COLONIAL TRUST II /, 485BPOS, 1996-11-18

COLONIAL TRUST II /
485BPOS, 1996-11-18

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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. 27 [ X ]

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

Amendment No. 27 [ 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)
[ X ] on December 3, 1996 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on [date] pursuant to paragraph (a)(1) of Rule 485
[ ] 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 29, 1996, the Registrant
filed the Rule 24f-2 Notice for the Registrant's most recent fiscal year ended
August 31, 1996.

This Post-Effective Amendment relates solely to Colonial Newport Japan Fund and
Colonial Newport Tiger Cub Fund. No information relating to any other series of
the Registrant is amended or superseded hereby.

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. The Fund's Financial History

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

December 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. 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.

JF-01/979C-1196

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 December 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 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 1.00% 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
The Fund's Financial History
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 Class A, Class B and Class D 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. It is anticipated that
the Fund's annual operating expenses would not change materially upon conversion
to the master/feeder structure.

Shareholder Transaction Expenses(1) (2)
<TABLE>
<CAPTION>

Class A Class B Class D
<S> <C> <C> <C>
Maximum Sales Charge (as a % of offering price) 5.75% 5.00%(5) 1.99%(5)
Maximum Initial Sales Charge Imposed on a Purchase (as a % of offering price) 5.75% 0.00%(5) 1.00%(5)
Maximum Contingent Deferred Sales Charge (as a % of offering price) (3) 1.00%(4) 5.00% 0.99%

</TABLE>

(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 0.75% 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)
<TABLE>
<CAPTION>

Class A Class B Class D
<S> <C> <C> <C>

Management and administration fees (after expense 0.00% 0.00% 0.00%
reimbursement)
12b-1 fees 0.25% 1.00% 1.00%
Other expenses (after expense reimbursement) 1.75% 1.75% 1.75%
--------- --------- ---------
Total operating expenses 2.00%(6) 2.75%(6) 2.75%(6)
==== ==== ====

</TABLE>

(6) The Adviser/Administrator has voluntarily agreed to waive or bear
certain Fund expenses until further notice to the Fund. Absent such
agreement, the "Management and administration fees" would have been
1.20% for each Class of shares, "Other expenses" would have been 3.55%
for each Class of shares, and "Total operating expenses" would have been
5.00% for Class A shares and 5.75% for Class B and Class D shares.

For the period ended August 31,1996, total operating expenses as a
percent of net assets were 11.13% for Class A shares and 11.88% for
Class B and Class D shares which do not reflect current operating
expenses of the Fund.

Example

The following Example shows the cumulative expenses attributable to a
hypothetical $1,000 investment in the Class A, Class B and Class D 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: (7) (8) (7) (8)
<S> <C> <C> <C> <C> <C>

1 year $77 $78 $28 $48 $38
3 years $117 $115 $85 $94 $94(9)

</TABLE>

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

Without voluntary fee reductions, the amounts would be $105 and $199 for Class A
shares for 1 and 3 years, respectively; $107 and $201 for Class B shares
assuming redemptions for 1 and 3 years, respectively; $57 and $171 for Class B
shares assuming no redemptions for 1 and 3 years, respectively; $77 and $179 for
Class D shares assuming redemptions for 1 and 3 years, respectively; and $67 and
$179 for Class D shares assuming no redemptions for 1 and 3 years, respectively.

THE FUND'S FINANCIAL HISTORY(a)

The following information is derived from the schedule of financial highlights
for a share outstanding throughout the period from June 3, 1996 through August
31, 1996 has been audited by Price Waterhouse LLP, independent accountants.
Their unqualified report is included in the Fund's 1996 Annual Report and is
incorporated by reference into the Statement of Additional Information

Period ended August 31
1996(c)
----------------------------------------------------------
Class A Class B Class D
<S> <C> <C> <C>
Net asset value - Beginning of period $10.000 $10.000 $10.000
-------- -------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (b) (0.016) (0.034) (0.034)
Net realized and unrealized loss (0.274) (0.276) (0.276)
------- ------- -------
Total from Investment Operations (0.290) (0.310) (0.310)
------- ------- -------
Net asset value - End of period $9.710 $9.690 $9.690
======= ======= ======
Total return (d)(e) (2.90)% (f) (3.10)% (f) (3.10)% (f)
======= ======= =======
RATIOS TO AVERAGE NET ASSETS
Expenses 2.00% (g)(h) 2.75% (g)(h) 2.75% (g)(h)
Net investment loss (0.66)% (g)(h) (1.41)% (g)(h) (1.41)% (g)(h)
Fees and expenses waived or borne by the 9.13% (h) 9.13% (h) 9.13% (h)
Adviser/Administrator
Portfolio turnover ---- ---- ----
Average commission rate $0.1794 $0.1794 $0.1794
Net assets at end of period (000) $1,066 $1,197 $472
- ---------------------------------

(a) Per share data was calculated using average shares outstanding during
the period.
(b) Net of fees and expenses waived or borne by the
Adviser/Administrator which amounted to: $0.230 $0.230 $0.230
(c) The Fund commenced investment operations on June 3, 1996.
(d) Total return at net asset value assuming all distributions reinvested
and no initial sales charge or contingent deferred sales charge.
(e) Had the Adviser/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>

Further performance information is contained in the Fund's Annual Report to
shareholders, which is obtainable free of charge by calling 1-800-248-2828.

FUTURE MASTER/FEEDER STRUCTURE

The Trustees have approved conversion of the Fund to the master/feeder structure
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 an interest in the Portfolio. Shareholders will not have an
opportunity to vote on such conversion. After conversion, rather than investing
directly in individual securities, the Fund would seek to achieve its investment
objective by investing all of its assets in the Portfolio, and the Portfolio
would 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. In addition to the Fund, other
institutional investors (including other investment companies) also would be
able to invest in the Portfolio. The conversion would be effected to allow other
such investors to invest in the Portfolio, potentially creating economies of
scale and providing additional portfolio management flexibility for the
Portfolio which, if achieved, also would indirectly benefit the Fund and its
shareholders. 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 in excess of U.S. $200 million) (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 "Japanese
Securities" below.

Japanese Securities. Because the Fund's investments are concentrated in Japan,
the value of its shares will be especially affected by political, economic and
market conditions within Japan and by movements in 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. Transactions in Japanese securities may be more costly
due to currency conversion costs and higher brokerage and custodial costs.

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 of
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 investment policies may be changed
without shareholder approval. The Fund will notify investors 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 investment objective. The Fund's fundamental
investment 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 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
Administrator, 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 0.95% 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 its behalf since 1994. Prior to 1996, Mr. Smith was an analyst at
Newport Pacific, an Executive Vice President at Carnegie Investor Services, and
a Vice President at Global Strategies, Redwood Securities, and Smith Bellingham
International, Inc. 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, pricing and 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 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 share 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 $5 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 share 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 plus an initial
sales charge as follows:

_____Initial Sales Charge_____
Retained
by
Financial
Service
Firm as
_____as % of_____ % 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 0.75% annual distribution fee for
approximately eight years (at which time they automatically convert to Class A
shares not bearing a distribution 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 and subject to a 0.75% annual distribution fee, a 1.00%
contingent deferred sales charge (0.99% of the offering price) 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
0.75% 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."

Class A shares of the Fund may also be purchased at net asset value by (i)
investment advisers or financial planners who have entered into agreements with
the Distributor (or who maintain a master account with a broker or agent that
has entered into such an agreement) and who charge a management, consulting or
other fee for their services, and clients of such investment advisers or
financial planners who place trades for their own accounts, if the accounts are
linked to the master account of such investment adviser or financial planner on
the books and records of the broker or agent; and (ii) retirement and deferred
compensation plans and trusts used to fund those plans, including, but not
limited to, those defined in Section 401(a), 403(b), or 457 of the Internal
Revenue Code and "rabbi trust," where the plans are administered by firms
that have entered into agreements with the Distributor or the Transfer Agent.

Investors may be charged a fee if they effect transactions in Fund shares
through a broker or agent.

Shareholder Services and Account Fees. 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.

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. The Fund may also deduct annual maintenance and processing fees
(payable to the Transfer Agent) in connection with certain retirement plan
accounts. See "Special Purchase Programs/Investor Services" in the Statement of
Additional Information for more information.

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.

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 most Colonial
funds. 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 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 may be elected on the account application by completing
the Telephone Withdrawal Options section including the Bank Information.
Proceeds and confirmations of telephone transactions will be mailed or sent to
the address of record. 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 and may be liable for
losses related to unauthorized transactions in the event reasonable procedures
are not employed. 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 0.25%
of the Fund's average net assets attributed to Class A, Class B and Class D
shares. The Fund also pays the Distributor an annual distribution fee of 0.75%
of the average net assets attributed to its Class B and Class D shares. Because
the Class B and Class D shares bear 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 October 31, 1996, the following persons owned more than 25% of Class B, Class
D and Class Z shares of the Fund and, therefore, may be deemed to control the
Fund:

Class B

Merrill Lynch Pierce Fenner & Smith 49.35%
for the Sole Benefit of its Customers
Attn.: Fund Administration
4800 Deer Lake Drive East, Third Floor
Jacksonville, Florida 32246

Class D

Liberty Financial Companies 31.38%
Attn.: Michael Santilli
600 Atlantic Avenue
Boston, Massachusetts 02110

Merrill Lynch Pierce Fenner & Smith 50.46%
for the Sole Benefit of its Customers
Attn.: Fund Administration
4800 Deer Lake Drive East, Third Floor
Jacksonville, Florida 32246

Class Z

Liberty Financial Companies 99.46%
Attn.: Michael Santilli
600 Atlantic Avenue
Boston, Massachusetts 02110

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.

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

December 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 December 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
_________________________________________________________________
Please send your completed application to:

Colonial Investors Service Center, Inc.
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: Names 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

________________ ___________________ _____________________

$_______________ $__________________ $____________________
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/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. 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.

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.

The Internal Revenue Service does not require your consent to any provision of
this document other than the certifications required to avoid backup
withholdings.
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 electronic
funds transfer (EFT), 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:

___________________
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, if indicating EFT,month).

___________________
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,if indicating EFT,month).

Payment Instructions
Send the payment to (choose one):
__My address of record.
__My bank account via EFT. Please complete the Bank Information section below.
All EFT transactions will be made two business days after the processing date.
Your bank must be a member of the Automated Clearing House 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 EFT. Telephone redemptions over $1,000 will be sent via federal fund wire,
usually on the 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 EFT Redemption
__I would like the On-Demand EFT Redemption Privilege. Proceeds paid via EFT
will be credited to your bank account two business days after the process
date. You or your financial adviser may withdraw shares from your fund account
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 distributions from one fund into
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.

____________________________
From fund

____________________________
Account number (if existing)

____________________________
To fund

____________________________
Account number (if existing)

____________________________
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 EFT Purchase
Fundamatic automatically transfers the specified amount from your 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

________________________________
Account number
$_____________________ _________________
Amount to transfer Month to start
__On-Demand Purchase (will be automatically established if you choose
Fundamatic)
__Fundamatic Frequency
__Monthly or __Quarterly

Check one:

__EFT- Choose any day of the month_____________________
__Paper Draft-Choose either the:
__5th day of the month
__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(s)
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.

_____________________________________
Name on account

_____________________________________
Account number

_____________________________________
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.

SH-938B-0396

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. The Fund's Financial History

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

December 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.

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. 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.

JF-/981C-1196

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 December 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 $5 million in the Fund and (ii) the
Adviser and its affiliates.

Contents Page

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" for more complete descriptions of the Fund's various costs
and expenses. It is anticipated that the Fund's annual operating expenses would
not change materially upon conversion to the master/feeder structure.

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 and administration fees (after expense 0.00%
reimbursement)
12b-1 fees 0.00
Other expenses (after expense reimbursement) 1.75
----
Total operating expenses 1.75%(3)
====

(3) The Adviser/Administrator has voluntarily agreed to waive or bear
certain Fund expenses until further notice to the Fund. Absent such
agreement, the "Management and administration fees" would have been
1.20%, "Other expenses" would have been 3.55% and "Total operating
expenses" would have been 4.75%.

For the period ended August 31, 1996, total operating expenses as a
percent of net assets were 10.88% which do not reflect current operating
expenses of the Fund.

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 $18
3 years $55

Without voluntary fee reductions, the amounts would be $48 and $143 for 1 and
3 years, respectively.

THE FUND'S FINANCIAL HISTORY (a)

The following information derived from the schedule of financial highlights for
a Class Z share outstanding throughout the period from June 3, 1996 through
August 31, 1996 has been audited by Price Waterhouse LLP, independent
accountants. Their unqualified report is included in the Fund's 1996 Annual
Report and is incorporated by reference into the Statement of Additional
Information.

CLASS Z
---------------
Period ended
August 31
---------------
1996 (c)
<S> <C>
Net asset value - Beginning of period $10.000
-------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(b) (0.010)
Net realized and unrealized loss (0.270)
Total from Investment Operations (0.280)
-------
Net asset value - End of period $9.720
======
Total return(d)(e) (2.80)% (f)
=======
RATIOS TO AVERAGE NET ASSETS
Expenses 1.75% (g)(h)
Net investment loss (0.41)% (g)(h)
Fees and expenses waived or borne by the Adviser/Administrator 9.13% (h)
Portfolio turnover ----
Average commission rate $0.1794
Net assets at end of period (000) $1,214
- ---------------------------------

(a) Per share data was calculated using average shares outstanding during the period.
(b) Net of fees and expenses waived or borne by the Adviser/Administrator
which amounted to: $0.230
(c) The Fund commenced investment operations on June 3, 1996.
(d) Total return at net asset value assuming all distributions reinvested
and no initial sales charge or contingent deferred sales charge.
(e) Had the Adviser/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>

Further performance information is contained in the Fund's Annual Report to
shareholders, which is obtainable free of charge by calling 1-800-248-2828.

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

The Fund normally invests substantially all of its assets in equity securities
of well-established Japanese companies (i.e. companies with equity market
capitalizations in excess of U.S. $200 million) (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 "Japanese
Securities" below.

Other. The Fund may not always achieve its investment objective. The Fund's
investment objective and non-fundamental investment policies may be changed
without shareholder approval. The Fund will notify investors 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 investment 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. 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 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 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 0.95% 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 its behalf since 1994. Prior to 1996, Mr. Smith was an analyst at
Newport Pacific, an Executive Vice President at Carnegie Investor Services, and
a Vice President a Global Strategies, Redwood Securities, and Smith Bellingham
International, Inc. 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, pricing and 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 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.

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. The Fund may deduct annual maintenance and processing fees (payable to
the Transfer Agent) in connection with certain retirement plan accounts. See
"Special Purchase Programs/Investor Services" in the Statement of Additional
Information for more information.

Other Classes of Shares. In addition to Class Z shares, the Fund offers three
other classes of shares, Classes A, B and D, through a separate Prospectus.

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, which do not bear 12b-1 fees or contingent deferred sales charges,
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.

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.

TELEPHONE TRANSACTIONS

All shareholders and/or their financial advisers are automatically eligible to
exchange 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 may be elected on the account application by completing
the Telephone Withdrawal Options section including the Bank Information.
Proceeds and confirmations of telephone transactions will be mailed or sent to
the address of record. 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 and may be liable for
losses related to unauthorized transactions in the event reasonable procedures
are not employed. 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.