<PAGE> 1
[COLONIAL LOGO]
COUNSELOR SELECT PORTFOLIOS(SM) ANNUAL REPORT
NOVEMBER 30, 1999
CAREFULLY
ASSEMBLED
PORTFOLIOS
TO SUIT YOUR
INVESTMENT NEEDS
<PAGE> 2
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
The 12-month period ended November 30, 1999 will go down in the books as another
strong year for the U.S. economy and a time of rebuilding for global economies.
In the U.S., consumer confidence, personal income and employment remained high
while inflation edged up from 2.1% to 2.6%. Although that's still below
inflation's long-term historical average, the Federal Reserve stepped in to
raise interest rates three times between June and November and put the nation on
notice that it would continue to take steps to balance economic growth and
inflation in the months ahead.
The U.S. stock market enjoyed another year of impressive gains. However, the
major indexes masked the market's volatility as well as its selectivity.
Although value stocks enjoyed a rebound in the spring, a narrow band of large,
growth companies led the market for most of the year. Small- and mid-sized
growth companies rallied at the end of the period.
Rising interest rates throughout the year hampered bonds. Generally speaking,
mortgage bonds outperformed U.S. Treasury and corporate bonds. After a volatile
year, high-yield bonds staged a rebound in the last months of the period.
As economies strengthened around the world, international stock markets also
delivered attractive returns. Japanese stocks soared as the government took
steps to invigorate Japan's sagging economy. In Europe, German and U.K. stock
markets produced double-digit returns.
The following report will provide you with more specific information about your
Portfolios' performance and the strategies your managers, William Parmentier and
Chris Carabell, used during the period. Thank you for choosing Colonial
Counselor Select Portfolios. As always, we look forward to continuing to serve
your investment needs.
Sincerely,
/s/ Stephen E. Gibson
Stephen E. Gibson
President
January 11, 2000
Please note, equity investments are affected by stock market fluctuations that
occur in response to economic and business developments; stocks of smaller
companies pose special risks, including possible illiquidity and greater price
volatility; global investing poses special risks, including those related to
economic and political developments, as well as currency fluctuations; bond
investments are affected by interest rate changes and the creditworthiness of
the issues held by the funds; high-yield investing poses additional credit risk
related to lower-rated bonds.
Because economic and market conditions change frequently, there can be no
assurance that the trends described above or on the following pages will
continue.
- ---------------------------
NOT FDIC MAY LOSE VALUE
INSURED -----------------
NO BANK GUARANTEE
- ---------------------------
<PAGE> 3
HIGHLIGHTS
- - GROWTH INVESTMENTS REGAINED MARKET LEADERSHIP.
After a brief rebound in value stocks at mid-year, growth companies bounced
back to dominate the second half of the period. Technology and Internet
stocks did exceptionally well.
- - RISING INTEREST RATES HURT THE BOND MARKET.
Long-term interest rates pushed above 6.0%, reflecting investor fears that
the economy was growing too fast to keep inflation in check.
- - INTERNATIONAL STOCKS BENEFITED FROM IMPROVING ECONOMIC CONDITIONS.
Southeast Asia, Japan and certain Latin American markets -- Mexico, for
example -- grew faster than expected. The good news was reflected in
positive returns for many foreign stock markets.
- - VOLATILITY CONTINUED IN ALL MARKET SECTORS.
The value of diversification was affirmed as stocks and bonds, at home and
abroad, were volatile throughout the year. According to the New York Stock
Exchange, stocks fluctuated 1% or more on nearly half of the trading days
in 1999.
BROAD-BASED MARKET INDEX PERFORMANCE
1/29/99 - 11/30/99(1)
<TABLE>
<CAPTION>
LEHMAN BROTHERS
S&P INDEX AGGREGATE BOND INDEX MSCI-EAFE INDEX
--------- -------------------- ---------------
<C> <C> <C>
9.72% (1.05)% 16.85%
</TABLE>
(1) The Colonial Counselor Select Portfolios commenced investment operations on
January 29, 1999.
The Standard & Poor's 500 Index is an unmanaged index that tracks the
performance of 500 widely held, large-capitalization U.S. stocks. The Lehman
Brothers Aggregate Bond Index is an unmanaged index that tracks the performance
of U.S. bonds. The MSCI-EAFE Index is a broad-based index that tracks the
performance of stocks of companies in Europe, Australia and the Far East. Unlike
mutual funds, indexes are not investments and do not incur fees or expenses. It
is not possible to invest directly in an index.
1
<PAGE> 4
COLONIAL COUNSELOR SELECT INCOME PORTFOLIO
COLONIAL COUNSELOR SELECT INCOME PORTFOLIO SEEKS CURRENT INCOME WITH THE
POTENTIAL FOR CAPITAL APPRECIATION. IT IS THE MOST CONSERVATIVE COLONIAL
COUNSELOR SELECT PORTFOLIO, INVESTING PRIMARILY IN BOND FUNDS THAT INVEST IN
MORTGAGE, U.S. GOVERNMENT, CORPORATE AND HIGH-YIELD BONDS. MANAGERS ARE FREE TO
INVEST UP TO 20% OF THE PORTFOLIO'S ASSETS IN STOCK FUNDS THAT INVEST IN COMMON
STOCKS OF LARGE COMPANIES AND UTILITIES, AS WELL AS REAL ESTATE INVESTMENT
TRUSTS (REITS).
Class A shares of Colonial Counselor Select Income Portfolio returned negative
0.74% during the ten-month period ended November 30, 1999, without a sales
charge. This compares favorably with the Lehman Brothers Aggregate Bond Index,
which returned negative 1.05% over the same time period. Performance was helped
by the Portfolio's allocation between fixed-income and equity investments.
On the equity side, we added an investment in value funds. That hurt performance
in the second half of the period because value underperformed growth. However,
to the extent that it expanded diversification, the move was consistent with the
Portfolio's charter.
On the fixed-income side, we added an investment in Crabbe Huson Contrarian
Income Fund, which invests primarily in investment-grade corporate bonds. The
new position provides the potential for higher yield without substantially
altering the quality of the portfolio.
Looking ahead, we expect volatility to continue as concerns about the economy
and inflation continue to plague the fixed-income markets. However, we believe
the Portfolio's diversification among various asset classes and investment
styles should provide conservative investors with the potential for both current
income and capital appreciation.
NET ASSET VALUE AS OF 11/30/99
<TABLE>
<S> <C>
Class A $ 9.51
- --------------------------------------------------------------------------------
Class B $ 9.50
- --------------------------------------------------------------------------------
Class C $ 9.53
- --------------------------------------------------------------------------------
</TABLE>
DISTRIBUTIONS DECLARED PER SHARE FROM 1/29/99 - 11/30/99
<TABLE>
<S> <C>
Class A $ 0.415
- --------------------------------------------------------------------------------
Class B $ 0.354
- --------------------------------------------------------------------------------
Class C $ 0.354
- --------------------------------------------------------------------------------
PORTFOLIO HOLDINGS AS OF 11/30/99
FIXED-INCOME
- --------------------------------------------------------------------------------
Colonial Intermediate U.S. Government Fund 29.9%
- --------------------------------------------------------------------------------
Stein Roe Intermediate Bond Fund 24.9%
- --------------------------------------------------------------------------------
Colonial Strategic Income Fund 9.9%
- --------------------------------------------------------------------------------
EQUITY
- --------------------------------------------------------------------------------
Crabbe Huson Contrarian Income Fund 14.8%
- --------------------------------------------------------------------------------
Stein Roe Growth Stock Fund 5.2%
- --------------------------------------------------------------------------------
Colonial Utilities Fund 5.1%
- --------------------------------------------------------------------------------
Colonial Value Fund 4.9%
- --------------------------------------------------------------------------------
Crabbe Huson Real Estate Investment Fund 4.8%
- --------------------------------------------------------------------------------
</TABLE>
Underlying funds are calculated as a percentage of the Portfolio's net assets.
Because the Portfolio is actively managed, there can be no guarantee the
Portfolio will continue to hold these percentages in the underlying funds in the
future.
2
<PAGE> 5
PERFORMANCE INFORMATION
PERFORMANCE OF A $10,000 INVESTMENT IN CLASS A SHARES 1/29/99 - 11/30/99
<TABLE>
<CAPTION>
Without Sales With Sales Lehman Brothers
Charge Charge Aggregate Bond Index
------------- ---------- --------------------
<S> <C> <C> <C>
1/31/99 10000 9525 10000
2/28/99 9775 9311 9825
3/31/99 9899 9429 9879
4/30/99 10034 9557 9911
5/31/99 9915 9444 9823
6/30/99 9969 9495 9792
7/31/99 9890 9420 9750
8/31/99 9820 9353 9745
9/30/99 9822 9355 9858
10/31/99 9885 9415 9895
11/30/99 9926 9455 9895
</TABLE>
The Lehman Brothers Aggregate Bond Index is an unmanaged index that tracks the
performance of U.S. bonds. Unlike mutual funds, indexes are not investments and
do not incur fees or expenses. It is not possible to invest directly in an
index.
PERFORMANCE OF $10,000 INVESTMENT IN ALL SHARE CLASSES 1/29/99 - 11/30/99
<TABLE>
<CAPTION>
Without With
sales sales
charge charge
- -------------------------------------------------------------------------------
<S> <C> <C>
Class A $9,926 $9,455
- -------------------------------------------------------------------------------
Class B $9,854 $9,379
- -------------------------------------------------------------------------------
Class C $9,884 $9,788
- -------------------------------------------------------------------------------
</TABLE>
CUMULATIVE TOTAL RETURNS AS OF 11/30/99
<TABLE>
<CAPTION>
Share Class(1) A B C
- ---------------------------------------------------------------------------------------
w/o sales with sales w/o sales with sales w/o sales with sales
charge charge charge charge charge charge
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Life (0.74)% (5.45)% (1.46)% (6.21)% (1.16)% (2.12)%
- ---------------------------------------------------------------------------------------
</TABLE>
CUMULATIVE TOTAL RETURNS AS OF 9/30/99
<TABLE>
<CAPTION>
Share Class(1) A B C
- ---------------------------------------------------------------------------------------
w/o sales with sales w/o sales with sales w/o sales with sales
charge charge charge charge charge charge
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Life (1.78)% (6.45)% (2.27)% (7.03)% (1.97)% (2.92)%
- ---------------------------------------------------------------------------------------
</TABLE>
(1) Inception for all share classes is January 29, 1999.
Past performance cannot predict future results. Returns and values of an
investment will vary, resulting in a gain or loss on sale. All results shown
assume reinvestment of distributions. The "with sales charge" returns include
the maximum 4.75% charge for Class A shares and the contingent deferred sales
charge (CDSC) maximum charge of 5% since inception for Class B shares and 1% for
Class C shares. Performance for different class shares will vary based on
differences in sales charges and fees associated with each class.
Performance results reflect any voluntary waivers or reimbursement of Fund
expenses by the Advisor or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower.
3
<PAGE> 6
COLONIAL COUNSELOR SELECT BALANCED PORTFOLIO
<TABLE>
<S> <C>
NET ASSET VALUE AS OF 11/30/99
Class A $10.33
- ----------------------------------------
Class B $10.33
- ----------------------------------------
Class C $10.34
- ----------------------------------------
Class Z $10.41
- ----------------------------------------
DISTRIBUTIONS DECLARED PER
SHARE FROM 1/29/99 - 11/30/99
Class A $0.158
- ----------------------------------------
Class B $0.113
- ----------------------------------------
Class C $0.113
- ----------------------------------------
Class Z (9/29/99 - 11/30/99) $0.000
- ----------------------------------------
PORTFOLIO HOLDINGS AS OF
11/30/99
FIXED-INCOME
- ----------------------------------------
Colonial Intermediate
U.S. Government Fund 14.9%
- ----------------------------------------
Stein Roe Intermediate
Bond Fund 14.9%
- ----------------------------------------
Crabbe Huson
Contrarian Income Fund 9.9%
- ----------------------------------------
Colonial Strategic
Income Fund 4.9%
- ----------------------------------------
EQUITY
- ----------------------------------------
Stein Roe Growth
Stock Fund 20.1%
- ----------------------------------------
Colonial Value Fund 19.8%
- ----------------------------------------
Colonial International
Horizons Fund 7.6%
- ----------------------------------------
Colonial Small Cap
Value Fund 4.8%
- ----------------------------------------
Newport Asia
Pacific Fund 2.8%
- ----------------------------------------
</TABLE>
Underlying funds are calculated as a percentage of the Portfolio's net assets.
Because the Portfolio is actively managed, there can be no guarantee the
Portfolio will continue to hold these percentages in the underlying funds in the
future.
COLONIAL COUNSELOR SELECT BALANCED PORTFOLIO SEEKS A BALANCE OF LONG-TERM GROWTH
OF CAPITAL AND CURRENT INCOME. IT INVESTS IN A MIX OF STOCK AND BOND MUTUAL
FUNDS, INCLUDING FUNDS THAT INVEST IN LARGE- AND SMALL-COMPANY STOCKS AND
INTERNATIONAL STOCKS, AS WELL AS U.S. GOVERNMENT, CORPORATE AND HIGH-YIELD
BONDS.
Class A shares of Colonial Counselor Select Balanced Portfolio generated a total
return of 4.93%, without a sales charge, during the ten-month period ended
November 30, 1999. This compares favorably with the Lehman Brothers Aggregate
Bond Index, which returned negative 1.05% over the period. However, it fell
short of the S&P 500 Index, a broad measure of U.S. common stock performance,
which gained 9.72%. Keep in mind that approximately half of the Portfolio's
assets are invested in stock mutual funds and half in bond mutual funds. As a
result, neither index offers a complete or comparable measure of performance.
Positive performance from the Portfolio's investments in stock mutual funds
helped offset negative returns among its fixed-income investments during the
period. The balance between growth and value funds helped the Portfolio during
the middle of the period as investors shifted their preference from growth to
value. However, it hurt performance in the second half as growth stocks soared
ahead. And although small company stocks did well in the last two months of the
period, the rebound occurred primarily among small, speculative technology and
Internet-related companies. A lack of exposure to this segment of the market
hampered the Portfolio's performance.
We added an investment in Newport Asia Pacific Fund, which contributed to
positive performance. That gave the Portfolio exposure to the stock markets of
Asia and Japan, which staged a strong rebound during the year.
Looking ahead, we expect volatility to continue as concerns about the economy
and inflation continue to plague the U.S. fixed-income markets and soaring
valuations raise questions about the U.S. stock market. However, we believe the
Portfolio's diversification among various asset classes, markets and investment
styles should provide investors with the potential for attractive risk-adjusted
returns.
4
<PAGE> 7
PERFORMANCE INFORMATION
PERFORMANCE OF A $10,000 INVESTMENT IN CLASS A SHARES 1/29/99 - 11/30/99
<TABLE>
<CAPTION>
Lehman
Without With Brothers
Sales Sales Aggregate S&P 500
Charge Charge Bond Index Index
------ ------ ---------- -----
<S> <C> <C> <C> <C>
1/31/99 10000 9425 10000 10000
2/28/99 9790 9227 9825 9762
3/31/99 10132 9549 9879 10169
4/30/99 10402 9804 9911 10581
5/31/99 10262 9672 9823 10036
6/30/99 10510 9906 9792 10427
7/31/99 10369 9773 9750 10737
8/31/99 10228 9640 9745 10777
9/30/99 10147 9564 9858 10886
10/31/99 10310 9717 9895 11294
11/30/99 10493 9890 9894 10972
</TABLE>
The Standard & Poor's 500 Index is an unmanaged index that tracks the
performance of 500 widely held, large-capitalization U.S. stocks. The Lehman
Brothers Aggregate Bond Index is an unmanaged index that tracks the performance
of U.S. bonds. Unlike mutual funds, indexes are not investments and do not incur
fees or expenses. It is not possible to invest directly in an index.
CUMULATIVE TOTAL RETURNS AS OF 11/30/99
<TABLE>
<CAPTION>
Share Class(1) A B C Z*
- -----------------------------------------------------------------------------------------------------
w/o sales with sales w/o sales with sales w/o sales with sales w/o sales
charge charge charge charge charge charge charge
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Life 4.93% (1.10)% 4.47% (0.53)% 4.56% 3.56% 5.85%
- -----------------------------------------------------------------------------------------------------
</TABLE>
CUMULATIVE TOTAL RETURNS AS OF 9/30/99
<TABLE>
<CAPTION>
Share Class(1) A B C Z*
- -----------------------------------------------------------------------------------------------------
w/o sales with sales w/o sales with sales w/o sales with sales w/o sales
charge charge charge charge charge charge charge
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Life 1.47% (4.36)% 0.93% (4.06)% 1.13% 0.13% N/A
- -----------------------------------------------------------------------------------------------------
</TABLE>
(1) Inception for A, B and C share classes is January 29, 1999. Inception for
Class Z shares is September 29, 1999.
*Class Z share performance information includes returns of the Fund's Class A
shares (as its expense structure more closely resembles that of a newer class)
for periods prior to its inception date. These Class A share returns are not
restated to reflect any expense differential (e.g. Rule 12b-1 fees) between
Class A shares and Class Z shares. Had the expense differential been reflected,
the returns for the periods prior to the inception of newer class shares would
have been higher.
Past performance cannot predict future results. Returns and values of an
investment will vary, resulting in a gain or loss on sale. All results shown
assume reinvestment of distributions. The "with sales charge" returns include
the maximum 5.75% charge for Class A shares and the contingent deferred sales
charge (CDSC) maximum charge of 5% since inception for Class B shares and 1% for
Class C shares. Performance for different class shares will vary based on
differences in sales charges and fees associated with each class.
Performance results reflect any voluntary waivers or reimbursement of Fund
expenses by the Advisor or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower.
PERFORMANCE OF $10,000 INVESTMENT IN ALL SHARE CLASSES 1/29/99 - 11/30/99
<TABLE>
<CAPTION>
Without With
sales sales
charge charge
- ----------------------------------------
<S> <C> <C>
Class A $10,493 $9,890
- ----------------------------------------
Class B $10,447 $9,947
- ----------------------------------------
Class C $10,456 $10,356
- ----------------------------------------
Class Z* $10,585
- ----------------------------------------
</TABLE>
5
<PAGE> 8
COLONIAL COUNSELOR SELECT GROWTH PORTFOLIO
COLONIAL COUNSELOR SELECT GROWTH PORTFOLIO SEEKS LONG-TERM GROWTH OF CAPITAL. IT
OFFERS THE HIGHEST RETURN AND RISK POTENTIAL OF THE COLONIAL COUNSELOR SELECT
PORTFOLIOS. THE PORTFOLIO INVESTS PRIMARILY IN STOCK MUTUAL FUNDS, INCLUDING
FUNDS THAT INVEST IN SMALL AND LARGE COMPANY STOCKS AND INTERNATIONAL STOCKS AS
WELL AS U.S. GOVERNMENT, CORPORATE AND HIGH-YIELD BONDS.
Class A shares of the Colonial Counselor Select Growth Portfolio returned 9.30%,
without a sales charge, during the ten-month period ended November 30, 1999.
This is comparable to the S&P 500 Index, a broad measure of U.S. stock market
performance, which gained 9.72% over the same period. The performance was
especially strong when you consider that 20% of the Portfolio's assets are
invested in fixed-income mutual funds, which significantly underperformed the
S&P 500 during the year.
A strong stock market in the U.S. and a rebound in key foreign markets helped
the Portfolio deliver attractive returns. The strongest contributions to
performance came from the Portfolio's investments in growth and international
stocks. Although value investments made a strong showing in the middle of the
year, growth stocks came roaring back, led by technology companies. Small-cap
growth stocks also did well in the final months of the period. However, the
Portfolio did not benefit because most gains were concentrated in small-company
technology stocks, especially those associated with the Internet.
During the period, we sold the Portfolio's position in Newport Tiger Fund and
replaced it with Newport Asia Pacific Fund, in order to gain exposure to the
Japanese stock market. The move was well timed and captured much of the upswing
that took place in Japan during the year.
Looking ahead, we expect volatility to continue as concerns about the economy,
interest rates, inflation and valuations affect the U.S. stock market and
political, currency and economic uncertainty affect stock markets abroad.
However, we believe the Portfolio's diversification among various markets and
investment styles should provide growth-oriented investors with the potential
for capital appreciation.
NET ASSET VALUE AS OF 11/30/99
<TABLE>
<S> <C>
Class A $10.93
- ------------------------------
Class B $10.87
- ------------------------------
Class C $10.86
- ------------------------------
Class Z $10.94
- ------------------------------
</TABLE>
PORTFOLIO HOLDINGS AS OF 11/30/99
<TABLE>
FIXED-INCOME
- ----------------------------------
<S> <C>
Colonial Strategic
Income Fund 10.1%
- ----------------------------------
Stein Roe Intermediate
Bond Fund 10.1%
- ----------------------------------
EQUITY
- ----------------------------------
Stein Roe Growth
Stock Fund 25.2%
- ----------------------------------
Colonial
Value Fund 24.9%
- ----------------------------------
Colonial International
Horizons Fund 15.2%
- ----------------------------------
Colonial Small Cap
Value Fund 9.8%
- ----------------------------------
Newport Asia
Pacific Fund 5.8%
- ----------------------------------
</TABLE>
Underlying funds are calculated as a percentage of the Portfolio's net assets.
Because the Portfolio is actively managed, there can be no guarantee the
Portfolio will continue to hold these percentages in the underlying funds in the
future.
6
<PAGE> 9
PERFORMANCE INFORMATION
PERFORMANCE OF $10,000 INVESTMENT IN CLASS A SHARES 1/29/99 - 11/30/99
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
S&P 500 Without Sales With Sales
Index Charge Charge
<S> <C> <C> <C>
"1/31/99" 10000 10000 9425
"2/28/99" 9689 9750 9189
"3/31/99" 10077 10190 9604
"4/30/99" 10467 10659 10047
"5/31/99" 10220 10479 9877
"6/30/99" 10787 10919 10292
"7/31/99" 10450 10749 10131
"8/31/99" 10398 10540 9933
"9/30/99" 10113 10290 9698
"10/31/99" 10753 10620 10009
"11/30/99" 10972 10930 10302
</TABLE>
The Standard & Poor's 500 Index is an unmanaged index that tracks the
performance of 500 widely held, large-capitalization U.S. stocks. Unlike mutual
funds, indexes are not investments and do not incur fees or expenses. It is not
possible to invest directly in an index.
CUMULATIVE TOTAL RETURNS AS OF 11/30/99
<TABLE>
<CAPTION>
Share Class(1) A B C Z*
- ---------------------------------------------------------------------------------------------------
w/o sales with sales w/o sales with sales w/o sales with sales w/o sales
charge charge charge charge charge charge charge
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Life 9.30% 3.02% 8.70% 3.70% 8.60% 7.60% 9.61%
- ---------------------------------------------------------------------------------------------------
</TABLE>
CUMULATIVE TOTAL RETURNS AS OF 9/30/99
<TABLE>
<CAPTION>
Share Class(1) A B C Z*
- ------------------------------------------------------------------------------------------------
w/o sales with sales w/o sales with sales w/o sales with sales w/o sales
charge charge charge charge charge charge charge
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Life 2.90% (3.02)% 2.50% (2.50)% 2.40% 1.40% N/A
- ------------------------------------------------------------------------------------------------
</TABLE>
(1) Inception for Class A, B and C shares is January 29, 1999. Inception for
Class Z shares is September 29, 1999.
* Class Z share performance information includes returns of the Fund's Class
A shares (as its expense structure more closely resembles that of the newer
class) for periods prior to its inception date. These Class A share returns
are not restated to reflect any expense differential (e.g. Rule 12b-1 fees)
between Class A shares and Class Z shares. Had the expense differential
been reflected, the returns for the periods prior to the inception of newer
class shares would have been higher.
Past performance cannot predict future results. Returns and values of an
investment will vary, resulting in a gain or loss on sale. All results shown
assume reinvestment of distributions. The "with sales charge" returns include
the maximum 5.75% charge for Class A shares and the contingent deferred sales
charge (CDSC) maximum charge of 5% since inception for Class B shares and 1% for
Class C shares. Performance for different class shares will vary based on
differences in sales charges and fees associated with each class.
Performance results reflect any voluntary waivers or reimbursement of Fund
expenses by the Advisor or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower.
PERFORMANCE OF $10,000
INVESTMENT IN ALL SHARE
CLASSES 1/29/99 - 11/30/99
<TABLE>
<CAPTION>
Without With
sales sales
charge charge
- ------------------------------
<S> <C> <C>
Class A $10,930 $10,302
- ------------------------------
Class B $10,870 $10,370
- ------------------------------
Class C $10,860 $10,760
- ------------------------------
Class Z* $10,961
- ------------------------------
</TABLE>
7
<PAGE> 10
INVESTMENT PORTFOLIO
November 30, 1999 (In thousands)
COLONIAL COUNSELOR SELECT INCOME PORTFOLIO (CCSIP)
<TABLE>
<CAPTION>
MUTUAL FUNDS 99.5% SHARES VALUE
- ------------------------------------------------------------
<S> <C> <C>
Colonial Intermediate U.S. Government
Fund, Class Z 492 $ 3,107
Stein Roe Intermediate Bond Fund 305 2,590
Crabbe Huson Contrarian Income
Fund, Class Z 153 1,539
Colonial Strategic Income Fund, Class Z 156 1,031
Stein Roe Growth Stock Fund (a) 10 541
Colonial Utilities Fund, Class Z 23 523
Colonial Value Fund, Class Z 44 511
Crabbe Huson Real Estate Investment
Fund, Class Z 53 502
-------
TOTAL INVESTMENTS
(cost of $10,577) (b) 10,344
=======
OTHER ASSETS & LIABILITIES, NET - 0.5% 52
=======
NET ASSETS - 100.0% $10,396
=======
</TABLE>
NOTES TO INVESTMENT PORTFOLIO
(a) Non-income producing.
(b) Cost for federal income tax purposes is $10,607.
COLONIAL COUNSELOR SELECT GROWTH PORTFOLIO (CCSGP)
<TABLE>
<CAPTION>
MUTUAL FUNDS 101.1% SHARES VALUE
- ------------------------------------------------------------
<S> <C> <C>
Stein Roe Growth Stock Fund (a) 117 $ 6,143
Colonial Value Fund, Class Z 524 6,068
Colonial International Horizons Fund,
Class Z (a) 262 3,716
Stein Roe Intermediate Bond Fund 288 2,460
Colonial Strategic Income Fund, Class Z 371 2,452
Colonial Small Cap Value Fund, Class Z 81 2,396
Newport Asia Pacific Fund, Class Z (a) 54 1,422
-------
TOTAL INVESTMENTS
(cost of $23,830) (b) 24,657
=======
OTHER ASSETS & LIABILITIES, NET - (1.1)% (276)
=======
NET ASSETS - 100.0% $24,381
=======
</TABLE>
NOTES TO INVESTMENT PORTFOLIO
(a) Non-income producing.
(b) Cost for federal income tax purposes is the same.
COLONIAL COUNSELOR SELECT BALANCED PORTFOLIO (CCSBP)
<TABLE>
<CAPTION>
MUTUAL FUNDS 99.7% SHARES VALUE
- ------------------------------------------------------------
<S> <C> <C>
Stein Roe Growth Stock Fund (a) 110 $ 5,780
Colonial Value Fund, Class Z 494 5,712
Colonial Intermediate U.S. Government
Fund, Class Z 681 4,302
Stein Roe Intermediate Bond Fund 505 4,295
Crabbe Huson Contrarian Income
Fund, Class Z 282 2,843
Colonial International Horizons
Fund, Class Z (a) 153 2,174
Colonial Strategic Income Fund, Class Z 212 1,401
Colonial Small Cap Value Fund, Class Z 47 1,393
Newport Asia Pacific Fund, Class Z (a) 30 797
-------
TOTAL INVESTMENTS
(cost of $28,296) (b) 28,697
=======
OTHER ASSETS & LIABILITIES, NET - 0.3% 95
=======
NET ASSETS - 100.0% $28,792
=======
</TABLE>
NOTES TO INVESTMENT PORTFOLIO
(a) Non-income producing.
(b) Cost for federal income tax purposes is $28,373.
See notes to financial statements.
8
<PAGE> 11
STATEMENT OF ASSETS AND LIABILITIES
November 30, 1999
(In thousands except for per share amounts and footnotes)
<TABLE>
<CAPTION>
CCSIP CCSBP CCSGP
- -------------------------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C> <C> <C> <C> <C>
Investments at cost $ 10,577 $ 28,296 $ 23,830
Appreciation (Depreciation) (233) 401 827
------------- -------------- --------------
Investments at value 10,344 28,697 24,657
Cash $33 $27 $ --
Receivable for:
Dividends 8 14 4
Fund shares sold 1 34 69
Expense reimbursement due from Advisor/Administrator 36 44 43
Other -- 78 2 121 -- 116
--- ------------- --- -------------- ---- --------------
Total Assets 10,422 28,818 24,773
LIABILITIES
Payable due to custodian bank -- -- 377
Payable for:
Distributions 11 -- --
Fund shares repurchased 3 6 4
Other 12 20 11
--- --- ----
Total Liabilities 26 26 342
------------- -------------- --------------
NET ASSETS $ 10,396 $ 28,792 $ 24,381
------------- -------------- --------------
Net asset value & redemption price per share $9.51 $10.33 $10.93
------------- -------------- --------------
-- Class A (a) ($4,799/505) ($8,789/851) ($9,209/843)
Maximum offering price per share $9.98 $10.96 $11.60
------------- -------------- --------------
-- Class A (b) ($9.51/0.9525) ($10.33/0.9425) ($10.93/0.9425)
Net asset value & offering price per share $9.50 $10.33 $10.87
------------- -------------- --------------
-- Class B (a) ($3,144/331) ($12,892/1,248) ($8,706/801)
Net asset value & offering price per share $9.53 $10.34 $10.86
------------- -------------- --------------
-- Class C (a) ($2,453/257) ($6,626/641) ($5,859/539)
Net asset value, offering & redemption price per share N/A $10.41 $10.94
------------- -------------- --------------
-- Class Z N/A ($485/47) ($607/55)
COMPOSITION OF NET ASSETS
Capital paid in $ 10,682 $ 28,361 $ 23,247
Undistributed net investment income 40 174 199
Accumulated net realized gain (loss) (93) (144) 108
Net unrealized appreciation (depreciation) (233) 401 827
------------- -------------- --------------
$ 10,396 $ 28,792 $ 24,381
============= ============== ==============
</TABLE>
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
(b) On sales of $50,000 or more the offering price is reduced.
See notes to financial statements.
9
<PAGE> 12
STATEMENT OF OPERATIONS
For the Period Ended November 30, 1999 (a)
(In thousands)
<TABLE>
<CAPTION>
CCSIP CCSBP CCSGP
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividend $338 $464 $ 228
Interest 1 3 3
---- ---- ------
339 467 231
EXPENSES
Management fee $ 1 $1 $ 1
Service fee-- Class A, Class B, Class C 15 36 33
Distribution fee-- Class B 11 38 24
Distribution fee-- Class C 10 27 31
Transfer agent fee 1 3 4
Bookkeeping fee 3 3 3
Custodian fee 2 2 3
Audit fee 8 8 8
Registration fee 73 77 80
Reports to shareholders fee 1 2 1
Other 1 1 1
---- --- ----
Total Expenses 126 198 189
Fees and expenses waived or borne
by the Advisor/Administrator (87) 39 (90) 108 (94) 95
---- ---- --- ---- ---- ------
Net Investment Income 300 359 136
---- ---- ------
NET REALIZED & UNREALIZED GAIN (LOSS)
ON PORTFOLIO POSITIONS
Net realized gain (loss) (93) (144) 108
Net change in unrealized appreciation/depreciation (233) 401 827
---- ---- ------
Net Gain (Loss) (326) 257 935
---- ---- ------
Increase (Decrease) in Net Assets from Operations $(26) $616 $1,071
==== ==== ======
</TABLE>
(a) The Funds commenced investment operations on January 29, 1999.
See notes to financial statements.
10
<PAGE> 13
STATEMENT OF CHANGES IN NET ASSETS
(in thousands)
<TABLE>
<CAPTION>
Period Ended Period Ended Period Ended
November 30 November 30 November 30
- ---------------------------------------------------------------------------------------------------------------------------
CCSIP CCSBP CCSGP
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS 1999(a) 1999(a)(b) 1999(a)(b)
Operations:
Net investment income $ 300 $ 359 $ 136
Net realized gain (loss) (93) (144) 108
Net change in unrealized appreciation /depreciation (233) 401 827
------- ------- -------
Net Increase (Decrease) from Operations (26) 616 1,071
Distributions:
From net investment income -- Class A (173) (108) --
From net investment income -- Class B (71) (80) --
From net investment income -- Class C (67) (53) --
------- ------- -------
(337) 375 1,071
------- ------- -------
Fund Share Transactions:
Receipts for shares sold -- Class A 5,040 9,348 8,789
Value of distributions reinvested -- Class A 126 105 --
Cost of shares repurchased -- Class A (200) (907) (69)
------- ------- -------
4,966 8,546 8,720
------- ------- -------
Receipts for shares sold -- Class B 3,249 13,362 8,801
Value of distributions reinvested -- Class B 62 79 --
Cost of shares repurchased -- Class B (82) (629) (285)
------- ------- -------
3,229 12,812 8,516
------- ------- -------
Receipts for shares sold -- Class C 3,044 7,953 7,940
Value of distributions reinvested -- Class C 56 51 --
Cost of shares repurchased -- Class C (562) (1,409) (2,441)
------- ------- -------
2,538 6,595 5,499
------- ------- -------
Receipts for shares sold -- Class Z -- 468 577
Cost of shares repurchased -- Class Z -- (4) (2)
------- ------- -------
-- 464 575
------- ------- -------
Net Increase from Fund Share Transactions 10,733 28,417 23,310
------- ------- -------
Total Increase 10,396 28,792 24,381
NET ASSETS
Beginning of period -- -- --
------- ------- -------
End of period $10,396 $28,792 $24,381
------- ------- -------
Including undistributed net investment income $ 40 $ 174 $ 199
------- ------- -------
NUMBER OF FUND SHARES
Sold -- Class A 513 930 849
Issued for distributions reinvested -- Class A 13 10 --
Repurchased -- Class A (21) (89) (6)
------- ------- -------
505 851 843
------- ------- -------
Sold -- Class B 333 1,302 828
Issued for distributions reinvested -- Class B 7 8 --
Repurchased -- Class B (9) (62) (27)
------- ------- -------
331 1,248 801
------- ------- -------
Sold -- Class C 310 773 766
Issued for distributions reinvested -- Class C 6 5 --
Repurchased -- Class C (59) (137) (227)
------- ------- -------
257 641 539
------- ------- -------
Sold -- Class Z -- 47 55
Repurchased -- Class Z -- (c) (c)
------- ------- -------
-- 47 55
------- ------- -------
</TABLE>
(a) The Fund commenced investment operations on January 29, 1999.
(b) Class Z shares were initially offered on September 29, 1999.
(c) Rounds to less than one.
See notes to financial statements. 11
<PAGE> 14
NOTES TO FINANCIAL STATEMENTS
November 30, 1999
NOTE 1. ACCOUNTING POLICIES
ORGANIZATION:
Colonial Counselor Select Portfolios (the Funds), each a series of Liberty Funds
Trust IV (the Trust), formerly Colonial Trust IV, are diversified portfolios of
Massachusetts business trusts, registered under the Investment Company Act of
1940, as amended, as open-end, management investment companies. The Colonial
Counselor Select Income Portfolio (CCSIP) seeks current income. The Colonial
Counselor Select Balanced Portfolio (CCSBP) seeks a balance of long-term growth
of capital and current income. The Colonial Counselor Select Growth Portfolio
(CCSGP) seeks long-term growth of capital.
The Funds seek to achieve their respective objectives by allocating their assets
primarily among other mutual funds (Underlying Liberty Funds) distributed by
Liberty Funds Distributor, Inc. (the Distributor) and managed by Colonial
Management Associates, Inc. (the Administrator), Stein Roe & Farnham
Incorporated, Newport Fund Management, Inc. and Crabbe Huson Group, Inc., each
of which is an investment advisory affiliate of the Distributor.
The Funds may issue an unlimited number of shares. CCSIP offers three classes of
shares: Class A, Class B and Class C. CCSBP and CCSGP offer four classes of
shares: Class A, Class B, Class C and Class Z. 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 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. Class C shares are
subject to a contingent deferred sales charge on redemptions made within one
year after purchase and an annual distribution fee. Effective September 29,
1999, CCSBP and CCSGP began offering Class Z shares. Class Z shares are offered
continuously at net asset value. There are certain restrictions on the purchase
of Class Z shares, as described in the Funds' prospectus.
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 consistently followed by the Funds in the
preparation of their financial statements.
SECURITY VALUATION AND TRANSACTIONS:
Shares of the Underlying Liberty Funds are valued at their net asset value as
reported on each business day.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
Other assets and securities for which market quotations are not readily
available are valued at fair value under procedures approved by the Trustees.
Security transactions are accounted for on the date the securities are
purchased, sold or mature.
Cost is determined and gains and losses are based upon the specific
identification method for both financial statement and federal income tax
purposes.
DETERMINATION OF CLASS NET ASSET VALUES AND FINANCIAL HIGHLIGHTS:
All income, expenses (other than the Class A, Class B and Class C service fees
and Class B and Class C distribution fees), 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.
The per share data was calculated using the average shares outstanding during
the period. In addition, Class A, Class B and Class C net investment income per
share data reflect the service fee per share applicable to Class A, Class B and
Class C shares and the distribution fee applicable to Class B and Class C shares
only.
Class A, Class B and Class C ratios are calculated by adjusting the expense and
net investment income ratios for the Funds for the entire period by the service
fee applicable to Class A, Class B and Class C shares and distribution fees
applicable to Class B and Class C shares only.
FEDERAL INCOME TAXES:
Consistent with each 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.
INVESTMENT INCOME:
Income and capital gain distributions from the Underlying Liberty Funds, if any,
are recorded on the ex-dividend date. Interest income is recorded on the accrual
basis.
EXPENSES:
Most expenses of the trust can be directly attributed to a fund. Expenses that
cannot be directly attributed are apportioned between the Funds of the Trust.
Expenses included in the accompanying financial statements reflect the expenses
of each Fund and do not include any expenses associated with the Underlying
Liberty Funds.
DISTRIBUTION TO SHAREHOLDERS:
Distributions to shareholders are recorded on the ex-date.
The amount and character of income and gains to be distributed are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles. Reclassifications are made to each Fund's capital
accounts to reflect income and gains available for distribution (or available
capital loss carryforwards) under income tax regulations.
INVESTMENT RISK:
The Funds are subject to the investment risk associated with an investment in
the Underlying Liberty Funds, some of which may invest in foreign securities.
There are certain additional risks involved in investing in foreign securities
that are not inherent in
12
<PAGE> 15
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
November 30, 1999
investments in domestic securities. These risks may involve adverse political
and economic developments, including the possible imposition of capital controls
or other foreign governmental laws or restrictions. In addition, the securities
of some foreign companies and securities markets are less liquid and at times
more volatile than securities of comparable U.S. companies and U.S. securities
markets.
The risks described above apply to an even greater extent to investments in
emerging markets. The securities markets of emerging countries are generally
smaller, less developed, less liquid and more volatile than the securities
markets of the U.S. and developed foreign markets.
NOTE 2. FEES AND COMPENSATION PAID TO AFFILIATES
MANAGEMENT FEE:
Liberty Asset Management Company (the Advisor), an affiliate
of the Distributor, is the investment Advisor of the Funds and determines the
asset allocation policies of each Fund and allocates and reallocates its assets
among the Underlying Liberty Funds from time to time. For these services, each
Fund pays the Advisor a monthly fee of 0.01% annually of each Fund's average net
assets.
ADMINISTRATION FEE:
The Administrator, an affiliate of the Distributor, is the Administrator of the
Funds and provides the Funds with administrative personnel and services, office
space, and other services at the Administrator's expense, for a monthly fee
equal to 0.0025% annually of each Fund's average net assets.
BOOKKEEPING FEE:
For each Fund, the Administrator provides bookkeeping and pricing services for a
monthly fee equal to $3,600 annually plus 0.035% annually of each Fund's average
net assets over $50 million.
TRANSFER AGENT FEE:
Liberty Funds Services, Inc. (the Transfer Agent), an affiliate of the
Distributor, provides shareholder services for a monthly fee equal to 0.0025%
annually of each Fund's average net assets and receives reimbursement for
certain out-of-pocket expenses.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES:
The Distributor is the principal underwriter of each Fund. For the period ended
November 30, 1999, each Fund has been advised that the Distributor retained net
underwriting discounts on CCSIP, CCSBP and CCSGP of $22,834, $134 and $121,
respectively, on sales of the Funds' Class A shares and received no contingent
deferred sales charges (CDSC) on Class A share redemptions, and $616, $7, and $6
on Class B share redemptions, and $2,974, none and $1 on Class C share
redemptions, respectively.
Each Fund has adopted a 12b-1 plan which requires the payment of a service fee
to the Distributor equal to 0.25% annually of their 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 only.
The CDSC and the fees received from the 12b-1 plan are used principally as
repayment to the Distributor for amounts paid by the Distributor to dealers who
sold such shares.
EXPENSE LIMITS:
The Advisor/Administrator have agreed, until further notice, to waive fees and
bear certain Fund expenses to the extent that total expenses (exclusive of
service fees, distribution fees, brokerage commissions, interest, taxes, and
extraordinary expenses, if any) exceed 0.05% annually of each Fund's average net
assets.
OTHER:
The Funds pay no compensation to its officers, all of whom are employees of the
Advisor.
The Funds' 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
Funds' assets.
The Funds have an agreement with their custodian bank under which custodian fees
were reduced by balance credits on CCSIP, CCSBP and CCSGP of $389, $631 and
$464, respectively, during the period ended November 30, 1999. The Funds could
have invested a portion of the assets utilized in connection with the expense
offset arrangements in an income producing asset if they had not entered into
such an agreement.
NOTE 3. PORTFOLIO INFORMATION
INVESTMENT ACTIVITY:
For the period ended November 30, 1999, purchases and sales of investments,
other than short-term obligations were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
- -------------------------------------------------------------
<S> <C> <C>
CCSIP $13,225,725 $2,556,155
CCSBP $32,081,227 $3,640,234
CCSGP $24,791,956 $1,069,749
</TABLE>
Unrealized appreciation (depreciation) at November 30, 1999 based on the cost of
investments for federal income tax purposes was:
<TABLE>
<CAPTION>
CCSIP CCSBP CCSGP
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
Gross unrealized
appreciation $ 85,078 $ 1,022,597 $ 1,498,911
Gross unrealized
depreciation (348,245) (698,115) (672,208)
--------- ----------- -----------
Net unrealized appreciation
(depreciation) $(263,167) $ 324,482 $ 826,703
========= =========== ===========
</TABLE>
CAPITAL LOSS CARRYFORWARD:
At November 30, 1999, capital loss carry forwards available (to the extent
provided in regulations) to offset future realized gains were approximately as
follows:
<TABLE>
<CAPTION>
YEAR OF CAPITAL LOSS
EXPIRATION CARRYFORWARD
- --------------------------------------------------------------
<S> <C> <C>
CCSIP 2007 $65,000
CCSBP 2007 $68,000
</TABLE>
13
<PAGE> 16
FINANCIAL HIGHLIGHTS
Selected data for a share of each class outstanding throughout each period are
as follows:
COLONIAL COUNSELOR SELECT INCOME PORTFOLIO
<TABLE>
<CAPTION>
PERIOD ENDED NOVEMBER 30, 1999(b)
CLASS A CLASS B CLASS C
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.000 $10.000 $10.000
------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (a)(c) 0.441 0.380 0.380
Net realized and unrealized loss (0.516) (0.526) (0.496)
------- ------- -------
Total from Investment Operations (0.075) (0.146) (0.116)
------- ------- -------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.415) (0.354) (0.354)
------- ------- -------
Net asset value-- End of period $ 9.510 $ 9.500 $ 9.530
======= ======= =======
Total return (d)(e)(f) (0.74)% (1.46)% (1.16)%
======= ======= =======
RATIOS TO AVERAGE NET ASSETS
Expenses (g)(h) 0.30% 1.05% 1.05%
Net investment income (g)(h) 5.44% 4.69% 4.69%
Fees and expenses waived or borne by the Advisor/Administrator (g)(h) 1.48% 1.48% 1.48%
Portfolio turnover (f) 34% 34% 34%
Net assets at end of period (000) $ 4,799 $3,144 $ 2,453
(a) Net of fees and expenses waived or borne by the Advisor/
Administrator which amounted to: $ 0.120 $ 0.120 $ 0.120
</TABLE>
(b) The Fund commenced investment operations on January 29, 1999.
(c) Per share data was calculated using average shares outstanding during the
period.
(d) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(e) Had the Advisor/Administrator not waived or reimbursed a portion of
expenses, total return would have been reduced.
(f) Not annualized.
(g) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
(h) Annualized.
14
<PAGE> 17
FINANCIAL HIGHLIGHTS
Selected data for a share of each class outstanding throughout each period are
as follows:
COLONIAL COUNSELOR SELECT BALANCED PORTFOLIO
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
PERIOD ENDED NOVEMBER 30, 1999(b)
CLASS A CLASS B CLASS C CLASS Z(c)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.000 $ 10.000 $ 10.000 $ 9.980
-------- --------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (a)(d) 0.256 0.192 0.191 0.053
Net realized and unrealized gain 0.232 0.251 0.262 0.377
-------- --------- -------- --------
Total from Investment Operations 0.488 0.443 0.453 0.430
-------- --------- -------- --------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.158) (0.113) (0.113) --
-------- --------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 10.330 $ 10.330 $ 10.340 $ 10.410
======== ========= ======== ========
Total return (e)(f)(g) 4.93% 4.47% 4.56% 4.31%
======== ========= ======== ========
RATIOS TO AVERAGE NET ASSETS
Expenses (h)(i) 0.30% 1.05% 1.05% 0.05%
Net investment income (h)(i) 2.98% 2.23% 2.23% 2.94%
Fees and expenses waived or borne by the
Advisor/Administrator (h)(i) 0.63% 0.63% 0.63% 1.10%
Portfolio turnover (g) 20% 20% 20% 20%
Net assets at end of period (000) $ 8,789 $ 12,892 $ 6,626 $ 485
(a) Net of fees and expenses waived or borne by
the Advisor/Administrator which amounted to: $ 0.055 $ 0.055 $ 0.055 $ 0.020
</TABLE>
(b) The Fund commenced investment operations on January 29, 1999.
(c) Class Z shares were initially offered on September 29, 1999. Per share
amounts reflect activity from that date.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(f) Had the Advisor/Administrator not waived or reimbursed a portion of
expenses, total return would have been reduced.
(g) Not annualized.
(h) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
(i) Annualized.
15
<PAGE> 18
FINANCIAL HIGHLIGHTS
Selected data for a share of each class outstanding throughout each period are
as follows:
<TABLE>
<CAPTION>
COLONIAL COUNSELOR SELECT GROWTH PORTFOLIO
- ------------------------------------------------------------------------------------------------------------------------------------
PERIOD ENDED NOVEMBER 30, 1999(b)
CLASS A CLASS B CLASS C CLASS Z(c)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.000 $10.000 $10.000 $ 9.98
------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (a)(d) 0.132 0.067 0.067 0.029
Net realized and unrealized gain 0.798 0.803 0.793 0.931
------- ------- ------- -------
Total from Investment Operations 0.930 0.870 0.860 0.960
------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $10.930 $10.870 $10.860 $10.940
======= ======= ======= =======
Total return (e)(f)(g) 9.30% 8.70% 8.60% 9.62%
======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS
Expenses (h)(i) 0.30% 1.05% 1.05% 0.05%
Net investment income (h)(i) 1.49% 0.74% 0.74% 1.55%
Fees and expenses waived or borne by the Advisor/Administrator (h)(i) 0.73% 0.73% 0.73% 1.33%
Portfolio turnover (g) 7% 7% 7% 7%
Net assets at end of period (000) $ 9,209 $ 8,706 $ 5,859 $ 607
(a) Net of fees and expenses waived or borne by the Advisor/Administrator
which amounted to: $ 0.065 $ 0.065 $ 0.065 $ 0.024
</TABLE>
(b) The Fund commenced investment operations on January 29, 1999.
(c) The Z shares commenced operations on September 29, 1999. Per share amounts
reflect activity from that date.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Total return at net asset value assuming all distributions reinvested and no
initial sales charge or contingent deferred sales charge.
(f) Had the Advisor/Administrator not waived or reimbursed a portion of
expenses, total return would have been reduced.
(g) Not annualized.
(h) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
(i) Annualized.
16
<PAGE> 19
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
TO THE TRUSTEES OF LIBERTY FUNDS TRUST IV AND THE SHAREHOLDERS OF:
COLONIAL COUNSELOR SELECT INCOME PORTFOLIO
COLONIAL COUNSELOR SELECT BALANCED PORTFOLIO
COLONIAL COUNSELOR SELECT GROWTH PORTFOLIO
We have audited the accompanying statements of assets and liabilities of the
Colonial Counselor Select Income Portfolio, Colonial Counselor Select Balanced
Portfolio, and Colonial Counselor Select Growth Portfolio, three of the series
of Liberty Funds Trust IV (the "Trust"), including the investment portfolios, as
of November 30, 1999, and the related statements of operations, the statements
of changes in net assets, and the financial highlights for the period from
January 29, 1999 (commencement of operations) to November 30, 1999. These
financial statements and financial highlights are the responsibility of the
Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit.
We conducted our audit 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 and
financial highlights. Our procedures included confirmation of securities owned
as of November 30, 1999 by correspondence with the custodian or by other
appropriate auditing procedures. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the aforementioned series of Liberty Funds Trust IV at November 30, 1999, the
results of their operations, the changes in their net assets, and the financial
highlights for the period from January 29, 1999 (commencement of operations) to
November 30, 1999 in conformity with generally accepted accounting principles.
/s/ Ernst & Young LLP
Boston, Massachusetts
January 11, 2000
17
<PAGE> 20
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<PAGE> 21
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<PAGE> 22
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<PAGE> 23
TRUSTEES & TRANSFER AGENT
ROBERT J. BIRNBAUM
Retired (formerly Special Counsel, Dechert, Price & Rhoads; President and Chief
Operating Officer, New York Stock Exchange, Inc.)
TOM BLEASDALE
Retired (formerly Chairman of the Board and Chief Executive Officer, Shore Bank
& Trust Company)
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, Nessen, Kamin & 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, L.L.C. (formerly Dean, College of Business and
Management, University of Maryland; Dean, Simon Graduate School of Business,
University of Rochester; Chairman and Chief Executive Officer, CS First Boston
Merchant Bank; and President and Chief Executive Officer, The First Boston
Corporation)
JAMES L. MOODY, JR.
Retired (formerly Chairman of the Board and Chief Executive Officer, Hannaford
Bros. Co.)
JOHN J. NEUHAUSER
Dean, Boston College School of Management
THOMAS E. STITZEL
Professor of Finance, College of Business, Boise State University; Business
Consultant and Author
ROBERT L. SULLIVAN
Retired Partner, Peat Marwick Main & Co. (formerly Management Consultant,
Saatchi and Saatchi Consulting Ltd. and Principal and International Practice
Director, Management Consulting, Peat Marwick Main & Co.)
ANNE-LEE VERVILLE
Consultant (formerly General Manager, Global Education Industry, and President,
Applications solutions Division, IBM Corporation)
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Colonial Counselor Select Portfolios is:
Liberty Funds Distributor, Inc.
P.O. Box 1722
Boston, MA 02105-1722
1-800-345-6611
The Portfolios mail 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 Counselor Select
Portfolios. This report may also be used as sales literature when preceded or
accompanied by the current prospectus which provides details of sales charges,
investment objectives and operating policies of the Portfolios and with the most
recent copy of the Liberty Funds Distributor, Inc. Performance Update.
<PAGE> 24
Liberty offers the independent thinking and collective strength of six financial
specialists. Our distinguished product line helps financial advisors and their
clients build diversified investment portfolios for long-term financial goals.
LIBERTY
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FUNDS
<TABLE>
<S> <C>
ALL-STAR INSTITUTIONAL MONEY MANAGEMENT APPROACH FOR INDIVIDUAL INVESTORS.
COLONIAL FIXED INCOME AND VALUE STYLE EQUITY INVESTING.
CRABBE HUSON A CONTRARIAN APPROACH TO FIXED INCOME AND EQUITY INVESTING.
NEWPORT A LEADER IN INTERNATIONAL INVESTING.(SM)
STEIN ROE
ADVISOR GROWTH STYLE EQUITY INVESTING.
[KEYPORT LOGO] A LEADING PROVIDER OF INNOVATIVE ANNUITY PRODUCTS.
</TABLE>
Liberty's mutual funds are offered by prospectus through Liberty Funds
Distributor, Inc.
BEFORE YOU INVEST, CONSULT YOUR FINANCIAL ADVISOR.
Your financial advisor can help you develop a long-term plan for reaching your
financial goals.
COLONIAL COUNSELOR SELECT PORTFOLIOS(SM) ANNUAL REPORT
[LIBERTY FUNDS LOGO AND LETTERHEAD]
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BULK RATE
U.S. POSTAGE
PAID
HOLLISTON, MA
PERMIT NO. 20
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