[front cover]
- ----------------------------------------------------
COLONIAL MUNICIPAL MONEY MARKET FUND Annual report
- ----------------------------------------------------
June 30, 1999
- ---------------------------------
Not FDIC May Lose Value
Insured -----------------
No Bank Guarantee
- ---------------------------------
<PAGE>
COLONIAL MUNICIPAL MONEY MARKET FUND HIGHLIGHTS
JULY 1, 1998 - JUNE 30, 1999
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, a municipal money market fund with the
same investment objective as the Fund.
Portfolio Manager Commentary: "Early in the fiscal year, we lengthened the
average maturity of the Portfolio to lock in attractive yields before the
Federal Reserve Board (Fed) lowered short-term rates in late 1998. From that
point, low supply influenced our strategy. Because of the strong economy,
municipalities did not need to borrow as much; supply was low and fixed-rate
issues were expensive. In June, supply picked up, but one-year note prices
remained relatively unattractive. We'll remain cautious due to uncertainty about
future Fed interest rate moves, taking advantage of selective opportunities to
add yield."-- Ronnie Wallace
Colonial Municipal Money Market Fund Performance
<TABLE>
<CAPTION>
Class A Class B Class C
Inception dates 6/16/87 5/5/92 8/1/97
<S> <C> <C> <C>
12-month distributions declared per share $0.026 $0.016 $0.022
Seven-day yields on 6/30/99(1) 2.70% 1.70% 2.30%
Seven-day taxable-equivalent yields on 6/30/99(2) 4.47% 2.81% 3.81%
30-day yields on 6/30/99(1) 2.58% 1.52% 2.18%
</TABLE>
<TABLE>
<CAPTION>
Portfolio Breakdown(3) Portfolio Maturity(3)
(as of 6/30/99) (as of 6/30/99)
- ---------------------------------------------- ---------------------------------------------
<S> <C> <C> <C>
Variable-Rate Notes......................75.0% 0 - 29 days............................ 76.9%
Tax-Exempt Bonds.........................14.8% 30 - 89 days............................ 4.7%
Other Tax Exempts.........................4.3% 90 - 179 days........................... 7.8%
Put Bonds.................................3.8% 180 - 299 days.......................... 3.5%
Tax-Anticipation Notes....................1.4% 300 - 375 days.......................... 7.1%
Commercial Paper..........................0.7%
</TABLE>
(1) If the Advisor or its affiliates had not waived or borne certain Fund
expenses, the 7-day and 30-day yields would have been 0.81% and 1.18% for
Class A shares, (0.19)% and 0.12% for Class B shares, and (0.20)% and 0.17%
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 SR&F Municipal Money Market 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
TO FUND SHAREHOLDERS
I am pleased to present the annual report for Colonial Municipal Money Market
Fund for the 12-month period ended June 30, 1999.
The last half of 1998 and the first half of 1999 provided two very different
investment climates for money markets. Overall, though, money market funds
provided higher returns than many categories of fixed-income investments. Fear
of inflation outweighed the potential benefits of strong domestic economic
growth, driving down intermediate- and long-term bond prices.
In the second half of 1998, financial turmoil abroad and signs of a potential
slowdown in the U.S. economy prompted the Federal Reserve Board (Fed) to
implement a series of three interest rate cuts. These rate cuts helped boost the
value of most fixed-income investments, none more so than U.S. Treasury
securities, which experienced a significant rally due to their reputation as
safe and stable investments.
That flight to quality reversed as we passed from 1998 into 1999, although
investors feared inflation would return. That sentiment was confirmed in May
when the Fed announced they were inclined to raise short-term rates to slow
growth and head off inflation. The Fed followed through, hiking a key short-term
interest rate on June 30.
The tax-exempt market in which the Fund invests was influenced by many of the
same issues. In addition, factors related to supply and demand dictated pricing
during the period. Overall, there was low supply of one-year securities, which
drove prices up and yields down.
For investors seeking a relatively stable environment for their investment
dollars and the potential for competitive, tax-exempt income, we believe
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, 1999
Because market and economic conditions change, there can be no assurance that
the trends discussed above will continue.
3
<PAGE>
SR&F MUNICIPAL MONEY MARKET PORTFOLIO
INVESTMENT PORTFOLIO
JUNE 30, 1999 (IN THOUSANDS)
<TABLE>
<CAPTION>
MUNICIPAL SECURITIES - 105.0% PAR VALUE
============================================================================
<S> <C> <C>
ALABAMA - 0.4%
University of Alabama Revenue Series A
(General Fee-Huntsville, MBIA Insured, prerefunded
to 11/1/99, escrowed in U.S. Treasury securities,
7.000% 11/1/09 $ 500 $ 516
-----------
- ----------------------------------------------------------------------------
ALASKA - 0.2%
Anchorage Alaska Water Revenue
(FSA Insured) 4.500% 8/1/99 235 236
-----------
- ----------------------------------------------------------------------------
ARIZONA - 1.7%
Phoenix Industrial Development Authority
(Spring Air Mattress Company Project,
LOC Bank One Arizona) VRDB 3.720% (a) 1,870 1,870
Scottsdale GO Series C 7.750% 7/1/00 450 468
-----------
2,338
-----------
- ----------------------------------------------------------------------------
ARKANSAS - 2.2%
Clark County Solid Waste Disposal Revenue
(Reynolds Metals Project, LOC Sun Trust Bank)
VRDB 3.400% (a) 3,000 3,000
-----------
- ----------------------------------------------------------------------------
CALIFORNIA - 1.5%
California Higher Education Loan Authority
Student Loan Revenue Series A
(LOC State Street) VRDB 3.200%
(Mandatory Put 6/1/00) (a) 1,000 1,000
Los Angeles County Tax & Revenue Anticipation
Notes 4.000% 6/30/00 1,000 1,007
-----------
2,007
-----------
- ----------------------------------------------------------------------------
COLORADO - 3.1%
Colorado Health Facilities Authority Revenue
(AMC Cancer Research Center, LOC U.S. Bank NA)
3.400% 1/15/28 (Mandatory Put 1/15/00) 440 440
Colorado Springs IDR (Catalano Family LLP Project,
LOC Bank One Colorado) VRDB 3.720% (a) 1,145 1,145
Lowry Economic Redevelopment Authority Colorado
Revenue Series B (LOC Canadian Imperial Bank)
VRDB 3.450% 1,000 1,000
</TABLE>
4
<PAGE>
Investment Portfolio/June 30, 1999
- ----------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
SBC Metropolitan District Colorado
(LOC U.S. Bank NA) 3.350% 12/1/17
(Mandatory Put 12/1/99) $1,555 $ 1,555
-----------
4,140
-----------
- ----------------------------------------------------------------------------
FLORIDA - 1.0%
Putnam County Development Authority PCR
Series D (Seminole Electric Cooperation)
VRDB 3.125% (Optional Put 12/15/99) 1,400 1,400
-----------
- ----------------------------------------------------------------------------
GEORGIA - 1.8%
Gwinnett County Development Authority IDR
(Price Companies Project, LOC NationsBank
of Georgia) VRDB 3.900% (a) 2,400 2,400
-----------
- ----------------------------------------------------------------------------
ILLINOIS - 24.5%
ABN AMRO Munitops Certificates Trust Series
1998-14 (Cook County GO Refunding Bond,
ABN AMRO Liquidity Provider) VRDB 3.640% (b) 1,000 1,000
Chicago Economic Development Revenue
(Crane Carton Project, LOC Northern Trust)
VRDB 3.700% 2,150 2,150
Chicago IDR (P S Greetings Incorporated Project)
VRDB 3.800% 600 600
Chicago Multi Family Housing Series B
(Archer Courts Apartments) VRDB 3.850% 1,010 1,010
Chicago Revenue (De La Salle Institute Project,
LOC Northern Trust) VRDB 3.500% 900 900
Chicago School Finance Authority Series A
(FGIC Insured) 5.900% 6/1/00 1,000 1,021
Chicago Tax Increment Allocation (Stockyards,
LOC Northern Trust) Series A, VRDB 3.500% 1,500 1,500
Chicago Wastewater Transmission Revenue
Second Lien Series B (MBIA Insured) 4.250% 1/1/00 500 502
Cook County Community College District Number
504 Triton Certificates (FSA Insured) 4.300% 10/1/99 275 276
Cook County School District Number 98 Berwyn GO
(FSA Insured) 9.000% 12/1/99 145 148
Cook & Will Counties Illinois Community College
District Number 515, (FSA Insured) 5.300% 12/1/99 450 454
Country Club Hills (FSA Insured) 3.400% 12/1/99 605 606
Du Page & Cook Counties Community Unit School
District Number 205, 5.400% 1/1/00 767 775
Elgin Corporate Purpose Bonds 5.500% 1/1/00 445 449
Glendale Heights IDR (Judy LLC/York Corrugated,
LOC Harris Trust and Savings Bank)
VRDB 3.800% (a) 1,600 1,600
</TABLE>
5
<PAGE>
Investment Portfolio/June 30, 1999
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<TABLE>
<CAPTION>
MUNICIPAL SECURITIES - CONT. PAR VALUE
============================================================================
<S> <C> <C>
ILLINOIS - CONT.
Homewood Flossmoor Park District GO
(FSA Insured) 4.200% 12/1/99 $ 135 $ 136
Illinois Development Finance Authority Revenue
(Nutrasweet Project, gtd. by Monsanto) VRDB 3.750% 4,400 4,400
(Wheaton Academy Project, LOC Northern Trust)
VRDB 3.550% 1,000 1,000
Illinois Educational Facilities Authority Revenues
(Aurora University, LOC Harris Trust & Savings
Bank) VRDB 3.700% 1,200 1,200
Illinois Health Facility Authority Revenue
(University of Chicago Hospital Project)
3.200% 8/1/15 (Mandatory Put 10/5/99) 1,000 1,000
Illinois State Toll Highway Authority Highway
Priority Revenue Series A, 4.500% 1/1/00 1,000 1,006
Illinois Student Assistance Commission Student
Loan Revenue (LOC Bank of America Illinois)
Series 96A VRDB 3.600% (a) 1,000 1,000
Jefferson & Franklin Counties Community College
District Number 521, GO (FSA Insured)
3.250% 11/1/99 365 365
Montgomery & Bond Counties Community Unit
School District Number 3 (FSA Insured)
3.400% 11/1/99 395 395
Morton IDR Series A (Morton Welding Project,
LOC Bank One Illinois NA Chicago)
VRDB 3.820% (a) 905 905
North Aurora IDR (Oberweis Dairy Incorporated
Project, LOC Lasalle National Bank) VRDB 3.610% 1,700 1,700
Palatine Special Facility Limited Obligation Revenue
(Little City Community Development Project,
LOC Federal Home Loan Bank) VRDB 3.550% 1,000 1,000
Quad Cities Regional Economic Development
Authority Revenue:
(Steel Warehouse, LOC Bank One Indiana)
VRDB 3.720% (a) 2,000 2,000
(Steel Warehouse, LOC Bank One Indiana)
VRDB 3.720% (a) 2,200 2,200
Rockford GO Series A (FGIC Insured) 4.380% 12/15/99 240 241
Springfield IDR (Phillips Brothers Incorporated
Project, LOC Bank One Illinois) VRDB 3.720% (a) 1,350 1,350
-----------
32,889
-----------
- ----------------------------------------------------------------------------
INDIANA - 9.4%
Crawfordsville Economic Development Revenue
(Pedcor Investments, Shady Knoll Project,
LOC FHLB) VRDB 3.670% (a) 1,558 1,558
</TABLE>
6
<PAGE>
Investment Portfolio/June 30, 1999
- ----------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Indiana Health Facility Financing Authority
Revenue (Capital Access Designated Pool)
VRDB 3.100% $ 300 $ 300
Indiana State Development Finance Authority
Economic Development Revenue (Carr Metal
Products Project, LOC Bank One, Indiana)
VRDB 3.850% 1,440 1,440
Franklin Economic Development Revenue
(Pedcor Investments, Lakeview Apartments
LOC FHLB) VRDB 3.670% (a) 2,839 2,839
Kokomo Economic Development Revenue
(Village Community Partners IV Project,
LOC FHLB) VRDB 3.670% (a) 2,940 2,940
La Porte County Economic Development Revenue
(Pedcor Investments, Woodland Project,
LOC FHLB) VRDB 3.670% (a) 1,965 1,965
Plymouth Economic Development Revenue Series A
(Hillcrest Apartments Project, LOC La Salle
National Bank) VRDB 3.750% (a) 1,000 1,000
Portage Economic Development Revenue Series A
(Pedcor Investments, LOC Federal Home Loan
Bank) VRDB 3.850% 500 500
-----------
12,542
-----------
- ----------------------------------------------------------------------------
IOWA - 7.2%
Clinton IDR (Sethness Products Project,
LOC Northern Trust) VRDB 3.650% (a) 3,500 3,500
Iowa Higher Education Loan Authority Revenue
(Saint Ambrose University, LOC Norwest Bank
Minnesota) VRDB 3.750% 1,000 1,000
Mount Pleasant GO Series A (MBIA Insured)
3.600% 12/1/99 190 190
Muscatine County PCR (Monsanto Project)
VRDB 3.650% 2,000 2,000
Scott County Industrial Waste Revenue
(Recycling Nichols Aluminum Project,
LOC Firstar Bank Milwaukee) VRDB 3.600% 3,000 3,000
-----------
9,690
-----------
- ----------------------------------------------------------------------------
KANSAS - 0.6%
Olathe IDR (Garmin International Project,
LOC NationsBank) VRDB 3.750% (a) 800 800
-----------
- ----------------------------------------------------------------------------
KENTUCKY - 3.6%
Covington Industrial Building Revenue
(White Castle Distributing, LOC Bank One
Columbus) Series 1991 VRDB 3.720% (a) 3,205 3,205
</TABLE>
7
<PAGE>
Investment Portfolio/June 30, 1999
- ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL SECURITIES - CONT. PAR VALUE
- ----------------------------------------------------------------------------
<S> <C> <C>
KENTUCKY - CONT.
Shelby County Industrial Building Revenue
(Roll Forming, LOC Bank One Kentucky)
VRDB 3.720% (a) $1,595 $ 1,595
-----------
4,800
-----------
- ----------------------------------------------------------------------------
LOUISIANA - 0.3%
Lake Charles Harbor & Terminal District Pollution
Control Revenue (Conoco Incorporated Project)
VRDB 3.550% (a) 400 400
-----------
- ----------------------------------------------------------------------------
MARYLAND - 0.9%
Anne Arundel County Economic Development
Revenue (Baltimore Gas and Electric Project)
3.200% 12/1/18 (Mandatory Put 9/15/99) (a) 1,000 1,000
University of Maryland Auxiliary Facility & Tuition
Revenue Series A 6.500% 4/1/07 (prerefunded to
4/1/00, escrowed in U.S. Treasury Notes) 250 260
-----------
1,260
-----------
- ----------------------------------------------------------------------------
MICHIGAN - 3.3%
ABN AMRO Munitops Certificates Trust Series
1998-13, (Michigan Trunk Line Revenue, ABN
AMRO Liquidity Provider) VRDB 3.610% (b) 2,000 2,000
Detroit City School District GO 4.500% 7/1/99 1,000 1,000
Detroit City School District (MBIA Insured)
3.250% 5/1/00 385 384
Detroit City School District State School Aid
Notes 4.000% 6/1/00 1,000 1,007
-----------
4,391
-----------
- ----------------------------------------------------------------------------
MINNESOTA - 0.7%
Minneapolis GO Series B (SPA Bayerische
Vereinsbank) VRDB 2.800% 900 900
-----------
- ----------------------------------------------------------------------------
MISSOURI - 3.9%
Jefferson County Industrial Development Authority
IDR (GHF Holdings Project, LOC Bank One
Indiana) VRDB 3.720% (a) 3,700 3,700
Kansas City Industrial Development Authority
IDR (Lanter Project, LOC Harris Trust & Savings
Bank) VRDB 3.800% 480 480
St. Louis General Federal Revenue Tax & Revenue
Anticipation Notes (TRAN) 4.000% 6/30/00 1,000 1,007
-----------
5,187
-----------
</TABLE>
8
<PAGE>
Investment Portfolio/June 30, 1999
- ----------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
NEBRASKA - 0.1%
Omaha Public Power District Nebraska Electric
Revenue Series A 4.850% 2/1/00 $ 125 $ 126
-----------
- ----------------------------------------------------------------------------
NEW JERSEY - 0.3%
South Brunswick Township GO 4.400% 8/1/99 395 395
-----------
- ----------------------------------------------------------------------------
NEW MEXICO - 0.8%
Albuquerque Educational Facilities Revenue
(Menaul School Project, LOC Norwest Bank
Minnesota) VRDB 3.750% 290 290
Rio Rancho Public School District Number 94 GO
Series B (FSA Insured) 6.100% 8/1/99 835 837
-----------
1,127
-----------
- ----------------------------------------------------------------------------
NEVADA - 0.1%
Washoe County GO Series A (AMBAC Insured)
4.500% 12/1/99 100 100
-----------
- ----------------------------------------------------------------------------
NORTH CAROLINA - 1.0%
New Hanover County Industrial Facilities
(Gang-Nail Systems Project, LOC Harris Trust &
Savings Bank) VRDB 3.650% 1,400 1,400
-----------
- ----------------------------------------------------------------------------
OHIO - 2.6%
Cleveland State University General Receipt Bond
Anticipation Notes, Series A, 3.800% 8/16/99 750 751
Hancock County Multi-Family Revenue
(Pedcor Investments, Crystal Glen Apartments
Project, LOC FHLB) VRDB 3.770% (a) 750 750
Ohio Environmental Improvement Revenue
(U.S. Steel Project, LOC Pittsburgh National
Bank) VRDB 3.300% 400 400
Ohio State Building Authority Series C (prerefunded
to 10/1/99, escrowed in U.S. Treasury securities)
7.350% 10/1/04 500 520
Summit County Bond Anticipation Notes Series A
3.800% 6/1/00 1,000 1,005
-----------
3,426
-----------
- ----------------------------------------------------------------------------
OKLAHOMA - 0.1%
Oklahoma State IDR Health System Series C
(Baptist Center, AMBAC Insured) 5.400% 8/15/99 200 201
-----------
- ----------------------------------------------------------------------------
PENNSYLVANIA - 2.1% Pennsylvania State GO:
Second Series A (MBIA Insured) 6.000% 11/1/99 200 202
Third Series A (MBIA Insured) 5.700% 11/15/99 130 131
</TABLE>
9
<PAGE>
Investment Portfolio/June 30, 1999
- ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL SECURITIES - CONT. PAR VALUE
============================================================================
<S> <C> <C>
PENNSYLVANIA - CONT.
Pennsylvania State Higher Educational Facilities
Authority College & University Revenue,
(Bryn Mawr College, FGIC Insured, prerefunded
to 12/1/99, escrowed in U.S. Treasury securities)
6.750% 12/1/01 $ 750 $ 776
Quakertown General Authority Revenue Series 96A
(LOC PNC Bank) VRDB 3.550% 1,683 1,683
-----------
2,792
-----------
- ----------------------------------------------------------------------------
RHODE ISLAND - 0.3%
Convention Center Authority Revenue Series B
(MBIA Insured) 4.600% 5/15/00 300 302
-----------
- ----------------------------------------------------------------------------
SOUTH CAROLINA - 1.5%
South Carolina Jobs Economic Development Authority
IDR, (Specialty Equipment Companies, LOC Bank
of America, Illinois) VRDB 3.720% (a) 2,045 2,045
-----------
- ----------------------------------------------------------------------------
TENNESSEE - 2.1%
Clarksville Public Building Authority Revenue
(Pooled Financing-Tennesee Municipal Bond Fund,
LOC Nationsbank) VRDB 3.800% 2,000 2,000
McMinn County Industrial Development Board IDR
(Creative Fabrication, LOC NBD Bank) VRDB 3.900% 791 791
-----------
2,791
-----------
- ----------------------------------------------------------------------------
TEXAS - 5.4%
Arlington GO 6.500% 8/15/99 660 663
Austin Certificates of Obligation 7.000% 9/1/99 620 623
Brazos Industrial Development Corporation Marine
Term Revenue, (Monsanto Project) VRDB 3.550% 400 400
Carrollton GO 6.250% 8/15/99 335 336
Grand Prairie Industrial Development Revenue
(W. W. Grainger Incorporated, Liquidation
Facility Northern Trust) VRDB 3.950% 800 800
Gulf Coast Industrial Development Authority Solid
Waste Disposal Revenue (CITGO Petroleum Project
LOC Banque Nationale de Paris), VRDB 3.550% (a) 400 400
Harris County Industrial Development Corporation IDR
(Precision General Project, LOC Morgan Guaranty
Trust) VRDB 3.720% (a) 2,060 2,060
Harris County Revenue (MBIA Insured)
5.100% 8/15/99 (a) 235 235
Robertson County Industrial Development Corporation
(Sanderson Farms Project, LOC Harris Trust &
& Savings Bank) VRDB 3.650% (a) 300 300
</TABLE>
10
<PAGE>
Investment Portfolio/June 30, 1999
- ----------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Tarrant County Hospital District GO 5.000% 8/15/99 $ 500 $ 501
University of Texas Revenue Series B 5.000% 8/15/99 500 501
Webb County Certificates of Obligation
(FGIC Insured) 6.000% 2/1/00 355 360
-----------
7,179
-----------
- ----------------------------------------------------------------------------
UTAH - 0.4%
Davis County School District (FGIC Insured) 250 250
4.550% 6/1/00
Utah Municipal Power System Revenue (Hunter
Project, AMBAC Insured) 4.200% 7/1/99 250 250
-----------
500
-----------
- ----------------------------------------------------------------------------
WASHINGTON - 8.6%
Washington State Housing Finance Commission
Multi-Family Housing Revenue (Hamilton Place
Senior Living Project, LOC U.S. Bank of
of Washington) Series A VRDB 3.850% (a) 1,125 1,125
Washington State Public Power Supply System Revenue:
Series A (Nuclear Project Number 1) 7.250% 7/1/99 1,500 1,500
Series C (Nuclear Project Number 2) 7.200% 7/1/99 3,650 3,650
Yakima County Public Corporation IDR
(John I. Haas Project, LOC Bayerische Vereinsbank)
VRDB 3.650% (a) 5,300 5,300
-----------
11,575
-----------
- ----------------------------------------------------------------------------
WISCONSIN - 13.3%
Campbellsport School District (FSA Insured)
3.500% 3/15/00 120 120
Carlton PCR (Wisconsin Power & Light Project)
VRDB 3.550% (a) 3,300 3,300
Chase IDR (Belgioioso Cheese Project, LOC Bank
One Wisconsin) VRDB 3.720% (a) 1,000 1,000
Fond Du Lac IDR (Brenner Tank, LOC Bank One
Wisconsin) VRDB 3.720% (a) 2,355 2,355
Fox Lake Redevelopment Authority IDR (Karavan
Trailers Project, LOC Bank One Wisconsin)
VRDB 3.720% (a) 1,440 1,440
Holland IDR (White Clover Dairy Project, LOC Bank
One Wisconsin) VRDB 3.720% (a) 2,275 2,275
Kenosha IDR (Monarch Plastics Project, LOC Bank
One Wisconsin) VRDB 3.720% (a) 1,920 1,920
Mukwonago School District Bond Anticipation Notes
3.750% 11/1/99 1,000 1,002
Oshkosh Area School District GO Bond Anticipation
Notes 3.330% 12/15/99 1,000 1,000
Two Rivers GO Series B (FSA Insured) 3.500% 4/1/00 100 100
</TABLE>
11
<PAGE>
Investment Portfolio/June 30, 1999
- ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL SECURITIES - CONT. PAR VALUE
============================================================================
<S> <C> <C>
WISCONSIN - CONT.
Whitnall School District GO (FSA Insured) 3.900% 4/1/00 $ 255 $ 256
Wisconsin Housing & Economic Development Authority
Home Ownership Revenue
Series H (GO of Authority Insured) 4.350% 3/1/00 525 529
Wisconsin State Health & Educational Facilities
Authority Revenue (Grace Lutheran Foundation
Project) VRDB 3.750% 2,555 2,555
-----------
17,852
-----------
TOTAL MUNICIPAL SECURITIES - 105.0% (c)
(amortized cost of $140,707) 140,707
-----------
OTHER ASSETS & LIABILITIES (5.0%) (6,658)
- ----------------------------------------------------------------------------
NET ASSETS - 100.0% $134,049
===========
</TABLE>
NOTES TO INVESTMENT PORTFOLIO:
- ----------------------------------------------------------------------------
(a) Security is subject to federal alternative minimum tax. At June 30, 1999,
these securities represented 54.2 percent of total net assets.
(b) Represents private placement securities issued under Rule 144A, which are
exempt from the registration requirements of the Securities Act of 1933.
These securities are generally issued to qualified institutional buyers,
such as the Portfolio, and any resale by the Portfolio must be an exempt
transaction, normally to other qualified institutional investors. At June
30, 1999, the aggregate amortized cost of the Portfolio's private placement
securities was $3,000 which represented 2.2 percent of net assets.
(c) At June 30, 1999, 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 with a major bank.
<TABLE>
<CAPTION>
Acronym Name
------------ -----------------------
<S> <C>
LOC Letter or Line of Credit
GO General Obligation
TRAN Tax & Revenue Anticipation Note
IDR Industrial Development Revenue
PCR Pollution Control Revenue
</TABLE>
See accompanying notes to financial statements.
12
<PAGE>
SR&F MUNICIPAL MONEY MARKET PORTFOLIO
STATEMENT OF ASSETS & LIABILITIES
JUNE 30, 1999
<TABLE>
<CAPTION>
(in thousands)
<S> <C> <C>
ASSETS
Investments at amortized cost $ 140,707
Receivable for:
Interest $839
Investments sold 610
Other 5 1,454
------------- -------------
Total Assets 142,161
LIABILITIES
Payable for investments purchased 8,035
Payable to investment Advisor 30
Other liabilities 47
-------------
Total Liabilities 8,112
-------------
NET ASSETS applicable to investors' beneficial interests $ 134,049
=============
</TABLE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 1999
<TABLE>
<CAPTION>
(in thousands)
<S> <C> <C>
INVESTMENT INCOME
Interest income $ 4,598
EXPENSES
Management fee $ 339
Accounting fees 27
Audit and legal fees 17
Trustees' fees 9
Custodian fees 4
Other 13 409
------------- -------------
Net Investment Income $ 4,189
-------------
</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 1999 1998
<S> <C> <C>
Operations:
Net investment income $ 4,189 $ 4,891
------------- -------------
Transactions in investors'
beneficial interests:
Contributions 101,419 80,237
Withdrawals (103,577) (92,038)
------------- -------------
Net transactions in investors'
beneficial interest (2,158) (11,801)
------------- -------------
Net Increase (Decrease) in Net Assets 2,031 (6,910)
NET ASSETS
Beginning of period 132,018 138,928
------------- -------------
End of period $134,049 $132,018
============= =============
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Year ended June 30
----------------------------------------------
RATIOS TO AVERAGE 1999 1998 1997
NET ASSETS
<S> <C> <C> <C>
Expenses 0.30% 0.34% 0.32%
Net investment income 3.07% 3.41% 3.36%
Period ended
June 30 (a)
---------------
1996
Expenses 0.30% (b)
Net investment income 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, 1999
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, 1999, Stein Roe Municipal Money Market Fund and Colonial Municipal
Money Market Fund owned 89.6 percent and 10.4 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, 1999. 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 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.
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.
15
<PAGE>
Notes to Financial Statements/June 30, 1999
- --------------------------------------------------------------------------------
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, 1999,
61.9 percent of the Portfolio's investments was 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 monthly management fees to Stein Roe & Farnham Incorporated
(the "Advisor"), an indirect, majority-owned subsidiary of Liberty Mutual
Insurance Company, for its services as investment advisor and manager. The
management fee for the Portfolio is computed at an annual rate of 0.25 of 1
percent of average daily net assets. The Advisor also provides accounting
services.
Certain officers and trustees of the Trust are also officers of the Advisor.
Compensation is paid to trustees not affiliated with the Advisor. No
remuneration was paid to any other trustee or officer of the Trust for the year
ended June 30, 1999.
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, 1999.
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, 1999, 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 periods
indicated therein. 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 and financial highlights. Our procedures included confirmation of
securities owned as of June 30, 1999, 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, 1999, and the results of its
operations, the changes in its net assets, and financial highlights for each the
periods referred to above, in conformity with generally accepted accounting
principles.
Ernst & Young LLP
Boston, Massachusetts
August 11, 1999
17
<PAGE>
COLONIAL MUNICIPAL MONEY MARKET FUND
STATEMENT OF ASSETS & LIABILITIES
JUNE 30, 1999
<TABLE>
<CAPTION>
(in thousands except for per share amounts)
<S> <C> <C>
ASSETS
Investment in SR&F Municipal Money Market
Portfolio $ 13,987
Receivable for:
Expense reimbursement due
from Administrator $ 9
Fund shares sold 1
Other 5 15
------------ -------------
Total Assets 14,002
LIABILITIES
Payable for:
Fund shares repurchased 82
Distributions 12
Payable to custodian 8
Accrued:
Deferred Trustees fees 3
Other 16
------------
Total Liabilities 121
-------------
NET ASSETS $ 13,881
=============
Net asset value:
Class A ($12,604/12,607) $ 1.00
=============
Class B ($1,099/1,099) $ 1.00 (a)
=============
Class C ($178/178) $ 1.00 (a)
=============
COMPOSITION OF NET ASSETS
Capital paid in $ 13,883
Overdistributed net investment income (1)
Accumulated net realized loss (1)
-------------
$ 13,881
=============
</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, 1999
<TABLE>
<CAPTION>
(in thousands)
<S> <C> <C>
INVESTMENT INCOME
Interest income from
SR&F Municipal Money Market Portfolio $ 501
Expenses allocated from
SR&F Municipal Money Market Portfolio (45)
-------------
456
EXPENSES
Administration fee $ 37
Service fee - Class B 2
Service fee - Class C 1
Distribution fee - Class B 8
Distribution fee - Class C 1
Transfer agent 35
Bookkeeping fee 18
Trustees fee 8
Audit fee 13
Legal fee 4
Registration fee 34
Reports to shareholders 7
Other 21
------------
189
Fees and expenses waived or borne
by the Administrator (111)
Fee waived by the Distributor - Class C (1) 77
------------ -------------
Net Investment Income $ 379
-------------
</TABLE>
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 1999 1998
NET ASSETS
<S> <C> <C>
Operations:
Net investment income $ 379 $ 591
------------ -------------
Distributions:
From net investment income - Class A (357) (560)
From net investment income - Class B (18) (26)
From net investment income - Class C (5) (3)
------------ -------------
(1) 2
Fund Share Transactions:
Receipts for shares sold - Class A 10,827 17,953
Value of distributions reinvested - Class A 331 449
Cost of shares repurchased - Class A (14,943) (20,465)
------------ -------------
(3,785) (2,063)
------------ -------------
Receipts for shares sold - Class B 1,734 2,475
Value of distributions reinvested - Class B 16 22
Cost of shares repurchased - Class B (1,921) (2,430)
------------ -------------
(171) 67
------------ -------------
Receipts for shares sold - Class C 105 333
Value of distributions reinvested - Class C 5 3
Cost of shares repurchased - Class C (107) (160)
------------ -------------
3 176
------------ -------------
Net Decrease from Fund
Share Transactions (3,953) (1,820)
------------ -------------
Total Decrease (3,954) (1,818)
NET ASSETS
Beginning of period 17,835 19,653
------------ -------------
End of period (net of overdistributed
net investment income of $1 and $0,
respectively) $13,881 $17,835
============ =============
</TABLE>
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 1999 1998
<S> <C> <C>
Sold - Class A 10,827 17,954
Issued for distributions reinvested - Class A 331 449
Repurchased - Class A (14,943) (20,465)
------------ -------------
(3,785) (2,062)
------------ -------------
Sold - Class B 1,734 2,475
Issued for distributions reinvested - Class B 16 22
Repurchased - Class B (1,921) (2,430)
------------ -------------
(171) 67
------------ -------------
Sold - Class C 105 333
Issued for distributions reinvested - Class C 5 3
Repurchased - Class C (108) (160)
------------ -------------
2 176
------------ -------------
</TABLE>
See notes to financial statements.
21
<PAGE>
COLONIAL MUNICIPAL MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
NOTE 1. ACCOUNTING POLICIES
................................................................................
Organization: Colonial Municipal Money Market Fund (the Fund), a series of
Liberty Funds Trust IV, formerly 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 law 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 (10.4% at June 30, 1999). 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 A shares are sold with a front end sales
charge. A 1.00% contingent deferred sales charge is assessed on redemptions made
within eighteen months on an original purchase of $1 million to $5 million.
Class B shares are subject to an annual service and and distribution fee and a
contingent deferred sales charge. Class B shares will convert to Class A shares
when they have been oustanding approximately eight years. Class C shares 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, 1999
- --------------------------------------------------------------------------------
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 Class A 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 Advisor 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: Liberty Funds Services, 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 Distributor, Inc.
(the Distributor), a subsidiary of the Administrator, is the Fund's principal
underwriter. During the year ended June 30, 1999, the Fund has been advised that
the Distributor received contingent deferred sales charges (CDSC) of $8,406 and
none on Class B and Class C share 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, 1999
- --------------------------------------------------------------------------------
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.
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
========================================
1999
Class A Class B Class C
------------ ----------- -----------
<S> <C> <C> <C>
Net asset value -
Beginning of period $ 1.000 $ 1.000 $ 1.000
------------ ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (a)(b) 0.026 0.016 0.022 (c)
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.026) (0.016) (0.022)
------------ ----------- -----------
Net asset value -
End of period $ 1.000 $ 1.000 $ 1.000
============ =========== ===========
Total return (d)(e) 2.68% 1.65% 2.27% (f)
============ =========== ===========
RATIOS TO AVERAGE NET ASSETS
Expenses (b) 0.75% 1.75% 1.15% (c)
Fees and expenses waived or
borne by the
Administrator (b) 0.75% 0.75% 0.75%
Net investment income (b) 2.66% 1.66% 2.26% (c)
Net assets at end
of period (000) $12,604 $ 1,099 $ 178
(a) Net of fees and expenses waived or borne by
the Administrator
which amounted to: $ 0.008 $ 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) Net of fees waived by the Distributor which amounted to $0.006 per share and
0.60%.
(d) Total return at net asset value assuming all distributions reinvested and no
contingent deferred sales charge.
(e) Had the Administrator not waived or reimbursed a portion of expenses, total
return would have been reduced.
(f) Had the Distributor not waived or reimbursed a portion of expenses, total
return would have been reduced.
</TABLE>
25
<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 (c)
------------ ----------- -----------
<S> <C> <C> <C>
Net asset value -
Beginning of period $ 1.000 $ 1.000 $ 1.000
------------ ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (a)(d) 0.030 0.023 0.024 (e)
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 (f)(g) 3.03% 2.31% 2.40% (h)(i)
============ =========== ===========
RATIOS TO AVERAGE NET ASSETS
Expenses (d) 0.75% 1.48% 1.15% (e)(j)
Fees and expenses waived or
borne by the
Administrator (d) 0.70% 0.70% 0.70% (j)
Net investment income (d) 3.02% 2.29% 2.62% (e)(j)
Net assets at end
of period (000) $16,389 $ 1,270 $ 176
(a) Net of fees and expenses waived or borne by
the Advisor/Administrator
which amounted to: $ 0.007 $ 0.007 $ 0.007
(b) Effective September 28, 1995, SR&F became the investment Advisor of the
Fund.
(c) Class C shares were initially offered on August 1, 1997. Per share amounts
reflect activity from that date.
(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) Net of fees waived by the Distributor which amounted to $0.005 per share and
0.60% (annualized).
(f) Total return at net asset value assuming all distributions reinvested and no
contingent deferred sales charge.
(g) Had the Advisor/Administrator not waived or reimbursed a portion of
expenses, total return would have been reduced.
(h) Had the Distributor not waived or reimbursed a portion of expenses, total
return would have been reduced.
(i) Not annualized.
(j) Annualized.
</TABLE>
26
<PAGE>
COLONIAL MUNICIPAL MONEY MARKET FUND
FINANCIAL HIGHLIGHTS - CONT.
<TABLE>
<CAPTION>
Year ended June 30
=================================================
1997 1996(b)
Class A Class B Class A Class B
--------- --------- --------- ---------
<S> <C> <C> <C>
$ 1.000 $ 1.000 $ 1.000 $ 1.000
--------- --------- --------- ---------
0.029 0.021 0.030 0.020
(0.029) (0.021) (0.030) (0.020)
--------- --------- --------- ---------
$ 1.000 $ 1.000 $ 1.000 $ 1.000
========= ========= ========= =========
2.98% 2.12% 3.04% 2.02%
========= ========= ========= =========
0.75% 1.66% 0.75% 1.75%
0.46% 0.46% 0.84% 0.84%
2.94% 2.03% 3.00% 2.00%
$18,450 $ 1,203 $19,676 $ 1,235
$ 0.005 $ 0.005 $ 0.008 $ 0.008
</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 Year ended
June 30 November 30
===================== ======================
1995 (b) 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/
Administrator 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 Advisor/Administrator
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 Advisor/Administrator not waived or reimbursed a portion of
expenses, total return would have been reduced.
(e) Not annualized.
(f) Annualized.
</TABLE>
28
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
T0 THE TRUSTEES OF LIBERTY FUNDS 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 Liberty Funds
Trust IV, formerly Colonial Trust IV) at June 30, 1999, the results of its
operations, the changes in its net assets and the financial highlights for the
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, 1999, provide a reasonable basis
for the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
August 11, 1999
29
<PAGE>
HOW TO REACH US
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.
Liberty 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,
Inc., call Monday to Friday, 8:30 a.m. to 6:30 p.m. ET.
By Mail
Liberty Funds Services, 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:
Liberty Funds Services, 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 the Liberty Funds Distributor, Inc. Performance Update.
31
<PAGE>
[back cover]
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)
John V. Carberry
Senior Vice President of Liberty Financial Companies, Inc. (formerly Managing
Director, Salomon Brothers)
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)
Salvatore Macera
Private Investor (formerly Executive Vice President of Itek Corp. and President
of Itek Optical & Electronic Industries, Inc.)
William E. Mayer
Partner, Development Capital, LLC (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
Thomas E. Stitzel
Professor of Finance, College of Business, Boise State University; Business
Consultant and Author
Robert L. Sullivan
Retired Partner, KPMG LLP (formerly Management Consultant, Saatchi and Saatchi
Consulting Ltd. and Principal and International Practice Director, Management
Consulting, Peat Marwick Main & Co.)
Anne-Lee Verville
Consultant (formerly General Manager, Global Education Industry, and President,
Applications Solutions Division, IBM Corporation)
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ALL STAR o COLONIAL o CRABBE HUSON o NEWPORT o STEIN ROE ADVISOR
Liberty Funds Distributor, Inc. (C) 1999
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