COLONIAL TRUST II /, 485APOS, 1996-03-20

COLONIAL TRUST II /
485APOS, 1996-03-20

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Registration Numbers: 2-66976
811-3009
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ X ]

Pre-Effective Amendment No. [ ]

Post-Effective Amendment No. 25 [ X ]

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ X ]

Amendment No. 25 [ X ]

COLONIAL TRUST II
(Exact Name of Registrant as Specified in Charter)

One Financial Center, Boston, Massachusetts 02111
(Address of Principal Executive Offices)

(617) 426-3750
(Registrant's Telephone Number, Including Area Code)

Name and Address of Agent for Service: Copy to:

Arthur O. Stern, Esquire Peter MacDougall, Esquire
Colonial Management Associates, Inc. Ropes & Gray
One Financial Center One International Place
Boston, Massachusetts 02111 Boston, Massachusetts 02110

It is proposed that this filing will become effective (check
appropriate box):

[ ] immediately upon filing pursuant to paragraph (b)
[ ] on [date] pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on [date] pursuant to paragraph (a)(1) of Rule 485
[ X ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485

If appropriate check the following box:

[ ] this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.

DECLARATION

The Registrant has registered an indefinite number of its shares
of beneficial interest under the Securities Act of 1933 pursuant
to Rule 24f-2 under the Investment Company Act of 1940 and on or
about October 30, 1995, the Registrant filed the Rule 24f-2
Notice for the Registrant's most recent fiscal year ended
August 31, 1995.

COLONIAL TRUST II

Cross Reference Sheet (Colonial Newport Japan Fund)(Classes
A,B,D)

Item Number of Form N-1A Prospectus Location or Caption

Part A

1. Cover Page

2. Summary of Expenses

3. Not Applicable

4. Organization and History;
The Fund's Investment
Objective; How the Fund
Pursues Its Objective and
Certain Risk Factors

5. Cover Page; The Fund's
Investment Objective; How
the Fund is Managed;
Organization and History;
Back Cover

6. Organization and History;
Distributions and Taxes;
How to Buy Shares

7. Summary of Expenses; How
to Buy Shares; How the
Fund Values Its Shares;
12b-1 plans; Back Cover

8. How to Sell Shares; How
to Exchange Shares;
Telephone Transactions

9. Not applicable

June 3, 1996

COLONIAL NEWPORT JAPAN FUND

PROSPECTUS

BEFORE YOU INVEST

Colonial Management Associates, Inc. (Administrator) and your full-service
financial adviser want you to understand both the risks and benefits of mutual
fund investing.

While mutual funds offer significant opportunities and are professionally
managed, they also carry risks including possible loss of principal. Unlike
savings accounts and certificates of deposit, mutual funds are not insured or
guaranteed by any financial institution or government agency.

Please consult your full-service financial adviser to determine how investing in
this mutual fund may suit your unique needs, time horizon and risk tolerance.

Colonial Newport Japan Fund (Fund), a diversified portfolio of Colonial Trust II
(Trust), an open-end management investment company, seeks capital appreciation
by investing primarily in equity securities of Japanese companies.

The Fund is managed by Newport Fund Management, Inc. (Adviser), an investment
adviser since 1984 and an affiliate of the Administrator.

The Fund currently is structured as a traditional mutual fund investing in
individual securities. The Trustees have approved conversion of the Fund to the
master/feeder structure upon resolution by the Administrator of several issues
regarding the operation of the Fund after such conversion. Such conversion is
anticipated to occur prior to December 31, 1996. Shareholders of the Fund will
not have an opportunity to vote on such conversion. Upon conversion to the
master/feeder structure, the Fund would seek to achieve its objective by
investing all of its assets in another open-end management investment company
managed by the Adviser and having the same objective and investment policies as
the Fund.

XX-X-X

This Prospectus explains concisely what you should know before investing in the
Fund. Read it carefully and retain it for future reference. More detailed
information about the Fund is in the June 3, 1996 Statement of Additional
Information which has been filed with the Securities and Exchange Commission and
is obtainable free of charge by calling the Administrator at 1-800-248-2828. The
Statement of Additional Information is incorporated by reference in (which means
it is considered to be a part of) this Prospectus.

The Fund offers multiple classes of shares. Class A shares are offered at net
asset value plus a sales charge imposed at the time of purchase; Class B shares
are offered at net asset value and, in addition, are subject to an annual
distribution fee and a declining contingent deferred sales charge on redemptions
made within six years after purchase; and Class D shares are offered at net
asset value plus a small initial sales charge and are subject to a contingent
deferred sales charge on redemptions made within one year after purchase and a
continuing distribution fee. Class B shares automatically convert to Class A
shares after approximately eight years. See "How to Buy Shares".

Contents Page
Summary of Expenses
Future Master/Feeder Structure
The Fund's Investment Objective
How the Fund Pursues its Objective and
Certain Risk Factors
How the Fund Measures its Performance
How the Fund is Managed
How the Fund Values its Shares
Distributions and Taxes
How to Buy Shares
How to Sell Shares
How to Exchange Shares
Telephone Transactions
12b-1 Plans
Organization and History

FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED, ENDORSED OR
INSURED BY, ANY BANK OR GOVERNMENT AGENCY.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

SUMMARY OF EXPENSES

Expenses are one of several factors to consider when investing in the Fund. The
following tables summarize your maximum transaction costs and your estimated
annual expenses for an investment in each Class of the Fund's shares. "Other
expenses" are based on estimated amounts for the current fiscal year. See "How
the Fund is Managed" and "12b-1 Plans" for more complete descriptions of the
Fund's various costs and expenses.

Shareholder Transaction Expenses(1) (2)
Class A Class B Class D
Maximum Initial Sales Charge Imposed on
a Purchase (as a % of offering price)(3) 5.75% 0.00%(5) 1.00%(5)
Maximum Contingent Deferred Sales
Charge (as a % of offering price) (3) 1.00%(4) 5.00% 1.00%

(1) For accounts less than $1,000 an annual fee of $10 may be deducted.
See "How to Sell Shares."
(2) Redemption proceeds exceeding $5,000 sent via federal funds wire will
be subject to a $7.50 charge per transaction.
(3) Does not apply to reinvested distributions.
(4) Only with respect to any portion of purchases of $1 million to
$5 million redeemed within approximately 18 months after purchase.
See "How to Buy Shares."
(5) Because of the 0.XX% distribution fee applicable to Class B and Class D
shares, long-term Class B and Class D shareholders may pay more in
aggregate sales charges than the maximum initial sales charge permitted
by the National Association of Securities Dealers, Inc. However, because
the Fund's Class B shares automatically convert to Class A shares after
approximately 8 years, this is less likely for Class B shares than for a
class without a conversion feature.

Estimated Annual Operating Expenses (as a % of average net assets)

Class A Class B Class D
Management fee 0.XX% 0.XX% 0.XX%
12b-1 fees 0.XX X.XX X.XX
Other expenses 0.XX 0.XX 0.XX
---- ---- ----
Total operating expenses XXX% XXX% XXX%
=== === ===

Example

The following Example shows the cumulative expenses attributable to a
hypothetical $1,000 investment in each Class of shares of the Fund for the
periods specified, assuming a 5% annual return and, unless otherwise noted,
redemption at period end. The 5% return and expenses in this Example should not
be considered indicative of actual or expected Fund performance or expenses,
both of which will vary:

Class A Class B Class D
Period: (6) (7) (6) (7)
1 year $XX $XX $XX $XX $XX
3 years $XX $XX $XX $XX $XX(8)

(6) Assumes redemption at period end.
(7) Assumes no redemption.
(8) Class D shares do not incur a contingent deferred sales charge on
redemptions made after one year.

FUTURE MASTER/FEEDER STRUCTURE

As described on the cover page to the Prospectus, it is anticipated that the
Fund will convert to the master/feeder structure by December 31, 1996, by
transferring all of its portfolio assets to a separate open-end management
investment company (Portfolio) with the same investment objective as the Fund in
exchange for a 100% interest in the Portfolio. Shareholders will not have an
opportunity to vote on such conversion. After conversion, rather than investing
in individual securities, the Fund would seek to achieve its investment
objective by investing all of its assets in the Portfolio, and the Portfolio
will invest directly in portfolio securities. See "The Fund's Investment
Objective," "How the Fund Pursues its Objective and Certain Risk Factors" and
"How the Fund is Managed" for information concerning the Fund's investment
objective, policies, management and expenses. The following describes certain of
the effects and risks of this structure.

After conversion, the Fund's and the Portfolio's fundamental investment policies
may not be changed without shareholder approval. Generally, matters submitted by
the Portfolio to its investors for a vote will be passed along by the Fund to
its shareholders, and the Fund will vote its entire interest in the Portfolio in
proportion to the votes actually received from Fund shareholders. In addition to
the Fund, it is expected that other funds or institutional investors would
invest in the Portfolio. Such other investors could alone or collectively
acquire sufficient voting interests in the Portfolio to control matters relating
to the operation of the Portfolio. After the conversion, you may obtain
information about whether there are other investors in the Portfolio by writing
or calling the Administrator at 1-800-248-2828.

Other funds or institutions would invest in the Portfolio on the same terms and
conditions as the Fund and would bear their proportionate share of the
Portfolio's expenses. However, such other mutual funds would not be required to
issue their shares at the same public offering price as the Fund and may have
direct expenses that are higher or lower than those of the Fund. These
differences may result in such other funds generating investment returns higher
or lower than those of the Fund. Large scale redemptions by any such other
investors in the Portfolio could result in untimely liquidation of the
Portfolio's security holdings, loss of investment flexibility, and an increase
in the operating expenses of the Portfolio as a percentage of its assets.

After conversion, the Fund will continue to invest in the Portfolio so long as
the Trust's Board of Trustees determines it is in the best interest of Fund
shareholders to do so. In the event that the Portfolio's investment objective or
policies were changed so as to be inconsistent with the Fund's investment
objective or policies, the Board of Trustees would consider what action might be
taken, including changes to the Fund's investment objective or policies, or
withdrawal of the Fund's assets from the Portfolio and investment of such assets
in another pooled investment entity or the retention of an investment adviser to
manage the Fund's investments. Certain of these actions would require Fund
shareholder approval. Further, because certain individuals serve on the Boards
of both the Fund and the Portfolio, in the event at the time any such action
were to be taken other investors had invested directly in the Portfolio,
decisions by such individuals as to the appropriate actions to take might
involve conflicts of interest. Withdrawal of the Fund's assets from the
Portfolio could result in a distribution by the Portfolio to the Fund of
portfolio securities in kind (as opposed to a cash distribution), and the Fund
could incur brokerage fees or other transaction costs and could realize
distributable taxable gains in converting such securities to cash. Such a
distribution in kind could also result in a less diversified portfolio of
investments for the Fund.

THE FUND'S INVESTMENT OBJECTIVE

The Fund seeks capital appreciation by investing primarily in equity securities
of Japanese companies.

HOW THE FUND PURSUES ITS OBJECTIVE AND CERTAIN RISK FACTORS

The Fund normally invests substantially all of its assets in equity securities
of well-established Japanese companies (i.e. companies with equity market
capitalizations of U.S. $500 million to $25 billion) (Japanese Securities). The
Fund seeks to invest in companies with histories of consistent earnings growth
in industries with attractive or improving prospects. Japanese Securities
generally include common and preferred stock, warrants (rights) to purchase such
stock, debt securities convertible into such stock, sponsored and unsponsored
American Depository Receipts (receipts issued in the U.S. by banks or trust
companies evidencing ownership of underlying foreign securities) and Global
Depository Receipts (receipts issued by foreign banks or trust companies).
Investment in foreign securities involves special risks. See "Foreign
Investments Generally" and "Japanese Securities" below.

Foreign Investments Generally. Investments in foreign securities have special
risks related to political, economic and legal conditions outside the U.S. As a
result, the prices of such securities, and therefore the net asset value of Fund
shares, may fluctuate more than the prices of securities or issuers based in the
U.S. Special risks associated with foreign securities include the possibility of
unfavorable currency exchange rates, the existence of less liquid and less
regulated markets, the unavailability of reliable information about issuers, the
existence of different accounting, auditing and financial standards in foreign
countries, the existence (or potential imposition) of exchange control
regulations (including currency blockage), and political and economic
instability, among others. In addition, transactions in foreign securities may
be more costly due to currency conversion costs and higher brokerage and
custodial costs. See "Foreign Securities" and "Foreign Currency Transactions" in
the Statement of Additional Information for more information about foreign
investments.

Japanese Securities. Because the Fund's investments are concentrated in a single
country, the value of its shares will be especially affected by political,
economic and market conditions within Japan and by currency exchange rates
between the Japanese and U.S. currencies, and may fluctuate more widely than the
value of shares of a fund investing in companies located in a number of
different countries. In addition, because Japan's economy is significantly
dependent on foreign trade, economic and market conditions within Japan, and
therefore the value of Fund shares, are significantly influenced by domestic
economic and market conditions within its trading partner countries and by
political relations and currency exchange rates between Japan and such
countries. Japan has in the past experienced difficult relations with its
trading partners, particularly the U.S. The imposition of trade sanctions or
other protectionist measures could negatively impact the Japanese economy and
the value of Fund shares.

Foreign Currency Transactions. In connection with its investments in Japanese
Securities, the Fund may purchase and sell (i) Japanese-yen on a spot or forward
basis, (ii) Japanese yen futures contracts, and (iii) options on Japanese yen
and on Japanese yen-denominated futures contracts. Such transactions will be
entered into (i) to lock in a particular foreign exchange rate pending
settlement of a purchase or sale of a security or pending the receipt of
interest, principal or dividend payments on a security held by the Fund, or (ii)
to hedge against a decline in the value of the yen relative to the U.S. dollar.
The Fund will not attempt, nor would it be able, to eliminate all foreign
currency risk. Further, although hedging may lessen the risk of loss if the
yen's value declines, it limits the potential gain from increases in the yen's
value. See the Statement of Additional Information for information relating to
the Fund's obligations in entering into such transactions.

Futures Contracts and Options. The Fund may purchase and sell Japanese stock
index futures contracts and options on such contracts. Such transactions will be
entered into to gain exposure to the Japanese market pending investment in
individual securities or to hedge against market declines. A futures contract
creates an obligation by the seller to deliver and the buyer to take delivery of
a type of instrument at the time and in the amount specified in the contract. A
sale of a futures contract can be terminated in advance of the specified
delivery date by subsequently purchasing a similar contract; a purchase of a
futures contract can be terminated by a subsequent sale. Gain or loss on a
contract generally is realized upon such termination. An option on a futures
contract generally gives the option holder the right, but not the obligation, to
purchase or sell the futures contract prior to the option's specified expiration
date. If the option expires unexercised, the holder will lose any amount it paid
to acquire the option. Transactions in futures and related options may not
precisely achieve the goals of hedging or gaining market exposure to the extent
there is an imperfect correlation between the price movements of the contracts
and of the underlying securities. In addition, if the Adviser's prediction on
stock market movements is inaccurate, the Fund may be worse off than if it had
not hedged.

Borrowing of Money. The Fund may borrow money from banks for temporary or
emergency purposes up to 10% of its net assets; however, the Fund will not
purchase additional portfolio securities while borrowings exceed 5% of net
assets.

Temporary/Defensive Investments. Temporarily available cash may be invested in
U.S. dollar or yen denominated demand deposits, certificates of deposit,
bankers' acceptances, and high-quality, short-term debt securities, as well as
in Treasury bills and repurchase agreements. Some or all of the Fund's assets
may be invested in such investments during periods of unusual market conditions.
Under a repurchase agreement, the Fund buys a security from a bank or dealer,
which is obligated to buy it back at a fixed price and time. The security is
held in a separate account at the Fund's custodian and constitutes the Fund's
collateral for the bank's or dealer's repurchase obligation. Additional
collateral will be added so that the obligation will at all times be fully
collateralized. However, if the bank or dealer defaults or enters bankruptcy,
the Fund may experience costs and delays in liquidating the collateral and may
experience a loss if it is unable to demonstrate its right to the collateral in
a bankruptcy proceeding. Not more than 15% of the Fund's net assets will be
invested in repurchase agreements maturing in more than 7 days and other
illiquid assets.

Other. The Fund may not always achieve its investment objective. The Fund's
investment objective and non-fundamental policies may be changed without
shareholder approval. The Fund will notify investors at least 30 days prior to
any material change in the Fund's investment objective. If there is a change in
the investment objective, shareholders should consider whether the Fund remains
an appropriate investment in light of their financial position and needs.
Shareholders may incur a contingent deferred sales charge if shares are redeemed
in response to a change in objective. The Fund's fundamental policies listed in
the Statement of Additional Information cannot be changed without the approval
of a majority of the Fund's outstanding voting securities. Additional
information concerning certain of the securities and investment techniques
described above is contained in the Statement of Additional Information.

HOW THE FUND MEASURES ITS PERFORMANCE

Performance may be quoted in sales literature and advertisements. Each Class's
average annual total returns are calculated in accordance with the Securities
and Exchange Commission's formula and assume the reinvestment of all
distributions, the maximum initial sales charge of 5.75% on Class A shares and
1.00% on Class D shares, and the contingent deferred sales charge applicable to
the time period quoted on Class B and Class D shares. Other total returns differ
from average annual total return only in that they may relate to different time
periods, may represent aggregate as opposed to average annual total returns, and
may not reflect the initial or contingent deferred sales charges.

Each Class's yield, which differs from total return because it does not consider
changes in net asset value, is calculated in accordance with the Securities and
Exchange Commission's formula. Each Class's distribution rate is calculated by
dividing the most recent twelve months' distributions, annualized, by the
maximum offering price of that Class at the end of the period. Each Class's
performance may be compared to various indices. Quotations from various
publications may be included in sales literature and advertisements. See
"Performance Measures" in the Statement of Additional Information.

All performance information is historical and does not predict future results.

HOW THE FUND IS MANAGED

The Trustees formulate the Fund's general policies and oversee the Fund's
affairs as conducted by the Adviser.

The Adviser is an indirect subsidiary of Liberty Financial Companies, Inc.
(Liberty Financial) which in turn is an indirect subsidiary of Liberty Mutual
Insurance Company (Liberty Mutual).

The Administrator is a subsidiary of The Colonial Group, Inc. which in turn is a
direct subsidiary of Liberty Financial.

Liberty Mutual is considered to be the controlling entity of the Adviser, the
Administrator and their affiliates. Liberty Mutual is an underwriter of workers'
compensation insurance and a property and casualty insurer in the U.S.

Colonial Investment Services, Inc. (Distributor) is a subsidiary of the
Administrator and serves as the distributor for the Fund's shares. Colonial
Investors Service Center, Inc. (Transfer Agent), an affiliate of the Adviser,
serves as the shareholder services and transfer agent for the Fund.

The Adviser furnishes the Fund with investment management services at the
Adviser's expense. For these services, the Fund pays the Adviser a monthly fee
at an annual rate of X.X% of the Fund's average daily net assets. The fee is
higher than that paid by most other investment companies, although it is
comparable to that paid by many investment companies investing in foreign
securities.

David Smith [Senior Vice President] of the Adviser manages the Fund. Mr. Smith
is Director of North Asian Strategies of Newport Pacific Management, Inc.
(Newport Pacific), the Adviser's immediate parent, and has managed other funds
or accounts on their behalf since [1989]. See "Management of the Fund" in the
Statement of Additional Information for more information.

The Administrator provides certain administrative services to the Fund, for
which the Fund pays the Administrator a monthly fee at the annual rate of 0.25%
of the Fund's average daily net assets for such services. The Administrator also
provides pricing and bookkeeping services to the Fund for a monthly fee of
$2,250 plus a percentage of the Fund's average net assets over $50 million.

The Transfer Agent provides transfer agency and shareholder services to the Fund
for a monthly fee at the annual rate of 0.25% of average daily net assets plus
certain out-of-pocket expenses.

Each of the foregoing fees is subject to any reimbursement or fee waiver to
which the Adviser and its affiliates may agree.

The Adviser places all orders for the purchase and sale of portfolio securities.
In doing so, the Adviser seeks to obtain the best combination of price and
execution, which involves a number of judgmental factors. When the Adviser
believes that more than one broker-dealer is capable of providing the best
combination of price and execution in a particular portfolio transaction, the
Adviser often selects a broker-dealer that furnishes it with research products
or services, and may consider sales of shares of the Fund as a factor in the
selection of the broker-dealer.

Fund expenses consist of management, administration, bookkeeping, shareholder
service and transfer agent fees discussed above, 12b-1 service and distribution
fees discussed under the caption "12b-1 Plans", and all other expenses, fees,
charges, taxes, organization costs and liabilities incurred or arising in
connection with the Fund or Trust or in connection with the management thereof,
including but not limited to, trustees' compensation and expenses and auditing,
counsel, custodian and other expenses deemed necessary and proper by the
Trustees.

HOW THE FUND VALUES ITS SHARES

DISTRIBUTIONS AND TAXES

The Fund intends to qualify as a "regulated investment company" under the
Internal Revenue Code and to distribute to shareholders virtually all net income
and any net realized gain at least annually.

The Fund generally declares and pays distributions annually. Distributions are
invested in additional shares of the same Class of the Fund at net asset value
unless the shareholder elects to receive cash. Regardless of the shareholder's
election, distributions of $10 or less will not be paid in cash to shareholders
but will be invested in additional shares of the same Class of the Fund at net
asset value. To change your election, call the Transfer Agent for information.
Whether you receive distributions in cash or in additional Fund shares, you must
report them as taxable income unless you are a tax-exempt institution. If you
buy shares shortly before a distribution is declared, the distribution will be
taxable although it is, in effect, a partial return of the amount invested. Each
January, information on the amount and nature of distributions for the prior
year is sent to shareholders.

HOW TO BUY SHARES

Shares of the Fund are offered continuously. Orders received in good form prior
to the time at which the Fund values its shares (or placed with the financial
service firm before such time and transmitted by the financial service firm
before the Fund processes that day's share transactions) will be processed based
on that day's closing net asset value, plus any applicable initial sales charge.

The minimum initial investment is $1,000; subsequent investments may be as small
as $50. The minimum initial investment for the Colonial Fundamatic program is
$50 and the minimum initial investment for a Colonial retirement account is $25.
Certificates will not be issued for Class B or Class D shares and there are some
limitations on the issuance of Class A certificates. The Fund may refuse any
purchase order for its shares. See the Statement of Additional Information for
more information.

The Fund also offers Class Z shares which are offered through a separate
Prospectus only to (i) certain institutions (including certain insurance
companies and banks investing for their own account, trusts, endowment funds,
foundations and investment companies) and defined benefit retirement plans
investing a minimum of $2 million in the Fund and (ii) the Adviser and its
affiliates. Class Z shares have no initial or contingent deferred sales charge
and no Rule 12b-1 fee. Otherwise, Class Z expenses are the same as for Classes
A, B and D. Class Z shares may be exchanged at net asset value for the Class A
shares of any other Colonial fund.

Class A Shares. Class A shares are offered at net asset value, subject to a
0.XX% annual service fee, plus an initial or contingent deferred sales charge as
follows:
_____Initial Sales Charge_____
Retained
by
Financial
Service
Firm as
% of
_____as % of_____
Amount Offering Offering
Amount Purchased Invested Price Price
Less than $50,000 6.10% 5.75% 5.00%
$50,000 to less than
$100,000 4.71% 4.50% 3.75%
$100,000 to less than
$250,000 3.63% 3.50% 2.75%
$250,000 to less than
$500,000 2.56% 2.50% 2.00%
$500,000 to less than
$1,000,000 2.04% 2.00% 1.75%
$1,000,000 or more 0.00% 0.00% 0.00%

On purchases of $1 million or more, the Distributor pays the financial service
firm a cumulative commission as follows:

Amount Purchased Commission
First $3,000,000 1.00%
Next $2,000,000 0.50%
Over $5,000,000 0.25%(1)

(1) Paid over 12 months but only to the extent
the shares remain outstanding.

Purchases of $1 million to $5 million are subject to a 1.00% contingent deferred
sales charge payable to the Distributor on redemptions within 18 months from the
first day of the month following the purchase. The contingent deferred sales
charge does not apply to the excess of any purchase over $5 million.

Class B Shares. Class B shares are offered at net asset value, without an
initial sales charge, subject to a 0.XX% annual distribution fee for
approximately eight years (at which time they convert to Class A shares not
bearing a distribution fee), a 0.XX% annual service fee and a declining
contingent deferred sales charge if redeemed within six years after purchase. As
shown below, the amount of the contingent deferred sales charge depends on the
number of years after purchase that the redemption occurs:

Contingent
Years Deferred
After Sales
Purchase Charge
0-1 5.00%
1-2 4.00%
2-3 3.00%
3-4 3.00%
4-5 2.00%
5-6 1.00%
More than 6 0.00%

Year one ends one year after the end of the month in which the purchase was
accepted and so on. The Distributor pays financial service firms a commission of
4.00% on Class B share purchases.

Class D Shares. Class D shares are offered at net asset value plus a 1.00%
initial sales charge, subject to a 0.XX% annual distribution fee, a 0.XX% annual
service fee and a 1.00% contingent deferred sales charge on redemptions made
within one year from the first day of the month after purchase.

The Distributor pays financial service firms an initial commission of 1.85% on
purchases of Class D shares and an ongoing commission of 0.65% annually. Payment
of the ongoing commission is conditioned on receipt by the Distributor of the
0.XX% annual distribution fee referred to above. The commission may be reduced
or eliminated if the distribution fee paid by the Fund is reduced or eliminated
for any reason.

General. All contingent deferred sales charges are deducted from the amount
redeemed, not the amount remaining in the account, and are paid to the
Distributor. Shares issued upon distribution reinvestment and amounts
representing appreciation are not subject to a contingent deferred sales charge.
The contingent deferred sales charge is imposed on redemptions which result in
the account value falling below its Base Amount (the total dollar value of
purchase payments (including initial sales charges, if any) in the account
reduced by prior redemptions on which a contingent deferred sales charge was
paid and any exempt redemptions). See the Statement of Additional Information
for more information.

Which Class is more beneficial to an investor depends on the amount and intended
length of the investment. Large investments, qualifying for a reduced Class A
sales charge, avoid the distribution fee. Investments in Class B shares have
100% of the purchase invested immediately. Investors investing for a relatively
short period of time might consider Class D shares. Purchases of $250,000 or
more must be for Class A or Class D shares. Purchases of $500,000 must be for
Class A shares. Consult your financial service firm.

Special Purchase Programs. The Fund allows certain investors or groups of
investors to purchase shares at a reduced, or without an, initial or contingent
deferred sales charge. These programs are described in the Statement of
Additional Information under "Programs for Reducing or Eliminating Sales
Charges" and "How to Sell Shares."

Shareholder Services. A variety of shareholder services are available. For more
information about these services or your account, call 1-800-345-6611. Some
services are described in the attached account application. A shareholder's
manual explaining all available services will be provided upon request.

HOW TO SELL SHARES

Shares of the Fund may be sold on any day the Exchange is open, either directly
to the Fund or through your financial service firm. Sale proceeds generally are
sent within seven days (usually on the next business day after your request is
received in good form). However, for shares recently purchased by check, the
Fund will send proceeds as soon as the check has cleared (which may take up to
15 days).

Selling Shares Directly To The Fund. Send a signed letter of instruction or
stock power form to the Transfer Agent, along with any certificates for shares
to be sold. The sale price is the net asset value (less any applicable
contingent deferred sales charge) next calculated after the Fund receives the
request in proper form. Signatures must be guaranteed by a bank, a member firm
of a national stock exchange or another eligible guarantor institution. Stock
power forms are available from financial service firms, the Transfer Agent and
many banks. Additional documentation is required for sales by corporations,
agents, fiduciaries, surviving joint owners and individual retirement account
holders. For details contact:

Colonial Investors Service Center, Inc.
P.O. Box 1722
Boston, MA 02105-1722
1-800-345-6611

Selling Shares Through Financial Service Firms. Financial service firms must
receive requests prior to the time at which the Fund values its shares to
receive that day's price, are responsible for furnishing all necessary
documentation to the Transfer Agent and may charge for this service.

General. The sale of shares is a taxable transaction for income tax purposes and
may be subject to a contingent deferred sales charge. The contingent deferred
sales charge may be waived under certain circumstances. See the Statement of
Additional Information for more information. Under unusual circumstances, the
Fund may suspend repurchases or postpone payment for up to seven days or longer,
as permitted by federal securities law. In June of any year, the Fund may deduct
$10 (payable to the Transfer Agent) from accounts valued at less than $1,000
unless the account value has dropped below $1,000 solely as a result of share
value depreciation. Shareholders will receive 60 days' written notice to
increase the account value before the fee is deducted.

HOW TO EXCHANGE SHARES

Except as described below with respect to money market funds, Fund shares may be
exchanged at net asset value for shares of the same class of any other Colonial
Fund offering such class. Not all Colonial Funds offer Class D shares. Shares
will continue to age without regard to the exchange for purposes of conversion
and in determining the contingent deferred sales charge, if any, upon
redemption. Carefully read the prospectus of the fund into which the exchange
will go before submitting the request. Call 1-800-248-2828 to receive a
prospectus and an exchange authorization form. Call 1-800-422-3737 to exchange
shares by telephone. An exchange is a taxable capital transaction. The exchange
service may be changed, suspended or eliminated on 60 days' written notice.

Class A Shares. An exchange from a money market fund into a non-money market
fund will be at the applicable offering price next determined (including sales
charge), except for amounts on which an initial sales charge was paid. Non-money
market fund shares must be held for five months before qualifying for exchange
to a fund with a higher sales charge, after which exchanges are made at the net
asset value next determined.

Class B Shares. Exchanges of Class B shares are not subject to the contingent
deferred sales charge. However, if shares are redeemed within six years after
the original purchase, a contingent deferred sales charge will be assessed using
the schedule of the fund in which the original investment was made.

Class D Shares. Exchanges of Class D shares will not be subject to the
contingent deferred sales charge. However, if shares are redeemed within one
year after the original purchase, a 1.00% contingent deferred sales charge will
be assessed.

TELEPHONE TRANSACTIONS

All shareholders and/or their financial advisers are automatically eligible to
exchange Fund shares and may redeem up to $50,000 of Fund shares by calling
1-800-422-3737 toll-free any business day between 9:00 a.m. and the time at
which the Fund values its shares. Telephone redemption privileges for larger
amounts may be elected on the account application. Proceeds and confirmations of
telephone transactions will be mailed or sent to the address of record.
Telephone redemptions are not available on accounts with an address change in
the preceding 30 days. The Adviser, the Administrator, the Transfer Agent and
the Fund will not be liable when following telephone instructions reasonably
believed to be genuine, and a shareholder may suffer a loss from unauthorized
transactions. The Transfer Agent will employ reasonable procedures to confirm
that instructions communicated by telephone are genuine. All telephone
transactions are recorded. Shareholders and/or their financial advisers are
required to provide their name, address and account number. Financial advisers
are also required to provide their broker number. Shareholders and/or their
financial advisers wishing to redeem or exchange shares by telephone may
experience difficulty in reaching the Fund at its toll-free telephone number
during periods of drastic economic or market changes. In that event,
shareholders and/or their financial advisers should follow the procedures for
redemption or exchange by mail as described above under "How to Sell Shares."
The Adviser, the Administrator, the Transfer Agent and the Fund reserve the
right to change, modify, or terminate the telephone redemption or exchange
services at any time upon prior written notice to shareholders. Shareholders
and/or their financial advisers are not obligated to transact by telephone.

12B-1 PLANS

Under 12b-1 Plans, the Fund pays the Distributor an annual service fee of 0.XX%
of the Fund's average net assets attributed to each Class of shares. The Fund
also pays the Distributor an annual distribution fee of 0.XX% of the average net
assets attributed to its Class B and Class D shares. Because the Class B and
Class D shares bear the additional distribution fees, their dividends will be
lower than the dividends of Class A shares. Class B shares automatically convert
to Class A shares, approximately eight years after the Class B shares were
purchased. Class D shares do not convert. The multiple class structure could be
terminated should certain Internal Revenue Service rulings be rescinded. See the
Statement of Additional Information for more information. The Distributor uses
the fees to defray the cost of commissions and service fees paid to financial
service firms which have sold Fund shares, and to defray other expenses such as
sales literature, prospectus printing and distribution, shareholder servicing
costs and compensation to wholesalers. Should the fees exceed the Distributor's
expenses in any year, the Distributor would realize a profit. The Plans also
authorize other payments to the Distributor and its affiliates (including the
Adviser and the Administrator) which may be construed to be indirect financing
of sales of Fund shares.

ORGANIZATION AND HISTORY

The Trust is a Massachusetts business trust organized in 1980. The Fund
commenced investment operations in 1996 as a separate portfolio of the Trust
and, therefore, has no prior history.

At inception, the Adviser owned 100% of each Class of shares of the Fund and,
therefore, may be deemed to "control" the Fund.

The Trust is not required to hold annual shareholder meetings, but special
meetings may be called for certain purposes. Shareholders receive one vote for
each Fund share. Shares of the Trust vote together except when required by law
to vote separately by fund or by class. Shareholders owning in the aggregate ten
percent of Trust shares may call meetings to consider removal of Trustees. Under
certain circumstances, the Trust will provide information to assist shareholders
in calling such a meeting. See the Statement of Additional Information for more
information.

Under Massachusetts law, shareholders could, under certain circumstances, be
held personally liable for the obligations of the Trust. However, the Trust's
Declaration of Trust (Declaration) disclaims shareholder liability for acts or
obligations of the Fund and the Trust and requires that notice of such
disclaimer be given in each agreement, obligation, or instrument entered into or
executed by the Fund or the Trust's Trustees. The Declaration provides for
indemnification out of Fund property for all loss and expense of any shareholder
held personally liable for the obligations of the Fund. Thus, the risk of a
shareholder incurring financial loss on account of shareholder liability is
limited to circumstances (which are considered remote) in which the Fund would
be unable to meet its obligations and the disclaimer was inoperative.

The risk of a particular fund incurring financial loss on account of another
fund of the Trust is also believed to be remote because it would be limited to
circumstances in which the disclaimer was inoperative and the other fund was
unable to meet its obligations.

Investment Adviser
Newport Fund Management, Inc.
580 California Street, Suite 1960
San Francisco, CA 94104

Administrator
Colonial Management Associates, Inc.
One Financial Center
Boston, MA 02111-2621

Distributor
Colonial Investment Services, Inc.
One Financial Center
Boston, MA 02111-2621

Custodian
Boston Safe Deposit and Trust Company
One Boston Place
Boston, MA 02108-2624

Shareholder Services and Transfer Agent
Colonial Investors Service Center, Inc.
One Financial Center
Boston, MA 02111-2621
1-800-345-6611

Independent Accountants
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110-2624

Legal Counsel
Ropes & Gray
One International Place
Boston, MA 02110-2624

Your financial service firm is:

Printed in U.S.A

June 3, 1996

COLONIAL NEWPORT JAPAN FUND

PROSPECTUS

Colonial Newport Japan Fund seeks capital appreciation by investing primarily in
equity securities of Japanese companies.

For more detailed information about the Fund, call the Administrator at
1-800-248-2828 for the June 3, 1996 Statement of Additional Information.

FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED, ENDORSED OR
INSURED BY, ANY BANK OR GOVERNMENT AGENCY.

[Colonial Flag Logo] COLONIAL
Mutual Funds

Colonial Investment Services, Inc.,
Distributor
One Financial Center
Boston, Massachusetts 02111-2621
617-426-3750
[COLONIAL FLAG LOGO]

Colonial Mutual Funds
_________________________________________________________________
Please send your completed application to:

Colonial Mutual Funds
P.O. Box 1722
Boston, Massachusetts 02105-1722

New Account Application/Revision to Existing Account

To open a new account, complete sections 1, 2, 3, & 7.

To apply for special services for a new or existing account, complete sections
4, 5, 6, or 8 as appropriate.

___ Please check here if this is a revision.

1-----------Account Ownership--------------
Please choose one of the following.

__Individual: Print your name, Social Security #, U.S. citizen status.

__Joint Tenant: Print all names, the Social Security # for the first person,
and his/her U.S. citizen status.

__Uniform Gift to Minors: Name of custodian and minor, minor's Social Security
#, minor's U.S. citizen status.

__Corporation, Association, Partnership: Include full name, Taxpayer I.D. #.

__Trust: Name of trustee, trust title & date, and trust's Taxpayer I.D. #.

______________________________________
Name of account owner

______________________________________
Name of joint account owner

______________________________________
Street address

______________________________________
City, State, and Zip

______________________________________
Daytime phone number

______________________________________
Social Security # or Taxpayer I.D. #

Are you a U.S. citizen? Yes___ No___

______________________________________
If no, country of permanent residence

______________________________________
Owner's date of birth

______________________________________
Account number (if existing account)

2 -----Colonial Fund(s) You Are Purchasing--------
Your investment will be made in Class A shares if no class is indicated.
Certificates are not available for Class B or D shares. If no distribution
option is selected, distributions will be reinvested in additional Fund
shares. Please consult your financial adviser to determine which class of
shares best suits your needs.

Fund Fund Fund

1_______________ 2__________________ 3____________________

$_______________ $__________________ $____________________
Amount Amount Amount

Class
___ A Shares ___ B Shares (less than $250,000) ___ C Shares (Adjustable Rate
U.S. Government Fund only)

___ D Shares (less than $500,000, available on certain funds; see prospectus)

Method of Payment

Choose one

___Check payable to the Fund

___Bank wired on (Date) ____/____/____
Wire confirmation #

___Wire/Trade confirmation #___________________

Ways to Receive Your Distributions

Choose one

___Reinvest dividends and capital gains

___Dividends and capital gains in cash

___Dividends in cash; reinvest capital gains

___Automatic Dividend Diversification See section 5A, inside

___Direct Deposit via Colonial Cash Connection Complete Bank Information
in section 4B. I understand that my bank must be a member of the
Automated Clearing House (ACH).

Distributions of $10.00 or less will automatically be reinvested in additional
fund shares.

3---Your Signature & Taxpayer I.D. Number Certification----

Each person signing on behalf of an entity represents that his/her actions are
authorized.

I have received and read each appropriate Fund prospectus and understand that
its terms are incorporated by reference into this application. I understand
that this application is subject to acceptance. I understand that certain
redemptions may be subject to a contingent deferred sales charge. I certify,
under penalties of perjury, that:

1. The Social Security # or Taxpayer I.D. # provided is correct.

You must cross out item 2a, b or c below only if you have been notified by the
Internal Revenue Service (IRS) that you are currently subject to back-up
withholding because of under-reporting interest or dividends on you tax return.

2. I am not subject to back-up withholding because: (a) I am exempt from back-
up withholding, or (b) I have not been notified by the IRS that I am
subject to back-up withholding as a result of a failure to report all
interest or dividends, or (c) the IRS has notified me that I am no longer
subject to back-up withholding. It is agreed that the Fund, all Colonial
companies and their officers, directors, agents, and employees will not be
liable for any loss, liability, damage, or expense for relying upon this
application or any instruction believed genuine.

X______________________________________________
Signature

_______________________________________________
Capacity, if applicable Date

X______________________________________________
Signature

_______________________________________________
Capacity, if applicable Date

4--------Ways to Withdraw from Your Fund-------

It may take up to 30 days to activate the following features. Complete only
the section(s) that apply to the features you would like.

A. Systematic Withdrawal Plan (SWP)
You can receive monthly, quarterly, or semiannual checks from your account in
any amount you select, with certain limitations. Your redemption checks can
be sent to you at the address of record for your account, to your bank
account, or to another person you choose. The value of the shares in your
account must be at least $5,000 and you must reinvest all of your
distributions. Checks will be processed on the 10th calendar day of the month
or the following business day. If you receive your SWP payment via ACH, you
may request it to be processed any day of the month. Withdrawals in excess of
12% annually of your current account value will not be accepted. Redemptions
made in addition to SWP payments may be subject to a contingent deferred sales
charge for Class B or Class D shares. Please consult your financial or tax
adviser before electing this option.

Funds for Withdrawal:

1___________________
Name of fund

Withdrawal Amount
Redeem shares from account as follows:
Dollar amount of payment $___________
or
Total annual %_________

Frequency (choose one)
__Monthly __Quarterly __Semiannually

I would like payments to begin _____/_____ (day/month).

2___________________
Name of fund

Withdrawal Amount
Redeem shares from account as follows:
Dollar amount of payment $___________
or
Total annual %_________

Frequency (choose one)
__Monthly __Quarterly __Semiannually

I would like payments to begin _____/_____ (day/month).

Payment Instructions
Send the payment to (choose one):
__My address of record.
__My bank account via Colonial Cash Connection (through electronic funds
transfer). Please complete the Bank Information section below. All ACH
transactions will be made two business days after the processing date
My bank must be a member of the Automated Clearing House (ACH) system.
__The payee listed at right. If more than one payee, provide the name,
address, payment amount, and frequency for other payees (maximum of 5) on
a separate sheet. If you are adding this service to an existing account,
please sign below and have your signature(s) guaranteed.

______________________________________________
Name of payee

______________________________________________
Address of payee

______________________________________________
City

______________________________________________
State Zip

______________________________________________
Payee's bank account number, if applicable

B. Telephone Withdrawal Options
All telephone transaction calls are recorded. These options are not available
for retirement accounts. Please sign below and have your signature(s)
guaranteed.

1. Fast Cash
You are automatically eligible for this service. You or your financial
adviser can withdraw up to $50,000 from your account and have it sent to your
address of record. For your protection, this service is only available on
accounts that have not had an address change within 30 days of the redemption
request.

2. Telephone Redemption
__I would like the Telephone Redemption privilege either by federal fund wire
or ACH. Telephone redemptions over $1,000 will be sent via federal fund wire,
usually on hte next business day ($7.50 will be deducted). Redemptions of
$1,000 or less will be sent by check to your designated bank.

3. On-Demand ACH Redemption
__I would like the On-Demand ACH Redemption Privilege. Proceeds paid via ACH
will be credited to your bank account two business days after the process
date. You or your financial adviser may withdraw shares from you fund acount
by telephone and send your money to your bank account. If you are adding
this service to an existing account, complete the Bank Information section
below and have all shareholder signatures guaranteed.

Colonial's and the Fund's liability is limited when following telephone
instructions; a shareholder may suffer a loss from an unauthorized transaction
reasonably believed by Colonial to have been authorized.

Bank Information (For Sections A and B Above)
I authorize deposits to the following bank account:

____________________________________________________________
Bank name City Bank account number

____________________________________________________________
Bank street address State Zip Bank routing # (your bank
can provide this)

X__________________________________
Signature of account owner(s)

X__________________________________
Signature of account owner(s) Place signature guarantee here.

5-----Ways to Make Additional Investments--------

These services involve continuous investments regardless of varying share
prices. Please consider your ability to continue purchases through periods of
price fluctuations. Dollar cost averaging does not assure a profit or protect
against loss in declining markets.

A. Automatic Dividend Diversification
Please diversify my portfolio by investing fund distributions in another
Colonial fund. These investments will be made in the same share class and
without sales charges. Accounts must be identically registered. I have
carefully read the prospectus for the fund(s) listed below.

1____________________________
From fund

____________________________
Account number (if existing)

____________________________
To fund

____________________________
Account number (if existing)

2____________________________
From fund

____________________________
Account number (if existing)

____________________________
To fund

____________________________
Account number (if existing)

B. Automated Dollar Cost Averaging
This program allows you to automatically have money from any Colonial fund in
which you have a balance of at least $5,000 exchanged into the same share
class of up to four other identically registered Colonial accounts, on a
monthly basis. The minimum amount for each exchange is $100. Please complete
the section below.

____________________________________
Fund from which shares will be sold

$_________________________
Amount to redeem monthly

1____________________________________
Fund to invest shares in

$_________________________
Amount to invest monthly

2____________________________________
Fund to invest shares in

$_________________________
Amount to invest monthly

C. Fundamatic/On-Demand ACH Purchase
Fundamatic automatically transfers the specified amount from your bank
checking account to your Colonial fund account. The On-Demand ACH Purchase
program moves money from you bank checking account to your Colonial Fund
account by electronic funds transfer on any specified day of the month.
You will receive the applicable price two business days after the receipt
of your request. Your bank needs to be a member of the Automated Clearing
House system. Please attach a blank check marked "VOID." Also, complete the
section below.

1____________________________________
Fund name

_________________________________
Account number

$_____________________ _________________
Amount to transfer Month to start

2___________________________________
Fund name

$_____________________ _________________
Amount to transfer Month to start

Frequency
__Monthly or __Quarterly

Check one:

__ACH (Any day of the month)

__Paper Draft
(Choose either the 5th__ or 20th__ day of the month)

Authorization to honor checks drawn by Colonial Investors Service Center,
Inc. Do Not Detach. Make sure all depositors on the bank account sign to
the far right. Please attach a blank check marked "VOID" here. See reverse
for bank instructions.

I authorize Colonial to draw on my bank account, by check or electronic funds
transfer, for an investment in a Colonial fund. Colonial and my bank are not
liable for any loss arising from delays or dishonored draws. If a draw is not
honored, I understand that notice may not be given and Colonial may reverse
the purchase and charge my account $15.

______________________________________
Bank name

______________________________________
Bank street address

______________________________________
City State Zip

______________________________________
Bank account number

______________________________________
Bank routing #

X_____________________________________
Depositor's Signature(s)
Exactly as appears on bank records

6------------Ways to Reduce Your Sales Charges------------
These services can help you reduce your sales charge while increasing your
share balance over the long term.

A. Right of Accumulation
If you, your spouse or your children own any other shares in other
Colonial funds, you may be eligible for a reduced sales charge. The combined
value of your accounts must be $50,000 or more. Class A shares of money market
funds are not eligible unless purchased by exchange from another Colonial fund.

The sales charge for your purchase will be based on the sum of the purchase
added to the value of all shares in other Colonial funds at the previous
day's public offering price.

__Please link the accounts listed below for Right of Accumulation privileges,
so that this and future purchases will receive any discount for which they
are eligible.

1_____________________________________
Name on account

_____________________________________
Account number

2_____________________________________
Name on account

_____________________________________
Account number

B. Statement of Intent
If you agree in advance to invest at least $50,000 within 13 months, you'll
pay a lower sales charge on every dollar you invest. If you sign a Statement
of Intent within 90 days after you establish your account, you can receive a
retroactive discount on prior investments. The amount required to receive a
discount varies by fund; see the sales charge table in the "How to Buy Shares"
section of your fund prospectus.

__I want to reduce my sales charge.
I agree to invest $ _______________ over a 13-month period starting
______/______/ 19______ (not more than 90 days prior to this application). I
understand an additional sales charge must be paid if I do not complete this
Statement of Intent.

7-------------Financial Service Firm---------------------
To be completed by a Representative of your financial service firm.

This application is submitted in accordance with our selling agreement with
Colonial Investment Services, Inc. (CISI), the Fund's prospectus, and this
application. We will notify CISI, Inc., of any purchase made under a Statement
of Intent, Right of Accumulation, or Sponsored Arrangement. We guarantee the
signatures on this application and the legal capacity of the signers.

_____________________________________
Representative's name

_____________________________________
Representative's number

_____________________________________
Representative's phone number

_____________________________________
Account # for client at financial
service firm

_____________________________________
Branch office address

_____________________________________
City

_____________________________________
State Zip

_____________________________________
Branch office number

_____________________________________
Name of financial service firm

_____________________________________
Main office address

_____________________________________
City

_____________________________________
State Zip

X____________________________________
Authorized signature

8----------Request for a Combined Quarterly Statement Mailing-----------
Colonial can mail all of your quarterly statements in one envelope. This
option simplifies your record keeping and helps reduce fund expenses.

__I want to receive a combined quarterly mailing for all my accounts. Please
indicate accounts to be linked.______________________

Fundamatic (See Reverse Side)
Applications must be received before the start date for processing.

This program's deposit privilege can be revoked by Colonial without prior
notice if any check is not paid upon presentation. Colonial has no obligation
to notify the shareholder of non-payment of any draw. This program may be
discontinued by Colonial by written notice at least 30 business days prior
to the due date of any draw or by the shareholder at any time.

To the Bank Named on the Reverse Side:

Your depositor has authorized Colonial Investors Service Center, Inc. to
collect amounts due under an investment program from his/her personal checking
account. When you pay and charge the draws to the account of your depositor
executing the authorization payable to the order of Colonial Investors
Service Center, Inc., Colonial Investment Services, Inc., hereby indemnifies
and holds you harmless from any loss (including reasonable expenses) you may
suffer from honoring such draw, except any losses due to your payment of any
draw against insufficient funds.

D-224B-1295

COLONIAL TRUST II

Cross Reference Sheet (Colonial Newport Japan Fund)(Class Z)

Item Number of Form N-1A Prospectus Location or Caption

Part A

1. Cover Page

2. Summary of Expenses

3. Not Applicable

4. Organization and History;
The Fund's Investment
Objective; How the Fund
Pursues Its Objective and
Certain Risk Factors

5. Cover Page; The Fund's
Investment Objective; How
the Fund is Managed;
Organization and History;
Back Cover

6. Organization and History;
Distributions and Taxes;
How to Buy Shares

7. Summary of Expenses; How
to Buy Shares; How the
Fund Values Its Shares;
Back Cover

8. How to Sell Shares; How
to Exchange Shares;
Telephone Transactions

9. Not applicable

June 3, 1996

COLONIAL NEWPORT JAPAN FUND

CLASS Z SHARES

PROSPECTUS

BEFORE YOU INVEST

Colonial Management Associates, Inc. (Administrator) and your full-service
financial adviser want you to understand both the risks and benefits of mutual
fund investing.

Please consult your full-service financial adviser to determine how investing in
this mutual fund may suit your unique needs, time horizon and risk tolerance.

The Fund is managed by Newport Fund Management, Inc. (Adviser), an investment
adviser since 1984 and an affiliate of the Administrator.

XX-X-X

This Prospectus explains concisely what you should know before investing in the
Class Z shares of the Fund. Read it carefully and retain it for future
reference. More detailed information about the Fund is in the June 3, 1996
Statement of Additional Information which has been filed with the Securities and
Exchange Commission and is obtainable free of charge by calling the
Administrator at 1-800-248-2828. The Statement of Additional Information is
incorporated by reference in (which means it is considered to be a part of) this
Prospectus.

Class Z shares may be purchased only by (i) certain institutions (including
certain insurance companies and banks investing for their own account, trusts,
endowment funds, foundations and investment companies) and defined benefit
retirement plans investing a minimum of $2 million in the Fund and (ii) the
Adviser and its affiliates.

FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED, ENDORSED OR
INSURED BY, ANY BANK OR GOVERNMENT AGENCY.

SUMMARY OF EXPENSES

Expenses are one of several factors to consider when investing in the Fund. The
following tables summarize your maximum transaction costs and your estimated
annual expenses for an investment in the Class Z shares of the Fund. "Other
expenses" are based on estimated amounts for the current fiscal year. See "How
the Fund is Managed" and "12b-1 Plans" for more complete descriptions of the
Fund's various costs and expenses.

Shareholder Transaction Expenses(1) (2)

Maximum Initial Sales Charge Imposed on a Purchase
(as a % of offering price) 0.00%
Maximum Contingent Deferred Sales Charge (as a % of offering price) 0.00%

Estimated Annual Operating Expenses (as a % of average net assets)

Management fee 0.XX%
12b-1 fees 0.XX
Other expenses 0.XX
----
Total operating expenses XXX%
====
Example

The following Example shows the cumulative expenses attributable to a
hypothetical $1,000 investment in the Class Z shares of the Fund for the periods
specified, assuming a 5% annual return with or without, redemption at period
end. The 5% return and expenses in this Example should not be considered
indicative of actual or expected Fund performance or expenses, both of which
will vary:

Period:
1 year $XX
3 years $XX

FUTURE MASTER/FEEDER STRUCTURE

THE FUND'S INVESTMENT OBJECTIVE

The Fund seeks capital appreciation by investing primarily in equity securities
of Japanese companies.

HOW THE FUND PURSUES ITS OBJECTIVE AND CERTAIN RISK FACTORS

Foreign Currency Transactions. In connection with its investments in Japanese
Securities, the Fund may purchase and sell (i) Japanese yen on a spot or forward
basis, (ii) Japanese yen futures contracts, and (iii) options on Japanese yen
and on Japanese yen-denominated futures contracts. Such transactions will be
entered into (i) to lock in a particular foreign exchange rate pending
settlement of a purchase or sale of a security or pending the receipt of
interest, principal or dividend payments on a security held by the Fund, or (ii)
to hedge against a decline in the value of the yen relative to the U.S. dollar.
The Fund will not attempt, nor would it be able, to eliminate all foreign
currency risk. Further, although hedging may lessen the risk of loss if the
yen's value declines, it limits the potential gain from increases in the yen's
value. See the Statement of Additional Information for information relating to
the Fund's obligations in entering into such transactions.

HOW THE FUND MEASURES ITS PERFORMANCE

Performance may be quoted in sales literature and advertisements. Average annual
total returns are calculated in accordance with the Securities and Exchange
Commission's formula and assume the reinvestment of all distributions. Other
total returns differ from average annual total return only in that they may
relate to different time periods and may not reflect aggregate as opposed to
average annual returns.

Yield, which differs from total return because it does not consider changes in
net asset value, is calculated in accordance with the Securities and Exchange
Commission's formula. Distribution rate is calculated by dividing the most
recent twelve months' distributions, annualized, by the net asset value at the
end of the period. Performance may be compared to various indices. Quotations
from various publications may be included in sales literature and
advertisements. See "Performance Measures" in the Statement of Additional
Information.

All performance information is historical and does not predict future results.

HOW THE FUND IS MANAGED

The Trustees formulate the Fund's general policies and oversee the Fund's
affairs as conducted by the Adviser.

The Adviser is an indirect subsidiary of Liberty Financial Companies, Inc.
(Liberty Financial) which in turn is an indirect subsidiary of Liberty Mutual
Insurance Company (Liberty Mutual).

The Administrator is a subsidiary of The Colonial Group, Inc. which in turn is a
direct subsidiary of Liberty Financial.

The Adviser furnishes the Fund with investment management services at the
Adviser's expense. For these services, the Fund pays the Adviser a monthly fee
at an annual rate of X.X% of the Fund's average daily net assets. The fee is
higher than that paid by most other investment companies, although, it is
comparable to that paid by many investment companies investing in foreign
securities.

David Smith, [Senior Vice President] of the Adviser, manages the Fund. Mr. Smith
is Director of North Asian Strategies of Newport Pacific Management, Inc.
(Newport Pacific), the Adviser's immediate parent, and has managed other funds
or accounts on their behalf since [1989]. See "Management of the Fund" in the
Statement of Additional Information for more information.

The Transfer Agent provides transfer agency and shareholder services to the Fund
for a monthly fee at the annual rate of 0.25% of average daily net assets plus
certain out-of-pocket expenses.

Each of the foregoing fees is subject to any reimbursement or fee waiver to
which the Adviser and its affiliates may agree.

Fund expenses consist of management, administration, bookkeeping, shareholder
service and transfer agent fees discussed above, and all other expenses, fees,
charges, taxes, organization costs and liabilities incurred or arising in
connection with the Fund or Trust or in connection with the management thereof,
including but not limited to, trustees' compensation and expenses and auditing,
counsel, custodian and other expenses deemed necessary and proper by the
Trustees.

HOW THE FUND VALUES ITS SHARES

DISTRIBUTIONS AND TAXES

The Fund intends to qualify as a "regulated investment company" under the
Internal Revenue Code and to distribute to shareholders virtually all net income
and any net realized gain at least annually.

The Fund generally declares and pays distributions annually. Distributions are
invested in additional Class Z shares at net asset value unless the shareholder
elects to receive cash. Regardless of the shareholder's election, distributions
of $10 or less will not be paid in cash to shareholders but will be invested in
additional Class Z shares at net asset value. To change your election, call the
Transfer Agent for information. Whether you receive distributions in cash or in
additional Fund shares, you must report them as taxable income unless you are a
tax-exempt institution. If you buy shares shortly before a distribution is
declared, the distribution will be taxable although it is, in effect, a partial
return of the amount invested. Each January, information on the amount and
nature of distributions for the prior year is sent to shareholders.

HOW TO BUY SHARES

Class Z shares are offered continuously at net asset value without a sales
charge. Orders received in good form prior to the time at which the Fund values
its shares (or placed with the financial service firm before such time and
transmitted by the financial service firm before the Fund processes that day's
share transactions) will be processed based on that day's closing net asset
value. Certificates will not be issued for Class Z shares. The Fund may refuse
any purchase order for its shares. See the Statement of Additional Information
for more information.

Other Classes of Shares. In addition to Class Z shares, the Fund offers other
classes of shares through a separate Prospectus. Class A shares are offered at
net asset value plus a maximum 5.75% sales charge imposed at the time of
purchase, and are subject to an ongoing 0.25% annual Rule 12b-1 fee and a 1.00%
contingent deferred sales charge on certain redemptions made within 18 months
after purchase. Class B shares are offered at net asset value and are subject to
a 1.00% annual Rule 12b-1 fee and a contingent deferred sales charge on
redemptions made within six years after purchase. The contingent deferred sales
charge is 5.00% on redemptions made in year one, and declines to 0% after six
years. Class B shares convert to Class A after approximately eight years. The
maximum purchase amount allowed for Class B shares is $250,000. Class D shares
are offered at net asset value plus a small initial sales charge and, are
subject to a contingent deferred sales charge on redemptions made within one
year after purchase and a continuing 1.00% Rule 12b-1 fee. Purchases of $250,000
or more must be for Class A or D shares. Purchases of $500,000 must be for Class
D shares.

Other than the sales charges and Rule 12b-1 fees described above, the fees and
expenses relating to Classes A, B and D are the same as those for Class Z
shares.

Classes A, B and D are exchangeable for the same class of any other Colonial
fund offering such class.

Which Class is more beneficial to an investor depends on the amount and intended
length of the investment. In general, anyone eligible to purchase Class Z shares
should do so in preference over other classes.

Financial service firms may receive different compensation rates for selling
different classes of shares. The Distributor may pay additional compensation to
financial service firms which have made or may make significant sales. Initial
or contingent deferred sales charges may be reduced or eliminated for certain
persons or organizations purchasing Fund shares alone or in combination with
certain other Colonial funds. See the Statement of Additional Information for
more information.

HOW TO SELL SHARES

Colonial Investors Service Center, Inc.
P.O. Box 1722
Boston, MA 02105-1722
1-800-345-6611

General. The sale of shares is a taxable transaction for income tax purposes.
See the Statement of Additional Information for more information. Under unusual
circumstances, the Fund may suspend repurchases or postpone payment for up to
seven days or longer, as permitted by federal securities law. In June of any
year, the Fund may deduct $10 (payable to the Transfer Agent) from accounts
valued at less than $1,000 unless the account value has dropped below $1,000
solely as a result of share value depreciation. Shareholders will receive 60
days' written notice to increase the account value before the fee is deducted.

HOW TO EXCHANGE SHARES

Class Z shares may be exchanged at net asset value for the Class A shares of any
other Colonial Fund. Carefully read the prospectus of the fund into which the
exchange will go before submitting the request. Call 1-800-248-2828 to receive a
prospectus and an exchange authorization form. Call 1-800-422-3737 to exchange
shares by telephone. An exchange is a taxable capital transaction. The exchange
service may be changed, suspended or eliminated on 60 days' written notice.