<PAGE> 1
LIBERTY
COUNSELOR PORTFOLIOS(SM) SEMIANNUAL REPORT
May 31, 2000
CAREFULLY
ASSEMBLED
PORTFOLIOS
TO SUIT YOUR
INVESTMENT NEEDS
<PAGE> 2
PRESIDENT'S MESSAGE
Dear Shareholder:
You may have noticed that the name of your investment has changed from Colonial
Counselor Select Portfolios to Liberty Counselor Portfolios. This name change
was effective July 14, 2000. The names of the underlying portfolios and the
Funds they invest in have changed, as well.
As an investor in a Liberty Counselor Portfolio, you already access the skills,
knowledge and experience of our investment managers: Colonial Management
Associates, Crabbe Huson, Liberty Asset Management Company, Newport Fund
Management and Stein Roe & Farnham. We are changing the names of the Funds to
better reflect that they are all part of one family. The investment approach and
strategy of each manager remains the same. Our philosophy behind the Liberty
Counselor Portfolios remains the same, as well: Since each Portfolio diversifies
its assets among various asset classes and investment styles, weak performance
in one market sector may be offset by stronger performance in another. By
reducing the effects of market volatility through diversification, the
Portfolios seek to provide investors with an opportunity for consistent
investment returns. The benefits of this strategy are clear in a volatile market
environment, such as we have experienced over the past several months.
The following report will provide you with more specific information about your
Portfolio's performance and the strategies used by manager Christopher Carabell.
Thank you for choosing a Liberty Funds investment and for the opportunity to
serve your investment needs.
Sincerely,
/s/ Stephen E. Gibson
-----------------------------
Stephen E. Gibson
President
July 17, 2000
Because economic and market conditions change frequently, there can be no
assurance that the trends described above or on the following pages will
continue. Holdings of underlying funds are calculated as a percentage of total
investments. Because the Portfolios are actively managed, there can be no
guarantee that the Portfolios will continue to hold these underlying portfolios
in the future.
Past performance cannot predict future results. Returns and value of an
investment may 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% sales charge for Class A shares for both Counselor Select
Balanced and Counselor Select Growth Portfolio, and 4.75% for Counselor Select
Income Portfolio. It also includes the appropriate Class B contingent deferred
sales charge for the holding period after purchase as follows: through first
year -5%, second year -4%, third year -3%, fourth year -3%, fifth year -2%,
sixth year -1%, thereafter -0% and the Class C contingent deferred sales charge
of 1% for the first year only. Performance results reflect any voluntary waivers
or reimbursement arrangements. Absent these waivers, or reimbursement
arrangements, performance results would have been lower.
Performance for different share classes will vary based on the difference in
sales charges and fees associated with each class.
----------------------------
NOT FDIC | MAY LOSE VALUE
INSURED |------------------
| NO BANK GUARANTEE
----------------------------
<PAGE> 3
PORTFOLIO MANAGER'S REPORT
U.S. EQUITY MARKETS EXPERIENCE DRAMATIC VOLATILITY
U.S. equity markets experienced wide swings in performance as investors shifted
their focus from technology companies with high valuations to companies with
more reasonable valuations and demonstrated earnings. As a result, fund managers
focusing on the value style of investment management outperformed growth fund
managers during the months of March, April and May. The previously
underperforming utility and REIT sectors of the equity market achieved strong
relative performance during the first five months of 2000.
Growth stocks experienced a broad correction beginning in March 2000 with the
technology-heavy NASDAQ Composite Index declining over 30% from March 1 to May
31. Aggressive growth fund managers focusing on smaller technology and Internet
companies experienced even larger declines.
U.S. BOND MARKETS REMAIN CHALLENGING
The fixed-income markets also experienced significant volatility in performance
as investors reacted to economic statistics and Federal Reserve interest rate
moves. The broad fixed-income market's strong performance during February and
March was partially offset by weak performance during April and May. Individual
fund manager performance was significantly impacted by which sector of the
fixed-income market they chose to emphasize. During much of the year,
investment-grade corporate and high-yield bonds performed poorly relative to
U.S. Treasurys and mortgage securities. As a result, fund managers that
overweighted below investment-grade corporate bonds underperformed fund managers
who overweighted U.S. Treasury bonds.
INTERNATIONAL EQUITY MARKETS DECLINE
International equity markets experienced poor performance led by the decline in
Japanese and Pacific Basin (ex-Japan) equity markets. International fund
managers who concentrated in the growth sectors of the market also performed
poorly.
BENEFITS OF DIVERSIFICATION
Uncertainty about which asset classes or investment styles will emerge as market
leaders -- and how long they will remain leaders -- is one reason to own a
diversified portfolio. The Liberty Counselor Portfolios employ a disciplined
investment approach designed to manage market volatility. Each portfolio is
diversified among different mutual funds representing various asset classes,
management styles and across a variety of market segments. Today's volatile
investment markets underscore the importance of maintaining a diversified
portfolio.
/s/ Christopher S. Carabell
-----------------------------------
Christopher S. Carabell
Christopher S. Carabell is responsible for the management of the Portfolios. Mr.
Carabell is a Senior Vice President of Investments and joined Liberty Asset
Management Company, the Advisor, in 1996.
Equity Investments are affected by stock market fluctuations that occur in
response to economic and business developments; stock of smaller companies pose
special risks, including possible illiquidity and greater price volatility than
stocks of larger, more-established companies; 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.
The asset allocation percentages for each model represent target ratios that may
vary over time. Please refer to the prospectus for additional details.
BROAD-BASED MARKET INDEX PERFORMANCE 11/30/99 - 5/31/00(1)
<TABLE>
<S> <C>
S&P 500 INDEX 2.90%
LEHMAN BROTHERS AGGREGATE BOND INDEX 1.38%
MSCI-EAFE INDEX 0.61%
</TABLE>
(1) The Counselor 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 is a broad based index that tracks the performance
of foreign 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
LIBERTY COUNSELOR INCOME PORTFOLIO
LIBERTY COUNSELOR INCOME PORTFOLIO SEEKS CURRENT INCOME WITH THE POTENTIAL FOR
CAPITAL APPRECIATION. IT IS THE MOST CONSERVATIVE LIBERTY COUNSELOR PORTFOLIO,
INVESTING PRIMARILY IN BOND FUNDS THAT INVEST IN MORTGAGE, U.S. GOVERNMENT,
CORPORATE AND HIGH-YIELD BONDS. THE MANAGER IS 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 the Liberty Counselor Income Fund returned positive 2.37%
during the six-month period ended May 31, 2000, without a sales charge. This
compares favorably with the Lehman Brothers Aggregate Bond Index, which returned
1.38% over the same time period.
Performance was helped by the portfolio's 20% target allocation to equity fund
investments. Within the equity allocation, the strong performance of the Liberty
Growth Stock Fund in the beginning of the period was augmented by strong
performance for the Liberty Value Fund during the April/May market correction.
The Liberty Utilities Fund and the Liberty Real Estate Fund helped performance
with returns of 10.72% and 10.71%, respectively, for the six-month time period
ending May 31, 2000. The Liberty Contrarian Income Fund, previously added on
September 17, 1999, was the best performing bond fund within the portfolio
during the six-month period. No funds were added or removed from the portfolio
during this time period.
Looking ahead, we expect volatility to continue as concerns about the economy
and inflation continue to influence 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
current income and moderate capital appreciation.
NET ASSET VALUE AS OF 5/31/00
<TABLE>
<CAPTION>
<S> <C>
Class A $ 9.40
Class B $ 9.40
Class C $ 9.43
</TABLE>
DISTRIBUTION DECLARED PER SHARE FROM 11/30/99 - 5/31/00
<TABLE>
<CAPTION>
<S> <C>
Class A $ 0.332
Class B $ 0.296
Class C $ 0.296
</TABLE>
PORTFOLIO HOLDINGS AS OF 5/31/00
FIXED-INCOME
<TABLE>
<CAPTION>
<S> <C>
Liberty Intermediate Government Fund 31.54%
Stein Roe Intermediate Bond Fund 25.80%
Liberty Contrarian Income Fund 14.85%
Liberty Strategic Income Fund 9.36%
</TABLE>
EQUITY
<TABLE>
<CAPTION>
<S> <C>
Stein Roe Growth Stock Fund 3.54%
Liberty Utilities Fund 4.95%
Liberty Value Fund 5.20%
Liberty Real Estate Fund 4.76%
</TABLE>
Underlying funds are calculated as a percentage of the Portfolio's net total
investments. 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
AVERAGE ANNUAL TOTAL RETURNS AS OF 5/31/00
<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>
6 Months (cumulative) 2.37% (2.50)% 2.09% (2.86)% 2.08% 1.09%
1 Year 2.48% (2.39)% 1.72% (3.09)% 1.71% 0.74%
Life of Fund 1.20% (2.41)% 0.45% (2.37)% 0.67% 0.67%
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS AS OF 3/31/00
<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>
6 Months (cumulative) 3.99% (0.95)% 3.50% (1.50)% 3.59% 2.59%
1 Year 3.19% (1.71)% 2.31% (2.55)% 2.82% 1.85%
Life of Fund 1.82% (2.32)% 0.98% (2.29)% 1.32% 1.32%
</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% sales charge for Class A shares, the appropriate Class B
contingent deferred sales charge for the holding period after purchase as
follows: through first year -5%, second year -4%, third year -3%, fourth year
-3%, fifth year -2%, sixth year -1%, thereafter -0% and the Class C contingent
deferred sales charge of 1% for the first year only. Performance for different
share classes 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
LIBERTY COUNSELOR BALANCED PORTFOLIO
LIBERTY COUNSELOR 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 AND INTERNATIONAL STOCKS,
AS WELL AS U.S. GOVERNMENT, CORPORATE AND HIGH-YIELD BONDS.
Class A shares of the Liberty Counselor Balanced Portfolio generated a total
return of 4.69%, without a sales charge, during the six-month period ended May
31, 2000. This compares favorably with the Lehman Brothers Aggregate Bond Index,
which returned 1.38% over the period and the S&P 500 Index, a broad measure of
U.S. common stock performance, which gained 2.90%.
Performance was helped by the portfolio's allocation to equity fund investments.
Within the equity allocation, the strong performance of the Stein Roe Growth
Stock Fund in the beginning of the period was augmented by strong performance
for the Liberty Value Fund during the market correction in April and May. The
10% target allocation to international equities hurt performance during the time
period. Liberty Newport Asia Pacific Fund was the weakest performing fund. The
Liberty Contrarian Income Fund, added on September 17, 1999, was the best
performing bond fund within the portfolio during the six-month period. No funds
were added or removed from the portfolio during the time period.
Looking ahead, we expect volatility to continue as concerns about the economy
and inflation continue to influence the fixed-income markets. However, we
believe the Portfolio's diversification among various asset classes and
investment styles should provide investors with the potential for current income
and capital appreciation.
NET ASSET VALUE PER SHARE AS OF 5/31/00
<TABLE>
<CAPTION>
<S> <C>
Class A $ 10.60
Class B $ 10.60
Class C $ 10.62
Class Z $ 10.68
</TABLE>
DISTRIBUTIONS DECLARED PER SHARE AS OF 11/30/99 - 5/31/00
<TABLE>
<CAPTION>
<S> <C>
Class A $ 0.214
Class B $ 0.173
Class C $ 0.173
Class Z $ 0.227
</TABLE>
PORTFOLIO HOLDINGS AS OF 5/31/00
FIXED-INCOME
<TABLE>
<CAPTION>
<S> <C>
Liberty Intermediate Government Fund 15.12%
Stein Roe Intermediate Bond Fund 15.06%
Liberty Contrarian Income Fund 10.08%
Liberty Strategic Income Fund 4.70%
</TABLE>
EQUITY
<TABLE>
<CAPTION>
<S> <C>
Liberty Value Fund 22.51%
Stein Roe Growth Stock Fund 19.19%
Liberty Newport International Equity Fund 6.47%
Liberty Small-Cap Value Fund 5.03%
Liberty Newport Asia Pacific Fund 1.84%
</TABLE>
Underlying funds are calculated as a percentage of the Portfolio's total
investments. 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.
4
<PAGE> 7
PERFORMANCE INFORMATION
AVERAGE ANNUAL TOTAL RETURNS AS OF 5/31/00
<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>
Six Months
(cumulative) 4.69% (1.33)% 4.29% 0.29% 4.39% 3.39% 4.78%
1 Year 7.05% 0.89% 6.34% 2.34% 6.33% 5.33% 7.97%
Life of Fund 7.26% 2.62% 6.61% 4.41% 6.75% 6.75% 7.95%
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS AS OF 3/31/00
<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>
Six Months
(cumulative) 11.11% 4.72% 10.90% 6.90% 10.88% 9.88% 12.05%
1 Year 11.29% 4.89% 10.44% 6.44% 10.53% 9.53% 12.23%
Life of Fund 10.78% 5.32% 10.09% 7.57% 10.26% 10.26% 11.57%
</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 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% sales charge for Class A shares, the appropriate Class B
contingent deferred sales charge for the holding period after purchase as
follows: through first year -5%, second year -4%, third year -3%, fourth year
-3%, fifth year -2%, sixth year -1%, thereafter -0% and the Class C contingent
deferred sales charge of 1% for the first year only. Performance for different
share classes 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.
5
<PAGE> 8
LIBERTY COUNSELOR GROWTH PORTFOLIO
LIBERTY COUNSELOR GROWTH PORTFOLIO SEEKS LONG-TERM GROWTH OF CAPITAL. IT OFFERS
THE HIGHEST RETURN AND RISK POTENTIAL OF THE LIBERTY COUNSELOR 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 Liberty Counselor Growth Portfolio returned 5.83%, without
a sales charge, during the six-month period ended May 31, 2000. This compares
favorably to the S&P 500 Index, a broad measure of U.S. stock performance, which
gained 2.90% over the same time period.
Within the equity allocation, strong performance of the Stein Roe Growth Stock
Fund in the beginning of the period was augmented by strong performance for the
Liberty Value Fund during the April/May market correction. The 20% target
allocation to international equities hurt performance during this time period.
Liberty Newport Asia Pacific Fund was the weakest performing Fund in the
portfolio. No funds were added or removed from the portfolio during the time
period.
Looking ahead, we expect volatility to continue as concerns about the economy
and inflation continue to influence the fixed-income markets. However, we
believe the Portfolio's diversification among various asset classes and
investment styles should provide growth-oriented investors with the potential
for capital appreciation.
NET ASSET VALUE AS OF 5/31/00
<TABLE>
<CAPTION>
<S> <C>
Class A $ 11.32
Class B $ 11.31
Class C $ 11.30
Class Z $ 11.34
</TABLE>
PORTFOLIO HOLDINGS AS OF 5/31/00
FIXED-INCOME
<TABLE>
<CAPTION>
<S> <C>
Liberty Strategic Income Fund 9.23%
Stein Roe Intermediate Bond Fund 9.45%
</TABLE>
EQUITY
<TABLE>
<CAPTION>
<S> <C>
Liberty Value Fund 29.64%
Stein Roe Growth Stock Fund 23.67%
Liberty Newport International Equity Fund 13.68%
Liberty Small-Cap Value Fund 9.65%
Liberty Newport Asia Pacific Fund 4.68%
</TABLE>
Underlying funds are calculated as a percentage of the Portfolio's total
investments. 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
AVERAGE ANNUAL TOTAL RETURNS AS OF 5/31/00
<TABLE>
<CAPTION>
Share Class(1) A B C Z*
-----------------------------------------------------------------------------------------------------
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> <C>
Six Months
(cumulative) 5.83% (0.26%) 5.59% 0.59% 5.60% 4.60% 6.16%
1 Year 10.37% 4.03% 9.63% 4.63% 9.74% 8.74% 11.04%
Life of Fund 11.48% 6.66% 10.84% 7.94% 10.76% 10.76% 11.98%
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS AS OF 3/31/00
<TABLE>
<CAPTION>
Share Class(1) A B C Z*
-----------------------------------------------------------------------------------------------------
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> <C>
Six Months
(cumulative) 16.48% 9.78% 16.24% 11.24% 16.25% 15.25% 16.95%
1 Year 17.62% 10.86% 17.04% 12.04% 17.05% 16.05% 18.32%
Life of Fund 16.71% 10.96% 16.11% 12.78% 16.03% 16.03% 17.30%
</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 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% sales charge for Class A shares, the appropriate Class B
contingent deferred sales charge for the holding period after purchase as
follows: through first year -5%, second year -4%, third year -3%, fourth year
-3%, fifth year -2%, sixth year -1%, thereafter -0% and the Class C contingent
deferred sales charge of 1% for the first year only. Performance for different
share classes will vary based on differences in sales charges and fees
associated with each class.
Performance results reflect any voluntary waivers or reimbursements of Fund
expenses by the Advisor or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower.
7
<PAGE> 10
INVESTMENT PORTFOLIO
May 31, 2000 (Unaudited, in thousands)
<TABLE>
<CAPTION>
LIBERTY COUNSELOR INCOME PORTFOLIO (LCIP)
--------------------------------------------------------------------------------
MUTUAL FUNDS - 101.4% SHARES VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
Liberty Intermediate Government
Fund, Class Z 416 $ 2,560
Stein Roe Intermediate Bond Fund 254 2,094
Liberty Contrarian Income Fund, Class Z 122 1,205
Liberty Strategic Income Fund, Class Z 122 760
Liberty Real Estate
Fund, Class Z 39 386
Liberty Value Fund, Class Z 35 422
Liberty Utilities Fund, Class Z 17 402
Stein Roe Growth Stock Fund 5 287
TOTAL INVESTMENTS
(cost of $8,388) (a) 8,116
=======
OTHER ASSETS & LIABILITIES, NET - (1.4)% (110)
=======
NET ASSETS - 100.0% $ 8,006
=======
</TABLE>
NOTES TO INVESTMENT PORTFOLIO:
(a) Cost for federal income tax purposes is the same.
<TABLE>
<CAPTION>
LIBERTY COUNSELOR BALANCED PORTFOLIO (LCBP)
--------------------------------------------------------------------------------
MUTUAL FUNDS - 100.5% SHARES VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
Liberty Value Fund, Class Z 522 $ 6,276
Stein Roe Growth Stock Fund 95 5,353
Liberty Intermediate Government
Fund, Class Z 686 4,218
Stein Roe Intermediate Bond Fund 509 4,201
Liberty Contrarian Income
Fund, Class Z 284 2,811
Liberty Newport International Equity
Fund, Class Z 131 1,805
Liberty Small-Cap Value Fund, Class Z 44 1,403
Liberty Strategic Income Fund, Class Z 210 1,311
Liberty Newport Asia Pacific Fund, Class Z 22 514
TOTAL INVESTMENTS
(cost of $27,340) (a) 27,892
========
OTHER ASSETS & LIABILITIES, NET - (0.5)% (132)
========
NET ASSETS - 100.0% $ 27,760
========
</TABLE>
NOTES TO INVESTMENT PORTFOLIO:
(a) Cost for federal income tax purposes is the same.
<TABLE>
<CAPTION>
LIBERTY COUNSELOR GROWTH PORTFOLIO (LCGP)
--------------------------------------------------------------------------------
MUTUAL FUNDS - 97.8% SHARES VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
Liberty Value Fund, Class Z 704 $ 8,465
Stein Roe Growth Stock Fund 120 6,758
Liberty Newport International Equity Fund,
Class Z 284 3,905
Liberty Small Cap Value Fund, Class Z 87 2,754
Stein Roe Intermediate Bond Fund 327 2,699
Liberty Strategic Income Fund, Class Z 422 2,634
Liberty Newport Asia Pacific Fund, Class Z 57 1,337
TOTAL INVESTMENTS
(cost of $27,173) (a) 28,552
=======
</TABLE>
<TABLE>
<CAPTION>
SHORT-TERM OBLIGATIONS - 2.1% PAR
------------------------------------------------------------------------------
<S> <C> <C>
Federal Home Loan Mortgage Co.,6.30% (b)6/1/00 $ 622 622
-------
OTHER ASSETS & LIABILITIES, NET - 0.1% 13
=======
NET ASSETS - 100.0% $29,187
=======
</TABLE>
NOTES TO INVESTMENT PORTFOLIO:
(a) Cost for federal income tax purposes is the same.
(b) Rate represents yield at date of purchase.
8 See notes to financial statements.
<PAGE> 11
STATEMENT OF ASSETS AND LIABILITIES
May 31, 2000
(Unaudited, in thousands except for per share amounts and footnotes)
<TABLE>
<CAPTION>
LCIP LCBP LCGP
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments at cost $ 8,338 $ 27,340 $ 27,173
Unrealized appreciation (depreciation) (272) 552 1,379
------------- -------------- -----------
Investments at value 8,116 27,892 28,552
Short-term obligations -- -- 622
Receivable for:
Dividends $23 $18 $ 5
Fund shares sold -- 1 12
Expense reimbursement due from
Advisor/Administrator 10 8 25
Other 5 38 2 29 1 43
--- ------------- --- -------------- --- -----------
Total Assets 8,154 27,921 29,217
LIABILITIES
Payable due to custodian bank 74 99 --
Payable for:
Fund shares repurchased 45 51 21
Investments purchased 13 -- --
Distributions 11 -- --
Accrued:
Distribution fee -- Class B -- 1 --
Distribution fee -- Class C 1 -- --
Transfer agent fee 1 1 1
Other 3 9 8
--- --- ---
Total Liabilities 148 161 30
------------- -------------- -----------
NET ASSETS $ 8,006 $ 27,760 $ 29,187
------------- -------------- -----------
Net asset value & redemption price per share $ 9.40 $ 10.60 $ 11.32
------------- -------------- -----------
-- Class A (a) ($3,491/371) ($9,127/861) ($10,449/923)
Maximum offering price per share $ 9.87 $ 11.25 $ 12.01
------------- -------------- -----------
-- Class A (b) ($9.40/0.9525) ($10.60/0.9425) ($11.32/0.9425)
Net asset value & offering price per share $ 9.40 $ 10.60 $11.31
------------- -------------- -----------
-- Class B (a) ($2,622/279) ($12,868/1,213) ($12,205/1,079)
Net asset value & offering price per share $ 9.43 $ 10.62 $ 11.30
------------- -------------- -----------
-- Class C (a) ($1,893/201) ($5,181/488) ($5,721/506)
Net asset value, offering & redemption price per share N/A $ 10.68 $ 11.34
------------- -------------- -----------
-- Class Z N/A ($584/55) ($812/71)
COMPOSITION OF NET ASSETS
Capital paid in $ 8,384 $ 26,580 $ 27,099
Undistributed net investment income 84 533 518
Accumulated net realized gain (loss) (190) 95 191
Net unrealized appreciation (depreciation) (272) 552 1,379
------------- -------------- -----------
$ 8,006 $ 27,760 $ 29,187
============= ============== ===========
</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 SIX MONTHS ENDED MAY 31, 2000
(Unaudited, in thousands)
<TABLE>
<CAPTION>
LCIP LCBP LCGP
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividend $ 371 $ 973 $ 804
Interest 3 5 12
----- ------ ------
374 978 816
EXPENSES
Management fee $ (a) $ 1 $ 1
Administration fee (a) (a) (a)
Service fee -- Class A, Class B, Class C 11 35 34
Distribution fee -- Class B 11 49 40
Distribution fee -- Class C 8 22 22
Transfer agent fee 1 3 6
Bookkeeping fee 2 2 2
Custodian fee 2 3 1
Audit fee 4 4 4
Registration fee 27 30 28
Reports to shareholders 2 1 2
Legal fee -- -- (a)
Other 3 1 4
------ ---- ----
71 151 144
Fees and expenses waived or borne
by the Advisor/Administrator (39) 32 (38) 113 (41) 103
------ ----- ---- ------ ---- ------
Net Investment Income 342 865 713
----- ------ ------
NET REALIZED & UNREALIZED GAIN (LOSS)
ON PORTFOLIO POSITIONS
Net realized gain (loss) (97) 239 191
Net change in unrealized appreciation/
depreciation during the period (39) 151 552
----- ------ ------
Net Gain (Loss) (136) 390 743
----- ------ ------
Increase in Net Assets from Operations $ 206 $1,255 $1,456
===== ====== ======
</TABLE>
(a) Rounds to less than one.
10 See notes to financial statements.
<PAGE> 13
STATEMENT OF CHANGES IN NET ASSETS
(In thousands)
<TABLE>
<CAPTION>
(Unaudited) (Unaudited) (Unaudited)
Six Months Period Six Months Period Six Months Period
Ended Ended Ended Ended Ended Ended
May 31, November 30, May 31, November 30, May 31, November 30,
-----------------------------------------------------------------------------------------------------------------------------------
LCIP LCBP LCGP
-----------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS 2000 1999(a) 2000 1999(a)(b) 2000 1999(a)(b)
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income $ 342 $ 300 $ 865 $ 359 $ 713 $ 136
Net realized gain (loss) (97) (93) 239 (144) 191 108
Net change in unrealized appreciation/depreciation (39) (233) 151 401 552 827
-------- -------- -------- -------- -------- --------
Net Increase (Decrease) from Operations 206 (26) 1,255 616 1,456 1,071
Distributions:
From net investment income -- Class A (146) (173) (181) (108) (160) --
From net realized gains -- Class A -- -- -- -- (41) --
From net investment income -- Class B (88) (71) (212) (80) (95) --
From net realized gains -- Class B -- -- -- -- (40) --
From net investment income -- Class C (64) (67) (102) (53) (62) --
From net realized gains -- Class C -- -- -- -- (26) --
From net investment income -- Class Z -- -- (11) -- (12) --
From net realized gains -- Class Z -- -- -- -- (3) --
-------- -------- -------- -------- -------- --------
(92) (337) 749 375 1,017 1,071
-------- -------- -------- -------- -------- --------
Fund Share Transactions:
Receipts for shares sold -- Class A 55 5,040 466 9,348 1,392 8,789
Value of distributions reinvested -- Class A 97 126 178 105 202 --
Cost of shares repurchased -- Class A (1,416) (200) (538) (907) (720) (69)
-------- -------- -------- -------- -------- --------
(1,264) 4,966 106 8,546 874 8,720
-------- -------- -------- -------- -------- --------
Receipts for shares sold -- Class B 105 3,249 1,972 13,362 4,040 8,801
Value of distributions reinvested -- Class B 73 62 205 79 134 --
Cost of shares repurchased -- Class B (670) (82) (2,540) (629) (1,062) (285)
-------- -------- -------- -------- -------- --------
(492) 3,229 (363) 12,812 3,112 8,516
-------- -------- -------- -------- -------- --------
Receipts for shares sold -- Class C 41 3,044 368 7,953 194 7,940
Value of distributions reinvested -- Class C 57 56 95 51 87 --
Cost of shares repurchased -- Class C (640) (562) (2,072) (1,409) (656) (2,441)
-------- -------- -------- -------- -------- --------
(542) 2,538 (1,609) 6,595 (375) 5,499
-------- -------- -------- -------- -------- --------
Receipts for shares sold -- Class Z -- -- 173 468 243 577
Value of distributions reinvested -- Class Z -- -- 11 -- 15 --
Cost of shares repurchased -- Class Z -- -- (99) (4) (80) (2)
-------- -------- -------- -------- -------- --------
-- -- 85 464 178 575
-------- -------- -------- -------- -------- --------
Net Increase (Decrease) from Fund Share Transactions (2,298) 10,733 (1,781) 28,417 3,789 23,310
-------- -------- -------- -------- -------- --------
Total Increase (Decrease) (2,390) 10,396 (1,032) 28,792 6,262 24,381
NET ASSETS
Beginning of period 10,396 -- 28,792 -- 24,381 --
-------- -------- -------- -------- -------- --------
End of period $ 8,006 $ 10,396 $ 27,760 $ 28,792 $ 30,643 $ 24,381
-------- -------- -------- -------- -------- --------
Including undistributed net investment income $ 84 $ 40 $ 533 $ 174 $ 518 $ 199
-------- -------- -------- -------- -------- --------
NUMBER OF FUND SHARES
Sold -- Class A (9) 513 44 930 125 849
Issued for distributions reinvested -- Class A 10 13 17 10 19 --
Repurchased -- Class A (135) (21) (51) (89) (63) (6)
-------- -------- -------- -------- -------- --------
(134) 505 10 851 80 843
-------- -------- -------- -------- -------- --------
Sold -- Class B 11 333 187 1,302 359 828
Issued for distributions reinvested -- Class B 8 7 19 8 12 --
Repurchased -- Class B (71) (9) (241) (62) (94) (27)
-------- -------- -------- -------- -------- --------
(52) 331 (35) 1,248 278 801
-------- -------- -------- -------- -------- --------
Sold -- Class C 4 310 35 773 17 766
Issued for distributions reinvested -- Class C 6 6 9 5 8 --
Repurchased -- Class C (66) (59) (197) (137) (58) (227)
-------- -------- -------- -------- -------- --------
(56) 257 (153) 641 (33) 539
-------- -------- -------- -------- -------- --------
Sold -- Class Z -- -- 16 47 22 55
Issued for distributions reinvested -- Class Z -- -- 1 -- 1 --
Repurchased -- Class Z -- -- (9) (c) (7) (c)
-------- -------- -------- -------- -------- --------
-- -- 8 47 16 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
May 31, 2000 (Unaudited)
NOTE 1. INTERIM FINANCIAL STATEMENTS
In the opinion of management of Liberty Counselor Portfolios, (formerly Colonial
Counselor Select Portfolios), (the Funds), each a series of Liberty Funds Trust
IV, the accompanying financial statements contain all normal and recurring
adjustments necessary for the fair presentation of the financial position of the
Funds at May 31, 2000, and the results of their operations, the changes in their
net assets and their financial highlights for the period then ended.
NOTE 2. ACCOUNTING POLICIES
ORGANIZATION:
The Funds are diversified portfolios of Massachusetts business trusts,
registered under the Investment Company Act of 1940, as amended, as open-end,
management investment companies. The Liberty Counselor Income Portfolio,
(formerly Colonial Counselor Select Income Portfolio), (LCIP) seeks current
income. The Liberty Counselor Balanced Portfolio, (formerly Colonial Counselor
Select Balanced Portfolio), (LCBP) seeks a balance of long term growth of
capital and current income. The Liberty Counselor Growth Portfolio, (formerly
Colonial Counselor Select Growth Portfolio), (LCGP) 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. LCIP offers three classes of
shares: Class A, Class B and Class C. LCBP and LCGP 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
as follows:
<TABLE>
<CAPTION>
CONVERTS TO
ORIGINAL PURCHASE CLASS A SHARES
--------------------------------------------------------------------------------
<S> <C>
Less than $250,000 8 years
$250,000 to less than $500,000 4 years
$500,000 to less than $1,000,000 3 years
</TABLE>
Class C shares are subject to a contingent deferred sales charge on redemptions
made within one year after purchase and an annual distribution fee. 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 (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.
DISTRIBUTIONS 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.
12
<PAGE> 15
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
-------------------------------------------------------------------------------
MAY 31, 2000 (Unaudited)
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 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 3. 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 Fund 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 fee at the annual rate of 0.01% annually of each Fund's average
net assets.
ADMINISTRATION FEE:
Colonial Management Associates, Inc. (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 at the rate of 0.0025% annually of
each Funds' 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% 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 six months
ended May 31, 2000, each Fund has been advised that the Distributor retained net
underwriting discounts on LCIP, LCBP and LCGP of none, $2,719 and $4,486
respectively, on sales of the Funds' Class A shares and received no contingent
deferred sales charges (CDSC) on Class A share redemptions, and $4,677, $36,305,
and $12,484 on Class B share redemptions, and $1,031,409 none and $649 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 each Fund's net assets as of the
20th of each month. The plan also requires the payment of a distribution fee to
the Distributor equal to 0.75% annually of the average net assets attributable
to Class B 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 has 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
Fund's assets.
The Funds have an agreement with their custodian bank under which custodian fees
were reduced by balance credits on LCIP, LCBP and LCGP of $104, $288 and $190,
respectively, during the six months ended May 31, 2000. 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 4. INVESTMENT ACTIVITY
For the six months ended May 31, 2000, purchases and sales of investments, other
than short-term obligations were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
--------------------------------------------------------------
<S> <C> <C>
LCIP $ 408,611 $2,500,000
LCBP $1,237,953 $2,385,393
LCGP $4,165,287 $1,000,000
</TABLE>
Unrealized appreciation (depreciation) at May 31, 2000, based on the cost of
investments for both financial statement and federal income tax purposes was:
<TABLE>
<CAPTION>
LCIP LCBP LCGP
----------------------------------------------------------------------------
<S> <C> <C> <C>
Gross unrealized
appreciation $92,362 $1,432,284 $2,155,302
Gross unrealized
depreciation (364,291) (880,269) (775,877)
----------- ----------- -----------
Net unrealized appreciation
(depreciation) $(271,929) $552,015 $1,379,425
----------- ----------- -----------
</TABLE>
CAPITAL LOSS CARRYFORWARD:
At November 30, 1999, capital loss carryforwards available (to the extent
provided in regulations) to offset future realized gains were approximately as
follows:
<TABLE>
<CAPTION>
YEAR OF CAPITAL LOSS
EXPIRATION CARRYFORWARDS
-----------------------------------------------------------------
<S> <C> <C>
LCIP 2007 $65,000
LCBP 2007 $68,000
</TABLE>
13
<PAGE> 16
FINANCIAL HIGHLIGHTS
-------------------------------------------------------------------------------
Selected data for a share of each class outstanding throughout each period are
as follows:
<TABLE>
<CAPTION>
LIBERTY COUNSELOR INCOME PORTFOLIO
-----------------------------------------------------------------------------------------------------
(UNAUDITED)
SIX MONTHS ENDED MAY 31, 2000
CLASS A CLASS B CLASS C
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.510 $ 9.500 $ 9.530
-------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (a)(b) 0.372 0.336 0.336
Net realized and unrealized loss (0.150) (0.140) (0.140)
-------- -------- --------
Total from Investment Operations 0.222 0.196 0.196
-------- -------- --------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.332) (0.296) (0.296)
-------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 9.400 $ 9.400 $ 9.430
======== ======== ========
Total return (c)(d)(e) 2.37% 2.09% 2.08%
======== ======== ========
RATIOS TO AVERAGE NET ASSETS
Expenses (f)(g) 0.30% 1.05% 1.05%
Net investment income (f)(g) 7.85% 7.10% 7.10%
Fees and expenses waived or borne by the
Advisor/Administrator (f)(g) 0.85% 0.85% 0.85%
Portfolio turnover (e) 4% 4% 4%
Net assets at end of period (000) $ 3,491 $ 2,622 $ 1,893
(a) Net of fees and expenses waived or borne
by the Advisor/Administrator which amounted to: $ 0.040 $ 0.040 $ 0.040
(b) Per share data was calculated using average shares outstanding during
the period.
(c) Total return at net asset value assuming all distributions reinvested
and no initial sales charge or 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) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
(g) Annualized.
</TABLE>
<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
(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.
</TABLE>
14
<PAGE> 17
FINANCIAL HIGHLIGHTS
-------------------------------------------------------------------------------
Selected data for a share of each class outstanding throughout each period are
as follows:
<TABLE>
<CAPTION>
LIBERTY COUNSELOR BALANCED PORTFOLIO
-------------------------------------------------------------------------------------------------------------------------------
(UNAUDITED)
SIX MONTHS ENDED MAY 31, 2000
CLASS A CLASS B CLASS C CLASS Z
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.330 $10.330 $10.340 $10.410
------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (a)(b) 0.346 0.306 0.307 0.359
Net realized and unrealized gain 0.138 0.137 0.146 0.138
------- ------- ------- -------
Total from Investment Operations 0.484 0.443 0.453 0.497
------- ------- ------- -------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.214) (0.173) (0.173) (0.227)
------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $10.600 $10.600 $10.620 $10.680
======= ======= ======= =======
Total return (c)(d)(e) 4.69% 4.29% 4.39% 4.78%
======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS
Expenses (f)(g) 0.30% 1.05% 1.05% 0.05%
Net investment income (f)(g) 6.55% 5.80% 4.98% 6.80%
Fees and expenses waived or borne by the
Advisor/Administrator (f)(g) 0.26% 0.26% 0.26% 0.26%
Portfolio turnover (e) 4% 4% 4% 4%
Net assets at end of period (000) $9,127 $12,868 $5,181 $584
(a) Net of fees and expenses waived or borne by
the Advisor/Administrator which amounted to: $0.014 $0.014 $0.014 $0.014
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming all distributions reinvested and no
initial sales charge or 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) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
(g) Annualized.
</TABLE>
<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
(b) The Fund commenced investment operations on January 29, 1999.
(c) Class Z shares were initially offered on September 29, 1999. Per share data
reflects 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.
</TABLE>
15
<PAGE> 18
FINANCIAL HIGHLIGHTS
-------------------------------------------------------------------------------
Selected data for a share of each class outstanding throughout each period are
as follows:
<TABLE>
<CAPTION>
LIBERTY COUNSELOR GROWTH PORTFOLIO
-----------------------------------------------------------------------------------------------------------------------------------
(UNAUDITED)
SIX MONTHS ENDED MAY 31, 2000
CLASS A CLASS B CLASS C CLASS Z
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.930 $10.870 $10.860 $10.940
------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (a)(b) 0.316 0.274 0.274 0.330
Net realized and unrealized gain 0.312 0.328 0.328 0.333
------- ------- ------- -------
Total from Investment Operations 0.628 0.602 0.602 0.663
------- ------- ------- -------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.190) (0.114) (0.114) (0.215)
From net realized gains (0.048) (0.048) (0.048) (0.048)
------- ------- ------- -------
Total Distributions
Declared to Shareholders (0.238) (0.162) (0.162) (0.263)
------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $11.320 $11.310 $11.300 $11.340
======= ======= ======= =======
Total return (c)(d)(e) 5.83% 5.59% 5.60% 6.16%
======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS
Expenses (f)(g) 0.30% 1.05% 1.05% 0.05%
Net investment income (f)(g) 5.61% 4.86% 4.86% 5.86%
Fees and expenses waived or borne by the
Advisor/Administrator (f)(g) 0.30% 0.30% 0.30% 0.30%
Portfolio turnover (e) 4% 4% 4% 4%
Net assets at end of period (000) $10,449 $12,205 $5,721 $812
(a) Net of fees and expenses waived or borne
by the Advisor/Administrator which amounted to: $0.017 $0.017 $0.017 $0.017
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming all distributions reinvested and no
initial sales charge or 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) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
(g) Annualized.
</TABLE>
<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) 0.132 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
(b) The Fund commenced investment operations on January 29, 1999.
(c) Class Z shares were initially offered on September 29, 1999. Per share data
reflects 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.
</TABLE>
16
<PAGE> 19
TRUSTEES & TRANSFER AGENT
-------------------------------------------------------------------------------
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
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 Liberty Counselor 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 Liberty Counselor 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> 20
CHOOSE LIBERTY
-------------------------------------------------------------------------------
BECAUSE NO SINGLE INVESTMENT MANAGER CAN BE ALL THINGS TO ALL INVESTORS.(SM)
[Liberty Funds Graphic]
Liberty's mutual funds are offered by prospectus through Liberty Funds
Distributor, Inc.
That's why each of these affiliated managers has excelled in a particular
investment style. These managers not only specialize in a distinct investment
style, they hold a passion for their style along with a demonstrated track
record.
Each of these managers is a member of the Liberty Financial Companies (NYSE: L),
a diversified asset accumulation and management organization with approximately
$61 billion in assets under management for more than 1.7 million investors. Many
of the affiliated managers' products are offered by prospectus through Liberty
Funds Distributor, Inc.
Ask your financial advisor to help you develop an investment strategy that
blends the complementary disciplines of different managers into a well-balanced
program tailored to your goals.
LIBERTY COUNSELOR PORTFOLIOSSM SEMIANNUAL REPORT, MAY 31, 2000
-------------------------------------------------------------------------------
[LIBERTY FUNDS LOGO] [STAMP GRAPHIC]
CCS-03/774-B-0600(7/00)00/116
