------------------------------------------------------------------------------------
DELAWARE - 2.3%
Delaware Economic Development Authority IDR
(Star Enterprise, Delaware Clean Power Project,
LOC Canadian Imperial Bank) Series C
VRDB 3.650% (a) 3,000 3,000
---------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Investment Portfolio/June 30, 1998
--------------------------------------------------------------------------------------------------------
<S> <C> <C>
DISTRICT OF COLUMBIA - 1.6%
District of Columbia (American University, LOC
National Westminster Bank) VRDB 3.600% $ 1,100 $ 1,100
District of Columbia GO TRAN Series 98C (LOC
Union Bank of Switzerland) 5.000% 9/30/98 1,000 1,003
---------
2,103
---------
--------------------------------------------------------------------------------------------------------
FLORIDA - 1.5%
Dade County GO (FGIC Insured) 6.500% 11/1/98 1,045 1,054
Putman County Development Authority PCR
(Seminole Electric Cooperative Project, gtd. by
National Rural Utilities Cooperative Finance)
Variable Rate 3.650% Optional Put 12/15/98 1,000 1,000
---------
2,054
---------
--------------------------------------------------------------------------------------------------------
GEORGIA - 2.0%
Gwinnett County Development Authority IDR
(Price Companies Project, LOC
NationsBank of Georgia) VRDB 3.700% (a) 2,600 2,600
---------
--------------------------------------------------------------------------------------------------------
ILLINOIS - 12.3%
Chicago Economic Development Revenue (Crane
Carton Project, LOC Northern
Trust) VRDB 3.750% 750 750
Chicago Revenue (De La Salle Institute Project,
LOC Northern Trust) VRDB 3.600% 1,000 1,000
Chicago Tax Increment Allocation
(Stockyards, LOC Northern Trust)
Series A VRDB 3.600% 1,500 1,500
Cook County School District No. 100 Berwyn South
GO (FSA Insured) 8.200% 12/1/98 375 381
Illinois Development Finance Authority Sewage
Facilities Revenue (Nutrasweet Project,
gtd. by Monsanto) VRDB 3.800% (a) 4,300 4,300
Illinois Development Finance Authority Solid Waste
Disposal Revenue (Waste Management Project,
LOC Chase Manhattan Bank) VRDB 3.550% (a) 2,000 2,000
Illinois Health Facility Authority Revenue (University
of Chicago Project) 3.750% Mandatory Put 11/4/98 1,000 1,000
Illinois Health Facility Authority Revenue
(Swedish American Hospital Project,
AMBAC Insured) 4.400% 11/15/98 200 200
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Investment Portfolio/June 30, 1998
---------------------------------------------------------------------------------------------------------
MUNICIPAL SECURITIES - CONT. PAR VALUE
---------------------------------------------------------------------------------------------------------
<S> <C> <C>
ILLINOIS - CONT.
Illinois Student Assistance Student Loan
Revenue (LOC Bank of America
of Illinois) Series 96A VRDB 3.650% (a) $ 1,900 $ 1,900
Jasper/Richland Counties Community Unit
School District No. 1 GO (AMBAC Insured)
4.100% 11/1/98 340 340
Northbrook Park District GO 5.800% 11/1/98 800 805
Quad Cities Regional Economic Development
Authority Revenue (Steel Warehouse, LOC
Bank One Indiana) VRDB 3.700% (a) 2,000 2,001
---------
16,177
---------
--------------------------------------------------------------------------------------------------------
INDIANA - 7.9%
Crawfordsville Economic Development Revenue
(Pedcor Investments, Shady Knoll Project, LOC
FHLB) VRDB 3.650% (a) 1,567 1,567
Franklin Economic Development Revenue
(Pedcor Investments, LOC FHLB)
VRDB 3.650% (a) 2,885 2,885
Gary Environmental Improvement Revenue
(U.S. Steel Project, LOC Bank of Nova Scotia)
Floating Rate Note 3.700% Optional Put 7/15/98 500 500
Indiana Municipal Power Agency Power
Supply System Revenue Series B
(MBIA Insured) 4.850% 1/1/99 500 503
Kokomo Economic Development Revenue (Village
Community Partners IV Project, LOC
FHLB) VRDB 3.650% (a) 2,940 2,940
La Porte County Economic Development Revenue
(Pedcor Investments, Woodland Project, LOC
FHLB) VRDB 3.650% (a) 1,983 1,983
---------
10,378
---------
--------------------------------------------------------------------------------------------------------
IOWA - 5.3%
Clinton IDR (Sethness Products Project, LOC
Northern Trust) VRDB 3.700% (a) 4,000 4,000
Iowa School Corporation Cash Anticipation Program
Warrant Certificates (FSA Insured)
Series 97-98B 4.250% 1/28/99 1,000 1,004
Series 98-99A 4.500% 6/25/99 2,000 2,016
---------
7,020
---------
--------------------------------------------------------------------------------------------------------
KANSAS - 0.6%
Olathe IDR (Garmin International Project,
LOC NationsBank) VRDB 3.900% (a) 800 800
---------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Investment Portfolio/June 30, 1998
--------------------------------------------------------------------------------------------------------
<S> <C> <C>
KENTUCKY - 4.8%
Clark County PCR (Eastern Kentucky Power
Project, gtd. by National Rural Utilities
Cooperative Finance) Series J-1
Variable Rate 3.600% Optional Put 10/15/98 $ 1,000 $ 1,000
Covington Industrial Building Revenue
(White Castle Distributing, LOC Bank One)
Series 1991 VRDB 3.700% (a) 3,560 3,560
Shelby County Industrial Building Revenue
(Roll Forming, LOC Bank One Kentucky)
VRDB 3.700% (a) 1,730 1,730
---------
6,290
---------
--------------------------------------------------------------------------------------------------------
LOUISIANA - 0.2%
Terrebonne Parish Hospital Service District
No. 1 (General Medical Center Project,
AMBAC Insured) 4.000% 4/1/99 320 320
---------
--------------------------------------------------------------------------------------------------------
MARYLAND - 1.3%
Anne Arundel Economic Development Revenue
(Baltimore Gas and Electric Project) Variable
Rate 3.800% Mandatory Put 9/8/98 (a) 1,000 1,000
Maryland State Community Development
Administration Department of Housing and
Community Development Single Family Program
4.450% 4/1/99 (a) 655 658
---------
1,658
---------
--------------------------------------------------------------------------------------------------------
MICHIGAN - 2.1%
Detroit School District GO 4.500% 7/1/99 1,000 1,008
Lowell Michigan Area Schools GO 6.750% 5/1/99 225 230
Michigan State Job Development Authority Revenue
(Michigan Sugar, LOC Trust Company Bank)
VRDB 3.600% 1,600 1,600
---------
2,838
---------
--------------------------------------------------------------------------------------------------------
MISSOURI - 4.2%
Jefferson County Industrial Development Authority
IDR (GHF Holdings Project, LOC Bank One
Indiana) Series A VRDB 3.700% (a) 3,945 3,945
Kansas City Industrial Development Authority
IDR (Lanter Project, LOC Harris Trust & Savings
Bank) VRDB 3.700% 600 600
St. Louis General Fund TRAN 4.500% 6/30/99 1,000 1,008
---------
5,553
---------
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
Investment Portfolio/June 30, 1998
--------------------------------------------------------------------------------------------------------
MUNICIPAL SECURITIES - CONT. PAR VALUE
---------------------------------------------------------------------------------------------------------
<S> <C> <C>
MONTANA - 0.8%
Montana State Board of Investment Revenue
Series 1991 Variable Rate 3.600%
Optional Put 3/1/99 $ 1,000 $ 1,000
---------
--------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 0.9%
New Hampshire Business Finance Authority
Resource Recovery Revenue (Wheelabrator Concord,
LOC Wachovia Bank) Series B VRDB 3.650% (a) 1,200 1,200
---------
--------------------------------------------------------------------------------------------------------
NEVADA - 0.5%
Clark County GO TRAN Series 98B
4.000% 11/1/98 670 671
---------
--------------------------------------------------------------------------------------------------------
NEW JERSEY - 0.4%
Middlesex School District GO (FSA Insured)
4.750% 4/15/99 250 252
Pitman School District GO (FGIC Insured)
4.800% 4/1/99 325 327
---------
579
---------
--------------------------------------------------------------------------------------------------------
NEW YORK - 2.3%
Batavia School District GO (FSA Insured)
4.350% 6/15/99 1,639 1,649
Nassau County GO Series S (AMBAC Insured)
5.000% 3/1/99 715 720
Oceanside Unified Free School District GO
(FGIC Insured) 7.000% 6/15/99 650 669
---------
3,038
---------
--------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 0.4%
New Hanover County Industrial Facilities
(Gang-Nail Systems Project, LOC Harris
Trust & Savings Bank) VRDB 3.650% 600 600
---------
--------------------------------------------------------------------------------------------------------
OHIO - 2.2%
Hancock County Multi-Family Revenue
(Pedcor Investments, Crystal Glen Apartments
Project, LOC FHLB) VRDB 3.7500% (a) 750 750
Ohio Environmental Improvement Revenue
(U.S. Steel Project, LOC Pittsburgh
National Bank) VRDB 3.850% 400 400
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Investment Portfolio/June 30, 1998
--------------------------------------------------------------------------------------------------------
<S> <C> <C>
Ohio Housing Finance Agency Mortgage Revenue
Series A-2
3.800% 3/1/99 (gtd. by Trinity Funding GIC) (a) $ 1,500 $ 1,500
4.050% 9/1/98 (gtd. by GNMA) (a) 155 155
Ohio State Higher Educational Facility Revenue
Series II-B (AMBAC Insured) 5.875% 12/1/98 140 141
---------
2,946
---------
--------------------------------------------------------------------------------------------------------
OKLAHOMA - 0.4%
Tulsa County Independent School District No. 9
Union Board of Education GO 5.350% 5/1/99 500 506
---------
--------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 2.3%
Philadelphia TRAN Series 98-99A 4.250% 6/30/99 1,000 1,006
Quakertown General Authority Revenue Series 96A
(LOC PNC Bank) VRDB 3.000% 2,088 2,088
---------
3,094
---------
--------------------------------------------------------------------------------------------------------
PUERTO RICO - 0.4%
Puerto Rico Municipal Finance Agency
Series A 4.500% 7/1/98 550 550
---------
--------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 2.5%
Richland County Hospital Facilities Revenue
Series B (South Carolina Baptist Hospital,
AMBAC Insured) 6.200% 8/1/98 250 250
South Carolina Jobs Economic Development
Authority IDR (Specialty Equipment Companies,
LOC Bank of America) VRDB 3.700% (a) 3,000 3,000
---------
3,250
---------
--------------------------------------------------------------------------------------------------------
SOUTH DAKOTA - 0.8%
Yankton IDR (Alumax Project, LOC Bank of
America) VRDB 3.500% 1,000 1,000
---------
--------------------------------------------------------------------------------------------------------
TENNESSEE - 4.4%
Knoxville Waste Water System Revenue
4.375% 4/1/99 610 613
McMinn County Industrial Development Board
IDR (Creative Fabrication Project, LOC NBD
Bank) VRDB 3.750% (a) 3,321 3,321
Montgomery County Public Building Authority
Pooled Financing Government Obligation Revenue
(LOC NationsBank of Tennessee) VRDB 3.600% 1,900 1,900
---------
5,834
---------
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
Investment Portfolio/June 30, 1998
---------------------------------------------------------------------------------------------------------
MUNICIPAL SECURITIES - CONT. PAR VALUE
---------------------------------------------------------------------------------------------------------
<S> <C> <C>
TEXAS - 5.8%
Bexar Metropolitan Water District Waterworks
Revenue (MBIA Insured) 4.350% 5/1/99 $ 300 $ 301
Everman Independent School District
GO (gtd. by PSF) 4.550% 8/1/98 1,000 1,001
Galena Park Independent School District
GO (gtd. by PSF) 4.500% 8/15/98 100 100
Haltom City GO (AMBAC Insured) 6.500% 2/1/99 300 305
Haltom City Waterworks and Sewer Revenue
(FSA Insured) 6.500% 2/1/99 100 102
Harris County Industrial Development Corp. IDR
(Precision General Project, LOC Morgan
Guaranty Trust) VRDB 3.700% (a) 2,060 2,060
Pasadena Independent School District GO
(gtd. by PSF) 4.500% 2/15/99 435 437
Richardson Independent School District GO
5.500% 2/15/99 740 747
Texas TRAN Series 97A 4.750% 8/31/98 2,000 2,003
Ysleta Independent School District GO
(gtd. by PSF) 3.800% 8/15/98 550 550
----------
7,606
----------
--------------------------------------------------------------------------------------------------------
UTAH - 0.2%
Utah Municipal Power System Revenue (Hunter
Project, AMBAC Insured) 4.200% 7/1/99 250 251
----------
--------------------------------------------------------------------------------------------------------
VERMONT - 0.7%
Vermont Educational & Health Buildings Financing
Agency Revenue (Middlebury College Project) Series
A Variable Rate 3.750% Optional Put 5/1/99 910 910
----------
--------------------------------------------------------------------------------------------------------
WASHINGTON - 7.0%
Pierce County Washington School District No. 3
Puyallup GO (FSA Insured) 3.650% 12/1/98 315 315
Seattle Water System Revenue (MBIA Insured)
4.400% 12/1/98 500 502
Washington Housing Finance Commission
Multi-Family Housing Revenue (Hamilton Place
Senior Living Project, LOC U.S. Bank
of Washington) Series A VRDB 3.750% (a) 1,140 1,140
Washington State Public Power Supply System
Nuclear Project No. 2 Series C
7.200% 7/1/99 3,650 3,772
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Investment Portfolio/June 30, 1998
--------------------------------------------------------------------------------------------------------
<S> <C> <C>
Yakima County Public Corporation IDR (John I. Haas
Project, LOC Bayerische Vereinsbank)
VRDB 3.800% (a) $ 3,550 $ 3,550
----------
9,279
----------
--------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 0.8%
West Virginia School Building Authority
Revenue (MBIA Insured)
6.000% 7/1/98 1,000 1,000
----------
--------------------------------------------------------------------------------------------------------
WISCONSIN - 14.0%
Carlton PCR (Wisconsin Power &
Light Project) VRDB 3.650% (a) 6,500 6,500
Chase IDR (Belgioioso Cheese Project, LOC
Bank One Wisconsin) VRDB 3.700% (a) 1,000 1,000
Fond Du Lac IDR (Brenner Tank Project,
LOC Bank One Wisconsin) VRDB 3.700% (a) 2,355 2,355
Fox Lake Redevelopment Authority IDR
(Karavan Trailers Project, LOC Bank One
Wisconsin) VRDB 3.700% (a) 1,600 1,600
Hamilton School District GO 4.000% 4/1/99 415 415
Holland IDR (White Clover Dairy Project,
LOC Bank One Wisconsin) VRDB 3.700% (a) 2,275 2,275
Kenosha IDR (Monarch Plastics Project, LOC
Bank One Wisconsin) VRDB 3.700% (a) 2,090 2,090
Oak Creek IDR (McAdams Graphics Project,
LOC Bank One Wisconsin) VRDB 3.700% (a) 1,600 1,600
Sheboygan County GO Promissory Notes
3.750% 11/1/98 200 200
Wisconsin State Clean Water Revenue Series 1
4.200% 6/1/99 500 503
----------
18,538
----------
TOTAL MUNICIPAL SECURITIES - 102.6% (b)
(Amortized cost $135,481) 135,481
----------
OTHER ASSETS & LIABILITIES, NET - (2.6)% (3,463)
---------------------------------------------------------------------------------------------------------
NET ASSETS - 100.0% $ 132,018
----------
</TABLE>
11
<PAGE>
Investment Portfolio/June 30, 1998
Notes to Portfolio of Investments
(a) These securities are subject to federal alternative minimum tax. At
June 30, 1998, these securities represented 64.1 percent of net
assets.
(b) At June 30, 1998, the cost of investments for financial reporting and
federal income tax purposes was identical.
Variable rate demand bonds (VRDB) are securities whose yields are
periodically reset at levels that are generally comparable to
tax-exempt commercial paper. These securities are payable on demand
within seven calendar days and normally incorporate an irrevocable
letter of credit or line of credit from a major bank.
Acronym Name
LOC Letter or Line of Credit
GO General Obligation
TRAN Tax & Revenue Anticipation Note
IDR Industrial Development Bond
PCR Pollution Control Bond
See notes to financial statements.
12
<PAGE>
SR&F MUNICIPAL MONEY MARKET PORTFOLIO
STATEMENT OF ASSETS & LIABILITIES
JUNE 30, 1998
<TABLE>
<CAPTION>
(in thousands)
<S> <C> <C>
ASSETS
Investments at amortized cost
$135,481
Receivable for:
Investments sold
$1,173
Interest 927
2,100
--------
Total Assets
137,581
LIABILITIES
Payable for investments purchased
5,477
Payable to investment adviser
32
Other liabilities
54
------
Total Liabilities
5,563
--------
NET ASSETS applicable to investors' beneficial interests
$132,018
========
</TABLE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 1998
<TABLE>
<CAPTION>
(in thousands)
<S> <C> <C>
INVESTMENT INCOME
Interest income
$5,382
EXPENSES
Management fee
$359
Accounting fees
27
Audit and legal fees
18
Trustees' fees
15
Custodian fees
7
Other 65
491
------ ------
Net Investment Income
$4,891
======
</TABLE>
See notes to financial statements.
13
<PAGE>
SR&F MUNICIPAL MONEY MARKET PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
(in thousands) Year ended June
30
-----------------------
INCREASE (DECREASE) IN NET ASSETS 1998
1997
<S> <C> <C>
Operations:
Net investment income $ 4,891 $
4,728
-------- --------
Transactions in investors'
beneficial interests:
Contributions 80,237
118,114
Withdrawals (92,038)
(126,842)
-------- --------
Net transactions in
investors'
beneficial interest (11,801)
(8,728)
-------- --------
Net decrease in net assets (6,910)
(4,000)
NET ASSETS
Beginning of period 138,928
142,928
-------- --------
End of period $132,018
$138,928
======== ========
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Period
ended
Year ended June 30 June 30
(a)
--------------------- ------------
RATIOS TO AVERAGE 1998 1997
1996
<S> <C> <C> <C>
NET ASSETS
Expenses 0.34% 0.32% 0.30%
(b)
Net investment income 3.41% 3.36% 3.50%
(b)
</TABLE>
(a) The Portfolio commenced operations September 28, 1995.
(b) Annualized.
See notes to financial statements.
14
<PAGE>
SR&F MUNICIPAL MONEY MARKET PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
NOTE 1. ORGANIZATION OF THE SR&F MUNICIPAL MONEY MARKET PORTFOLIO
SR&F Municipal Money Market Portfolio (the "Portfolio") is a separate
series of SR&F Base Trust, a Massachusetts common law 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 investment objective of the Portfolio is to
seek maximum current tax-free income consistent with capital preservation
and maintenance of liquidity.
The Portfolio allocates income, expenses and realized gains and losses
to each investor on a daily basis, based on their respective percentage
of ownership. At June 30, 1998, Stein Roe Municipal Money Market Fund
and Colonial Municipal Money Market Fund owned 86.7 percent and 13.3
percent, respectively, of the Portfolio.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following summarizes the significant accounting policies of the
Portfolio. These policies are in conformity with generally accepted
accounting principles, which require management to make estimates and
assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME:
Investment transactions are accounted for on trade date. Interest income,
including discount accretion and premium amortization, is recorded daily on
the accrual basis. Realized gains or losses from investment transactions
are reported on an identified cost basis.
INVESTMENT VALUATIONS:
All securities are valued as of June 30, 1998. 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. In the event that a deviation of .50 of 1 percent or more
exists between the Fund's $1.00 per-share net asset value, calculated at
amortized cost, and the net asset value calculated by reference to market
quotations, the Board of Trustees would consider what action, if any,
should be taken. Other assets are valued at fair value as determined in
good faith by or under the direction of the Board of Trustees.
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 their respective percentages of
ownership.
15
<PAGE>
Notes to Financial Statements/June 30, 1998
-------------------------------------------
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - CONT.
- --------------------------------------------------------------------------------
OTHER INFORMATION:
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 were 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 were
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, 1998,
60.7 percent of the Portfolio's investments were backed by bank letters of
credit. See the portfolio of investments for additional information on portfolio
composition.
NOTE 4. TRUSTEES FEES AND TRANSACTIONS WITH AFFILIATES
- --------------------------------------------------------------------------------
The Portfolio pays a monthly management fee 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, 1998.
NOTE 5. SHORT-TERM DEBT
- --------------------------------------------------------------------------------
To facilitate portfolio liquidity, the Portfolio maintains borrowing
arrangements under which it can borrow against Portfolio securities. There were
no borrowings by the Portfolio during the year ended June 30, 1998.
16
<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 portfolio of investments, of SR&F Municipal Money Market Portfolio
as of June 30, 1998, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the 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 misstatement. 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, 1998, 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 audits provide 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, 1998, and the
results of its operations, the changes in its net assets, and the financial
highlights for the fiscal periods referred to above, in conformity with
generally accepted accounting principles.
Ernst & Young LLP
Chicago, Illinois
August 7, 1998
17
<PAGE>
COLONIAL MUNICIPAL MONEY MARKET FUND
STATEMENT OF ASSETS & LIABILITIES
JUNE 30, 1998
<TABLE>
(in thousands except for per share amounts)
ASSETS
<S> <C> <C>
Investment in SR&F Municipal Money Market
Portfolio $ 17,557
Receivable for:
Fund shares sold $ 322
Expense reimbursement due
from Administrator 11
Other 6 339
----- -----------
Total Assets 17,896
LIABILITIES
Payable for:
Distributions 43
Fund shares repurchased 9
Accrued:
Deferred Trustees fees 1
Other 8
-----
Total Liabilities 61
------------
NET ASSETS $ 17,835
------------
Net asset value:
Class A ($16,389/16,392) $ 1.00
------------
Class B ($1,270/1,270) $ 1.00 (a)
--- --------
Class C ($176/176) $ 1.00 (a)
------------
COMPOSITION OF NET ASSETS
Capital paid in $ 17,836
Accumulated net realized loss (1)
------------
$ 17,835
------------
</TABLE>
(a) Redemption price per share is equal to net asset value less any
applicable contingent deferred sales charge.
See notes to financial statements.
18
<PAGE>
COLONIAL MUNICIPAL MONEY MARKET FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 1998
<TABLE>
<S> <C> <C>
(in thousands)
INVESTMENT INCOME
Interest income from
SR&F Municipal Money Market Portfolio $ 749
Expenses allocated from
SR&F Municipal Money Market Portfolio (68)
-----
681
EXPENSES
Administration fee $ 50
Service fee - Class B 3
Service fee - Class C (a)
Distribution fee - Class B 5
Distribution fee - Class C (a)
Transfer agent 46
Bookkeeping fee 18
Trustees fee 9
Audit fee 12
Legal fee 6
Registration fee 60
Reports to shareholders 13
Other 7
-----
229
Fees and expenses waived or borne
by the Administrator (139)
Fee waived by the Distributor - Class C (a) 90
----- -----
Net Investment Income $ 591
-----
</TABLE>
(a) Rounds to less than one.
See notes to financial statements.
19
<PAGE>
COLONIAL MUNICIPAL MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
(in thousands) Year ended June 30
----------------------------
INCREASE (DECREASE) IN 1998(a) 1997
NET ASSETS
Operations:
<S> <C> <C>
Net investment income $ 591 $ 587
-------- --------
Distributions:
From net investment income - Class A (560) (554)
In excess of net investment income - Class A -- (1)
From net investment income - Class B (26) (34)
In excess of net investment income - Class B -- (b)
From net investment income - Class C (3) --
-------- --------
2 (2)
Fund Share Transactions:
Receipts for shares sold - Class A 17,953 38,030
Value of distributions reinvested - Class A 449 496
Cost of shares repurchased - Class A (20,465) (39,750)
-------- --------
(2,063) (1,224)
-------- --------
Receipts for shares sold - Class B 2,475 9,278
Value of distributions reinvested - Class B 22 22
Cost of shares repurchased - Class B (2,430) (9,332)
-------- --------
67 (32)
-------- --------
Receipts for shares sold - Class C 333 --
Value of distributions reinvested - Class C 3 --
Cost of shares repurchased - Class C (160) --
-------- --------
176 --
-------- --------
Net Decrease from Fund
Share Transactions (1,820) (1,256)
-------- --------
Total Decrease (1,818) (1,258)
NET ASSETS
Beginning of period 19,653 20,911
-------- --------
End of period (net of overdistributed
net investment income of $0 and $2,
respectively) $ 17,835 $ 19,653
-------- --------
</TABLE>
(a) Class C shares were initially offered on August 1, 1997.
(b) Rounds to less than one.
Statement of Changes in Net Assets continued on following page.
See notes to financial statements.
20
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS - CONT.
<TABLE>
<CAPTION>
(in thousands)
Year ended June 30
------------------
NUMBER OF FUND SHARES 1998(a) 1997
<S> <C> <C>
Sold - Class A 17,954 38,030
Issued for distributions reinvested - Class A 449 496
Repurchased - Class A (20,465) (39,750)
------- -------
(2,062) (1,224)
------- -------
Sold - Class B 2,475 9,278
Issued for distributions reinvested - Class B 22 22
Repurchased - Class B (2,430) (9,332)
------- -------
67 (32)
------- -------
Sold - Class C 333 --
Issued for distributions reinvested - Class C 3 --
Repurchased - Class C (160) --
------- -------
176 --
------- -------
</TABLE>
(a) Class C shares were initially offered on August 1, 1997.
See notes to financial statements.
21
<PAGE>
COLONIAL MUNICIPAL MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
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 (13.3% at June 30, 1998). 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. The Fund offers three classes of shares: Class
A, Class B, and Class C 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. Effective August 1,
1997, the Fund began offering Class C shares which are subject to a
contingent deferred sales charge on redemptions made within one year after
purchase and an annual service and distribution fee.
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 and Class C service and
distribution fees), 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.
22
<PAGE>
Notes to Financial Statements/June 30, 1998
---------------------------------------------------------------------------
NOTE 1. ACCOUNTING POLICIES - CONT.
---------------------------------------------------------------------------
Class B and Class C 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
and Class C 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: Liberty Funds
Distributor, Inc., formerly Liberty Financial Investments, Inc. (the
Distributor), an affiliate of the Administrator, is the Fund's principal
underwriter. During the year ended June 30, 1998, the Fund has been advised
that the Distributor received contingent deferred sales charges (CDSC) of
$9,350 and none on Class B and Class C redemptions, respectively.
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 and Class C 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 and Class C shares. The
Distributor has voluntarily agreed to waive a portion of the Class C share
distribution fee so that it does not exceed 0.15% annually.
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.
23
<PAGE>
Notes to Financial Statements/June 30, 1998
- -------------------------------------------------------------------------------
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.
NOTE 3. OTHER RELATED PARTY TRANSACTIONS
---------------------------------------------------------------------------
At June 30, 1998, one shareholder owned 14% of the Fund's shares
outstanding.
24
<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 June 30
----------------------------------------------------
1998
Class A Class B Class C (b)
---------------------------------- ---------------
<S> <C> <C> <C>
Net asset value - Beginning of period $ 1.000 $ 1.000 $ 1.000
--------------- -------------- ------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (a)(c) 0.030 0.023 0.024(d)
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.030) (0.023) (0.024)
--------------- -------------- ------------
Net asset value -
End of period $ 1.000 $ 1.000 $ 1.000
=============== ============== ============
Total return (e)(f) 3.03% 2.31% 2.40%(g)(h)
=============== ============== ============
RATIOS TO AVERAGE NET ASSETS
Expenses (c) 0.75% 1.48% 1.15%(d)(i)
Fees and expenses waived or
borne by the
Administrator (c) 0.70% 0.70% 0.70%(i)
Net investment income (c) 3.02% 2.29% 2.62%(d)(i)
Net assets at end
of period (000) $ 16,389 $ 1,270 $ 176
(a) Net of fees and expenses waived or borne by
the Administrator
which amounted to: $ 0.007 $ 0.007 $ 0.007
</TABLE>
(b) Class C shares were initially offered on August 1, 1997. Per
share amounts reflect activity from that date.
(c) 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.
(d) Net of fees waived by the Distributor which amounted to $0.005
per share and 0.60% (annualized).
(e) Total return at net asset value assuming all distributions
reinvested and no contingent deferred sales charge.
(f) Had the Administrator not waived or reimbursed a portion of
expenses, total return would have been reduced.
(g) Had the Distributor not waived or reimbursed a portion of
expenses, total return would have been reduced.
(h) Not annualized.
(i) Annualized.
25
<PAGE>
COLONIAL MUNICIPAL MONEY MARKET FUND
FINANCIAL HIGHLIGHTS - CONT.
Selected data for a share of each class outstanding throughout each
period are as follows:
<TABLE>
<CAPTION>
Year ended June 30
- -------------------------------------------------------------------------------
1997
1996(b)
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) 0.029(d) 0.021(d)
0.030(d) 0.020(d)
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.029) (0.021)
(0.030) (0.020)
--------------- ----------- ---------------
- -----------
Net asset value -
End of period $ 1.000 $ 1.000 $ 1.000
$ 1.000
=============== =========== ===============
===========
Total return (e)(f) 2.98% 2.12%
3.04% 2.02%
================ ============ ===============
============
RATIOS TO AVERAGE NET ASSETS
Expenses 0.75%(d) 1.66%(d)
0.75%(d) 1.75%(d)
Fees and expenses waived or
borne by the Adviser/
Administrator 0.46%(d) 0.46%(d)
0.84%(d) 0.84%(d)
Net investment income 2.94%(d) 2.03%(d)
3.00%(d) 2.00%(d)
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
</TABLE>
(b) Effective September 28, 1995, SR&F became the investment
Adviser of the Fund.
(c) The Fund changed its fiscal year end from November 30 to June
30 in 1995.
(d) 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.
(e) Total return at net asset value assuming all distributions
reinvested and no contingent deferred sales charge.
(f) Had the Adviser/Administrator not waived or reimbursed a
portion of expenses, total return would have been reduced.
(g) Not annualized.
(h) Annualized.
26
<PAGE>
COLONIAL MUNICIPAL MONEY MARKET FUND
FINANCIAL HIGHLIGHTS - CONT.
<TABLE>
<CAPTION>
Period ended Year ended
June 30(c) November 30
-------------------------------- ------------------------------------
1995 1994
Class A Class B Class A Class B
------- ------- ------- -------
<S> <C> <C> <C> <C>
$ 1.000 $ 1.000 $ 1.000 $ 1.000
------- ------- ------- ------
0.018 0.012 0.020 0.010
(0.018) (0.012) (0.020) (0.010)
------- ------- -------- ------
$ 1.000 $ 1.000 $ 1.000 $ 1.000
------- ------- ------- -------
1.80%(g) 1.20%(g) 2.00% 1.01%
------- ------- ------- -------
0.75%(h) 1.75%(h) 0.60% 1.60%
0.36%(h) 0.36%(h) 0.59% 0.59%
3.05%(h) 2.05%(h) 2.05% 1.05%
$ 24,675 $ 3,111 $ 28,808 $ 3,867
$ 0.002 $ 0.002 $ 0.006 $ 0.006
</TABLE>
27
<PAGE>
COLONIAL MUNICIPAL MONEY MARKET FUND
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
Class A Class B
------- -------
Net asset value -
<S> <C> <C>
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
</TABLE>
(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.
28
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE TRUSTEES OF COLONIAL TRUST IV AND THE SHAREHOLDER OF
COLONIAL MUNICIPAL MONEY MARKET FUND
In our opinion, the accompanying statement of assets and liabilities,
including the investment portfolio, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Colonial Municipal Money Market Fund (the "Fund") (a series of Colonial
Trust IV) at June 30, 1998, the results of its operations, the changes in
its net assets and the financial highlights for the periods indicated, in
conformity with generally accepted accounting principles. These financial
statements and the financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management;
our responsibility is to express an opinion on these financial statements
based on our audits. We conducted our audits of these financial statements
in accordance with generally accepted auditing standards which require
that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of portfolio positions at June 30,
1998 by correspondence with the custodian provides a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
August 11, 1998
29
<PAGE>
HOW TO REACH COLONIAL
BY PHONE OR BY MAIL
BY TELEPHONE
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 service 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 fund distributed by Liberty Funds Distributor, 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
30
<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
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. It 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 and with the most
recent copy of Liberty Funds Distributor's Performance Update.
31
<PAGE>
TRUSTEES
ROBERT J. BIRNBAUM
Consultant (formerly Special Counsel, Dechert, Price & Rhoads; President and
Chief Operating Officer, New York Stock Exchange, Inc.; President, American
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, & Frankel)
JAMES E. GRINNELL
Private Investor (formerly Senior Vice President - Operations, The Rockport
Company)
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, Chief Executive Officer and Director,
Hannaford Bros. Co.)
JOHN J. NEUHAUSER
Dean, Boston College School of Management
ROBERT L. SULLIVAN
Retired Partner, KPMG Peat Marwick LLP (formerly Management Consultant, Saatchi
and Saatchi Consulting Ltd. and Principal and International Practice Director,
Management Consulting, Peat Marwick Main & Co.)
[Liberty Logo] TM-02/625F-0698 (8/98) 98/812
Liberty Funds Distributor, Inc.(c)1998
One Financial Center, Boston, MA 02111-2621, 1-800-426-3750
Visit us at www.libertyfunds.com
