Registration Nos: 33-12109
811-5030
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF [ X ]
1933
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 18 [ X ]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY [ X ]
ACT OF 1940
Amendment No. 19 [ X ]
COLONIAL TRUST V
(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 Copy to:
Service:
Arthur O. Stern, Esquire John M. Loder, Esquire
Colonial Management Associates, Ropes & Gray
Inc.
One Financial Center One International Place
Boston, Massachusetts 02111 Boston, Massachusetts 02110-2624
It is proposed that this filing will become effective (check
appropriate box):
[ ] immediately upon filing pursuant to
paragraph (b).
[ X ] on May 31, 1995 pursuant to paragraph (b).
[ ] 60 days after filing pursuant to paragraph
(a)(i).
[ ] on (date) pursuant to paragraph (a)(i) of
Rule 485.
[ ] 75 days after filing pursuant to paragraph
(a)(ii).
[ ] on (date) pursuant to paragraph (a)(ii) 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.
STATEMENT PURSUANT TO RULE 24f-2
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. On March
31, 1995, the Registrant filed the Rule 24f-2 Notice for
Registrant's fiscal year ended January 31, 1995.
COLONIAL TRUST V
Cross Reference Sheet
Colonial California Tax-Exempt Fund
Colonial Connecticut Tax-Exempt Fund
Colonial Florida Tax-Exempt Fund
Colonial Massachusetts Tax-Exempt Fund
Colonial Michigan Tax-Exempt Fund
Colonial Minnesota Tax-Exempt Fund
Colonial New York Tax-Exempt Fund
Colonial North Carolina Tax-Exempt Fund
Colonial Ohio Tax-Exempt Fund
Item Number of Form N1A Location or Caption in
Prospectus
Part A
1. Cover Page
2. Summary of expenses
3. The Funds' financial history
4. The Funds' investment objective;
Organization and history; How the
Funds pursue their objectives
5. Cover page; How the Funds are
managed; Organization and
history; The Funds' investment
objective; Back Cover
6. Organization and history;
Distributions and taxes; How to
buy shares
7. Summary of expenses; How to buy
shares; How the Funds value their
shares; 12b-1 plans; Cover page;
Back Cover
8. Summary of expenses; How to sell
shares; How to exchange shares;
Telephone transactions
9. Not applicable
May 31, 1995
COLONIAL CALIFORNIA TAX-EXEMPT FUND
COLONIAL CONNECTICUT TAX-EXEMPT FUND
COLONIAL FLORIDA TAX-EXEMPT FUND
COLONIAL MASSACHUSETTS TAX-EXEMPT FUND
COLONIAL MICHIGAN TAX-EXEMPT FUND
COLONIAL MINNESOTA TAX-EXEMPT FUND
COLONIAL NEW YORK TAX-EXEMPT FUND
COLONIAL NORTH CAROLINA TAX-EXEMPT FUND
COLONIAL OHIO TAX-EXEMPT FUND
PROSPECTUS
BEFORE YOU INVEST
Colonial Management Associates, Inc. (Adviser) 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 one of these mutual funds may suit your unique needs,
time horizon and risk tolerance.
Each of Colonial California, Connecticut, Florida, Massachusetts,
Michigan, Minnesota, New York, North Carolina and Ohio Tax-Exempt
Funds is a portfolio of Colonial Trust V (Trust), an open-end
management investment company. Each Fund seeks as high a level of
after-tax total return, as is consistent with prudent risk, by
pursuing current income exempt from federal and its Fund's respective
state personal income tax (if any) and opportunities for long-term
appreciation from a portfolio primarily invested in investment grade
municipal bonds. The Florida, Michigan and North Carolina Funds'
shares are intended to be exempt from the respective state's
intangibles tax. Each Fund (except the California Fund) is non-
diversified. The Funds are managed by the Adviser, an investment
adviser since 1931.
SP-01/907A-0595
This Prospectus explains concisely what you should know before
investing in the Funds. Read it carefully and retain it for future
reference. More detailed information about each Fund is in the May
31, 1995 Statement of Additional Information which has been filed with
the Securities and Exchange Commission and is obtainable free of
charge by calling the Adviser 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.
Each Fund offers two 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 plus an annual
distribution fee and a declining contingent deferred sales charge on
redemptions made within six years after purchase. Class B shares
automatically convert to Class A shares after approximately eight
years. See "How to buy shares."
Contents Page
Summary of expenses.
The Funds' financial history
The Funds' investment objective
How the Funds pursue their
objective
How the Funds measure their
performance
How the Funds are managed
How the Funds value their shares
Distributions and taxes
How to buy shares
How to sell shares
How to exchange shares
Telephone transactions
12b-1 plans
Organization and history
Appendix
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 a
Fund. The following tables summarize your maximum transaction costs
and annual expenses for an investment in each Class of each Fund's
shares.
Shareholder Transaction Expenses(1)(2)
Class A Class B
Maximum Initial Sales Charge
Imposed on a Purchase (as a % of
offering price)(3) 4.75% 0.00%(5)
Maximum Contingent Deferred Sales
Charge (as a % of offering
price)(3) 1.00%(4) 5.00%
(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 0.75% distribution fee applicable
to Class B shares, long-term Class B
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
Funds' Class B shares automatically convert to
Class A shares after approximately 8 years, this
is less likely to be true for Class B shares
than for a class without a conversion feature.
Annual Operating Expenses (as a % of net assets)
California Connecticut Florida
Class A Class B Class A Class B Class A Class B
Management fee
(after
waiver)(6) 0.54% 0.54% 0.02% 0.02% 0.00% 0.00%
12b-1 fee
(6)(7) 0.12 0.87 0.12 0.87 0.12 0.87
Other expenses
(after waiver) 0.18 0.18 0.28 0.28 0.20 0.20
Net expenses 0.84% 1.59% 0.42% 1.17% 0.32% 1.07%
Massachusetts Michigan Minnesota
Class A Class B Class A Class B Class A Class B
Management fee
(after
waiver)(6) 0.45% 0.45% 0.25% 0.25% 0.30% 0.30%
12b-1
fee(6)(7) 0.12 0.87 0.12 0.87 0.12 0.87
Other expenses
(after waiver) 0.25 0.25 0.35 0.35 0.40 0.40
Net expenses 0.82% 1.57% 0.72% 1.47% 0.82% 1.57%
New York North Carolina Ohio
Class A Class B Class A Class B Class A Class B
Management fee
(after
waiver)(6) 0.10% 0.10% 0.00% 0.00% 0.41% 0.41%
12b-1
fees(6)(7) 0.12 0.87 0.12 0.87 0.12 0.87
Other expenses
(after waiver) 0.30 0.30 0.10 0.10 0.29 0.29
Net expenses 0.52% 1.27% 0.22% 0.97% 0.82% 1.57%
Without voluntary expense limits that the Adviser may discontinue at anytime,
the amounts in Annual Operating Expenses would be:
California Connecticut Florida
Class A Class B Class A Class B Class A Class B
Management fee (6) 0.54% 0.54% 0.54% 0.54% 0.54% 0.54%
12b-1 fees (6) (7) 0.12 0.87 0.12 0.87 0.12 0.87
Other expenses 0.18 0.18 0.28 0.28 0.37 0.37
Total expenses 0.84% 1.59% 0.94% 1.69% 1.03% 1.78%
Massachusetts Michigan Minnesota
Class A Class B Class A Class B Class A Class B
Management fee (6) 0.54% 0.54% 0.54% 0.54% 0.54% 0.54%
12b-1 fees(6)(7) 0.12 0.87 0.12 0.87 0.12 0.87
Other expenses 0.25 0.25 0.35 0.35 0.40 0.40
Total expenses 0.91% 1.66% 1.01% 1.76% 1.06% 1.81%
New York North Carolina Ohio
Class A Class B Class A Class B Class A Class B
Management fee (6) 0.54% 0.54% 0.54% 0.54% 0.54% 0.54%
12b-1 fees(6)(7) 0.12 0.87 0.12 0.87 0.12 0.87
Other expenses 0.30 0.30 0.46 0.46 0.29 0.29
Total expenses 0.96% 1.71% 1.12% 1.87% 0.95% 1.70%
Example
The following Example shows the cumulative expenses attributable to a
hypothetical $1,000 investment in each Class of shares of each Fund
for the periods specified, assuming a 5% annual return, and, unless
otherwise noted, redemption at period end. The 5% return and expenses
used in the Example should not be considered indicative of actual or
expected Fund performance or expenses, both of which will vary.
California Connecticut Florida
Class A Class B Class A Class B Class A Class B
Period: (8) (8) (8)
1 year $ 56 $ 66 $ 16 $52 $ 62 $ 12 $51 $ 61 $ 11
3 years 73 81 51 60 67 37 57 64 34
5 years 92 107 87 70 85 65 65 79 59
10 years 147 170(9) 170(9) 98 122(9) 122(9) 86 110(9) 110(9)
Massachusetts Michigan Minnesota
Class A Class B Class A Class B Class A Class B
Period: (8) (8) (8)
1 year $ 55 $ 66 $ 16 $ 55 $ 65 $ 15 $ 55 $ 66 $ 16
3 years 72 80 50 69 77 47 72 80 50
5 years 91 106 86 86 101 81 91 106 86
10 years 144 168(9) 168(9) 133 156(9) 156(9) 144 168(9) 168(9)
New York North Carolina Ohio
Class A Class B Class A Class B Class A Class B
Period: (8) (8) (8)
1 year $ 53 $ 63 $ 13 $50 $60 $10 $ 55 $ 66 $ 16
3 years 63 71 41 54 61 31 72 80 50
5 years 75 90 70 59 74 54 91 106 86
10 years 110 133(9) 133(9) 74 98(9) 98(9) 144 168(9) 168(9)
Without voluntary expense limits that the Adviser may discontinue at
any time, the amounts in the Example would be:
California Connecticut Florida
Class A Class B Class A Class B Class A Class B
Period: (8) (8) (8)
1 year $ 56 $ 66 $ 16 $ 57 $ 67 $ 17 $ 58 $ 68 $ 18
3 years 73 81 51 76 84 54 79 87 57
5 years 92 107 87 97 113 93 102 117 97
10 years 147 170(9) 170(9) 158 181(9) 181(9) 168 191(9) 191(9)
Massachusetts Michigan Minnesota
Class A Class B Class A Class B Class A Class B
Period: (8) (8) (8)
1 year $ 56 $ 67 $ 17 $ 57 $ 68 $ 18 $ 58 $ 69 $ 19
3 years 75 83 53 78 86 56 80 87 57
5 years 96 111 91 101 116 96 103 119 99
10 years 154 178(9) 178(9) 166 189(9) 189(9) 170 194(9) 194(9)
New York North Carolina Ohio
Class A Class B Class A Class B Class A Class B
Period: (8) (8) (8)
1 year $ 57 $ 68 $ 18 $ 58 $ 69 $ 19 $ 57 $ 67 $ 17
3 years 77 84 54 81 89 59 76 84 54
5 years 98 113 93 106 122 102 98 113 93
10 years 160 183(9) 183(9) 177 201(9) 201(9) 159 182(9) 182(9)
(6) The nominal Management and Rule 12b-1 fees were
changed during the fiscal year ended January
1995. The percentages shown are estimates based
on the new fees.
(7) Includes an annualized service fee of_0.12%.
The service fee rate will fluctuate but will not
exceed 0.25%.
(8) Assumes no redemption.
(9) Class B shares convert to Class A shares after
approximately 8 years; therefore years 9 and 10
reflect Class A shares expenses.
THE FUNDS' FINANCIAL HISTORY
The following schedules of financial highlights for a share
outstanding throughout each period have been audited by Price
Waterhouse LLP, independent accountants. Their unqualified reports
are included in the Funds' 1995 Annual Reports, and are incorporated
by reference into the Statement of Additional Information.
<TABLE>
<CAPTION>
CALIFORNIA
Two months ended Year ended
Year ended January 31 January 31 November 30
1995 1994 1993(b) 1992
Class A Class B Class A Class B Class A Class B Class A Class B (c)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value -
Beginning of period $7.660 $7.660 $7.350 $7.350 $7.270 $7.270 $7.150 $7.410
------ ------ ------ ------ ------- ------- ------ -------
Income from investment
operations:
Net investment income(a) 0.413 0.360 0.434 0.378 0.076 0.067 0.467 0.143
Net realized and
unrealized gain (loss)
on investments (0.791) (0.791) 0.315 0.315 0.081 0.081 0.109 (0.151)
------- ------- ----- ----- ----- ----- ----- -------
Total from investment
operations (0.378) (0.431) 0.749 0.693 0.157 0.148 0.576 (0.008)
------- ------- ------- ------- ------- ------- ------- -------
Less distributions
declared to shareholders:
From net investment income (0.412) (0.359) (0.439) (0.383) (0.077) (0.068) (0.456) (0.132)
Total distributions
declared shareholders: (0.412) (0.359) (0.439) (0.383) (0.077) (0.068) (0.456) (0.132)
------- ------- ------- ------- ------- ------- ------- -------
Net asset value -
End of period $6.870 $6.870 $7.660 $7.660 $7.350 $7.350 $7.270 $7.270 (g)
------- ------ ------- ------- ------- ------- ------- -------
------- ------ ------- ------- ------- ------- ------- -------
Total return(d)(e) (4.83)% (5.55)% 10.44% 9.63% 8.70%(f 1.01%(f) 8.27% 1.94% (g)
------- ------ ------- ------- ------- ------- ------- -------
------- ------ ------- ------- ------- ------- ------- -------
Ratios to average net assets:
Expenses 0.77%(h) 1.52%(h) 0.75% 1.50% 0.65%(g) 1.40%(g) 0.71% 1.46%
Net investment income 5.91% 5.16% 5.73% 4.98% 6.29%(g) 5.54%(g) 6.44% 5.69%
Fees and expenses waived
or borne by Adviser 0.06% 0.06% 0.08% 0.08% 0.21%(g) 0.21%(g) 0.13% 0.13%
Portfolio turnover 47% 47% 17% 17% 19%(g) 19%(g) 12% 12%
Net assets at
end of period (000) $301,912 $98,975 $379,987 $104,578 $337,409 $33,819 $324,012 $22,797
----------------------------
(a) Net of fees and
expenses waived or
borne by the Adviser
which amounted to $0.004 $0.004 $0.006 $0.006 $0.002 $0.002 $0.010 $0.010
(b) The Fund changed its fiscal year end from November 30 to January
31 in 1992.
(c) Class B shares were initially offered on August 4, 1992. Per
share amounts reflect
activity from that date.
(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 not waived or reimbursed a portion of expenses
total return would have been reduced.
(f) Not annualized.
(g) Annualized.
(h) Includes service fee since inception on December 1, 1994, of
0.02% (not annualized).
</TABLE>
<TABLE>
<CAPTION>
CALIFORNIA (CONTINUED)
Period ended
Year ended November 30 November 30
1991 1990 1989 1988 1987 1986(b)
<S> Class A Class A Class A Class A Class A Class A
Net asset value - <C> <C> <C> <C> <C> <C>
Beginning of period $6.940 $7.010 $6.850 $6.530 $7.490 $7.140
------ ------ ------ ------- ------- -------
Income from investment operations:
Net investment income(a) 0.473 0.490 0.480 0.497 0.515 0.237
Net realized and unrealized
gain (loss) on investments 0.211 (0.065) 0.160 0.316 (0.950) 0.351
----- ------ ------ ------ ------- ------
Total from investment operations: 0.684 0.425 0.640 0.813 (0.435) 0.588
------ ------ ------ ------ ------- ------
Less distributions declared
to shareholders
From net investment income (0.473) (0.492) (0.480) (0.493) (0.514) (0.238)
From net realized gains --- -- ---- -- (0.002) ---
From capital paid in (c) (0.001) (0.003) --- --- (0.009) ---
------ ------ ------ ------- ------- -------
Total distributions declared
to shareholders (0.474) (0.495) (0.480) (0.493) (0.525) (0.238)
------- ------- ------- ------- ------- -------
Net asset value - End of period $7.150 $6.940 $7.010 $6.850 $6.530 $7.490
------ ------ ------- ------- ------- -------
------ ------ ------- ------- ------- -------
Total return (d) (e) 10.18% 6.30% 9.61% 12.74% (6.02)% 8.35% (f)
------ ------ ------- ------- ------- -------
------ ------ ------- ------- ------- -------
Ratios to average net assets:
Expenses 0.80% 0.70% 0.95% 0.66% 0.52% --- (g)
Net investment income 6.69% 7.02% 6.87% 7.28% 7.33% 6.99% (g)
Fees and expenses waived
or borne by Adviser 0.05% 0.15% 0.15% 0.49% 0.63% 1.08% (g)
Portfolio turnover 11% 22% 40% 106% 94% 31% (g)
Net assets at end of period (000) $295,459 $221,519 $155,514 $133,317 $113,774 $57,777
(a) Net of fees and
expenses waived or borne
by the Adviser which
amounted to $0.003 $0.010 $0.011 $0.033 $0.044 $0.014
(b) The Fund commenced investment operations on June 16, 1986.
(c) Because of differences between book and tax basis accounting
there was no return of capital for federal income tax purposes.
(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 not waived or reimbursed a portion of expenses
total return would have been reduced.
(f) Not annualized.
(g) Annualized.
</TABLE>
<TABLE>
<CAPTION>
CONNECTICUT
Year ended January 31
1995 1994
---- ----
Class A Class B Class A Class B
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value - Beginning
of period $7.890 $7.890 $7.420 $7.420
------ ------ ------ ------
Income (loss) from investment
operations:
Net investment income(a) 0.418 0.363 0.429 0.372
Net realized and unrealized
gain (loss) on investments (0.809) (0.809) 0.465 0.465
------- ------- ----- -----
Total from investment
operations (0.391) (0.446) 0.894 0.837
------- ------- ----- -----
Less distributions declared
to shareholders:
From net investment income (0.418) (0.363) (0.424) (0.367)
In excess of net investment income --- --- --- ---
From net realized gains (0.001) (0.001) --- ---
In excess of net realized gains --- --- --- ---
------- ------- ------- -------
Total from distributions declared
to shareholders (0.419) (0.364) (0.424) (0.367)
------- ------- ------- -------
Net asset value - End of period $7.080 $7.080 $7.890 $7.890
===== ===== ===== =====
Total return(d)(e) (4.85)% (5.57)% 12.30% 11.49%
==== ==== ===== =====
Ratios to average net assets:
Expenses 0.32%(f) 1.07%(f) 0.22% 0.97%
Net investment income 5.81% 5.06% 5.48% 4.73%
Fees and expense waived
or borne by the Adviser 0.55% 0.55% 0.65% 0.65%
Portfolio turnover 22% 22% 5% 5%
Net assets at end of period (000) $74,616 $73,580 $91,436 $71,791
-------------------------------------
(a) Net of fees and expenses
waived or borne by the
Adviser which amounted
to $0.039 $0.039 $0.051 $0.051
(b) Class B shares were initially offered on June 8, 1992.
Per share amounts reflect activity from that date.
(c) The Fund commenced investment operations on November 1, 1991.
(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 not waved or reimbursed a portion of
expenses total return would have been reduced.
(f) Includes service fee since its inception in December
1, 1994, of 0.02% (not annualized).
(g) Not annualized.
(h) Annualized.
</TABLE>
<TABLE>
<CAPTION>
CONNECTICUT
Period ended
Year ended January 31 January 31
1993 1992
---- ----
Class A Class B(b) Class A (c)
------- ---------- -----------
<S> <C> <C> <C>
Net asset value - Beginning
of period $7.190 $7.200 $7.140
------ ------ ------
Income (loss) from investment
operations:
Net investment income(a) 0.449 0.256 0.118
Net realized and unrealized
gain (loss) on investments 0.270 0.257 0.046
----- ----- -----
Total from investment
operations 0.719 0.513 0.164
----- ----- -----
Less distributions declared
to shareholders:
From net investment income (0.452) (0.256) (0.114)
In excess of net investment income (0.002) (0.002) ---
From net realized gains (0.021) (0.021) ---
In excess of net realized gains (0.014) (0.014) ---
------- ------- -------
Total from distributions declared
to shareholders (0.489) (0.293) (0.114)
------- ------- -------
Net asset value - End of period $7.420 $7.420 $7.190
===== ===== =====
Total return(d)(e) 10.34% 7.23%(g) 2.31%(g)
===== ==== ====
Ratios to average net assets:
Expenses --- 0.75%(h) ---
Net investment income 6.00% 5.25%(h) 4.68%(h)
Fees and expense waived
or borne by the Adviser 0.90% 0.90% 1.32%(h)
Portfolio turnover 4% 4% 53%(h)
Net assets at end of period (000) $63,126 $27,839 $12,349
-------------------------------------
(a) Net of fees and expenses
waived or borne by the
Adviser which amounted
to $0.067 $0.042 $0.033
(b) Class B shares were initially offered on June 8, 1992.
Per share amounts reflect activity from that date.
(c) The Fund commenced investment operations on November 1, 1991.
(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 not waved or reimbursed a portion of
expenses total return would have been reduced.
(f) Includes service fee since its inception in December
1, 1994, of 0.02% (not annualized).
(g) Not annualized.
(h) Annualized.
</TABLE>
<TABLE>
<CAPTION>
FLORIDA
Year ended January 31
1995 1994(b)
---- -------
Class A Class B Class A Class B
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value - Beginning of period $7.930 $7.930 $7.500 $7.500
------ ------ ------ ------
Income (loss) from investment operations:
Net investment income(a) 0.423 0.369 0.434 0.378
Net realized and unrealized gain (loss) on investments (0.839) (0.839) 0.420 0.420
------- ------- ----- -----
Total from investment operations (0.416) (0.470) 0.854 0.798
------- ------- ----- -----
Less distributions declared to shareholders:
From net investment income (0.414) (0.360) (0.424) (0.368)
Net asset value - End of period $7.100 $7.100 $7.930 $7.930
===== ===== ===== =====
Total return(c)(d) (5.11)% (5.83)% 11.66% 10.85%
==== ==== ===== =====
Ratios to average net assets:
Expenses 0.22%(e) 0.97%(e) 0.05% 0.80%
Net investment income 5.92% 5.17% 5.40% 4.65%
Fees and expenses waived or borne by the Adviser 0.73% 0.73% 0.88% 0.88%
Portfolio turnover 45% 45% 19% 19%
Net assets at end of period (000) $27,498 $31,116 $23,802 $31,513
-------------------------------------------
(a) Net of fees and expenses
waived or borne by the
Adviser which amounted to $0.052 $0.052 $0.071 $0.071
(b) The Fund commenced investment operations on February 1, 1993.
(c) Total return at net asset value assuming all
distributions reinvested and no initial sales charge
or contingent deferred sales charge.
(d) Had the Adviser not waved or reimbursed a portion of
expenses total return would have been reduced.
(e) Includes service fee since its inception in December
1, 1994, of 0.02% (not annualized).
</TABLE>
<TABLE>
<CAPTION>
MASSACHUSETTS
Year ended January 31
1995 1994 1993
Class A Class B Class A Class B Class A Class B (b)
<S> <C> <C> <C> <C> <C> <C>
Net asset value - Beginning of period $8.130 $8.130 $7.700 $7.700 $7.420 $7.450
------ ------ ------ ------ ------- ------
Income from investment operations:
Net investment income(a) 0.444 0.388 0.453 0.395 0.481 0.272
Net realized and unrealized
gain (loss) on investments (0.738) (0.738) 0.439 0.439 0.301 0.275
------ ------ ------ ------ ------- ------
Total from investment
operations (0.294) (0.350) 0.892 0.834 0.782 0.547
------ ------ ------ ------ ------- ------
Less distributions declared
to shareholders:
From net investment income (0.446) (0.390) (0.462) (0.404) (0.479) (0.274)
From net realized gains --- --- --- --- (0.002) (0.002)
In excess of net realized gains --- --- --- --- (0.021) (0.021)
------ ------ ------ ------ ------- ------
Total distributions declared
to shareholders (0.446) (0.390) (0.462) (0.404) (0.502) (0.297)
------ ------ ------ ------ ------- ------
Net asset value - End of period $7.390 $7.390 $8.130 $8.130 $7.700 $7.700
------ ------ ------ ------ ------- ------
------ ------ ------ ------ ------- ------
Total return(c)(d) (3.49)% (4.21)% 11.86% 11.05% 10.87% 1.11%(f)
------ ------ ------ ------ ------- ------
------ ------ ------ ------ ------- ------
Ratios to average net assets:
Expenses 0.72%(e) 1.47%(e) 0.64% 1.39% 0.54% 1.29%(g)
Net investment income 5.93% 5.18% 5.68% 4.93% 6.38% 5.63%(g)
Fees and expense waived
or borne by the Adviser 0.12% 0.12% 0.21% 0.21% 0.33% 0.33%
Portfolio turnover 58% 58% 7% 7% 7% 7%
Net assets at end of period (000) $193,303 $53,973 $225,636 $51,819 $186,526 $17,282
_____________________________
(a) Net of fees and
expenses waived or
borne by the Adviser
which amounted to
amounted to $0.009 $0.009 $0.016 $0.016 $0.025 $0.016
(b) Class B shares were initially offered on June 8, 1992. Per share amounts reflect
activity from that date.
(c) Total return at net asset value assuming all distributions
reinvested and no initial sales charge or contingent deferred sales charge.
(d) Had the Adviser not waived or reimbursed a portion of total
expenses total return would have been reduced.
(e) Includes service fee since its inception on December 1, 1994, of
0.02% (not annualized).
(f) Not annualized.
(g) Annualized.
(h) The Fund commenced investment operations on April 10, 1987.
</TABLE>
<TABLE>
<CAPTION>
MASSACHUSETTS
Period ended
Year ended January 31 January 31
1992 1991 1990 1989 1988(h)
Class A Class A Class A Class A Class A
<S> <C> <C> <C> <C> <C>
Net asset value - Beginning of period $7.120 $7.080 $7.190 $7.060 $7.140
------ ------ ------- ------ -------
Income from investment operations:
Net investment income(a) 0.505 0.523 0.515 0.517 0.407
Net realized and unrealized
gain (loss) on investments 0.295 0.041 (0.107) 0.129 (0.085)
------ ------ ------- ------ -------
Total from investment
operations 0.800 0.564 0.408 0.646 0.322
------ ------ ------- ------ -------
Less distributions declared
to shareholders:
From net investment income (0.500) (0.524) (0.518) (0.516) (0.402)
From net realized gains --- --- --- --- ---
In excess of net realized gain --- --- --- --- ---
------ ------ ------- ------ -------
Total distributions declared
to shareholders (0.500) (0.524) (0.518) (0.516) (0.402)
------- ------- ------- ------- -------
Net asset value - End of period $7.420 $7.120 $7.080 $7.190 $7.060
------ ------ ------- ------ -------
------ ------ ------- ------ -------
Total return(c)(d) 11.61% 8.31% 5.86% 9.55% 4.80%(f)
------ ------ ------- ------ -------
------ ------ ------- ------ -------
Ratios to average net assets:
Expenses 0.46% 0.30% 0.45% 0.22% ---(g)
Net investment income 6.89% 7.34% 7.17% 7.30% 7.47%(g)
Fees and expense waived
or borne by the Adviser 0.43% 0.65% 0.89% 1.94% 2.90%(g)
Portfolio turnover 14% 30% 25% 44% 104%(g)
Net assets at end of period (000) $145,957 $85,301 $42,167 $21,987 $7,563
_____________________________
(a) Net of fees and
expenses waived or
borne by the Adviser
which amounted to
amounted to $0.032 $0.046 $0.064 $0.137 $0.157
(b) Class B shares were initially offered on June 8, 1992. Per share amounts reflect
activity from that date.
(c) Total return at net asset value assuming all distributions
reinvested and no initial sales charge or contingent deferred sales charge.
(d) Had the Adviser not waived or reimbursed a portion of total
expenses total return would have been reduced.
(e) Includes service fee since its inception on December 1, 1994, of
0.02% (not annualized).
(f) Not annualized.
(g) Annualized.
(h) The Fund commenced investment operations on April 10, 1987.
</TABLE>
<TABLE>
<CAPTION>
MICHIGAN
Year ended January 31
1995 1994 1993
---- ---- ----
Class A Class B Class A Class B Class A Class B(b)
------- ------- ------- ------- ------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value - Beginning of period $7.340 $7.340 $6.970 $6.970 $6.730 $6.950
------ ------ ------ ------ ------ ------
Income (loss) from investment operations:
Net investment income (a) 0.410 0.359 0.404 0.351 0.405 0.167
Net realized and unrealized
gain (loss) on investments (0.689) (0.689) 0.356 0.356 0.250 0.029
------- ------- ----- ----- ----- -----
Total from investment
operations (0.279) (0.330) 0.760 0.707 0.655 0.196
------- ------- ----- ----- ----- -----
Less distributions declared
to shareholders:
From net investment income (0.401) (0.350) (0.390) (0.337) (0.407) (0.168)
In excess of net investment income --- --- --- --- (0.008) (0.008)
----- ----- ----- ----- ------- -------
Total distributions declared
to shareholders (0.401) (0.350) (0.390) (0.337) (0.415) (0.176)
------- ------- ------- ------- ------- -------
Net asset value - End of period $6.660 $6.660 $7.340 $7.340 $6.970 $6.970
====== ====== ====== ====== ====== ======
Total return (c)(d) (3.66)% (4.39)% 11.16% 10.36% 10.04% 0.98%(f)
====== ====== ===== ===== ===== ====
Ratios to average net assets:
Expenses 0.62%(e) 1.37%(e) 0.66% 1.41% 0.88% 1.63%(g)
Net investment income 6.08% 5.33% 5.61% 4.86% 5.86% 5.11%(g)
Fees and expense waived
or borne by the Adviser 0.32% 0.32% 0.33% 0.33% 0.32% 0.32%
Portfolio turnover 40% 40% 7% 7% 14% 14%
Net assets at end of period (000) $41,844 $14,144 $45,570 $15,030 $36,024 $6,670
_____________________________
(a) Net of fees
and expenss waived
or borne by the
Adviser which
amounted to $0.022 $0.022 $0.024 $0.024 $0.022 $0.009
(b) Class B shares were initially offered on August 4, 1992. Per
share amounts reflect activity from that date.
(c) Total return at net asset value assuming all distributions
reinvested and no initial
sales charge or contingent deferred sales charge.
(d) Had the Adviser not waived or reimbursed a portion of expenses
total return would have been reduced.
(e) Includes service fee since its inception on December 1, 1994, of
0.02% (not annualized).
(f) Not annualized.
(g) Annualized.
(h) The Fund commenced investment operations on September 26, 1986.
(i) Because of differences between book and tax basis accounting, there was no
return of capital for federal income tax purposes.
</TABLE>
<TABLE>
<CAPTION>
MICHIGAN
Period ended
Year ended January 31 January 31
1992 1991 1990 1989 1988 1987(h)
---- ---- ---- ---- ---- ----
Class A Class A Class A Class A Class A Class A
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value - Beginning of period $6.520 $6.520 $6.690 $6.550 $7.260 $7.140
------ ------ ------ ------ ------ ------
Income (loss) from investment operations:
Net investment income (a) 0.432 0.441 0.422 0.438 0.495 0.170
Net realized and unrealized
gain (loss) on investments 0.208 (0.001) (0.168) 0.133 (0.709) 0.125
----- ------- ------- ----- ------- -----
Total from investment
operations 0.640 0.440 0.254 0.571 (0.214) 0.295
----- ----- ----- ----- ------- -----
Less distributions declared
to shareholders:
From net investment income (0.430) (0.440) (0.424) (0.431) (0.496)(i) (0.175)(i)
In excess of net investment income --- --- --- --- --- ---
----- ----- ----- ----- ----- -----
Total distributions declared
to shareholders (0.430) (0.440) (0.424) (0.431) (0.496) (0.175)
------- ------- ------- ------- ------- -------
Net asset value - End of period $6.730 $6.520 $6.520 $6.690 $6.550 $7.260
====== ====== ====== ====== ====== ======
Total return (c)(d) 10.12% 7.01% 3.90% 9.08% (2.68)% 4.18% (f)
===== ==== ==== ==== ====== ====
Ratios to average net assets:
Expenses 0.95% 1.00% 1.42% 1.29% 0.38% --- (g)
Net investment income 6.50% 6.79% 6.37% 6.73% 7.38% 6.19% (g)
Fees and expense waived
or borne by the Adviser 0.35% 0.40% 0.30% 0.51% 1.36% 1.93% (g)
Portfolio turnover 5% 18% 16% 57% 58% 31% (g)
Net assets at end of period (000) $28,608 $24,273 $18,870 $20,112 $21,426 $9,679
_____________________________
(a) Net of fees
and expenss waived
or borne by the
Adviser which
amounted to $0.023 $0.026 $0.020 $0.033 $0.089 $0.052
(b) Class B shares were initially offered on August 4, 1992. Per
share amounts reflect activity from that date.
(c) Total return at net asset value assuming all distributions
reinvested and no initial
sales charge or contingent deferred sales charge.
(d) Had the Adviser not waived or reimbursed a portion of expenses
total return would have been reduced.
(e) Includes service fee since its inception on December 1, 1994, of
0.02% (not annualized).
(f) Not annualized.
(g) Annualized.
(h) The Fund commenced investment operations on September 26, 1986.
(i) Because of differences between book and tax basis accounting, there was no
return of capital for federal income tax purposes.
</TABLE>
<TABLE>
<CAPTION>
MINNESOTA
Year ended January 31
1995 1994 1993
Class A Class B Class A Class B Class A Class B (b)
<S> <C> <C> <C> <C> <C> <C>
Net asset value - Beginning of period $7.480 $7.480 $7.160 $7.160 $7.030 $7.210
------ ------ ------ ------ ------ ------
Income from investment operations:
Net investment income(a) 0.415 0.363 0.419 0.364 0.449 0.191
Net realized and unrealized
gain (loss) on investments (0.642) (0.642) 0.323 0.323 0.125 (0.049)
------- ------- ------ ------ ------ -------
Total from investment
operations (0.227) (0.279) 0.742 0.687 0.574 0.142
-------- ------- ----- ----- ----- -----
Less distributions declared
to shareholders:
From net investment income (0.413) (0.361) (0.422) (0.367) (0.444) (0.192)
From net realized gains --- --- --- --- --- ---
From capital paid in (c) --- --- --- --- --- ---
------- ------- ------- ------- ------- -------
Total distributions declared
to shareholders (0.413) (0.361) (0.422) (0.367) (0.444) (0.192)
------- ------- ------- ------- ------- -------
Net asset value - End of period $6.840 $6.840 $7.480 $7.480 $7.160 $7.160
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
Total return (d)(e) (2.92)% (3.65)% 10.62% 9.81% 8.41% 2.01%(g)
------- ------- ------- ------ ------ -------
------- ------- ------- ------ ------ -------
Ratios to average net assets:
Expenses 0.72%(f) 1.47%(f) 0.82% 1.57% 0.85% 1.60%(h)
Net investment income 5.98% 5.23% 5.69% 4.94% 6.33% 5.58%(h)
Fees and expense waived
or borne by the Adviser 0.26% 0.26% 0.20% 0.20% 0.35% 0.35%
Portfolio turnover 26% 26% 9% 9% 5% 5%
Net assets at end of period (000) $35,846 $14,731 $41,326 $10,317 $35,017 $2,173
_____________________________
(a) Net of fees
and waived or borne
by the Adviser
which amounted to $0.018 $0.018 $0.015 $0.015 $0.025 $0.009
(b) Class B shares were initially offered on August 4, 1992. Per
share amounts reflect activity from that date.
(c) Because of differences between book and tax basis accounting,
there was no return of capital for federal income tax purposes.
(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 not waived or reimbursed a portion of expenses
total return would have been reduced.
(f) Includes service fee since its inception on December 1, 1994, of
0.02% (not annualized).
(g) Not annualized.
(h) Annualized.
(i) The Fund commenced investment operations on September 26, 1986.
</TABLE>
<TABLE>
<CAPTION>
Period ended
Year ended January 31 January 31
1992 1991 1990 1989 1988 1987(i)
Class A Class A Class A Class A Class A Class A
<S> <C> <C> <C> <C> <C> <C>
Net asset value - Beginning of period $6.930 $6.820 $6.850 $6.820 $7.310 $7.140
------ ------ ------ ------ ------ ------
Income from investment operations:
Net investment income(a) 0.461 0.467 0.440 0.434 0.499 0.170
Net realized and unrealized
gain (loss) on investments 0.098 0.108 (0.032) 0.034 (0.490) 0.175
------ ------ ------ ------ ------ ------
Total from investment
operations 0.559 0.575 0.408 0.468 0.009 0.345
------ ------ ------ ------ ------ ------
Less distributions declared
to shareholders:
From net investment income (0.458) (0.465) (0.438) (0.438) (0.497) (0.175)
From net realized gains --- --- --- --- (0.002) ---
From capital paid in (c) (0.001) --- --- --- --- ---
------- ------- ------- ------- ------- -------
Total distributions declared
to shareholders (0.459) (0.465) (0.438) (0.438) (0.499) (0.175)
------- ------- ------- ------- ------- -------
Net asset value - End of period $7.030 $6.930 $6.820 $6.850 $6.820 $7.310
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
Total return (d)(e) 8.33% 8.70% 6.11% 7.15% 0.47% 4.87% (g)
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
Ratios to average net assets:
Expenses 0.88% 1.00% 1.41% 1.47% 0.55% ---- (h)
Net investment income 6.58% 6.77% 6.40% 6.41% 7.22% 6.16% (h)
Fees and expense waived
or borne by the Adviser 0.42% 0.37% 0.28% 0.39% 1.36% 4.83% (h)
Portfolio turnover 1% 7% 13% 20% 43% 43% (h)
Net assets at end of period (000) $30,676 $24,188 $19,100 $19,721 $17,533 $5,765
_____________________________
(a) Net of fees
and waived or borne
by the Adviser
which amounted to $0.029 $0.026 $0.019 $0.027 $0.094 $0.131
(b) Class B shares were initially offered on August 4, 1992. Per
share amounts reflect activity from that date.
(c) Because of differences between book and tax basis accounting,
there was no return of capital for federal income tax purposes.
(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 not waived or reimbursed a portion of expenses
total return would have been reduced.
(f) Includes service fee since its inception on December 1, 1994, of
0.02% (not annualized).
(g) Not annualized.
(h) Annualized.
(i) The Fund commenced investment operations on September 26, 1986.
</TABLE>
<TABLE>
<CAPTION>
NEW YORK
Year ended January 31
1995 1994 1993
---- ---- ----
Class A Class B Class A Class B Class A Class B(b)
------- ------- ------- ------- ------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value - Beginning of period $7.500 $7.500 $7.090 $7.090 $6.840 $7.130
------ ------ ------ ------ ------ ------
Income from investment operations:
Net investment income(a) 0.427 0.376 0.421 0.368 0.438 0.182
Net realized and unrealized
gain (loss) on investments (0.834) (0.834) 0.407 0.407 0.260 (0.029)
------- ------- ----- ----- ----- -------
Total from investment operations (0.407) (0.458) 0.828 0.775 0.698 0.153
------- ------- ----- ----- ----- -----
Less distributions declared
to shareholders:
From net investment income (0.413) (0.362) (0.418) (0.365) (0.445) (0.190)
In excess of net investment income --- --- --- --- (0.003) (0.003)
----- ----- ----- ----- ------- -------
Total distributions declared
to shareholders (0.413) (0.362) (0.418) (0.365) (0.448) (0.193)
------- ------- ------- ------- ------- -------
Net asset value - End of period $6.680 $6.680 $7.500 $7.500 $7.090 $7.090
====== ====== ====== ====== ====== ======
Total return (c)(d) (5.32)% (6.04)% 11.95% 11.14% 10.50% 1.16%(f)
====== ====== ===== ===== ===== ====
Ratios to average net assets:
Expenses 0.42%(e) 1.17%(e) 0.62% 1.37% 0.96% 1.71%(g)
Net investment income 6.25% 5.50% 5.68% 4.93% 6.25% 5.50%(g)
Fees and expense waived
or borne by the Adviser 0.46% 0.46% 0.29% 0.29% 0.06% 0.06%
Portfolio turnover 65% 65% 25% 25% 7% 7%
Net assets at end of period (000) $53,322 $43,166 $63,527 $45,061 $53,779 $14,473
_____________________________
(a) Net of fees
and expenses
waived or borne by
the Adviser which
amounted to $0.032 $0.032 $0.021 $0.021 $0.004 $0.001
(b) Class B shares were initially offered on August 4, 1992. Per
share amounts reflect activity from that date.
(c) Total return at net asset value assuming all distributions
reinvested and no initial sales charge or contingent deferred sales charge.
(d) Had the Adviser not waived or reimbursed a portion of expenses
total return would have been reduced.
(e) Includes service fee since its inception on December 1, 1994, of
0.02% (not annualized).
(f) Not annualized.
(g) Annualized.
(h) The Fund commenced investment operations on September 26, 1986.
</TABLE>
<TABLE>
<CAPTION>
NEW YORK
Period ended
Year ended January 31 January 31
1992 1991 1990 1989 1988 1987(h)
---- ---- ---- ---- ---- ----
Class A Class A Class A Class A Class A Class A
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value - Beginning of period $6.600 $6.590 $6.690 $6.620 $7.310 $7.140
------ ------ ------ ------ ------ ------
Income from investment operations:
Net investment income(a) 0.453 0.459 0.441 0.427 0.488 0.175
Net realized and unrealized
gain (loss) on investments 0.242 0.013 (0.116) 0.073 (0.687) 0.168
----- ----- ------- ----- ------- -----
Total from investment operations 0.695 0.472 0.325 0.500 (0.199) 0.343
----- ----- ----- ----- ------- -----
Less distributions declared
to shareholders:
From net investment income (0.455) (0.462) (0.425) (0.430) (0.491) (0.173)
In excess of net investment income --- --- --- --- --- ---
----- ----- ----- ----- ----- -----
Total distributions declared
to shareholders (0.455) (0.462) (0.425) (0.430) (0.491) (0.173)
------- ------- ------- ------- ------- -------
Net asset value - End of period $6.840 $6.600 $6.590 $6.690 $6.620 $7.310
====== ====== ====== ====== ====== ======
Total return (c)(d) 10.86% 7.42% 4.98% 7.89% (2.44)% 4.83% (f)
===== ==== ==== ==== ====== ====
Ratios to average net assets:
Expenses 1.00% 1.04% 1.46% 1.46% 0.49% --- (g)
Net investment income 6.71% 6.99% 6.62% 6.52% 7.35% 6.27% (g)
Fees and expense waived
or borne by the Adviser 0.14% 0.24% 0.05% 0.10% 1.04% 1.70% (g)
Portfolio turnover 17% 6% 41% 53% 112% 30% (g)
Net assets at end of period (000) $40,233 $31,691 $23,124 $25,360 $26,588 $15,738
_____________________________
(a) Net of fees
and expenses
waived or borne by
the Adviser which
amounted to $0.009 $0.016 $0.003 $0.007 $0.070 $0.047
(b) Class B shares were initially offered on August 4, 1992. Per
share amounts reflect activity from that date.
(c) Total return at net asset value assuming all distributions
reinvested and no initial sales charge or contingent deferred sales charge.
(d) Had the Adviser not waived or reimbursed a portion of expenses
total return would have been reduced.
(e) Includes service fee since its inception on December 1, 1994, of
0.02% (not annualized).
(f) Not annualized.
(g) Annualized.
(h) The Fund commenced investment operations on September 26, 1986.
</TABLE>
<TABLE>
<CAPTION>
NORTH CAROLINA
Year ended January 31
1995 1994(b)
---- -------
Class A Class B Class A Class B
<S> <C> <C> <C> <C>
Net asset value - Beginning of period $7.500 $7.500 $7.500 $7.500
------ ------ ------ ------
Income (loss) from investment operations:
Net investment income(a) 0.396 0.345 0.164 0.141
Net realized and unrealized loss on investments (0.822) (0.822) --- ---
------- ------- ----- -----
Total from investment operations (0.426) (0.477) 0.164 0.141
------- ------- ----- -----
Less distributions declared to shareholders:
From net investment income (0.394) (0.343) (0.164) (0.141)
------- ------- ------- -------
Net asset value - End of period $6.680 $6.680 $7.500 $7.500
===== ===== ===== =====
Total return(c)(d) (5.55)% (6.27)% 2.22%(f) 1.90%(f)
==== ==== ==== ====
Ratios to average net assets:
Expenses 0.12%(e) 0.87%(e) 0.10%(g) 0.85%(g)
Net investment income 5.83% 5.08% 4.91%(g) 4.16%(g)
Fees and expenses waived or borne by the Adviser 0.93% 0.93% 1.20%(g) 1.20%(g)
Portfolio turnover 37% 37% 1%(g) 1%(g)
Net assets at end of period (000) $14,189 $17,169 $13,710 $9,934
----------------------------------------
(a) Net of fees and expenses
waived or borne by the
Adviser which amounted to $0.063 $0.063 $0.040 $0.040
(b) The Fund commenced investment operations on February 1, 1993.
(c) Total return at net asset value assuming all
distributions reinvested and no initial sales charge
or contingent deferred sales charge.
(d) Had the Adviser not waved or reimbursed a portion of
expenses total return would have been reduced.
(e) Includes service fee since its inception in December
1, 1994, of 0.02% (not annualized).
(f) Not annualized.
(g) Annualized.
</TABLE>
<TABLE>
<CAPTION>
OHIO
Year ended January 31
1995 1994 1993
---- ---- ----
Class A Class B Class A Class B Class A Class B(b)
------- ------- ------- ------- ------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value - Beginning of period $7.670 $7.670 $7.290 $7.290 $7.090 $7.330
------ ------ ------ ------ ------ ------
Income from investment operations:
Net investment income(a) 0.401 0.348 0.406 0.351 0.444 0.185
Net realized and unrealized
gain (loss) on investments (0.745) (0.745) 0.389 0.389 0.204 (0.033)
------- ------- ----- ----- ----- -------
Total from investment
operations (0.344) (0.397) 0.795 0.740 0.648 0.152
------- ------- ----- ----- ----- -----
Less distributions declared
to shareholders:
From net investment income (0.396) (0.343) (0.411) (0.356) (0.448) (0.192)
In excess of net investment income --- --- (0.004) (0.004) --- ---
From net realized gains --- --- --- --- --- ---
----- ----- ----- ----- ----- -----
Total distributions declared
to shareholders (0.396) (0.343) (0.415) (0.360) (0.448) (0.192)
------- ------- ------- ------- ------- -------
Net asset value - End of period $6.930 $6.930 $7.670 $7.670 $7.290 $7.290
====== ====== ====== ====== ====== ======
Total return (c)(d) (4.38)% (5.10)% 11.17% 10.36% 9.41% 0.85%(f)
====== ====== ===== ===== ==== ====
Ratios to average net assets:
Expenses 0.72%(e) 1.47%(e) 0.82% 1.57% 1.00% 1.75%(g)
Net investment income 5.71% 4.96% 5.34% 4.59% 6.18% 5.43%(g)
Fees and expense waived
or borne by the Adviser 0.16% 0.16% 0.09% 0.09% 0.03% 0.03%
Portfolio turnover 33% 33% 3% 3% 13% 13%
Net assets at end of period
(000) $72,123 $53,547 $79,394 $51,212 $62,439 $7,293
_____________________________
(a) Net of fees
and expenses
waived or borne by
the Adviser which
amounted to $0.011 $0.011 $0.007 $0.007 $0.002 ---
(b) Class B shares were initially offered on August 4, 1992. Per
share amounts reflect activity from that date.
(c) Total return at net asset value assuming all distributions
reinvested and no initial sales charge or contingent deferred sales charge.
(d) Had the Adviser not waived or reimbursed a portion of expenses
total return would have been reduced.
(e) Includes service fee since its inception on December 1, 1994, of
0.02% (not annualized).
(f) Not annualized.
(g) Annualized.
(h) The Fund commenced investment operations on September 26, 1986.
(i) Approximately $0.004 per share represents a return of capital for book purposes only.
</TABLE>
<TABLE>
<CAPTION>
OHIO
Period ended
Year ended January 31 January 31
1992 1991 1990 1989 1988 1987(h)
---- ---- ---- ---- ---- -------
Class A Class A Class A Class A Class A Class A
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value - Beginning of period $6.880 $6.750 $6.850 $6.640 $7.260 $7.140
------ ------ ------ ------ ------ ------
Income from investment operations:
Net investment income(a) 0.457 0.462 0.463 0.448 0.499 0.175
Net realized and unrealized
gain (loss) on investments 0.208 0.138 (0.114) 0.204 (0.615) 0.120
----- ----- ------- ----- ------- -----
Total from investment
operations 0.665 0.600 0.349 0.652 (0.116) 0.295
----- ----- ----- ----- ------- -----
Less distributions declared
to shareholders:
From net investment income (0.455) (0.470) (0.449) (0.442) (0.503)(i) (0.175)
In excess of net investment income --- --- --- --- --- ---
From net realized gains --- --- --- --- (0.001) ---
----- ----- ----- ----- ------- -----
Total distributions declared
to shareholders (0.455) (0.470) (0.449) (0.442) (0.504) (0.175)
------- ------- ------- ------- ------- -------
Net asset value - End of period $7.090 $6.880 $6.750 $6.850 $6.640 $7.260
====== ====== ====== ====== ====== ======
Total return (c)(d) 10.00% 9.21% 5.21% 10.22% (1.25)% 4.18%(f)
===== ==== ==== ===== ====== ====
Ratios to average net assets:
Expenses 1.00% 1.00% 1.27% 1.28% 0.41% --- (g)
Net investment income 6.57% 6.83% 6.77% 6.74% 7.49% 6.59%(g)
Fees and expense waived
or borne by the Adviser 0.09% 0.15% 0.06% 0.34% 1.12% 1.72%(g)
Portfolio turnover 13% 11% 45% 89% 69% 158%(g)
Net assets at end of period
(000) $50,281 $41,158 $27,433 $27,676 $27,320 $13,041
_____________________________
(a) Net of fees
and expenses
waived or borne by
the Adviser which
amounted to $0.006 $0.010 $0.004 $0.022 $0.074 $0.045
(b) Class B shares were initially offered on August 4, 1992. Per
share amounts reflect activity from that date.
(c) Total return at net asset value assuming all distributions
reinvested and no initial sales charge or contingent deferred sales charge.
(d) Had the Adviser not waived or reimbursed a portion of expenses
total return would have been reduced.
(e) Includes service fee since its inception on December 1, 1994, of
0.02% (not annualized).
(f) Not annualized.
(g) Annualized.
(h) The Fund commenced investment operations on September 26, 1986.
(i) Approximately $0.004 per share represents a return of capital for book purposes only.
</TABLE>
Further performance information is contained in each Fund's Annual
Report to shareholders, which is obtainable free of charge by calling
1-800-248-2828.
THE FUNDS' INVESTMENT OBJECTIVES
Each Fund seeks as high a level of after-tax total return, as is
consistent with prudent risk, by pursuing current income exempt from
federal and its Fund's respective state personal income tax (if any)
and opportunities for long-term appreciation from a portfolio
primarily invested in investment grade municipal bonds. The Florida,
Michigan and North Carolina Funds' shares are intended to be exempt
from the respective state's intangibles tax.
HOW THE FUNDS PURSUE THEIR OBJECTIVES
Each Fund normally invests substantially all of its assets in
investment grade debt securities of any maturity, the interest on
which is exempt from federal income tax and that state's personal
income tax (if any), other than any alternative minimum tax (State
Bonds); in the case of the Florida, Michigan and North Carolina Funds,
the State Bonds are exempt from the state intangibles tax. The value
of debt securities (and thus of Fund shares) usually fluctuates
inversely to changes in interest rates. Mutual funds investing in
taxable securities may have higher yields than the Funds. Each Fund
under normal circumstances will invest at least 80% of its assets in
its State's Bonds. The Minnesota Fund intends to invest its assets so
that at least 95% of its exempt-interest dividends each year are
derived from certain Minnesota sources, as specified by Minnesota law.
In periods of unusual market conditions, when the Adviser considers it
appropriate, each Fund may temporarily invest up to 50% of its total
assets in assets that are not State Bonds, subject to applicable state
requirements. The Adviser relies on the opinion of bond counsel to
each issuer as to the tax-exempt status of the issue. Each Fund
normally limits investments in State Bonds subject to individual
alternative minimum tax and securities that are not State Bonds to a
maximum of 20% of the Fund's total assets, subject to applicable state
requirements. Investment grade securities are those rated at least
Baa by Moody's, BBB by S&P, comparably rated by another national
rating service or unrated but considered similar in quality by the
Adviser. Bonds rated BBB or Baa are considered to have some
speculative characteristics and could be more adversely affected by
unfavorable economic developments than higher rated bonds. Each Fund
may invest up to 25% of its net assets in securities below investment
grade (or comparable unrated securities), but not below the equivalent
of CCC by S&P. Each Fund may invest up to 25% of its assets in
unrated State Bonds and other unrated securities, subject to
applicable state requirements. Certain bonds do not pay interest in
cash on a current basis. However, the Funds will accrue and
distribute this interest on a current basis, and may have to sell
securities to generate cash for distributions. Certain variable rate
debt securities (known as "inverse floaters") pay interest rates that
move inversely to changes in short-term market interest rates, but
have values that move inversely to changes in long-term rates. The
values of certain inverse floaters will change substantially more,
given a change in long-term rates, than would a traditional debt
security of similar maturity. There may not always be a sufficient
supply of State Bonds to enable the Funds to achieve their objectives.
Many bonds have call features and if called the Funds may only be able
to invest the proceeds at lower yields.
Each Fund may invest, under normal conditions, up to 20% of its total
assets in high quality, short-term obligations of banks or
corporations (rated at least Prime-2 by Moody's, A-2 by S&P,
comparably rated by another national rating service or unrated but
considered comparable by the Adviser), the U.S. government, and
repurchase agreements. These investments are subject to federal
and/or state income tax. In addition, gains realized upon the sale of
portfolio securities may be taxable when distributed by the Fund.
Under a repurchase agreement, a 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 that the Fund's collateral for the bank's repurchase
obligation. 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 hearing. Not
more than 15% of each Fund's net assets will be invested in repurchase
agreements maturing in more than 7 days and other illiquid assets.
To participate in the new issues market, each Fund may without limit
acquire securities on a "when-issued" basis by contracting to purchase
securities for a fixed price on a date beyond the customary settlement
time with no interest accruing until settlement. High quality
securities in an amount equal to the when-issued securities are
maintained in a segregated account at the custodian. If made through
a dealer the contract is dependent on the dealer's consummation of the
sale. The dealer's failure could deprive a Fund of an advantageous
yield or price. These contracts may be considered securities and
involve risk to the extent that the value of the underlying security
changes prior to settlement. A Fund may realize short-term profits or
losses if the contracts are sold.
Lower Rated Bonds (commonly referred to as junk bonds). The Funds may
purchase lower rated bonds. Lower rated bonds are those rated lower
than Baa by Moody's or BBB by S&P, or comparable unrated securities.
(The Funds will not purchase securities rated below CCC by S&P or
equivalent.) Relative to comparable securities of high quality:
1. The market price is likely to be more volatile because:
a. an economic downturn or increased interest rates may have a
more significant effect on the yield, price and potential for
default;
b. the secondary market may at times become less liquid or respond
to adverse publicity or investor perceptions, increasing the
difficulty in valuing or disposing of the bonds;
c. existing or future legislation limits and may further limit (i)
investment by certain institutions or (ii) tax deductibility of
the interest by the issuer, which may adversely affect value;
and
</R
>
d. certain lower rated bonds do not pay interest in cash on a
current basis. However, the Funds will accrue and distribute
this interest on a current basis, and may have to sell
securities to generate cash for distributions.
2. The Funds' achievement of their investment objective is more
dependent on the Adviser's credit analysis.
3. Lower rated bonds are less sensitive to interest rate changes,
but are more sensitive to adverse economic developments.
Options And Futures. Each Fund may write covered call and put options
and purchase call and put options on debt securities. A call option
gives the purchaser the right to buy a security from, and a put option
the right to sell a security to, the option writer at a specified
price, on or before a specified date. Each Fund will pay a premium
when purchasing an option, which reduces the Fund's return on the
underlying security if the option is exercised and results in a loss
if the option expires unexercised. Each Fund will receive a premium
from writing an option, which may increase its return if the option
expires or is closed out at a profit. If the Fund is unable to close
out an unexpired option, the Fund must continue to hold the underlying
security until the option expires. Trading hours for options may
differ from the trading hours for the underlying securities. Thus
significant price movements may occur in the securities markets that
are not reflected in the options market. This may limit the
effectiveness of options as hedging devices.
Each Fund may buy or write options that are not traded on national
securities exchanges and not protected by the Options Clearing
Corporation. These transactions are effected directly with a broker-
dealer, and each Fund bears the risk that the broker-dealer will fail
to meet its obligations. The market value of such options and other
illiquid assets will not exceed 15% of each Fund's total assets.
For hedging purposes each Fund may purchase or sell (1) interest rate
and tax-exempt bond index futures contracts and (2) put and call
options on such contracts and on such indices. A futures contract
creates an obligation by the seller to deliver and the buyer to take
delivery of the type of instrument at the time and in the amount
specified in the contract. Although a futures contract calls for
delivery (or acceptance) of the specified instrument, a futures
contract is usually closed out before the settlement date through the
purchase (sale) of a comparable contract. If the initial sale price
of the future exceeds (or is less than) the price of the offsetting
purchase, the Fund realizes a gain (or loss). Options on futures
contracts operate in a similar manner to options on securities, except
that the position assumed is in the futures contracts rather than in
the security. A Fund may not purchase or sell futures contracts or
purchase related options if immediately thereafter the sum of the
amount of deposits for initial margin or premiums on the existing
futures and related options positions would exceed 5% of the market
value of the Fund's total assets. Transactions in futures and related
options involve the risk of (1) imperfect correlation between the
price movement of the contracts and the underlying securities, (2)
significant price movement in one but not the other market because of
different trading hours, (3) the possible absence of a liquid
secondary market at any point in time, and (4) if the Adviser's
prediction on interest rates is inaccurate, the Fund may be worse off
than if it had not hedged.
Special Considerations. State Bonds include general obligation bonds
(GOs), revenue bonds (RBs) and industrial revenue bonds (IRBs). GOs
are payable from the issuer's unrestricted revenues and may depend on
appropriation by the applicable legislative body. RBs are payable
only from a specified revenue source, not the unrestricted revenues of
the issuer. An IRB generally is payable only from the revenues of the
corporate user of a facility and consequently its credit rating
relates to that of the corporate user. Each Fund may invest more than
25% of its total assets in IRBs, but intends to limit investments in
IRBs which are based on the credit of private entities in any one
industry to 25% or less.
State Fiscal Conditions. The value of each Fund's shares may be
affected by factors pertaining to its state's economy (which may
affect issuer tax revenues) and the ability of issuers of State Bonds
to meet their obligations and may fluctuate more widely than the value
of shares of a portfolio investing in a number of different states.
The availability of federal, state and local aid to issuers of State
Bonds may also affect their ability to meet their obligations.
Payments of principal and interest on RBs and IRBs will depend on the
economic condition of the specific revenue source, which could be
affected by economic, political and demographic conditions in the
relevant state. There is no assurance that any issuer of a State Bond
will make full and timely payments of principal and interest or remain
solvent. For example, in December 1994, Orange County, California
filed for protection under the federal bankruptcy laws. A reduction
in the actual or perceived ability of an issuer of State Bonds to meet
its obligations (including a reduction in the rating of its
outstanding securities) could also affect adversely the value and
marketability of State Bonds.
California. From mid-1990 to late 1993, the State of California
suffered a recession with the worst economic, fiscal and budget
conditions since the 1930's. Construction, manufacturing (especially
aerospace), and financial services, among others, were severely
affected. Job losses were the worst of any post-war recession, and
although employment levels stabilized by late 1993 and grew during
1994, pre-recession employment levels are not expected to be reached
until late 1996. Economic indicators show a steady recovery underway
in the State since the start of 1994. The recession seriously
affected State tax revenues and caused an increase in expenditures for
health and welfare programs. Consequently, the State has experienced
recurring budget deficits, and the ratings of the State's general
obligation bonds have been lowered, most recently in July 1994. It is
impossible to predict the time, location or magnitude of a major
earthquake or its effect on the California economy. In January 1994,
a major earthquake struck Los Angeles, causing significant property
damage in a four-county area. The possibility exists that another
earthquake could create a major dislocation of the California economy.
Certain California State Bonds rely on real property taxes as a source
of revenue. In 1978, California voters approved Proposition 13, which
limits ad valorem taxes on real property and restricts the ability of
taxing entities to increase property taxes. California voters
subsequently approved measures that limit spending by the State and
local governments. Decreased State revenues may result in reductions
of funds provided to local governments. The effect of these changes
on the ability of issuers of California State Bonds to pay interest
and principal on their obligations remains unclear, and may depend
upon whether a particular bond is a general obligation or limited
obligation bond.
Connecticut. The State of Connecticut has a mature economy with
primary dependence on durable goods manufacturing, particularly in
defense-related industries. Significant job losses in this sector
coupled with restructurings in the insurance and other service
industries have resulted in the State losing 9% of its job base
between 1988 and 1993. Partially offsetting these factors is the
State's exceptional personal wealth level which, despite the poverty
of certain of its largest cities, continues to rank among the first in
the nation in terms of per capita income. While no signs of a strong
economic recovery are present, personal income growth has increased
and unemployment levels have stabilized. Strong tax revenue
collections through the first half of fiscal year 1994 reinforce the
positive actions taken by the State's government in 1992 to implement
a personal income tax while cutting certain business and consumption
based taxes with the intent of reducing economic vulnerability and
diversifying the revenue base. These actions have been coupled with a
constitutional cap on the rate of spending growth and have served to
stabilize the State's finances and restore budgetary balance. The
outlook for future economic growth is modest and a return to the
growth rates of the 1980s is unlikely.
Florida. The State of Florida continues to experience strong
population growth and good economic performance. The State's economy
is becoming more diversified with foreign trade surpassing tourism as
the State's leading industry. Export industries have benefited from
the State's strategic geographic location for international trade,
particularly with Latin America. Creation of additional long-term
opportunities is expected from the passage of NAFTA. While the
State's growth has been impressive, continuing strong fiscal and
economic performance will be based on the State's ability to maintain
a balance that adequately funds the additional service and
infrastructure needs driven by rapid population growth while
continuing to promote further economic development. Without a
personal income tax, the State's operations are largely dependent on
consumption based taxes which are more vulnerable to general economic
conditions.
Massachusetts. The Commonwealth of Massachusetts has a highly
developed economy with a large service sector, particularly in health
care and education. Strong economic growth in the 1980s was halted
late in the decade by weakening in the high technology, real estate
and finance sectors, resulting in steady job losses. At this time,
unemployment in the Commonwealth appears to have peaked and, along
with other indicators, including construction and retail sales
activity, points toward a leveling off of recovery of the local
economy. It is believed, however, that the turnaround in the
Commonwealth's economy will not match the growth rates of the early
1980s as continued restructuring in the defense and computer
manufacturing industries will hold back anticipated strength in the
construction, biotech and computer software industries. The
Commonwealth's economy is also dependent on the healthcare sector
which could be hurt by cuts in medicare and other reforms in
Washington. Of equal importance to the observed economic improvement
is the Commonwealth's progress in stabilizing its fiscal position
since 1990. More realistic revenue expectations and increased efforts
to impose spending discipline have resulted in the elimination of
deficit financing, reduced reliance on short-term financing and three
consecutive years of positive fund balances.
Michigan. The State of Michigan is highly industrialized with a
strong economic concentration in motor vehicle production and other
durable goods manufacturing. A significant degree of industrial
restructuring took place in the early 1980s thus mitigating the
economic impact of the recent recession. A broad-based recovery for
the State rests on national economic development and continuing
improvement in international competitiveness that will in turn boost
demand for the State's primary products. To date, positive economic
indicators for the State include a stabilizing market share and
improving profitability for the domestic auto manufacturers, increased
manufacturing productivity and a minimal exposure to the downsizing
defense industry. In addition, the State has demonstrated its
commitment to addressing budget imbalances and promoting public
service efficiencies, resulting in balanced general fund operations
throughout a difficult economic period and enabling the State to
transfer approximately $464 million to the State's budget
stabilization fund as of September 30, 1994, the end of the State's
1993-94 fiscal year, bringing the balance in that fund to over $779
million.
Minnesota. The State of Minnesota's overall economic structure
closely parallels that of the nation as a whole, although
manufacturing is modestly more significant than construction, finance
and real estate. The State's strong natural resource base is
evidenced in its strong positions in food and forestry products, and
the State serves as a major regional commercial center. While the
recession has been less severe in the State than in the nation
overall, the State has not been immune to its impact as evidenced by
slowdowns in income and sales tax revenue growth. Because the State
relies on a progressive personal income tax and retail sales tax for
general fund revenue, the State's fiscal system is particularly
sensitive to economic conditions. As a result, the less than expected
revenue growth, combined with increased spending pressure, led to
budget deficits in fiscal years 1991 and 1992. The State demonstrated
its financial discipline by curing the deficits through a variety of
measures, including a sales tax rate increase and spending cuts. An
improved economy in 1993 and 1994 has led to stronger revenues and a
more favorable expectation for balanced budget operations.
New York. The State of New York enjoys a generally diverse and
substantial economic base and a strong socioeconomic profile with
personal income levels among the highest in the nation. The
employment levels in the State have been adversely affected by the
most recent recession as a result of an overweighting in the service
sector, especially in finance, real estate and insurance. While
unemployment appears to have peaked, the State's level continues to be
in excess of the national average. Significant improvement in the
labor market is not expected due to current weakness in the
manufacturing, defense sectors and healthcare. Income levels have
suffered as well, despite the State's strong position relative to the
rest of the nation, as growth rates have been stagnant and have lagged
the nation as a whole. Improvement in this indicator of economic
health will be tied to improvement in the employment level. New
York's financial operations have been historically weak, with chronic
budget deficits, untimely budget passage and overly optimistic revenue
assumptions in the face of a protracted economic recession. The
Governor recently proposed a series of tax cuts designed to stimulate
business activity. Both the State and New York City must overcome
substantial budget gaps in fiscal year 1996 which will be difficult
given the local politics and economic health of the State and New York
City. A concurrent focus on structural debt reform may also improve
the State's financial management and fiscal position.
North Carolina. Although the State of North Carolina is the tenth
largest state in population, it is primarily a rural state, having
only five municipalities with populations in excess of 100,000. The
labor force has undergone significant change during recent years. The
State has moved from an agricultural to a service and goods producing
economy. Those persons displaced by farm mechanization and farm
consolidations have, in large measure, sought and found employment in
other pursuits. During the period 1980 to 1994, the State labor force
grew about 25%. Per capita income during the period 1980 to 1993
increased by 133.8%. The current economic profile of the State
consists of a combination of industry, agriculture and tourism. As of
June 1994, the State was reported to rank tenth among the states in
non-agricultural employment and eigth in manufacturing employment.
Employment indicators have varied somewhat in the annual periods since
June of 1989, but have demonstrated an upward trend since 1991. As of
the date of this Prospectus, Moody's rated the State's general
obligation bonds as Aaa and Standard & Poor's rated such bonds as AAA.
Standard & Poor's also reaffirmed its stable outlook for the State in
January 1994. Standard & Poor's reports that the State's rating
reflects the State's strong economic characteristics, sound financial
performance, and low debt levels.
Ohio. While diversifying more into the service and other non-
manufacturing areas, the State of Ohio's economy continues to rely in
part on durable goods manufacturing largely concentrated in motor
vehicles and equipment, steel, rubber products and household
appliances. As a result, general economic activity, as in many other
industrially-developed states, tends to be more cyclical than in some
other states and in the nation as a whole. Agriculture is an
important segment of the economy. In prior years, the State's overall
unemployment rate was commonly somewhat higher than the national
figure. However, for the last four years the State rates were below
the national rates. The unemployment rate and its effects vary among
geographic areas of the State.
Non-Diversification. Because of the relatively small number of
issuers of investment grade State Bonds, each Fund (except the
California Fund) may concentrate in the securities of a few issuers
which the Adviser considers to be attractive. This may increase the
risk of loss to those Funds. It is also possible that there will not
be a sufficient supply of State Bonds available to enable each Fund to
achieve its objective.
Other. The Funds may not always achieve their investment objective.
The Funds' investment objective and non-fundamental policies may be
changed without shareholder approval. Each Fund will notify investors
at least 30 days prior to any material change in its investment
objective. If there is a change in a Fund's investment objective,
shareholders should consider whether the Fund remains an appropriate
investment in light of their current financial position and needs.
Shareholders may incur a contingent deferred sales charge if shares
are redeemed in response to a change in objective. Each Fund's
fundamental policies listed in the Statement of Additional Information
cannot be changed without the approval of a majority of that 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 FUNDS MEASURE THEIR 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
4.75% on Class A shares and the contingent deferred sales charge
applicable to the time period quoted on Class B shares. Other total
returns differ from the 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 and tax-equivalent yield, which differ from total
return because they do not consider the change in net asset value, are
calculated in accordance with the Securities and Exchange Commission's
formula. Each Class's distribution rate is calculated by dividing
the most recent month's distribution, annualized, by the maximum
offering price of that Class at the end of the month. 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 for more information.
All performance information is historical and does not predict future
results.
HOW THE FUNDS ARE MANAGED
The Trustees formulate the Funds' general policies and oversee the
Funds' affairs as conducted by the Adviser.
The Adviser is a subsidiary of The Colonial Group, Inc. Colonial
Investment Services, Inc. (Distributor ) is a subsidiary of the
Adviser and serves as the distributor for the Funds' shares . The
Colonial Group, Inc. is the parent of Colonial Investors Service
Center, Inc. (Transfer Agent), which serves as the shareholder
services and transfer agent for the Funds. The Colonial Group, Inc.
is a direct subsidiary of Liberty Financial Companies, Inc. which in
turn is an indirect subsidiary of Liberty Mutual Insurance Company
(Liberty Mutual). Liberty Mutual is considered to be the controlling
entity of The Colonial Group, Inc. Liberty Mutual is an underwriter
of worker's compensation insurance and a property and casualty insurer
in the U.S.
The Adviser furnishes each Fund with investment management, accounting
and administrative personnel and services, office space and other
equipment and services at the Adviser's expense. For these services,
each Fund paid the Adviser the following percentage of the Fund's net
assets for the year ended 1995: the California Fund paid 0.51%; the
Connecticut Fund paid 0.02%; the Florida Fund did not pay any fee; the
Massachusetts Fund paid 0.45%; the Michigan Fund paid 0.25%; the
Minnesota Fund paid 0.30%; the New York Fund paid 0.10%; and the Ohio
Fund paid 0.41%. The North Carolina Fund pays the Adviser 0.60% of
the Fund's net assets.
Jeffrey B. Augustine, Vice President of the Adviser, has managed the
Connecticut Fund since its inception, the Florida Fund since 1993, the
Massachusetts Fund since 1988, the New York Fund since 1987 and the
North Carolina Fund since its inception. Mr. Augustine has managed
various other Colonial tax-exempt funds since 1987.
Brian Hartford, Vice President of the Adviser, has managed the
Michigan Fund, the Minnesota Fund and the Ohio Fund since 1993. Mr.
Hartford was a Senior Municipal Trader of the Adviser from 1991 until
1993, and Manager of the Analyst Department at Harvard Management
Company until 1991.
William C. Loring, Vice President of the Adviser, has managed the
California Fund since its inception and has managed various other
Colonial tax-exempt funds since 1986.
The Adviser also provides pricing and bookkeeping services to each
Fund for a monthly fee of $2,250 per Fund plus a percentage of each
Fund's average net assets over $50 million. The Transfer Agent
provides transfer agency and shareholder services to each Fund for a
fee of 0.14% annually of average net assets plus out-of-pocket
expenses.
Each of the foregoing fees is subject to any reimbursement or fee
waiver to which the Adviser may agree.
The Adviser places all orders for the purchase and sale of portfolio
securities. In selecting broker-dealers, the Adviser may consider
research and brokerage services furnished to it and its affiliates.
Subject to seeking best execution, the Adviser may consider sales of
shares of the Funds (and of certain other Colonial funds) in selecting
broker-dealers for portfolio security transactions.
HOW THE FUNDS VALUE THEIR SHARES
Per share net asset value is calculated by dividing the total value of
each Class's net assets by its number of outstanding shares. Shares
are valued as of the close of the New York Stock Exchange (Exchange)
each day the Exchange is open. Portfolio securities for which market
quotations are readily available are valued at market. Short-term
investments maturing in 60 days or less are valued at amortized cost,
when it is determined,, pursuant to procedures adopted by the
Trustees, that such cost approximates market value. All other
securities and assets are valued at fair value following procedures
adopted by the Trustees.
DISTRIBUTIONS AND TAXES
Each 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 Funds generally declare distributions daily and pay them monthly.
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 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. The Funds'
distributions of net income generally will be exempt from Federal and
the relevant State's income taxes. However, as described above under
"How the Funds pursue their objective," certain investments may
produce taxable income, and portfolio transactions may produce gains a
portion of which may be taxable at ordinary Federal income tax rates.
If the Funds make taxable distributions, those distributions will
generally be taxable whether you receive them in cash or in additional
Fund shares, unless you are a tax-exempt institution. Each January,
information on the amount and nature of distributions for the prior
year, including the alternative minimum tax portion, is sent to
shareholders.
While each Fund's distributions from income on its State's Bonds are
generally not taxable at the federal level or subject to that Fund's
state's personal income tax, if any, a portion may be included in
computing a shareholder's alternative minimum tax liability. Social
security benefits may be taxed as a result of receiving tax-exempt
income.
HOW TO BUY SHARES
Shares are offered continuously. Orders received in good form prior
to 4:00 p.m. Eastern time (or placed with a financial service firm
before such time and transmitted by the financial service firm before
a 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. Certificates
will not be issued for Class B shares and there are some limitations
on the issuance of Class A certificates. The Funds may refuse any
purchase order for their shares. See the Statement of Additional
Information for more information.
Class A Shares. Class A shares are offered at net asset value plus an
initial or a contingent deferred sales charge as follows:
______Initial Sales Charge_____
Retained
by
Financial
Service
Firm as
as % of %
Amount Offering Offering
Amount Purchased Invested Price Price
Less than $50,000 4.99% 4.75% 4.25%
$50,000 to less than $100,000 4.71% 4.50% 4.00%
$100,000 to less than
$250,000 3.90% 3.50% 3.00%
$250,000 to less than
$500,000 3.09% 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 A shares bear an annual service fee calculated at the rates of
0.10% of average net assets attributed to shares outstanding on
November 30, 1994, and 0.25% of average net assets attributed to
shares issued thereafter.
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 8 years (at which time they convert
to Class A shares not bearing a distribution fee), an annual service
fee calculated at the rates of 0.10% of average net assets attributed
to shares outstanding on November 30, 1994, and 0.25% of average net
assets attributed to shares issued thereafter and a contingent
deferred sales charge if redeemed within 6 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 Purchase Sales 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.
General. All contingent deferred sales charges are deducted from the
redemption, 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 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. Purchases of $250,000 or more must be for Class A
shares. Consult your financial service firm.
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 groups or
organizations purchasing Fund shares alone or in combination with
certain other Colonial funds. See the Statement of Additional
Information for more information.
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 may be sold on any day the New York Stock Exchange is open,
either directly to a 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 after 15 days from the date of the purchase.
Selling Shares Directly To A 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 particular 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 before 4:00 p.m. Eastern time 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 federal and
state tax purposes and may be subject to a contingent deferred sales
charge. The deferred sales charge may be waived under certain
circumstances. See the Statement of Additional Information for more
information. Under unusual circumstances, a 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, a 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 before the fee
is deducted.
HOW TO EXCHANGE SHARES
Exchanges at net asset value may be made among shares of the same
class of most Colonial funds. Shares will continue to age without
regard to the exchange for purposes of conversion and 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 into
which the original investment was made.
TELEPHONE TRANSACTIONS
All shareholders and/or their financial advisers may redeem up to
$50,000 of Fund shares by telephone, and may elect telephone
redemption privileges for larger amounts on the account application.
All exchanges may be accomplished by telephone. See the Statement of
Additional Information for more information. The Adviser, 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. Shareholders
and/or their financial advisers will be required to provide their
name, address and account number. Financial advisers will also be
required to provide their broker number. 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 60 days. All telephone transactions
are recorded. Shareholders are not obligated to transact by
telephone.
12B-1 PLANS
Under 12b-1 Plans, each Fund pays the Distributor an annual service
fee calculated at the rates of 0.10% of average net assets attributed
to shares outstanding on November 30, 1994, and 0.25% of average net
assets attributed to shares issued thereafter. Each Fund also pays
the Distributor an annual distribution fee of 0.75% of the average net
assets attributed to its Class B shares. Because the Class B shares
bear the additional fee, 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. 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) 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 1987. Each
Fund represents the entire interest in a separate portfolio of the
Trust.
The Trust is not required to hold annual shareholder meetings, but
special meetings may be called for certain purposes. You receive one
vote for each of your Fund shares. 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.
APPENDIX
DESCRIPTION OF BOND RATINGS
S&P
AAA The highest rating assigned by S&P indicates an extremely strong
capacity to repay principal and interest.
AA bonds also qualify as high quality. Capacity to repay principal
and pay interest is very strong, and in the majority of instances,
they differ from AAA only in a small degree.
A bonds have a strong capacity to repay principal and interest,
although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions.
BBB bonds are regarded as having an adequate capacity to repay
principal and interest. Whereas they normally exhibit protection
parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to repay principal and
interest than for bonds in the A category.
BB, B, CCC and CC bonds are regarded, on balance, as predominantly
speculative with respect to capacity to pay interest and principal in
accordance with the terms of the obligation. BB indicates the lowest
degree of speculation and CC the highest degree. While likely to have
some quality and protection characteristics, these are outweighed by
large uncertainties or major risk exposures to adverse conditions.
C ratings are reserved for income bonds on which no interest is being
paid.
D bonds are in default, and payment of interest and/or principal is in
arrears.
Plus(+) or minus (-) are modifiers relative to the standing within the
major rating categories.
MOODY'S
Aaa bonds are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as
"gilt edge". Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While various
protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong
position of such issues.
Aa bonds are judged to be of high quality by all standards. Together
with Aaa bonds they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because margins of
protective elements may be of greater amplitude or there may be other
elements present which make the long-term risk appear somewhat larger
than in Aaa securities.
Those bonds in the Aa through B groups which Moody's believes possess
the strongest investment attributes are designated by the symbol Aa1,
A1 and Baa1.
A bonds possess many of the favorable investment attributes and are to
be considered as upper-medium-grade obligations. Factors giving
security to principal and interest are considered adequate, but
elements may be present which suggest a susceptibility to impairment
sometime in the future.
Baa bonds are considered as medium grade, neither highly protected nor
poorly secured. Interest payments and principal security appear
adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length
of time. Such bonds lack outstanding investment characteristics and,
in fact, have speculative characteristics as well.
Ba bonds are judged to have speculative elements: their future cannot
be considered as well secured. Often, the protection of interest and
principal payments may be very moderate, and thereby not well
safeguarded during both good and bad times over the future.
Uncertainty of position characterizes these bonds.
B bonds generally lack characteristics of the desirable investment.
Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa bonds are of poor standing. They may be in default or there may
be present elements of danger with respect to principal or interest.
Ca bonds are speculative in a high degree, often in default or having
other marked shortcomings.
C bonds are the lowest rated class of bonds and can be regarded as
having extremely poor prospects of ever attaining any real investment
standing.
Investment Adviser
Colonial Management Associates, Inc.
One Financial Center
Boston, MA 02111-2621
Distributor
Colonial Investment Services, Inc.
One Financial Center
Boston, MA 02111-2621
Custodian
United Missouri Bank, n.a.
928 Grand Avenue
Kansas City, MO 64106
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.
May 31,1995
COLONIAL CALIFORNIA
TAX-EXEMPT FUND
COLONIAL CONNECTICUT
TAX-EXEMPT FUND
COLONIAL FLORIDA
TAX-EXEMPT FUND
COLONIAL MASSACHUSETTS
TAX-EXEMPT FUND
COLONIAL MICHIGAN
TAX-EXEMPT FUND
COLONIAL MINNESOTA
TAX-EXEMPT FUND
COLONIAL NEW YORK
TAX-EXEMPT FUND
COLONIAL NORTH CAROLINA
TAX-EXEMPT FUND
COLONIAL OHIO
TAX-EXEMPT FUND
PROSPECTUS
Each of Colonial California Tax-Exempt Fund, Colonial Connecticut Tax-
Exempt Fund, Colonial Florida Tax-Exempt Fund, Colonial Massachusetts
Tax-Exempt Fund, Colonial Michigan Tax-Exempt Fund, Colonial Minnesota
Tax-Exempt Fund, Colonial New York Tax-Exempt Fund, Colonial North
Carolina Tax-Exempt Fund and Colonial Ohio Tax-Exempt Fund seeks as
high a level of after-tax total return, as is consistent with prudent
risk, by pursuing current income exempt from federal and its Fund's
respective state personal income tax (if any) and opportunities for
long-term appreciation from a portfolio primarily invested in
investment grade municipal bonds.
For more detailed information about the Funds, call the Adviser at
1-800-248-2828 for the May 31, 1995 Statement of Additional Information.
FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED,
ENDORSED OR INSURED BY, ANY BANK OR GOVERNMENT AGENCY.
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, & 8.
To apply for special services for a new or existing account,
complete sections 4, 5, 6, 7, or 9 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
______________________________________
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 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 Choice(s)
Fund
___ A Shares ___ B Shares (less than $250,000)
$______________________________________________
Amount
Method of Payment
Choose one for each fund
___Check payable to the Fund, enclosed
___Bank wired on (Date) ____/____/____
Wire confirmation #
___Dealer purchased on (Date) ____/____/____
Trade confirmation #
Ways to Receive Your Distributions
Choose one for each fund
___Reinvest dividends and capital gains
___Dividends in cash; reinvest capital gains
___Dividends and capital gains in cash
___Automatic Dividend Diversification See section 5A, inside
___Direct Deposit via Colonial Cash Connection See section
4B, inside
Fund Choice(s)
Fund
___ A Shares ___ B Shares (less than $250,000)
$______________________________________________
Amount
Method of Payment
Choose one for each fund
___Check payable to the Fund, enclosed
___Bank wired on (Date) ____/____/____
Wire confirmation #
___Dealer purchased on (Date) ____/____/____
Trade confirmation #
Ways to Receive Your Distributions
Choose one for each fund
___Reinvest dividends and capital gains
___Dividends in cash; reinvest capital gains
___Dividends and capital gains in cash
___Automatic Dividend Diversification See section 5A, inside
___Direct Deposit via Colonial Cash Connection See section
4B, inside
Fund Choice(s)
Fund
___ A Shares ___ B Shares (less than $250,000)
$______________________________________________
Amount
Method of Payment
Choose one for each fund
___Check payable to the Fund, enclosed
___Bank wired on (Date) ____/____/____
Wire confirmation #
___Dealer purchased on (Date) ____/____/____
Trade confirmation #
Ways to Receive Your Distributions
Choose one for each fund
___Reinvest dividends and capital gains
___Dividends in cash; reinvest capital gains
___Dividends and capital gains in cash
___Automatic Dividend Diversification See section 5A, inside
___Direct Deposit via Colonial Cash Connection See section
4B, inside
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.
Cross out 2(a) or 2(b) if either is not true in your case.
2. I am not subject to 31% backup withholding because (a) I
have not been notified that I am subject to backup
withholding or (b) the Internal Revenue Service has notified
me that I am no longer subject to backup 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. Withdrawals in excess of 12% annually of your
current account value will not be accepted. Redemptions made
in addition to Plan payments may be subject to a contingent
deferred sales charge for Class B 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 _________________ (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 _________________ (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 _________________ (month).
Payment Instructions
Send the payment to (choose one):
__My address of record.
__My bank account via Colonial Cash Connection. Please
complete Section 4B and the Bank Information section below.
__The payee listed at right.
______________________________________________
Name of payee
______________________________________________
Address of payee
______________________________________________
City
______________________________________________
State Zip
______________________________________________
Payee's bank account number, if applicable
X_____________________________________________
Signature of account owner(s)
X_____________________________________________
Signature of account owner(s)
Signatures of all owners must be guaranteed. Provide the
name, address, payment amount, and frequency for other
payees (maximum of 5) on a separate sheet.
B. Direct Deposit via Colonial Cash Connection
You can arrange to have distributions from your Colonial
fund account(s) or Systematic Withdrawal Plan checks
automatically deposited directly into your bank checking
account. Distribution deposits will be made 2 days after the
Fund's payable date. Please complete Bank Information below
and attach a blank check marked "VOID."
Please deposit my:
__Dividend distributions only
__Dividend and capital gain distributions
__Systematic Withdrawal Plan payments
I understand that my bank must be a member of the Automated
Clearing House system.
C. Telephone Withdrawal Options
All telephone transaction calls are recorded. These options
are not available for retirement accounts.
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 on our records. For
your protection, this service is only available on accounts
that have not had an address change within
60 days of the redemption request.
2. Telephone Redemption
__I would like the Telephone Redemption privilege.
You 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. Telephone redemptions
exceeding $5,000 will be sent via Federal Fund Wire, usually
on the next business day ($7.50 will be deducted).
Redemptions of $5,000 or less will be sent by check to your
designated bank.
Bank Information (For A, B, or C 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)
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. 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)
____________________________
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 transferred into the same share class of up to four
other Colonial funds, on a monthly basis. The minimum amount
for each transfer is $100. Please complete the section
below.
____________________________________
Fund from which shares will be sold
$_________________________
Amount to redeem monthly
____________________________________
Fund name
$_________________________
Amount to invest monthly
____________________________________
Fund name
$_________________________
Amount to invest monthly
____________________________________
Fund name
$_________________________
Amount to invest monthly
C. Fundamatic
Fundamatic automatically transfers the specified amount from
your bank checking account to your Colonial fund account.
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 and Fundamatic
Authorization (Section 6).
____________________________________
Fund name
$_____________________ _________________
Amount to transfer Month to start
Frequency
__Monthly or __Quarterly
Date
__5th or __20th of the month
____________________________________
Fund name
$_____________________ _________________
Amount to transfer Month to start
Frequency
__Monthly or __Quarterly
Date
__5th or __20th of the month
____________________________________
Fund name
$_____________________ _________________
Amount to transfer Month to start
Frequency
__Monthly or __Quarterly
Date
__5th or __20th of the month
6 -------------Fundamatic Authorization--------------------
Authorization to honor checks drawn by Colonial Investors
Service Center. 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
______________________________________
Bank street address
______________________________________
City State Zip
______________________________________
Bank account number
______________________________________
Bank routing #
X_____________________________________
Depositor's Signature(s)
Exactly as appears on bank records
X_____________________________________
Depositor's Signature(s)
Exactly as appears on bank records
7--Ways to Reduce Your Sales Charges for Class A Shares--
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 Class A, B or D
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.
_____________________________________
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.
8-------------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 (CIS), the
Fund's prospectus, and this application. We will notify CIS
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
_____________________________________
Main office address
_____________________________________
City
_____________________________________
State Zip
X____________________________________
Authorized signature
9--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.
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 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, Colonial Management Associates, 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-461L-594
Checkwriting Signature Card
(Class A Shares Only)
Colonial Mutual Funds
Signature Card for the Bank of Boston ("Bank").
-----------------------------------------------
Name of Fund
-----------------------------------------------
Fund account number
To request additional signature cards, please call Colonial at 1-800-248-2828.
Account Name:
You must sign below exactly as your account is registered.
X
-----------------------------------------------
Signature
X
-----------------------------------------------
Signature
By signing this card, you are subject to the conditions printed on the reverse
side. If adding this privilege to an existing account, your signatures must be
guaranteed.
Checkwriting Privilege
By electing the checkwriting privilege and signing the signature card, I
acknowledge that I am subject to the rules and regulations of the Bank of
Boston ("Bank") as currently existing and as they may be amended from time
to time. I designate the Bank as my representative to present checks drawn
on my Fund account to the Fund or its Agent and deposit the proceeds in this
checking account. I understand that the shares for which share certificates
have been issued or requested cannot be redeemed in this manner.
I understand that if my Fund account is registered in joint tenancy, that all
checks must include all signatures of all persons named on the account.
If the account is registered in joint tenancy, each person guarantees the
genuineness of all other parties' signatures.
Minimum and Maximum
I understand that checks may not be in amounts less than $500 nor more than
$100,000, and that the Fund reserves the right to change these limits in its
sole discretion. I agree that neither the Fund nor its Agent is responsible
for any loss, expense, or cost arising from these redemptions. Also, if I have
recently made additional investments, I understand that redemption proceeds
will not be available until the check used to purchase the investment
(including a certified or cashier's check) has been cleared by the bank on
which it is drawn, which could take up to 15 days or more.
D-256A-1094
Part A of Post-Effective Amendment No. 6 filed with the
Commission on August 12, 1991 (Colonial Texas Tax-Exempt Fund) is
incorporated herein in its entirety by reference.
COLONIAL TRUST V
Cross Reference Sheet
Colonial California Tax-Exempt Fund
Colonial Connecticut Tax-Exempt Fund
Colonial Florida Tax-Exempt Fund
Colonial Massachusetts Tax-Exempt Fund
Colonial Michigan Tax-Exempt Fund
Colonial Minnesota Tax-Exempt Fund
Colonial New York Tax-Exempt Fund
Colonial North Carolina Tax-Exempt Fund
Colonial Ohio Tax-Exempt Fund
Location or Caption in Statement
Item Number of Form N-1A of Additional Information
Part B
10. Cover Page
11. Table of Contents
12. Not Applicable
13. Investment Objective and
Policies; Fundamental Investment
Policies; Other Investment
Policies; Miscellaneous
Investment Practices; Portfolio
Turnover
14. Management of the Funds; Fund
Charges and Expenses
15. Fund Charges and Expenses
16. Fund Charges and Expenses;
Management of the Funds
17. Fund Charges and Expenses;
Management of the Funds
18. Shareholder Liability
19. How to Buy Shares; Determination
of Net Asset Value; Suspension of
Redemptions; Investor Services;
20. Taxes
21. Fund Charges and Expenses;
Management of the Funds
22. Fund Charges and Expenses;
Investment Performance
23. Independent Accountants
COLONIAL CALIFORNIA TAX-EXEMPT FUND
COLONIAL CONNECTICUT TAX-EXEMPT FUND
COLONIAL FLORIDA TAX-EXEMPT FUND
COLONIAL MASSACHUSETTS TAX-EXEMPT FUND
COLONIAL MICHIGAN TAX-EXEMPT FUND
COLONIAL MINNESOTA TAX-EXEMPT FUND
COLONIAL NEW YORK TAX-EXEMPT FUND
COLONIAL NORTH CAROLINA TAX-EXEMPT FUND
COLONIAL OHIO TAX-EXEMPT FUND
Statement of Additional Information
May 31, 1995
This Statement of Additional Information (SAI) contains information which
may be useful to investors but which is not included in the Prospectus of
Colonial California Tax-Exempt Fund, Colonial Connecticut Tax-Exempt Fund,
Colonial Florida Tax-Exempt Fund, Colonial Massachusetts Tax-Exempt Fund,
Colonial Michigan Tax-Exempt Fund, Colonial Minnesota Tax-Exempt Fund,
Colonial New York Tax-Exempt Fund, Colonial North Carolina Tax-Exempt Fund
and Colonial Ohio Tax-Exempt Fund (Funds). This SAI is not a prospectus
and is authorized for distribution only when accompanied or preceded by the
Prospectus of the Funds dated May 31, 1995. This SAI should be read
together with the Prospectus. Investors may obtain a free copy of the
Prospectus from Colonial Investment Services, Inc. One Financial Center,
Boston, MA 02111-2621.
Part 1 of this SAI contains specific information about the Funds. Part 2
includes information about the Colonial funds generally and additional
information about certain securities and investment techniques described in
the Fund's Prospectus.
TABLE OF CONTENTS
Part 1 Page
Definitions
Investment Objectives and Policies of the Funds
Fundamental Investment Policies of the Funds
Other Investment Policies of the Funds
California Tax Considerations
Connecticut Tax Considerations
Florida Tax Considerations
Massachusetts Tax Considerations
Michigan Tax Considerations
Minnesota Tax Considerations
New York Tax Considerations
North Carolina Tax Considerations
Ohio Tax Considerations
Portfolio Turnover
Fund Charges and Expenses
Investment Performance
Custodian
Independent Accountants
Part 2
Miscellaneous Investment Practices
Taxes
Management of the Funds
Determination of Net Asset Value
How to Buy Shares
Investor Services
Suspension of Redemptions
Shareholder Liability
Performance Measures
Appendix I
Appendix II
SP-16/910A-0595
Part 1
COLONIAL CALIFORNIA TAX-EXEMPT FUND
COLONIAL CONNECTICUT TAX-EXEMPT FUND
COLONIAL FLORIDA TAX-EXEMPT FUND
COLONIAL MASSACHUSETTS TAX-EXEMPT FUND
COLONIAL MICHIGAN TAX-EXEMPT FUND
COLONIAL MINNESOTA TAX-EXEMPT FUND
COLONIAL NORTH CAROLINA TAX-EXEMPT FUND
COLONIAL NEW YORK TAX-EXEMPT FUND
COLONIAL OHIO TAX-EXEMPT FUND
Statement of Additional Information
May 31, 1995
DEFINITIONS
"California Fund" or "Fund" Colonial California Tax-Exempt Fund
"Connecticut Fund" or "Fund" Colonial Connecticut Tax-Exempt Fund
"Florida Fund" or "Fund" Colonial Florida Tax-Exempt Fund
"Massachusetts Fund" or Colonial Massachusetts Tax-Exempt Fund
"Fund"
"Michigan Fund" or "Fund" Colonial Michigan Tax-Exempt Fund
"Minnesota Fund" or "Fund" Colonial Minnesota Tax-Exempt Fund
"New York Fund" or "Fund" Colonial New York Tax-Exempt Fund
"North Carolina" or "Fund" Colonial North Carolina Tax-Exempt Fund
"Ohio Fund" or "Fund" Colonial Ohio Tax-Exempt Fund
"Trust" Colonial Trust V
"Colonial" Colonial Management Associates, Inc.,
the Funds' investment manager
"CISI" Colonial Investment Services, Inc., the
Funds' distributor
"CISC" Colonial Investors Service Center,
Inc., the Funds' shareholder services
and transfer agent
INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS
The Prospectus describes each Fund's investment objectives and policies.
Part 1 includes additional information concerning, among other things, the
investment policies of the Funds. Part 2 of this SAI contains additional
information about the following securities and investment techniques :
Short-Term Trading
Lower Rated Bonds
Inverse Floaters
Short Sales
Forward Commitments
Repurchase Agreements
Futures Contracts and Related Options (Limited to interest rate
futures, tax-exempt bond index futures, options on
such futures and options on such indices)
Options on Securities-purchasing put options
Participation Interests
Stand-by Commitments
Zero Coupon Securities (Zeros)
Except as described below under "Fundamental Investment Policies," the
Funds' investment policies are not fundamental and the Trustees may change
the policies without shareholder approval.
FUNDAMENTAL INVESTMENT POLICIES OF THE FUNDS
The Investment Company Act of 1940 (Act) provides that a "vote of a
majority of the outstanding voting securities" means the affirmative vote
of the lesser of (1) more than 50% of the outstanding shares of the Fund,
or (2) 67% or more of the shares present at a meeting if more than 50% of
the outstanding shares are represented at the meeting in person or by
proxy. The following fundamental investment policies can not be changed
without such a vote.
Each Fund may:
1. Issue senior securities only through borrowing money from banks for
temporary or emergency purposes up to 10% of its net assets
(entering into repurchase agreements and other similar instruments
is not considered the issuance of a senior security); however, the
Fund will not purchase additional portfolio securities while
borrowings exceed 5% of net assets;
2. Only own real estate acquired as a result of owning securities and
not more than 5% of total assets;
3. Purchase and sell futures contracts and related options so long as
the total initial margin and premiums on the contracts do not exceed
5% of its total assets;
4. Underwrite securities issued by others only when disposing of
portfolio securities;
5. Make loans through lending of securities not exceeding 30% of total
assets, through the purchase of debt instruments or similar
evidences of indebtedness typically sold privately to financial
institutions and through repurchase agreements;
6. Not concentrate more than 25% of its total assets in any one
industry or, [California Fund only] with respect to 75% of total
assets purchase any security (other than obligations of the U.S.
Government and cash items including receivables) if as a result more
than 5% of its total assets would then be invested in securities of
a single issuer or purchase the voting securities of an issuer if,
as a result of such purchases the Fund would own more than 10% of
the outstanding voting shares of such issuer;
7. And will, under normal circumstances, invest at least 80% of its
total assets in State Bonds subject to applicable State
requirements.
OTHER INVESTMENT POLICIES OF THE FUNDS
As non-fundamental investment policies which may be changed without
a shareholder vote, each Fund may not:
1. Purchase securities on margin, but the Fund may receive short-term
credit to clear securities transactions and may make initial or
maintenance margin deposits in connection with futures transactions;
2. Have a short securities position, unless the Fund owns, or owns
rights (exercisable without payment) to acquire, an equal amount of
such securities;
3. Own securities of any company if the Fund knows that officers and
Trustees of the Trust or officers and directors of Colonial who
individually own more than 0.5% of such securities together own more
than 5% of such securities;
4. Invest in interests in oil, gas or other mineral exploration or
development programs, including leases;
5. Purchase any security resulting in the Fund having more than 5% of
its total assets invested in securities of companies (including
predecessors) less than three years old, or in industrial
development revenue bonds (IRBs) where the private entity on whose
credit the security is based, directly or indirectly, has a record
of less than three years continuous business operations or relevant
business experience (including predecessors, controlling persons,
general partners and guarantors), unless the security purchased by
the Fund is rated by a nationally recognized rating service;
6. Pledge more than 33% of its total assets;
7. Purchase any security if, as a result of such purchase, more than
10% of its total assets would be invested in securities which are
restricted as to disposition;
8. Invest more than 15% of its net assets in illiquid assets; and
9. Invest in warrants if, immediately after giving effect to any such
investment, the Fund's aggregate investment in warrants, valued at
the lower of cost or market, would exceed 5% of the value of the
Fund's net assets. Included within that amount, but not to exceed
2% of the value of the Fund's net assets, may be warrants which are
not listed on the New York Stock Exchange or the American Stock
Exchange. Warrants acquired by the Fund in units or attached to
securities will be deemed to be without value.
Total assets and net assets are determined at current value for purposes of
compliance with investment restrictions and policies. All percentage
limitations will apply at the time of investment and are not violated
unless an excess or deficiency occurs as a result of such investment. For
the purpose of the Act diversification requirement, the issuer is the
entity whose revenues support the security.
CALIFORNIA TAX CONSIDERATIONS
It is the policy of the Fund to meet all applicable requirements of the
Internal Revenue Code (Code) and the California Revenue and Taxation Code
for shareholders to be relieved of the obligation to pay regular federal
income taxes and California personal income tax on amounts distributed to
them which are derived from tax-exempt interest income. That is, the Fund
will have at least 50% of its total assets invested in tax-exempt bonds
(and at least 50% of its total assets invested in California Bonds and U.
S. Government obligations whose interest is excluded from income for
California personal income tax purposes) at the end of each quarter.
California law provides that, to the extent distributions by the Fund are
derived from interest on California Bonds (as defined in the Prospectus)
and notes (or on obligations of the United States which pay interest
excludable from income under the Constitution or laws of the United States)
and are designated as such, such distributions shall be exempt from
California personal income taxes. For California personal income tax
purposes, distributions derived from other investments and distributions
from any net realized capital gains will be taxable, whether paid in cash
or reinvested in additional shares.
Interest derived from California Bonds is not subject to the California
alternative minimum tax and California personal income tax does not apply
to any portion of Social Security or railroad retirement benefits. Under
the Code, a portion of interest on any indebtedness (including insurance
policy loans) incurred or continued to purchase or carry shares of the Fund
which is deemed to relate to tax-exempt dividends will not be deductible.
For California personal income tax purposes none of such interest will be
deductible. Depending on the circumstances, the Internal Revenue Service
or California Franchise Tax Board may consider shares to have been
purchased or carried with borrowed funds even though the shares are not
directly traceable to the borrowed funds. Shareholders who are, within the
meaning of Section 147 of the Code, "substantial users" (or "related
persons" of substantial users) of facilities financed by industrial
development bonds should consult their tax advisers as to whether the Fund
is a desirable investment.
Distributions from investment income and capital gains, including dividends
derived from interest paid on California Bonds, will be subject to
California franchise tax and California corporate income tax.
Special Factors Affecting California Bonds
Certain California State Bonds rely on real property taxes as a source of
revenue. In 1978, an amendment to the California Constitution, Article
XIII A, limited taxes on real property and restricted the ability to
increase property taxes. In 1979, Article XIII B was added to the
California Constitution, significantly limiting spending by state and local
government. In June 1982, voters approved initiative measures which would
result in substantial annual reductions in state revenues. California also
revised its system of taxing corporations which could also result in
decreased state revenues. Decreased state revenues may result in
reductions to local governments. The State's ability to raise revenues and
to reduce expenditures to the extent necessary to balance the budget for
any year depends upon, among other things, the State's economic health and
the accuracy of the State's revenue predictions, as well as the impact of
budgetary restrictions.
It is not presently possible to determine the impact of Articles XIII A or
XIII B or any implementing or related legislation on the securities in the
Fund's portfolio or the ability of State or local governments to pay the
interest or principal on the securities.
CONNECTICUT TAX CONSIDERATIONS
Distributions received by shareholders from the Fund that are treated as
exempt-interest dividends for federal income tax purposes are exempt from
the Connecticut personal income tax to the extent that they are derived
from interest on Connecticut Bonds or on the obligations of certain other
governmental entities the interest on which the states are prohibited from
taxing by federal law (including obligations of Guam, the United States
Virgin Islands and the Commonwealth of Puerto Rico), and are designated as
such. Other distributions are subject to the Connecticut personal income
tax, except that those treated as capital gain dividends for federal income
tax purposes are not subject to the tax to the extent derived from the sale
or exchange of Connecticut Bonds. Distributions that are subject to the
federal alternative minimum tax are subject to the net Connecticut minimum
tax, with the exception of those derived from interest on Connecticut
Bonds.
Distributions from investment income and capital gains, including dividends
derived from interest paid on Connecticut Bonds, are included in gross
income for purposes of the Connecticut corporation business tax. However,
seventy percent of such distributions, provided that they are treated as
dividends for federal income tax purposes, but not as exempt-interest
dividends or capital gain dividends, are deductible for purposes of this
tax, but no deduction is allowed for expenses related thereto.
FLORIDA TAX CONSIDERATIONS
Florida currently has no income tax on individuals. Thus individual
shareholders of the Fund will not be subject to any Florida state income
tax on distributions received from the Fund. However, certain
distributions will be taxable to corporate shareholders which are subject
to Florida corporate income tax.
Florida currently imposes an "intangibles tax" at the annual rate of 0.20%
on certain securities and other intangible assets owned by Florida
residents. Certain types of tax exempt securities of Florida issuers, U.S.
Government Securities and tax exempt securities issued by certain U.S.
territories and possessions are exempt from this intangibles tax. The Fund
has received a ruling from Florida authorities that, if on December 31 of
any year the Fund's portfolio consists solely of such exempt assets, the
Fund's shares will be exempt from the Florida intangibles tax for that
year. To take advantage of this exemption in any year, the Fund must sell
any non-exempt assets held in its portfolio prior to December 31. Such
sales could result in capital losses or in the realization of taxable
capital gains, as well as transaction costs that may reduce the Fund's
return.
You should consult your tax adviser to determine the precise application of
Florida or other state law to your particular situation.
MASSACHUSETTS TAX CONSIDERATIONS
Distributions received by shareholders from the Fund are exempt from
Massachusetts personal income tax to the extent that they are derived from
interest on Massachusetts Bonds and are designated as such. The Fund
believes that gains it realizes on the sale of certain Massachusetts Bonds
are exempt from Massachusetts personal income taxation and will designate
them as such when those gains are distributed to shareholders.
Distributions from investment income and capital gains, including dividends
derived from interest paid on Massachusetts Bonds, may be subject to
Massachusetts corporate excise tax.
MICHIGAN TAX CONSIDERATIONS
To the extent that dividends from the Fund are derived from interest on
debt obligations issued by the State of Michigan or its political
subdivisions, the interest on which is excludable from gross income for
purposes of both federal income taxation and
Michigan personal income tax ("Michigan Bonds"), such dividends will be
exempt from Michigan personal income tax and intangibles tax. For Michigan
personal income and intangibles tax purposes, exempt-interest dividends
attributable to any investment in other than Michigan Bonds or certain
obligations of the U.S. will be fully taxable. Distributions representing
capital gains, if any, will be fully taxable for both Michigan personal
income and intangible tax purposes (except that distributions reinvested in
shares of the Fund are excluded from the taxable income base of the
Michigan intangibles tax).
Certain Michigan cities have adopted Michigan's Uniform City Income Tax
Ordinance, which under the Michigan City Income Tax Act is the only income
tax ordinance that may be adopted by cities in Michigan. To the extent
that distributions from the Fund are not subject to Michigan income tax,
they are not subject to any Michigan city's income tax.
You should consult your tax adviser if you are subject to the Michigan
Single Business Tax.
MINNESOTA TAX CONSIDERATIONS
Provided that the Fund qualifies as a "regulated investment
company" under the Internal Revenue Code of 1986, as amended (the "Code"),
shareholders of the Fund who are individuals, estates or trusts and who are
subject to the regular Minnesota personal income tax, will not be subject
to such tax on Fund dividends under current law to the extent that such
distributions qualify as exempt-interest dividends under section 852(b)(5)
of the Code which are derived from interest on tax-exempt obligations of
the State of Minnesota or its political or governmental subdivisions,
municipalities, governmental agencies or instrumentalities (Minnesota
Sources). The foregoing will apply, however, only if the portion of the
exempt-interest dividends from Minnesota Sources that is paid to all
shareholders represents 95% or more of the exempt-interest dividends that
are paid by the Fund. If the 95% test is not met, all exempt-interest
dividends that are paid by the Fund will be subject to the regular
Minnesota personal income tax. Even if the 95% test is met, to the extent
that exempt-interest dividends that are paid by the Fund are not derived
from Minnesota Sources, such dividends will be subject to the regular
Minnesota personal income tax. Other distributions of the Fund, including
distributions from net short-term and long-term capital gains, are
generally not exempt from the regular Minnesota personal income tax.
Shareholders of the Fund who are individuals, estates or trusts may be
subject to the Minnesota alternative minimum tax as a result of the receipt
of exempt-interest dividends that are attributable to certain private
activity bond interest even though derived from Minnesota Sources. In
addition, the entire portion of exempt-interest dividends that is received
by such shareholders and that is derived from sources other than Minnesota
sources is subject to the Minnesota alternative minimum tax. Further,
should the 95% test fail to be met, all of the exempt-interest dividends
that are paid by the Fund, including those derived from Minnesota Sources,
will be subject to the Minnesota alternative minimum tax in the case of
shareholders of the Fund who are individuals, estates or trusts.
Subject to certain limitations that are set forth in the Minnesota rules,
Fund dividends, if any, that are derived from interest on certain United
States obligations are not subject to the regular Minnesota personal income
tax or the Minnesota alternative minimum tax in the case of shareholders of
the Fund who are individuals, estates, or trusts.
Fund distributions, including exempt-interest dividends, are not excluded
in determining the Minnesota franchise tax on corporations, which is
measured by taxable income and alternative minimum taxable income. Fund
distributions may also be taken into account in certain cases in
determining the minimum fee that is imposed on corporations, S corporations
and partnerships.
NEW YORK TAX CONSIDERATIONS
New York law provides that, to the extent distributions by a regulated
investment company are derived from interest on debt obligations issued by
the State of New York or its political subdivisions or certain other
governmental entities (for example, U.S. territories), the interest on
which was at the time of issuance, excludable from gross income for
purposes of both federal income taxation and New York State or City
personal income taxation (New York Bonds) and designated as such, such
distributions shall be exempt from New York State and City personal income
taxes. For New York State and City personal income tax purposes,
distributions derived from investments other than New York Bonds and
distributions from any net short-term capital gains will be taxable as
ordinary income, whether paid in cash or reinvested in additional shares.
Distributions of net long-term capital gains will in general be taxable to
shareholders as long-term capital gains for federal and for New York State
and City personal income tax purposes, whether received in cash or shares
and regardless of the length of time shares of the Fund are held.
Distributions by the Fund from investment income and capital gains,
including exempt-interest dividends, may be subject to New York State
franchise taxes and to the New York City General Corporation Tax if
received by a corporation subject to those taxes, to state taxes in states
other than New York and to local taxes in cities other than New York City.
NORTH CAROLINA TAX CONSIDERATIONS
Under existing North Carolina law, as long as the Fund qualifies as a
separate "regulated investment company" under the Internal Revenue Code of
1986, as amended, and 50% or more of the value of the total assets of the
Fund at the close of each quarter of its taxable year consists of
obligations whose interest is exempt from federal income tax, dividends
received from the Fund that represent either (i) interest exempt from
federal income tax and received by the Fund on obligations of North
Carolina or its political subdivisions; nonprofit educational institutions
organized or chartered under the laws of North Carolina; or Guam, Puerto
Rico, or the U.S. Virgin Islands, including the governments thereof and
their agencies, instrumentalities and authorities, or (ii) interest
received by the Fund on direct obligations of the United States will be
exempt from North Carolina individual, trust and estate income taxation.
Any capital gains distributed by the Fund (except for capital gains
attributable to the sale by the Fund of an obligation, the profit from
which is exempt by a North Carolina statute) or gains realized by the
shareholder from a redemption or sale of shares of the Fund will be subject
to North Carolina individual, trust or estate income taxation.
Under existing North Carolina law, shares of the Fund will be exempt from
the North Carolina intangible personal property tax as long as (i) the
assets of the Fund on December 31 of each year consist entirely of
obligations of the United States and its possessions and North Carolina and
its political subdivisions, and (ii) on December 31 of each year, at least
80% of the fair market value of those obligations represents obligations
issued by North Carolina and its political subdivisions. The Fund intends
to satisfy these requirements.
Section 23-48 of the North Carolina General Statutes appears to permit any
city, town, school district, county or other taxing district to avail
itself of the provisions of Chapter 9 of the United States Bankruptcy Code,
but only with the consent of the Local Government Commission of the State
and of the holders of such percentage or percentages of the indebtedness of
the issuer as may be required by the Bankruptcy Code (if any such consent
is required). Thus, although limitations apply, in certain circumstances
political subdivisions might be able to seek the protection of the
Bankruptcy Code.
Fund shareholders that are corporations are advised to consult their own
tax advisors regarding the North Carolina tax consequences to them of
investing in the Fund.
OHIO TAX CONSIDERATIONS
Provided that the Fund continues to qualify as a regulated investment
company under the Internal Revenue Code of 1986, as amended (Code), and
that at all times at least 50% of the value of the total assets of the Fund
consists of obligations issued by or on behalf of Ohio, political
subdivisions thereof or agencies or instrumentalities of Ohio or its
political subdivisions (Ohio Obligations), or similar obligations of other
states or their subdivisions, (i) distributions with respect to shares of
the Fund ("Distributions") will be exempt from Ohio personal income tax and
municipal and school district income taxes in Ohio, and will be excluded
from the net income base of the Ohio corporation franchise tax to the
extent such Distributions are properly attributable to interest payments
on Ohio Obligations or on obligations issued by the Governments of Puerto
Rico, The Virgin Islands or Guam (Territorial Obligations), and (ii)
Distributions of profit made on the sale, exchange, or other disposition of
Ohio Obligations, including Distributions of "capital gain dividends." as
defined in the Code, properly attributable to the sale, exchange, or other
disposition of Ohio Obligations, will be exempt from Ohio personal income
tax, and municipal and school district income taxes in Ohio, and will be
excluded from the net income base of the Ohio corporation franchise tax.
Distributions that are properly attributable to interest on obligations of
the United States or its territories or possessions or of any authority,
commission, or instrumentality of the United States that is exempt from
state income taxes under the laws of the United States (including
Territorial Obligations) will be exempt from Ohio personal income tax and
municipal and school district income taxes in Ohio, and will be excluded
from the net income base of the Ohio corporation franchise tax.
However, other Distributions will generally not be exempt from Ohio
personal income tax and municipal and school district income taxes in Ohio,
and shares of the Fund will not be excluded from the net worth base of the
Ohio corporation franchise tax.
PORTFOLIO TURNOVER
Years ended January 31
1995 1994
California Fund 47% 17%
Connecticut Fund 22% 5%
Florida Fund 45% 19%
Massachusetts Fund 58% 7%
Michigan Fund 40% 7%
Minnesota Fund 26% 9%
New York Fund 65% 25%
Ohio Fund 33% 3%
North Carolina Fund
Period September 1, 1993
Year ended (commencement of
January 31, operations)
1995 through January 31, 1994
37% 1% (annualized)
FUND CHARGES AND EXPENSES
Under the Funds' management agreement, the Funds pay Colonial a monthly
fee based on the aggregate average daily net assets of the Funds,
determined at the close of each business day during the month, at the
annual rate of 0.55% of the first $1 billion, 0.50% in excess of $1 billion
and 0.45% in excess of $2 billion (subject to such reductions that Colonial
may agree to periodically). The fee is allocated among the Funds based on
each Fund's net assets..
Recent Fees paid to Colonial, CISI and CISC (dollars in thousands)
California Fund
Years ended Two months Year ended
January 31 ended January 31 November 30
1995 1994 1993 1992
Management fee
(before reduction) $2,457 $2,622 $358 $1,886
Bookkeeping fee 161 162 22 119
Shareholder service 671 679 83 412
and transfer agent fee
12b-1 fees:
Service fee (a) 71 --- --- ---
Distribution fee
(Class B) 762 552 36 25
Fees waived or borne
by Colonial (241) (347) (122) (413)
Connecticut Fund
Years ended
January 31
1995 1994 1993
Management fee
(before reduction) $870 $808 $298
Bookkeeping fee 63 56 28
Shareholder service
and transfer agent fee 240 210 16
12b-1 fees:
Service fee (a) 27 --- ---
Distribution fee
(Class B) 540 393 64
Fees waived or borne
by Colonial (841) (877) (445)
Florida Fund
Years ended January 31
1995 1994
Management fee
(before reduction) $316 $233
Bookkeeping fee 29 27
Shareholder service and
transfer agent 89 61
12b-1 fees:
Service fee (a) 9 ---
Distribution fee
(Class B) 236 166
Fees waived or borne
by Colonial (411) (345)
Massachusetts Fund
Years ended January 31
1995 1994 1993
Management fee
(before reduction) $1,446 $1,474 $1,034
Bookkeeping fee 99 95 70
Shareholder service
and transfer agent fee 400 384 240
12b-1 fees:
Service fee (a) 45 --- ---
Distribution fee
(Class B) 396 265 39
Fees waived or borne
by Colonial (298) (507) (573)
Michigan Fund
Years ended January 31
1995 1994 1993
Management fee
(before reduction) $326 $314 $198
Bookkeeping fee 30 28 27
Shareholder service
and transfer agent fee 96 82 67
12b-1 fees:
Service fee (a) 10 --- ---
Distribution fee
(Class B) 112 84 11
Fees waived or borne
by Colonial (185) (174) (106)
Minnesota Fund
Years ended January 31
1995 1994 1993
Management fee
(before reduction) $295 $274 $197
Bookkeeping fee 28 27 27
Shareholder service and
transfer agent fee 88 76 68
12b-1 fees:
Service fee (a) 9 --- ---
Distribution fee
(Class B) 99 50 3
Fees waived or borne
by Colonial (137) (93) (114)
New York Fund
Years ended January 31
1995 1994 1993
Management fee
(before reduction) $574 $556 $290
Bookkeeping fee 45 42 28
Shareholder service
and transfer agent fee 159 146 75
12b-1 fee:
Service fee (a) 17 --- ---
Distribution fee
(Class B) 330 241 25
Fees waived or borne
by Colonial (471) (268) (31)
North Carolina Fund
Period September 1, 1993
Year ended (commencement of
January 31, operations)
1995 January 31, 1994
Management fee
(before reduction) $165 $32
Bookkeeping fee 27 11
Shareholder service and
transfer agent fee 49 8
12b-1 fees:
Service fee (a) 5 ---
Distribution fee
(Class B) 105 20
Fees waived or borne
by Colonial (271) (65)
Ohio Fund
Years ended January 31
1995 1994 1993
Management fee
(before reduction) $720 $630 $338
reduction)
Bookkeeping fee 54 46 29
Shareholder service
and transfer agent fee 213 170 107
12b-1 fees:
Service fee (a) 23 --- ---
Distribution fee
(Class B) 399 241 10
Fees waived or borne
by Colonial (202) (94) (19)
(a) Effective December 31, 1994, each Fund pays CISI monthly a service fee at
the rate of 0.10% of average net assets attributed to shares outstanding
on November 30, 1994 and 0.25% of average net assets attributed to shares
issued thereafter.
Brokerage Commissions (dollars in thousands)
California Fund
Years ended Two months Year ended
January 31 ended November 30
1995 1994 January 31, 1993 1992
Total commissions $10 $0 $0 $0
Directed transactions (b) 0 0 0 0
Commissions on
directed transactions 0 0 0 0
Connecticut Fund
Years ended January 31
1995 1994 1993
Total commissions $2 $11 $9
Directed transactions (b) 0 0 0
Commissions on
directed transactions 0 0 0
Florida Fund
Years ended
January 31
1995 1994
Total commissions $4 $3
Directed transactions (b) 0 0
Commissions on
directed transactions 0 0
Massachusetts Fund
Years ended January 31
1995 1994 1993
Total commissions $5 $3 $10
Directed transactions (b) 0 0 0
Commissions on
directed transactions 0 0 0
Michigan Fund
Years ended January 31
1995 1994 1993
Total commissions $2 $1 $3
Directed transactions (b) 0 0 0
Commissions on
directed transactions 0 0 0
Minnesota Fund
Years ended January 31
1995 1994 1993
Total commissions $0 $0 $0
Directed transactions (b) 0 0 0
Commissions on
directed transactions 0 0 0
New York Fund
Years ended January 31
1995 1994 1993
Total commissions $3 $1 $0
Directed transactions (b) 0 0 0
Commissions on
directed transactions 0 0 0
North Carolina Fund
Period September 1,
Year ended 1993 (commencement of
January 31 operations) through
1995 January 31, 1994
Total commissions $2 $1
Directed transactions (b) 0 0
Commissions on
directed transactions 0 0
Ohio Fund
Years ended January 31
1995 1994 1993
Total commissions $4 $0 $1
Directed transactions (b) 0 0 0
Commissions on
directed transactions 0 0 0
(b) See "Management of the Funds - Portfolio Transactions - Brokerage and
research services" in Part 2 of this SAI.
Trustees Fees
For the fiscal ended January 31, 1995 and the calendar year ended December
31, 1994, the Trustees received the following compensation for serving as
Trustees:
California Fund
Aggregate Total
Compensation Pension or Compensation
From Fund for Retirement Estimated From Fund and
the fiscal Benefits Accrued Annual Fund Complex
year ended As Part of Benefits for the year
Trustee 1/31/95 Fund Expense Upon Retirement ended 12/31/94
Tom Bleasdale $3,061(c) $0 $0 $101,000(e)
Lora S. Collins 3,477 0 0 95,000
William D.
Ireland, Jr. 3,338 0 0 110,000
William E.
Mayer 2,760 0 0 89,752
John A.
McNeice, Jr. 0 0 0 0
James L.
Moody, Jr. 3,317(f) 0 0 109,000
John J.
Neuhauser 2,884 0 0 95,000
George L. Shinn 3,393 0 0 112,000
Robert L.
Sullivan 3,221 0 0 104,561
Sinclair
Weeks, Jr. 3,518 0 0 116,000
(c) Includes $1,476 payable as deferred compensation.
(d) At 12/31/94 the Colonial Funds Complex consisted of 31 open-
end and 5 closed-end management investment company
portfolios.
(e) Includes $49,000 payable as deferred compensation.
(f) Includes $391 payable as deferred compensation.
Connecticut Fund
Aggregate
Compensation Pension or
From Fund for Retirement Estimated
the fiscal Benefits Accrued Annual
year ended As Part of Benefits
Trustee 1/31/95 Fund Expense Upon Retirement
Tom Bleasdale $1,571(g) $0 $0
Lora S. Collins 1,772 0 0
William D. Ireland Jr. 1,708 0 0
William E. Mayer 1,414 0 0
John A. McNeice, Jr. 0 0 0
James L. Moody, Jr. 1,696(h) 0 0
John J. Neuhauser 1,472 0 0
George L. Shinn 1,737 0 0
Robert L. Sullivan 1,650 0 0
Sinclair Weeks, Jr. 1,800 0 0
(g) Includes $825 payable as deferred compensation.
(h) Includes $221 payable as deferred compensation.
Florida Fund
Aggregate
Compensation Pension or
From Fund for Retirement Estimated
the fiscal Benefits Accrued Annual
year ended As Part of Benefits
Trustee 1/31/95 Fund Expense Upon Retirement
Tom Bleasdale $1,085(i) $0 $0
Lora S. Collins 1,229 0 0
William D.
Ireland, Jr. 1,185 0 0
William E. Mayer 978 0 0
John A. McNeice, Jr. 0 0 0
James L. Moody, Jr. 1,183(j) 0 0
John J. Neuhauser 1,022 0 0
George L. Shinn 1,206 0 0
Robert L. Sullivan 1,147 0 0
Sinclair Weeks, Jr. 1,245 0 0
(i) Includes $598 payable as deferred compensation.
(j) Includes $160 payable as deferred compensation.
Massachusetts Fund
Aggregate
Compensation Pension or
From Fund for Retirement Estimated
the fiscal Benefits Accrued Annual
year ended As Part of Benefits
Trustee 1/31/95 Fund Expense Upon Retirement
Tom Bleasdale $1,256(k) $0 $0
Lora S. Collins 1,403 0 0
William D.
Ireland, Jr. 1,371 0 0
William E. Mayer 1,135 0 0
John A. McNeice, Jr 0 0 0
James L. Moody, Jr. 1,367(l) 0 0
John J. Neuhauser 1,185 0 0
George L. Shinn 1,400 0 0
Robert L. Sullivan 1,330 0 0
Sinclair Weeks, Jr. 1,441 0 0
(k) Includes $1,059 payable as deferred compensation.
(l) Includes $282 payable as deferred compensation.
Michigan Fund
Aggregate
Compensation Pension or
From Fund for Retirement Estimated
the fiscal Benefits Accrued Annual
year ended As Part of Benefits
Trustee 1/31/95 Fund Expense Upon Retirement
Tom Bleasdale $2,074(m) $0 $0
Lora S. Collins 2,378 0 0
William D.
Ireland, Jr. 2,260 0 0
William E. Mayer 1,863 0 0
John A. McNeice, Jr. 0 0 0
James L. Moody, Jr. 2,250(n) 0 0
John J. Neuhauser 1,954 0 0
George L. Shinn 2,298 0 0
Robert L. Sullivan 2,183 0 0
Sinclair Weeks, Jr. 2,392 0 0
(m) Includes $602 payable as deferred compensation.
(n) Includes $161 payable as deferred compensation.
Minnesota Fund
Aggregate
Compensation Pension or
From Fund for Retirement Estimated
the fiscal Benefits Accrued Annual
year ended As Part of Benefits
Trustee 1/31/95 Fund Expense Upon Retirement
Tom Bleasdale $1,249(o) $0 $0
Lora S. Collins 1,414 0 0
William D.
Ireland, Jr. 1,359 0 0
William E. Mayer 1,121 0 0
John A. McNeice, Jr. 0 0 0
James L. Moody 1,353(d) 0 0
John J. Neuhauser 1,172 0 0
George L. Shinn 1,385 0 0
Robert L. Sullivan 1,312 0 0
Sinclair Weeks, Jr. 1,430 0 0
(o) Includes $590 payable as deferred compensation.
(p) Includes $158 payable as deferred compensation.
New York Fund
Aggregate
Compensation Pension or
From Fund for Retirement Estimated
the fiscal Benefits Accrued Annual
year ended As Part of Benefits
Trustee 1/31/95 Fund Expense Upon Retirement
Tom Bleasdale $1,455(q) $0 $0
Lora S. Collins 1,655 0 0
William D.
Ireland, Jr. 1,587 0 0
William E. Mayer 1,310 0 0
John A. McNeice, Jr. 0 0 0
James L. Moody, Jr. 1,582(r) 0 0
John J. Neuhauser 1,372 0 0
George L. Shinn 1,612 0 0
Robert L. Sullivan 1,538 0 0
Sinclair Weeks, Jr. 1,671 0 0
(q) Includes $703 payable as deferred compensation.
(r) Includes $188 payable as deferred compensation.
North Carolina Fund
Aggregate
Compensation Pension or
From Fund for Retirement Estimated
the fiscal Benefits Accrued Annual
year ended As Part of Benefits
Trustee 1/31/95 Fund Expense Upon Retirement
Tom Bleasdale $1,108(s) $0 $0
Lora S. Collins 1,265 0 0
William D.
Ireland, Jr. 1,207 0 0
William E. Mayer 1,001 0 0
John A. McNeice, Jr. 0 0 0
James L. Moody, Jr. 1,206(t) 0 0
John J. Neuhaser 1,044 0 0
George L. Shinn 1,230 0 0
Robert L. Sullivan 1,174 0 0
Sinclair Weeks, Jr. 1,275 0 0
(s) Includes $431 payable as deferred compensation.
(t) Includes $144 payable as deferred compensation.
Ohio Fund
Aggregate
Compensation Pension or
From Fund for Retirement Estimated
the fiscal Benefits Accrued Annual
year ended As Part of Benefits
Trustee 1/31/95 Fund Expense Upon Retirement
Tom Bleasdale $1,890(u) $0 $0
Lora S. Collins 2,148 0 0
William D.
Ireland, Jr. 2,053 0 0
William E. Mayer 1,700 0 0
John A. McNeice, Jr. 0 0 0
James L. Moody, Jr. 2,045(v) 0 0
John J. Neuhauser 1,772 0 0
George L. Shinn 2,089 0 0
Robert L. Sullivan 1,980 0 0
Sinclair Weeks, Jr. 2,170 0 0
(u) Includes $764 payable as deferred compensation.
(v) Includes $206 payable as deferred compensation.
The following table sets forth the amount of compensation paid to Messrs.
Birnbaum, Grinnell and Lowry in their capacities as Trustees of the Liberty
All-Star Equity Fund, The Charles Allmon Trust, Inc., Liberty Financial
Trust and LFC Utilities Trust (together, Liberty Funds) for service during
the year ended December 31, 1994:
Total
Pension or Estimated Compensation
Retirement Annual From Liberty
Benefits Benefits Funds for
Accrued As Upon the calendar
Part of Retire- year ended
Trustee Fund Expense ment 12/31/94 (w)
Robert J. Birnbaum (x) $0 $0 $ 0
James E. Grinnell (x) 0 0 31,032
Richard W. Lowry (x) 0 0 31,282
(w) At 12/31/94 the Liberty Funds consisted of 5 open-end and 2
closed-end management investment company portfolios, each of
which were advised by Stein Roe & Farnham Incorporated, an
indirect wholly-owned subsidiary of Liberty Financial
Companies, Inc., and intermediate parent of Colonial. On
March 27, 1995, four of the portfolio series in the Liberty
Financial Trust (now known as Colonial Trust VII) were
merged into existing Colonial funds and a fifth was merged
into a new portfolio series of Colonial Trust III.
(x) Elected to the Colonial Funds Complex on April 21, 1995.
None of Messrs. Birnbaum, Grinnell or Lowry received any compensation from
any of the Funds for the fiscal year ended January 31, 1995.
Ownership of the Funds
At April 30, 1995, the officers and Trustees of the Trust as a group owned
less than 1% of the outstanding shares of each of the California,
Connecticut, Florida, Massachusetts, Michigan, Minnesota, New York, North
Carolina and Ohio Funds.
At April 30, 1995, the following shareholders owned 5% or more of the
following Funds' outstanding Class A and Class B shares:
California Fund: Merrill Lynch, Pierce, Fenner & Smith, Inc., Attn. Book
Entry, 4800 Deer Lake Drive E, 3rd Floor, Jacksonville, FL 32216 (Class A:
12.02%) (Class B: 7.06%)
Connecticut Fund: Merrill Lynch, Pierce, Fenner & Smith, Inc., Attn. Book
Entry, 4800 Deer Lake Drive E, 3rd Floor, Jacksonville, FL 32216 (Class A:
16.27%) (Class B: 22.01%)
Florida Fund: Merrill Lynch, Pierce, Fenner & Smith, Inc., Attn. Book
Entry, 4800 Deer Lake Drive E, 3rd Floor, Jacksonville, FL, 32216 (Class A:
10.27%) (Class B: 13.10%)
Massachusetts Fund: Merrill Lynch, Pierce, Fenner & Smith, Inc., Attn.
Book Entry, 4800 Deer Lake Drive E, 3rd Floor, Jacksonville, FL 32216
(Class A: 5.56%)
Michigan Fund: Merrill Lynch, Pierce, Fenner & Smith, Inc., Attn: Book
Entry, 4800 Deer Lake Drive E, 3rd Floor, Jacksonville, FL 32216-0561
(Class A: 10.65%) (Class B: 23.66%)
Minnesota Fund: Merrill Lynch, Pierce, Fenner & Smith, Inc., Attn: Book
Entry, 4800 Deer Lake Drive E, 3rd Floor, Jacksonville, FL 32216 (Class B:
8.39%)
New York Fund: Merrill Lynch, Pierce, Fenner & Smith, Inc., Attn. Book
Entry, 4800 Deer Lake Drive E, 3rd Floor, Jacksonville, FL 32216 (Class A:
15.73%) (Class B: 17.77%)
North Carolina Fund: Frank M. Drendel, 330 17th Avenue NW, Hickory, NC
28601-1817 (Class A: 6.42); Merrill Lynch, Pierce, Fenner & Smith, Inc.,
Attn. Book Entry, 4800 Deer Lake Drive E, 3rd Floor, Jacksonville, FL 32216
(Class B: 5.41%)
Ohio Fund: Merrill Lynch, Pierce, Fenner & Smith, Inc., Attn. Book Entry,
4800 Deer Lake Drive E, 3rd Floor, Jacksonville, FL 32216 (Class A: 7.29%)
At April 30, 1995, there were the following number of shareholders of each
Fund:
Class A Class B
California Fund 5,584 2,422
Connecticut Fund 1,842 1,800
Florida Fund 648 733
Massachusetts Fund 4,622 1,789
Michigan Fund 1,410 434
Minnesota Fund 1,464 600
New York Fund 1,418 1,108
North Carolina Fund 601 553
Ohio Fund 2,760 2,126
Sales Charges (dollars in thousands)
Class A Shares
California Fund
Years ended Two months Year ended
January 31 ended January 31 November 30
1995 1994 1993 1992
Aggregate initial
sales charges on
Fund share sales $483 $1,527 $237 $1,507
Initial sales
charges retained by
CISI 47 201 29 182
Connecticut Fund
Years ended January 31
1995 1994 1993
Aggregate initial
sales charges on
Fund share sales $370 $1,057 $1,713
Initial sales charges
retained by CISI 34 117 203
Florida Fund
Year ended January 31
1995 1994
Aggregate initial
sales charges on Fund
share sales $153 $716
Initial sales charges
retained by CISI 12 33
Massachusetts Fund
Years ended January 31
1995 1994 1993
Aggregate initial
sales charges on
Fund share sales $634 $1,463 $1,644
Initial sales charges
retained by CISI 55 167 191
Michigan Fund
Years ended January 31
1995 1994 1993
Aggregate initial
sales charges on
Fund share sales $143 $315 $306
Initial sales charges
retained by CISI 12 34 35
Minnesota Fund
Years ended January 31
1995 1994 1993
Aggregate initial
sales charges on
Fund share sales $143 $308 $229
Initial sales charges
retained by CISI 12 31 26
New York Fund
Years ended January 31
1995 1994 1993
Aggregate initial
sales charges on
Fund share sales $218 $488 $467
Initial sales charges
retained by CISI 19 52 52
North Carolina Fund
Period September 1, 1993
Year ended (commencement of operations)
January 31, 1995 through January 31, 1994
Aggregate initial
sales charges on Fund
share sales $235 $309
Initial sales charges
retained by CISI 18 4
Ohio Fund
Years ended January 31
1995 1994 1993
Aggregate initial
sales charges on
Fund share sales $247 $696 $638
Initial sales
charges retained
by CISI 21 73 65
Class B Shares
California Fund
Period
August 4, 1992
Two months (commencement
Years ended ended of operations)
January 31 January 31 through
1995 1994 1993 November 30, 1992
Aggregate
contingent
deferred sales
charges (CDSC)
on Fund
redemptions
retained
by CISI $489 $173 $8 $11
Connecticut Fund
Period June 8, 1992
Years ended (commencement of
January 31 operations)
1995 1994 through January 31, 1993
Aggregate CDSC
on Fund
redemptions
retained by CISI $198 $51 $6
Florida Fund
Year ended
1995 January 31, 1994
Aggregate CDSC on
Fund redemptions
retained by CISI $139 $11
Massachusetts Fund
Period June 8,
1992
Years ended (commencement of
January 31 operations)
through
1995 1994 January 31, 1993
Aggregate CDSC on
Fund redemptions
retained by CISI $169 $61 $4
Michigan Fund
Period August 4,
1992
Years ended (commencement of
January 31 operations)
through
1995 1994 January 31, 1993
Aggregate CDSC on
Fund redemptions
retained by CISI $68 $5 $0
Minnesota Fund
Period August 4,
Years ended 1992
January 31 (commencement of
operations)
1995 1994 through January 31, 1993
Aggregate CDSC on
Fund redemptions
retained by CISI $31 $3 $0
New York Fund
Period August
Years ended 4, 1992
January 31 (commencement
of operations)
through
1995 1994 January 31, 1993
Aggregate CDSC on
Fund redemptions
retained by CISI $155 $34 $28
North Carolina Fund
Period September
1, 1993
(commencement of
Year ended operations)
January 31, 1995 through January 31,
Aggregate CDSC on
Fund redemptions
retained by CISI $35 $0
Ohio Fund
Period August 4,
Years ended 1992
January 31 (commencement of
operations)
1995 1994 January 31, 1993
Aggregate CDSC on
Fund redemptions
retained by CISI $181 $29 $41
Distribution Plan, CDSCs and Conversion of Shares
The Funds each offer two classes of shares - Class A and Class B. Each
Fund may in the future offer other classes of shares. The Trustees have
approved 12b-1 plans (Plans) for each Fund pursuant to Rule 12b-1 under the
Act. Under the Plans, each Fund pays CISI monthly a service fee at the rate
of 0.10% of average net assets attributed to shares outstanding on November
30, 1994, and 0.25% of average net assets attributed to shares issued
thereafter. The Funds also pay CISI a distribution fee not to exceed 0.75%
of average net assets attributed to each Fund's Class B shares. CISI may
use the entire amount of such fees to defray the costs of commissions and
service fees paid to financial service firms (FSFs) and for certain other
purposes. Since the distribution and service fees are payable regardless
of the amount of CISI's expenses, CISI may realize a profit from the fees.
The Plans authorize any other payments by the Funds to CISI (and its
affiliates including Colonial) to the extent that such payments might be
construed to be indirectly financing the distribution of each Fund's
shares.
The Trustees believe the Plans could be a significant factor in the growth
and retention of each Fund's assets resulting in a more advantageous
expense ratio and increased investment flexibility which could benefit each
Fund's shareholders. The Plans will continue in effect from year to year
so long as continuance is specifically approved at least annually by a vote
of the Trustees, including the Trustees who are not interested persons of
the Trust and have no direct or indirect financial interest in the
operation of the Plans or in any agreements related to the Plans
(Independent Trustees), cast in person at a meeting called for the purpose
of voting on the Plans. The Plans may not be amended to increase the fee
materially without approval by vote of a majority of the outstanding voting
securities of the relevant class of shares and all material amendments of
the Plans must be approved by the Trustees in the manner provided in the
foregoing sentence. The Plans may be terminated at any time by vote of a
majority of the Independent Trustees or by vote of a majority of the
outstanding voting securities of the relevant class of shares. The
continuance of the Plans will only be effective if the selection and
nomination of the Trustees who are non-interested Trustees is effected by
such non-interested Trustees.
Class A shares are offered at net asset value plus varying sales charges
which may include a CDSC. Class B shares are offered at net asset value
subject to a CDSC if redeemed within six years after the purchase. The
CDSCs are described in the Prospectus.
No CDSC will be imposed on distributions or on amounts which represent an
increase in the value of the shareholders account resulting from capital
appreciation. In determining the applicability and rate of any CDSC, it
will be assumed that a redemption is made first of shares representing
capital appreciation, next of shares representing reinvestment of
distributions and finally of other shares held by the shareholder for the
longest period of time.
Eight years after the end of the month in which a Class B share is
purchased, such share and a pro rata portion of any shares issued on the
reinvestment of distributions will be automatically converted into Class A
shares having an equal value, which are not subject to the distribution
fee.
Sales-related expenses (dollars in thousands) of CISI relating to the Funds
for the fiscal year ended January 31, 1995 were:
California Fund Connecticut Fund
Class A Class B Class A Class B
Fees to FSFs $99 $815 $32 $624
Cost of sales material 44 54 29 46
Allocated travel,
entertainment and
other promotional 92 110 61 89
Florida Fund Massachusetts Fund
Class A Class B Class A Class B
Fees to FSFs $49 $271 $89 $592
Cost of sales material 26 16 61 39
Allocated travel,
entertainment and
other promotional 40 32 126 83
Michigan Fund Minnesota Fund
Class A Class B Class A Class B
Fees to FSFs $13 $136 $17 $250
Cost of sales material 15 12 11 16
Allocated travel,
entertainment and
other promotional 19 17 24 36
New York Fund North Carolina Fund
Class A Class B Class A Class B
Fees to FSFs $17 $355 $15 $374
Cost of sales material 17 26 18 27
Allocated travel,
entertainment and
other promotional 32 47 35 53
Ohio Fund
Class A Class B
Fees to FSFs $23 $536
Cost of sales material 20 34
Allocated travel,
entertainment and
other promotional 38 68
INVESTMENT PERFORMANCE
The following Funds' Class A and Class B yields for the month ended January
31, 1995, were:
Class A Shares
Tax-
Equivalent Adjusted
Yield Yield(p) Yield(q)
California Fund 5.48% 10.19% 5.45%
Connecticut Fund 5.72% 9.92% 5.47%
Florida Fund 5.78% 9.57% 5.11%
Massachusetts Fund 5.68% 10.69% 5.58%
Michigan Fund 5.69% 9.87% 5.52%
Minnesota Fund 5.45% 9.86% 5.22%
New York Fund 5.94% 11.18% 5.52%
North Carolina Fund 5.82% 10.45% 4.87%
Ohio Fund 5.65% 10.11% 5.57%
Class B Shares
Tax-
Equivalent Adjusted
Yield Yield(p) Yield(q)
California Fund 5.00% 9.30% 4.97%
Connecticut Fund 5.29% 9.17% 4.72%
Florida Fund 5.31% 8.79% 4.61%
Massachusetts Fund 5.21% 9.80% 5.11%
Michigan Fund 5.22% 9.06% 5.04%
Minnesota Fund 4.97% 8.99% 4.73%
New York Fund 5.48% 10.32% 5.04%
North Carolina Fund 5.36% 9.62% 4.36%
Ohio Fund 5.19% 9.29% 5.10%
(p) Calculated using the effective maximum combined federal and state
tax rates.
(q) Without voluntary expense limit.
The following Funds' average annual total returns at January 31, 1995,
were:
Class A Shares
California Fund
Since
inception
6/16/86 to
1 year 5 years 1/31/95
With sales charge of 4.75% -9.35% 5.30% 5.83%
Without sales charge -4.83% 6.33% 6.43%
Connecticut Fund
Since inception
1 year 11/1/91 to 1/31/95
With sales charge of 4.75% -9.37% 4.36%
Without sales charge -4.85% 5.93%
Florida Fund
Since inception
1 year 2/1/93 to 1/31/95
With sales charge of 4.75% -9.62% 0.46%
Without sales charge -5.11% 2.93%
Massachusetts Fund
Years ended January 31
Since
inception
4/10/87 to
1 year 5 years 1/31/95
With sales charge of 4.75% -8.07% 6.62% 6.82%
Without sales charge -3.49% 7.67% 7.48%
Michigan Fund
Years ended January 31
Since
inception
9/26/86 to
1 year 5 years 1/31/95
With sales charge of 4.75% -8.24% 5.75% 5.14%
Without sales charge -3.66% 6.79% 5.75%
Minnesota Fund
Years ended January 31
Since
inception
9/26/86 to
1 year 5 years 1/31/95
With sales charge of 4.75% -7.53% 5.48% 5.50%
Without sales charge -2.92% 6.51% 6.12%
New York Fund
Years ended January 31
Since
inception
9/26/86 to
1 year 5 years 1/31/95
With sales charge of 4.75% -9.82% 5.85% 5.30%
Without sales charge -5.32% 6.88% 5.91%
North Carolina Fund
Since inception
1 year 9/1/93 to 1/31/95
With sales charge of 4.75% -10.04% -5.74%
Without sales charge -5.55% -2.45%
Ohio Fund
Years ended January 31
Since
inception
9/26/86 to
1 year 5 years 1/31/95
With sales charge of 4.75% -8.92% 5.88% 5.69%
Without sales charge -4.38% 6.92% 6.30%
Class B Shares
California Fund
Since inception
1 year 8/4/92 to 1/31/95
With CDSC of 5% -10.04% 1.10%
Without CDSC -5.55% 2.19%
Connecticut Fund
Since inception
1 year 6/8/92 to 1/31/95
With CDSC of 5% -10.06% 3.64%
Without CDSC -5.57% 4.68%
Florida Fund
Since inception
1 year 2/1/93 to 1/31/95
With CDSC of 5% -10.31% 0.30%
Without CDSC -5.83% 2.17%
Massachusetts Fund
Since inception
1 year 6/8/92 to 1/31/95
With CDSC of 5% -8.76% 4.12%
Without CDSC -4.21% 5.16%
Michigan Fund
Since inception
1 year 8/4/92 to 1/31/95
With CDSC of 5% -8.92% 2.24%
Without CDSC -4.39% 3.34%
Minnesota Fund
Since inception
1 year 8/4/92 to 1/31/95
With CDSC of 5% -8.22% 2.01%
Without CDSC -3.65% 3.11%
New York Fund
Since inception
1 year 8/4/92 to 1/31/95
With CDSC of 5% -10.49% 1.55%
Without CDSC -6.04% 2.64%
North Carolina Fund
Since inception
1 year 9/1/93 to 1/31/95
With sales charge of 4.75% -10.72% -5.74%
Without sales charge -6.27% -3.18%
Ohio Fund
Since inception
1 year 8/4/92 to 1/31/95
With CDSC of 5% -9.61% 1.63%
Without CDSC -5.10% 2.74%
The following Funds' Class A and Class B share distribution rates at
January 31, 1995, based on the most recent month's distribution,
annualized, and the maximum offering price (net asset value for Class B) at
the end of the month, were:
Fund Class A Class B
California Fund 5.61% 5.17%
Connecticut Fund 5.65% 5.20%
Florida Fund 5.80% 5.37%
Massachusetts Fund 5.72% 5.28%
Michigan Fund 5.58% 5.14%
Minnesota Fund 5.55% 5.09%
New York Fund 5.99% 5.59%
North Carolina Fund 5.65% 5.21%
Ohio Fund 5.48% 4.85%
See Part 2 of this SAI, "Performance Measures," for how calculations are
made.
CUSTODIAN
United Missouri Bank, n.a. is the Funds' custodian. The Funds' custodian
is responsible for safeguarding each Fund's cash and securities, receiving
and delivering securities and collecting the Fund's interest and dividends.
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP are the Funds' independent accountants providing audit
and tax return preparation services and assistance and consultation in
connection with the review of various SEC filings. The financial statements
incorporated by reference in this SAI have been so incorporated, and the
schedules of financial highlights in the Prospectus have been so included,
in reliance upon the report of Price Waterhouse LLP given on the authority
of said firm as experts in accounting and auditing.
The following Funds' financial statements and Reports of Independent
Accountants appearing on the referenced pages in each of the Fund's January
31, 1995 Annual Reports are incorporated in this SAI by reference:
Fund Pages
California Fund 3-16
Connecticut Fund 3-13
Florida Fund 3-12
Massachusetts Fund 3-15
Michigan Fund 3-12
Minnesota Fund 3-13
New York Fund 3-12
North Carolina Fund 3-11
Ohio Fund 3-14
STATEMENT OF ADDITIONAL INFORMATION
PART 2
The following information applies generally to your Fund and to the
other Colonial funds. In certain cases the discussion applies to
some but not all of the funds, and you should refer to your Fund's
Prospectus and to Part 1 of this SAI to determine whether the matter
is applicable to your Fund. You will also be referred to Part 1 for
certain data applicable to your Fund.
MISCELLANEOUS INVESTMENT PRACTICES
Part 1 of this Statement lists on page b which of the following
investment practices are available to your Fund.
Short-Term Trading
In seeking the Fund's objective, Colonial will buy or sell portfolio
securities whenever Colonial believes it appropriate. Colonial's
decision will not generally be influenced by how long the Fund may
have owned the security. From time to time the Fund will buy
securities intending to seek short-term trading profits. A change in
the securities held by the Fund is known as "portfolio turnover" and
generally involves some expense to the Fund. These expenses may
include brokerage commissions or dealer mark-ups and other
transaction costs on both the sale of securities and the reinvestment
of the proceeds in other securities. If sales of portfolio
securities cause the Fund to realize net short-term capital gains,
such gains will be taxable as ordinary income. As a result of the
Fund's investment policies, under certain market conditions the
Fund's portfolio turnover rate may be higher than that of other
mutual funds. Portfolio turnover rate for a fiscal year is the ratio
of the lesser of purchases or sales of portfolio securities to the
monthly average of the value of portfolio securities, excluding
securities whose maturities at acquisition were one year or less.
The Fund's portfolio turnover rate is not a limiting factor when
Colonial considers a change in the Fund's portfolio.
Lower Rated Bonds
Lower rated bonds are those rated lower than Baa by Moody's, BBB by
S&P, or comparable unrated securities. Relative to comparable
securities of higher quality:
1. the market price is likely to be more volatile because:
a. an economic downturn or increased interest rates may have a
more significant effect on the yield, price and potential for
default;
b. the secondary market may at times become less liquid or
respond to adverse publicity or investor perceptions,
increasing the difficulty in valuing or disposing of the
bonds;
c. existing or future legislation limits and may further limit
(i) investment by certain institutions or (ii) tax
deductibility of the interest by the issuer, which may
adversely affect value; and
d. certain lower rated bonds do not pay interest in cash on a
current basis. However, the Fund will accrue and distribute
this interest on a current basis, and may have to sell
securities to generate cash for distributions.
2. the Fund's achievement of its investment objective is more
dependent on Colonial's credit analysis.
3. lower rated bonds are less sensitive to interest rate changes,
but are more sensitive to adverse economic developments.
Small Companies
Smaller, less well established companies may offer greater
opportunities for capital appreciation than larger, better
established companies, but may also involve certain special risks
related to limited product lines, markets, or financial resources and
dependence on a small management group. Their securities may trade
less frequently, in smaller volumes, and fluctuate more sharply in
value than securities of larger companies.
Foreign Securities
The Fund may invest in securities traded in markets outside the
United States. Foreign investments can be affected favorably or
unfavorably by changes in currency rates and in exchange control
regulations. There may be less publicly available information about
a foreign company than about a U.S. company, and foreign companies
may not be subject to accounting, auditing and financial reporting
standards comparable to those applicable to U.S. companies.
Securities of some foreign companies are less liquid or more volatile
than securities of U.S. companies, and foreign brokerage commissions
and custodian fees may be higher than in the United States.
Investments in foreign securities can involve other risks different
from those affecting U.S. investments, including local political or
economic developments, expropriation or nationalization of assets and
imposition of withholding taxes on dividend or interest payments.
Foreign securities, like other assets of the Fund, will be held by
the Fund's custodian or by a subcustodian or depository. See also
"Foreign Currency Transactions" below.
The Fund may invest in certain Passive Foreign Investment Companies
(PFICs) which may be subject to U.S. federal income tax on a portion
of any "excess distribution" or gain (PFIC tax) related to the
investment. The PFIC tax is the highest ordinary income rate and it
could be increased by an interest charge on the deemed tax deferral.
The Fund may possibly elect to include in its income its pro rata
share of the ordinary earnings and net capital gain of PFICs. This
election requires certain annual information from the PFICs which in
many cases may be difficult to obtain. An alternative election would
permit the Fund to recognize as income any appreciation (but not
depreciation) on its holdings of PFICs as of the end of its fiscal
year.
Zero Coupon Securities (Zeros)
The Fund may invest in debt securities which do not pay interest, but
instead are issued at a deep discount from par. The value of the
security increases over time to reflect the interest accreted. The
value of these securities may fluctuate more than similar securities
which are issued at par and pay interest periodically. Although
these securities pay no interest to holders prior to maturity,
interest on these securities is reported as income to the Fund and
distributed to its shareholders. These distributions must be made
from the Fund's cash assets or, if necessary, from the proceeds of
sales of portfolio securities. The Fund will not be able to purchase
additional income producing securities with cash used to make such
distributions and its current income ultimately may be reduced as a
result.
Step Coupon Bonds (Steps)
The Fund may invest in debt securities which do not pay interest for
a stated period of time and then pay interest at a series of
different rates for a series of periods. In addition to the risks
associated with the credit rating of the issuers, these securities
are subject to the volatility risk of zero coupon bonds for the
period when no interest is paid.
Pay-In-Kind (PIK) Securities
The Fund may invest in securities which pay interest either in cash
or additional securities at the issuer's option. These securities are
generally high yield securities and in addition to the other risks
associated with investing in high yield securities are subject to the
risks that the interest payments that are securities are also subject
to the risks of high yield securities.
Money Market Instruments
Government obligations are issued by the U.S. or foreign government,
its subdivisions, agencies and instrumentalities. Supranational
obligations are issued by supranational entities and are generally
designed to promote economic improvements. Certificates of deposits
are issued against funds deposited in a commercial bank with a
defined return and maturity. Banker's acceptances are used to
finance the import, export or storage of goods and are "accepted"
when guaranteed at maturity by a bank. Commercial paper are
promissory notes issued by businesses to finance short-term needs
(including those with floating or variable interest rates, or
including a frequent interval put feature). Short-term corporate
obligations are bonds and notes (with one year or less to maturity at
the time of purchase) issued by businesses to finance long-term
needs. Participation Interests include the underlying securities and
any related guaranty, letter of credit, or collateralization
arrangement which the Fund would be allowed to invest in directly.
Securities Loans
The Fund may make secured loans of its portfolio securities amounting
to not more than the percentage of its total assets specified in Part
1 of this SAI, thereby realizing additional income. The risks in
lending portfolio securities, as with other extensions of credit,
consist of possible delay in recovery of the securities or possible
loss of rights in the collateral should the borrower fail
financially. As a matter of policy, securities loans are made to
banks and broker-dealers pursuant to agreements requiring that loans
be continuously secured by collateral in cash or short-term debt
obligations at least equal at all times to the value of the
securities on loan. The borrower pays to the Fund an amount equal to
any dividends or interest received on securities lent. The Fund
retains all or a portion of the interest received on investment of
the cash collateral or receives a fee from the borrower. Although
voting rights, or rights to consent, with respect to the loaned
securities pass to the borrower, the Fund retains the right to call
the loans at any time on reasonable notice, and it will do so in
order that the securities may be voted by the Fund if the holders of
such securities are asked to vote upon or consent to matters
materially affecting the investment. The Fund may also call such
loans in order to sell the securities involved.
Forward Commitments
The Fund may enter into contracts to purchase securities for a fixed
price at a future date beyond customary settlement time ("forward
commitments" and "when issued securities") if the Fund holds until
the settlement date, in a segregated account, cash or high-grade debt
obligations in an amount sufficient to meet the purchase price, or if
the Fund enters into offsetting contracts for the forward sale of
other securities it owns. Forward commitments may be considered
securities in themselves, and involve a risk of loss if the value of
the security to be purchased declines prior to the settlement date.
Where such purchases are made through dealers, the Fund relies on the
dealer to consummate the sale. The dealer's failure to do so may
result in the loss to the Fund of an advantageous yield or price.
Although the Fund will generally enter into forward commitments with
the intention of acquiring securities for its portfolio or for
delivery pursuant to options contracts it has entered into, the Fund
may dispose of a commitment prior to settlement if Colonial deems it
appropriate to do so. The Fund may realize short-term profits or
losses upon the sale of forward commitments.
Repurchase Agreements
The Fund may enter into repurchase agreements. A repurchase
agreement is a contract under which the Fund acquires a security for
a relatively short period (usually not more than one week) subject to
the obligation of the seller to repurchase and the Fund to resell
such security at a fixed time and price (representing the Fund's cost
plus interest). It is the Fund's present intention to enter into
repurchase agreements only with commercial banks and registered
broker-dealers and only with respect to obligations of the U.S.
government or its agencies or instrumentalities. Repurchase
agreements may also be viewed as loans made by the Fund which are
collateralized by the securities subject to repurchase. Colonial
will monitor such transactions to determine that the value of the
underlying securities is at least equal at all times to the total
amount of the repurchase obligation, including the interest factor.
If the seller defaults, the Fund could realize a loss on the sale of
the underlying security to the extent that the proceeds of sale
including accrued interest are less than the resale price provided in
the agreement including interest. In addition, if the seller should
be involved in bankruptcy or insolvency proceedings, the Fund may
incur delay and costs in selling the underlying security or may
suffer a loss of principal and interest if the Fund is treated as an
unsecured creditor and required to return the underlying collateral
to the seller's estate.
Reverse Repurchase Agreements
In a reverse repurchase agreement, a Fund sells a security and agrees
to repurchase the same security at a mutually agreed upon date and
price. A reverse repurchase agreement may also be viewed as the
borrowing of money by the Fund and, therefore, as a form of leverage.
The Fund will invest the proceeds of borrowings under reverse
repurchase agreements. In addition, a Fund will enter into a reverse
repurchase agreement only when the interest income expected to be
earned from the investment of the proceeds is greater than the
interest expense of the transaction. A Fund will not invest the
proceeds of a reverse repurchase agreement for a period which exceeds
the duration of the reverse repurchase agreement. A Fund may not
enter into reverse repurchase agreements exceeding in the aggregate
one-third of the market value of its total assets, less liabilities
other than the obligations created by reverse repurchase agreements.
Each Fund will establish and maintain with its custodian a separate
account with a segregated portfolio of securities in an amount at
least equal to its purchase obligations under its reverse repurchase
agreements. If interest rates rise during the term of a reverse
repurchase agreement, entering into the reverse repurchase agreement
may have a negative impact on a money market fund's ability to
maintain a net asset value of $1.00 per share.
Options on Securities
Writing covered options. The Fund may write covered call options and
covered put options on securities held in its portfolio when, in the
opinion of Colonial, such transactions are consistent with the Fund's
investment objectives and policies. Call options written by the Fund
give the purchaser the right to buy the underlying securities from
the Fund at a stated exercise price; put options give the purchaser
the right to sell the underlying securities to the Fund at a stated
price.
The Fund may write only covered options, which means that, so long as
the Fund is obligated as the writer of a call option, it will own the
underlying securities subject to the option (or comparable securities
satisfying the cover requirements of securities exchanges). In the
case of put options, the Fund will hold cash and/or high-grade short-
term debt obligations equal to the price to be paid if the option is
exercised. In addition, the Fund will be considered to have covered
a put or call option if and to the extent that it holds an option
that offsets some or all of the risk of the option it has written.
The Fund may write combinations of covered puts and calls on the same
underlying security.
The Fund will receive a premium from writing a put or call option,
which increases the Fund's return on the underlying security if the
option expires unexercised or is closed out at a profit. The amount
of the premium reflects, among other things, the relationship between
the exercise price and the current market value of the underlying
security, the volatility of the underlying security, the amount of
time remaining until expiration, current interest rates, and the
effect of supply and demand in the options market and in the market
for the underlying security. By writing a call option, the Fund
limits its opportunity to profit from any increase in the market
value of the underlying security above the exercise price of the
option but continues to bear the risk of a decline in the value of
the underlying security. By writing a put option, the Fund assumes
the risk that it may be required to purchase the underlying security
for an exercise price higher than its then-current market value,
resulting in a potential capital loss unless the security
subsequently appreciates in value.
The Fund may terminate an option that it has written prior to its
expiration by entering into a closing purchase transaction in which
it purchases an offsetting option. The Fund realizes a profit or
loss from a closing transaction if the cost of the transaction
(option premium plus transaction costs) is less or more than the
premium received from writing the option. Because increases in the
market price of a call option generally reflect increases in the
market price of the security underlying the option, any loss
resulting from a closing purchase transaction may be offset in whole
or in part by unrealized appreciation of the underlying security.
If the Fund writes a call option but does not own the underlying
security, and when it writes a put option, the Fund may be required
to deposit cash or securities with its broker as "margin" or
collateral for its obligation to buy or sell the underlying security.
As the value of the underlying security varies, the Fund may have to
deposit additional margin with the broker. Margin requirements are
complex and are fixed by individual brokers, subject to minimum
requirements currently imposed by the Federal Reserve Board and by
stock exchanges and other self-regulatory organizations.
Purchasing put options. The Fund may purchase put options to protect
its portfolio holdings in an underlying security against a decline in
market value. Such hedge protection is provided during the life of
the put option since the Fund, as holder of the put option, is able
to sell the underlying security at the put exercise price regardless
of any decline in the underlying security's market price. For a put
option to be profitable, the market price of the underlying security
must decline sufficiently below the exercise price to cover the
premium and transaction costs. By using put options in this manner,
the Fund will reduce any profit it might otherwise have realized from
appreciation of the underlying security by the premium paid for the
put option and by transaction costs.
Purchasing call options. The Fund may purchase call options to hedge
against an increase in the price of securities that the Fund wants
ultimately to buy. Such hedge protection is provided during the life
of the call option since the Fund, as holder of the call option, is
able to buy the underlying security at the exercise price regardless
of any increase in the underlying security's market price. In order
for a call option to be profitable, the market price of the
underlying security must rise sufficiently above the exercise price
to cover the premium and transaction costs. These costs will reduce
any profit the Fund might have realized had it bought the underlying
security at the time it purchased the call option.
Over-the-Counter (OTC) options. The Staff of the Division of
Investment Management of the Securities and Exchange Commission has
taken the position that OTC options purchased by the Fund and assets
held to cover OTC options written by the Fund are illiquid
securities. Although the Staff has indicated that it is continuing
to evaluate this issue, pending further developments, the Fund
intends to enter into OTC options transactions only with primary
dealers in U.S. Government Securities and, in the case of OTC options
written by the Fund, only pursuant to agreements that will assure
that the Fund will at all times have the right to repurchase the
option written by it from the dealer at a specified formula price.
The Fund will treat the amount by which such formula price exceeds
the amount, if any, by which the option may be "in-the-money" as an
illiquid investment. It is the present policy of the Fund not to
enter into any OTC option transaction if, as a result, more than 15%
(10% in some cases, refer to your Fund's Prospectus) of the Fund's
net assets would be invested in (i) illiquid investments (determined
under the foregoing formula) relating to OTC options written by the
Fund, (ii) OTC options purchased by the Fund, (iii) securities which
are not readily marketable, and (iv) repurchase agreements maturing
in more than seven days.
Risk factors in options transactions. The successful use of the
Fund's options strategies depends on the ability of Colonial to
forecast interest rate and market movements correctly.
When it purchases an option, the Fund runs the risk that it will lose
its entire investment in the option in a relatively short period of
time, unless the Fund exercises the option or enters into a closing
sale transaction with respect to the option during the life of the
option. If the price of the underlying security does not rise (in
the case of a call) or fall (in the case of a put) to an extent
sufficient to cover the option premium and transaction costs, the
Fund will lose part or all of its investment in the option. This
contrasts with an investment by the Fund in the underlying
securities, since the Fund may continue to hold its investment in
those securities notwithstanding the lack of a change in price of
those securities.
The effective use of options also depends on the Fund's ability to
terminate option positions at times when Colonial deems it desirable
to do so. Although the Fund will take an option position only if
Colonial believes there is a liquid secondary market for the option,
there is no assurance that the Fund will be able to effect closing
transactions at any particular time or at an acceptable price.
If a secondary trading market in options were to become unavailable,
the Fund could no longer engage in closing transactions. Lack of
investor interest might adversely affect the liquidity of the market
for particular options or series of options. A marketplace may
discontinue trading of a particular option or options generally. In
addition, a market could become temporarily unavailable if unusual
events -- such as volume in excess of trading or clearing capability
-- were to interrupt normal market operations.
A marketplace may at times find it necessary to impose restrictions
on particular types of options transactions, which may limit the
Fund's ability to realize its profits or limit its losses.
Disruptions in the markets for the securities underlying options
purchased or sold by the Fund could result in losses on the options.
If trading is interrupted in an underlying security, the trading of
options on that security is normally halted as well. As a result,
the Fund as purchaser or writer of an option will be unable to close
out its positions until options trading resumes, and it may be faced
with losses if trading in the security reopens at a substantially
different price. In addition, the Options Clearing Corporation (OCC)
or other options markets may impose exercise restrictions. If a
prohibition on exercise is imposed at the time when trading in the
option has also been halted, the Fund as purchaser or writer of an
option will be locked into its position until one of the two
restrictions has been lifted. If a prohibition on exercise remains
in effect until an option owned by the Fund has expired, the Fund
could lose the entire value of its option.
Special risks are presented by internationally-traded options.
Because of time differences between the United States and the various
foreign countries, and because different holidays are observed in
different countries, foreign options markets may be open for trading
during hours or on days when U.S. markets are closed. As a result,
option premiums may not reflect the current prices of the underlying
interest in the United States.
Futures Contracts and Related Options
The Fund will enter into futures contracts only when, in compliance
with the SEC's requirements, cash or cash equivalents, (or, in the
case of a fund investing primarily in foreign equity securities, such
equity securities), equal in value to the commodity value (less any
applicable margin deposits) have been deposited in a segregated
account of the Fund's custodian.
A futures contract sale creates an obligation by the seller to
deliver the type of instrument called for in the contract in a
specified delivery month for a stated price. A futures contract
purchase creates an obligation by the purchaser to take delivery of
the type of instrument called for in the contract in a specified
delivery month at a stated price. The specific instruments delivered
or taken at settlement date are not determined until on or near that
date. The determination is made in accordance with the rules of the
exchanges on which the futures contract was made. Futures contracts
are traded in the United States only on commodity exchange or boards
of trade -- known as "contract markets" -- approved for such trading
by the Commodity Futures Trading Commission (CFTC), and must be
executed through a futures commission merchant or brokerage firm
which is a member of the relevant contract market.
Although futures contracts by their terms call for actual delivery or
acceptance of commodities or securities, the contracts usually are
closed out before the settlement date without the making or taking of
delivery. Closing out a futures contract sale is effected by
purchasing a futures contract for the same aggregate amount of the
specific type of financial instrument or commodity with the same
delivery date. If the price of the initial sale of the futures
contract exceeds the price of the offsetting purchase, the seller is
paid the difference and realizes a gain. Conversely, if the price of
the offsetting purchase exceeds the price of the initial sale, the
seller realizes a loss. Similarly, the closing out of a futures
contract purchase is effected by the purchaser's entering into a
futures contract sale. If the offsetting sale price exceeds the
purchase price, the purchaser realizes a gain, and if the purchase
price exceeds the offsetting sale price, the purchaser realizes a
loss.
Unlike when the Fund purchases or sells a security, no price is paid
or received by the Fund upon the purchase or sale of a futures
contract, although the Fund is required to deposit with its custodian
in a segregated account in the name of the futures broker an amount
of cash and/or U.S. Government Securities. This amount is known as
"initial margin". The nature of initial margin in futures
transactions is different from that of margin in security
transactions in that futures contract margin does not involve the
borrowing of funds by the Fund to finance the transactions. Rather,
initial margin is in the nature of a performance bond or good faith
deposit on the contract that is returned to the Fund upon termination
of the futures contract, assuming all contractual obligations have
been satisfied. Futures contracts also involve brokerage costs.
Subsequent payments, called "variation margin", to and from the
broker (or the custodian) are made on a daily basis as the price of
the underlying security or commodity fluctuates, making the long and
short positions in the futures contract more or less valuable, a
process known as "marking to market."
The Fund may elect to close some or all of its futures positions at
any time prior to their expiration. The purpose of making such a
move would be to reduce or eliminate the hedge position then
currently held by the Fund. The Fund may close its positions by
taking opposite positions which will operate to terminate the Fund's
position in the futures contracts. Final determinations of
variation margin are then made, additional cash is required to be
paid by or released to the Fund, and the Fund realizes a loss or a
gain. Such closing transactions involve additional commission costs.
Options on futures contracts. The Fund will enter into written
options on futures contracts only when, in compliance with the SEC's
requirements, cash or equivalents equal in value to the commodity
value (less any applicable margin deposits) have been deposited in a
segregated account of the Fund's custodian. The Fund may purchase
and write call and put options on futures contracts it may buy or
sell and enter into closing transactions with respect to such options
to terminate existing positions. The Fund may use such options on
futures contracts in lieu of writing options directly on the
underlying securities or purchasing and selling the underlying
futures contracts. Such options generally operate in the same
manner as options purchased or written directly on the underlying
investments.
As with options on securities, the holder or writer of an option may
terminate his position by selling or purchasing an offsetting option.
There is no guarantee that such closing transactions can be effected.
The Fund will be required to deposit initial margin and maintenance
margin with respect to put and call options on futures contracts
written by it pursuant to brokers' requirements similar to those
described above.
Risks of transactions in futures contracts and related options.
Successful use of futures contracts by the Fund is subject to
Colonial's ability to predict correctly movements in the direction of
interest rates and other factors affecting securities markets.
Compared to the purchase or sale of futures contracts, the purchase
of call or put options on futures contracts involves less potential
risk to the Fund because the maximum amount at risk is the premium
paid for the options (plus transaction costs). However, there may be
circumstances when the purchase of a call or put option on a futures
contract would result in a loss to the Fund when the purchase or sale
of a futures contract would not, such as when there is no movement in
the prices of the hedged investments. The writing of an option on a
futures contract involves risks similar to those risks relating to
the sale of futures contracts.
There is no assurance that higher than anticipated trading activity
or other unforeseen events might not, at times, render certain market
clearing facilities inadequate, and thereby result in the
institution, by exchanges, of special procedures which may interfere
with the timely execution of customer orders.
To reduce or eliminate a hedge position held by the Fund, the Fund
may seek to close out a position. The ability to establish and close
out positions will be subject to the development and maintenance of a
liquid secondary market. It is not certain that this market will
develop or continue to exist for a particular futures contract.
Reasons for the absence of a liquid secondary market on an exchange
include the following: (i) there may be insufficient trading
interest in certain contracts or options; (ii) restrictions may be
imposed by an exchange on opening transactions or closing
transactions or both; (iii) trading halts, suspensions or other
restrictions may be imposed with respect to particular classes or
series of contracts or options, or underlying securities; (iv)
unusual or unforeseen circumstances may interrupt normal operations
on an exchange; (v) the facilities of an exchange or a clearing
corporation may not at all times be adequate to handle current
trading volume; or (vi) one or more exchanges could, for economic or
other reasons, decide or be compelled at some future date to
discontinue the trading of contracts or options (or a particular
class or series of contracts or options), in which event the
secondary market on that exchange (or in the class or series of
contracts or options) would cease to exist, although outstanding
contracts or options on the exchange that had been issued by a
clearing corporation as a result of trades on that exchange would
continue to be exercisable in accordance with their terms.
Use by tax-exempt funds of U.S. Treasury security futures contracts
and options. A Fund investing in tax-exempt securities issued by a
governmental entity may purchase and sell futures contracts and
related options on U.S. Treasury securities when, in the opinion of
Colonial, price movements in Treasury security futures and related
options will correlate closely with price movements in the tax-exempt
securities which are the subject of the hedge. U.S. Treasury
securities futures contracts require the seller to deliver, or the
purchaser to take delivery of, the type of U.S. Treasury security
called for in the contract at a specified date and price. Options on
U.S. Treasury security futures contracts give the purchaser the right
in return for the premium paid to assume a position in a U.S.
Treasury futures contract at the specified option exercise price at
any time during the period of the option.
In addition to the risks generally involved in using futures
contracts, there is also a risk that price movements in U.S. Treasury
security futures contracts and related options will not correlate
closely with price movements in markets for tax-exempt securities.
Index futures contracts. An index futures contract is a contract to
buy or sell units of an index at a specified future date at a price
agreed upon when the contract is made. Entering into a contract to
buy units of an index is commonly referred to as buying or purchasing
a contract or holding a long position in the index. Entering into a
contract to sell units of an index is commonly referred to as selling
a contract or holding a short position. A unit is the current value
of the index. The Fund may enter into stock index futures contracts,
debt index futures contracts, or other index futures contracts
appropriate to its objective(s). The Fund may also purchase and sell
options on index futures contracts.
There are several risks in connection with the use by the Fund of
index futures as a hedging device. One risk arises because of the
imperfect correlation between movements in the prices of the index
futures and movements in the prices of securities which are the
subject of the hedge. Colonial will attempt to reduce this risk by
selling, to the extent possible, futures on indices the movements of
which will, in its judgment, have a significant correlation with
movements in the prices of the Fund's portfolio securities sought to
be hedged.
Successful use of the index futures by the Fund for hedging purposes
is also subject to Colonial's ability to predict correctly movements
in the direction of the market. It is possible that, where the Fund
has sold futures to hedge its portfolio against a decline in the
market, the index on which the futures are written may advance and
the value of securities held in the Fund's portfolio may decline. If
this occurs, the Fund would lose money on the futures and also
experience a decline in the value in its portfolio securities.
However, while this could occur to a certain degree, Colonial
believes that over time the value of the Fund's portfolio will tend
to move in the same direction as the market indices which are
intended to correlate to the price movements of the portfolio
securities sought to be hedged. It is also possible that, if the
Fund has hedged against the possibility of a decline in the market
adversely affecting securities held in its portfolio and securities
prices increase instead, the Fund will lose part or all of the
benefit of the increased valued of those securities that it has
hedged because it will have offsetting losses in its futures
positions. In addition, in such situations, if the Fund has
insufficient cash, it may have to sell securities to meet daily
variation margin requirements.
In addition to the possibility that there may be an imperfect
correlation, or no correlation at all, between movements in the index
futures and the securities of the portfolio being hedged, the prices
of index futures may not correlate perfectly with movements in the
underlying index due to certain market distortions. First, all
participants in the futures markets are subject to margin deposit and
maintenance requirements. Rather than meeting additional margin
deposit requirements, investors may close futures contracts through
offsetting transactions which would distort the normal relationship
between the index and futures markets. Second, margin requirements
in the futures market are less onerous than margin requirements in
the securities market, and as a result the futures market may attract
more speculators than the securities market. Increased participation
by speculators in the futures market may also cause temporary price
distortions. Due to the possibility of price distortions in the
futures market and also because of the imperfect correlation between
movements in the index and movements in the prices of index futures,
even a correct forecast of general market trends by Colonial may
still not result in a successful hedging transaction.
Options on index futures. Options on index futures are similar to
options on securities except that options on index futures give the
purchaser the right, in return for the premium paid, to assume a
position in an index futures contract (a long position if the option
is a call and a short position if the option is a put), at a
specified exercise price at any time during the period of the option.
Upon exercise of the option, the delivery of the futures position by
the writer of the option to the holder of the option will be
accompanied by delivery of the accumulated balance in the writer's
futures margin account which represents the amount by which the
market price of the index futures contract, at exercise, exceeds (in
the case of a call) or is less than (in the case of a put) the
exercise price of the option on the index future. If an option is
exercised on the last trading day prior to the expiration date of the
option, the settlement will be made entirely in cash equal to the
difference between the exercise price of the option and the closing
level of the index on which the future is based on the expiration
date. Purchasers of options who fail to exercise their options prior
to the exercise date suffer a loss of the premium paid.
Options on indices. As an alternative to purchasing call and put
options on index futures, the Fund may purchase call and put options
on the underlying indices themselves. Such options could be used in
a manner identical to the use of options on index futures.
Foreign Currency Transactions
The Fund may engage in currency exchange transactions to protect
against uncertainty in the level of future currency exchange rates.
The Fund may engage in both "transaction hedging" and "position
hedging". When it engages in transaction hedging, the Fund enters
into foreign currency transactions with respect to specific
receivables or payables of the Fund generally arising in connection
with the purchase or sale of its portfolio securities. The Fund will
engage in transaction hedging when it desires to "lock in" the U.S.
dollar price of a security it has agreed to purchase or sell, or the
U.S. dollar equivalent of a dividend or interest payment in a foreign
currency. By transaction hedging the Fund attempts to protect itself
against a possible loss resulting from an adverse change in the
relationship between the U.S. dollar and the applicable foreign
currency during the period between the date on which the security is
purchased or sold, or on which the dividend or interest payment is
declared, and the date on which such payments are made or received.
The Fund may purchase or sell a foreign currency on a spot (or cash)
basis at the prevailing spot rate in connection with the settlement
of transactions in portfolio securities denominated in that foreign
currency. The Fund may also enter into contracts to purchase or sell
foreign currencies at a future date ("forward contracts") and
purchase and sell foreign currency futures contracts.
For transaction hedging purposes the Fund may also purchase exchange-
listed and over-the-counter call and put options on foreign currency
futures contracts and on foreign currencies. Over-the-counter
options are considered to be illiquid by the SEC staff. A put option
on a futures contract gives the Fund the right to assume a short
position in the futures contract until expiration of the option. A
put option on currency gives the Fund the right to sell a currency at
an exercise price until the expiration of the option. A call option
on a futures contract gives the Fund the right to assume a long
position in the futures contract until the expiration of the option.
A call option on currency gives the Fund the right to purchase a
currency at the exercise price until the expiration of the option.
When it engages in position hedging, the Fund enters into foreign
currency exchange transactions to protect against a decline in the
values of the foreign currencies in which its portfolio securities
are denominated (or an increase in the value of currency for
securities which the Fund expects to purchase, when the Fund holds
cash or short-term investments). In connection with position
hedging, the Fund may purchase put or call options on foreign
currency and foreign currency futures contracts and buy or sell
forward contracts and foreign currency futures contracts. The Fund
may also purchase or sell foreign currency on a spot basis.
The precise matching of the amounts of foreign currency exchange
transactions and the value of the portfolio securities involved will
not generally be possible since the future value of such securities
in foreign currencies will change as a consequence of market
movements in the value of those securities between the dates the
currency exchange transactions are entered into and the dates they
mature.
It is impossible to forecast with precision the market value of
portfolio securities at the expiration or maturity of a forward or
futures contract. Accordingly, it may be necessary for the Fund to
purchase additional foreign currency on the spot market (and bear the
expense of such purchase) if the market value of the security or
securities being hedged is less than the amount of foreign currency
the Fund is obligated to deliver and if a decision is made to sell
the security or securities and make delivery of the foreign currency.
Conversely, it may be necessary to sell on the spot market some of
the foreign currency received upon the sale of the portfolio security
or securities if the market value of such security or securities
exceeds the amount of foreign currency the Fund is obligated to
deliver.
Transaction and position hedging do not eliminate fluctuations in the
underlying prices of the securities which the Fund owns or intends to
purchase or sell. They simply establish a rate of exchange which one
can achieve at some future point in time. Additionally, although
these techniques tend to minimize the risk of loss due to a decline
in the value of the hedged currency, they tend to limit any potential
gain which might result from the increase in value of such currency.
Currency forward and futures contracts. The Fund will enter into
such contracts only when, in compliance with the SEC's requirements,
cash or equivalents equal in value to the commodity value (less any
applicable margin deposits) have been deposited in a segregated
account of the Fund's custodian. A forward currency contract
involves an obligation to purchase or sell a specific currency at a
future date, which may be any fixed number of days from the date of
the contract as agreed by the parties, at a price set at the time of
the contract. In the case of a cancelable contract, the holder has
the unilateral right to cancel the contract at maturity by paying a
specified fee. The contracts are traded in the interbank market
conducted directly between currency traders (usually large
commercial banks) and their customers. A contract generally has no
deposit requirement, and no commissions are changed at any stage for
trades. A currency futures contract is a standardized contract for
the future delivery of a specified amount of a foreign currency at a
future date at a price set at the time of the contract. Currency
futures contracts traded in the United States are designed and traded
on exchanges regulated by the CFTC, such as the New York Mercantile
Exchange.
Forward currency contracts differ from currency futures contracts in
certain respects. For example, the maturity date of a forward
contract may be any fixed number of days from the date of the
contract agreed upon by the parties, rather than a predetermined date
in a given month. Forward contracts may be in any amounts agreed
upon by the parties rather than predetermined amounts. Also, forward
contracts are traded directly between currency traders so that no
intermediary is required. A forward contract generally requires no
margin or other deposit.
At the maturity of a forward or futures contract, the Fund may either
accept or make delivery of the currency specified in the contract, or
at or prior to maturity enter into a closing transaction involving
the purchase or sale of an offsetting contract. Closing transactions
with respect to forward contracts are usually effected with the
currency trader who is a party to the original forward contract.
Closing transactions with respect to futures contracts are effected
on a commodities exchange; a clearing corporation associated with the
exchange assumes responsibility for closing out such contracts.
Positions in currency futures contracts may be closed out only on an
exchange or board of trade which provides a secondary market in such
contracts. Although the Fund intends to purchase or sell currency
futures contracts only on exchanges or boards of trade where there
appears to be an active secondary market, there is no assurance that
a secondary market on an exchange or board of trade will exist for
any particular contract or at any particular time. In such event, it
may not be possible to close a futures position and, in the event of
adverse price movements, the Fund would continue to be required to
make daily cash payments of variation margin.
Currency options. In general, options on currencies operate
similarly to options on securities and are subject to many similar
risks. Currency options are traded primarily in the over-the-counter
market, although options on currencies have recently been listed on
several exchanges. Options are traded not only on the currencies of
individual nations, but also on the European Currency Unit ("ECU").
The ECU is composed of amounts of a number of currencies, and is the
official medium of exchange of the European Economic Community's
European Monetary System.
The Fund will only purchase or write currency options when Colonial
believes that a liquid secondary market exists for such options.
There can be no assurance that a liquid secondary market will exist
for a particular option at any specified time. Currency options are
affected by all of those factors which influence exchange rates and
investments generally. To the extent that these options are traded
over the counter, they are considered to be illiquid by the SEC
staff.
The value of any currency, including the U.S. dollars, may be
affected by complex political and economic factors applicable to the
issuing country. In addition, the exchange rates of currencies (and
therefore the values of currency options) may be significantly
affected, fixed, or supported directly or indirectly by government
actions. Government intervention may increase risks involved in
purchasing or selling currency options, since exchange rates may not
be free to fluctuate in respect to other market forces.
The value of a currency option reflects the value of an exchange
rate, which in turn reflects relative values of two currencies, the
U.S. dollar and the foreign currency in question. Because currency
transactions occurring in the interbank market involve substantially
larger amounts than those that may be involved in the exercise of
currency options, investors may be disadvantaged by having to deal in
an odd lot market for the underlying currencies in connection with
options at prices that are less favorable than for round lots.
Foreign governmental restrictions or taxes could result in adverse
changes in the cost of acquiring or disposing of currencies.
There is no systematic reporting of last sale information for
currencies and there is no regulatory requirement that quotations
available through dealers or other market sources be firm or revised
on a timely basis. Available quotation information is generally
representative of very large round-lot transactions in the interbank
market and thus may not reflect exchange rates for smaller odd-lot
transactions (less than $1 million) where rates may be less
favorable. The interbank market in currencies is a global, around-
the-clock market. To the extent that options markets are closed
while the markets for the underlying currencies remain open,
significant price and rate movements may take place in the underlying
markets that cannot be reflected in the options markets.
Settlement procedures. Settlement procedures relating to the Fund's
investments in foreign securities and to the Fund's foreign currency
exchange transactions may be more complex than settlements with
respect to investments in debt or equity securities of U.S. issuers,
and may involve certain risks not present in the Fund's domestic
investments, including foreign currency risks and local custom and
usage. Foreign currency transactions may also involve the risk that
an entity involved in the settlement may not meet its obligations.
Foreign currency conversion. Although foreign exchange dealers do
not charge a fee for currency conversion, they do realize a profit
based on the difference (spread) between prices at which they are
buying and selling various currencies. Thus, a dealer may offer to
sell a foreign currency to the Fund at one rate, while offering a
lesser rate of exchange should the Fund desire to resell that
currency to the dealer. Foreign currency transactions may also
involve the risk that an entity involved in the settlement may not
meet its obligation.
Participation Interests
The Fund may invest in municipal obligations either by purchasing
them directly or by purchasing certificates of accrual or similar
instruments evidencing direct ownership of interest payments or
principal payments, or both, on municipal obligations, provided that,
in the opinion of counsel to the initial seller of each such
certificate or instrument, any discount accruing on such certificate
or instrument that is purchased at a yield not greater than the
coupon rate of interest on the related municipal obligations will be
exempt from federal income tax to the same extent as interest on such
municipal obligations. The Fund may also invest in tax-exempt
obligations by purchasing from banks participation interests in all
or part of specific holdings of municipal obligations. Such
participations may be backed in whole or part by an irrevocable
letter of credit or guarantee of the selling bank. The selling bank
may receive a fee from the Fund in connection with the arrangement.
The Fund will not purchase such participation interests unless it
receives an opinion of counsel or a ruling of the Internal Revenue
Service that interest earned by it on municipal obligations in which
it holds such participation interests is exempt from federal income
tax.
Stand-by Commitments
When the Fund purchases municipal obligations it may also acquire
stand-by commitments from banks and broker-dealers with respect to
such municipal obligations. A stand-by commitment is the equivalent
of a put option acquired by the Fund with respect to a particular
municipal obligation held in its portfolio. A stand-by commitment is
a security independent of the municipal obligation to which it
relates. The amount payable by a bank or dealer during the time a
stand-by commitment is exercisable, absent unusual circumstances
relating to a change in market value, would be substantially the same
as the value of the underlying municipal obligation. A stand-by
commitment might not be transferable by the Fund, although it could
sell the underlying municipal obligation to a third party at any
time.
The Fund expects that stand-by commitments generally will be
available without the payment of direct or indirect consideration.
However, if necessary and advisable, the Fund may pay for stand-by
commitments either separately in cash or by paying a higher price for
portfolio securities which are acquired subject to such a commitment
(thus reducing the yield to maturity otherwise available for the same
securities.) The total amount paid in either manner for outstanding
stand-by commitments held in the Fund portfolio will not exceed 10%
of the value of the Fund's total assets calculated immediately after
each stand-by commitment is acquired. The Fund will enter into stand-
by commitments only with banks and broker-dealers that, in the
judgment of the Board of Trustees, present minimal credit risks.
Inverse Floaters
Inverse floaters are derivative securities whose interest rates vary
inversely to changes in short-term interest rates and whose values
fluctuate inversely to changes in long-term interest rates. The
value of certain inverse floaters will fluctuate substantially more
in response to a given change in long-term rates than would a
traditional debt security. These securities have investment
characteristics similar to leverage, in that interest rate changes
have a magnified effect on the value of inverse floaters.
TAXES
All discussions of taxation at the shareholder level relate to
federal taxes only. Consult your tax adviser for state and local tax
considerations and for information about special tax considerations
that may apply to shareholders that are not natural persons.
Dividends Received Deductions. Distributions will qualify for the
corporate dividends received deduction only to the extent that
dividends earned by the Fund qualify. Any such dividends are,
however, includable in adjusted current earnings for purposes of
computing corporate AMT.
Return of Capital Distributions. To the extent that a distribution
is a return of capital for federal tax purposes, it reduces the cost
basis of the shares on the record date and is similar to a partial
return of the original investment (on which a sales charge may have
been paid). There is no recognition of a gain or loss, however,
unless the return of capital reduces the cost basis in the shares to
below zero. If distributions are taken in additional shares, they
will have no impact since the capital returned is reinvested and the
cost basis of the investment is unchanged.
Funds that invest in U.S. Government Securities. Many states grant
tax-free status to dividends paid to shareholders of mutual funds
from interest income earned by the Fund from direct obligations of
the U.S. government. Investments in mortgage-backed securities
(including GNMA, FNMA and FHLMC Securities) and repurchase agreements
collateralized by U.S. government securities do not qualify as direct
federal obligations in most states. Shareholders should consult with
their own tax advisers about the applicability of state and local
intangible property, income or other taxes to their Fund shares and
distributions and redemption proceeds received from the Fund.
Distributions from Tax-Exempt Funds. Each tax-exempt Fund will have
at least 50% of its total assets invested in tax-exempt bonds at the
end of each quarter so that dividends from net interest income on tax-
exempt bonds will be exempt from Federal income tax when received by
a shareholder. The tax-exempt portion of dividends paid will be
designated within 60 days after year end based upon the ratio of net
tax-exempt income to total net investment income earned during the
year. That ratio may be substantially different than the ratio of
net tax-exempt income to total net investment income earned during
any particular portion of the year. Thus, a shareholder who holds
shares for only a part of the year may be allocated more or less tax-
exempt dividends than would be the case if the allocation were based
on the ratio of net tax-exempt income to total net investment income
actually earned while a shareholder.
The Tax Reform Act of 1986 makes income from certain "private
activity bonds" issued after August 7, 1986, a tax preference item
for the alternative minimum tax (AMT) at the maximum rate of 28% for
individuals and 20% for corporations. If the Fund invests in private
activity bonds, shareholders may be subject to the AMT on that part
of the distributions derived from interest income on such bonds.
Other provisions of the Tax Reform Act affect the tax treatment of
distributions for corporations, casualty insurance companies and
financial institutions; interest on all tax-exempt bonds is included
in corporate adjusted current earnings when computing the AMT
applicable to corporations. Seventy-five percent of the excess of
adjusted current earnings over the amount of income otherwise subject
to the AMT is a preference item and added to the AMT income,
potentially creating an AMT liability.
Dividends derived from net income on any investments other than tax-
exempt bonds and any distributions of short-term capital gains are
taxable to shareholders as ordinary income. Any distributions of net
long-term gains will in general be taxable to shareholders as long-
term capital gains regardless of the length of time Fund shares are
held.
Shareholders receiving social security and certain retirement
benefits may be taxed on a portion of those benefits as a result of
receiving tax-exempt income, including tax-exempt dividends from the
Fund. The tax is imposed only where the sum of the recipient's
adjusted gross income, tax-exempt interest and dividend income and
one-half the social security benefits exceeds a base amount ($25,000
for single individuals and $32,000 for individuals filing a joint
return). The tax is imposed on the lesser of one-half of the social
security benefits or on one-half of the excess over the base amount.
Special Tax Rules Applicable to Tax-Exempt Funds. Income
distributions to shareholders who are substantial users or related
persons of substantial users of facilities financed by industrial
revenue bonds may not be excludable from their gross income if such
income is derived from such bonds. Income derived from Fund
investments other than tax-exempt instruments may give rise to
taxable income. Fund shares must be held for more than six months in
order to avoid the disallowance of a capital loss on the sale of Fund
shares to the extent of tax-exempt dividends paid during that period.
A shareholder that borrows money to purchase Fund shares will not be
able to deduct the interest paid with respect to such borrowed money.
Backup Withholding. Certain distributions and redemptions may be
subject to a 31% backup withholding unless a taxpayer identification
number and certification that the shareholder is not subject to the
withholding is provided to the Fund. This number and form may be
provided by either a Form W-9 or the accompanying application. In
certain instances CISC may be notified by the Internal Revenue
Service that a shareholder is subject to backup withholding.
Excise Tax. To the extent that the Fund does not annually distribute
substantially all taxable income and realized gains, it is subject to
an excise tax. Colonial intends to avoid this tax except when the
cost of processing the distribution is greater than the tax.
Tax Accounting Principles. To qualify as a "regulated investment
company," the Fund must (a) derive at least 90% of its gross income
from dividends, interest, payments with respect to securities loans,
gains from the sale or other disposition of securities or foreign
currencies or other income (including but not limited to gains from
options, futures or forward contracts) derived with respect to its
business of investing in such securities or currencies; (b) derive
less than 30% of its gross income from the sale or other disposition
of certain assets held less than three months; (c) diversify its
holdings so that, at the close of each quarter of its taxable year,
(i) at least 50% of the value of its total assets consists of cash,
cash items, U.S. Government securities, and other securities limited
generally with respect to any one issuer to not more than 5% of the
total assets of the Fund and not more than 10% of the outstanding
voting securities of such issuer, and (ii) not more than 25% of the
value of its assets is invested in the securities of any issuer
(other than U.S. Government securities).
Futures Contracts. Accounting for futures contracts will be in
accordance with generally accepted accounting principles. The amount
of any realized gain or loss on the closing out of a futures contract
will result in a capital gain or loss for tax purposes. In addition,
certain futures contracts held by the Fund (so-called "Section 1256
contracts") will be required to be "marked-to-market" (deemed sold)
for federal income tax purposes at the end of each fiscal year.
Sixty percent of any net gain or loss recognized on such deemed sales
or on actual sales will be treated as long-term capital gain or loss,
and the remainder will be treated as short-term capital gain or loss.
However, if a futures contract is part of a "mixed straddle" (i.e., a
straddle comprised in part of Section 1256 contracts), a Fund may be
able to make an election which will affect the character arising from
such contracts as long-term or short-term and the timing of the
recognition of such gains or losses. In any event, the straddle
provisions described below will be applicable to such mixed
straddles.
Special Tax Rules Applicable to "Straddles". The straddle provisions
of the Code may affect the taxation of the Fund's options and futures
transactions and transactions in securities to which they relate. A
"straddle" is made up of two or more offsetting positions in
"personal property," including debt securities, related options and
futures, equity securities, related index futures and, in certain
circumstances, options relating to equity securities, and foreign
currencies and related options and futures.
The straddle rules may operate to defer losses realized or deemed
realized on the disposition of a position in a straddle, may suspend
or terminate the Fund's holding period in such positions, and may
convert short-term losses to long-term losses in certain
circumstances.
Foreign Currency-Denominated Securities and Related Hedging
Transactions. The Fund's transactions in foreign currency-
denominated debt securities, certain foreign currency options,
futures contracts and forward contracts may give rise to ordinary
income or loss to the extent such income or loss results from
fluctuations in the value of the foreign currency concerned.
If more than 50% of a Fund's total assets at the end of its fiscal
year are invested in securities of foreign corporate issuers, the
Fund may make an election permitting its shareholders to take a
deduction or credit for federal tax purposes for their portion of
certain foreign taxes paid by the Fund. Colonial will consider the
value of the benefit to a typical shareholder, the cost to the Fund
of compliance with the election, and incidental costs to the
shareholder in deciding whether to make the election. A
shareholder's ability to claim such a foreign tax credit will be
subject to certain limitations imposed by the Code, as a result of
which a shareholder may not get a full credit for the amount of
foreign taxes so paid by the Fund. Shareholders who do not itemize
on their federal income tax returns may claim a credit (but no
deduction) for such foreign taxes.
Certain Securities are considered to be Passive Foreign Investment
Companies (PFICS) under the Code, and the Fund is liable for any PFIC-
related taxes.
MANAGEMENT OF THE FUNDS
Colonial is a subsidiary of The Colonial Group, Inc. (TCG), One
Financial Center, Boston, MA 02111. TCG is a subsidiary of Liberty
Financial Companies, Inc. (Liberty Financial), which in turn is an
indirect subsidiary of Liberty Mutual Insurance Company (Liberty
Mutual). Liberty Mutual is an underwriter of worker's compensation
insurance and a property and casualty insurer in the U.S. Liberty
Financial's address is 600 Atlantic Avenue, Boston, MA 02210.
Liberty Mutual's address is 175 Berkeley Street, Boston, MA 02117.
Trustees and Officers
Robert J. Birnbaum(1), Trustee, is a Trustee (formerly Special
Counsel, Dechert Price & Rhoads), 313 Bedford Road, Ridgewood, NJ
07405
Tom Bleasdale, Trustee, is a Trustee (formerly Chairman of the Board
and Chief Executive Officer, Shore Bank & Trust Company), 1508
Ferncroft Tower, Danvers, MA 01923
Lora S. Collins, Trustee, is an Attorney with Kramer, Levin,
Naftalis, Nessen, Kamin & Frankel, 919 Third Avenue, New York, NY
10022
James E. Grinnell(1), Trustee, is a Private Investor, 22 Harbor
Avenue, Marblehead, MA 01945
William D. Ireland, Jr., Trustee, is a Trustee (formerly Chairman of
the Board, Bank of New England - Worcester), 103 Springline Drive,
Vero Beach, FL 32963
Richard W. Lowry(1), Trustee, is a Private Investor, 10701 Charleston
Drive, Vero Beach, FL 32963
William E. Mayer, Trustee, is Dean, College of Business and
Management, University of Maryland (formerly Dean, Simon Graduate
School of Business, University of Rochester; Chairman and Chief
Executive Officer, C.S. First Boston Merchant Bank; and President and
Chief Executive Officer, The First Boston Corporation), College Park,
MD 20742
John A. McNeice, Jr.(2), Trustee and President, is Chairman of the
Board and Director, TCG and Colonial, Director, Liberty Financial
(formerly Chief Executive Officer, Colonial and TCG)
James L. Moody, Jr., Trustee, is Chairman of the Board, Hannaford
Bros., Co. (formerly Chief Executive Officer, Hannaford Bros. Co.),
P.O. Box 1000, Portland, ME 04104
John J. Neuhauser, Trustee, is Dean, Boston College School of
Management, 140 Commonwealth Avenue, Chestnut Hill, MA 02167
George L. Shinn, Trustee, is a Financial Consultant (formerly
Chairman, Chief Executive Officer and Consultant, The First Boston
Corporation), The First Boston Corporation, Tower Forty Nine, 12
East 49th Street, New York, NY 10017
Robert L. Sullivan, Trustee, is a Management Consultant, 7121 Natelli
Woods Lane, Bethesda, MD 20817
Sinclair Weeks, Jr., Trustee, is Chairman of the Board, Reed & Barton
Corporation, Bay Colony Corporate Center, Suite 4550, 1000 Winter
Street, Waltham, MA 02154
Harold W. Cogger, Vice President, is President, Chief Executive
Officer and Director, Colonial (formerly Executive Vice President;
Colonial); President, Chief Executive Officer and Director, TCG;
Executive Vice President and Director, Liberty Financial
Peter L. Lydecker, Controller (formerly Assistant Controller), is
Vice President, Colonial (formerly Assistant Vice President,
Colonial)
Davey S. Scoon, Vice President, is Executive Vice President and
Director, Colonial (formerly Senior Vice President and Treasurer,
Colonial); Executive Vice President and Chief Operating Officer, TCG,
(formerly Vice President - Finance and Administration, TCG)
Richard A. Silver, Treasurer and Chief Financial Officer (formerly
Controller), is Senior Vice President, Director, Treasurer and Chief
Financial Officer, Colonial; Treasurer and Chief Financial Officer,
TCG (formerly Assistant Treasurer, TCG)
Arthur O. Stern,Secretary, is Director, Executive Vice President,
General Cousel, Clerk and Secretary, Colonial; Executive Vice
President, Legal and Compliance and Clerk, TCG (formerlyVice
President - Legal, TCG)
(1) Elected to the Colonial Funds Complex on April 21, 1995.
(2) Trustees who are "interested persons" (as defined in the
1940 Act) of the Fund or Colonial.
The Trustees serve as trustees of all Colonial funds for which each
Trustee (except Mr. McNeice) will receive an annual retainer of
$45,000 and attendance fees of $7,500 for each regular joint meeting
and $1,000 for each special joint meeting. Committee chairs receive
an annual retainer of $5,000. Committee members receive an annual
retainer of $1,000 and $1,000 for each special meeting attended. Two-
thirds of the Trustee fees are allocated among the Colonial funds
based on the Funds' relative net assets and one-third of the fees are
divided equally among the Colonial funds.
The Agreement and Declaration of Trust (Declaration) of the Trust
provides that the Trust will indemnify its Trustees and officers
against liabilities and expenses incurred in connection with
litigation in which they may be involved because of their offices
with the Trust but that such indemnification will not relieve any
officer or Trustee of any liability to the Trust or its shareholders
by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of his or her duties. The Trust, at its expense,
provides liability insurance for the benefit of its Trustees and
officers.
Colonial or its affiliate, Colonial Advisory Services, Inc. (CASI),
has rendered investment advisory services to investment company,
institutional and other clients since 1931. Colonial currently
serves as investment adviser for 33 open-end and 5 closed-end
management investment company portfolios (collectively, Colonial
funds). Trustees and officers of the Trust who are also officers of
Colonial or its affiliates will benefit from the advisory fees, sales
commissions and agency fees paid or allowed by the Trust. More than
30,000 financial advisers have recommended Colonial funds to over
800,000 clients worldwide, representing more than $15.5 billion in
assets.
The Management Agreement
Under a Management Agreement (Agreement), Colonial has contracted to
furnish the Fund with investment research and recommendations or fund
management, respectively, and accounting, and administrative
personnel and services, and with office space, equipment and other
facilities, at Colonial's expense. For these services and
facilities, the Fund pays a monthly fee based on the average of the
daily closing value of the total net assets of the Fund for such
month.
Colonial's compensation under the Agreement is subject to reduction
in any fiscal year to the extent that the total expenses of the Fund
for such year (subject to applicable exclusions) exceed the most
restrictive applicable expense limitation prescribed by any state
statute or regulatory authority in which the Trust's shares are
qualified for sale. The most restrictive expense limitation
applicable to the Fund is 2.5% of the first $30 million of the
Trust's average net assets for such year, 2% of the next $70 million
and 1.5% of any excess over $100 million.
Under the Agreement, any liability of Colonial to the Fund and its
shareholders is limited to situations involving Colonial's own
willful misfeasance, bad faith, gross negligence or reckless
disregard of duties.
The Agreement may be terminated with respect to the Fund at any time
on 60 days' written notice by Colonial or by the Trustees of the
Trust or by a vote of a majority of the outstanding voting securities
of the Fund. The Agreement will automatically terminate upon any
assignment thereof and shall continue in effect from year to year
only so long as such continuance is approved at least annually (i) by
the Trustees of the Trust or by a vote of a majority of the
outstanding voting securities of the Fund and (ii) by vote of a
majority of the Trustees who are not interested persons (as such term
is defined in the 1940 Act) of Colonial or the Trust, cast in person
at a meeting called for the purpose of voting on such approval.
Colonial pays all salaries of officers of the Trust. The Trust pays
all expenses not assumed by Colonial including, but not limited to,
auditing, legal, custodial, investor servicing and shareholder
reporting expenses. The Trust pays the cost of typesetting for its
Prospectuses and the cost of printing and mailing any Prospectuses
sent to shareholders. CISI pays the cost of printing and
distributing all other Prospectuses.
The Agreement provides that Colonial shall not be subject to any
liability to the Trust or to any shareholder of the Trust for any act
or omission in the course of or connected with rendering services to
the Trust in the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of its duties on the part of
Colonial.
The Pricing and Bookkeeping Agreement
Colonial provides pricing and bookkeeping services to the Fund
pursuant to a Pricing and Bookkeeping Agreement. The Pricing and
Bookkeeping Agreement has a one-year term. Colonial is paid monthly
a fee of $2,250 by each Fund, plus a monthly percentage fee based on
net assets of the Fund equal to the following:
1/12 of 0.000% of the first $50 million;
1/12 of 0.035% of the next $950 million;
1/12 of 0.025% of the next $1 billion;
1/12 of 0.015% of the next $1 billion; and
1/12 of 0.001% on the excess over $3 billion
Portfolio Transactions
Investment decisions. Colonial also acts as investment adviser to
the other Colonial funds (as defined under Management of the Fund
herein) and its affiliate, CASI, advises other institutional,
corporate, fiduciary and individual clients for which CASI performs
various services. Various officers and Trustees of the Trust also
serve as officers or Trustees of other Colonial funds and the other
corporate or fiduciary clients of Colonial. The other Funds and
clients advised by Colonial sometimes invest in securities in which
the Fund also invests and sometimes engage in covered option writing
programs and enter into transactions utilizing stock index options
and stock index and financial futures and related options ("other
instruments"). If the Fund, such other Funds and such other clients
desire to buy or sell the same portfolio securities, options or other
instruments at about the same time, the purchases and sales are
normally made as nearly as practicable on a pro rata basis in
proportion to the amounts desired to be purchased or sold by each.
Although in some cases these practices could have a detrimental
effect on the price or volume of the securities, options or other
instruments as far as the Fund is concerned, in most cases it is
believed that these practices should produce better executions. It
is the opinion of the Trustees that the desirability of retaining
Colonial as investment adviser to the Fund outweighs the
disadvantages, if any, which might result from these practices.
Brokerage and research services. Consistent with the Rules of Fair
Practice of the National Association of Securities Dealers, Inc., and
subject to seeking "best execution" (as defined below) and such other
policies as the Trustees may determine, Colonial may consider sales
of shares of the Fund and of the other Colonial funds as a factor in
the selection of broker-dealers to execute securities transactions
for the Fund.
Colonial places the transactions of the Fund with broker-dealers
selected by Colonial and, if applicable, negotiates commissions.
Broker-dealers may receive brokerage commissions on portfolio
transactions, including the purchase and writing of options, the
effecting of closing purchase and sale transactions, and the purchase
and sale of underlying securities upon the exercise of options and
the purchase or sale of other instruments. The Fund from time to
time also executes portfolio transactions with such broker-dealers
acting as principals. The Fund does not intend to deal exclusively
with any particular broker-dealer or group of broker-dealers.
Except as described below in connection with commissions paid to a
clearing agent on sales of securities, it is the Fund's and
Colonial's policy always to seek best execution, which is to place
the Fund's transactions where the Fund can obtain the most favorable
combination of price and execution services in particular
transactions or provided on a continuing basis by a broker-dealer,
and to deal directly with a principal market maker in connection with
over-the-counter transactions, except when it is believed that best
execution is obtainable elsewhere. In evaluating the execution
services of, including the overall reasonableness of brokerage
commissions paid to, a broker-dealer, consideration is given to,
among other things, the firm's general execution and operational
capabilities, and to its reliability, integrity and financial
condition.
Subject to such practice of always seeking best execution, securities
transactions of the Fund may be executed by broker-dealers who also
provide research services (as defined below) to Colonial, the Fund
and the other Colonial funds. Colonial may use all, some or none of
such research services in providing investment advisory services to
each of its investment company and other clients, including the Fund.
To the extent that such services are used by Colonial, they tend to
reduce Colonial's expenses. In Colonial's opinion, it is impossible
to assign an exact dollar value for such services.
Subject to such policies as the Trustees may determine, Colonial may
cause the Fund to pay a broker-dealer which provides brokerage and
research services to Colonial an amount of commission for effecting a
securities transaction, including the sale of an option or a closing
purchase transaction, for the Fund in excess of the amount of
commission which another broker-dealer would have charged for
effecting that transaction. As provided in Section 28(e) of the
Securities Exchange Act of 1934, "brokerage and research services"
include advice as to the value of securities, the advisability of
investing in, purchasing or selling securities and the availability
of securities or purchasers or sellers of securities; furnishing
analyses and reports concerning issues, industries, securities,
economic factors and trends and portfolio strategy and performance of
accounts; and effecting securities transactions and performing
functions incidental thereto (such as clearance and settlement).
Colonial must determine in good faith that such greater commission is
reasonable in relation to the value of the brokerage and research
services provided by the executing broker-dealer viewed in terms of
that particular transaction or Colonial's overall responsibilities to
the Fund and all its other clients.
The Trustees have authorized Colonial to utilize the services of a
clearing agent with respect to all call options written by Funds that
write options and to pay such clearing agent commissions of a fixed
amount per share (currently 1.25 cents) on the sale of the underlying
security upon the exercise of an option written by a Fund. The
Trustees may further authorize Colonial to depart from the present
policy of always seeking best execution and to pay higher brokerage
commissions from time to time for other brokerage and research
services as described above in the future if developments in the
securities markets indicate that such would be in the interests of
the shareholders of the Fund.
Principal Underwriter
CISI is the principal underwriter of the Trust's shares. CISI has no
obligation to buy the Fund's shares, and purchases the Fund's
shares, only upon receipt of orders from authorized FSFs or
investors.
Investor Servicing and Transfer Agent
CISC is the Trust's investor servicing agent (transfer, plan and
dividend disbursing agent), for which it receives fees which are paid
monthly by the Trust. The fee paid to CISC is based on the average
daily net assets of each Colonial fund. See "Fund Charges and
Expenses" in Part 1 of this SAI for information on fees received by
CISC. The agreement continues indefinitely but may be terminated by
90 days' notice by the Fund to CISC or generally by 6 months' notice
by CISC to the Fund. The agreement limits the liability of CISC to
the Fund for loss or damage incurred by the Fund to situations
involving a failure of CISC to use reasonable care or to act in good
faith in performing its duties under the agreement. It also provides
that the Fund will indemnify CISC against, among other things, loss
or damage incurred by CISC on account of any claim, demand, action or
suit made on or against CISC not resulting from CISC's bad faith or
negligence and arising out of, or in connection with, its duties
under the agreement.
DETERMINATION OF NET ASSET VALUE
The Fund determines net asset value (NAV) per share for each Class as
of the close of the New York Stock Exchange each day the Exchange is
open. Currently, the Exchange is closed Saturdays, Sundays and the
following holidays: New Year's Day, Presidents' Day, Good Friday,
Memorial Day, the Fourth of July, Labor Day, Thanksgiving and
Christmas. Debt securities generally are valued by a pricing service
which determines valuations based upon market transactions for
normal, institutional-size trading units of similar securities.
However, in circumstances where such prices are not available or
where Colonial deems it appropriate to do so, an over-the-counter or
exchange bid quotation is used. Securities listed on an exchange or
on NASDAQ are valued at the last sale price. Listed securities for
which there were no sales during the day and unlisted securities are
valued at the last quoted bid price. Options are valued at the last
sale price or in the absence of a sale, the mean between the last
quoted bid and offering prices. Short-term obligations with a
maturity of 60 days or less are valued at amortized cost pursuant to
procedures adopted by the Trustees. The values of foreign securities
quoted in foreign currencies are translated into U.S. dollars at the
exchange rate for that day. Portfolio positions for which there are
no such valuations and other assets are valued at fair value as
determined in good faith under the direction of the Trustees.
Generally, trading in certain securities (such as foreign securities)
is substantially completed each day at various times prior to the
close of the Exchange. The values of these securities used in
determining the NAV are computed as of such times. Also, because of
the amount of time required to collect and process trading
information as to large numbers of securities issues, the values of
certain securities (such as convertible bonds, U.S. government
securities, and tax-exempt securities) are determined based on market
quotations collected earlier in the day at the latest practicable
time prior to the close of the Exchange. Occasionally, events
affecting the value of such securities may occur between such times
and the close of the Exchange which will not be reflected in the
computation of the Fund's NAV. If events materially affecting the
value of such securities occur during such period, then these
securities will be valued at their fair value following procedures
approved by the Trustees.
Amortized Cost for Money Market Funds
Money market funds generally value their portfolio securities at
amortized cost according to Rule 2a-7 under the 1940 Act.
Portfolio instruments are valued under the amortized cost method,
whereby the instrument is recorded at cost and thereafter amortized
to maturity. This method assures a constant NAV but may result in a
yield different than that of the same portfolio under the market
value method. The Trustees have adopted procedures intended to
stabilize the Fund's NAV per share at $1.00. When the Fund's market
value deviates from the amortized cost of $1.00, and results in a
material dilution to existing shareholders, the Trustees will take
corrective action to: realize gains or losses; shorten the
portfolio's maturity; withhold distributions; redeem shares in kind;
or convert to the market value method (in which case the NAV per
share may differ from $1.00). All investments will be determined
pursuant to procedures approved by the Trustees to present minimal
credit risk.
See the Statement of Assets and Liabilities of the Fund for a
specimen price sheet showing the computation of maximum offering
price per share of Class A shares .
HOW TO BUY SHARES
The Prospectus contains a general description of how investors may
buy shares of the Fund and tables of charges. This SAI contains
additional information which may be of interest to investors.
The Fund will accept unconditional orders for shares to be executed
at the public offering price based on the NAV per share next
determined after the order is placed in good order. The public
offering price is the NAV plus the applicable sales charge, if any.
In the case of orders for purchase of shares placed through FSFs, the
public offering price will be determined on the day the order is
placed in good order, but only if the FSF receives the order before
4:00 p.m. Eastern time and transmits it to the Fund before the Fund
processes that day's transactions. If the FSF fails to transmit
before the Fund processes that day's transactions, the customer's
entitlement to that day's closing price must be settled between the
customer and the FSF. If the FSF receives the order after 4:00 p.m.
Eastern time, the price will be based on the NAV determined as of the
close of the Exchange on the next day it is open. If funds for the
purchase of shares are sent directly to CISC they will be invested at
the public offering price next determined after receipt in good
order. Payment for shares of the Fund must be in U.S. dollars; if
made by check, the check must be drawn on a U.S. bank.
As a convenience to investors, shares of most Colonial funds may be
purchased through the Colonial Fundamatic Check Program.
Preauthorized monthly bank drafts or electronic funds transfer for a
fixed amount (at least $50) are used to purchase Fund shares at the
public offering price next determined after CISI receives the
proceeds from the draft (normally the 5th or the 20th of each month,
or the next business day thereafter). Further information and
application forms are available from FSFs or from CISI.
Class A Shares
Most Funds continuously offer Class A shares. The Fund receives the
entire NAV of shares sold. CISI's commission is the sales charge
shown in the Prospectus less any applicable FSF discount. The FSF
discount is the same for all FSFs, except that CISI retains the
entire sales charge on any sales made to a shareholder who does not
specify an FSF on the investment account application and retains the
entire contingent deferred sales charge (CDSC).
CISI offers several plans by which an investor may obtain reduced
sales charges on purchases of a Fund's Class A shares. These plans
may be altered or discontinued at any time.
Right of Accumulation and Statement of Intent (Class A Shares only)
Reduced sales charges on Class A shares can be effected by combining
a current purchase with prior purchases of Class A, B or D shares of
the Colonial funds. The applicable sales charge is based on the
combined total of:
1. the current purchase; and
2. the value at the public offering price at the close of
business on the previous day of all Colonial fund Class A
shares held by the shareholder (except shares of any Colonial
money market fund, unless such shares were acquired by
exchange from Class A shares of another Colonial fund other
than a money market fund and any Class C shares) and Class B
and D shares.
CISI must be promptly notified of each purchase which entitles a
shareholder to a reduced sales charge. Such reduced sales charge
will be applied upon confirmation of the shareholder's holdings by
CISC. The Fund may terminate or amend this Right of Accumulation.
Any person may qualify for reduced sales charges on purchases of
Class A shares (exclusive of reinvested distributions of all Colonial
funds) made within a thirteen-month period pursuant to a Statement of
Intent ("Statement"). A shareholder may include, as an accumulation
credit towards the completion of such Statement, the value of all
Class A, B and D shares held by the shareholder in Colonial funds
(except money market fund, unless acquired by exchange from another
non-money market Colonial fund). The value is determined at the
public offering price on the date of the Statement.
During the term of a Statement, CISC will hold shares in escrow to
secure payment of the higher sales charge applicable to Class A
shares actually purchased. Dividends and capital gains will be paid
on all escrowed shares and these shares will be released when the
amount indicated has been purchased. A Statement does not obligate
the investor to buy or a Fund to sell the amount of the Statement.
If a shareholder exceeds the amount of the Statement and reaches an
amount which would qualify for a further quantity discount, a
retroactive price adjustment will be made at the time of expiration
of the Statement. The resulting difference in offering price will
purchase additional shares for the shareholder's account at the
applicable offering price. As a part of this adjustment, the FSF
shall return to CISI the excess commission previously paid during the
thirteen-month period.
If the amount of the Statement is not purchased, the shareholder
shall remit to CISI an amount equal to the difference between the
sales charge paid and the sales charge that should have been paid.
If the shareholder fails within twenty days after a written request
to pay such difference in sales charge, CISC will redeem that number
of escrowed Class A shares to equal such difference. The additional
amount of FSF discount from the applicable offering price shall be
remitted to the shareholder's FSF of record.
Additional information about and the terms of Statements of Intent
are available from your FSF, or from CISC at 1-800- 345-6611.
Class B Shares
For those Funds offering Class B shares, the Prospectus contains a
general description of how investors may buy Class B shares of the
Fund and a description of the CDSC. This SAI contains additional
information which may be of interest to investors.
Most Funds continuously offer Class B shares. The Fund receives the
entire NAV of shares sold. The FSF commission is the same for all
FSFs; CISI retains the entire CDSC.
Colonial money market fund Class B shares are subject to higher
charges than those normally associated with money market funds, and
checkwriting privileges are not offered.
Class C Shares
For those Funds offering Class C shares, the Prospectus contains a
general description of how investors may buy Class C shares of the
Fund. This SAI contains additional information which may be of
interest to investors.
Class C shares are offered continuously. The Fund receives the
entire NAV of shares sold.
Class D Shares
For those Funds offering Class D Shares, the Prospectus contains a
general description of how investors may buy Class D shares of the
Fund and a description of the CDSC. This SAI contains additional
information which may be of interest to investors.
The Fund receives the entire NAV of shares sold. The FSF commission
is the same for all FSFs; CISI retains the entire CDSC.
Waiver of Contingent Deferred Sales Charges (CDSCs) (Classes A, B and
D)
CDSCs may be waived on redemptions in the following situations with
the proper documentation.
1. Death. CDSCs may be waived on redemptions within one year
following the death of (i) the sole shareholder on an
individual account, (ii) a joint tenant where the surviving
joint tenant is the deceased's spouse, or (iii) the
beneficiary of a Uniform Gifts to Minors Act (UGMA), Uniform
Transfers to Minors Act (UTMA) or other custodial account.
If, upon the occurrence of one of the foregoing, the account
is transferred to an account registered in the name of the
deceased's estate, the CDSC will be waived on any redemption
from the estate account occurring within one year after the
death. If the Class B shares are not redeemed within one year
of the death, they will remain subject to the applicable CDSC,
when redeemed from the transferee's account.
2. Systematic Withdrawal Plan (SWP). CDSCs may be waived on
redemptions occurring pursuant to a monthly, quarterly or semi-
annual SWP established with Colonial, to the extent the
redemptions do not exceed, on an annual basis, 12% of the
account's value, so long as at the time of the first SWP
redemption the account had had distributions reinvested for a
period at least equal to the period of the SWP (e.g., if it is
a quarterly SWP, distributions must have been reinvested at
least for the three month period prior to the first SWP
redemption; otherwise CDSCs will be charged on SWP redemptions
until this requirement is met; this requirement does not apply
if the SWP is set-up at the time the account is established,
and distributions are being reinvested).
3. Disability. CDSCs may be waived on redemptions occurring
within one year after the sole shareholder on an individual
account or a joint tenant on a spousal joint tenant account
becomes disabled (as defined in Section 72(m)(7) of the
Internal Revenue Code). To be eligible for such waiver, (i)
the disability must arise after the purchase of shares and
(ii) the disabled shareholder must have been under age 65 at
the time of the initial determination of disability. If the
account is transferred to a new registration and then a
redemption is requested, the applicable CDSC will be charged.
4. Death of a trustee. CDSCs may be waived on redemptions
occurring upon dissolution of a revocable living or grantor
trust following the death of the sole trustee where (i) the
grantor of the trust is the sole trustee and the current
beneficiary, (ii) death occurs following the purchase and
(iii) the trust document provides for dissolution of the trust
upon the trustee's death. If the account is transferred to a
new registration (including that of a successor trustee), the
applicable CDSC will be charged upon any subsequent
redemption.
5. Returns of excess contributions. CDSCs may be waived on
redemptions required to return excess contributions made to
retirement plans or individual retirement accounts, so long as
the FSF agrees to return the applicable portion of any
commission paid by Colonial.
6. Qualified Retirement Plans. CDSCs may be waived on
redemptions required to make distributions from qualified
retirement plans following (i) normal retirement (as stated in
the Plan document) or (ii) separation from service. CDSCs
also will be waived on SWP redemptions made to make required
minimum distributions from qualified retirement plans that
have invested in Colonial funds for at least two years.
Fundamatic Check Program
As a convenience to investors, shares of most Colonial funds may be
purchased through the Colonial Fundamatic Check Program.
Preauthorized monthly bank drafts or electronic funds transfer for a
fixed amount of at least $50 are used to purchase Fund shares at the
public offering price next determined after CISI receives the
proceeds from the draft (normally the 5th or the 20th of each month,
or the next business day thereafter). Further information and
application forms are available from FSFs or from CISI.
Automated Dollar Cost Averaging (Classes A, B and D)
Colonial's Automated Dollar Cost Averaging Program allows you to
exchange on a monthly basis from any Colonial fund in which you have
a current balance of at least $5,000 into the same class of shares of
up to four other Colonial funds. Complete the Automated Dollar
Cost Averaging section of the application agreeing to a monthly
exchange of $100 or more to the same class of shares of the Colonial
fund you designate on your written application. The designated
amount will be exchanged on the third Tuesday of each month. There
is no charge for the exchanges made pursuant to the Automated Dollar
Cost Averaging program. Exchanges will continue so long as your
Colonial fund balance is sufficient to complete the transfers. Your
normal rights and privileges as a shareholder remain in full force
and effect. Thus you can: buy any Funds, exchange between the same
Class shares of Funds by written instruction or by telephone exchange
if you have so elected and withdraw amounts from any Fund, subject to
the imposition of any applicable CDSC.
Any additional payments or exchanges into your Fund will extend the
time of the Automated Dollar Cost Averaging program.
An exchange is a taxable capital transaction for federal tax
purposes.
You may terminate your program, change the amount of the exchange
(subject to the $100 minimum), or change your selection of funds, by
telephone or in writing; if in writing by mailing it to Colonial
Investors Service Center, P.O. Box 1722, Boston, MA 02105-1722.
You should consult your FSF or investment adviser to determine
whether or not the Automated Dollar Cost Averaging program is
appropriate for you.
Colonial Asset Builder Investment Program (Class A only)
A reduced sales charge applies to a purchase of certain Colonial
fund's Class A shares under a statement of intent for the Colonial
Asset Builder Investment Program. The Program offer may be withdrawn
at any time without notice. A completed Program may serve as the
initial investment for a new Program, subject to the maximum of
$4,000 in initial investments per investor. CISC will escrow shares
to secure payment of the additional sales charge on amounts invested
if the Program is not completed. Escrowed shares are credited with
distributions and will be released when the Program has ended. Prior
to completion of the Program, only scheduled Program investments may
be made in a Colonial fund in which an investor has a Program
account. The following services are not available to Program
accounts until a Program has ended:
Systematic Withdrawal Telephone Redemption Statement of Intent
Plan
Sponsored Colonial Cash Share Certificates
Arrangements Connection
$50,000 Fast Cash Reduced Sales Charges Automatic Dividend
Diversification
Right of Accumulation for any "person" Exchange Privilege*
*Exchanges may be made to other Colonial funds offering the Program.
Because of the unavailability of certain services, the Program may
not be suitable for all investors.
The FSF receives 3% of the investor's intended purchases under a
Program at the time of initial investment and 1% after the 24th
monthly payment. CISI may require the FSF to return all applicable
commissions paid with respect to a Program terminated within six
months of inception, and thereafter to return commissions in excess
of the FSF discount applicable to shares actually purchased.
Since the Asset Builder plan involves continuous investment
regardless of the fluctuating prices of Fund shares, investors should
consult their FSF to determine whether it is appropriate. The Plan
does not assure a profit nor protects against loss in declining
markets.
Tax-Sheltered Retirement Plans (Classes A, B and D)
Certain Colonial funds offer prototype tax-qualified plans, including
Individual Retirement Accounts, and Pension and Profit-Sharing Plans
for individuals, corporations, employees and the self-employed. The
minimum initial Retirement Plan investment in any of the Funds is
$25. The First National Bank of Boston is the Trustee and charges a
$10 annual fee. Detailed information concerning these retirement
plans and copies of the Retirement Plans are available from CISI.
Other Plans (Class A only)
Shares of certain funds may be sold at NAV to current and retired:
Trustees of funds advised by Colonial; directors, officers and
employees of Colonial, CISI and other companies affiliated with
Colonial; registered representatives and employees of FSFs (including
their affiliates) that are parties to Dealer Agreements or other
sales arrangements with CISI; and such persons' families and their
beneficial accounts.
Class A Shares of certain funds may be purchased at reduced or no
sales charge pursuant to sponsored arrangements, which include
programs under which an organization makes recommendations to, or
permits group solicitation of, its employees, members or participants
in connection with the purchase of shares of the Fund on an
individual basis. The amount of the sales charge reduction will
reflect the anticipated reduction in sales expense associated with
sponsored arrangements. The reduction in sales expense, and
therefore the reduction in sales charge will vary depending on
factors such as the size and stability of the organizations group,
the term of the organization's existence and certain characteristics
of the members of its group. The Funds reserve the right to revise
the terms of or to suspend or discontinue sales pursuant to sponsored
plans at any time.
Class A shares of certain funds may also be purchased at reduced or
no sales charge by clients of dealers, brokers or registered
investment advisers that have entered into agreements with CISI
pursuant to which the Colonial funds are included as investment
options in programs involving fee-based compensation arrangements.
Class A shares of certain funds may also be purchased at reduced or
no sales charge by investors moving from another mutual fund complex
and by participants in certain retirement plans. In lieu of the
commissions described in the Prospectus, Colonial will pay the FSF a
finder's fee of 0.25% of the applicable account value during the
first twelve months in connection with such purchases.
Consultation with a competent financial and tax advisor regarding
these Plans and consideration of the suitability of Fund shares as an
investment under the Employee Retirement Income Security Act of 1974
or otherwise is recommended.
INVESTOR SERVICES
Your Open Account
The following information provides more detail concerning the
operation of a Colonial Open Account (an account with book entry
shares only). For further information or assistance, investors
should consult CISC.
The Open Account permits a shareholder to reinvest all or a portion
of a recent cash distribution without a sales charge. A shareholder
request must be received within 30 calendar days of the distribution.
A shareholder may exercise this privilege only once. No charge is
currently made for reinvestment.
The $10 fee on small accounts is paid to CISC.
If a shareholder changes his or her address and does not notify the
Fund, the Fund will reinvest all future distributions regardless of
the option chosen.
The Open Account also provides a way to accumulate shares of the
Fund. Checks presented for the purchase of shares of the Fund which
are returned by the purchaser's bank, or checkwriting privilege
checks for which there are insufficient funds in a shareholder's
account to cover redemption, will subject such purchaser or
shareholder to a $15 service fee for each check returned. Checks
must be drawn on a U.S. bank and must be payable in U.S. dollars.
CISC acts as the shareholder's agent whenever it receives
instructions to carry out a transaction on the shareholder's account.
Upon receipt of instructions that shares are to be purchased for a
shareholder's account, the designated FSF will receive the applicable
sales commission. Shareholders may change FSFs at any time by
written notice to CISC, provided the new FSF has a sales agreement
with CISI.
Shares credited to an account are transferable upon written
instructions in good order to CISC and may be redeemed as described
under "How to sell shares" in the Prospectus. Certificates will not
be issued for Class A shares unless specifically requested and no
certificates will be issued for Class B, C or D shares. Money market
funds will not issue certificates. A shareholder may send any
certificates which have been previously acquired to CISC for deposit
to their account.
Shares of Funds that pay daily dividends will normally earn dividends
starting with the date the Fund receives payment for the shares and
will continue through the day before the shares are redeemed,
transferred or exchanged.
Undelivered distribution checks returned by the post office may be
invested in your account.
Reinvestment Privilege
An investor who has redeemed Class A, B, or D shares may reinvest
(within 90 days) a portion or all of the proceeds of such sale in
shares of the same Class of any Colonial fund at the NAV next
determined after CISC receives a written request and payment. Any
CDSC paid at the time of the redemption will be credited to the
shareholder upon reinvestment. The period between the redemption and
the reinvestment will not be counted in aging the reinvested shares
for purposes of calculating any CDSC or conversion date. Investors
who desire to exercise this Privilege should contact their FSF or
CISC. Shareholders may exercise this Privilege an unlimited number
of times.Exercise of this Privilege does not alter the federal income
tax treatment. The sale of Fund shares constitutes a capital
transaction for federal tax purposes. Consult your tax adviser.
Exchange Privilege
Shares of the Fund may be exchanged for the same class of shares of
the other continuously offered Colonial funds (with certain
exceptions) on the basis of the NAVs per share at the time of
exchange. The prospectus of each Fund describes its investment
objective and policies, and shareholders should obtain a prospectus
and consider these objectives and policies carefully before
requesting an exchange. Shares of certain Colonial funds are not
available to residents of all states. Consult CISC before requesting
an exchange.
By calling CISC, shareholders or their FSF of record may exchange
among accounts with identical registrations, provided that the shares
are held on deposit. During periods of unusual market changes and
shareholder activity, shareholders may experience delays in
contacting CISC by telephone to exercise the Telephone Exchange
Privilege. Because an exchange involves a redemption and
reinvestment in another Colonial fund, completion of an exchange may
be delayed under unusual circumstances, such as if the Fund suspends
repurchases or postpones payment for the Fund shares being exchanged
in accordance with federal securities law. CISC will also make
exchanges upon receipt of a written exchange request and, share
certificates, if any. If the shareholder is a corporation,
partnership, agent, or surviving joint owner, CISC will require
customary additional documentation. Prospectuses of the other
Colonial funds are available from the Colonial Literature Department.
A loss to a shareholder may result from an unauthorized transaction
reasonably believed to have been authorized. No shareholder is
obligated to use the telephone to execute transactions.
You need to hold your Class A shares for five months before
exchanging to certain funds having a higher maximum sales charge.
Consult your FSF or CISC. In all cases, the shares to be exchanged
must be registered on the records of the Fund in the name of the
shareholder desiring to exchange.
Shareholders of the other Colonial open-end Funds generally may
exchange their shares at NAV for the same class of shares of the
Fund.
An exchange is a capital sale transaction for federal income tax
purposes. The Exchange Privilege may be revised, suspended or
terminated at any time.
Telephone Address Change Services
By calling CISC, shareholders or their FSF of record may change an
address on a recorded telephone line. Confirmations of address
change will be sent to both the old and the new addresses. The
$50,000 Fast Cash privilege is suspended for 60 days after an address
change is effected.
Plans Available To Shareholders
The Plans described below are offered by most Colonial funds, are
voluntary and may be terminated at any time without the imposition by
the Fund or CISC of any penalty.
Checkwriting (Available only on the Class A and C shares of certain
Funds)
Shares may be redeemed by check if a shareholder completed an
Investment Account Application and Signature Card. Colonial will
provide checks to be drawn on The First National Bank of Boston (the
"Bank"). These checks may be made payable to the order of any person
in the amount of not less than $500 nor more than $100,000. The
shareholder will continue to earn dividends on shares until a check
is presented to the Bank for payment. At such time a sufficient
number of full and fractional shares will be redeemed at the next
determined net asset value to cover the amount of the check.
Certificate shares may not be redeemed in this manner.
Shareholders utilizing checkwriting drafts will be subject to the
Bank's rules governing checking accounts. There is currently no
charge to the shareholder for the use of checks. The shareholder
should make sure that there are sufficient shares in his or her Open
Account to cover the amount of any check drawn since the net asset
value of shares will fluctuate. If insufficient shares are in the
shareholder's Open Account, the check will be returned marked
"insufficient funds" and no shares will be redeemed. It is not
possible to determine in advance the total value of an Open Account
because prior redemptions and possible changes in net asset value may
cause the value of an Open Account to change. Accordingly, a check
redemption should not be used to close an Open Account.
Systematic Withdrawal Plan
If a shareholder's Account Balance is at least $5,000, the
shareholder may establish a Systematic Withdrawal Plan (SWP). A
specified dollar amount or percentage of the then current net asset
value of the shareholder's investment in any Fund will be paid
monthly or quarterly to a designated payee. The amount or percentage
the shareholder specifies generally may not, on an annualized basis,
exceed 12% of the value, as of the time the shareholder makes the
election, of the shareholder's investment. Withdrawals from Class B
and Class D shares of a Fund under a SWP will be treated as
redemptions of shares purchased through the reinvestment of Fund
distributions, or, to the extent such shares in the shareholder's
account are insufficient to cover Plan payments, as redemptions from
the earliest purchased shares of such Fund in the shareholder's
account. Generally, no CDSCs apply to a redemption pursuant to a
SWP, even if, after giving effect to the redemption, the
shareholder's Account Balance is less than the shareholder's Base
Amount. Qualified Plan participants who are required by Internal
Revenue Code regulation to withdraw more than 12%, on an annual
basis, of the value of their Class B and Class D share account may do
so but will be subject to a CDSC ranging from 1.00% to 5% of the
amount withdrawn. If a shareholder wishes to participate in a SWP,
the shareholder must elect to have all of the shareholder's income
dividends and other Fund distributions payable in shares of the Fund
rather than in cash.
A shareholder or a shareholder's FSF of record may establish a SWP
account by telephone on a recorded line. However, SWP checks will be
payable only to the shareholder and sent to the address of record.
SWPs from retirement accounts cannot be established by telephone.
A shareholder may not establish a SWP if the shareholder holds shares
in certificate form. Purchasing additional shares (other than
through dividend and distribution reinvestment) while receiving SWP
payments is ordinarily disadvantageous because of duplicative sales
charges. For this reason, a shareholder may not maintain a plan for
the accumulation of shares of a Fund (other than through the
reinvestment of dividends) and a SWP at the same time.
SWP payments are made through share redemptions, which may result in
a gain or loss for tax purposes, may involve the use of principal and
may eventually use up all of the shares in a shareholder's Open
Account.
The Funds may terminate a shareholder's SWP if the shareholder's
Account Balance falls below $5,000 due to any transfer or liquidation
of shares other than pursuant to the SWP. SWP payments will be
terminated on receiving satisfactory evidence of the death or
incapacity of a shareholder. Until this evidence is received, CISC
will not be liable for any payment made in accordance with the
provisions of a SWP.
The cost of administering SWPs for the benefit of shareholders who
participate in them is borne by the Funds as an expense of all
shareholders.
Shareholders whose positions are held in "street name" by certain
FSFs may not be able to participate in a SWP. If a shareholder's
Fund shares are held in "street name", the shareholder should consult
his or her FSF to determine whether he or she may participate in a
SWP.
Colonial cash connection. Dividends and any other distributions,
including SWP payments, may be automatically deposited to a
shareholder's bank account via electronic funds transfer.
Shareholders wishing to avail themselves of this electronic transfer
procedure should complete the appropriate sections of the Investment
Account Application.
Automatic dividend diversification. The automatic dividend
diversification reinvestment program (ADD) generally allows
shareholders to have all distributions from a Fund automatically
invested in the same class of shares of the other Colonial funds. An
ADD account must be in the same name as the shareholder's existing
Open Account with the particular fund. Call CISC for more
information at 1-800- 422-3737.
Telephone Redemptions. Shareholders and/or their financial advisers
may select telephonic redemptions on their account application. A
redemption of up to $50,000 may be sent to a shareholder's address
without preauthorization, by calling 1-800-422-3737 between 9:00 a.m.
and 4:00 p.m. (NY time) on business days. CISC will employ
reasonable procedures to confirm that instructions communicated by
telephone are genuine. Telephone redemptions are not available on
accounts with an address change in the preceding 60 days and proceeds
and confirmations will be mailed or sent to the address of record.
Shareholders and/or their financial advisers will be required to
provide their name, address and account number. Financial advisers
will also be required to provide their broker number. All telephone
transactions are recorded. A loss to a shareholder may result from
an unauthorized transaction reasonably believed to have been
authorized. No shareholder is obligated to execute the telephone
authorization form or to use the telephone to execute transactions.
Non cash Redemptions. For redemptions of any single shareholder
within any 90-day period exceeding the lesser of $250,000 or 1% of
the Fund's net asset value, the Fund may make the payment or a
portion of the payment with portfolio securities held by the Fund
instead of cash, in which case the redeeming shareholder may incur
brokerage and other costs in selling the securities received.
SUSPENSION OF REDEMPTIONS
The Fund may not suspend shareholders' right of redemption or
postpone payment for more than seven days unless the New York Stock
Exchange is closed for other than customary weekends or holidays, or
if permitted by the rules of the SEC during periods when trading on
the Exchange is restricted or during any emergency which makes it
impracticable for the Fund to dispose of its securities or to
determine fairly the value of its net assets, or during any other
period permitted by order of the SEC for protection of investors.
SHAREHOLDER LIABILITY
Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the
Fund. However, the Declaration disclaims shareholder liability for
acts or obligations of the Fund and requires that notice of such
disclaimer be given in each agreement, obligation, or instrument
entered into or executed by the Fund or the 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 in which the Fund would be unable to meet its
obligations. The likelihood of such circumstances is remote.
As described under the caption "Organization and history" in the
Prospectus, the Fund will not hold annual shareholders' meetings.
The Trustees may fill any vacancies in the Board of Trustees except
that the Trustees may not fill a vacancy if, immediately after
filling such vacancy, less than two-thirds of the Trustees then in
office would have been elected to such office by the shareholders.
In addition, at such times as less than a majority of the Trustees
then in office have been elected to such office by the shareholders,
the Trustees must call a meeting of shareholders. Trustees may be
removed from office by a written consent signed by a majority of the
outstanding shares of the Trust or by a vote of the holders of a
majority of the outstanding shares at a meeting duly called for the
purpose, which meeting shall be held upon written request of the
holders of not less than 10% of the outstanding shares of the Trust.
Upon written request by the holders of 1% of the outstanding shares
of the Trust stating that such shareholders of the Trust, for the
purpose of obtaining the signatures necessary to demand a
shareholder's meeting to consider removal of a Trustee, request
information regarding the Trust's shareholders the Trust will provide
appropriate materials (at the expense of the requesting
shareholders). Except as otherwise disclosed in the Prospectus and
this SAI, the Trustees shall continue to hold office and may appoint
their successors.
At any shareholders' meetings that may be held, shareholders of all
series would vote together, irrespective of series, on the election
of Trustees or the selection independent accountants, but each series
would vote separately from the others on other matters, such as
changes in the investment policies of that series or the approval of
the investment advisory agreement for that series.
PERFORMANCE MEASURES
Total Return
Standardized average annual total return. Average annual total
return is the actual return on a $1,000 investment in a particular
class of shares of a Fund, made at the beginning of a stated period,
adjusted for the maximum sales charge or applicable CDSC for the
class of shares of the Fund and assuming that all distributions were
reinvested at NAV, converted to an average annual return assuming
annual compounding.
Nonstandardized total return. Nonstandardized total returns differ
from standardized average annual total returns only in that they may
relate to nonstandardized periods, represent aggregate rather than
average annual total returns or in that the sales charge or CDSC is
not deducted.
Yield
Money market. A Money Market fund's yield and effective yield is
computed in accordance with the SEC's formula for money market fund
yields.
Non money market. The yield for each class of shares is determined
by (i) calculating the income (as defined by the SEC for purposes of
advertising yield) during the base period and subtracting actual
expenses for the period (net of any reimbursements), and (ii)
dividing the result by the product of the average daily number of
shares of the Fund entitled to dividends for the period and the
maximum offering price of the Fund on the last day of the period ,
(iii) then annualizing the result assuming semi-annual compounding.
Tax-equivalent yield is calculated by taking that portion of the
yield which is exempt from income tax and determining the equivalent
taxable yield which would produce the same after tax yield for any
given Federal and State tax rate, and adding to that the portion of
the yield which is fully taxable. Adjusted yield is calculated in
the same manner as yield except that expenses voluntarily borne or
waived by Colonial have been added back to actual expenses.
Distribution rate. The distribution rate for each class of shares is
calculated by annualizing the most current period's distributions and
dividing by the maximum offering price on the last day of the period.
Generally, a Fund's distribution rate reflects total amounts actually
paid to shareholders, while yield reflects the current earning power
of a Fund's portfolio securities (net of a Fund's expenses). A
Fund's yield for any period may be more or less than the amount
actually distributed in respect of such period.
A Fund may compare its performance to various unmanaged indices
published by such sources as listed in Appendix II.
A Fund may also refer to quotations, graphs and electronically
transmitted data from sources believed by Colonial to be reputable,
and publications in the press pertaining to a Fund's performance or
to Colonial or its affiliates, including comparisons with competitors
and matters of national and global economic and financial interest.
Examples include Forbes, Business Week, MONEY Magazine, The Wall
Street Journal, The New York Times, The Boston Globe, Barron's
National Business & Financial Weekly, Financial Planning, Changing
Times, Reuters Information Services, Wiesenberger Mutual Funds
Investment Report, Lipper Analytical Services Corporation,
Morningstar, Inc., Sylvia Porter's Personal Finance Magazine, Money
Market Directory, SEI Funds Evaluation Services, FTA World Index and
Disclosure Incorporated.
All data is based on past performance and does not predict future
results.
APPENDIX I
DESCRIPTION OF BOND RATINGS
S&P
AAA The highest rating assigned by S&P indicates an extremely strong
capacity to repay principal and interest.
AA bonds also qualify as high quality. Capacity to repay principal and pay
interest is very strong, and in the majority of instances, they differ from
AAA only in small degree.
A bonds have a strong capacity to repay principal and interest, although
they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions.
BBB bonds are regarded as having an adequate capacity to repay principal
and interest. Whereas they normally exhibit protection parameters, adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity to repay principal and interest than for bonds in the A
category.
BB, B, CCC, and CC bonds are regarded, on balance, as predominantly
speculative with respect to capacity to pay interest and principal in
accordance with the terms of the obligation. BB indicates the lowest
degree of speculation and CC the highest degree. While likely to have some
quality and protection characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
C ratings are reserved for income bonds on which no interest is being paid.
D bonds are in default, and payment of interest and/or principal is in
arrears.
Plus(+) or minus (-) are modifiers relative to the standing within the
major rating categories.
MOODY'S
Aaa bonds are judged to be of the best quality. They carry the smallest
degree of investment risk and are generally referred to as "gilt edge".
Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While various protective elements are
likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.
Aa bonds are judged to be of high quality by all standards. Together with
Aaa bonds they comprise what are generally known as high-grade bonds. They
are rated lower than the best bonds because margins of protective elements
may be of greater amplitude or there may be other elements present which
make the long-term risk appear somewhat larger than in Aaa securities.
Those bonds in the Aa through B groups that Moody's believes possess the
strongest investment attributes are designated by the symbol Aa1, A1 and
Baa1.
A bonds possess many of the favorable investment attributes and are to be
considered as upper-medium-grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
that suggest a susceptibility to impairment sometime in the future.
Baa bonds are considered as medium grade, neither highly protected nor
poorly secured. Interest payments and principal security appear adequate
for the present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such bonds
lack outstanding investment characteristics and in fact, have speculative
characteristics as well.
Ba bonds are judged to have speculative elements: their future cannot be
considered as well secured. Often, the protection of interest and
principal payments may be very moderate, and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes these bonds.
B bonds generally lack characteristics of the desirable investment.
Assurance of interest and principal payments or of maintenance of other
terms of the contract over any long period of time may be small.
Caa bonds are of poor standing. They may be in default or there may be
present elements of danger with respect to principal or interest.
Ca bonds are speculative in a high degree, often in default or having other
marked shortcomings.
C bonds are the lowest rated class of bonds and can be regarded as having
extremely poor prospects of ever attaining any real investment standing.
APPENDIX II
1994
SOURCE CATEGORY RETURN
(%)
Donoghue Tax-Free Funds 2.25
Donoghue U.S. Treasury Funds 3.34
Dow Jones Industrials 5.03
Morgan Stanley Capital 8.06
International EAFE Index
Morgan Stanley Capital 8.21
International EAFE GDP Index
Libor Six-month Libor 6.9375
Lipper Adjustable Rate Mortgage -2.20
Lipper California Municipal Bond -7.52
Funds
Lipper Connecticut Municipal Bond -7.04
Funds
Lipper Closed End Bond Funds -6.86
Lipper Florida Municipal Bond Funds -7.76
Lipper General Bond Fund -5.98
Lipper General Municipal Bonds -6.53
Lipper General Short-Term Tax-Exempt -0.28
Bonds
Lipper Global Flexible Portfolio -3.03
Funds
Lipper Growth Funds -2.15
Lipper Growth & Income Funds -0.94
Lipper High Current Yield Bond Funds -3.83
Lipper High Yield Municipal BondDebt -4.99
Lipper Fixed Income Funds -3.62
Lipper Insured Municipal Bond -6.47
Average
Lipper Intermediate Muni Bonds -3.53
Lipper Intermediate (5-10) U.S. -3.72
Government Funds
Lipper Massachusetts Municipal Bond -6.35
Funds
Lipper Michigan Municipal Bond Funds -5.89
Lipper Mid Cap Funds -2.05
Lipper Minnesota Municipal Bond -5.87
Funds
Lipper U.S. Government Money Market 3.58
Funds
Lipper Natural Resources -4.20
Lipper New York Municipal Bond Funds -7.54
Lipper North Carolina Municipal Bond -7.48
Funds
Lipper Ohio Municipal Bond Funds -6.08
Lipper Small Company Growth Funds -0.73
Lipper Specialty/Miscellaneous Funds -2.29
Lipper U.S. Government Funds -4.63
Shearson Lehman Composite -3.37
Government Index
Shearson Lehman -3.51
Government/Corporate Index
Shearson Lehman Long-term -7.73
Government Index
S&P 500 S&P 1.32
S&P Utility Index S&P -7.94
Bond Buyer Bond Buyer Price Index -18.10
First Boston High Yield Index -0.97
Swiss Bank 10 Year U.S. Government -6.39
(Corporate Bond)
Swiss Bank 10 Year United Kingdom -5.29
(Corporate Bond)
Swiss Bank 10 Year France (Corporate -1.37
Bond)
Swiss Bank 10 Year Germany (Corporate 4.09
Bond)
Swiss Bank 10 Year Japan (Corporate 7.95
Bond)
Swiss Bank 10 Year Canada (Corporate -14.10
Bond)
Swiss Bank 10 Year Australia (Corporate 0.52
Bond)
Morgan Stanley Capital 10 Year Hong Kong (Equity) -28.90
International
Morgan Stanley Capital 10 Year Belgium (Equity) 9.43
International
Morgan Stanley Capital 10 Year Spain (Equity) -3.93
International
SOURCE CATEGORY RETURN
(%)
Morgan Stanley Capital 10 Year Austria (Equity) -6.05
International
Morgan Stanley Capital 10 Year France (Equity) -4.70
International
Morgan Stanley Capital 10 Year Netherlands (Equity) 12.66
International
Morgan Stanley Capital 10 Year Japan (Equity) 21.62
International
Morgan Stanley Capital 10 Year Switzerland (Equity) 4.18
International
Morgan Stanley Capital 10 Year United Kingdom -1.63
International (Equity)
Morgan Stanley Capital 10 Year Germany (Equity) 5.11
International
Morgan Stanley Capital 10 Year Italy (Equity) 12.13
International
Morgan Stanley Capital 10 Year Sweden (Equity) 18.80
International
Morgan Stanley Capital 10 Year United States 2.00
International (Equity)
Morgan Stanley Capital 10 Year Australia (Equity) 6.48
International
Morgan Stanley Capital 10 Year Norway (Equity) 24.07
International
Inflation Consumer Price Index 2.67
FHLB-San Francisco 11th District Cost-of-Funds 4.367
Index
Federal Reserve Six-Month Treasury Bill 6.49
Federal Reserve One-Year Constant-Maturity 7.14
Treasury Rate
Federal Reserve Five-Year Constant-Maturity 7.78
Treasury Rate
*in U.S. currency
<PAGE>
INVESTMENT PORTFOLIO (IN THOUSANDS) JANUARY 31, 1995
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL BONDS - 99.4% PAR VALUE
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<S> <C> <C>
EDUCATION - 6.8%
Alum Rock Unified Elementary School
District, Series 1991:
(a) 09/01/11. . . . . . . . . . $ 1,925 $ 611
(a) 09/01/12. . . . . . . . . . 1,565 462
(a) 09/01/14. . . . . . . . . . 1,000 253
Antioch Unified School District,
Certificate of Participation,
Series 1991,
(a) 07/01/11. . . . . . . . . . 5,175 1,624
(a) 07/01/16. . . . . . . . . . 5,000 1,081
Fresno Unified School District,
Certificate of Participation,
Phase VI, Series 1991 A,
7.200% 05/01/11. . . . . . . . . . 1,000 1,014
Moreno Valley Unified School District,
Certificate of Participation,
7.400% 09/01/16. . . . . . . . . . 20 20
San Mateo County Board of Education,
Series 1991,
7.100% 05/01/21. . . . . . . . . . 750 753
State Educational Facilities
Authority, St. Mary's College,
Series 1993,
4.750% 10/01/20 . . . . . . . . . 4,435 3,382
State Public Works,
Regents of the University of California,
Series 1993 A,
5.500% 06/01/14 . . . . . . . . . 10,000 8,550
University of California,
Series 1989,
5.000% 09/01/23 . . . . . . . . . 12,000 9,630
------
27,380
--------------------------------------------------------------------------------
ELECTRIC - 14.1%
Anderson Certificates of
Participation,
7.900% 12/01/11. . . . . . . . . . 610 640
Anaheim Public Financing
Authority, San Juan Electric
Utilities, Series 2,
5.750% 10/01/22. . . . . . . . . . 5,000 4,500
Northern California Power Agency,
Hydroelectric Project #1:
Series 1992-A,
5.500% 07/01/23(b) . . . . . . . . 11,000 9,570
Series 1993-A,
5.500% 07/01/16. . . . . . . . . . 4,000 3,555
Series E,
7.150% 07/01/24. . . . . . . . . . 1,480 1,506
Northern California Transmission,
Series A,
5.250% 05/01/20 . . . . . . . . . 8,100 6,865
Pleasanton Joint Power Authority,
Series 1993 A,
6.150% 09/02/12 . . . . . . . . . $ 970 $ 906
Public Power Project San Juan Unit
5.000% 01/01/20 . . . . . . . . . 9,000 7,313
Puerto Rico Electric Power Authority:
Series 1989-NS
7.000% 07/01/07 . . . . . . . . . 1,000 1,040
Series 1989-O,
(a) 07/01/17 . . . . . . . . . 2,490 563
Reading Electric System,
Series 1992-A, RIB,
8.294% (variable rate) 07/01/22. . . . . . . 750 755
Riverside Electric Revenue,
5.000% 10/01/13 . . . . . . . . . 6,640 5,561
Rocklin-Stanford Ranch Community
Facilities, Series 1990,
8.100% 11/01/15 . . . . . . . . . 1,000 1,027
San Diego Industrial Development,
San Diego Gas and Electric Company,
5.900% 09/01/18 . . . . . . . . . 5,000 4,481
Series 1987,
8.750% 03/01/23 . . . . . . . . . 4,450 4,784
Series 1993-A,
5.900% 06/01/18 . . . . . . . . . 3,000 2,689
Westminster Redevelopment Agency,
Commercial Redevelopment Project #1,
Series 1993,
6.200% 08/01/23 . . . . . . . . . 1,000 849
------
56,604
--------------------------------------------------------------------------------
GENERAL OBLIGATIONS - 10.1%
Alum Rock Unified Elementary School
District, Series 1991,
(a) 09/01/15 . . . . . . . . . 1,825 429
Carlsbad Unified School District,
Community Facility,
Mello-Roos Financings Series 1990,
7.650% 09/01/14 . . . . . . . . . 1,000 972
Central Unified School District,
(a) 03/01/18 . . . . . . . . . 20,065 4,414
Commonwealth of Puerto Rico:
Series 1993,
3.785% 07/01/08(c) . . . . . . . . 875(d) 323
5.500% 07/01/08 . . . . . . . . . 1,750 1,673
Grossmont Unified School District,
Certificate of Participation,
Capital Project Series 1991,
(a) 11/15/06 . . . . . . . . . 4,500 2,199
Moulton Niguel,
5.250% 09/01/13 . . . . . . . . . 11,000 9,556
</TABLE>
See notes to investment portfolio.
3
<PAGE>
INVESTMENT PORTFOLIO - CONTINUED
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<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
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<S> <C> <C>
GENERAL OBLIGATIONS - CONT.
Sacramento Unified School District 1
Commission Facilities Specialized Tax,
Mello-Roos Financings Series B,
7.300% 09/01/13. . . . . . . . . . $ 1,760 $ 1,846
Santa Margarita, Dana Point,
Series B,
7.250% 08/01/13. . . . . . . . . . 2,000 2,202
State of California:
5.125% 10/01/17. . . . . . . . . . 7,710 6,399
5.500% 04/01/12. . . . . . . . . . 2,770 2,479
Statewide Communities
Development Corp.,
5.000% 10/01/23(b) . . . . . . . . 10,000 8,037
------
40,529
--------------------------------------------------------------------------------
HOSPITALS & HEALTH CARE - 0.3%
Duarte Certificate of Participation,
City of Hope Natural Medical Center,
Series 1993,
6.000% 04/01/08. . . . . . . . . . 500 456
Redbud Hospital District,
Series 1986,
7.900% 06/01/11. . . . . . . . . . 175 182
San Bernardino County,
Sisters of Charity, Series 1991-A,
7.000% 07/01/21. . . . . . . . . . 500 507
------
1,145
--------------------------------------------------------------------------------
HOUSING - 3.1%
MULTI-FAMILY - 0.5%
Garden Grove Certificate of Participation,
Bahia VLG/Emerald Isle Project,
5.650% 08/01/13. . . . . . . . . . 1,350 1,205
San Francisco Redevelopment
Agency, Serenity Towers,
Series 1993 A,
6.450% 02/15/24. . . . . . . . . . 500 490
Santa Rosa, Chanate Lodge Projects,
Series 1992,
6.625% 12/01/02 . . . . . . . . . 415 403
------
2,098
SINGLE-FAMILY - 2.6%
Delta County Single-family Housing,
Series 1992-A,
6.750% 12/01/25. . . . . . . . . . 1,800 1,768
Puerto Rico Housing Finance,
Corporation, Single-family,
7.650% 10/15/22. . . . . . . . . . 680 709
Pomona Single-family Mortgage,
Series 1990 B,
7.500% 08/01/23. . . . . . . . . . 1,000 1,102
Southern California Home
Financing Authority:
Series A,
7.625% 10/01/22 . . . . . . . . . $ 1,630 $ 1,685
Series 1990 A,
7.625% 10/01/23 . . . . . . . . . 580 601
State Housing Finance Agency:
Series B,
8.600% 08/01/19 . . . . . . . . . 2,850 2,975
Series 1990-D,
7.750% 08/01/10 . . . . . . . . . 965 1,005
Series 1991-C,
7.450% 08/01/11. . . . . . . . . . 305 315
Stockton, Series 1990 A,
7.400% 08/01/05. . . . . . . . . . 40 41
------
10,201
--------------------------------------------------------------------------------
IN-SUBSTANCE DEFEASED (e) - 11.2%
Brea Public Finance Authority,
Redevelopment Project AB 1991-A,
6.750% 08/01/22(b) . . . . . . . . 1,410 1,528
Brentwood Certificates of
Participation, Series 1988,
8.400% 04/01/11. . . . . . . . . . 1,000 1,026
Central School District,
San Bernardino County,
Series A,
7.050% 05/01/16. . . . . . . . . . 750 805
Commerce Joint Powers,
8.000% 03/01/21. . . . . . . . . . 30 34
Commonwealth of Puerto Rico,
Series 1991,
7.300% 07/01/20. . . . . . . . . . 1,200 1,326
Concord Redevelopment Agency,
Central Concord Redevelopment Project,
Series 1988-3,
8.000% 07/01/18. . . . . . . . . . 1,500 1,649
Desert Hospital Certificate of
Participation, Series 1990,
8.100% 07/01/20. . . . . . . . . . 1,750 1,993
Empire Union School District,
Mello-Roos Financings, Series 1990-A,
7.400% 10/01/15. . . . . . . . . . 1,000 1,119
Fontana Public Financing Authority,
North Fontana Redevelopment, Series 1991-A,
7.750% 12/01/20. . . . . . . . . . 785 893
Glendora Public Financing Authority,
Series B,
7.625% 09/01/10. . . . . . . . . . 850 937
</TABLE>
See notes to investment portfolio.
4
<PAGE>
INVESTMENT PORTFOLIO - CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
La Quinta Redevelopment Agency,
Series 1990,
8.400% 09/01/12. . . . . . . . . . $ 1,000 $ 1,156
Local Government Power Authority,
Anaheim Redevelopment Agency,
Series 1986 A,
8.200% 09/01/15. . . . . . . . . . 4,500 4,984
Los Angeles Convention & Exhibit
Center, Series 1985,
9.000% 12/01/20. . . . . . . . . . 500 631
Los Angeles County Transportation,
Metro Train Series 1991 A,
6.900% 07/01/21. . . . . . . . . . 1,000 1,091
Los Angeles Department of Water &
Power:
Series 1986:
7.375% 04/15/24. . . . . . . . . . 40 42
Series 1988,
7.900% 05/01/28. . . . . . . . . . 2,340 2,554
Los Angeles Waste Water System,
Series 1991-A,
7.100% 02/01/21. . . . . . . . . . 400 432
Modesto Certificate of Participation,
Community Center Project, Series 1987,
8.100% 11/01/15. . . . . . . . . . 1,500 1,637
Monterey Redevelopment Agency,
Series A:
9.250% 11/01/10. . . . . . . . . . 500 564
9.250% 11/01/11. . . . . . . . . . 250 283
9.250% 11/01/12. . . . . . . . . . 750 849
Northern California Power Agency,
Hydroelectric Project Number 1,
Series 1986 B-2,
8.000% 07/01/24. . . . . . . . . . 1,750 1,897
Orange County Community Facility,
District Number 87-3 Mello-Roos,
7.800% 08/15/15. . . . . . . . . . 2,000 2,245
District 87-4, Foothills Ranch,
Series 1990-A,
8.000% 08/15/15. . . . . . . . . . 1,000 1,131
Rancho Mirage Joint Powers
Financing Authority, Series 1991 A,
7.500% 04/01/17. . . . . . . . . . 1,545 1,723
Riverside Public Financing
Authority, Series A,
8.000% 02/01/18. . . . . . . . . . 590 670
Sacramento City Financing Authority,
Series 1991,
6.800% 11/01/20. . . . . . . . . . 2,500 2,722
Santa Rosa Waste Water,
Series 1989,
7.800% 07/02/15. . . . . . . . . . 900 970
State Educational Facilities
Authority, Westmont College,
Series 1985-A,
9.200% 12/01/00. . . . . . . . . . $ 40 $ 45
State Health Facilities Finance
Authority, Children's Hospital of
Los Angeles, Series 1991-A,
7.125% 06/01/21. . . . . . . . . . 2,000 2,195
Sisters of Providence,
8.375% 10/01/07. . . . . . . . . . 2,500 2,738
State Public Works,
University of California,
Series 1990-A,
7.000% 09/01/15(b) . . . . . . . . 1,625 1,773
University of California,
Central Chilter Cogeneration Project,
7.000% 11/01/15 . . . . . . . . . 1,250 1,348
------
44,990
--------------------------------------------------------------------------------
POLLUTION CONTROL REVENUE - 6.0%
California Pollution Control
Financing, Pacific Gas & Electric
Company, Series 1993-B,
5.850% 12/01/23 . . . . . . . . . 9,000 7,897
Southern California Edison,
Series 1992-B
6.400% 12/01/24 . . . . . . . . . 4,000 3,835
San Elijo Joint Powers Authority,
Series 1993,
5.000% 03/01/20 . . . . . . . . . 6,690 5,436
State Pollution Control Finance
Authority, Pacific Gas & Electric Co.,
Series 1987-B,
8.875% 01/01/10 . . . . . . . . . 6,200 6,812
------
23,980
--------------------------------------------------------------------------------
PUBLIC FACILITY & IMPROVEMENT - 17.2%
Alameda County Certificates of
Participation, Capital Projects:
Series 1989,
(a) 06/15/14 . . . . . . . . . 2,185 606
Marina Village, Series 1989-1,
7.650% 09/02/10 . . . . . . . . . . . 1,000 1,000
Beverly Hills Public Financing
Authority,
5.650% 06/01/15 . . . . . . . . . 5,000 4,538
Bishop, Escalon & Lemoore Cities
Certificates of Participation,
Series 1991-A,
7.700% 05/01/11 . . . . . . . . . 700 718
Brea Public Financing Authority,
Redevelopment Project Series 1991 A,
6.750% 08/01/22 . . . . . . . . . 590 603
See notes to investment portfolio.
5
<PAGE>
INVESTMENT PORTFOLIO - CONTINUED
--------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
PUBLIC FACILITY & IMPROVEMENT - CONT.
Commerce Joint Powers,
8.000% 03/01/21. . . . . . . . . . $ 970 $ 994
Compton Certificate of Participation,
Civic Center Project, Series 1989 B,
7.500% 08/01/15. . . . . . . . . . 1,000 1,040
Corona Community Facility,
Foothill Ranch, Series 1990-A-1,
8.350% 09/01/20. . . . . . . . . . 1,000 888
Costa Mesa Public Financing,
Mello-Roos Financings, Series 1991-A,
7.100% 08/01/21. . . . . . . . . . 1,000 849
Emeryville Public Finance Authority
Emeryville Redevelopment,
Series 1993-A,
6.500% 05/01/21. . . . . . . . . . 2,000 1,890
Fairfield Improvement Bond,
8.000% 09/02/11. . . . . . . . . . 255 254
Fairs Financing Authority,
Series 1991,
6.500% 07/01/11. . . . . . . . . . 1,300 1,323
Foster City Community Development,
Public Financing, Series 1993 A,
6.000% 09/01/13. . . . . . . . . . 1,000 906
Fremont Local Improvement District,
Fremont Auto Mall, Series 43-B,
8.900% 09/02/18. . . . . . . . . . 1,000 944
Glendora Public Financing Authority,
Series B,
7.625% 09/01/10. . . . . . . . . . 150 149
Long Beach Certificate of Participation,
Fleet Services Project, Series 1992 A,
6.600% 05/01/14. . . . . . . . . . 2,000 1,950
Los Angeles County Certificate of
Participation, Series 1991,
8.367% 05/01/15. . . . . . . . . . 1,000 1,016
Los Angeles County, Harbor Boulevard,
8.375% 09/02/18. . . . . . . . . . 1,000 1,026
Los Angeles County Public Works
Financing Authority,
5.000% 03/01/17. . . . . . . . . . 5,000 4,063
Los Angeles Municipal Improvement,
Central Library, Series 1993 A,
6.350% 06/01/20. . . . . . . . . . 1,500 1,419
Nevada County Certificate of
Participation, Solid Waste Management
Systems, Series 1991,
7.500% 06/01/21. . . . . . . . . . 1,000 948
Oakland Refunding Revenue,
Series 1988 A,
7.600% 08/01/21(b) . . . . . . . . 1,995 2,117
Placentia Community Facility District,
7.900% 09/01/15. . . . . . . . . . $ 1,000 $ 845
Pomona Public Financing Authority,
Southwest Pomona Redevelopment,
Series 1994-L,
5.750% 02/01/20. . . . . . . . . . 3,800 3,107
Public Capital Improvements,
Financing Authority, Pooled Project,
Joint Powers Agency:
Series 1988-A
8.500% 03/01/18(b) . . . . . . . . 3,500 3,732
Series 1988-B,
8.100% 03/01/18(b) . . . . . . . . 4,870 5,144
Rancho Mirage Joint Powers
Financing Authority, Series 1991 A,
7.500% 04/01/17. . . . . . . . . . 455 466
Richmond Joint Powers Financing
Authority, Series 1990-A,
7.700% 10/01/10. . . . . . . . . . 970 1,012
Riverside County, Public Facilities
Financing Project:
Series A,
8.000% 02/01/18. . . . . . . . . . 410 414
Types I & II,
7.875% 12/01/15. . . . . . . . . . 1,000 1,037
San Jose Redevelopment Agency,
5.000% 08/01/21. . . . . . . . . . 10,000 8,088
Santa Ana Financing Authority,
Police Holding Facility,
Series 1994 A,
6.250% 07/01/18. . . . . . . . . . 6,035 5,944
South San Francisco Capital Imports
Financing Authority, Conference Center,
Series 1993,
6.125% 09/01/18. . . . . . . . . . 1,000 883
Special Districts Financing Authority,
Certificate of Participation,
Series 1988-A,
8.400% 07/01/05. . . . . . . . . . 1,875 2,039
State Public Works Board,
State Archives, Series 1992 A,
6.500% 12/01/08. . . . . . . . . . 1,000 1,039
State Public Works Various Projects,
Series 1993 A,
5.250% 12/01/13. . . . . . . . . . 2,500 2,188
Watsonville Mammoth Lakes, Certificates
of Participation, Series B,
7.875% 06/01/11. . . . . . . . . . 500 519
West Covina Redevelopment Agency,
Community Facility District 1,
(Fashion Plaza) Series 1989,
7.800% 09/01/22 . . . . . . . . . 1,000 1,014
</TABLE>
See notes to investment portfolio.
6
<PAGE>
INVESTMENT PORTFOLIO - CONTINUED
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
Woodland East Main Street Assesment,
Series 90-1,
7.900% 09/02/15. . . . . . . . . . $ 1,450 $ 1,463
Virgin Islands Public Financing,
Series 1992-A,
7.250% 10/01/18. . . . . . . . . . 1,000 1,008
------
69,183
--------------------------------------------------------------------------------
REDEVELOPMENT AGENCIES & TAX ALLOCATION - 3.2%
Carson Improvement Series 1992,
7.375% 09/02/22. . . . . . . . . . 990 992
Contra Costa County Public Financing
Authority, Series 1992-A,
7.100% 08/01/22. . . . . . . . . . 1,000 994
Folsom Redevelopment Agency,
Central Folsom Project Area:
Series 1987 A,
8.600% 02/01/13. . . . . . . . . . 400 424
Mello-Roos Financings,
8.250% 12/01/06. . . . . . . . . . 400 418
Fontana Public Financing Authority,
Series 1993-A,
5.000% 09/01/20(b). . . . . . . . 4,510 3,653
Menlo Park Community Development,
Las Pulgas Community Development
Project, Series 1992,
6.550% 10/01/11. . . . . . . . . . 2,000 2,045
Riverside Unified School District
No. 2, Series 1993 A,
7.250% 09/01/18. . . . . . . . . . 1,000 1,002
Seaside Redevelopment Agency,
Gateway Project, Series 1986,
8.500% 08/01/06. . . . . . . . . . 105 107
Soledad Redevelopment Project,
Series 1992,
7.400% 11/01/12. . . . . . . . . . 985 995
Stockton Special Tax Allocation,
7.750% 08/01/15. . . . . . . . . . 1,000 1,034
Torrance, Downtown Redevelopment
Project, Series 1992,
7.125% 09/01/21. . . . . . . . . . 1,000 992
------
12,656
--------------------------------------------------------------------------------
TRANSPORTATION - 1.4%
Commonwealth of Puerto Rico,
Highway & Transportation Authority,
4.040% 07/01/09(c). . . . . . . . 290(d) 113
5.500% 07/01/09. . . . . . . . . . 580 527
Los Angeles County Transportation,
Series 1991 B,
6.500% 07/01/15. . . . . . . . . . 250 251
Northern California Transmission,
Series 1992 A,
6.500% 05/01/16. . . . . . . . . . 2,500 2,522
San Joaquin Hills Transportation,
Corridor Agency,
(a) 01/01/20. . . . . . . . . . $15,400 $ 2,117
-------
5,530
--------------------------------------------------------------------------------
WASTE DISPOSAL - 2.5%
Pollution Control Financing Authority,
North County Recycling Center,
Series 1991-A,
6.750% 07/01/17. . . . . . . . . . 1,000 1,011
Sacramento County Sanitation District
Financing Authority,
Series 1993,
4.750% 12/01/23. . . . . . . . . . 12,000 8,940
-------
9,951
--------------------------------------------------------------------------------
WATER & SEWER - 23.5%
Contra Costa Water District:
Series A,
9.000% 10/01/17. . . . . . . . . . 2,500 2,769
Series G,
5.500% 10/01/19(b) . . . . . . . . 12,500 11,031
Covina Certificate of Participation,
Water System Improvement Project,
Series 1991,
7.300% 04/01/16. . . . . . . . . . 1,000 1,024
Cucamonga County Water District,
Certificate of Participation,
Series 1992,
6.500% 09/01/22. . . . . . . . . . 2,000 2,010
Fresno Sewer Revenue,
Series 1993 A,
5.250% 09/01/19(b) . . . . . . . . 4,000 3,395
Hemet Public Financing Authority,
Series 1992 A,
6.500% 02/01/12. . . . . . . . . . 1,500 1,446
Irvine Ranch Water District,
Series 1988 Issue II,
8.250% 08/15/23. . . . . . . . . . 5,500 5,658
Los Angeles County Sanitation District,
Series 1993 A,
5.000% 10/01/23. . . . . . . . . . 14,300 11,333
5.250% 10/01/19. . . . . . . . . . 14,930 12,541
Los Angeles Waste Water System:
Series 1991-A,
5.700% 06/01/20. . . . . . . . . . 3,700 3,353
Series 1993-D,
5.200% 11/01/21(b) . . . . . . . . 6,800 5,687
Metropolitan Water District, RIB,
7.811% (variable rate) 08/05/22 . . . . . . 2,000 1,740
Mojave Water Agency,
Morongo Basin Pipeline:
Series 1991,
6.950% 09/01/21. . . . . . . . . . 1,000 1,040
</TABLE>
See notes to investment portfolio.
7
<PAGE>
INVESTMENT PORTFOLIO - CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
WATER & SEWER - CONT.
Series 1992,
6.600% 09/01/13. . . . . . . . . . $ 800 $ 776
Murrieta County Water District,
Mello-Roos Financings, Series 1991,
8.300% 10/01/21. . . . . . . . . . 1,000 1,056
San Diego Sewer Redevelopment,
Series 1993:
5.000% 05/15/23. . . . . . . . . . 5,000 3,944
5.250% 05/15/20. . . . . . . . . . 6,685 5,649
San Francisco Water Revenue,
5.375% 10/01/22. . . . . . . . . . 8,900 7,665
State Department Water Resources,
Central Valley Project,
5.500% 12/01/23. . . . . . . . . . 10,000 8,600
Tehachapi Water & Sewer District,
8.200% 11/01/20. . . . . . . . . . 2,000 2,145
Turlock Irrigation District,
Series 1991,
7.300% 01/01/11. . . . . . . . . . 1,500 1,517
--------
94,379
--------------------------------------------------------------------------------
Total investments (cost $405,284) (f) 398,626
--------------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES, NET - 0.6% 2,261
--------------------------------------------------------------------------------
NET ASSETS - 100.0% $400,887
--------------------------------------------------------------------------------
<FN>
Notes to investment portfolio:
(a) Zero coupon bond.
(b) These securities with a total market value of $55,667 are being used to
collateralize open futures contracts.
(c) This security is a variable rate instrument; on July 1, 1998 it will
change to a fixed rate instrument. Interest income is accrued daily
on the notional amount at the applicable interest rates.
(d) Notional amount.
(e) The Fund has been informed that the issuer has placed direct obligations
of the U.S. Government in an irrevocable trust, solely for the payment of
the interest and principal.
(f) Cost for federal income tax purposes is the same.
Short futures contracts open at January 31, 1995:
Par value Unrealized
covered Expiration depreciation
Type contract month at 1/31/95
--------------------------------------------------------------------------------
Treasury bonds $45,000 March $1,715
--------------------------------------------------------------------------------
Acronym Name
------- -----------------------
RIB Residual Interest Bonds
</TABLE>
See notes to financial statements.
8
<PAGE>
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
STATEMENT OF ASSETS & LIABILITIES
January 31, 1995
(in thousands except for per share amounts and footnote)
--------------------------------------------------------------------------------
<S> <C> <C>
Assets
Investments at value (cost $405,284)................... $ 398,626
Receivable for:
Interest.............................. $7,815
Fund shares sold...................... 515
Investments sold...................... 86
Expense reimbursement
from adviser........................ 59
Other.................................... 23 8,498
------ --------
Total assets................................. 407,124
Liabilities
Payable for:
Distributions......................... 1,911
Fund shares repurchased............... 502
Variation margin on futures........... 211
Payable to custodian bank................ 3,573
Accrued:
Deferred Trustees fees............... 4
Other.................................... 36
------
Total liabilities............................ 6,237
--------
Net assets........................................... $400,887
========
Net asset value & redemption price per share -
Class A ($301,912/43,919)......................... $ 6.87
========
Maximum offering price per share - Class A
($6.87/0.9525)..................................... $ 7.21
========
Net asset value & offering price per share -
Class B ($98,975/14,398).......................... $ 6.87
========
Composition of net assets
Capital paid in.................................... $418,868
Undistributed net investment income................ 257
Accumulated net realized loss...................... (9,865)
Net unrealized depreciation on:
Investments...................................... (6,658)
Open futures contracts........................... (1,715)
--------
$400,887
========
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
Year ended January 31, 1995
(in thousands)
--------------------------------------------------------------------------------
<S> <C> <C>
Investment income
Interest.......................................... $ 28,972
Expenses
Management fee......................... $2,457
Service fee............................ 71
Distribution fee - Class B............. 762
Transfer agent......................... 671
Bookkeeping fee........................ 161
Trustees fees.......................... 29
Custodian fee.......................... 52
Audit fee.............................. 38
Legal fee.............................. 6
Registration fees...................... 39
Reports to shareholders................ 9
Other.................................. 32
-------
4,327
Fees waived by the adviser............. (241) 4,086
------- --------
Net investment income..................... 24,886
--------
Net realized and unrealized gain (loss)
on portfolio positions
Net realized gain (loss) on:
Investments.......................... (7,521)
Closed futures contracts............. 2,401
-------
Net realized loss............................ (5,120)
Net unrealized depreciation
during the period on:
Investments.......................... (43,923)
Open futures contracts............... (1,715)
-------
Net unrealized depreciation.................. (45,638)
--------
Net loss.................................. (50,758)
--------
Net decrease in net assets from
operations..................................... $(25,872)
<FN> --------
* On sales of $50,000 or more the offering price is reduced.
</TABLE>
See notes to financial statements.
9
<PAGE>
FINANCIAL STATEMENTS - CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
(in thousands)
------------------------------------------------------------------------------------------------------------------------------------
Year ended January 31
---------------------
1995 1994
-------- --------
<S> <C> <C>
Increase (decrease) in net assets
Operations
Net investment income................................................................................ $ 24,886 $ 24,520
Net realized gain (loss)............................................................................. (5,120) 1,053
Net unrealized appreciation (depreciation)........................................................... (45,638) 16,708
-------- --------
Net increase (decrease) from operations........................................................ (25,872) 42,281
Distributions
From net investment income - Class A................................................................. (19,603) (21,105)
From net investment income - Class B................................................................. (5,218) (3,634)
-------- --------
(50,693) 17,542
-------- --------
Fund share transactions
Receipts for shares sold - Class A................................................................... 22,581 65,589
Value of distributions reinvested - Class A.......................................................... 8,857 10,064
Cost of shares repurchased - Class A................................................................. (70,189) (47,919)
-------- --------
(38,751) 27,734
-------- --------
Receipts for shares sold - Class B................................................................... 22,661 72,077
Value of distributions reinvested - Class B.......................................................... 2,741 1,830
Cost of shares repurchased - Class B................................................................. (19,636) (5,846)
-------- --------
5,766 68,061
-------- --------
Net increase (decrease) from Fund share transactions........................................... (32,985) 95,795
-------- --------
Total increase (decrease)................................................................ (83,678) 113,337
Net assets
Beginning of period.................................................................................. 484,565 371,228
-------- --------
End of period (including undistributed
net investment income of $257 and $187, respectively)............................................... $400,887 $484,565
======== ========
Number of Fund shares
Sold - Class A....................................................................................... 3,184 8,707
Issued for distributions reinvested - Class A........................................................ 1,265 1,338
Repurchased - Class A................................................................................ (10,141) (6,361)
-------- --------
(5,692) 3,684
-------- --------
Sold - Class B....................................................................................... 3,198 9,580
Issued for distributions reinvested - Class B........................................................ 392 243
Repurchased - Class B................................................................................ (2,845) (773)
-------- --------
745 9,050
-------- --------
Net increase (decrease) in shares outstanding.................................................. (4,947) 12,734
Outstanding at
Beginning of period............................................................................... 63,264 50,530
-------- --------
End of period..................................................................................... 58,317 63,264
======== ========
</TABLE>
See notes to financial statements.
10
<PAGE>
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------
NOTE 1. ACCOUNTING POLICIES
Colonial California Tax-Exempt Fund (the Fund), a series of Colonial
Trust V, is a Massachusetts business trust, registered under the Investment
Company Act of 1940, as amended, as a diversified, open-end, management
investment company. The Fund may issue an unlimited number of shares. The Fund
offers Class A shares sold with a front-end sales charge and Class B shares
which are subject to an annual distribution fee and a contingent deferred sales
charge. Class B shares will convert to Class A shares when they have been
outstanding approximately eight years. The following significant accounting
policies are consistently followed by the Fund in the preparation of its
financial statements and conform to generally accepted accounting principles.
--------------------------------------------------------------------------------
SECURITY VALUATION AND TRANSACTIONS
Debt securities generally are valued by a pricing service based upon
market transactions for normal, institutional-size income is recorded on the
trading units of similar securities. When management deems it appropriate, an
over-the-counter or exchange bid quotation is used. Futures contracts are
valued based on the difference between the last sale price and the opening price
of the contract.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
Portfolio positions which cannot be valued as set forth above are valued
at fair value under procedures approved by the Trustees.
Security transactions are accounted for on distributed are determined in
the date the securities are purchased or sold.
Cost is determined and gains and losses are based upon the specific
identification method for both financial statement and federal income tax
purposes.
The Fund may trade securities on other than normal settlement terms.
This may increase the risk if the other party to the transaction fails to
deliver and causes the Fund to subsequently invest at less advantageous prices.
--------------------------------------------------------------------------------
DETERMINATION OF CLASS NET ASSET VALUES AND
FINANCIAL HIGHLIGHTS
All income, expenses (other than the Class B distribution fee),
realized and unrealized gains (losses) are allocated to each class
proportionately on a daily basis for purposes of determining the net asset
value of each class.
Class B per share data and ratios are calculated by adjusting the
expense and net investment income per share data and ratios for the Fund
for the entire period by the distribution fee applicable to Class B shares
only.
--------------------------------------------------------------------------------
FEDERAL INCOME TAXES
Consistent with the Fund's policy to qualify as a regulated investment
company and to distribute all of its taxable and tax-exempt income, no federal
income tax has been accrued.
--------------------------------------------------------------------------------
INTEREST INCOME, DEBT DISCOUNT AND PREMIUM
Interest income is recorded on the accrual basis. Original issue
discount is accreted to interest income over the life of a security with a
corresponding increase in the cost basis; market discount is not accreted.
Premium is amortized against interest income with a corresponding decrease in
the cost basis.
--------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
The Fund declares and records distributions daily and pays monthly.
The amount and character of income and gains to be distributed are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles.
--------------------------------------------------------------------------------
NOTE 2. FEES AND COMPENSATION PAID TO AFFILIATES
MANAGEMENT FEE
Colonial Management Associates, Inc. (the Adviser) is the investment
adviser of the Fund and furnishes accounting and other services and office
facilities for a monthly fee. Through June 30, 1994,
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS - CONTINUED
--------------------------------------------------------------------------------
this fee was 0.60% annually of the Fund's average net assets. Effective July
1, 1994, the monthly fee is based on each Fund's pro rata portion of the
combined average net assets of Trust V as follows:
<TABLE>
<CAPTION>
Average Net Assets Annual Fee Rate
------------------ ---------------
<S> <C>
First $1 billion 0.55%
Next $1 billion 0.50%
Over $2 billion 0.45%
</TABLE>
--------------------------------------------------------------------------------
BOOKKEEPING FEE
The Adviser provides bookkeeping and pricing services for $27,000 per year plus
0.035% of the Fund's average net assets over $50 million.
--------------------------------------------------------------------------------
TRANSFER AGENT
Colonial Investors Service Center, Inc. (the Transfer Agent), an affiliate of
the Adviser, provides shareholder services for a monthly fee equal to 0.14%
annually of the Fund's average net assets and receives a reimbursement for
certain out of pocket expenses.
--------------------------------------------------------------------------------
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES
The Adviser, through Colonial Investment Servies, Inc. (the
Distributor), is the Fund's principal underwriter. During the year ended
January 31, 1995, the Distributor retained net underwriting discounts of
$47,312 on sales of the Fund's Class A shares and received contingent
defferrred sales charges (CDSC) of $489,156 on Class B share redemptions.
The Fund has adopted a 12b-1 plan which requires the payment of a
distribution fee to the Distributor equal to 0.75% anually of the average net
assets attributable to Class B shares. Efffective December 1, 1994, the plan
was amended to include payment by the Fund of a service fee applicable to Class
A and Class B, to the Distributor as follows:
<TABLE>
<CAPTION>
Valuation of shares Annual
outstanding on the 20th of Fee
each month which were issued Rate
---------------------------- ------
<S> <C>
Prior to November 30, 1994............... 0.10%
On or after December 1, 1994............. 0.25%
</TABLE>
The CDSC and the fees received from the 12b-1 plan are used principally as
repayment to the Distributor for amounts paid by the Distributor to dealers who
sold such shares.
--------------------------------------------------------------------------------
EXPENSE LIMITS
The Adviser has agreed, until further notice to waive fees and bear certain
Fund expenses to the extent that total expenses (exclusive of service and
distribution fees, brokerage commissions, interest, taxes, and extraordinary
expenses, if any) exceed 0.75% annually of the Fund's average net assets.
--------------------------------------------------------------------------------
OTHER
The Fund pays no compensation to its officers, all of whom are
employees of the Adviser.
The Fund's Trestees may participate in a deferred compensation plan
which may be terminated at any time. Obligations of the plan will be paid
solely out of the Fund's assets.
--------------------------------------------------------------------------------
NOTE 3. PORTFOLIO INFORMATION
During the year ended January 31, 1995, purchases and sales of
investments, other than short-term obligations, were $199,274,751 and
$223,223,408, respectively.
Unrealized appreciation (depreciation) at January 31, 1995, based on
cost of investments for both financial statement and federal income tax
purposes was:
<TABLE>
<S> <C>
Gross unrealized appreciation.................... $ 9,492,373
Gross unrealized depreciation.................... (16,150,305)
-----------
Net unrealized depreciation.................... $(6,657,932)
===========
</TABLE>
--------------------------------------------------------------------------------
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS - CONTINUED
================================================================================
<TABLE>
CAPITAL LOSS CARRYFORWARDS
At January 31, 1995, capital loss carryforwards available (to the
extent provided in regulations) to offset future realized gains were
approximately as follows:
<CAPTION>
Year of Capital loss
expiration carryforward
-------------- --------------
<S> <C>
1996...... $3,864,000
1998...... 421,000
1999...... 409,000
2003...... 4,418,000
--------------
$9,112,000
==============
</TABLE>
Expired capital loss carryforwards, if any, are recorded as a reduction
of capital paid in.
To the extent loss carryforwards are used to offset any future realized
gains, it is unlikely that such gains would be distributed since they may be
taxable to shareholders as ordinary income.
-------------------------------------------------------------------------------
OTHER
There are certain risks arising from geographic concentration in any state.
Certain revenue or tax related events in a state may impair the ability of
certain issuers of municipal securities to pay principal and interest on their
obligations.
The Fund may focus its investments in certain industries, subjecting it
to greater risk than a fund that is more diversified.
The Fund sells municipal and Treasury bond futures contracts to manage
overall portfolio interest rate exposure and not for trading purposes. The
use of futures contracts involves certain risks, which include (1) imperfect
correlation between the price movement of the contracts and the underlying
securities, (2) inability to close out positions due to different trading
hours, or the temporary absence of a liquid market, for either the contract or
the underlying securities, or (3) an inaccurate prediction by the Adviser of
the future direction of interest rates. Any of these risks may involve amounts
exceeding the initial or variation margin recorded in the Fund's Statement of
Assets and Liabilities at any given time.
--------------------------------------------------------------------------------
13
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
Selected data for a share of each class outstanding throughout each period are as follows:
------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
TWO MONTHS
ENDED
YEAR ENDED JANUARY 31 JANUARY 31 (b)
------------------------------------------ -------------------
1995 1994 1993
------------------- ----------------- -------------------
CLASS A CLASS B CLASS A CLASS B CLASS A CLASS B
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value - Beginning of period....... $ 7.660 $ 7.660 $ 7.350 $ 7.350 $ 7.270 $ 7.270
Income (loss) from investment operations:
Net investment income (a)........... 0.413 0.360 0.434 0.378 0.076 0.067
Net realized and unrealized
gain (loss) on investments....... (0.791) (0.791) 0.315 0.315 0.081 0.081
-------- ------- -------- -------- -------- -------
Total from investmen operations..... (0.378) (0.431) 0.749 0.693 0.157 0.148
-------- ------- -------- -------- -------- -------
Less distributions declared
to shareholders:
From net investment income.......... (0.412) (0.359) (0.439) (0.383) (0.077) (0.068)
From capital paid in (d)............ -- -- -- -- -- --
-------- ------- -------- -------- -------- -------
Total distributions
declared to shareholders.......... (0.412) (0.359) (0.439) (0.383) (0.077) (0.068)
-------- ------- -------- -------- -------- -------
Net asset value - End of period............. $ 6.870 $ 6.870 $ 7.660 $ 7.660 $ 7.350 $ 7.350
======== ======= ======== ======== ======== =======
Total return (e)(f)......................... (4.83)% (5.55)% 10.44% 9.63% 8.70%(g) 1.01%(g)
======== ======= ======== ======== ======== =======
Ratios to average net assets:
Expenses............................ 0.77%(i) 1.52%(i) 0.75% 1.50% 0.65%(h) 1.40%(h)
Net investment income............... 5.91% 5.16% 5.73% 4.98% 6.29%(h) 5.54%(h)
Fees and expenses waived
or borne by the adviser........... 0.06% 0.06% 0.08% 0.08% 0.21%(h) 0.21%(h)
Portfolio turnover.......................... 47% 47% 17% 17% 19%(h) 19%(h)
Net assets at end of period (000)........... $301,912 $98,975 $379,987 $104,578 $337,409 $33,819
(a) Net of fees and expenses waived or borne
by the adviser which amounted to....... $ 0.004 $ 0.004 $ 0.006 $ 0.006 $ 0.002 $ 0.002
(b) The Fund changed its fiscal year end from November 30 to January 31 in 1992.
(c) Class B shares were initially offered on August 4, 1992. Per share amounts reflect
activity from that date.
(d) Because of differences between book and tax basis accounting, there was no return
of capital for federal income tax purposes.
(e) Total return at net asset value assuming all distributions reinvested and no initial sales
charge or CDSC.
(f) Had the adviser not waived or reimbursed a portion of expenses total return would
have been reduced.
(g) Not annualized.
(h) Annualized.
(i) Includes service fee since its inception on December 1, 1994, of 0.02% (not annualized).
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED
NOVEMBER 30
----------------------
1992
----------------------
CLASS A CLASS B(c)
-------- ----------
<S> <C> <C>
Net asset value - Beginning of period....... $ 7.150 $ 7.410
Income (loss) from investment operations:
Net investment income (a)........... 0.467 0.143
Net realized and unrealized
gain (loss) on investments........ 0.109 (0.151)
-------- --------
Total from investment operations.... 0.576 (0.008)
-------- --------
Less distributions declared
to shareholders:
From net investment income.......... (0.456) (0.132)
From capital paid in (d)............ -- --
-------- --------
Total distributions
declared to shareholders.......... (0.456) (0.132)
-------- --------
Net asset value - End of period............. $ 7.270 $ 7.270
======== ========
Total return (e)(f)......................... 8.27% 1.94%(g)
======== ========
Ratios to average net assets:
Expenses............................ 0.71% 1.46%(h)
Net investment income............... 6.44% 5.69%(h)
Fees and expenses waived
or borne by the adviser........... 0.13% 0.13%
Portfolio turnover.......................... 12% 12%
Net assets at end of period (000)........... $324,012 $22,797
(a) Net of fees and expenses waived or borne
by the adviser which amounted to....... $ 0.010 $ 0.010
(b) The Fund changed its fiscal year end from November 30 to January 31 in 1992.
(c) Class B shares were initially offered on August 4, 1992. Per share amounts reflect
activity from that date.
(d) Because of differences between book and tax basis accounting, there was no return
of capital for federal income tax purposes.
(e) Total return at net asset value assuming all distributions reinvested and no initial sales
charge or CDSC.
(f) Had the adviser not waived or reimbursed a portion of expenses total return would
have been reduced.
(g) Not annualized.
(h) Annualized.
(i) Includes service fee since its inception on December 1, 1994, of 0.02% (not annualized).
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS - CONTINUED
Selected data for a share of each class outstanding throughout each period are as follows:
------------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED NOVEMBER 30
------------------------
1991 1990
--------- ---------
CLASS A CLASS A
--------- ---------
<S> <C> <C>
Net asset value - Beginning of period................. $ 6.940 $ 7.010
Income (loss) from investment operations:
Net investment income (a)........................... 0.473 0.490
Net realized and unrealized
gain (loss) on investments........................ 0.211 (0.065)
-------- --------
Total from investment
operations........................................ 0.684 0.425
-------- --------
Less distributions declared
to shareholders:
From net investment income.......................... (0.473) (0.492)
From capital paid in (d)............................ (0.001) (0.003)
-------- --------
Total distributions
declared to shareholders......................... (0.474) (0.495)
-------- --------
Net asset value - End of period....................... $ 7.150 $ 6.940
======== ========
Total return (e)(f)................................... 10.18% 6.30%
======== ========
Ratios to average net assets:
Expenses............................................ 0.80% 0.70%
Net investment income............................... 6.69% 7.02%
Fees and expenses waived
or borne by the adviser........................... 0.05% 0.15%
Portfolio turnover.................................... 11% 22%
Net assets at end of period (000)..................... $295,459 $221,519
$ 0.003 $ 0.010
------------------------------------------------------------------------------------------------------------------------------------
Federal income tax information (unaudited)
All of the distributions will be treated as exempt income for federal income tax purposes.
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE TRUSTEES OF COLONIAL TRUST V AND THE SHAREHOLDERS OF COLONIAL CALIFORNIA
TAX-EXEMPT FUND
In our opinion, the accompanying statement of assets and liabilities,
including the investment portfolio, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in
all material respects, the financial position of Colonial California Tax-Exempt
Fund (a series of Colonial Trust V) at January 31, 1995, the results of its
operations, the changes in its net assets and the financial highlights for the
periods indicated, in conformity with generally accepted accounting principles.
These financial statements and the financial highlights (hereafter referred to
as "financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in
accordance with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included
confirmation of portfolio positions at January 31, 1995 by correspondence with
the custodian, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
March 10, 1995
<PAGE>
INVESTMENT PORTFOLIO (in thousands) JANUARY 31, 1995
===============================================================================
<TABLE>
<CAPTION>
MUNICIPAL BONDS - 99.1% PAR VALUE
-------------------------------------------------------------------------------
<S> <C> <C>
EDUCATION - 4.8%
State Health & Educational Facilities
Authority:
Family Education Loan Program,
Series A,
7.200% 11/15/10 . . . . . . . . . . . . . . . . . $ 915 $ 941
Lutheran General Health Care System,
7.250% 07/01/04 . . . . . . . . . . . . . . . . . 200 221
The Taft School, Series 1993 B:
5.250% 07/01/13 . . . . . . . . . . . . . . . . . 350 300
5.400% 07/01/20 . . . . . . . . . . . . . . . . . 1,750 1,474
Trinity College, Series C,
6.000% 07/01/12 . . . . . . . . . . . . . . . . . 1,000 969
Yale University:
Series K,
6.375% 07/01/13 . . . . . . . . . . . . . . . . . 500 502
Series 1992 R, RIB (variable rate),
6.402% 06/10/30(a). . . . . . . . . . . . . . . . 2,500 2,212
Supplemental Loan Authority,
Series 1993 A,
6.375% 11/15/99 . . . . . . . . . . . . . . . . . 485 491
-------
7,110
-------------------------------------------------------------------------------
ELECTRIC - 6.6%
Commonwealth of Puerto Rico,
Electric Power Authority, Series T,
5.500% 07/01/20 . . . . . . . . . . . . . . . . . 5,000 4,306
State Development Authority,
New England Power Co.,
7.250% 10/15/15 . . . . . . . . . . . . . . . . . 3,450 3,614
State Municipal Electric Energy
Cooperative, Series A,
5.000% 01/01/18(a) . . . . . . . . . . . . . . . . 2,250 1,887
-------
9,807
-------------------------------------------------------------------------------
GENERAL OBLIGATIONS - 25.7%
Commonwealth of Puerto Rico:
5.500% 07/01/08 . . . . . . . . . . . . . . . . . 3,330 3,184
5.500% 07/01/13 . . . . . . . . . . . . . . . . . 1,850 1,653
Series 1993,
3.785% 07/01/08(b). . . . . . . . . . . . . . . . 1,250(c) 461
Series 1994,
6.500% 07/01/23 . . . . . . . . . . . . . . . . . 2,000 2,000
Brookfield, Series 1992:
6.000% 09/15/09 . . . . . . . . . . . . . . . . . 240 239
6.000% 09/15/10 . . . . . . . . . . . . . . . . . 235 233
Cromwell, Series 1991,
5.250% 12/15/08 . . . . . . . . . . . . . . . . . 100 91
Danbury:
4.500% 02/01/12 . . . . . . . . . . . . . . . . . 1,280 1,045
4.500% 02/01/13 . . . . . . . . . . . . . . . . . 1,280 1,032
5.625% 08/15/11 . . . . . . . . . . . . . . . . . 690 651
East Haddam,
6.300% 06/15/09 . . . . . . . . . . . . . . . . . 260 261
Granby, Series 1993:
6.500% 04/01/09 . . . . . . . . . . . . . . . . . 200 209
6.550% 04/01/10 . . . . . . . . . . . . . . . . . 175 183
Griswold, Series 1992,
6.000% 04/15/09 . . . . . . . . . . . . . . . . . 410 407
Groton,
5.750% 01/15/07 . . . . . . . . . . . . . . . . . 285 278
Hamden, Series 1992:
6.000% 10/01/11 . . . . . . . . . . . . . . . . . 425 414
6.000% 10/01/12 . . . . . . . . . . . . . . . . . 425 414
Hartford:
5.625% 02/01/11 . . . . . . . . . . . . . . . . . 600 567
5.625% 02/01/12 . . . . . . . . . . . . . . . . . 600 566
5.625% 02/01/13 . . . . . . . . . . . . . . . . . 600 565
Hartford County Metropolitan
District, Series 1993:
5.200% 12/01/12 . . . . . . . . . . . . . . . . . 600 533
5.200% 12/01/13 . . . . . . . . . . . . . . . . . 600 528
Montville, Series 1993,
6.300% 03/01/12 . . . . . . . . . . . . . . . . . 335 343
New Britain, Series 1992,
6.000% 02/01/08 . . . . . . . . . . . . . . . . . 400 401
Series 1993 A,
6.000% 10/01/12 . . . . . . . . . . . . . . . . . 2,000 1,965
North Branford:
6.200% 02/15/11. . . . . . . . . . . . . . . . . 195 195
6.200% 02/15/12. . . . . . . . . . . . . . . . . 225 224
Norwich:
5.750% 09/15/13. . . . . . . . . . . . . . . . . 875 829
5.750% 09/15/14. . . . . . . . . . . . . . . . . 870 818
Plainfield, Series 1992,
6.375% 08/01/11. . . . . . . . . . . . . . . . . 500 506
Somers:
6.000% 01/15/11. . . . . . . . . . . . . . . . . 125 123
6.250% 01/15/08. . . . . . . . . . . . . . . . . 270 276
South Windsor, Series 1992,
6.200% 09/01/10. . . . . . . . . . . . . . . . . 495 496
Southington, Series 1993,
5.000% 06/15/13. . . . . . . . . . . . . . . . . 210 183
Stamford, Series 1992,
6.125% 11/01/11. . . . . . . . . . . . . . . . . 1,050 1,047
State Development Authority,
Series 1993 A,
5.250% 11/15/11. . . . . . . . . . . . . . . . . 750 654
State General Obligation:
Series 1989 B,
(d) 11/01/09. . . . . . . . . . . . . . . . . . . 1,450 593
Series 1992 A1,
(d) 05/15/12. . . . . . . . . . . . . . . . . . . 524 181
</TABLE>
See notes to investment portfolio.
3
<PAGE>
INVESTMENT PORTFOLIO - continued
===============================================================================
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
-------------------------------------------------------------------------------
<S> <C> <C>
GENERAL OBLIGATIONS - CONT.
Series 1992 A,
6.500% 03/15/12. . . . . . . . . . . . . $ 500 $ 531
Series 1993 A,
5.600% 11/15/10. . . . . . . . . . . . . 1,000 944
Series 1993 B:
5.400% 03/15/09. . . . . . . . . . . . . 100 93
5.400% 09/15/09(a) . . . . . . . . . . . 4,500 4,191
State Regional School District No. 5:
Series 1992,
6.300% 03/01/10. . . . . . . . . . . . . 400 404
Series 1993,
5.600% 02/15/12. . . . . . . . . . . . . 150 141
State Regional School District
No. 14, Woodbury & Bethlehem,
Series 1991,
6.100% 12/15/06. . . . . . . . . . . . . 285 290
Stratford,
7.300% 03/01/12. . . . . . . . . . . . . 500 551
Torrington:
Series 1992,
6.400% 05/15/10. . . . . . . . . . . . . 750 763
Series 1993:
5.400% 04/15/10. . . . . . . . . . . . . 725 670
5.400% 04/15/11. . . . . . . . . . . . . 725 668
Vernon, Series 1988,
7.100% 10/15/03. . . . . . . . . . . . . 250 279
Waterbury, Series 1993,
5.375% 04/15/08. . . . . . . . . . . . . 750 710
Westbrook, Series 1992:
6.300% 03/15/12. . . . . . . . . . . . . 265 269
6.400% 03/15/09. . . . . . . . . . . . . 630 649
West Haven, Series 1993 B:
5.375% 06/01/08. . . . . . . . . . . . . 630 589
5.400% 06/01/09. . . . . . . . . . . . . 665 621
5.400% 06/01/10. . . . . . . . . . . . . 705 653
5.400% 06/01/11. . . . . . . . . . . . . 740 680
-------
38,044
-------------------------------------------------------------------------------
HOSPITALS & HEALTH CARE - 15.5%
State Health & Educational
Facilities Authority:
Bridgeport Hospital, Series A,
6.500% 07/01/12. . . . . . . . . . . . . 1,000 1,014
Danbury Hospital, Series E,
6.500% 07/01/14. . . . . . . . . . . . . 1,400 1,417
Lawrence & Memorial Hospitals:
Series C:
6.250% 07/01/22. . . . . . . . . . . . . 400 422
6.375% 07/01/12. . . . . . . . . . . . . 1,000 1,062
Series 1993 D,
5.000% 07/01/22(a) . . . . . . . . . . . 1,500 1,207
Manchester Memorial Hospital,
Series 1993 D,
5.750% 07/01/22. . . . . . . . . . . . . 400 363
Middlesex Hospital, Series G,
6.250% 07/01/22. . . . . . . . . . . . . 1,250 1,219
New Britain Hospital, Series 1991 A,
7.750% 07/01/22. . . . . . . . . . . . . 200 201
Norwalk Hospital, Series D,
6.250% 07/01/12. . . . . . . . . . . . . 1,750 1,741
6.250% 07/01/22. . . . . . . . . . . . . 1,000 975
Pope John Paul II Health Center,
6.250% 11/01/13. . . . . . . . . . . . . 2,000 1,880
St. Francis Hospital, Series B:
6.125% 07/01/10(a) . . . . . . . . . . . 1,000 989
6.200% 07/01/22. . . . . . . . . . . . . 1,000 969
Series 1993 C,
5.000% 07/01/13(a) . . . . . . . . . . . 4,500 3,825
St. Raphael Hospital:
Series E,
6.750% 07/01/13. . . . . . . . . . . . . 1,400 1,445
Series 1992 F,
6.200% 07/01/14. . . . . . . . . . . . . 750 739
Series 1992 G,
6.200% 07/01/14. . . . . . . . . . . . . 225 222
Series 1993 H,
5.250% 07/01/09(a)(e) . . . . . . . . . 3,410 3,141
William W. Backus Hospital, Series C,
6.000% 07/01/12. . . . . . . . . . . . . 250 219
-------
23,050
-------------------------------------------------------------------------------
HOUSING - 14.0%
MULTI-FAMILY -7.1%
New Britain Housing Authority,
Nathan Hale Apartments:
Series 1992 A,
6.500% 07/01/02. . . . . . . . . . . . . 145 150
Series 1992 B,
6.875% 07/01/24. . . . . . . . . . . . . 2,590 2,619
State Housing Finance Authority:
Series 1992 A-1,
5.850% 11/15/16. . . . . . . . . . . . . 2,000 1,827
Series 1993 B:
5.650% 05/15/06. . . . . . . . . . . . . 550 530
6.200% 05/15/12. . . . . . . . . . . . . 5,000 4,844
Waterbury Nonprofit Housing Corp.,
Fairmont Heights, Series 1993 A,
6.500% 01/01/26. . . . . . . . . . . . . 600 597
-------
10,567
=======
</TABLE>
See notes to investment portfolio.
4
<PAGE>
INVESTMENT PORTFOLIO - continued
===============================================================================
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
-------------------------------------------------------------------------------
<S> <C> <C>
HOUSING - CONT.
SINGLE-FAMILY - 6.9%
State Housing Finance Authority:
6.350% 05/15/17. . . . . . . . . . . . . $1,250 $ 1,214
Series B2,
6.750% 05/15/22. . . . . . . . . . . . . 2,500 2,516
Series D1,
6.625% 05/15/24. . . . . . . . . . . . . 500 498
Series 1990 B-4,
7.300% 11/15/03. . . . . . . . . . . . . 225 235
Series 1991-C,
6.600% 11/15/23. . . . . . . . . . . . . 1,590 1,588
Series 1991 C-1,
6.450% 11/15/11. . . . . . . . . . . . . 1,325 1,328
Series 1991 C-2,
6.700% 11/15/22. . . . . . . . . . . . . 110 109
Series 1992 B,
6.700% 11/15/12. . . . . . . . . . . . . 2,700 2,751
-------
10,239
-------------------------------------------------------------------------------
NURSING HOMES - 6.3%
State Development Authority:
Clintonville Manor Realty,
6.750% 06/20/21. . . . . . . . . . . . . 1,490 1,494
Duncaster Inc., Series 1992:
6.700% 09/01/07. . . . . . . . . . . . . 500 522
6.750% 09/01/15. . . . . . . . . . . . . 2,500 2,475
Mansfield Center for Nursing,
6.000% 11/01/22. . . . . . . . . . . . . 1,250 1,108
Noble Horizons Nursing Home:
5.875% 11/01/12. . . . . . . . . . . . . 640 579
6.000% 11/01/22. . . . . . . . . . . . . 600 535
Windsor Nursing Home Project,
7.125% 11/01/24. . . . . . . . . . . . . 2,000 2,062
Yale New Haven Hospital,
Series G,
6.500% 07/01/12. . . . . . . . . . . . . 500 507
-------
9,282
-------------------------------------------------------------------------------
PUBLIC FACILITY & IMPROVEMENT - 7.5%
Commonwealth of Puerto Rico, Public
Building Authority, Series L,
5.750% 07/01/16. . . . . . . . . . . . . 2,000 1,810
Farmington, General Obligation,
Series 1993:
5.700% 01/15/12. . . . . . . . . . . . . 590 572
5.700% 01/15/13. . . . . . . . . . . . . 570 549
State Certificates of Participation,
Middletown Courthouse Project:
6.250% 12/15/09(a) . . . . . . . . . . . 1,685 1,698
6.250% 12/15/10. . . . . . . . . . . . . 750 754
6.250% 12/15/12. . . . . . . . . . . . . 100 101
6.250% 12/15/13. . . . . . . . . . . . . 850 854
State Development Authority,
Jewish Community of New Haven,
Series 1992,
6.600% 09/01/17. . . . . . . . . . . . . $ 500 $ 508
State Resource Recovery Authority:
Series 1985 B,
7.300% 11/15/12. . . . . . . . . . . . . 200 211
State Resource Recovery Authority,
American Ref-Fuel Co.:
Series 1988 A,
8.000% 11/15/15. . . . . . . . . . . . . 2,500 2,700
Series 1992 A,
6.450% 11/15/22. . . . . . . . . . . . . 1,425 1,318
-------
11,075
-------------------------------------------------------------------------------
TRANSPORTATION - 6.2%
Commonwealth of Puerto Rico,
Highway & Transportation Authority:
4.040% 07/01/09(b) . . . . . . . . . . . 415(c) 162
5.500% 07/01/09. . . . . . . . . . . . . 1,110 1,009
State Special Tax Obligation,
Transportation Infrastructure:
Series 1991 B,
6.250% 10/01/09. . . . . . . . . . . . . 2,500 2,516
Series 1992 B,
6.125% 09/01/12. . . . . . . . . . . . . 4,600 4,537
Series 1993 A,
5.375% 09/01/08. . . . . . . . . . . . . 1,000 914
-------
9,138
-------------------------------------------------------------------------------
WASTE DISPOSAL - 0.9%
Bristol Resource Recovery Facility,
Ogden Martin Systems,
6.500% 07/01/14(f) . . . . . . . . . . . 1,500 1,371
-------------------------------------------------------------------------------
WATER & SEWER - 11.6%
Hartford County Metropolitan
District, General Obligation,
Series 1991,
6.200% 11/15/10. . . . . . . . . . . . . 220 221
New Britain, General Obligation,
Series 1993 B,
6.000% 03/01/12. . . . . . . . . . . . . 1,000 983
South Central Regional Water
Authority, Series 10 A:
5.750% 08/01/12(a) . . . . . . . . . . . 3,500 3,299
5.875% 08/01/12. . . . . . . . . . . . . 1,000 1,024
State Clean Water Fund:
Series 1991,
7.000% 01/01/11. . . . . . . . . . . . . 1,850 1,956
Series 1992,
6.125% 02/01/12. . . . . . . . . . . . . 3,630 3,594
</TABLE>
See notes to investment portfolio.
5
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO - continued
===============================================================================
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
-------------------------------------------------------------------------------
<S> <C> <C>
WATER & SEWER - CONT.
Series 1993,
5.875% 04/01/09 . . . . . . . . . . . . . . . . . $1,000 $ 986
Series 1994,
5.800% 06/01/16 . . . . . . . . . . . . . . . . . 1,000 939
State Development Authority:
Bridgeport Hydraulic Co., Series B,
5.500% 06/01/28 . . . . . . . . . . . . . . . . . 1,000 871
Pfizer Inc. Project,
7.000% 07/01/25 . . . . . . . . . . . . . . . . . 2,000 2,067
State Development Authority,
Stamford Water Co., Series 1993,
5.300% 09/01/28 . . . . . . . . . . . . . . . . . 1,500 1,271
--------
17,211
-------------------------------------------------------------------------------
Total investments (cost $150,827) (g) 146,894
-------------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS - 1.0%
-------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES (H)
IL Health Facilities Authority,
Elmhurst Hospital,
4.100% 01/01/20. . . . . . . . . . . . . 100 100
NY Triborough Bridge & Tunnel Authority,
3.400% 01/01/24. . . . . . . . . . . . . 700 700
WY Green River,
4.200% 06/01/07. . . . . . . . . . . . . 700 700
-------------------------------------------------------------------------------
Total short-term obligations 1,500
-------------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES, NET - (0.1)% (198)
-------------------------------------------------------------------------------
NET ASSETS - 100.0% $148,196
-------------------------------------------------------------------------------
<FN>
Notes to investment portfolio:
(a) These securities, or a portion thereof, with a market value of $18,514, are
being used to collateralize open future contracts.
(b) These securities are variable rate instruments; on July 1, 1998, they will
change to fixed rate instruments. Interest income is accrued daily on the
notional amounts at the applicable interest rate.
(c) Notional amount.
(d) Zero coupon bond.
(e) This security, or a portion thereof, with a market value of $1,474, is being
used to collateralize the delayed delivery purchase indicated in note (f)
below.
(f) This security has been purchased on a delayed delivery basis, for settlement
at a future date beyond the customary settlement time.
(g) Cost for federal income tax purposes is the same.
(h) Variable rate demand notes are considered short-term obligations. Interest
rates change periodically on specified dates. These securities are payable
on demand and are secured by either letters of credit or other credit
support agreements from banks. The rates listed are as of January 31, 1995.
</TABLE>
<TABLE>
Short futures contracts open at January 31, 1995:
<CAPTION>
Par value Unrealized
covered by Expiration depreciation
Type contracts month at 1/31/95
-------------------------------------------------------------------------------
<S> <C> <C> <C>
Municipal bond $13,800 March $494
Treasury bond $ 3,200 March $ 73
-------------------------------------------------------------------------------
</TABLE>
Acronym Name
--------------------- -----------------------
RIB Residual Interest Bonds
See notes to investment portfolio.
6
<PAGE>
FINANCIAL STATEMENTS
===============================================================================
<TABLE>
STATEMENT OF ASSETS & LIABILITIES
January 31, 1995
(in thousands except for per share amounts and footnote)
-------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments at value (cost $150,827)......................... $146,894
Short-term investments....................................... 1,500
--------
148,394
Receivable for:
Interest.................................. $2,079
Investments sold.......................... 828
Fund shares sold.......................... 356
Deferred organization expenses............... 6 3,269
------ --------
Total assets........................................ 151,663
LIABILITIES
Payable for:
Investments purchased..................... 1,500
Distributions............................. 691
Fund shares repurchased................... 638
Variation margin on futures............... 93
Payable to custodian......................... 506
Payable to adviser........................... 8
Accrued:
Deferred Trustees fees.................... 2
Other........................................ 29
------
Total liabilities................................... 3,467
--------
NET ASSETS................................................... $148,196
--------
Net asset value & redemption price per share -
Class A ($74,616/10,539)................................. $ 7.08
--------
Maximum offering price per share - Class A
($7.08/0.9525)............................................ $ 7.43*
--------
Net asset value & offering price per share -
Class B ($73,580/10,393)................................. $ 7.08
--------
COMPOSITION OF NET ASSETS
Capital paid in........................................... $156,406
Undistributed net investment income....................... 91
Accumulated net realized loss............................. (3,801)
Net unrealized depreciation on:
Investments............................................. (3,933)
Open futures contracts.................................. (567)
--------
$148,196
========
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
Year ended January 31, 1995
(in thousands)
-------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Interest..................................................... $ 9,422
EXPENSES
Management fee............................... $ 870
Service fee.................................. 27
Distribution fee - Class B................... 540
Transfer agent............................... 240
Bookkeeping fee.............................. 63
Trustees fees................................ 17
Custodian fee................................ 7
Audit fee.................................... 31
Legal fee.................................... 13
Registration fees............................ 30
Reports to shareholders...................... 7
Amortization of deferred
organization expense........................ 4
Other........................................ 20
1,869
--------
Fees waived by the adviser................... (841) 1,028
-------- --------
Net investment income................................ 8,394
--------
NET REALIZED AND UNREALIZED LOSS
ON PORTFOLIO POSITIONS
Net realized loss on:
Investments................................ (2,176)
Closed futures contracts................... (181)
--------
Net realized loss....................................... (2,357)
--------
NET UNREALIZED DEPRECIATION
DURING THE PERIOD ON:
Investments................................ (14,889)
Open futures contracts..................... (244)
--------
Net unrealized depreciation............................. (15,133)
--------
Net loss............................................. (17,490)
Net decrease in net assets from --------
operations................................................ $ (9,096)
========
<FN>
* On sales of $50,000 or more the offering price is reduced.
</TABLE>
See notes to financial statements.
7
<PAGE>
FINANCIAL STATEMENTS - continued
===============================================================================
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
(in thousands)
-----------------------------------------------------------------------------------------------
<CAPTION>
Year ended January 31
----------------------
1995 1994
-------- --------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income.............................................. $ 8,394 $ 6,998
Net realized loss.................................................. (2,357) (1,274)
Net unrealized appreciation (depreciation)......................... (15,133) 8,706
-------- --------
Net increase (decrease) from operations...................... (9,096) 14,430
Distributions
From net investment income - Class A............................... (4,752) (4,473)
From net investment income - Class B............................... (3,634) (2,436)
From net realized gains - Class A.................................. (12) --
From net realized gains - Class B.................................. (9) --
-------- --------
(17,503) 7,521
-------- --------
Fund share transactions
Receipts for shares sold - Class A................................. 9,992 31,742
Value of distributions reinvested - Class A........................ 2,706 2,404
Cost of shares repurchased - Class A............................... (19,845) (10,595)
-------- --------
(7,147) 23,551
-------- --------
Receipts for shares sold - Class B................................. 16,129 42,004
Value of distributions reinvested - Class B........................ 2,236 1,476
Cost of shares repurchased - Class B............................... (8,746) (2,290)
-------- --------
9,619 41,190
-------- --------
Net increase from Fund share transactions.................... 2,472 64,741
-------- --------
Total increase (decrease).............................. (15,031) 72,262
NET ASSETS
Beginning of period................................................ 163,227 90,965
-------- --------
End of period (including undistributed
net investment income of $91 and $80, respectively)............... $148,196 $163,227
======== ========
NUMBER OF FUND SHARES
Sold - Class A..................................................... 1,375 4,135
Issued for distributions reinvested - Class A...................... 376 312
Repurchased - Class A.............................................. (2,800) (1,370)
-------- --------
(1,049) 3,077
-------- --------
Sold - Class B..................................................... 2,223 5,450
Issued for distributions reinvested - Class B...................... 311 191
Repurchased - Class B.............................................. (1,240) (296)
-------- --------
1,294 5,345
-------- --------
Net increase in shares outstanding........................... 245 8,422
Outstanding at
Beginning of period............................................. 20,687 12,265
-------- --------
End of period................................................... 20,932 20,687
======== ========
</TABLE>
See notes to financial statements.
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS
===============================================================================
NOTE 1. ACCOUNTING POLICIES
Colonial Connecticut Tax-Exempt Fund (the Fund), a series of Colonial Trust
V, is a Massachusetts business trust, registered under the Investment Company
Act of 1940, as amended, as a non-diversified, open-end, management investment
company. The Fund may issue an unlimited number of shares. The Fund offers Class
A shares sold with a front-end sales charge and Class B shares which are subject
to an annual distribution fee and a contingent deferred sales charge. Class B
shares will convert to Class A shares when they have been outstanding
approximately eight years. The following significant accounting policies are
consistently followed by the Fund in the preparation of its financial statements
and conform to generally accepted accounting principles.
-------------------------------------------------------------------------------
SECURITY VALUATION AND TRANSACTIONS
Debt securities generally are valued by a pricing service based upon market
transactions for normal, institutional-size trading units of similar
securities. When management deems it appropriate, an over- the-counter or
exchange bid quotation is used.
Futures contracts are valued based on the difference between the last sale
price and the opening price of the contract.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
Portfolio positions which cannot be valued as set forth above are valued
at fair value under procedures approved by the Trustees.
Security transactions are accounted for on the date the securities are
purchased or sold.
Cost is determined and gains and losses are based upon the specific
identification method for both financial statement and federal income tax
purposes.
The Fund may trade securities on other than normal settlement terms. This
may increase the risk if the other party to the transaction fails to deliver and
causes the Fund to subsequently invest at less advantageous prices.
-------------------------------------------------------------------------------
DETERMINATION OF CLASS NET ASSET VALUES AND FINANCIAL HIGHLIGHTS
All income, expenses (other than the Class B distribution fee), realized
and unrealized gains (losses) are allocated to each class proportionately on a
daily basis for purposes of determining the net asset value of each class.
Class B per share data and ratios are calculated by adjusting the expense
and net investment income per share data and ratios for the Fund for the entire
period by the distribution fee applicable to Class B shares only.
-------------------------------------------------------------------------------
FEDERAL INCOME TAXES
Consistent with the Fund's policy to qualify as a regulated investment
company and to distribute all of its taxable and tax-exempt income, no federal
income tax has been accrued.
-------------------------------------------------------------------------------
INTEREST INCOME, DEBT DISCOUNT AND PREMIUM
Interest income is recorded on the accrual basis. Original issue discount
is accreted to interest income over the life of a security with a corresponding
increase in the cost basis; market discount is not accreted. Premium is
amortized against interest income with a corresponding decrease in the cost
basis.
-------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
The Fund declares and records distributions daily and pays monthly.
The amount and character of income and gains to be distributed are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles.
-------------------------------------------------------------------------------
DEFERRED ORGANIZATION EXPENSES
The Fund incurred $17,793 of expenses in connection with its organization,
initial registration with the Securities and Exchange Commission and with
various states, and the initial public offering of its shares. These expenses
were deferred and are being amortized on a straight-line basis over five years.
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS - continued
===============================================================================
NOTE 2. FEES AND COMPENSATION PAID TO AFFILIATES
MANAGEMENT FEE
Colonial Management Associates, Inc. (the Adviser) is the investment
adviser of the Fund and furnishes accounting and other services and office
facilities for a monthly fee. Through June 30, 1994, this fee was 0.60%
annually of the Fund's average net assets. Effective July 1, 1994, the monthly
fee is based on each Fund's pro rata portion of the combined average net assets
of Trust V as follows:
<TABLE>
<CAPTION>
Average Net Assets Annual Fee Rate
------------------ ---------------
<S> <C>
First $1 billion 0.55%
Next $1 billion 0.50%
Over $2 billion 0.45%
</TABLE>
-------------------------------------------------------------------------------
BOOKKEEPING FEE
The Adviser provides bookkeeping and pricing services for $27,000 per year
plus 0.035% of the Fund's average net assets over $50 million.
-------------------------------------------------------------------------------
TRANSFER AGENT
Colonial Investors Service Center, Inc. (the Transfer Agent), an affiliate
of the Adviser, provides shareholder services for a monthly fee equal to 0.14%
annually of the Fund's average net assets and receives a reimbursement for
certain out of pocket expenses.
-------------------------------------------------------------------------------
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES
The Adviser, through Colonial Investment Services, Inc. (the Distributor),
is the Fund's principal underwriter. During the year ended January 31, 1995,
the Distributor retained net underwriting discounts of $33,572 on sales of the
Fund's Class A shares and received contingent deferred sales charges (CDSC) of
$198,104 on Class B share redemptions.
The Fund has adopted a 12b-1 plan which requires the payment of a
distribution fee to the Distributor equal to 0.75% annually of the average net
assets attributable to Class B shares. The plan also requires payment by the
Fund of a service fee, applicable to both Class A and Class B, to the
Distributor as follows:
<TABLE>
<CAPTION>
Valuation of shares Annual
outstanding on the 20th of Fee
each month which were issued Rate
-------------------------------------------------- ------
<S> <C>
Prior to November 30, 1994........................ 0.10%
On or after December 1, 1994...................... 0.25%
</TABLE>
The CDSC and the fees received from the 12b-1 plan are used principally as
repayment to the Distributor for amounts paid by the Distributor to dealers who
sold such shares.
-------------------------------------------------------------------------------
EXPENSE LIMITS
The Adviser has agreed, until further notice to waive fees and bear certain
Fund expenses to the extent that total expenses (exclusive of service and
distribution fees, brokerage commissions, interest, taxes, and extraordinary
expenses, if any) exceed 0.30% annually of the Fund's average net assets.
-------------------------------------------------------------------------------
OTHER
The Fund pays no compensation to its officers, all of whom are employees of
the Adviser.
The Fund's Trustees may participate in a deferred compensation plan which
may be terminated at any time. Obligations of the plan will be paid solely out
of the Fund's assets.
-------------------------------------------------------------------------------
NOTE 3. PORTFOLIO INFORMATION
During the year ended January 31, 1995, purchases and sales of
investments, other than short-term obligations, were $38,486,847 and
$33,660,362, respectively.
Unrealized appreciation (depreciation) at January 31, 1995, based on cost
of investments for both financial statement and federal income tax purposes was:
<TABLE>
<S> <C>
Gross unrealized appreciation................................ $ 1,479,155
Gross unrealized depreciation................................ (5,411,748)
-----------
Net unrealized depreciation............................. $(3,932,593)
===========
</TABLE>
10
<PAGE>
NOTES TO FINANCIAL STATEMENTS - continued
===============================================================================
CAPITAL LOSS CARRYFORWARDS
At January 31, 1995, capital loss carryforwards available (to the extent
provided in regulations) to offset future realized gains were approximately as
follows:
<TABLE>
<CAPTION>
Year of Capital loss
expiration carryforward
---------- ------------
<S> <C>
2003...... $2,374,000
</TABLE>
Expired capital loss carryforwards, if any, are recorded as a reduction of
capital paid in.
To the extent loss carryforwards are used to offset any future realized
gains, it is unlikely that such gains would be distributed since they may be
taxable to shareholders as ordinary income.
-------------------------------------------------------------------------------
OTHER
There are certain risks arising from geographic concentration in any state.
Certain revenue or tax related events in a state may impair the ability of
certain issuers of municipal securities to pay principal and interest on their
obligations.
The Fund may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
The Fund sells municipal and Treasury bond futures contracts to manage
overall portfolio interest rate exposure and not for trading purposes. The use
of futures contracts involves certain risks, which include (1) imperfect
correlation between the price movement of the contracts and the underlying
securities, (2) inability to close out positions due to different trading hours,
or the temporary absence of a liquid market, for either the contract or the
underlying securities, or (3) an inaccurate prediction by the Adviser of the
future direction of interest rates. Any of these risks may involve amounts
exceeding the initial or variation margin recorded in the Fund's Statement of
Assets and Liabilities at any given time.
-------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION (UNAUDITED)
All of the distributions will be treated as exempt income for federal
income tax purposes.
-------------------------------------------------------------------------------
11
<PAGE>
===============================================================================
<TABLE>
FINANCIAL HIGHLIGHTS
Selected data for a share of each class outstanding throughout each period are as follows:
-----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
PERIOD ENDED
YEAR ENDED JANUARY 31 JANUARY 31
------------------------------------------------------------------- ------------
1995 1994 1993 1992
-------------------- ------------------- ------------------- -----------
CLASS A CLASS B CLASS A CLASS B CLASS A CLASS B(b) CLASS A(c)
------- ------- -------- ------- ------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value - Beginning
of period................................... $ 7.890 $ 7.890 $ 7.420 $ 7.420 $ 7.190 $ 7.200 $ 7.140
------- ------- -------- ------- ------- ------- -------
Income (loss) from investment operations:
Net investment income (a)................... 0.418 0.363 0.429 0.372 0.449 0.256 0.118
Net realized and
unrealized gain (loss) on investments..... (0.809) (0.809) 0.465 0.465 0.270 0.257 0.046
------- ------- -------- ------- ------- ------- -------
Total from investment operations.......... (0.391) (0.446) 0.894 0.837 0.719 0.513 0.164
------- ------- -------- ------- ------- ------- -------
Less distributions declared to shareholders:
From net investment income.................. (0.418) (0.363) (0.424) (0.367) (0.452) (0.256) (0.114)
In excess of net investment
income.................................... -- -- -- -- (0.002) (0.002) --
(0.001) (0.001) -- -- (0.021) (0.021) --
From net realized gains..................... -- -- -- -- (0.014) (0.014) --
In escess of net realized gains............. ------- ------- -------- ------- ------- ------- -------
Total from distributions
declared to shareholders.................. (0.419) (0.364) (0.424) (0.367) (0.489) (0.293) (0.114)
------- ------- -------- ------- ------- ------- -------
Net asset value - End of period............... $ 7.080 $ 7.080 $ 7.890 $ 7.890 $ 7.420 $ 7.420 $ 7.190
------- ------- -------- ------- ------- ------- -------
Total return(d)(e)............................ (4.85)% (5.57)% 12.30% 11.49% 10.34% 7.23%(g) 2.31%(g)
------- ------- -------- ------- ------- ------- -------
Ratios to average net assets
Expenses.................................... 0.32%(f) 1.07%(f) 0.22% 0.97% -- 0.75%(h) --
Net investment income....................... 5.81% 5.06% 5.48% 4.73% 6.00% 5.25%(h) 4.68%(h)
Fees and expenses waived
or borne by the adviser................... 0.55% 0.55% 0.65% 0.65% 0.90% 0.90% 1.32%(h)
Portfolio turnover............................ 22% 22% 5% 5% 4% 4% 53%(h)
Net assets at end of period (000)............. $74,616 $73,580 $91,436 $ 71,791 $63,126 $27,839 $12,349
<FN>
(a) Net of fees and expenses
borne by the adviser which
amounted to.............................. $0.039 $ 0.039 $ 0.051 $ 0.051 $ 0.067 $ 0.042 $ 0.033
(b) Class B shares were initially offered on June 8, 1992. Per share amounts reflect
activity from that date.
(c) The Fund commenced investment operations on November 1, 1991.
(d) Total return at net asset value assuming all distributions reinvested and no initial sales
charge or CDSC.
(e) Had the adviser not waived or reimbursed a portion of expenses total return would
(f) Includes service fee since its inception on December 1, 1994, of 0.02% (not annualized).
(g) Not annualized.
(h) Annualized.
</TABLE>
12
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
===============================================================================
TO THE TRUSTEES OF COLONIAL TRUST V AND THE SHAREHOLDERS OF COLONIAL
CONNECTICUT TAX-EXEMPT FUND
In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Colonial Connecticut Tax-Exempt
Fund (a series of Colonial Trust V) at January 31, 1995, the results of its
operations, the changes in its net assets and the financial highlights for the
periods indicated, in conformity with generally accepted accounting principles.
These financial statements and the financial highlights (hereafter referred to
as "financial statements") are the responsibility of the Fund's management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included
confirmation of portfolio positions at January 31, 1995 by correspondence with
the custodian and brokers, provide a reasonable basis for the opinion expressed
above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
March 10, 1995
Part B of Post-Effective Amendment No. 6 filed with the
Commission on August 12, 1991 (Colonial Texas Tax-Exempt Fund) is
incorporated herein in its entirety by reference.
<PAGE>
INVESTMENT PORTFOLIO (IN THOUSANDS) JANUARY 31, 1995
===============================================================================
<TABLE>
<CAPTION>
MUNICIPAL BONDS - 99.6% PAR VALUE
---------------------------------------------------------------------------
<S> <C> <C>
EDUCATION - 5.1%
Dade County Educational Facilities
Authority,
5.000% 10/01/16(a) . . . . . . . . $ 1,500 $ 1,247
North Miami, Johnson & Wales
University Project, Series 1993 B,
6.100% 04/01/13. . . . . . . . . . 1,000 895
State Board of Education,
Series D,
5.250% 06/01/23. . . . . . . . . . 1,000 844
-------
2,986
----------------------------------------------------------------------------
ELECTRIC - 23.8%
Alachua Utilities, Series 1993,
5.750% 04/01/20(a) . . . . . . . . 1,000 919
Fort Pierce,
Utilities Authority Revenue,
5.250% 10/01/16. . . . . . . . . . 1,500 1,299
Hillsborough County,
County Center Project, Series 19,
6.750% 07/01/22. . . . . . . . . . 750 765
Jacksonville Electric Authority:
Bulk Power Supply System,
Scherer 4, Series 1993-A,
5.250% 10/01/21. . . . . . . . . . 1,000 852
Series 1993-A:
5.250% 10/01/28. . . . . . . . . . 2,000 1,695
5.750% 10/01/12. . . . . . . . . . 150 140
Martin County Industrial
Development Authority, Indiantown
Cogeneration Project,
7.875% 12/15/25. . . . . . . . . . 500 518
Orlando Utilities Commission:
Series 1992-A,
6.000% 10/01/20. . . . . . . . . . 150 142
Series 1993-B,
5.000% 10/01/23. . . . . . . . . . 1,700 1,390
5.250% 10/01/23. . . . . . . . . . 1,000 853
6.750% 10/01/17. . . . . . . . . . 1,000 1,065
Sarasota County, Utility System,
6.500% 10/01/22. . . . . . . . . . 750 763
Sebastian, Series 1993, Utility System,
5.450% 10/01/23. . . . . . . . . . 1,155 1,012
State Municipal Power Agency:
St. Lucie Project,
5.250% 10/01/21(a) . . . . . . . . 1,000 854
Series 1993,
5.100% 10/01/25(a) . . . . . . . . 2,000 1,660
-------
13,927
----------------------------------------------------------------------------
GENERAL OBLIGATIONS - 3.1%
Florida Board of Education,
7.250% 06/01/23. . . . . . . . . . 1,000 1,061
State Board of Education:
Series 1987 A,
5.000% 06/01/17. . . . . . . . . . 150 125
Series 1992 C,
5.875% 06/01/23. . . . . . . . . . 650 609
-------
1,795
----------------------------------------------------------------------------
HOSPITALS & HEALTH CARE - 6.5%
Alachua County Health Facilities
Authority, Shands Hospital,
5.750% 12/01/15(a) . . . . . . . . 500 462
Brevard County Health Facilities
Authority, Holmes Regional Medical
Center,
5.750% 10/01/13. . . . . . . . . . 1,000 897
Dade County Health Facility
Authority, Baptist Hospital,
5.250% 05/15/21. . . . . . . . . . 750 628
Palm Beach County Health
Facilities Authority,
Good Samaritan Health System,
6.300% 10/01/22. . . . . . . . . . 2,000 1,845
-------
3,832
----------------------------------------------------------------------------
HOUSING - 2.5%
MULTI-FAMILY - 1.7%
Clearwater,
Hampton Apartments,
8.250% 05/01/24. . . . . . . . . . 575 589
Hialeah Housing Authority,
Series 1991,
9.500% 11/01/21. . . . . . . . . . 200 202
State Housing Finance Agency,
Windsong Apartments, Series 1993-C,
9.250% 01/01/19. . . . . . . . . . 200 195
-------
986
SINGLE-FAMILY - 0.8%
Duval County Housing Finance
Authority,
Series 1988-A,
7.875% 09/01/09. . . . . . . . . . 430 455
----------------------------------------------------------------------------
IN-SUBSTANCE DEFEASED (B) - 2.4%
Jacksonville Electric Authority,
Bulk Power Supply System,
Scherer 4, Series 1991-A,
6.750% 10/01/16. . . . . . . . . . 1,000 1,074
</TABLE>
See notes to investment portfolio.
3
<PAGE>
INVESTMENT PORTFOLIO - CONTINUED
===============================================================================
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
-------------------------------------------------------------------------
<S> <C> <C>
IN-SUBSTANCE DEFEASED (B) - CONT.
State Turnpike Authority,
Department of Transportation,
Series 1992-A,
6.350% 07/01/22(a) . . . . . . . . $ 325 $ 343
--------
1,417
-------------------------------------------------------------------------
NURSING HOMES - 1.9%
Beverly Enterprises:
Broward County,
9.800% 11/01/10. . . . . . . . . . 120 131
Collier County Industrial
Development Auth., Series 1991,
10.75% 03/01/03. . . . . . . . . . 185 213
Escambia County, Series 1985 I,
9.800% 06/01/11. . . . . . . . . . 120 131
Leon County, Series 1985,
9.800% 06/01/11. . . . . . . . . . 120 132
Palm Beach County:
Hillcrest Manor Project,
10.25% 12/01/16. . . . . . . . . . 200 209
Series 1984-1,
10.00% 06/01/11. . . . . . . . . . 195 215
Volusia County, Industrial
Development Auth., Series 1987,
9.800% 12/01/07. . . . . . . . . . 60 63
--------
1,094
-------------------------------------------------------------------------
POLLUTION CONTROL REVENUE - 1.4%
Escambia County,
Champion International, Series 1993,
5.875% 06/01/22. . . . . . . . . . 1,000 853
-------------------------------------------------------------------------
PUBLIC FACILITY & IMPROVEMENT - 14.9%
Dade County Professional Sports
Franchise Facility, Series 1992-B,
6.000% 10/01/17(a) . . . . . . . . 1,000 960
Hernando County, Capital Improvements,
Series 1993,
5.750% 02/01/14. . . . . . . . . . 250 234
Jacksonville, Gator Bowl Project,
5.500% 10/01/19(a) . . . . . . . . 2,625 2,333
Jacksonville Port Authority,
Series 1993,
5.250% 10/01/17. . . . . . . . . . 2,000 1,695
Orange County, Series 1993-B,
5.375% 01/01/24. . . . . . . . . . 2,000 1,725
Palm Beach County Criminal Justice
Facility, Series 1993,
5.375% 06/01/11. . . . . . . . . . 1,250 1,141
State Department of Correction,
Okeechobee Correctional Facility,
6.250% 03/01/15. . . . . . . . . . 625 625
--------
8,713
-------------------------------------------------------------------------
REDEVELOPMENT AGENCIES & TAX
ALLOCATION - 6.9%
Jacksonville, Series 1993,
(c) 10/01/09. . . . . . . . . . 525 211
5.750% 10/01/20. . . . . . . . . . 200 180
Lake County,
NRG Recovery Group, Series 1993-A,
5.950% 10/01/13. . . . . . . . . . 1,050 898
Orange County Tourist Development,
Series 1994-B,
5.750% 10/01/19. . . . . . . . . . 2,500 2,306
Pasco County, Series 1992,
5.750% 08/01/13. . . . . . . . . . 500 471
--------
4,066
-------------------------------------------------------------------------
TRANSPORTATION - 18.6%
Dade County Aviation Department,
Miami International Airport,
Series 1992-B,
6.600% 10/01/22(a) . . . . . . . . 1,000 1,008
Greater Orlando Aviation Authority,
Orlando Airport Facility,
Series 1992-A,
6.500% 10/01/12. . . . . . . . . . 500 506
Hillsborough County Aviation
Authority, Tampa International
Airport, Series D,
5.375% 10/01/23(a) . . . . . . . . 1,250 1,053
Lee County, Airport,
Series 1992-A,
5.500% 10/01/10(a) . . . . . . . . 1,000 936
Orlando & Orange County Expressway
Authority:
Series 1993,
5.950% 07/01/23. . . . . . . . . . 2,000 1,835
Series 1993-A,
5.250% 07/01/19. . . . . . . . . . 2,000 1,710
Osceola County, Osceola
Parkway Project,
6.100% 04/01/17. . . . . . . . . . 2,225 2,183
State Turnpike Authority,
Department of Transportation:
Series 1993-A,
5.000% 07/01/19(a) . . . . . . . . 2,000 1,645
--------
10,876
-------------------------------------------------------------------------
WATER & SEWER - 12.5%
Indian River, Sewer Improvements,
Series 1993 A,
5.500% 09/01/11. . . . . . . . . . 965 895
Key West Sewer System, Series 1993,
5.700% 10/01/20. . . . . . . . . . 500 456
Lakeland, Wastewater Improvements,
5.500% 10/01/16. . . . . . . . . . 755 681
</TABLE>
See notes to investment portfolio.
4
<PAGE>
INVESTMENT PORTFOLIO - CONTINUED
===============================================================================
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
--------------------------------------------------------------------------
<S> <C> <C>
WATER & SEWER - CONT.
Ocoee, Series 1993,
5.750% 10/01/17. . . . . . . . . . $ 500 $ 465
Port Orange, Series 1993,
5.250% 10/01/21(a) . . . . . . . . 1,000 854
Reedy Creek Improvement District,
Series 1,
5.000% 10/01/19. . . . . . . . . . 1,000 828
Seacoast Utility Authority,
Series 1989 A,
5.500% 03/01/15. . . . . . . . . . 1,900 1,727
Seminole County,
6.000% 10/01/19. . . . . . . . . . 1,500 1,447
---------
7,353
--------------------------------------------------------------------------
Total investments (cost $60,627)(d) 58,353
--------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS - 1.5%
--------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES (E)
Palm Beach County Water & Sewer
Systems,
3.950% 10/01/11. . . . . . . . . . 300 300
Pinellas County Health Facilities
Authority,
3.950% 12/01/15. . . . . . . . . . 600 600
-------------------------------------------------------------------------
Total short-term obligations 900
-------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES, NET - (1.1)% (639)
-------------------------------------------------------------------------
NET ASSETS - 100% $ 58,614
-------------------------------------------------------------------------
</TABLE>
Notes to investment portfolio:
(a) These securities, or a portion thereof, with a total market value of
$13,094 are being used to collateralize open futures contracts.
(b) The Fund has been informed that the issuer has placed direct obligations of
the U.S. Government in an irrevocable trust, solely for the payment of the
interest and principal.
(c) Zero coupon bond.
(d) Cost for federal income tax purposes is $60,643.
(e) Variable rate demand notes are considered short-term obligations. Interest
rates change periodically on specified dates. These securities are payable
on demand and are secured by either letters of credit or other credit
support agreements from banks. The rates listed are as of January 31, 1995.
Short futures contracts open at January 31, 1995:
<TABLE>
<CAPTION>
Par value
covered Unrealized
by Expiration depreciation
Type contracts month at 1/31/95
----------------------------------------------------------------------------
<S> <C> <C> <C>
Municipal bond $ 11,300 March $ 405
Treasury bond $ 1,500 March $ 34
----------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
5
<PAGE>
FINANCIAL STATEMENTS
===============================================================================
STATEMENT OF ASSETS & LIABILITIES
January 31, 1995
(in thousands except for per share amounts and footnote)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Investments at value (cost $60,627)................................ $ 58,353
Short-term investments............................................. 900
---------
59,253
Receivable for:
Interest.................................... $ 1,040
Fund shares sold............................ 594
Investments sold............................ 338
Deferred organization expenses................. 29
Other.......................................... 27 2,028
------- ---------
Total assets.............................................. 61,281
LIABILITIES
Payable for:
Fund shares repurchased..................... 1,217
Investments purchased....................... 1,084
Distributions............................... 283
Variation margin on futures................. 70
Accrued:
Deferred Trustees fees ..................... 1
Other....................................... 12
-------
Total liabilities......................................... 2,667
---------
NET ASSETS ........................................................ $ 58,614
---------
Net asset value & redemption price per share -
Class A ($27,498/3,871)........................................ $7.10
---------
Maximum offering price per share - Class A
($7.10/0.9525).................................................. $7.45*
---------
Net asset value & offering price per share -
Class B ($31,116/4,382)........................................ $7.10
---------
COMPOSITION OF NET ASSETS
Capital paid in................................................. $ 62,779
Undistributed net investment income............................. 169
Accumulated net realized loss................................... (1,621)
Net unrealized depreciation on:
Investments.................................................. (2,274)
Open futures contracts....................................... (439)
---------
$ 58,614
---------
</TABLE>
STATEMENT OF OPERATIONS
Year ended January 31, 1995
(in thousands)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT INCOME
Interest........................................................... $ 3,434
EXPENSES
Management fee................................. $ 316
Service fee ................................... 9
Distribution fee - Class B..................... 236
Transfer agent................................. 89
Bookkeeping fee................................ 29
Trustees fees.................................. 12
Custodian fee.................................. 4
Audit fee...................................... 16
Legal fee...................................... 4
Registration fees.............................. 26
Reports to shareholders........................ 11
Amortization of deferred
organization expenses........................ 10
Other.......................................... 8
-------
770
Fees and expenses waived
or borne by the adviser...................... (411) 359
------- ---------
Net investment income...................................... 3,075
---------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON PORTFOLIO POSITIONS
Net realized gain (loss) on:
Investments.................................. (1,981)
Closed futures contracts..................... 657
-------
Net realized loss.............................................. (1,324)
Net unrealized depreciation
during the period on:
Investments.................................. (4,500)
Open futures contracts....................... (281)
-------
Net unrealized depreciation.................................... (4,781)
---------
Net loss................................................... (6,105)
Net decrease in net assets from ---------
operations....................................................... $ (3,030)
---------
</TABLE>
* On sales of $50,000 or more the offering price is reduced.
See notes to financial statements.
6
<PAGE>
FINANCIAL STATEMENTS - CONTINUED
===============================================================================
STATEMENT OF CHANGES IN NET ASSETS
(in thousands)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year ended January 31
------------------------
1995 1994 (a)
-------- --------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income................................................... $ 3,075 $ 1,946
Net realized loss....................................................... (1,324) (297)
Net unrealized appreciation (depreciation).............................. (4,781) 2,068
------- -------
Net increase (decrease) from operations.......................... (3,030) 3,717
Distributions
From net investment income - Class A.................................... (1,413) (884)
From net investment income - Class B.................................... (1,574) (1,000)
------- -------
(6,017) 1,833
------- -------
Fund share transactions
Receipts for shares sold - Class A...................................... 14,281 26,815
Value of distributions reinvested - Class A............................. 540 344
Cost of shares repurchased - Class A.................................... (8,635) (4,172)
------- -------
6,186 22,987
------- -------
Receipts for shares sold - Class B...................................... 8,694 32,119
Value of distributions reinvested - Class B............................. 579 394
Cost of shares repurchased - Class B.................................... (6,143) (2,018)
------- -------
3,130 30,495
------- -------
Net increase from Fund share transactions........................ 9,316 53,482
------- -------
Total increase.......................................... 3,299 55,315
NET ASSETS
Beginning of period..................................................... 55,315
------- -------
End of period (including undistributed net investment
income of $169 and $71, respectively)................................. $58,614 $55,315
======= =======
NUMBER OF FUND SHARES
Sold - Class A.......................................................... 2,002 3,495
Issued for distributions reinvested - Class A........................... 75 44
Repurchased - Class A................................................... (1,209) (536)
------- -------
868 3,003
------- -------
Sold - Class B.......................................................... 1,192 4,186
Issued for distributions reinvested - Class B........................... 81 51
Repurchased - Class B................................................... (868) (260)
------- -------
405 3,977
------- -------
Net increase in shares outstanding............................... 1,273 6,980
Outstanding at
Beginning of period................................................. 6,980
------- -------
End of period....................................................... 8,253 6,980
======= =======
</TABLE>
(a) The Fund commenced investment operations on February 1, 1993.
See notes to financial statements.
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
NOTE 1. ACCOUNTING POLICIES
Colonial Florida Tax-Exempt Fund (the Fund), a series of Colonial Trust V,
is a Massachusetts business trust, registered under the Investment Company Act
of 1940, as amended, as a non-diversified, open-end, management investment
company. The Fund may issue an unlimited number of shares. The Fund offers Class
A shares sold with a front-end sales charge and Class B shares which are subject
to an annual distribution fee and a contingent deferred sales charge. Class B
shares will convert to Class A shares when they have been outstanding
approximately eight years. The following significant accounting policies are
consistently followed by the Fund in the preparation of its financial statements
and conform to generally accepted accounting principles.
--------------------------------------------------------------------------------
SECURITY VALUATION AND TRANSACTIONS
Debt securities generally are valued by a pricing service based upon market
transactions for normal, institutional-size trading units of similar securities.
When management deems it appropriate, an over- the-counter or exchange bid
quotation is used.
Futures contracts are valued based on the difference between the last sale
price and the opening price of the contract.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
Portfolio positions which cannot be valued as set forth above are valued at
fair value under procedures approved by the Trustees.
Security transactions are accounted for on the date the securities are
purchased or sold.
Cost is determined and gains and losses are based upon the specific
identification method for both financial statement and federal income tax
purposes.
The Fund may trade securities on other than normal settlement terms. This
may increase the risk if the other party to the transaction fails to deliver and
causes the Fund to subsequently invest at less advantageous prices.
--------------------------------------------------------------------------------
DETERMINATION OF CLASS NET ASSET VALUES AND FINANCIAL HIGHLIGHTS
All income, expenses (other than the Class B distribution fee), realized
and unrealized gains (losses) are allocated to each class proportionately on a
daily basis for purposes of determining the net asset value of each class.
Class B per share data and ratios are calculated by adjusting the expense
and net investment income per share data and ratios for the Fund for the entire
period by the distribution fee applicable to Class B shares only.
--------------------------------------------------------------------------------
FEDERAL INCOME TAXES
Consistent with the Fund's policy to qualify as a regulated investment
company and to distribute all of its taxable and tax-exempt income, no federal
income tax has been accrued.
--------------------------------------------------------------------------------
DEFERRED ORGANIZATION EXPENSES
The Fund incurred $47,925 of expenses in connection with its organization,
initial registration with the Securities and Exchange Commission and with
various states, and the initial public offering of its shares. These expenses
were deferred and are being amortized on a straight-line basis over five years.
--------------------------------------------------------------------------------
INTEREST INCOME, DEBT DISCOUNT AND PREMIUM
Interest income is recorded on the accrual basis. Original issue discount
is accreted to interest income over the life of a security with a corresponding
increase in the cost basis; market discount is not accreted. Premium is
amortized against interest income with a corresponding decrease in the cost
basis.
--------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
The Fund declares and records distributions daily and pays monthly.
The amount and character of income and gains to be distributed are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles.
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS - continued
================================================================================
NOTE 2. FEES AND COMPENSATION PAID TO AFFILIATES
MANAGEMENT FEE
Colonial Management Associates, Inc. (the Adviser) is the investment
adviser of the Fund and furnishes accounting and other services and office
facilities for a monthly fee. Through June 30, 1994, this fee was 0.60% annually
of the Fund's average net assets. Effective July 1, 1994, the monthly fee is
based on each Fund's pro rata portion of the combined average net assets of
Trust V as follows:
<TABLE>
<CAPTION>
Average Net Assets Annual Fee Rate
--------------------- -------------------
<S> <C>
First $1 billion 0.55%
Next $1 billion 0.50%
Over $2 billion 0.45%
</TABLE>
--------------------------------------------------------------------------------
BOOKKEEPING FEE
The Adviser provides bookkeeping and pricing services for $27,000 per year
plus 0.035% of the Fund's average net assets over $50 million.
--------------------------------------------------------------------------------
TRANSFER AGENT
Colonial Investors Service Center, Inc. (the Transfer Agent), an affiliate
of the Adviser, provides shareholder services for a monthly fee equal to 0.14%
annually of the Fund's average net assets and receives a reimbursement for
certain out of pocket expenses.
--------------------------------------------------------------------------------
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES
The Adviser, through Colonial Investment Services, Inc. (the
Distributor), is the Fund's principal underwriter. During the year ended
January 31, 1995, the Distributor retained net underwriting discounts of
$12,194 on sales of the Fund's Class A shares and received contingent
deferred sales charges (CDSC) of $139,108 on Class B share redemptions.
The Fund has adopted a 12b-1 plan which requires the payment of a
distribution fee to the Distributor equal to 0.75% annually of the average
net assets attributable to Class B shares. Effective December 1, 1994, the
plan was amended to include payment by the Fund of a service fee applicable
to both Class A and Class B, to the Distributor as follows:
<TABLE>
<CAPTION>
Valuation of shares Annual
outstanding on the 20th of Fee
each month which were issued Rate
------------------------------------------------ ------
<S> <C>
Prior to November 30, 1994 .................... 0.10%
On or after December 1, 1994 .................. 0.25%
</TABLE>
The CDSC and the fees received from the 12b-1 plan are used principally as
repayment to the Distributor for amounts paid by the Distributor to dealers who
sold such shares.
--------------------------------------------------------------------------------
EXPENSE LIMITS
The Adviser has agreed, until further notice to waive fees and bear certain
Fund expenses to the extent that total expenses (exclusive of service and
distribution fees, brokerage commissions, interest, taxes, and extraordinary
expenses, if any) exceed 0.20% annually of the Fund's average net assets.
--------------------------------------------------------------------------------
OTHER
The Fund pays no compensation to its officers, all of whom are employees of
the Adviser.
The Fund's Trustees may participate in a deferred compensation plan which
may be terminated at any time. Obligations of the plan will be paid solely out
of the Fund's assets.
--------------------------------------------------------------------------------
NOTE 3. PORTFOLIO INFORMATION
During the year ended January 31, 1995, purchases and sales of
investments, other than short-term obligations, were $34,213,245 and
$24,223,568, respectively. Unrealized appreciation (depreciation) at January
31, 1995, based on cost of investments
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS - continued
================================================================================
for federal income tax purposes was:
<TABLE>
<CAPTION>
<S> <C>
Gross unrealized appreciation ............. $ 627,767
Gross unrealized depreciation ............. (2,917,869)
------------
Net unrealized depreciation ............. $ (2,290,102)
============
</TABLE>
--------------------------------------------------------------------------------
CAPITAL LOSS CARRYFORWARDS
At January 31, 1995, capital loss carryforwards available (to the extent
provided in regulations) to offset future realized gains were approximately as
follows:
<TABLE>
<CAPTION>
Year of Capital loss
expiration carryforward
---------- ------------
<S> <C>
2002 ..... $ 22,000
2003 ..... 557,000
$579,000
</TABLE>
Expired capital loss carryforwards, if any, are recorded as a reduction of
capital paid in.
To the extent loss carryforwards are used to offset any future realized
gains, it is unlikely that such gains would be distributed since they may be
taxable to shareholders as ordinary income.
--------------------------------------------------------------------------------
OTHER
There are certain risks arising from geographic concentration in any state.
Certain revenue or tax related events in a state may impair the ability of
certain issuers of municipal securities to pay principal and interest on their
obligations.
The Fund may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
The Fund sells municipal and Treasury bond futures contracts to manage
overall portfolio interest rate exposure and not for trading purposes. The use
of futures contracts involves certain risks, which include (1) imperfect
correlation between the price movement of the contracts and the underlying
securities, (2) inability to close out positions due to different trading hours,
or the temporary absence of a liquid market, for either the contract or the
underlying securities, or (3) an inaccurate prediction by the Adviser of the
future direction of interest rates. Any of these risks may involve amounts
exceeding the initial or variation margin recorded in the Fund's Statement of
Assets and Liabilities at any given time.
10
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
Selected data for a share of each class outstanding throughout each period are
as follows:
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED JANUARY 31
----------------------------------------------------
1995 1994 (B)
--------------------------- ---------------------
CLASS A CLASS B CLASS A CLASS B
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net asset value - Beginning of period ........................... $ 7.930 $ 7.930 $ 7.500 $ 7.500
------- ------- ------- -------
Income (loss) from investment operations:
Net investment income (a) .................................... 0.423 0.369 0.434 0.378
Net realized and unrealized gain (loss) on investments ....... (0.839) (0.839) 0.420 0.420
------- ------- ------- -------
Total from investment operations ........................... (0.416) (0.470) 0.854 0.798
------- ------- ------- -------
Less distributions declared to shareholders:
From net investment income ................................... (0.414) (0.360) (0.424) (0.368)
------- ------- ------- -------
Net asset value - End of period ................................. $ 7.100 $ 7.100 $ 7.930 $ 7.930
------- ------- ------- -------
Total return (c)(d).............................................. (5.11)% (5.83)% 11.66% 10.85%
------- ------- ------- -------
Ratios to average net assets
Expenses ..................................................... 0.22%(e) 0.97%(e) 0.05% 0.80%
Net investment income ........................................ 5.92% 5.17% 5.40% 4.65%
Fees and expenses waived or borne by the adviser ............. 0.73% 0.73% 0.88% 0.88%
Portfolio turnover 45% 45% 19% 19%
Net assets at end of period (000) ............................... $27,498 $31,116 $23,802 $31,513
(a) Net of fees and expenses waived or borne by the adviser
which amounted to........................................... $ 0.052 $ 0.052 $ 0.071 $ 0.071
(b) The Fund commenced investment operations on February 1, 1993.
(c) Total return at net asset value assuming all distributions
reinvested and no initial sales charge or CDSC.
(d) Had the adviser not waived or reimbursed a portion of
expenses total return would have been reduced.
(e) Includes service fee since its inception on December 1, 1994,
of 0.02% (not annualized).
</TABLE>
--------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION (UNAUDITED)
All of the distributions will treated as exempt income for federal income
tax purposes.
--------------------------------------------------------------------------------
11
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE TRUSTEES OF COLONIAL TRUST V AND THE SHAREHOLDERS OF COLONIAL FLORIDA
TAX-EXEMPT FUND
In our opinion, the accompanying statement of assets and liabilities,
including the investment portfolio, and the related statements of operations and
of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Colonial Florida Tax-Exempt Fund (a
series of Colonial Trust V) at January 31, 1995, the results of its operations,
the changes in its net assets and the financial highlights for the periods
indicated, in conformity with generally accepted accounting principles. These
financial statements and the financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of portfolio positions
at January 31, 1995 by correspondence with the custodian and brokers, and the
application of alternative auditing procedures where confirmations from brokers
were not received, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
March 10, 1995
<PAGE>
INVESTMENT PORTFOLIO (in thousands) JANUARY 31, 1995
================================================================================
<TABLE>
<CAPTION>
MUNICIPAL BONDS - 99.0% PAR VALUE
--------------------------------------------------------------------------
<S> <C> <C>
CONSUMER PRODUCTS - 0.7%
State Industrial Finance Agency,
House of Bianchi, Inc.,
8.750% 06/01/18. . . . . . . . . $ 1,785 $ 1,747
--------------------------------------------------------------------------
EDUCATION - 17.9%
Health and Educational Facilities:
Amherst College,
Series E,
6.800% 11/01/21. . . . . . . . . 500 512
Bentley College,
Series I,
6.125% 07/17/17. . . . . . . . . 1,250 1,194
Berklee College of Music,
Series C,
6.875% 10/01/21. . . . . . . . . 1,000 1,030
Boston College,
Series K:
5.250% 06/01/18. . . . . . . . . 6,000 5,100
5.250% 06/01/23. . . . . . . . . 3,850 3,196
Boston University, RIB, Series 1991-L,
(variable rate)
9.000% 10/01/31 1,000 1,028
Community Colleges Program,
Series A,
6.600% 10/01/22. . . . . . . . . 1,250 1,242
Harvard University:
6.250% 04/01/20(a). . . . . . . 9,250 9,296
Series 1991-M,
5.500% 12/01/15(a). . . . . . . 5,190 4,820
Nauset Regional School District:
Series A:
6.400% 06/15/09. . . . . . . . . 220 222
6.400% 06/15/10. . . . . . . . . 220 222
Series B:
6.400% 09/15/09. . . . . . . . . 260 263
6.400% 09/15/10. . . . . . . . . 260 262
Southern Berkshire Regional
School District,
7.000% 04/15/11. . . . . . . . . 500 527
State College Building Authority:
Series A,
7.500% 05/01/14. . . . . . . . . 1,825 2,085
Southeastern University,
Series 1986-A,
7.800% 05/01/16. . . . . . . . . 650 681
State Industrial Finance Agency:
Babson College,
Series 1992-A,
6.375% 10/01/09. . . . . . . . . 1,000 1,010
Brandeis University,
Series 1989-C,
6.800% 10/01/19. . . . . . . . . 1,450 1,474
Concord Academy,
Series 1991,
6.900% 09/01/21. . . . . . . . . 400 410
Emerson College,
Series 1991-A,
8.900% 01/01/18. . . . . . . . . 500 545
Milton Academy,
5.250% 09/01/19. . . . . . . . . 1,000 850
Phillips Academy,
Series 1993,
5.375% 09/01/23. . . . . . . . . 1,200 1,033
Suffolk University,
Series 1988-D,
7.700% 08/01/08. . . . . . . . . 400 435
Series 1992-B:
6.250% 07/01/12. . . . . . . . . 1,000 953
6.350% 07/01/22. . . . . . . . . 1,000 937
University of Lowell Building
Authority, Series 1987-A,
7.600% 11/01/11. . . . . . . . . 200 211
University of Massachusetts
Building Authority:
Series 1976-A,
7.500% 05/01/11. . . . . . . . . 100 111
Series 1986-A,
7.500% 05/01/11. . . . . . . . . 500 513
Series 1991-A,
7.200% 05/01/04. . . . . . . . . 400 437
Wellesley College,
5.375% 07/01/19. . . . . . . . . 3,000 2,614
Worcester Polytechnic Institute:
6.625% 09/01/17. . . . . . . . . 500 501
6.750% 09/01/11. . . . . . . . . 500 512
-------
44,226
--------------------------------------------------------------------------
ELECTRIC - 6.0%
Commonwealth of Puerto Rico,
Electric Power Authority, Series T,
5.500% 07/01/20. . . . . . . . . 5,000 4,306
Municipal Wholesale Electric
Power Supply System:
Series 1992-C,
6.625% 07/01/10. . . . . . . . . 1,435 1,457
</TABLE>
See notes to investment portfolio.
3
<PAGE>
INVESTMENT PORTFOLIO - continued
===============================================================================
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
------------------------------------------------------------------
<S> <C> <C>
ELECTRIC - CONT.
Series 1994-A:
4.404% 07/01/16. . . . . . . . . $ 4,000 $ 2,730
5.000% 07/01/17. . . . . . . . . 5,000 4,169
Series 1994-B,
5.000% 07/01/17. . . . . . . . . 2,000 1,658
State Industrial Finance Agency,
Eastern Edison Co., Series 1993,
5.875% 08/01/08. . . . . . . . . 500 452
-------
14,772
------------------------------------------------------------------
GENERAL OBLIGATIONS - 15.1%
Andover,
Lease Obligation Bonds,
Andover Old Town Hall, Series 1989,
7.700% 12/15/04. . . . . . . . . 1,255 1,366
Boston,
General Obligation Bonds,
Series 1992-A,
6.500% 07/01/12(a). . . . . . . 1,340 1,375
Commonwealth of Puerto Rico:
5.500% 07/01/08. . . . . . . . . 2,000 1,913
Series 1993,
3.785% 07/01/08(b). . . . . . . 1,000(c) 369
Series 1994,
6.500% 07/01/23. . . . . . . . . 5,000 5,000
Series 1990-A,
7.250% 06/01/96. . . . . . . . . 500 515
Fall River, General Obligation,
7.200% 06/01/10(a). . . . . . . 1,250 1,339
General Obligation Bonds,
Consolidated Loan:
Series 1990-B,
7.000% 07/01/09. . . . . . . . . 4,385 4,802
Series 1991-A,
6.000% 06/01/11. . . . . . . . . 2,600 2,554
Series 1991-B,
(d) 06/01/07. . . . . . . . . 450 219
Series 1992-A,
6.000% 06/01/13. . . . . . . . . 1,625 1,584
General Obligation Refunding Bonds:
Series 1991-A,
6.500% 08/01/11. . . . . . . . . 250 254
Series 1991-B,
6.500% 08/01/11. . . . . . . . . 2,000 2,035
Series 1991-C,
6.500% 08/01/11. . . . . . . . . 1,250 1,272
Series 1992-B,
6.500% 08/01/08. . . . . . . . . 1,000 1,038
Groveland,
Municipal Purpose Loan Bonds,
Series 1991,
6.900% 06/15/08. . . . . . . . . 250 265
Haverhill General Obligation
Municipal Purpose Loan, Series 1989,
8.200% 08/15/09. . . . . . . . . 935 1,033
Holyoke, General Obligation,
School Project Loan,
7.650% 08/01/09. . . . . . . . . 500 527
Leominster,
General Obligation Bonds,
7.500% 04/01/09(a) . . . . . . . 1,075 1,177
Lowell General Obligation Bonds,
8.400% 01/15/09. . . . . . . . . 1,000 1,140
Mansfield,
General Obligation Bonds,
6.700% 01/15/11(a) . . . . . . . 1,000 1,029
Nantucket, Series 1991,
6.800% 12/01/11. . . . . . . . . 1,000 1,042
Peabody, General Obligation Bonds:
6.900% 08/01/07. . . . . . . . . 485 517
6.950% 08/01/08. . . . . . . . . 500 533
Springfield, Series B,
7.100% 09/01/11. . . . . . . . . 2,600 2,636
Swansea, General Obligation Bonds:
6.800% 01/15/09. . . . . . . . . 250 252
6.800% 01/15/10. . . . . . . . . 125 126
6.800% 01/15/11. . . . . . . . . 210 212
Weymouth, Series 1992:
6.700% 06/15/09. . . . . . . . . 200 201
6.700% 06/15/10. . . . . . . . . 200 201
6.700% 06/15/11. . . . . . . . . 155 156
6.700% 06/15/12. . . . . . . . . 140 141
Woburn, Series 1990,
7.200% 04/01/04. . . . . . . . . 130 140
Worcester,
General Obligation Bonds,
6.900% 05/15/07(a) . . . . . . . 415 439
-------
37,402
------------------------------------------------------------------
</TABLE>
See notes to investment portfolio.
4
<PAGE>
INVESTMENT PORTFOLIO - continued
===============================================================================
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
------------------------------------------------------------------
<S> <C> <C>
HOSPITALS & HEALTH CARE - 14.0%
Boston City Hospital,
Series B,
5.750% 02/15/13. . . . . . . . . $ 2,000 $ 1,802
Health and Educational Facilities:
6.000% 07/01/23. . . . . . . . . 2,000 1,860
Addison Hospital,
Series 1993-C,
5.750% 07/01/14. . . . . . . . . 2,000 1,675
Berkshire Health Systems,
Series C,
6.000% 10/01/20. . . . . . . . . 1,000 806
Beth Israel Hospital,
Series D,
7.800% 07/01/14. . . . . . . . . 250 265
Beverly Hospital,
Series D-Lot 1,
7.300% 07/01/13. . . . . . . . . 1,000 1,040
Brigham and Women's Hospital,
Series D,
6.750% 07/01/24. . . . . . . . . 3,000 2,974
Capital Asset Program,
Series 1989-F,
7.300% 10/01/18. . . . . . . . . 750 791
Charlton Memorial Hospital,
Series B:
7.250% 07/01/07. . . . . . . . . 500 524
7.250% 07/01/13. . . . . . . . . 500 516
Children's Hospital,
Series E:
5.500% 10/01/19. . . . . . . . . 3,500 3,049
6.200% 10/01/16. . . . . . . . . 2,000 1,907
Cooley Hospital,
Series A,
7.125% 11/15/18. . . . . . . . . 1,955 1,750
Dana-Farber Cancer Institute:
Series 1985, C, D & E,
6.650% 12/01/15. . . . . . . . . 250 249
Series 1992-F,
6.000% 12/01/15. . . . . . . . . 1,000 956
Falmouth Hospital,
Series C,
5.625% 07/01/11. . . . . . . . . 500 460
Holyoke Hospital,
Series B,
6.500% 07/01/15. . . . . . . . . 1,500 1,374
Lahey Clinic, Series B,
5.375% 07/01/23. . . . . . . . . 5,100 4,335
Lowell General Hospital,
Series 1991-A,
8.400% 06/01/11. . . . . . . . . 500 541
Saint Elizabeth's Hospital of Boston,
Series E,
8.770% 08/15/21. . . . . . . . . 1,000 1,036
Spaulding Rehabilitation Hospital,
Series A,
7.625% 07/01/21. . . . . . . . . 400 421
University Hospital,
Series C,
7.250% 07/01/19. . . . . . . . . 1,000 1,053
Valley Health Systems,
Series C,
5.750% 07/01/18. . . . . . . . . 2,000 1,780
Hospital Revenue Bonds,
Medical Center of Central Massachusetts,
Series A,
7.000% 07/01/12. . . . . . . . . 1,000 1,012
State Industrial Finance Agency:
Harvard Community Health Plan,
Series B,
8.125% 10/01/17. . . . . . . . . 640 677
Quincy Hospital,
Series 1993-A,
5.250% 01/15/16. . . . . . . . . 2,000 1,718
-------
34,571
------------------------------------------------------------------
HOUSING - 9.0%
Multi-family - 5.4%
Boston-Mount Pleasant,
Multi-family Housing Development,
Series A,
6.750% 08/01/23(a). . . . . . . 1,700 1,715
Framingham Housing Authority Revenue,
Beaver Terrace Apartments,
Series 1991-A,
6.600% 08/20/16. . . . . . . . . 655 644
Health and Educational Facilities,
Finance Authority,
Series A,
6.100% 06/01/26. . . . . . . . . 2,340 2,112
Housing Finance Agency:
6.750% 07/01/28(a). . . . . . . 4,500 4,404
7.600% 12/01/16. . . . . . . . . 705 737
Series 1989-A,
8.200% 08/01/27. . . . . . . . . 330 344
Series 1989-A,
8.200% 08/01/15. . . . . . . . . 245 249
</TABLE>
See notes to investment portfolio.
5
<PAGE>
INVESTMENT PORTFOLIO - continued
==============================================================================
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
------------------------------------------------------------------------------
<S> <C> <C>
HOUSING - CONT.
MULTI-FAMILY - CONT.
Series 1990-A,
8.150% 02/01/29. . . . . . . . . $ 135 $ 143
Series 1992-C,
6.875% 11/15/11. . . . . . . . . 3,000 3,075
-------
13,423
SINGLE-FAMILY - 3.6%
Housing Finance Agency:
Series A:
8.700% 05/15/14. . . . . . . . . 240 268
9.000% 12/01/18. . . . . . . . . 215 225
Series B:
8.100% 08/01/23. . . . . . . . . 455 469
8.500% 08/01/20. . . . . . . . . 10 10
Series 1988-A,
8.400% 08/01/21. . . . . . . . . 1,210 1,234
Series 3,
7.875% 06/01/14. . . . . . . . . 400 411
Series 4,
7.375% 06/01/14. . . . . . . . . 760 779
Series 5,
8.375% 06/01/15. . . . . . . . . 500 517
Series 6,
8.100% 12/01/14. . . . . . . . . 495 513
Series 7,
8.100% 06/01/20. . . . . . . . . 440 457
Series 8,
7.700% 06/01/17. . . . . . . . . 575 592
Series 9
8.100% 12/01/21. . . . . . . . . 500 521
Series 12,
7.600% 12/01/13. . . . . . . . . 250 254
Series 13,
7.950% 06/01/23. . . . . . . . . 1,500 1,545
Series 18,
7.350% 12/01/16. . . . . . . . . 1,000 1,030
-------
8,825
------------------------------------------------------------------------------
IN-SUBSTANCE DEFEASED (E) - 7.0%
Bay Transportation Authority,
General Transportation System Bond,
Series 1990-B,
7.875% 03/01/21. . . . . . . . . 4,000 4,540
Boston,
General Obligation Bonds,
Series 1991-A,
6.750% 07/01/11(a). . . . . . . 1,000 1,081
Boston,
Water and Sewer Commission,
General Revenue Bonds, Series 1991-A,
7.000% 11/01/18(a). . . . . . . 2,700 2,963
General Obligation Bonds,
Series 1990-C,
7.000% 12/01/10. . . . . . . . . 2,000 2,152
Health and Educational Facilities:
Daughters Charity-Carney,
Series C,
7.750% 07/01/14. . . . . . . . . 500 558
Framingham Union Hospital,
Series B,
8.500% 07/01/20. . . . . . . . . 1,000 1,149
Mount Auburn Hospital,
Series 1988-A,
7.875% 07/01/18. . . . . . . . . 250 273
Saint John's Hospital,
Series 1990-B,
8.375% 12/01/20. . . . . . . . . 500 579
Winchester Hospital,
Series C,
7.550% 07/01/11. . . . . . . . . 500 559
Lynn, General Obligation Bonds,
7.850% 01/15/11. . . . . . . . . 1,000 1,159
Palmer, Series 1990-B,
7.700% 10/01/10. . . . . . . . . 1,000 1,122
Woods Hole, Martha's Vineyard &
Nantucket Steamship Authority,
Series 1992-B,
6.400% 03/01/12. . . . . . . . . 1,000 1,056
-------
17,191
-------------------------------------------------------------------------------
NURSING HOMES - 4.4%
Boston, Nursing Home,
10.000% 01/01/20. . . . . . . . . 500 537
Health and Educational Facilities:
Family Housing Authority
Insured Project, Series A,
7.700% 11/01/31. . . . . . . . . 995 1,040
First Mortgage Revenue Bonds,
Fairview Extended Care Service, Series A,
10.250% 01/01/21. . . . . . . . . 500 540
State Industrial Finance Agency:
Series 1987-G,
7.875% 05/01/07. . . . . . . . . 100 102
American Health Foundation Inc.,
Series 1989,
10.125% 03/01/19. . . . . . . . . 1,875 1,889
Belmont Home Project,
9.270% 01/01/25. . . . . . . . . 2,000 1,994
GF/Massachusetts Inc.,
Series 1994,
8.300% 07/01/23. . . . . . . . . 2,500 2,262
</TABLE>
See notes to investment portfolio.
6
<PAGE>
INVESTMENT PORTFOLIO - continued
================================================================================
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
---------------------------------------------------------------------------
<S> <C> <C>
NURSING HOMES - CONT.
Mary Ann Morse Nursing Home,
Series 1991-I,
10.000% 01/01/21 . . . . . . . . $ 925 $ 1,145
Seacoast Nursing Home,
Series 1991,
9.625% 12/01/21 . . . . . . . . 1,260 1,290
-------
10,799
---------------------------------------------------------------------------
PUBLIC FACILITY & IMPROVEMENT - 0.8%
Convention Center Authority,
Boston Common Parking Garage Bonds,
Series 1993-A,
5.375% 09/01/13 . . . . . . . . 2,000 1,823
Virgin Islands Public Finance
Authority, Series 1992-A,
7.000% 10/01/02 . . . . . . . . 250 261
-------
2,084
---------------------------------------------------------------------------
TRANSPORTATION - 12.2%
Bay Transportation Authority:
Series A:
7.000% 03/01/10 . . . . . . . . 5,000 5,456
7.000% 03/01/21 . . . . . . . . 1,500 1,627
Series B,
5.500% 03/01/21(a). . . . . . . 10,000 8,869
Certificate of Participation,
Series 1988,
7.750% 01/15/06 . . . . . . . . 250 269
Commonwealth of Puerto Rico,
Highway & Transportation Authority:
4.040% 07/01/09(b). . . . . . . 330(c) 129
5.500% 07/01/09 . . . . . . . . 660 600
General Transportation System,
Series 1992-A,
6.200% 03/01/16 . . . . . . . . 3,700 3,658
General Transportation System Bonds,
Series 1994-A,
7.000% 03/01/14 . . . . . . . . 1,250 1,353
State Industrial Finance Agency,
Series 1990,
9.000% 10/01/20 . . . . . . . . 490 520
State Port Authority:
5.000% 07/01/18 . . . . . . . . 5,000 4,044
Series B,
6.000% 07/01/23 . . . . . . . . 1,000 931
Series 1988-A,
7.750% 07/01/18 . . . . . . . . 2,750 2,826
-------
30,282
---------------------------------------------------------------------------
WASTE DISPOSAL - 1.4%
Agawam, Springfield Resource
Recovery Project,
8.500% 12/01/08 . . . . . . . . $ 500 $ 529
Boston,
Industrial Development Financing,
Solid Waste Disposal,
10.500% 01/01/11(a) . . . . . . 500 554
Industrial Finance Agency,
Peabody Landfill Project,
9.000% 09/01/05 . . . . . . . . 2,300 2,326
-------
3,409
---------------------------------------------------------------------------
WATER & SEWER - 10.0%
Amherst,
General Obligation Municipal Purpose Loan,
6.500% 01/15/12 . . . . . . . . 695 709
Boston, Water and Sewer Commission:
Series 1992-A,
5.750% 11/01/13 . . . . . . . . 1,000 917
Series 1993-A,
5.250% 11/01/19 . . . . . . . . 4,750 3,954
State Industrial Finance Agency,
Environmental Service Project,
Series 1994-A,
8.750% 11/01/21 . . . . . . . . 3,000 2,880
State Water Resources Authority:
Series B,
5.500% 03/01/17 . . . . . . . . 1,000 895
Series C:
5.250% 12/01/15 . . . . . . . . 1,000 875
5.250% 12/01/20 . . . . . . . . 5,025 4,190
Series 1992-A,
6.500% 07/15/09 . . . . . . . . 2,000 2,062
Series 1992-B,
5.500% 11/01/15 . . . . . . . . 8,000 7,090
Series 1993-A,
5.450% 02/01/13 . . . . . . . . 1,250 1,125
-------
24,697
---------------------------------------------------------------------------
OTHER - 0.5%
Health and Educational Facilities,
Independent Living Bonds,
Series 1993-A,
8.100% 07/01/18 . . . . . . . . 300 282
Plymouth County,
Certificate of Participation,
Plymouth Correctional Facility, Series A,
7.000% 04/01/22 . . . . . . . . 1,000 1,008
-------
1,290
---------------------------------------------------------------------------
Total investments (cost $240,272) (f) 244,718
---------------------------------------------------------------------------
</TABLE>
See notes to investment portfolio.
7
<PAGE>
INVESTMENT PORTFOLIO - continued
===============================================================================
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS - 0.0%
--------------------------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES (G)
IL Health Facilities Authority,
Memorial Medical Center, Series C,
4.250% 01/01/16 . . . . . . . . $100 $ 100
--------------------------------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES, NET-1.0% 2,458
--------------------------------------------------------------------------------------------------
NET ASSETS - 100.0% $247,276
--------------------------------------------------------------------------------------------------
</TABLE>
Notes to investment portfolio:
(a) These securities, or a portion thereof, with a market value of $29,308
are being used to collateralize open futures contracts.
(b) This security is a variable rate instrument; on July 1, 1998 it will
change to a fixed rate instrument. Interest income is accrued daily on
the notional amount at the applicable interest rates.
(c) Notional amount.
(d) Zero coupon bond.
(e) The Fund has been informed that each issuer has placed direct obligations
of the U.S. Government in an irrevocable trust, solely for the payment of
the interest and principal.
(f) Cost for federal income tax purposes is approximately the same.
(g) Variable rate demand notes are considered short-term obligations.
Interest rates change periodically on specified dates. These securities
are payable on demand and are secured by either letters of credit or
other credit support agreements from banks. The rates listed are as of
January 31, 1995.
Short futures contracts open at January 31, 1995:
<TABLE>
<CAPTION>
Par value Unrealized
covered by Expiration depreciation
Type contracts month at 1/31/95
---------------------------------------------------------------------
<S> <C> <C> <C>
Municipal bonds $ 23,100 March $827
Treasury bonds $ 5,300 March $121
---------------------------------------------------------------------
</TABLE>
Acronym Name
------- -----------------------
RIB Residual Interest Bonds
See notes to financial statements.
8
<PAGE>
FINANCIAL STATEMENTS - continued
================================================================================
<TABLE>
<CAPTION>
STATEMENT OF ASSETS & LIABILITIES
January 31, 1995
(in thousands except for per share amounts and footnote)
---------------------------------------------------------------------------------
<S> <C>
Assets
Investments at value (cost $240,272)................................ $244,718
Short-term investments.............................................. 100
--------
244,818
Receivable for:
Interest.......................................... $ 3,620
Fund shares sold.................................. 456
Expense reimbursement
from adviser..................................... 4
Other................................................ 29 4,109
------- --------
Total assets............................................... 248,927
========
Liabilities
Payable for:
Distributions..................................... 1,205
Fund shares repurchased........................... 273
Variation margin on futures....................... 155
Accrued:
Deferred Trustees fees............................ 3
Other............................................. 15
-------
Total liabilities.................................... 1,651
--------
Net assets.......................................................... $247,276
--------
Net asset value & redemption price per share -
Class A ($193,303/26,175)....................................... $ 7.39
--------
Maximum offering price per share - Class A
($7.39/0.9525)................................................... $ 7.76*
--------
Net asset value & offering price per share -
Class B ($53,973/7,308)......................................... $ 7.39
--------
Composition of net assets
Capital paid in..................................................... $248,326
Undistributed net investment income.............................. 31
Accumulated net realized loss.................................... (4,579)
Net unrealized appreciation (depreciation) on:
Investments.................................................... 4,446
Open futures contracts......................................... (948)
--------
$247,276
========
INVESTMENT INCOME
Interest............................................................. $ 16,977
Expenses
Management fee....................................... $ 1,446
Service fee.......................................... 45
Distribution fee - Class B........................... 396
Transfer agent....................................... 400
Bookkeeping fee...................................... 99
Trustees fees........................................ 18
Custodian fee........................................ 14
Audit fee............................................ 32
Legal fee............................................ 9
Registration fees.................................... 30
Reports to shareholders.............................. 9
Other................................................ 28
-------
2,526
Fees waived by the adviser........................... (298) 2,228
------- --------
Net investment income......................................... 14,749
--------
NET REALIZED AND UNREALIZED LOSS
ON PORTFOLIO POSITIONS
Net realized loss on:
Investments........................................ (2,944)
Closed futures contracts........................... (55)
-------
Net realized loss................................................ (2,999)
Net unrealized depreciation
during the period on:
Investments........................................ (21,911)
Open futures contracts............................. (948)
-------
Net unrealized depreciation...................................... (22,859)
--------
Net loss...................................................... (25,858)
--------
Net decrease in net assets from
operations......................................................... $(11,109)
--------
</TABLE>
* On sales of $50,000 or more the offering price is reduced.
See notes to financial statements.
9
<PAGE>
FINANCIAL STATEMENTS - continued
================================================================================
STATEMENT OF CHANGES IN NET ASSETS
(in thousands)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year ended January 31
-------------------------
1995 1994
--------- ---------
<S> <C> <C>
Increase (decrease) in net assets
Operations
Net investment income ........................................ $ 14,749 $ 13,715
Net realized loss ............................................ (2,999) (1,046)
Net unrealized appreciation (depreciation) ................... (22,859) 14,196
-------- --------
Net increase (decrease) from operations ................ (11,109) 26,865
Distributions
From net investment income - Class A ......................... (12,074) (12,184)
From net investment income - Class B ......................... (2,748) (1,750)
-------- --------
(25,931) 12,931
-------- --------
Fund share transactions
Receipts for shares sold - Class A ........................... 23,448 44,294
Value of distributions reinvested - Class A .................. 6,522 6,385
Cost of shares repurchased - Class A ......................... (41,484) (22,796)
-------- --------
(11,514) 27,883
-------- --------
Receipts for shares sold - Class B ........................... 13,955 33,898
Value of distributions reinvested - Class B .................. 1,534 904
Cost of shares repurchased - Class B ......................... (8,223) (1,969)
-------- --------
7,266 32,833
-------- --------
Net increase (decrease) from Fund share transactions ... (4,248) 60,716
-------- --------
Total increase (decrease) ........................ (30,179) 73,647
NET ASSETS
Beginning of period .......................................... 277,455 203,808
-------- --------
End of period (including undistributed
net investment income of $31 and $98, respectively) ......... $247,276 $277,455
======== ========
Number of Fund shares
Sold - Class A ............................................... 3,110 5,575
Issued for distributions reinvested - Class A ................ 872 803
Repurchased - Class A ........................................ (5,556) (2,858)
-------- --------
(1,574) 3,520
-------- --------
Sold - Class B ............................................... 1,841 4,262
Issued for distributions reinvested - Class B ................ 205 113
Repurchased - Class B ........................................ (1,111) (246)
-------- --------
935 4,129
-------- --------
Net increase (decrease) in shares outstanding .......... (639) 7,649
Outstanding at
Beginning of period ....................................... 34,122 26,473
-------- --------
End of period ............................................. 33,483 34,122
======== ========
</TABLE>
See notes to financial statements.
10
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
NOTE 1. ACCOUNTING POLICIES
Colonial Massachusetts Tax-Exempt Fund (the Fund), a series of Colonial
Trust V, is a Massachusetts business trust, registered under the Investment
Company Act of 1940, as amended, as a non-diversified, open-end, management
investment company. The Fund may issue an unlimited number of shares. The Fund
offers Class A shares sold with a front-end sales charge and Class B shares
which are subject to an annual distribution fee and a contingent deferred sales
charge. Class B shares will convert to Class A shares when they have been
outstanding approximately eight years. The following significant accounting
policies are consistently followed by the Fund in the preparation of its
financial statements and conform to generally accepted accounting principles.
--------------------------------------------------------------------------------
SECURITY VALUATION AND TRANSACTIONS
Debt securities generally are valued by a pricing service based upon market
transactions for normal, institutional-size trading units of similar securities.
When management deems it appropriate, an over-the-counter or exchange bid
quotation is used.
Futures contracts are valued based on the difference between the last sale
price and the opening price of the contract.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
Portfolio positions which cannot be valued as set forth above are valued at
fair value under procedures approved by the Trustees.
Security transactions are accounted for on the date the securities are
purchased or sold.
Cost is determined and gains and losses are based upon the specific
identification method for both financial statement and federal income tax
purposes.
The Fund may trade securities on other than normal settlement terms. This
may increase the risk if the other party to the transaction fails to deliver and
causes the Fund to subsequently invest at less advantageous prices.
--------------------------------------------------------------------------------
DETERMINATION OF CLASS NET ASSET VALUES AND FINANCIAL HIGHLIGHTS
All income, expenses (other than the Class B distribution fee), realized
and unrealized gains (losses) are allocated to each class proportionately on a
daily basis for purposes of determining the net asset value of each class.
Class B per share data and ratios are calculated by adjusting the expense
and net investment income per share data and ratios for the Fund for the entire
period by the distribution fee applicable to Class B shares only.
--------------------------------------------------------------------------------
FEDERAL INCOME TAXES
Consistent with the Fund's policy to qualify as a regulated investment
company and to distribute all of its taxable and tax-exempt income, no federal
income tax has been accrued.
--------------------------------------------------------------------------------
INTEREST INCOME, DEBT DISCOUNT AND PREMIUM
Interest income is recorded on the accrual basis. Original issue discount
is accreted to interest income over the life of a security with a corresponding
increase in the cost basis; market discount is not accreted. Premium is
amortized against interest income with a corresponding decrease in the cost
basis.
--------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
The Fund declares and records distributions daily and pays monthly.
The amount and character of income and gains to be distributed are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles.
--------------------------------------------------------------------------------
NOTE 2. FEES AND COMPENSATION PAID TO AFFILIATES
MANAGEMENT FEE
Colonial Management Associates, Inc. (the Adviser) is the investment
adviser of the Fund and furnishes accounting and other services and office
facilities for a monthly fee. Through June 30, 1994,
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS - CONTINUED
================================================================================
this fee was 0.60% annually of the Fund's average net assets. Effective July 1,
1994, the monthly fee is based on each Fund's pro rata portion of the combined
average net assets of Trust V as follows:
<TABLE>
<CAPTION>
Average Net Assets Annual Fee Rate
------------------ ---------------
<S> <C>
First $1 billion 0.55%
Next $1 billion 0.50%
Over $2 billion 0.45%
</TABLE>
--------------------------------------------------------------------------------
BOOKKEEPING FEE
The Adviser provides bookkeeping and pricing services for $27,000 per year
plus 0.035% of the Fund's average net assets over $50 million.
--------------------------------------------------------------------------------
TRANSFER AGENT
Colonial Investors Service Center, Inc. (the Transfer Agent), an affiliate
of the Adviser, provides shareholder services for a monthly fee equal to 0.14%
annually of the Fund's average net assets and receives a reimbursement for
certain out of pocket expenses.
--------------------------------------------------------------------------------
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES
The Adviser, through Colonial Investment Services, Inc. (the Distributor),
is the Fund's principal underwriter. During the year ended January 31, 1995,
the Distributor retained net underwriting discounts of $54,980 on sales of the
Fund's Class A shares and received contingent deferred sales charges (CDSC) of
$168,687 on Class B share redemptions.
The Fund has adopted a 12b-1 plan which requires the payment of a
distribution fee to the Distributor equal to 0.75% annually of the average net
assets attributable to Class B shares. Effective December 1, 1994, the plan was
amended to include payment by the Fund of a service fee applicable to both Class
A and Class B, to the Distributor as follows:
<TABLE>
<CAPTION>
Valuation of shares Annual
outstanding on the 20th of Fee
each month which were issued Rate
-------------------------------- ----------
<S> <C>
Prior to November 30, 1994......................................... 0.10%
On or after December 1, 1994....................................... 0.25%
</TABLE>
The CDSC and the fees received from the 12b-1 plan are used principally as
repayment to the Distributor for amounts paid by the Distributor to dealers who
sold such shares.
--------------------------------------------------------------------------------
EXPENSE LIMITS
The Adviser has agreed, until further notice to waive fees and bear
certain Fund expenses to the extent that total expenses (exclusive of service
and distribution fees, brokerage commissions, interest, taxes, and
extraordinary expenses, if any) exceed 0.70% annually of the Fund's average
net assets.
--------------------------------------------------------------------------------
OTHER
The Fund pays no compensation to its officers, all of whom are employees
of the Adviser.
The Fund's Trustees may participate in a deferred compensation plan which
may be terminated at any time. Obligations of the plan will be paid solely out
of the Fund's assets.
--------------------------------------------------------------------------------
NOTE 3. PORTFOLIO INFORMATION
During the year ended January 31, 1995, purchases and sales of
investments, other than short-term obligations, were $145,504,532 and
$146,935,621, respectively.
Unrealized appreciation (depreciation) at January 31, 1995, based on cost
of investments for federal income tax purposes was:
<TABLE>
<S> <C>
Gross unrealized appreciation.................. $ 7,921,696
Gross unrealized depreciation.................. (3,475,598)
------------
Net unrealized appreciation................ $ 4,446,098
============
</TABLE>
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS - CONTINUED
================================================================================
CAPITAL LOSS CARRYFORWARDS
At January 31, 1995, capital loss carryforwards available (to the extent
provided in regulations) to offset future realized gains were approximately as
follows:
<TABLE>
<CAPTION>
Year of Capital loss
expiration carryforward
-------------- ----------------
<S> <C>
2002........ 174,000
2003........ 1,749,000
---------
1,923,000
=========
</TABLE>
Expired capital loss carryforwards, if any, are recorded as a reduction of
capital paid in.
To the extent loss carryforwards are used to offset any future realized
gains, it is unlikely that such gains would be distributed since they may be
taxable to shareholders as ordinary income.
--------------------------------------------------------------------------------
OTHER
There are certain risks arising from geographic concentration in any
state. Certain revenue or tax related events in a state may impair the ability
of certain issuers of municipal securities to pay principal and interest on
their obligations.
The Fund may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
The Fund sells municipal and Treasury bond futures contracts to manage
overall portfolio interest rate exposure and not for trading purposes. The
use of futures contracts involves certain risks, which include (1) imperfect
correlation between the price movement of the contracts and the underlying
securities, (2) inability to close out positions due to different trading
hours, or the temporary absence of a liquid market, for either the contract or
the underlying securities, or (3) an inaccurate prediction by the Adviser of
the future direction of interest rates. Any of these risks may involve
amounts exceeding the initial or variation margin recorded in the Fund's
Statement of Assets and Liabilities at any given time.
--------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION (UNAUDITED)
All of the distributions will be treated as exempt income for federal
income tax purposes.
13
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
Selected data for a share of each class outstanding throughout each period are
as follows:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED JANUARY 31
----------------------------------------------------------------------------------------------------------------------------------
1995 1994 1993
------------------------- ------------------------ --------------------------
CLASS A CLASS B CLASS A CLASS B CLASS A CLASS B (b)
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value - Beginning
of period.......................... $8.130 $8.130 $7.700 $7.700 $7.420 $7.450
-------- ------- -------- ------- -------- -------
Income (loss) from investment
operations:
Net investment income (a).......... 0.444 0.388 0.453 0.395 0.481 0.272
Net realized and unrealized
gain (loss) on investments......... (0.738) (0.738) 0.439 0.439 0.301 0.275
-------- ------- -------- ------- -------- -------
Total from investment
operations......................... (0.294) (0.350) 0.892 0.834 0.782 0.547
-------- ------- -------- ------- -------- -------
Less distributions declared
to shareholders:
From net investment income......... (0.446) (0.390) (0.462) (0.404) (0.479) (0.274)
From net realized gains............ --- --- --- --- (0.002) (0.002)
-------- ------- -------- ------- -------- -------
In excess of net realized gains.... --- --- --- --- (0.021) (0.021)
Total distributions declared
to shareholders.................... (0.446) (0.390) (0.462) (0.404) (0.502) (0.297)
-------- ------- -------- ------- -------- -------
Net asset value - End of period.... $7.390 $7.390 $8.130 $8.130 $7.700 $7.700
-------- ------- -------- ------- -------- -------
Total return (c)(d)................ (3.49)% (4.21)% 11.86% 11.05% 10.87% 1.11% (f)
-------- ------- -------- ------- -------- -------
Ratios to average net assets
Expenses........................... 0.72% (e) 1.47% (e) 0.64% 1.39% 0.54% 1.29% (g)
Net investment income.............. 5.93% 5.18% 5.68% 4.93% 6.38% 5.63% (g)
Fees and expenses waived
or borne by the adviser............ 0.12% 0.12% 0.21% 0.21% 0.33% 0.33%
Portfolio turnover................. 58% 58% 7% 7% 7% 7%
Net assets at end of period(000)... $193,303 $53,973 $225,636 $51,819 $186,526 $17,282
(a) Net of fees and expenses
waived or borne by the
adviser which amounted to....... $0.009 $0.009 $0.016 $0.016 $0.025 $0.016
(b) Class B shares were initially offered on June 8, 1992. Per share data
reflects activity from that date.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or CDSC.
(d) Had the adviser not waived or reimbursed a portion of expenses total return
would have been reduced.
(e) Includes service fee since its inception on December 1, 1994, of 0.02% (not
annualized).
(f) Not annualized.
(g) Annualized.
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED JANUARY 31
-------------------------
1992 1991
------- -------
CLASS A CLASS A
------- -------
<S> <C> <C>
Net asset value - Beginning
of period.......................... $7.120 $7.080
-------- -------
Income (loss) from investment
operations:
Net investment income (a).......... 0.505 0.523
Net realized and unrealized
gain (loss) on investments......... 0.295 0.041
-------- -------
Total from investment
operations......................... 0.800 0.564
-------- -------
Less distributions declared
to shareholders:
From net investment income......... (0.500) (0.524)
From net realized gains............ --- ---
In excess of net realized gains.... --- ---
-------- -------
Total distributions declared
to shareholders.................... (0.500) (0.524)
-------- -------
Net asset value - End of period.... $7.420 $7.120
-------- -------
Total return (c)(d)................ 11.61% 8.31%
-------- -------
Ratios to average net assets
Expenses........................... 0.46% 0.30%
Net investment income.............. 6.89% 7.34%
Fees and expenses waived
or borne by the adviser............ 0.43% 0.65%
Portfolio turnover................. 14% 30%
Net assets at end of period(000)... $145,957 $85,301
</TABLE>
(a) Net of fees and expenses
waived or borne by the
adviser which amounted to....... $0.032 $0.046
(b) Class B shares were initially offered on June 8, 1992. Per share data
reflects activity from that date.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or CDSC.
(d) Had the adviser not waived or reimbursed a portion of expenses total return
would have been reduced.
(e) Includes service fee since its inception on December 1, 1994, of 0.02% (not
annualized).
(f) Not annualized.
(g) Annualized.
14
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
===============================================================================
TO THE TRUSTEES OF COLONIAL TRUST V AND THE SHAREHOLDERS OF COLONIAL
MASSACHUSETTS Tax-EXEMPT FUND
In our opinion, the accompanying statement of assets and liabilities,
including the investment portfolio, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in
all material respects, the financial position of Colonial Massachusetts
Tax-Exempt Fund (a series of Colonial Trust V) at January 31, 1995, the results
of its operations, the changes in its net assets and the financial highlights
for the periods indicated, in conformity with generally accepted accounting
principles. These financial statements and the financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of portfolio positions at January 31, 1995 by correspondence with
the custodian, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
March 10, 1995
<PAGE>
INVESTMENT PORTFOLIO (IN THOUSANDS) JANUARY 31, 1995
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL BONDS - 98.1% PAR VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
EDUCATION - 13.2%
Brighton Area School District, Series 1,
5.250% 05/01/14(a). . . . . . . $ 500 $ 438
Central University,
5.500% 10/01/15(a). . . . . . . 1,300 1,170
Romulus Township School District,
Series 1993,
(b) 05/01/21. . . . . . . . . 2,075 368
State Higher Education Facilities
Authority, Aquinas College,
Series 1991,
7.350% 05/01/11. . . . . . . . . 1,000 1,113
University of Michigan,
Major Capital Projects, Series 1993-A,
5.500% 04/01/12. . . . . . . . . 475 444
Wayne State University,
Series 1993,
5.650% 11/15/15(a). . . . . . . 750 684
Western Michigan University:
Series 1993-A,
5.500% 07/15/16. . . . . . . . . 1,250 1,122
Series A,
5.000% 07/15/21. . . . . . . . . 2,500 2,031
-----
7,370
-------------------------------------------------------------------------------
ELECTRIC - 7.8%
Commonwealth of Puerto Rico,
Electric Power Authority, Series T,
5.500% 07/01/20. . . . . . . . . 1,000 861
Grand Haven, Series 1993,
5.250% 07/01/13(a). . . . . . . 1,355 1,182
St. Clair County Economic
Development Corp., Detroit Edison Co.,
Series 1993-A,
6.400% 08/01/24(a). . . . . . . 1,000 994
State Public Power Agency,
Belle River Project, Series 1993-A,
5.500% 01/01/13. . . . . . . . . 500 449
State Strategic Fund,
Pollution Control Project,
Series 1994-AA,
5.875% 04/01/24(a). . . . . . . 1,000 885
-----
4,371
-------------------------------------------------------------------------------
GENERAL OBLIGATIONS - 20.8%
Chippewa Valley Schools,
General Obligation, Series 1993,
5.000% 05/01/21(a). . . . . . . 2,500 2,044
Clintondale Community School:
5.250% 05/01/15. . . . . . . . . 2,000 1,712
5.750% 05/01/16. . . . . . . . . 1,000 910
Detroit, General Obligation,
Series 1988-A,
7.875% 04/01/08. . . . . . . . . 750 782
Grand Rapids Community College,
5.000% 05/01/14. . . . . . . . .$ 770 $ 637
Kent County, General Obligation,
Series 1987,
8.400% 11/01/10. . . . . . . . . 750 808
Okemos Public School District:
Series 1993,
(b) 05/01/12(a). . . . . . . 500 166
(b) 05/01/18(a). . . . . . . 1,700 376
Pontiac, General Obligation,
Series 1987,
8.300% 06/01/99. . . . . . . . . 250 268
Romulus Township School District:
Series 1993,
(b) 05/01/17. . . . . . . . . 2,580 610
(b) 05/01/18(a). . . . . . . 3,985 887
South Lyon Community Schools,
Series 1992,
6.375% 05/01/18. . . . . . . . . 1,500 1,470
Warren Economic Development Corp.,
Autumn Woods Project, Series 1992,
6.900% 12/20/22. . . . . . . . . 500 511
Woodhaven School District,
6.000% 05/01/17(a). . . . . . . 500 476
------
11,657
-------------------------------------------------------------------------------
HOSPITALS & HEALTH CARE - 15.6%
Dickinson County Memorial Hospital,
8.125% 11/01/24. . . . . . . . . 550 555
Kalamazoo Hospital Finance Authority:
Borgess Medical Center,
Series 1994-A,
5.250% 06/01/17(a). . . . . . . 1,400 1,181
Bronson Methodist Hospital,
Series 1992-A,
6.250% 05/15/12. . . . . . . . . 1,500 1,421
Royal Oak Hospital Finance Authority,
William Beaumont Hospital,
Series 1993-G,
5.250% 11/15/19. . . . . . . . . 1,000 825
Saginaw Hospital Finance Authority,
General Hospital, Series 1989,
7.625% 10/01/19. . . . . . . . . 175 179
State Hospital Finance Authority:
Central Michigan Community Hospital,
Series 1993-A,
6.000% 10/01/08. . . . . . . . . 500 466
Crittenton Hospital, Series 1992-A,
6.700% 03/01/07. . . . . . . . . 750 758
Daughters of Charity-Providence,
Series 1991,
7.000% 11/01/21. . . . . . . . . 1,000 1,021
</TABLE>
See notes to investment portfolio.
3
<PAGE>
INVESTMENT PORTFOLIO - CONTINUED
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
-------------------------------------------------------------------------------
<S> <C> <C>
HOSPITALS AND HEALTH CARE - CONT.
Detroit Medical Center:
Series 1988-A,
8.125% 08/15/12. . . . . . . $ 50 $ 53
Series 1993-A,
6.250% 08/15/13. . . . . . . 500 466
Henry Ford Health System,
Series 1992-A,
5.750% 09/01/17. . . . . . . 2,000 1,825
-----
8,750
-------------------------------------------------------------------------------
HOUSING - 13.1%
MULTI-FAMILY - 11.1%
Grand Rapids Building Authority,
Series 1993,
5.500% 04/01/13. . . . . . . 1,000 914
Grand Rapids Housing Finance
Authority, Multi-family Housing,
Series A,
7.625% 09/01/23. . . . . . . 1,500 1,605
Redford Township Building Authority,
6.500% 11/01/13. . . . . . . 675 657
State Housing Development Authority:
Multi-family Housing,
6.850% 06/01/26. . . . . . . 2,000 1,965
Series 1987-A,
8.375% 07/01/19(a) . . . . . 1,000 1,038
-----
6,179
SINGLE-FAMILY - 2.0%
State Housing Development Authority:
Rental Housing:
Series 1990-A,
7.700% 04/01/23. . . . . . . 500 512
Series 1991-B,
7.050% 10/01/12. . . . . . . 225 231
Single-family Housing:
Series 1989-A,
7.700% 12/01/16. . . . . . . 225 233
Series 1989-B,
8.000% 06/01/18. . . . . . . 145 148
-----
1,124
-------------------------------------------------------------------------------
IN-SUBSTANCE DEFEASED (C) - 1.6%
Bloomingdale Public School
District No. 16,
7.125% 05/01/19. . . . . . . 300 318
Kent Hospital Finance Authority,
Butterworth Hospital, Series 1990-A
7.250% 01/15/12. . . . . . . 250 273
Rockford Public Schools,
Series 1990,
7.375% 05/01/19. . . . . . . 250 272
-----
863
-------------------------------------------------------------------------------
NURSING HOMES - 1.1%
Cheboygan County Economic
Development Corp.
Metro Health Foundation Project
10.000% 11/01/22. . . . . . . $600 $629
-------------------------------------------------------------------------------
POLLUTION CONTROL REVENUE - 0.8%
Monroe County,
North Star Steel Co., Series A,
6.875% 07/01/08. . . . . . . 470 471
-------------------------------------------------------------------------------
PUBLIC FACILITY & IMPROVEMENT - 16.2%
Detroit Convention Facilities,
Cobo Hall Expansion Project,
5.250% 09/30/12. . . . . . . 1,000 851
Grand Rapids & Kent Counties
Joint Building Authority,
6.000% 10/01/10. . . . . . . 500 474
State Building Authority,
Series 1991-2,
6.250% 10/01/20. . . . . . . 3,000 2,914
Series 1992-2A,
6.250% 10/01/12. . . . . . . 500 492
State Municipal Bond Authority,
Local Government Loan Project:
(b) 05/01/19. . . . . . . 2,000 408
(b) 05/01/20. . . . . . . 1,855 350
Series 1986-A,
7.700% 11/01/10(a) . . . . . 200 216
Series 1992-D,
6.650% 05/01/12. . . . . . . 1,000 1,025
Virgin Islands Public Finance
Authority, Series 1992-A,
7.000% 10/01/02. . . . . . . 125 130
Wayne County, Detroit Metropolitan Airport:
Series 1993-B,
5.250% 12/01/13(a) . . . . . 1,500 1,283
Series 1994-B,
6.125% 12/01/24(a) . . . . . 1,000 939
-----
9,082
-------------------------------------------------------------------------------
REDEVELOPMENT AGENCIES & TAX ALLOCATION - 1.4%
Battle Creek, Downtown Tax Revenue,
7.650% 05/01/22. . . . . . . 750 770
-------------------------------------------------------------------------------
TRANSPORTATION - 0.9%
Wayne County, Detroit Metropolitan
Airport, Series 1990-A,
7.000% 12/01/20. . . . . . . 500 524
-------------------------------------------------------------------------------
WASTE DISPOSAL- 1.5%
Strategic Fund Limited,
Great Lakes Pulp & Fibre Project,
10.250% 12/01/16. . . . . . . 500 514
State Strategic Fund,
Blue Water Fiber Project, Series 1994,
8.000% 01/01/12. . . . . . . 360 344
-----
858
-------------------------------------------------------------------------------
<FN>
See notes to investment portfolio.
</TABLE>
4
<PAGE>
INVESTMENT PORTFOLIO - CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
-------------------------------------------------------------------------
<S> <C> <C>
WATER & SEWER - 2.7%
Monroe County,
Frenchtown Charter, Series 1991,
5.750% 05/01/11................ $ 225 $ 213
Oakland County, Pebble Creek
Drainage District,
5.000% 05/01/11................. 300 254
Western Townships Utilities
Authority, Sewer Systems & Disposal,
Series 1989,
8.200% 01/01/18................. 1,000 1,065
------
1,532
------------------------------------------------------------------------
OTHER - 1.4%
Detroit Economic Development
Corp., E.H. Associates
Limited Partnership,
7.000% 06/01/12................. 750 779
------------------------------------------------------------------------
Total investments (cost $55,614) (d) 54,959
------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS - 1.1%
------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES (e)
IL Health Facilities Authority,
Memorial Medical Center, Series C,
4.250% 01/01/16................. 200 200
Grand Rapids
4.200% 01/01/20................. 400 400
------------------------------------------------------------------------
Total short-term obligations 600
------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES, NET - 0.8% 429
------------------------------------------------------------------------
NET ASSETS - 100.0% $ 55,988
------------------------------------------------------------------------
Notes to investment portfolio:
(a) These securities, or a portion thereof, with a total market value
of $13,258, are being used to collateralize open futures contracts.
(b) Zero coupon bond.
(c) The Fund has been informed that each issuer has placed direct
obligations of the U.S. government in an irrevocable trust, solely
for the payment of the interest and principal.
(d) Cost for federal income tax purposes is the same.
(e) Variable rate demand notes are considered short-term obligations.
Interest rates change periodically on specified dates. These securities
are payable on demand and are secured by either letters of credit or
other credit support agreements from banks. The rates listed are as of
January 31,1995.
Short futures contracts open at January 31,1995:
Par value Unrealized
covered Expiration depreciation
Type by contracts month at 1/31/95
-------------------------------------------------------------------------------
Treasury bond $10,900 March $359
-------------------------------------------------------------------------------
See notes to financial statements.
5
<PAGE>
FINANCIAL STATEMENTS
</TABLE>
<TABLE>
--------------------------------------------------------------------------------
STATEMENT OF ASSETS & LIABILITIES
January 31, 1995
(in thousands except for per share amounts and footnote)
--------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments at value (cost $55,614)........................ $54,959
Short-term investments..................................... 600
-------
55,559
Receivable for:
Interest............................ $ 823
Fund shares sold..................... 26
Other.................................. 17 866
------ -------
Total assets...................................... 56,425
LIABILITIES
Payable for:
Distributions......................... 265
Fund shares repurchased............... 111
Variation margin on futures........... 51
Payable to adviser...................... 4
Accrued:
Deferred Trustee fees................. 2
Other................................. 4
------
Total liabilities................................... 437
-------
NET ASSETS................................................ $55,988
=======
Net asset value & redemption price per share -
Class A ($41,844/6,282)................................. $ 6.66
=======
Maximum offering price per share - Class A
($6.66/0.9525)........................................... $ 6.99*
=======
Net asset value & offering price per share -
Class B ($14,144/2,123)................................. $ 6.66
=======
COMPOSITION OF NET ASSETS
Capital paid in.......................................... $58,190
Undistributed net investment income...................... 134
Accumulated net realized loss............................ (1,322)
Net unrealized depreciation on:
Investments............................................ (655)
Open futures contracts................................. (359)
-------
$55,988
=======
</TABLE>
<TABLE>
--------------------------------------------------------------------------------
<S> <C> <C>
STATEMENT OF OPERATIONS
Year ended January 31, 1995
(in thousands)
--------------------------------------------------------------------------------
INVESTMENT INCOME
Interest.................................................. $ 3,851
EXPENSES
Management fee......................... $ 326
Service fee............................ 10
Distribution fee - Class B............. 112
Transfer agent......................... 96
Bookkeeping fee........................ 30
Trustees fees.......................... 12
Custodian fee.......................... 5
Audit fee.............................. 31
Legal fee.............................. 5
Registration fees...................... 14
Reports to shareholders................ 3
Other.................................. 8
------
652
Fees waived by the adviser............. (185) 467
------ -------
Net investment income....................... 3,384
-------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON PORTFOLIO POSITIONS
Net realized gain (loss) on:
Investments............................ (54)
Closed futures contracts............... 458
------
Net realized gain....................................... 404
Net unrealized depreciation
during the period on:
Investments........................... (5,944)
Open futures contracts................ (359)
------
Net unrealized depreciation............................ (6,303)
-------
Net loss............................................. (5,899)
-------
Net decrease in net assets from
operations............................................. $(2,515)
=======
<FN>
* On sales of $50,000 or more the offering price is reduced.
</TABLE>
See notes to financial statements.
6
<PAGE>
FINANCIAL STATEMENTS-CONTINUED
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
(in thousands)
--------------------------------------------------------------------------------
Year ended January 31
---------------------
1995 1994
--------- --------
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income............................ $ 3,384 $ 2,857
Net realized gain(loss).......................... 404 (412)
Net unrealized appreciation (depreciation)....... (6,303) 2,921
--------- --------
Net increase (decrease) from operations.......... (2,515) 5,366
Distributions
From net investment income - Class A............. (2,541) (2,233)
From net investment income - Class B............. (770) (522)
--------- --------
(5,826) 2,611
--------- --------
Fund share transactions
Receipts for shares sold - Class A............... 4,363 9,471
Value of distributions reinvested - Class A...... 1,397 1,256
Cost of shares repurchased - Class A............. (5,158) (3,248)
--------- --------
602 7,479
--------- --------
Receipts for shares sold - Class B............... 3,284 9,510
Value of distributions reinvested - Class B...... 379 201
Cost of shares repurchased - Class B............. (3,051) (1,895)
--------- --------
612 7,816
--------- --------
Net increase from Fund share transactions..... 1,214 15,295
--------- --------
Total increase (decrease)................. (4,612) 17,906
Net assets
Beginning of period.............................. 60,600 42,694
--------- --------
End of period (including undistributed
net investment income of $134 and $58,
respectively)................................... $ 55,988 $ 60,600
========= ========
Number of Fund shares
Sold - Class A................................... 638 1,319
Issued for distributions reinvested - Class A.... 208 175
Repurchased - Class A............................ (773) (452)
--------- --------
73 1,042
--------- --------
Sold - Class B................................... 480 1,322
Issued for distributions reinvested - Class B.... 56 34
Repurchased - Class B............................ (461) (265)
--------- --------
75 1,091
--------- --------
Net increase in shares outstanding............ 148 2,133
Outstanding at
Beginning of period.............................. 8,257 6,124
--------- --------
End of period.................................... 8,405 8,257
========= ========
See notes to financial statements.
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
NOTE 1. ACCOUNTING POLICIES
Colonial Michigan Tax-Exempt Fund (the Fund), a series of Colonial
Trust V, is a Massachusetts business trust, registered under the Investment
Company Act of 1940, as amended, as amended, as a non-diversified, open-end,
management investment company. The Fund may issue an unlimited number of
shares. The Fund offers Class A shares sold with a front-end sales charge and
Class B shares which are subject to an annual distribution fee and a contingent
deferred sales charge. Class B shares will convert Class A shares when they
have been outstanding approximately eight years. The following significant
accounting policies are consistently followed by the Fund in the preparation of
its financial statements and conform to generally accepted accounting
principles.
--------------------------------------------------------------------------------
SECURITY VALUATION AND TRANSACTIONS
Debt securities generally are valued by a pricing service based upon
market transactions for normal, institutional-size trading units of similar
securities. When management deems it appropriate, an over-the-counter or
exchange bid quotation is used.
Futures contracts are valued based on the difference between the last
sale price and the opening price of the contract.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
Portfolio positions which cannot be valued as set forth above are
valued at fair value under procedures approved by the Trustees.
Security transactions are accounted for on the date the securities are
purchased or sold.
Cost is determined and gains and losses are based upon the specific
identification method for both financial statement and federal income tax
purposes.
The Fund may trade securities on other than normal settlement terms.
This may increase the risk if the other party to the transaction fails to
deliver and causes the Fund to subsequently invest at less advantageous prices.
--------------------------------------------------------------------------------
DETERMINATION OF CLASS NET ASSET VALUES AND FINANCIAL HIGHLIGHTS
All income, expenses (other than the Class B distribution fee), realized
and unrealized gains (losses) are allocated to each class proportionately on a
daily basis for purposes of determining the net asset value of each class.
Class B per share data and ratios are calculated by adjusting the
expense and net investment income per share data and ratios for the Fund for
the entire period by the distribution fee applicable to Class B shares only.
--------------------------------------------------------------------------------
FEDERAL INCOME TAXES
Consistent with the Fund's policy to qualify as a regulated investment
company and to distribute all of its taxable and tax-exempt income, no federal
income tax has been accrued.
--------------------------------------------------------------------------------
INTEREST INCOME, DEBT DISCOUNT AND PREMIUM
Interest income is recorded on the accrual basis. Original issue
discount is accreted to interest income over the life of a security with a
corresponding increase in the cost basis; market discount is not accreted.
Premium is amortized against interest income with a corresponding decrease in
the cost basis.
--------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
The Fund declares and records distributions daily and pays monthly.
The amount and character of income and gains to be distributed are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles.
--------------------------------------------------------------------------------
NOTE 2. FEES AND COMPENSATION PAID TO AFFILIATES
MANAGEMENT FEE
Colonial Management Associates, Inc. (the Adviser) is the investment
adviser of the Fund and furnishes accounting and other services and office
facilities for a monthly fee. Through June 30, 1994,
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS - continued
================================================================================
this fee was 0.60% annually of the Fund's average net assets. Effective July 1,
1994, the monthly fee is based on each Fund's pro rata portion of the combined
average net assets of Trust V as follows:
Average Net Assets Annual Fee Rate
----------------------- -------------------
First $1 billion 0.55%
Next $1 billion 0.50%
Over $2 billion 0.45%
--------------------------------------------------------------------------------
BOOKKEEPING FEE
The Adviser provides bookkeeping and pricing services for $27,000 per
year plus 0.035% of the Fund's average net assets over $50 million.
--------------------------------------------------------------------------------
TRANSFER AGENT
Colonial Investors Service Center, Inc. (the Transfer Agent), an
affiliate of the Adviser, provides shareholder services for a monthly fee equal
to 0.14% annually of the Fund's average net assets and receives a reimbursement
for certain out of pocket expenses.
--------------------------------------------------------------------------------
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES
The Adviser, through Colonial Investment Services, Inc. (the
Distributor), is the Fund's principal underwriter. During the year ended
January 31, 1995, the Distributor retained net underwriting discounts of
$11,936 on sales of the Fund's Class A shares and received contingent deferred
sales charges (CDSC) of $67,771 on Class B share redemptions."
The Fund has adopted a 12b-1 plan which requires the payment of a
distribution fee to the Distributor equal to 0.75% annually of the average net
assets attributable to Class B shares. Effective December 1, 1994, the plan
was amended to include payment by the Fund of a service fee applicable to both
Class A and Class B, to the Distributor as follows:
Valuation of shares Annual
outstanding on the 20th of Fee
each month which were issued Rate
------------------------------------------- ----------
Prior to November 30, 1994................. 0.10%
On or after December 1, 1994............... 0.25%
The CDSC and the fees received from the 12b-1 plan are used principally
as repayment to the Distributor for amounts paid by the Distributor to dealers
who sold such shares.
--------------------------------------------------------------------------------
EXPENSE LIMITS
The Adviser has agreed, until further notice to waive fees and bear
certain Fund expenses to the extent that total expenses (exclusive of service
and distribution fees, brokerage commissions, interest, taxes, and extraordinary
expenses, if any) exceed 0.60% annually of the Fund's average net assets.
--------------------------------------------------------------------------------
OTHER
The Fund pays no compensation to its officers, all of whom are employees
of the Adviser.
The Fund's Trustees may participate in a deferred compensation plan
which may be terminated at any time. Obligations of the plan will be paid
solely out of the Fund's assets.
--------------------------------------------------------------------------------
NOTE 3. PORTFOLIO INFORMATION
During the year ended January 31, 1995, purchases and sales of
investments, other than short-term obligations, were $24,345,863 and
$22,869,086, respectively.
Unrealized appreciation (depreciation) at January 31, 1995, based on
cost of investments for both financial statement and federal income tax purposes
was:
Gross unrealized appreciation.................... $1,172,513
Gross unrealized depreciation..................... (1,827,160)
-----------
Net unrealized depreciation.................... $ (654,647)
===========
--------------------------------------------------------------------------------
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS - continued
================================================================================
CAPITAL LOSS CARRYFORWARDS
At January 31, 1995, capital loss carryforwards available (to the
extent provided in regulations) to offset future realized gains were
approximately as follows:
Year of Capital loss
expiration carryforward
------------ --------------
1996........ $910,000
1997........ 131,000
1998........ 49,000
1999........ 98,000
2003........ 196,000
--------------
$1,384,000
==============
Expired capital loss carryforwards, if any, are recorded as a
reduction of capital paid in.
To the extent loss carryforwards are used to offset any future
realized gains, it is unlikely that such gains would be distributed since they
may be taxable to shareholders as ordinary income.
--------------------------------------------------------------------------------
OTHER
There are certain risks arising from geographic concentration in any
state. Certain revenue or tax related events in a state may impair the ability
of certain issuers of municipal securities to pay principal and interest on
their obligations.
The Fund may focus its investments in certain industries, subjecting
it to greater risk than a fund that is more diversified.
The Fund sells municipal and Treasury bond futures contracts to manage
overall portfolio interest rate exposure and not for trading purposes. The
use of futures contracts involves certain risks, which include (1) imperfect
correlation between the price movement of the contracts and the underlying
securities, (2) inability to close out positions due to different trading
hours, or the temporary absence of a liquid market, for either the contract or
the underlying securities, or (3) an inaccurate prediction by the Adviser of
the future direction of interest rates. Any of these risks may involve amounts
exceeding the initial or variation margin recorded in the Fund's Statement of
Assets and Liabilities at any given time.
--------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION (UNAUDITED)
Approximately $0.390 of Class A and $0.339 of Class B distributions
will be treated as exempt income for federal income tax purposes and $0.011 of
the distributions will be treated as distributions from taxable income.
--------------------------------------------------------------------------------
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
Selected data for a share of each class outstanding throughout each period are as follows:
----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Year ended January 31
==============================================================================================
1995 1994 1993 1992 1991
================== ================== ================== ======= =======
Class A Class B Class A Class B Class A Class B (b) Class A Class A
======= ======= ======= ======= ======= ======= ======= =======
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value - Beginning
of period..................... $ 7.340 $ 7.340 $ 6.970 $ 6.970 $ 6.730 $6.950 $6.520 $6.520
------------------ ------------------ ------------------ ------- -------
Income (loss) from investment
operations:
Net investment income (a)..... 0.410 0.359 0.404 0.351 0.405 0.167 0.432 0.441
Net realized and unrealized
gain (loss) on investments... (0.689) (0.689) 0.356 0.356 0.250 0.029 0.208 (0.001)
------------------ ------------------ ------------------ ------- -------
Total from investment
operations................... (0.279) (0.330) 0.760 0.707 0.655 0.196 0.640 0.440
------------------ ------------------ ------------------ ------- -------
Less distributions declared
to shareholders:
From net investment income.. (0.401) (0.350) (0.390) (0.337) (0.407) (0.168) (0.430) (0.440)
In excess of net
investment income......... -- -- -- -- (0.008) (0.008) -- --
------------------ ------------------ ------------------ ------- -------
Total distributions
declared to shareholders..... (0.401) (0.350) (0.390) (0.337) (0.415) (0.176) (0.430) (0.440)
------------------ ------------------ ------------------ ------- -------
Net asset value - End of period $ 6.660 $ 6.660 $ 7.340 $ 7.340 $ 6.970 $6.970 $6.730 $6.520
================== ================== ================== ======= =======
Total return (c)(d)............ (3.66)% (4.39)% 11.16% 10.36% 10.04% 0.98% (f) 10.12% 7.01%
================== ================== ================== ======= =======
Ratios to average net assets:
Expenses...................... 0.62%(e) 1.37% (e) 0.66% 1.41% 0.88% 1.63% (g) 0.95% 1.00%
Net investment income......... 6.08% 5.33% 5.61% 4.86% 5.86% 5.11% (g) 6.50% 6.79%
Fees and expenses waived
or borne by the adviser....... 0.32% 0.32% 0.33% 0.33% 0.32% 0.32% 0.35% 0.40%
Portfolio turnover............. 40% 40% 7% 7% 14% 14% 5% 18%
Net assets at end of period
(000)......................... $41,844 $14,144 $45,570 $15,030 $ 36,024 $ 6,670 $28,608 $24,273
<FN>
(a) Net of fees and expenses
waived or borne by the
adviser which amounted to.. $ 0.022 $ 0.022 $ 0.024 $ 0.024 $ 0.022 $ 0.009 $0.023 $ 0.026
(b) Class B shares were initially offered on August 4, 1992. Per share amounts reflect activity from that date .
(c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or CDSC.
(d) Had the adviser not waived or reimbursed a portion of expenses total return would have been reduced.
(e) Includes service fee since its inception on December 1, 1994, of 0.02% (not annualized).
(f) Not annualized.
(g) Annualized.
</TABLE>
11
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
-------------------------------------------------------------------------------
TO THE TRUSTEES OF COLONIAL TRUST V AND THE SHAREHOLDERS OF COLONIAL MICHIGAN
TAX-EXEMPT FUND
In our opinion, the accompanying statement of assets and liabilities,
including the investment portfolio, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in
all material respects, the financial position of Colonial Michigan Tax-Exempt
Fund (a series of Colonial Trust V) at January 31, 1995, the results of its
operations, the changes in its net assets and the financial highlights for the
periods indicated, in conformity with generally accepted accounting principles.
These financial statements and the financial highlights (hereafter referred to
as "financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in
accordance with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included
confirmation of portfolio positions at January 31, 1995 by correspondence with
the custodian, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
March 10, 1995
<PAGE>
INVESTMENT PORTFOLIO (in thousands) JANUARY 31, 1995
================================================================================
<TABLE>
<CAPTION>
MUNICIPAL BONDS - 99.1% PAR VALUE
--------------------------------------------------------------
<S> <C> <C>
CONSUMER PRODUCTS - 0.6%
Buffalo, Ruden Manufacturing Inc.,
10.500% 09/01/14. . . . . . $ 300 $ 312
--------------------------------------------------------------
EDUCATION - 15.1%
Anoka-Hennepin Independent School
District No. 11, Series 1993-C,
5.000% 02/01/09(a) . . . . 1,000 891
Bagley Independent School District
No. 162, Series 1994,
4.850% 02/01/12. . . . . . 750 635
Benson Independent School District
No. 777, Series 1992,
6.000% 02/01/15. . . . . . 500 484
Brainerd Independent School
District No. 181,
7.000% 06/01/11. . . . . . 200 215
Delano Independent School
District No. 879:
7.250% 02/01/09. . . . . . 100 110
7.250% 02/01/10. . . . . . 100 110
Elk River Independent School
District No. 728, Series 1991 A,
7.000% 02/01/11. . . . . . 100 106
Faribault Independent School
District No. 656,
5.750% 06/01/15(b) . . . . 1,500 1,419
Milaca Independent School District
No. 912,
5.500% 02/01/20. . . . . . 740 622
Minneapolis Special School District
No. 1,
7.300% 02/01/09. . . . . . 300 316
Montevideo Independent School
District No. 1, Series 1993,
4.900% 02/01/10. . . . . . 400 350
New York Mills Independent School
District No. 553, Series 1992 A,
6.850% 02/01/18. . . . . . 210 224
Roseau Independent School
District No. 682,
7.000% 02/01/14. . . . . . 200 206
Rosemount Independent School
District No. 196,
Series 1994-B,
(c) 06/01/10. . . . . . 2,765 1,071
State Higher Education Facilities
Authority:
Carlton College, Series 3-L1,
5.750% 11/01/12. . . . . . 500 476
Hamline University, Series 3-K,
6.600% 06/01/08. . . . . . $ 250 $ 257
Wadena Independent School
District No. 819,
5.500% 02/01/13. . . . . . 200 184
--------
7,676
--------------------------------------------------------------
ELECTRIC- 20.8%
Anoka County, United Power Association,
Series 1987 A,
6.950% 12/01/08. . . . . . 400 418
Bass Brook, Minnesota Power &
Light Co.,
6.000% 07/01/22. . . . . . 800 747
Northern Municipal Power Agency,
Minnesota Power & Light Co.,
Series 1989-A,
7.250% 01/01/16. . . . . . 700 740
Northern Power Electric Agency,
5.500% 01/01/18(a). . . . 1,400 1,265
Southern Minnesota Municipal
Power Agency:
(c) 01/01/27(a) . . . . 18,000 2,295
Series 1993 A:
4.750% 01/01/16(d) . . . . 2,000 1,625
5.000% 01/01/12 . . . . . 750 636
Series A,
5.750% 01/01/18. . . . . . 1,500 1,384
Western Minnesota Municipal
Power Agency:
Series 1983 A,
9.750% 01/01/16. . . . . . 1,000 1,368
Series 1985 A,
9.050% 01/01/00. . . . . . 25 26
--------
10,504
--------------------------------------------------------------
GENERAL OBLIGATIONS - 1.5%
Chaska, General Obligation, Series 1985,
8.200% 12/01/01. . . . . . 25 25
Minneapolis-St. Paul,
Minneapolis-St. Paul International
Airport, Series 1988,
7.800% 01/01/11. . . . . . 300 324
Rochester,
Series 1990-A,
7.150% 12/01/11. . . . . . 200 213
Virginia, Series 1989-B:
7.500% 02/01/07. . . . . . 100 107
7.500% 02/01/08. . . . . . 100 107
--------
776
--------------------------------------------------------------
</TABLE>
See notes to financial statements.
3
<PAGE>
INVESTMENT PORTFOLIO - continued
================================================================================
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
--------------------------------------------------------------
<S> <C> <C>
HOSPITALS & HEALTH CARE- 18.8%
Bloomington Health Care Facilities
Development Authority, Masonic Home
Care Center Project,
5.875% 07/01/22. . . . . . $ 500 $ 474
Breckenridge, Franciscan Sisters
Health Care Center, Series 1987 B2,
9.375% 09/01/17. . . . . . 500 557
Burnsville, Fairview Community
Hospital, Series 1982-A,
(c) 05/01/12. . . . . . 2,145 724
Duluth Economic Development
Authority:
Benedictine Health Systems,
St. Mary's Medical Center,
Series 1993 B,
6.000% 02/15/17. . . . . . 500 474
St. Luke's Hospital, Series 1992 A,
6.400% 05/01/12. . . . . . 300 301
The Duluth Clinic, Ltd.,
6.200% 11/01/12. . . . . . 250 249
Mankato, Immanuel St. Joseph's
Hospital, Series 1992 A,
6.300% 08/01/22. . . . . . 250 225
Minneapolis, Lifespan, Inc.,
Series 1988 B,
8.125% 08/01/17. . . . . . 245 263
Minneapolis-St. Paul Housing &
Redevelopment Authority:
Healtheast Project, Series 1993A,
6.625% 11/01/17. . . . . . 250 220
Healthspan, Series 1993-A,
4.750% 11/15/18(a) . . . . 2,000 1,573
St. Paul-Ramsey Medical Center
Project, Series 1993,
5.550% 05/15/23. . . . . . 250 220
Princeton, Fairview Hospital,
Series 1991-C,
6.250% 01/01/21. . . . . . 300 297
Red Wing, River Region Health
Care Facilities, Series 1993-A:
6.400% 09/01/12. . . . . . 200 183
6.500% 09/01/22. . . . . . 300 271
Rochester, Mayo Foundation,
Series 1992 I,
5.750% 11/15/21. . . . . . 1,000 902
St. Louis:
Healthsystem, Inc., Series 1993-A,
5.200% 07/01/23(a) . . . . 2,670 2,229
Methodist Hospital, Series 1990-A,
7.250% 07/01/15. . . . . . 300 324
--------
9,486
--------------------------------------------------------------
HOUSING - 19.0%
MULTI-FAMILY - 9.9%
Burnsville,
Coventry Court Apartments,
7.500% 09/01/17. . . . . . $ 500 $ 511
Chisago & Stearns Counties,
7.050% 09/01/27 . . . . . . 1,500 1,515
Eden Prairie, Preserve Place
Apartments,
8.000% 07/01/28. . . . . . 650 665
Lakeville, Southfork
Apartment Project, Series 1989 A,
9.875% 02/01/20. . . . . . 200 196
Minneapolis Community Development
Agency, Home Ownership Mortgage,
7.875% 07/01/17. . . . . . 635 649
Minneapolis, Seward Towers,
Series 1990,
7.375% 12/20/30. . . . . . 300 301
Minnetonka, Cedar Hills East Project,
Series 1985,
7.500% 12/01/27. . . . . . 300 311
Robbinsdale, Copperfield Hill,
Series 1985,
9.250% 12/01/18. . . . . . 350 350
State Housing Finance Agency,
Series 1991 A,
6.950% 02/01/14. . . . . . 300 304
White Bear Lake, Birch Lake
Townhomes Project,
Series 1988-A,
9.750% 07/15/19. . . . . . 200 205
--------
5,007
--------------------------------------------------------------
SINGLE-FAMILY - 9.1%
Dakota & Washington Counties
Housing & Redevelopment Authority:
Series 1986,
7.200% 12/01/09 . . . . . 90 93
Series 1988,
8.150% 09/01/16 . . . . . 235 240
Minneapolis, Riverplace Project,
Series 1987-A,
7.100% 01/01/20 . . . . . 255 259
St. Paul Housing Board,
Series 1987 C,
8.875% 11/01/18 . . . . . 505 528
Moorhead Residential Mortgage,
7.100% 08/01/11 . . . . . 20 22
</TABLE>
See notes to financial statements.
4
<PAGE>
INVESTMENT PORTFOLIO - continued
================================================================================
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
--------------------------------------------------------------
<S> <C> <C>
HOUSING - CONT.
SINGLE-FAMILY - CONT.
State Housing Finance Agency:
Series L,
6.700% 07/01/20. . . . . . $ 1,000 $ 985
Series 1987 A,
8.500% 02/01/17. . . . . . 25 26
Series 1987 C,
9.000% 08/01/18. . . . . . 600 613
Series 1988 C,
8.500% 07/01/19. . . . . . 95 99
Series 1988 D,
8.050% 08/01/18. . . . . . 240 244
Series 1992 C2,
6.150% 07/01/23. . . . . . 435 396
Series 1992 D2:
5.850% 07/01/11. . . . . . 440 410
5.950% 01/01/17. . . . . . 435 399
Washington County Housing &
Redevelopment Authority:
Cottages of Aspen Project,
9.250% 06/01/22. . . . . . 200 191
Series 1986,
7.600% 12/01/11. . . . . . 110 110
--------
4,615
--------------------------------------------------------------
IN-SUBSTANCE DEFEASED (E) - 11.6%
Centennial Independent School
District No. 12, Series 1991-A,
7.150% 02/01/11. . . . . . 100 107
East Central Solid Waste
Commission, Series 1990 B,
7.600% 06/01/07(a) . . . . 400 425
Fairbault County:
7.400% 04/01/06. . . . . . 65 68
7.400% 04/01/07. . . . . . 125 131
7.400% 04/01/09. . . . . . 25 26
7.400% 04/01/10. . . . . . 150 157
Minneapolis, Lifespan, Inc.:
Series 1987 A,
8.125% 04/01/17. . . . . . 300 323
Series 1987 B,
9.125% 12/01/14. . . . . . 200 223
Minneapolis-St. Paul Housing &
Redevelopment Authority:
Health One Group, Series 1990-C,
8.000% 08/15/19. . . . . . 500 567
New London-Spicer Independent
School District No. 345,
Series 1991,
6.600% 02/01/16 . . . . . $ 200 $ 211
Northfield, St. Olaf College,
Series 1988,
8.000% 10/01/18 . . . . . . 600 650
Owatonna Independent School
District No. 761, Series 1990:
7.100% 02/01/09 . . . . . . 115 123
7.100% 02/01/10 . . . . . . 120 128
7.100% 02/01/11 . . . . . . 130 139
Owatonna Public Utilities Revenue,
6.750% 01/01/16 . . . . . . 500 529
Rockford Independent School
District No. 883,
7.100% 12/15/10 . . . . . . 400 427
Southern Minnesota Municipal
Power Agency, Series 1985-A,
7.000% 01/01/18 . . . . . . 405 412
St. Cloud Hospital, Series 1990-B,
7.000% 07/01/20 . . . . . . 150 164
St. Louis Park, Methodist Hospital,
Series 1990-C,
7.250% 07/01/18 . . . . . . 165 181
State Higher Educational Facilities,
St. Thomas College, Series 2-0,
7.600% 10/01/07 . . . . . . 200 214
University of Minnesota,
Series 1986-A:
7.625% 02/01/05 . . . . . . 500 523
7.750% 02/01/10 . . . . . . 50 52
University of St. Thomas, Series 3 C,
7.100% 09/01/10 . . . . . . 100 109
--------
5,889
--------------------------------------------------------------
NURSING HOMES - 0.5%
Roseville, Care Institute, Inc.,
Series 1993,
7.750% 11/01/23 . . . . . . 300 272
--------------------------------------------------------------
POLLUTION CONTROL REVENUE - 1.3%
State Public Facilities Authority:
Series 1989-A,
7.000% 03/01/09 . . . . . . 100 105
Series 1990-A,
7.100% 03/01/12 . . . . . . 300 317
Series 1991 A,
6.950% 03/01/13 . . . . . . 200 211
--------
633
--------------------------------------------------------------
</TABLE>
See notes to investment portfolio.
5
<PAGE>
INVESTMENT PORTFOLIO - continued
================================================================================
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
--------------------------------------------------------------
<S> <C> <C>
PUBLIC FACILITIES & IMPROVEMENT - 4.2%
Brooklyn Park, TL Systems Corp.,
Series 1991,
10.000% 09/01/16. . . . . . $ 270 $ 266
Cloquet, Diamond Brands Inc.,
9.000% 06/01/02. . . . . . 700 717
Metropolitan Council,
Hubert H. Humphrey Metrodome,
Series 1992,
6.000% 10/01/09. . . . . . 300 291
Minneapolis Community Development
Agency:
Series 1987-III,
8.625% 12/01/27. . . . . . 260 273
Series 1991-1,
8.000% 12/01/16. . . . . . 250 261
St. Paul Housing & Redevelopment,
7.750% 07/01/06. . . . . . 290 297
--------
2,105
--------------------------------------------------------------
TRANSPORTATION - 3.9%
Duluth Seaway Port Authority,
Series A,
5.750% 12/01/16. . . . . . 1,500 1,322
St. Paul Port Authority:
Series 1983-C,
9.750% 12/01/96. . . . . . 25 25
Series 1985-F,
9.125% 12/01/14. . . . . . 650 602
--------
1,949
--------------------------------------------------------------
WASTE DISPOSAL- 1.2%
Hennepin County, Series 1987-A,
8.200% 11/01/09. . . . . . 300 317
Hubbard County, Potlach Corp.,
Series 1989,
7.375% 08/01/13. . . . . . 285 296
--------
613
--------------------------------------------------------------
WATER & SEWER - 0.6%
St. Paul Sewer, Series 1988-A,
8.000% 12/01/08. . . . . . 250 273
--------------------------------------------------------------
Total investments (cost $50,953) (f) 50,110
--------------------------------------------------------------
SHORT-TERM OBLIGATIONS - 1.8%
VARIABLE RATE DEMAND NOTES (G)
IL Health Facilities, Palos,
4.250% 12/01/15. . . . . . 900 900
--------------------------------------------------------------
OTHER ASSETS & LIABILITIES, NET - (0.9)% (433)
--------------------------------------------------------------
NET ASSETS - 100.0% $ 50,577
--------------------------------------------------------------
</TABLE>
See notes to financial statements.
Notes to investment portfolio:
(a) These securities, or a portion thereof, with a market value of $7,833,
are being used to collateralize open futures contracts.
(b) This security has been purchased on a delayed delivery basis, for
settlement at a future date beyond the customary settlement time.
(c) Zero coupon bond.
(d) This security, with a market value of $1,625, is being used to
collateralize the delayed delivery purchase indicated in note (b) above.
(e) The Fund has been informed that each issuer has placed direct
obligations of the U.S. Government in an irrevocable trust, solely for
the payment of the interest and principal.
(f) Cost for federal income tax purposes is $50,935.
(g) Variable rate demand notes are considered short-term obligations.
Interest rates change periodically on specified dates. These securities
are payable on demand and are secured by either letters of credit or
other credit support agreements from banks. The rates listed are as of
January 31, 1995.
Short futures contracts open at January 31, 1995:
<TABLE>
<CAPTION>
Par value Unrealized
covered Expiration depreciation
Type contract month at 1/31/95
---------------------------------------------------------------
<S> <C> <C> <C>
Treasury bonds $6,800 March $253
---------------------------------------------------------------
</TABLE>
6
<PAGE>
FINANCIAL STATEMENTS
================================================================================
<TABLE>
<CAPTION>
STATEMENT OF ASSETS & LIABILITIES
January 31, 1995
(in thousands except for per share amounts and footnote)
--------------------------------------------------------------------------------
<S> <C>
Assets
Investments at value (cost $50,953)............................. $50,110
Short-term investments.......................................... 900
-------
51,010
Receivable for:
Interest.......................................... $ 761
Investments sold.................................. 350
Fund shares sold.................................. 58
Other................................................ 88 1,257
------- -------
Total assets........................................... 52,267
Liabilities
Payable for:
Investments purchased............................. 1,404
Distributions..................................... 235
Variation margin on futu.......................... 32
Fund shares repurchased........................... 8
Accrued:
Deferred Trustees fees............................ 5
Other............................................. 6
-------
Total liabilities...................................... 1,690
-------
Net assets...................................................... $50,577
=======
Net asset value & redemption price per share -
Class A ($35,846/5,242)..................................... $ 6.84
-------
Maximum offering price per share - Class A
($6.84/0.9525)............................................... $ 7.18*
-------
Net asset value & offering price per share -
Class B ($14,731/2,154)..................................... $ 6.84
-------
Composition of net assets
Capital paid in.............................................. $52,372
Undistributed net investment income.......................... 39
Accumulated net realized loss................................ (738)
Net unrealized depreciation on:
Investments................................................ (843)
Open futures contracts..................................... (253)
-------
................................................................ $50,577
=======
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
Year ended January 31, 1995
(in thousands)
--------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
Interest........................................................ $ 3,492
EXPENSES
Management fee....................................... $ 295
Service fee.......................................... 9
Distribution fee - Class B........................... 99
Transfer agent....................................... 88
Bookkeeping fee...................................... 28
Trustees fees........................................ 10
Custodian fee........................................ 7
Audit fee............................................ 32
Legal fee............................................ 6
Registration fees.................................... 22
Reports to shareholders.............................. 6
Other................................................ 8
..................................................... 610
-------
Fees waived by the adviser........................... (137) 473
------- -------
Net investment income................................... 3,019
-------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON PORTFOLIO POSITIONS
Net realized gain (loss) on :
Investments........................................ (77)
Closed futures contracts........................... 107
-------
Net realized gain.......................................... 30
Net unrealized depreciation
during the period on:
Investments........................................ (4,524)
Open futures contracts............................. (253)
-------
Net unrealized depreciation................................ (4,777)
-------
Net loss................................................ (4,747)
-------
Net decrease in net assets from
operations................................................... $(1,728)
=======
</TABLE>
* On sales of $50,000 or more the offering price is reduced.
See notes to financial statements.
7
<PAGE>
FINANCIAL STATEMENTS - continued
================================================================================
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
(in thousands)
--------------------------------------------------------------------------------
Year ended January 31
------------------------
1995 1994
-------- --------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income............................................................ $ 3,019 $ 2,549
Net realized gain................................................................ 30 59
Net unrealized appreciation (depreciation)....................................... (4,777) 1,870
-------- --------
Net increase (decrease) from operations.................................... (1,728) 4,478
Distributions
From net investment income - Class A............................................. (2,325) (2,234)
From net investment income - Class B............................................. (681) (322)
-------- --------
(4,734) 1,922
-------- --------
Fund share transactions
Receipts for shares sold - Class A............................................... 4,991 9,283
Value of distributions reinvested - Class A...................................... 1,606 1,500
Cost of shares repurchased - Class A............................................. (8,415) (6,138)
-------- --------
(1,818) 4,645
-------- --------
Receipts for shares sold - Class B............................................... 6,114 8,211
Value of distributions reinvested - Class B...................................... 430 180
Cost of shares repurchased - Class B............................................. (1,058) (505)
-------- --------
5,486 7,886
-------- --------
Net increase from Fund share transactions.................................. 3,668 12,531
-------- --------
Total increase (decrease)............................................ (1,066) 14,453
-------- --------
NET ASSETS
Beginning of period.............................................................. 51,643 37,190
-------- --------
End of period (including undistributed
net investment income of $39 and $23, respectively)............................. $ 50,577 $ 51,643
======== ========
NUMBER OF FUND SHARES
Sold - Class A................................................................... 708 1,266
Issued for distributions reinvested - Class A.................................... 232 204
Repurchased - Class A............................................................ (1,226) (835)
-------- --------
(286) 635
-------- --------
Sold - Class B................................................................... 869 1,118
Issued for distributions reinvested - Class B.................................... 62 27
Repurchased - Class B............................................................ (157) (68)
-------- --------
774 1,077
-------- --------
Net increase in shares outstanding......................................... 488 1,712
Outstanding at
Beginning of period........................................................... 6,908 5,196
-------- --------
End of period................................................................. 7,396 6,908
======== ========
</TABLE>
See notes to financial statements.
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
NOTE 1. ACCOUNTING POLICIES
Colonial Minnesota Tax-Exempt Fund (the Fund), a series of Colonial Trust
V, is a Massachusetts business trust, registered under the Investment Company
Act of 1940, as amended, as a non-diversified, open-end, management investment
company. The Fund may issue an unlimited number of shares. The Fund offers Class
A shares sold with a front-end sales charge and Class B shares which are subject
to an annual distribution fee and a contingent deferred sales charge. Class B
shares will convert to Class A shares when they have been outstanding
approximately eight years. The following significant accounting policies are
consistently followed by the Fund in the preparation of its financial statements
and conform to generally accepted accounting principles.
--------------------------------------------------------------------------------
SECURITY VALUATION AND TRANSACTIONS
Debt securities generally are valued by a pricing service based upon market
transactions for normal, institutional-size trading units of similar securities.
When management deems it appropriate, an over- the-counter or exchange bid
quotation is used.
Futures contracts are valued based on the difference between the last sale
price and the opening price of the contract.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
Portfolio positions which cannot be valued as set forth above are valued at
fair value under procedures approved by the Trustees.
Security transactions are accounted for on the date the securities are
purchased or sold.
Cost is determined and gains and losses are based upon the specific
identification method for both financial statement and federal income tax
purposes.
The Fund may trade securities on other than normal settlement terms. This
may increase the risk if the other party to the transaction fails to deliver and
causes the Fund to subsequently invest at less advantageous prices.
--------------------------------------------------------------------------------
DETERMINATION OF CLASS NET ASSET VALUES AND
FINANCIAL HIGHLIGHTS
All income, expenses (other than the Class B distribution fee), realized
and unrealized gains (losses) are allocated to each class proportionately on a
daily basis for purposes of determining the net asset value of each class.
Class B per share data and ratios are calculated by adjusting the expense
and net investment income per share data and ratios for the Fund for the entire
period by the distribution fee applicable to Class B shares only.
--------------------------------------------------------------------------------
FEDERAL INCOME TAXES
Consistent with the Fund's policy to qualify as a regulated investment
company and to distribute all of its taxable and tax-exempt income, no federal
income tax has been accrued.
--------------------------------------------------------------------------------
INTEREST INCOME, DEBT DISCOUNT AND PREMIUM
Interest income is recorded on the accrual basis. Original issue discount
is accreted to interest income over the life of a security with a corresponding
increase in the cost basis; market discount is not accreted. Premium is
amortized against interest income with a corresponding decrease in the cost
basis.
-------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
The Fund declares and records distributions daily and pays monthly.
The amount and character of income and gains to be distributed are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles.
--------------------------------------------------------------------------------
NOTE 2. FEES AND COMPENSATION PAID TO AFFILIATES
MANAGEMENT FEE
Colonial Management Associates, Inc. (the Adviser) is the investment
adviser of the Fund and furnishes accounting and other services and office
facilities for a monthly fee. Through June 30, 1994,
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS - continued
================================================================================
this fee was 0.60% annually of the Fund's average net assets. Effective July 1,
1994, the monthly fee is based on each Fund's pro rata portion of the combined
average net assets of Trust V as follows:
<TABLE>
<CAPTION>
Average Net Assets Annual Fee Rate
------------------ ---------------
<S> <C>
First $1 billion 0.55%
Next $1 billion 0.50%
Over $2 billion 0.45%
</TABLE>
--------------------------------------------------------------------------------
BOOKKEEPING FEE
The Adviser provides bookkeeping and pricing services for $27,000 per year
plus 0.035% of the Fund's average net assets over $50 million.
--------------------------------------------------------------------------------
TRANSFER AGENT
Colonial Investors Service Center, Inc. (the Transfer Agent), an affiliate
of the Adviser, provides shareholder services for a monthly fee equal to 0.14%
annually of the Fund's average net assets and receives a reimbursement for
certain out of pocket expenses.
--------------------------------------------------------------------------------
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES
The Adviser, through Colonial Investment Services, Inc. (the Distributor),
is the Fund's principal underwriter. During the year ended January 31, 1995,
the Distributor retained net underwriting discounts of $11,627 on sales of the
Fund's Class A shares and received contingent deferred sales charges (CDSC) of
$30,726 on Class B share redemptions.
The Fund has adopted a 12b-1 plan which requires the payment of a
distribution fee to the Distributor equal to 0.75% annually of the average net
assets attributable to Class B shares. Effective December 1, 1994, the plan was
amended to include payment by the Fund of a service fee, applicable to both
Class A and Class B, to the Distributor as follows:
<TABLE>
<CAPTION>
Valuation of shares Annual
outstanding on the 20th of Fee
each month which were issued Rate
------------------------------- ------
<S> <C>
Prior to November 30, 1994....................................... 0.10%
On or after December 1, 1994..................................... 0.25%
</TABLE>
The CDSC and the fees received from the 12b-1 plan are used principally
asrepayment to the Distributor for amounts paid by the Distributor to dealers
who sold such shares.
--------------------------------------------------------------------------------
EXPENSE LIMITS
The Adviser has agreed, until further notice to waive fees and bear certain
Fund expenses to the extent that total expenses (exclusive of service and
distribution fees, brokerage commissions, interest, taxes, and extraordinary
expenses, if any) exceed 0.70% annually of the Fund's average net assets.
--------------------------------------------------------------------------------
OTHER
The Fund pays no compensation to its officers, all of whom are employees of
the Adviser.
The Fund's Trustees may participate in a deferred compensation plan which
may be terminated at any time. Obligations of the plan will be paid solely out
of the Fund's assets.
--------------------------------------------------------------------------------
NOTE 3. PORTFOLIO INFORMATION
During the year ended January 31, 1995 purchases and sales of investments,
other than short-term obligations, were $17,755,216 and $13,139,778,
respectively.
Unrealized appreciation (depreciation) at January 31, 1995, based on cost of
investments for federal income tax purposes was:
<TABLE>
<S> <C>
Gross unrealized appreciation........................ $ 1,286,592
Gross unrealized depreciation........................ (2,112,149)
-----------
Net unrealized depreciation....................... $ (825,557)
</TABLE> ===========
10
<PAGE>
NOTES TO FINANCIAL STATEMENTS - continued
================================================================================
CAPITAL LOSS CARRYFORWARDS
At January 31, 1995, capital loss carryforwards available (to the extent
provided in regulations) to offset future realized gains were approximately as
follows:
<TABLE>
<CAPTION>
Year of Capital loss
expiration carryforward
---------- -----------
<S> <C>
1996.............. $396,000
1997.............. 298,000
1999.............. 4,000
2001.............. 8,000
2002.............. 39,000
--------
$745,000
========
</TABLE>
Expired capital loss carryforwards, if any, are recorded as a reduction of
capital paid in.
To the extent loss carryforwards are used to offset any future realized
gains, it is unlikely that such gains would be distributed since they may be
taxable to shareholders as ordinary income.
--------------------------------------------------------------------------------
OTHER
There are certain risks arising from geographic concentration in any state.
Certain revenue or tax related events in a state may impair the ability of
certain issuers of municipal securities to pay principal and interest on their
obligations.
The Fund may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
The Fund sells municipal and Treasury bond futures contracts to manage
overall portfolio interest rate exposure and not for trading purposes. The use
of futures contracts involves certain risks, which include (1) imperfect
correlation between the price movement of the contracts and the underlying
securities, (2) inability to close out positions due to different trading hours,
or the temporary absence of a liquid market, for either the contract or the
underlying securities, or (3) an inaccurate prediction by the Adviser of the
future direction of interest rates. Any of these risks may involve amounts
exceeding the initial or variation margin recorded in the Fund's Statement of
Assets and Liabilities at any given time.
--------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION (UNAUDITED)
All of the distributions will be treated as exempt income for federal
income tax purposes.
11
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
Selected data for a share of each class outstanding throughout each period are
as follows:
<TABLE>
<CAPTION>
YEAR ENDED JANUARY 31
-----------------------------------------------------------------------------
1995 1994 1993
-------------------- ------------------ ------------------------
CLASS A CLASS B CLASS A CLASS B CLASS A CLASS B (b)
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value - Beginning
of period...................... $7.480 $7.480 $7.160 $7.160 $7.030 $7.210
------- ------- ------- ------- ------- ------
Income (loss) from investment
operations:
Net investment income (a)...... 0.415 0.363 0.419 0.364 0.449 0.191
Net realized and unrealized
gain(loss) on investments.... (0.642) (0.642) 0.323 0.323 0.125 (0.049)
------- ------- ------- ------- ------- ------
Total from investment
operations................... (0.227) (0.279) 0.742 0.687 0.574 0.142
------- ------- ------- ------- ------- ------
Less distributions declared
to shareholders:
From net investment income..... (0.413) (0.361) (0.422) (0.367) (0.444) (0.192)
From capital paid in (c)....... -- -- -- -- -- --
------- ------- ------- ------- ------- ------
Total distributions
declared to shareholders..... (0.413) (0.361) (0.422) (0.367) (0.444) (0.192)
------- ------- ------- ------- ------- ------
Net asset value - End of period.. $6.840 $6.840 $7.480 $7.480 $7.160 $7.160
======= ======= ======= ======= ======= ======
Total return (d)(e).............. (2.92)% (3.65)% 10.62% 9.81% 8.41% 2.01%(g)
======= ======= ======= ======= ======= ======
Ratios to average net assets:
Expenses....................... 0.72% (f) 1.47%(f) 0.82% 1.57% 0.85% 1.60%(h)
Net investment income.......... 5.98% 5.23% 5.69% 4.94% 6.33% 5.58%(h)
Fees and expenses waived
or borne by the adviser........ 0.26% 0.26% 0.20% 0.20% 0.35% 0.35%
Portfolio turnover............... 26% 26% 9% 9% 5% 5%
Net assets at end of period
(000).......................... $35,846 $14,731 $41,326 $10,317 $35,017 $2,173
(a) Net of fees and expenses
waived or borne by the
adviser which amounted to.... $0.018 $0.018 $0.015 $0.015 $0.025 $0.009
(b) Class B shares were initially offered on August 4, 1992. Per share amounts
reflect activity from that date.
(c) Because of differences between book and tax basis accounting, there was no
return of capital for federal income tax purposes.
(d) Total return at net asset value assuming all distributions reinvested and no
initial sales charge or CDSC.
(e) Had the adviser not waived or reimbursed a portion of expenses total return
would have been reduced.
(f) Includes service fee since its inception on December 1, 1994, of 0.02%
(not annualized).
(g) Not annualized.
(h) Annualized.
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED JANUARY 31
---------------------
1992 1991
-------- -------
CLASS A CLASS A
-------- -------
<S> <C> <C>
Net asset value - Beginning
of period...................... $6.930 $6.820
------- -------
Income (loss) from investment
operations:
Net investment income (a)...... 0.461 0.467
Net realized and unrealized
gain(loss) on investments.... 0.098 0.108
------- -------
Total from investment
operations................... 0.559 0.575
------- -------
Less distributions declared
to shareholders:
From net investment income..... (0.458) (0.465)
From capital paid in (c)....... (0.001) --
------- -------
Total distributions
declared to shareholders..... (0.459) (0.465)
------- -------
Net asset value - End of period.. $7.030 $6.930
======= =======
Total return (d)(e).............. 8.33% 8.70%
======= =======
Ratios to average net assets:
Expenses....................... 0.88% 1.00%
Net investment income.......... 6.58% 6.77%
Fees and expenses waived
or borne by the adviser........ 0.42% 0.37%
Portfolio turnover............... 1% 7%
Net assets at end of period
(000).......................... $30,676 $24,188
(a) Net of fees and expenses
waived or borne by the
adviser which amounted to.... $0.025 $0.009
(b) Class B shares were initially offered on August 4, 1992. Per share amounts
reflect activity from that date.
(c) Because of differences between book and tax basis accounting, there was no
return of capital for federal income tax purposes.
(d) Total return at net asset value assuming all distributions reinvested and no
initial sales charge or CDSC.
(e) Had the adviser not waived or reimbursed a portion of expenses total return
would have been reduced.
(f) Includes service fee since its inception on December 1, 1994, of 0.02%
(not annualized).
(g) Not annualized.
(h) Annualized.
</TABLE>
12
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
===============================================================================
TO THE TRUSTEES OF COLONIAL TRUST V AND THE SHAREHOLDERS OF COLONIAL MINNESOTA
TAX-EXEMPT FUND
In our opinion, the accompanying statement of assets and liabilities,
including the investment portfolio, and the related statements of operations and
of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Colonial Minnesota Tax-Exempt Fund
(a series of Colonial Trust V) at January 31, 1995, the results of its
operations, the changes in its net assets and the financial highlights for the
periods indicated, in conformity with generally accepted accounting principles.
These financial statements and the financial highlights (hereafter referred to
as "financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of portfolio positions
at January 31, 1995 by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
March 10, 1995
<PAGE>
INVESTMENT PORTFOLIO (IN THOUSANDS) JANUARY 31, 1995
-------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL BONDS - 96.0% PAR VALUE
-------------------------------------------------------------
<S> <C> <C>
CONSUMER NON-DURABLES - 1.3%
Monroe County Industrial
Development Agency,
Yorkmill Realty,
9.500% 12/01/2006 . . . . . $1,255 $ 1,302
-------------------------------------------------------------
EDUCATION - 17.9%
Monroe County Industrial
Development Agency, Roberts
Wesleyan College,
7.400% 09/01/2011 . . . . . 750 777
State Dormitory Authority,
City University System:
Series 1990-C,
7.500% 07/01/2010 . . . . . 1,500 1,631
Series 1991-A:
7.250% 05/15/2018 . . . . . 1,000 1,118
9.500% 04/15/2014 . . . . . 1,000 1,123
Series 1993-A,
5.750% 07/01/2013 . . . . . 1,000 894
State Dormitory Authority,
State University:
Series 1985-A,
7.800% 12/01/2005 (a) . . . 200 216
Series 1993-A:
5.250% 05/15/2021 . . . . . 5,320 4,285
5.375% 05/15/2016 . . . . . 3,000 2,509
5.875% 05/15/2017 . . . . . 2,000 1,805
6.000% 07/01/2020 . . . . . 2,000 1,788
State Dormitory Authority,
University of New York,
Series 1990 B,
7.500% 05/15/2011 . . . . . 1,000 1,089
-------
17,235
-------------------------------------------------------------
ELECTRIC - 4.8%
State Energy Research & Development
Authority:
Brooklyn Gas Co., Series 1991-B,
RIB, (variable rate),
9.209% 07/15/2026 . . . . . 700 736
Consolidated Edison Co.,
Series 1991-A:
5.250% 08/15/2020 (a) . . . 4,000 3,365
7.500% 01/01/2026 . . . . . 500 514
-------
4,615
-------------------------------------------------------------
GENERAL OBLIGATIONS - 0.4%
Commonwealth of Puerto Rico,
Series 1993,
3.785% 07/01/2008 (b) . . . 1,100 (c) 406
-------------------------------------------------------------
HOSPITALS & HEALTH CARE - 12.4%
New York City Health & Hospital
Corp., Series A,
6.300% 02/15/2020 . . . . . . 750 676
State Certificate of Participation,
Office of Mental Health,
8.300% 09/01/2012 . . . . . . 1,000 1,071
State Medical Care Facilities
Finance Agency:
Series 1987-A,
8.875% 08/15/2007 (a) . . . . 500 549
Series 1990-B,
7.875% 08/15/2008 (a) . . . . 475 524
Series 1991-D,
7.400% 02/15/2018 . . . . . . 820 848
Series 1993-F,
5.250% 02/15/2019 . . . . . . 4,000 3,170
Presbyterian Hospital, Series 1994-A,
5.500% 08/15/2024 . . . . . . 5,000 4,344
Vassar Brothers Hospital, Series 1987-A,
8.250% 11/01/2013 . . . . . . 740 786
-------
11,968
-------------------------------------------------------------
HOUSING - 11.4%
Multi-family - 8.6%
Hudson Housing Development Corp.,
Providence Hall-Schuyler Project,
Series 1992-A,
6.500% 01/01/2022 . . . . . . 750 745
New York City Housing Development
Corp., Multi-family Housing,
Series 1993-A,
6.550% 10/01/2015 . . . . . . 1,500 1,481
Nyack Housing Assistance
Corp., Plaza Apartments,
7.375% 06/01/2021 . . . . . . 1,420 1,361
State Housing Finance Agency:
Multi-family Housing, Series 1989-B,
7.550% 11/01/2029 (a). 235 248
New York City, Series 1990-A,
8.000% 11/01/2008 . . . . . . 250 276
Series C,
6.125% 03/15/2020. . . . . . 3,000 2,726
Yorktown Housing Corp.,
Beaveridge Apartments,
7.375% 06/01/2021 . . . . . . 1,466 1,466
-------
8,303
-------
SINGLE-FAMILY - 2.8%
State Mortgage Agency:
Series BB-2,
7.950% 10/01/2015 . . . . . . 570 594
</TABLE>
3
<PAGE>
INVESTMENT PORTFOLIO (IN THOUSANDS) JANUARY 31, 1995
------------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
------------------------------------------------------------------------
<S> <C> <C>
HOUSING - CONT.
Single-family - cont
Series EE 1,
8.050% 04/01/2016 . . . . . . . . . . . . $ 825 $ 872
State Mortgage Agency:
Series MM 1,
7.950% 10/01/2021 . . . . . . . . . . . . 1,000 1,059
Series 10-A,
8.100% 04/01/2014 . . . . . . . . . . . . 115 121
-------
2,646
------------------------------------------------------------------------
MANUFACTURING - 0.6%
Accede Mold & Tool Co.,
10.750% 11/01/2007 . . . . . . . . . . . . 615 598
------------------------------------------------------------------------
NURSING HOMES - 0.3%
State Dormitory Authority,
Menorah Campus, Series 1991-A,
7.400% 02/01/2031 . . . . . . . . . . . . 250 266
------------------------------------------------------------------------
POLLUTION CONTROL REVENUE - 0.0%
State Energy Research & Development
Authority, Orange & Rockland Utilities,
Series 1985,
9.000% 08/01/2015 . . . . . . . . . . . . 45 46
------------------------------------------------------------------------
PUBLIC FACILITY & IMPROVEMENT - 16.3%
Albany Parking Authority,
Green and Hudson Garage Project,
Series 1991-A,
7.150% 09/15/2016 . . . . . . . . . . . . 250 254
New York City Industrial
Development Agency, American
Airlines,
6.900% 08/01/2024 . . . . . . . . . . . . 2,000 1,933
New York City Industrial
Development Agency, United States Tennis
Association, Tennis Center Project,
6.375% 11/15/2014 (a) . . . . . . . . . . 1,500 1,502
Onondaga County Industrial
Development Authority, Bristol-Myers
Squibb Co., Series 1994,
5.750% 03/01/2024 (a) . . . . . . . . . . 3,000 2,696
State Urban Development Corp.,
Correctional Facilities:
Series 1993-A,
5.500% 01/01/2014 . . . . . . . . . . . . 3,000 2,595
Series 1994,
5.375% 01/01/2023 . . . . . . . . . . . . 5,000 4,050
Syracuse Industrial Development
Authority, Parking Facilities,
Series 1990-A,
7.700% 06/01/2015 . . . . . . . . . . . . 500 551
Triborough Bridge & Tunnel
Authority, Javits Convention Center
Project, Series E,
7.250% 01/01/2010 . . . . . . . . . . . . 1,000 1,058
United Nations Development Corp.,
Series 1992-A,
6.000% 07/01/2007 . . . . . . . . . . . . 1,125 1,091
-------
15,730
------------------------------------------------------------------------
REDEVELOPMENT AGENCIES & TAX ALLOCATION - 8.5%
State Energy Research & Development
Authority, Series 1993-B, RIB, (variable rate),
8.456% 04/01/2020 . . . . . . . . . . . . 1,500 1,408
State Local Government Assistance Corp.,
Series 1993-C,
5.500% 04/01/2017 . . . . . . . . . . . . 2,000 1,768
Series 1993-E:
5.000% 04/01/2021 . . . . . . . . . . . . 5,000 4,038
6.000% 04/01/2014 . . . . . . . . . . . . 1,000 955
-------
8,169
------------------------------------------------------------------------
TRANSPORTATION - 19.1%
Commonwealth of Puerto Rico,
Highway & Transportation Authority,
4.040% 07/01/2009 (b) . . . . . . . . . . 365 (c) 142
Metropolitan Transportation Authority:
Series O,
5.500% 07/01/2017 . . . . . . . . . . . . 3,200 2,700
Series 7:
(d) 07/01/2014 . . . . . . . . . . . . . . . . 8,430 2,181
4.750% 07/01/2019 . . . . . . . . . . . . 1,000 741
State Port Authority, Series 85,
5.375% 03/01/2028 . . . . . . . . . . . . 2,000 1,720
State Thruway Authority,
5.500% 01/01/2023 (a) . . . . . . . . . . 5,015 4,382
Triborough Bridge & Tunnel Authority:
5.500% 01/01/2017 (a) . . . . . . . . . . 2,500 2,219
Series 1993-B,
(d) 01/01/2021 . . . . . . . . . . . . 2,000 365
Series L:
8.000% 01/01/2007 . . . . . . . . . . . . 1,000 1,081
8.125% 01/01/2012 . . . . . . . . . . . . 1,100 1,202
Series Y,
6.000% 01/01/2012 . . . . . . . . . . . . 1,750 1,730
-------
18,463
------------------------------------------------------------------------
</TABLE>
See notes to investment portfolio.
4
<PAGE>
INVESTMENT PORTFOLIO - CONTINUED
-------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
-------------------------------------------------------------------
<S> <C> <C>
WASTE DISPOSAL - 1.9%
Babylon Industrial Development
Agency, Ogden Martin Systems,
Series 1985-B,
8.500% 01/01/2019 . . . . . . $ 495 $ 533
St. Lawrence County Solid Waste
Disposal Authority, Series 1987,
8.875% 01/01/2008 . . . . . . 750 785
Warren & Washington Counties
Industrial Development Authority,
Adirondack Series 1991-A,
8.000% 12/15/2012 . . . . . . 500 481
--------
1,799
-------------------------------------------------------------------
WATER & SEWER - 1.1%
State Environmental Facilities
Corp., Series 1990-A,
7.500% 06/15/2012 . . . . . . 1,000 1,079
-------------------------------------------------------------------
Total investments (cost $92,998) (e) 92,625
-------------------------------------------------------------------
SHORT-TERM OBLIGATIONS - 1.1%
-------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES (F)
NY New York City, General Obligation,
4.500% 10/01/2020 . . . . . . 100 100
NY State Energy Research &
Development Authority, Niagara
Mohawk Project,
4.200% 12/01/2023 . . . . . . 1,000 1,000
-------------------------------------------------------------------
Total short-term obligations 1,100
-------------------------------------------------------------------
OTHER ASSETS & LIABILITIES, NET - 2.9% 2,763
-------------------------------------------------------------------
NET ASSETS - 100.0% $ 96,488
-------------------------------------------------------------------
<FN>
Notes to investment portfolio:
(a) These securities, or a portion thereof, with a total market value of $13,682 are being used to collateralize open futures
contracts.
(b) These securities are variable rate instruments; on July 1, 1998 they will change to fixed rate instruments. Interest income is
accrued daily on the notional amount at the applicable interest rates.
(c) Notional amount.
(d) Zero coupon bond.
(e) Cost for federal income tax purposes is $93,022.
(f) Variable rate demand notes are considered short-term obligations. Interest rates change periodically on specified dates.
These securities are payable on demand and are secured by either letters of credit or other credit support agreements from
banks. The rates listed are as of January 31, 1995.
</TABLE>
<TABLE>
<CAPTION>
Acronym Name
------- ----------------------
RIB Residual Interest Bond
Short futures contracts open at
January 31, 1995:
Par value Unrealized
covered by Expiration depreciation
Type contracts month at 1/31/95
-----------------------------------------------------------
<S> <C> <C> <C>
Municipal bonds $10,300 March $369
Treasury bonds $ 3,000 March $ 68
-----------------------------------------------------------
</TABLE>
See notes to financial statements.
5
<PAGE>
FINANCIAL STATEMENTS
---------------------------------------------------------------------------
<TABLE>
STATEMENT OF ASSETS & LIABILITIES
January 31, 1995
(in thousands except for per share amounts and footnote)
---------------------------------------------------------------------------
<CAPTION>
ASSETS
<S> <C> <C>
Investments at value (cost $92,998)......................... $ 92,625
Short-term investments...................................... 1,100
---------
93,725
Receivable for:
Investments sold............................ $ 1,996
Interest.................................... 1,461
Fund shares sold............................ 413
Other....................................... 30 3,900
------- ---------
Total assets....................................... 97,625
lIABILITIES
Payable for:
Fund shares repurchased..................... 564
Distributions............................... 482
Variation margin on futures................. 72
Accrued:
Deferred Trustees fees...................... 2
Other.......................................... 17
-------
Total liabilities.................................. 1,137
---------
NET ASSETS.................................................. $ 96,488
=========
Net asset value & redemption price per share -
Class A ($53,322/7,988)................................. $ 6.68
=========
Maximum offering price per share - Class A
($6.68/0.9525)........................................... $ 7.01*
=========
Net asset value & offering price per share -
Class B ($43,166/6,466)................................. $ 6.68
=========
Composition of net assets
Capital paid in.......................................... $102,896
Undistributed net investment income...................... 199
Accumulated net realized loss............................ (5,797)
Net unrealized depreciation on:
Investments............................................ (373)
Open futures contracts................................. (437)
---------
$ 96,488
=========
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
Year ended January 31, 1995
(in thousands)
--------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Interest....................................... $ 6,751
EXPENSES
Management fee................................. $ 574
Service fee ................................... 17
Distribution fee - Class B..................... 330
Transfer agent................................. 159
Bookkeeping fee................................ 45
Trustees Fees.................................. 16
Custodian fee.................................. 10
Audit fee...................................... 32
Legal fee...................................... 6
Registration fees.............................. 20
Reports to shareholders........................ 4
Other.......................................... 11
------
1,224
Fees waived by the adviser..................... (471) 753
------ -------
Net investment income.................................. 5,998
-------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON PORTFOLIO POSITIONS
Net realized gain (loss) on:
Investments................................... (3,577)
Closed futures contracts...................... 203
------
Net realized loss........................................ (3,374)
Net unrealized depreciation
during the period on:
Investments................................... (8,876)
Open Futures contracts........................ (323)
------
Net unrealized depreciation ............................. (9,199)
-------
Net loss................................................ (12,573)
-------
Net decrease in net assets from
operations................................................ $(6,575)
=======
</TABLE>
* On sales of $50,000 or more the offering price is reduced.
See notes to financial statements.
6
<PAGE>
FINANCIAL STATEMENTS - CONTINUED
--------------------------------------------------------------------------------
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
(in thousands)
---------------------------------------------------------------------------------------------
<CAPTION>
Year ended January 31
---------------------
1995 1994
---- ----
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income..................................... $ 5,998 $ 5,030
Net realized gain (loss).................................. (3,374) 155
Net unrealized appreciation (depreciation)................ (9,199) 4,747
-------- --------
Net increase (decrease) from operations............. (6,575) 9,932
Distributions
From net investment income - Class A...................... (3,470) (3,443)
From net investment income - Class B...................... (2,334) (1,558)
-------- --------
(12,379) 4,931
-------- --------
Fund share transactions
Receipts for shares sold - Class A........................ 7,297 14,628
Value of distributions reinvested - Class A............... 1,733 1,811
Cost of shares repurchased - Class A...................... (12,138) (10,023)
-------- --------
(3,108) 6,416
-------- --------
Receipts for shares sold - Class B........................ 9,456 29,746
Value of distributions reinvested - Class B............... 1,395 910
Cost of shares repurchased - Class B...................... (7,464) (1,937)
-------- --------
3,387 28,719
-------- --------
Net increase from Fund share transactions........... 279 35,135
-------- --------
Total increase (decrease)..................... (12,100) 40,066
NET ASSETS
Beginning of period....................................... 108,588 68,522
-------- --------
End of period (including undistributed
net investment income of $199 and $2, respectively)...... $ 96,488 $108,588
======== ========
NUMBER OF FUND SHARES
Sold - Class A............................................ 1,059 1,992
Issued for distributions reinvested - Class A............. 254 247
Repurchased - Class A..................................... (1,792) (1,361)
-------- --------
(479) 878
-------- --------
Sold - Class B............................................ 1,373 4,064
Issued for distributions reinvested - Class B............. 205 124
Repurchased - Class B..................................... (1,117) (263)
-------- --------
461 3,925
-------- --------
Net increase (decrease) in shares outstanding....... (18) 4,803
Outstanding at
Beginning of period.................................... 14,472 9,669
-------- --------
End of period.......................................... 14,454 14,472
======== ========
</TABLE>
See notes to financial statements.
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
NOTE 1. ACCOUNTING POLICIES
Colonial New York Tax-Exempt Fund (the Fund), a series of Colonial Trust
V, is a Massachusetts business trust, registered under the Investment Company
Act of 1940, as amended, as a non-diversified, open-end, management investment
company. The Fund may issue an unlimited number of shares. The Fund offers Class
A shares sold with a front-end sales charge and Class B shares which are subject
to an annual distribution fee and a contingent deferred sales charge. Class B
shares will convert to Class A shares when they have been outstanding
approximately eight years. The following significant accounting policies are
consistently followed by the Fund in the preparation of its financial statements
and conform to generally accepted accounting principles.
--------------------------------------------------------------------------------
SECURITY VALUATION AND TRANSACTIONS
Debt securities generally are valued by a pricing service based upon
market transactions for normal, institutional-size trading units of similar
securities. When management deems it appropriate, an over-the-counter or
exchange bid quotation is used.
Futures contracts are valued based on the difference between the last
sale price and the opening price of the contract.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
Portfolio positions which cannot be valued as set forth above are valued
at fair value under procedures approved by the Trustees.
Security transactions are accounted for on the date the securities are
purchased or sold.
Cost is determined and gains and losses are based upon the specific
identification method for both financial statement and federal income tax
purposes.
The Fund may trade securities on other than normal settlement terms.
This may increase the risk if the other party to the transaction fails to
deliver and causes the Fund to subsequently invest at less advantageous prices.
--------------------------------------------------------------------------------
DETERMINATION OF CLASS NET ASSET VALUES AND FINANCIAL HIGHLIGHTS
All income, expenses (other than the Class B distribution fee), realized
and unrealized gains (losses) are allocated to each class proportionately on a
daily basis for purposes of determining the net asset value of each class.
Class B per share data and ratios are calculated by adjusting the
expense and net investment income per share data and ratios for the Fund for the
entire period by the distribution fee applicable to Class B shares
only.
--------------------------------------------------------------------------------
FEDERAL INCOME TAXES
Consistent with the Fund's policy to qualify as a regulated investment
company and to distribute all of its taxable and tax-exempt income, no federal
income tax has been accrued.
--------------------------------------------------------------------------------
INTEREST INCOME, DEBT DISCOUNT AND PREMIUM
Interest income is recorded on the accrual basis. Original issue
discount is accreted to interest income over the life of a security
with a corresponding increase in the cost basis; market discount is not
accreted. Premium is amortized against interest income with a corresponding
decrease in the cost basis.
--------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
The Fund declares and records distributions daily and pays monthly.
The amount and character of income and gains to be distributed are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles.
--------------------------------------------------------------------------------
NOTE 2. FEES AND COMPENSATION PAID TO AFFILIATES
MANAGEMENT FEE
Colonial Management Associates, Inc. (the Adviser) is the investment
adviser of the Fund and furnishes accounting and other services and office
facilities for a monthly fee. Through June 30, 1994,
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS - CONTINUED
--------------------------------------------------------------------------------
this fee was 0.60% annually of the Fund's average net assets. Effective
July 1, 1994, the monthly fee is based on each Fund's pro rata portion of the
combined average net assets of Trust V as follows:
Average Net Assets Annual Fee Rate
--------------------------- ---------------------------
First $1 billion 0.55%
Next $1 billion 0.50%
Over $2 billion 0.45%
--------------------------------------------------------------------------------
BOOKKEEPING FEE
The Adviser provides bookkeeping and pricing services for $27,000 per
year plus 0.035% of the Fund's average net assets over $50 million.
--------------------------------------------------------------------------------
TRANSFER AGENT
Colonial Investors Service Center, Inc. (the Transfer Agent), an
affiliate of the Adviser, provides shareholder services for a monthly fee equal
to 0.14% annually of the Fund's average net assets and receives a reimbursement
for certain out of pocket expenses.
-------------------------------------------------------------------------------
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES
The Adviser, through Colonial Investment Services, Inc. (the
Distributor), is the Fund's principal underwriter. During the year ended
January 31, 1995, the Distributor retained net underwriting discounts of
$18,774 on sales of the Fund's Class A shares and received contingent deferred
sales charges (CDSC) of $155,082 on Class B share redemptions.
The Fund has adopted a 12b-1 plan which requires the payment of a
distribution fee to the Distributor equal to 0.75 annually of the average net
assets attributable to Class B shares. Effective December 1, 1994, the plan
was amended to include payment by the Fund of a service fee applicable to both
Class A and Class B, to the Distributor as follows:
Valuation of shares Annual
outstanding on the 20th of Fee
each month which were issued Rate
------------------------------------------------- ----------
Prior to November 30, 1994....................... 0.10%
On or after December 1, 1994..................... 0.25%
The CDSC and the fees received from the 12b-1 plan are used principally
as repayment to the Distributor for amounts paid by the Distributor to dealers
who sold such shares.
-------------------------------------------------------------------------------
EXPENSE LIMITS
The Adviser has agreed, until further notice to waive fees and bear
certain Fund expenses to the extent that total expenses (exclusive of service
and distribution fees, brokerage commissions, interest, taxes, and
extraordinary expenses, if any) exceed 0.40% annually of the Fund's average net
assets.
-------------------------------------------------------------------------------
OTHER
The Fund pays no compensation to its officers, all of whom are
employees of the Adviser.
The Fund's Trustees may participate in a deferred compensation plan
which may be terminated at any time. Obligations of the plan will be paid
solely out of the Fund's assets.
===============================================================================
NOTE 3. PORTFOLIO INFORMATION
During the year ended January 31, 1995, purchases and sales of
investments, other than short-term obligations, were $64,365,356 and
$66,506,052 respectively.
Unrealized appreciation (depreciation) at January 31, 1995, based on
cost of investments for federal income tax purposes was:
Gross unrealized appreciation............... $ 3,024,534
Gross unrealized depreciation............... (3,421,120)
-----------
Net unrealized depreciation................ $ (396,586)
===========
-------------------------------------------------------------------------------
CAPITAL LOSS CARRYFORWARDS
At January 31, 1995, capital loss carryforwards available (to the
extent provided in regulations) to offset future realized gains were
approximately as follows:
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS - CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year of Capital loss
expiration carryforward
---------- ------------
<S> <C>
1996..... $2,052,000
1997..... 228,000
1998..... 26,000
1999..... 37,000
2003..... 187,000
----------
$2,530,000
==========
</TABLE>
Expired capital loss carryforwards, if any, are recorded as a reduction
of capital paid in.
To the extent loss carryforwards are used to offset any future
realized gains, it is unlikely that such gains would be distributed since they
may be taxable to shareholders as ordinary income.
--------------------------------------------------------------------------------
OTHER
There are certain risks arising from geographic concentration in any
state. Certain revenue or tax related events in a state may impair the ability
of certain issuers of municipal securities to pay principal and interest on
their obligations.
The Fund may focus its investments in certain industries, subjecting it
to greater risk than a fund that is more diversified.
The Fund sells municipal and Treasury bond futures contracts to manage
overall portfolio interest rate exposure and not for trading purposes. The use
of futures contracts involves certain risks, which include (1) imperfect
correlation between the price movement of the contracts and the underlying
securities, (2) inability to close out positions due to different trading
hours, or the temporary absence of a liquid market, for either the contract or
the underlying securities, or (3) an inaccurate prediction by the Adviser of
the future direction of interest rates. Any of these risks may involve amounts
exceeding the initial or variation margin recorded in the Fund's Statement of
Assets and Liabilities at any given time.
--------------------------------------------------------------------------------
10
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
Selected data for a share of each class outstanding throughout each period are as follows:
------------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED JANUARY 31
------------------------------------------------------------------------------------------
1995 1994 1993 1992 1991
-------------------- -------------------- --------------------- -------- --------
CLASS A CLASS B CLASS A CLASS B CLASS A CLASS B (B) CLASS A CLASS A
--------- -------- -------- -------- -------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value - Beginning
of period............................. $ 7.500 $ 7.500 $ 7.090 $ 7.090 $ 6.840 $ 7.130 $ 6.600 $ 6.590
Income(loss) from investment
operations:
Net investment income (a)............. 0.427 0.376 0.421 0.368 0.438 0.182 0.453 0.459
Net realized and unrealized
gain(loss) on investments............ (0.834) (0.834) 0.407 0.407 0.260 (0.029) 0.242 0.013
--------- -------- -------- -------- -------- --------- -------- --------
Total from investment operations...... (0.407) (0.458) 0.828 0.775 0.698 0.153 0.695 0.472
--------- -------- -------- -------- -------- --------- -------- --------
Less distributions declared
to shareholders:
From net investment income............ (0.413) (0.362) (0.418) (0.365) (0.445) (0.190) (0.455) (0.462)
In excess of net investment income.... -- -- -- -- (0.003) (0.003) -- --
--------- -------- -------- -------- -------- --------- -------- --------
Total distributions
declared to shareholders............ (0.413) (0.362) (0.418) (0.365) (0.448) (0.193) (0.455) (0.462)
--------- -------- -------- -------- -------- --------- -------- --------
Net asset value - End of period........ $ 6.680 $ 6.680 $ 7.500 $ 7.500 $ 7.090 $ 7.090 $ 6.840 $ 6.600
========= ======== ======== ======= ======== ======== ======== ========
Total return (c)(d).................... (5.32)% (6.04)% 11.95% 11.14% 10.50% 1.16%(f) 10.86% 7.42%
========= ======== ======== ======= ======== ======== ======== ========
Ratios to average net assets:
Expenses.............................. 0.42%(e) 1.17%(e) 0.62% 1.37% 0.96% 1.71%(g) 1.00% 1.04%
Net investment income................. 6.25% 5.50% 5.68% 4.93% 6.25% 5.50%(g) 6.71% 6.99%
Fees and expenses waived
or borne by the adviser.............. 0.46% 0.46% 0.29% 0.29% 0.06% 0.06% 0.14% 0.24%
Portfolio turnover..................... 65% 65% 25% 25% 7% 7% 17% 6%
Net assets at end of period
(000)................................. $53,322 $43,166 $63,527 $45,061 $53,779 $14,743 $40,233 $31,691
<FN>
(a) Net of fees and expenses waived or borne by the adviser which
amounted to...................... $ 0.032 $ 0.032 $ 0.021 $ 0.021 $ 0.004 $ 0.001 $ 0.009 $ 0.016
(b) Class B shares were initially offered on August 4, 1992. Per share amounts reflect activity from that date.
(c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or CDSC.
(d) Had the adviser not waived or reimbursed a portion of expenses total return would have been reduced.
(e) Includes service fee since its inception on December 1, 1994, of 0.02% (not annualized).
(f) Not annualized.
(g) Annualized.
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
FEDERAL INCOME TAX INFORMATION (UNAUDITED)
All of the distributions will be treated as exempt income for federal income
tax purposes.
11
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
------------------------------------------------------------------------------
TO THE TRUSTEES OF COLONIAL TRUST V AND THE SHAREHOLDERS OF COLONIAL NEW YORK
TAX-EXEMPT FUND
In our opinion, the accompanying statement of assets and liabilities,
including the investment portfolio, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in
all material respects, the financial position of Colonial New York Tax-Exempt
Fund (a series of Colonial Trust V) at January 31, 1995, the results of its
operations, the changes in its net assets and the financial highlights for the
periods indicated, in conformity with generally accepted accounting principles.
These financial statements and the financial highlights (hereafter referred to
as "financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in
accordance with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included
confirmation of portfolio positions at January 31, 1995 by correspondence with
the custodian, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
March 10, 1995
<PAGE>
INVESTMENT PORTFOLIO (in thousands)
============================================================================
<TABLE>
<CAPTION>
MUNICIPAL BONDS - 99.1% PAR VALUE
----------------------------------------------------------------------------
<S> <C> <C>
EDUCATION - 4.6%
East Carolina University:
Series 1993,
5.500% 05/01/17.............. $ 1,095 $ 966
Series 1994,
6.200% 11/01/15.............. 475 470
-----------
1,436
----------------------------------------------------------------------------
ELECTRIC - 3.7%
Commonwealth of Puerto Rico Power,
Authority, Series 1994-T,
6.000% 07/01/16.............. 500 467
State Municipal Power Agency,
Catawba Number 1, Series 1992,
5.750% 01/01/20.............. 750 690
-----------
1,157
----------------------------------------------------------------------------
GENERAL OBLIGATIONS - 18.8%
Commonwealth of Puerto Rico:
5.500% 07/01/08.............. 200 191
Public Building Authority:
Series 1993,
5.250% 07/01/18.............. 700 589
Series 1993-M,
5.500% 07/01/21.............. 900 778
Series 1994,
6.500% 07/01/23.............. 500 500
Lincoln County,
Series 1994,
5.100% 06/01/10(a)........... 850 752
Mecklenburg County:
Series 1993,
5.000% 04/01/08(a)........... 1,000 900
Series 1994,
5.500% 04/01/12.............. 1,000 931
Orange County,
5.500% 02/01/14.............. 490 447
State of North Carolina,
Series 1994-A,
4.750% 02/01/13.............. 1,000 825
-----------
5,913
----------------------------------------------------------------------------
HOSPITALS & HEALTH CARE- 18.7%
Charlotte-Mecklenburg Hospital
Authority,
6.250% 01/01/20.............. 1,000 971
Craven Regional Medical Authority,
5.500% 10/01/23.............. 600 531
Lincoln County,
9.000% 05/01/07.............. 300 320
New Hanover County Regional
Medical Center, Series 1993,
4.750% 10/01/13.............. 500 416
State Medical Care Commission:
Alamance Health Services Project,
5.500% 08/15/24.............. $ 500 $ 435
Memorial Mission Hospital,
Series 1993,
5.500% 10/01/18.............. 100 88
Moore Regional Hospital, Series 1993,
5.000% 10/01/18.............. 750 586
Presbyterian Health Services
Corp., Series 1993:
5.500% 10/01/14.............. 970 860
5.500% 10/01/20.............. 360 310
St. Joseph's Hospital Project,
Series 1994,
5.100% 10/01/14.............. 555 475
Wesley Long Community Hospital,
Series 1993,
5.250% 10/01/13.............. 500 438
Wake County Hospital Revenue,
5.125% 10/01/13.............. 500 427
-----------
5,857
----------------------------------------------------------------------------
HOUSING - 10.2%
MULTI-FAMILY - 8.7%
Durham Urban Development Authority,
Durham Hosiery Mill Project,
7.500% 08/01/29.............. 1,575 1,640
Eastern Carolina Regional Housing
Authority, Jacksonville New River
Apartments,
8.250% 09/01/14.............. 250 245
State Housing Finance Agency,
Multi-family, Series 1994,
5.450% 09/01/24.............. 1,000 835
-----------
2,720
-----------
SINGLE-FAMILY - 1.5%
State Housing Finance Agency,
Single-family, Series W,
6.450% 09/01/14.............. 500 492
----------------------------------------------------------------------------
IN-SUBSTANCE DEFEASED (b) - 3.0%
Municipal Power Agency,
5.500% 01/01/13.............. 1,000 934
----------------------------------------------------------------------------
POLLUTION CONTROL REVENUE - 1.3%
Haywood County Industrial Facilities
Pollution Control Authority, Champion
International Corp., Series 1993,
5.500% 10/01/18.............. 500 414
----------------------------------------------------------------------------
</TABLE>
See notes to investment portfolio.
3
<PAGE>
INVESTMENT PORTFOLIO - CONTINUED
===========================================================================
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
---------------------------------------------------------------------------
<S> <C> <C>
PUBLIC FACILITY & IMPROVEMENT - 16.5%
Charlotte Certificates of
Participation:
Cityfair Parking Facility Project,
Series A,
6.125% 06/01/10.............. $ 430 $ 419
Convention Facilities Project,
Series 1993-C,
5.250% 12/01/13(a)........... 1,550 1,358
Law Project, Series 1993-B
5.375% 06/01/13.............. 700 636
Cumberland County, Certificates of
Participation, Civic Center Project,
Series A,
6.400% 12/01/24.............. 1,000 995
Duplin County Certificates of
Participation, Law Enforcement &
Public Schools, Series 1993,
5.250% 08/01/14(a)........... 100 87
Durham County Certificates of
Participation, Hospital and Office
Project,
6.000% 05/01/14.............. 1,000 950
Harnett County, Certificates of
Participation,
6.400% 12/01/14.............. 250 249
Rowan County Certificates of
Participation, Justice Center
Project,
6.250% 12/01/07.............. 500 494
----------
5,188
---------------------------------------------------------------------------
TRANSPORTATION - 4.1%
Chapel Hill Certificates of
Participation, Parking Facilities,
6.450% 12/01/23.............. 500 484
Commonwealth of Puerto Rico,
Highway & Transportation Authority:
5.500% 07/01/09.............. 240 218
Series X,
5.250% 07/01/21.............. 700 578
----------
1,280
---------------------------------------------------------------------------
WASTE DISPOSAL- 2.0%
Martin County Industrial Facilities
& Pollution Control Authority,
Weyerhaeuser Co., Series 1993,
5.650% 12/01/23.............. 750 624
---------------------------------------------------------------------------
WATER & SEWER - 16.2%
Buncombe County Metropolitan Sewer
District, Series 1993-A:
5.375% 07/01/13(a)............ $ 140 $ 127
5.500% 07/01/22(a)............ 1,150 1,038
Charlotte Water & Sewer:
Series 1993,
5.250% 02/01/14............... 315 284
Series 1994,
5.800% 02/01/15(a)............ 1,000 961
Fayetteville Public Works
Commission, Series 1993,
4.750% 03/01/14(a)............ 1,500 1,223
Mount Holly Water & Sewer System,
Series 1993,
4.900% 03/01/12............... 120 104
Orange Water & Sewer Authority,
5.200% 07/01/16............... 500 418
Wilmington Water:
5.600% 06/01/13............... 500 460
5.700% 06/01/15............... 500 461
---------
5,076
---------------------------------------------------------------------------
Total investments (cost $33,444) (c) 31,091
---------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES, NET - 0.9% 267
---------------------------------------------------------------------------
NET ASSETS - 100.0% $ 31,358
---------------------------------------------------------------------------
</TABLE>
Notes to investment portfolio:
(a) These securities with a total market value of $6,446, are being used to
collateralize open futures contracts.
(b) The Fund has been informed that each issuer has placed direct obligations
of the U.S. Government in an irrevocable trust, solely for the payment of
the interest and principal.
(c) Cost for federal income tax purposes is $33,472.
Short futures contracts open at January 31, 1995:
<TABLE>
<CAPTION>
Par value Unrealized
covered Expiration depreciation
Type by contracts month at 1/31/95
---------------------------------------------------------------------------
<S> <C> <C> <C>
Municipal bond $ 4,000 March $ 143
Treasury bond $ 700 March $ 16
---------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
4
<PAGE>
FINANCIAL STATEMENTS
================================================================================
<TABLE>
STATEMENT OF ASSETS & LIABILITIES
January 31, 1995
(in thousands except for per share amounts and footnote)
----------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments at value (cost $33,444) .................................... $31,091
Receivable for:
Investments sold ............................ $ 900
Interest..................................... 525
Fund shares sold ............................ 193
Deferred organization expenses.................. 22 1,640
------ -------
Total assets................................................ 32,731
LIABILITIES
Payable for:
Investments purchased....................... 974
Distributions............................... 144
Fund shares repurchased..................... 109
Variation margin on futures................. 26
Payable to custodian banks..................... 106
Payable to adviser............................. 10
Accrued other.................................. 4
------
Total liabilities ........................................... 1,373
------
NET ASSETS............................................................ $31,358
-------
Net asset value & redemption price per share -
Class A ($14,189/2,125)........................................... $ 6.68
-------
Maximum offering price per share - Class A
($6.68/0.9525)...................................................... $ 7.01*
-------
Net asset value & offering price per share -
Class B ($17,169/2,571)............................................ $ 6.68
-------
COMPOSITION OF NET ASSETS
Capital paid in.................................................... $34,293
Undistributed net investment income................................ 12
Accumulated net realized loss...................................... (435)
Net unrealized deprecian on:
Investments...................................................... (2,353)
Open futures contracts........................................... (159)
-------
$31,358
-------
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
Year ended January 31, 1995
(in thousands)
-----------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Interest.................................................................. $ 1,742
-------
EXPENSES
Management fee................................. $ 165
Service fee.................................... 5
Distribution fee - Class B..................... 105
Transfer agent................................. 49
Bookkeeping fee................................ 27
Trustees fees.................................. 7
Custodian fee.................................. 4
Audit fee...................................... 8
Legal fee...................................... 4
Registration fees.............................. 16
Reports to shareholders........................ 3
Amortization of deferred
organization expenses........................ 7
Other.......................................... 10
------
410
Fees and expenses waived or borne
by the adviser............................. (271) 139
------ -------
Net investment income........................................... 1,603
-------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON PORTFOLIO POSITIONS
Net realized gain (loss) on:
Investments................................. (782)
Closed futures contracts.................... 390
------
Net realized loss................................................... (392)
Net unrealized depreciation
during the period on:
Investments................................. (2,600)
Open futures contracts...................... (26)
------
Net unrealized depreciation......................................... (2,626)
-------
Net loss......................................................... (3,018)
-------
Net decrease in net assets from
operations............................................................ $(1,415)
-------
<FN>
* On sales of $50,000 or more the offering price is reduced.
</TABLE>
See notes to financial statements.
5
<PAGE>
FINANCIAL STATEMENTS - continued
================================================================================
STATEMENT OF CHANGES IN NET ASSETS
(in thousands)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year ended Period ended
January 31 January 31
---------- ------------
1995 1994(a)
-------- -------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income............................................. $ 1,603 $ 243
Net realized loss................................................. (392) (43)
Net unrealized appreciation (depreciation)........................ (2,626) 114
-------- -------
Net increase (decrease) from operations..................... (1,415) 314
Distributions
From net investment income - Class A.............................. (889) (133)
From net investment income - Class B.............................. (707) (112)
-------- -------
(3,011) 69
-------- -------
Fund share transactions
Receipts for shares sold - Class A................................ 7,134 13,753
Value of distributions reinvested - Class A....................... 560 51
Cost of shares repurchased - Class A.............................. (5,510) (159)
-------- -------
2,184 13,645
-------- -------
Receipts for shares sold - Class B................................ 10,193 10,083
Value of distributions reinvested - Class B....................... 420 46
Cost of shares repurchased - Class B.............................. (2,072) (199)
-------- -------
8,541 9,930
-------- -------
Net increase from Fund share transactions................... 10,725 23,575
-------- -------
Total increase ....................................... 7,714 23,644
NET ASSETS
Beginning of period............................................... 23,644
-------- -------
End of period (including undistributed
net investment income of $12 and none, respectively) $ 31,358 $23,644
-------- -------
NUMBER OF FUND SHARES
Sold - Class A.................................................... 1,035 1,842
Issued for distributions reinvested - Class A..................... 83 7
Repurchased - Class A............................................. (821) (21)
-------- -------
297 1,828
-------- -------
Sold - Class B.................................................... 1,500 1,345
Issued for distributions reinvested - Class B..................... 63 6
Repurchased - Class B............................................. (317) (26)
-------- -------
1,246 1,325
-------- -------
Net increase in shares outstanding.......................... 1,543 3,153
Outstanding at
Beginning of period............................................ 3,153
-------- -------
End of period.................................................. 4,696 3,153
-------- -------
</TABLE>
(a) The Fund commenced investment operations on September 1, 1993.
See notes to financial statements.
6
<PAGE>
NOTES TO FINANCIAL STATEMENTS
===============================================================================
NOTE 1. ACCOUNTING POLICIES
Colonial North Carolina Tax-Exempt Fund (the Fund), a series of Colonial
Trust V, is a Massachusetts business trust, registered under the Investment
Company Act of 1940, as amended, as a non-diversified, open-end, management
investment company. The Fund may issue an unlimited number of shares. The Fund
offers Class A shares sold with a front-end sales charge and Class B shares
which are subject to an annual distribution fee and a contingent deferred sales
charge. Class B shares will convert to Class A shares when they have been
outstanding approximately eight years. The following significant accounting
policies are consistently followed by the Fund in the preparation of its
financial statements and conform to generally accepted accounting principles.
-------------------------------------------------------------------------------
SECURITY VALUATION AND TRANSACTIONS
Debt securities generally are valued by a pricing service based upon market
transactions for normal, institutional-size trading units of similar securities.
When management deems it appropriate, an over- the-counter or exchange bid
quotation is used.
Futures contracts are valued based on the difference between the last sale
price and the opening price of the contract.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
Portfolio positions which cannot be valued as set forth above are valued at
fair value under procedures approved by the Trustees.
Security transactions are accounted for on the date the securities are
purchased or sold.
Cost is determined and gains and losses are based upon the specific
identification method for both financial statement and federal income tax
purposes.
The Fund may trade securities on other than normal settlement terms. This
may increase the risk if the other party to the transaction fails to deliver and
causes the Fund to subsequently invest at less advantageous prices.
-------------------------------------------------------------------------------
DETERMINATION OF CLASS NET ASSET VALUES AND
FINANCIAL HIGHLIGHTS
All income, expenses (other than the Class B distribution fee), realized
and unrealized gains (losses) are allocated to each class proportionately on a
daily basis for purposes of determining the net asset value of each class.
Class B per share data and ratios are calculated by adjusting the expense
and net investment income per share data and ratios for the Fund for the entire
period by the distribution fee applicable to Class B shares only.
-------------------------------------------------------------------------------
FEDERAL INCOME TAXES
Consistent with the Fund's policy to qualify as a regulated investment
company and to distribute all of its taxable and tax-exempt income, no federal
income tax has been accrued.
-------------------------------------------------------------------------------
INTEREST INCOME, DEBT DISCOUNT AND PREMIUM
Interest income is recorded on the accrual basis. Original issue discount
is accreted to interest income over the life of a security with a corresponding
increase in the cost basis; market discount is not accreted. Premium is
amortized against interest income with a corresponding decrease in the cost
basis.
-------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
The Fund declares and records distributions daily and pays monthly.
The amount and character of income and gains to be distributed are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles.
-------------------------------------------------------------------------------
DEFERRED ORGANIZATION EXPENSES
The Fund incurred $31,806 of expenses in connection with its organization,
initial registration with the Securities and Exchange Commission and with
various states, and the initial public offering of its shares. These expenses
were deferred and are being amortized on a straight-line basis over five years.
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS - CONTINUED
================================================================================
NOTE 2. FEES AND COMPENSATION PAID TO
AFFILIATES
MANAGEMENT FEE
Colonial Management Associates, Inc. (the Adviser) is the investment
adviser of the Fund and furnishes accounting and other services and office
facilities for a monthly fee. Through June 30, 1994, this fee was 0.60%
annually of the Fund's average net assets. Effective July 1, 1994, the monthly
fee is based on each Fund's pro rata portion of the combined average net assets
of Trust V as follows:
<TABLE>
<CAPTION>
Average Net Asset Annual Fee Rate
------------------- ---------------
<S> <C>
First $1 billion 0.55%
Next $1 billion 0.50%
Over $2 billion 0.45%
----------------------------------------
</TABLE>
-------------------------------------------------------------------------------
BOOKKEEPING FEE
The Adviser provides bookkeeping and pricing services for $27,000 per year
plus 0.035% of the Fund's average net assets over $50 million.
-------------------------------------------------------------------------------
TRANSFER AGENT
Colonial Investors Service Center, Inc. (the Transfer Agent), an affiliate
of the Adviser, provides shareholder services for a monthly fee equal to 0.14%
annually of the Fund's average net assets and receives a reimbursement for
certain out of pocket expenses.
-------------------------------------------------------------------------------
UNDERWRITING DISCOUNTS, SERVICE AND
DISTRIBUTION FEES
The Adviser, through Colonial Investment Services, Inc. (the Distributor),
is the Fund's principal underwriter. During the year ended January 31, 1995,
the Distributor retained net underwriting discounts of $18,320 on sales of the
Fund's Class A shares and received contingent deferred sales charges (CDSC) of
$35,409 on Class B share redemptions.
The Fund has adopted a 12b-1 plan which requires the payment of a
distribution fee to the Distributor equal to 0.75% annually of the average net
assets attributable to Class B shares. Effective December 1, 1994, the plan was
amended to include payment by the Fund of a service fee applicable to both Class
A and Class B, to the Distributor as follows:
<TABLE>
<CAPTION>
Valuation of shares Annual
outstanding on the 20th of Fee
each month which were issued Rate
---------------------------------------- ------
<S> <C>
Prior to November 30, 1994........ 0.10%
On or after December 1, 1994...... 0.25%
</TABLE>
The CDSC and the fees received from the 12b-1 plan are used principally as
repayment to the Distributor for amounts paid by the Distributor to dealers who
sold such shares.
-------------------------------------------------------------------------------
EXPENSE LIMITS
The Adviser has agreed, until further notice to waive fees and bear certain
Fund expenses to the extent that total expenses (exclusive of service and
distribution fees, brokerage commissions, interest, taxes, and extraordinary
expenses, if any) exceed 0.10% annually of the Fund's average net assets.
-------------------------------------------------------------------------------
OTHER
The Fund pays no compensation to its officers, all of whom are employees of
the Adviser.
The Fund's Trustees may participate in a deferred compensation plan which
may be terminated at any time. Obligations of the plan will be paid solely out
of the Fund's assets.
-------------------------------------------------------------------------------
NOTE 3. PORTFOLIO INFORMATION
During the Year ended January 31, 1995, purchases and sales of investments,
other than short-term obligations, were $21,899,088 and $10,278,855,
respectively.
Unrealized appreciation (depreciation) at January 31, 1995, based on cost
of investments for federal income tax purposes was:
<TABLE>
<CAPTION>
<S> <C>
Gross unrealized appreciation... $ 42,879
Gross unrealized depreciation... (2,424,284)
-------------
Net unrealized depreciation.. $ (2,381,405)
-------------
</TABLE>
--------------------------------------------------------------------------------
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS - CONTINUED
================================================================================
CAPITAL LOSS CARRYFORWARDS
At January 31, 1995, capital loss carryforwards available (to the extent
provided in regulations) to offset future realized gains were approximately as
follows:
<TABLE>
<CAPTION>
Year of Capital loss
expiration carryforward
---------- ------------
<S> <C>
2003.... $230,000
</TABLE>
Expired capital loss carryforwards, if any, are recorded as a reduction of
capital paid in.
To the extent loss carryforwards are used to offset any future realized
gains, it is unlikely that such gains would be distributed since they may be
taxable to shareholders as ordinary income.
--------------------------------------------------------------------------------
OTHER
There are certain risks arising from geographic concentration in any state.
Certain revenue or tax related events in a state may impair the ability of
certain issuers of municipal securities to pay principal and interest on their
obligations.
The Fund may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
The Fund sells municipal and Treasury bond futures contracts to manage
overall portfolio interest rate exposure and not for trading purposes. The use
of futures contracts involves certain risks, which include (1) imperfect
correlation between the price movement of the contracts and the underlying
securities, (2) inability to close out positions due to different trading hours,
or the temporary absence of a liquid market, for either the contract or the
underlying securities, or (3) an inaccurate prediction by the Adviser of the
future direction of interest rates. Any of these risks may involve amounts
exceeding the initial or variation margin recorded in the Fund's Statement of
Assets and Liabilities at any given time.
--------------------------------------------------------------------------------
9
<PAGE>
FINANCIAL HIGHLIGHTS
================================================================================
Selected data for a share of each class outstanding throughout each period are
as follows:
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
JANUARY 31 JANUARY 31
-------------------- --------------------
1995 1994 (b)
-------------------- --------------------
CLASS A CLASS B CLASS A CLASS B
------ -------- ------- -------
<S> <C> <C> <C> <C>
Net asset value - Beginning of period.................... $7.500 $7.500 $7.500 $7.500
Income (loss) from investment operations:
Net investment income (a)............................. 0.396 0.345 0.164 0.141
Net realized and unrealized loss on investments....... (0.822) (0.822) --- ---
------ -------- ------- -------
Total from investment operations................ (0.426) (0.477) 0.164 0.141
------ -------- ------- -------
Less distributions declared to shareholders:
From net investment income................... (0.394) (0.343) (0.164) (0.141)
------ -------- ------- -------
Net asset value - End of period.......................... $6.680 $6.680 $7.500 $7.500
------ -------- ------- -------
Total return (c)(d)...................................... (5.55)% (6.27)% 2.22%(f) 1.90%(f)
------ -------- ------- -------
Ratios to average net assets
Expenses.............................................. 0.12%(e) 0.87%(e) 0.10%(g) 0.85%(g)
Net investment income ................................ 5.83% 5.08%(d) 4.91%(g) 4.16%(g)
Fees and expenses waived or borne by the adviser...... 0.93% 0.93%(d) 1.20%(g) 1.20%(g)
Portfolio turnover....................................... 37% 37%(d) 1%(g) 1%(g)
Net assets at end of period (000)........................ $14,189 $17,169 $13,710 $9,934
(a) Net of fees and expenses waived or borne
by the adviser which amounted to..................... $0.063 $0.063 $0.040 $0.040
(b) The Fund commenced investment operations on September 1, 1993.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or CDSC.
(d) Had the adviser not waived or reimbursed a portion of expenses total return
would have been reduced.
(e) Includes service fee since its inception on December 1, 1994, of 0.02% (not
annualized).
(f) Not annualized.
(g) Annualized.
</TABLE>
--------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION (UNAUDITED)
All of the distributions will be treated as exempt income for federal income tax
purposes.
10
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE TRUSTEES OF COLONIAL TRUST V AND THE SHAREHOLDERS OF COLONIAL NORTH
CAROLINA TAX-EXEMPT FUND
In our opinion, the accompanying statement of assets and liabilities,
including the investment portfolio, and the related statements of operations and
of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Colonial North Carolina Tax-Exempt
Fund (a series of Colonial Trust V) at January 31, 1995, the results of its
operations, the changes in its net assets and the financial highlights for the
periods indicated, in conformity with generally accepted accounting principles.
These financial statements and the financial highlights (hereafter referred to
as financial statements) are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of portfolio positions
at January 31, 1995 by correspondence with the custodian and brokers, and the
application of alternative auditing procedures where confirmations from brokers
were not recevied, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
March 10, 1995
<PAGE>
INVESTMENT PORTFOLIO (IN THOUSANDS) JANUARY 31, 1995
================================================================================
<TABLE>
<CAPTION>
MUNICIPAL BONDS - 99.0% PAR VALUE
--------------------------------------------------------------------------------------
<S> <C> <C>
CONSUMER PRODUCTS - 0.9%
State Development Financing
Commission, Burrows Paper Corp.,
Series 1991,
7.450% 06/01/03............................. $ 1,065 $ 1,149
--------------------------------------------------------------------------------------
EDUCATION - 21.2%
Benjamin Logan Local School District,
5.650% 12/01/08............................. 555 528
Buckeye Local School District,
Jefferson County,
5.625% 12/01/11 (a)......................... 1,000 934
Cleveland,
5.375% 09/01/11 (a)......................... 1,000 917
Cleveland School District,
Series 1992-A,
5.875% 12/01/11 (a)......................... 1,500 1,444
Columbus School District,
(b) 12/01/05 (a)......................... 4,000 2,140
Crookville Exempted Village School
District,
7.375% 12/01/07............................. 25 27
Cuyahoga County,
5.250% 10/01/13 (a)......................... 3,000 2,640
Franklin County, Online Computer
Library, Series C-1985,
9.750% 07/15/09............................. 30 31
Gahanna-Jefferson City School District:
(b) 12/01/10............................. 840 317
6.150% 12/01/17............................. 1,000 971
Series 1993,
(b) 12/01/11............................. 795 280
Hilliard City School District,
5.700% 12/01/12............................. 500 469
Lakota Local School District,
Series 1993,
5.650% 12/01/11............................. 1,400 1,307
Massillon City School District:
(b) 12/01/08............................. 1,000 439
Series 1994:
(b) 12/01/09............................. 1,000 407
(b) 12/01/11 (a)......................... 1,000 355
Miami University:
(b) 12/01/09............................. 400 162
5.600% 12/01/13............................. 500 466
Pickerington Local School District,
5.375% 12/01/19............................. 2,500 2,178
Shaker Heights School District,
Series 1990-A,
7.100% 12/15/10 (a)......................... 750 832
Shawnee State University,
7.100% 06/01/09............................. 400 421
Southwestern City School District,
5.000% 12/01/13............................. 1,000 855
State Higher Education Facilities
Commission:
Case Western Reserve:
6.125% 10/01/15............................. 1,505 1,479
6.250% 10/01/17............................. 1,840 1,824
Oberlin College,
5.375% 10/01/15............................. 1,000 884
Ohio Dominican College,
6.625% 12/01/14............................. 1,500 1,451
University of Dayton,
5.800% 12/01/19............................. 1,000 921
Tri-County North Local School District,
8.125% 12/01/06............................. 75 85
University of Cincinnati, Series R7,
5.200% 06/01/10 (a)......................... 1,000 891
Wright State University,
5.150% 05/01/11 (a)......................... 1,095 979
--------
26,634
--------------------------------------------------------------------------------------
ELECTRIC - 8.6%
Athens County, Athens Inn, Inc.,
8.625% 11/01/11............................. 250 254
Cleveland Public Power System,
Series A:
(b) 11/15/12............................. 2,250 734
(b) 11/15/13............................. 2,000 608
Hamilton County,
Series 1993-A,
4.750% 10/15/23............................. 1,750 1,387
Municipal Electric Generation
Agency,
5.375% 02/15/24............................. 2,930 2,505
Puerto Rico Commonwealth,
Electric Power Authority, Series T,
5.500% 07/01/20............................. 1,000 861
State Air Quality Development Authority:
6.375% 01/01/29............................. 2,000 1,945
Ohio Edison Co.,
Series 1990-A,
7.450% 03/01/16............................. 1,000 1,064
Toledo Edison Co.,
Series 1990-B,
8.000% 05/15/19............................. 500 509
State Municipal Electricity
Generation Agency, Venture Omega JV5,
5.375% 02/15/13............................. 1,000 898
--------
10,765
--------------------------------------------------------------------------------------
</TABLE>
See notes to investment portfolio.
3
<PAGE>
INVESTMENT PORTFOLIO - CONTINUED
=================================================================
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
-----------------------------------------------------------------
<S> <C> <C>
GENERAL OBLIGATIONS - 9.0%
Adams County,
7.250% 12/01/11................. $ 500 $ 516
Columbus:
7.100% 07/15/05................. 435 467
Series 1993-1,
5.500% 09/15/08(a).............. 2,000 1,880
Series 2,
5.500% 05/15/15................. 1,770 1,602
Cuyahoga County,
Series 1993-A,
(b) 10/01/12................. 1,000 336
Franklin County,
5.375% 12/01/20(a).............. 2,000 1,740
Mentor,
7.150% 12/01/11................. 1,000 1,051
Montgomery County,
5.500% 09/01/11................. 700 651
Puerto Rico Commonwealth:
3.785% 07/01/08(c).............. 620(d) 229
5.500% 07/01/08(a).............. 1,240 1,186
Stark County, Series 1993,
5.600% 11/15/08................. 500 478
State Infrastructure:
4.800% 08/01/13................. 1,000 839
6.100% 08/01/12................. 380 376
---------
11,351
-----------------------------------------------------------------
HOSPITALS & HEALTH CARE - 16.1%
Akron, Bath & Copley Joint
Townships:
Akron General Medical Center,
5.500% 01/01/08(a).............. 1,000 936
Summa Health Systems,
Series 1993-A,
5.500% 11/15/13................. 2,500 2,116
Clermont County Hospital Facilities,
Mercy Health System, Series 1993-B,
5.875% 09/01/15................. 1,000 943
Cuyahoga County:
Cleveland Clinic Foundation,
Series 1988-A,
8.000% 12/01/15................. 500 536
Deaconess Hospital of Cleveland,
Series 1985-C,
7.450% 10/01/18................. 500 529
Meridian Health Systems:
6.250% 08/15/24(e).............. 1,000 948
Series 1991,
7.000% 08/15/23................. 500 509
Franklin County:
Doctor's Hospital, Series 1993:
5.875% 12/01/13................. 1,000 863
5.875% 12/01/23................. 1,000 828
Mount Carmel
Health Center, Series 1991,
6.750% 06/01/19................. 500 504
United Methodist Hospital,
Series 1993-A,
5.750% 05/15/12................. 1,500 1,361
Geauga County,
Geauga Hospital Association,
Series I-1988,
8.750% 11/15/13................. 600 639
Green Springs Health Care
Facilities, St. Francis Health Care
Center, Series A,
7.000% 05/15/04................. 700 700
Hamilton County:
Children's Hospital Medical Center,
Series 1993-F,
5.200% 05/15/09................. 1,000 913
Sisters of Charity Hospital,
Series S 1992-A,
6.250% 05/15/14................. 500 501
Lucas County:
St. Vincent's Medical Center,
Series 1993-C,
5.250% 08/15/22................. 2,000 1,695
Toledo Hospital, Series 1993,
5.000% 11/15/22(a).............. 3,000 2,460
Miami County,
Upper Valley Medical Center,
Series 1987-A,
8.375% 05/01/13................. 500 531
Montgomery County:
Miami Valley Hospital,
Series 1992-A,
6.250% 11/15/12(a).............. 1,000 991
St. Elizabeth Medical Center,
Series B-1,
8.100% 07/01/18................. 500 511
Stark County,
Doctor's Hospital, Inc.,
6.000% 04/01/24................. 1,500 1,187
---------
20,201
-----------------------------------------------------------------
</TABLE>
See notes to investment portfolio.
4
<PAGE>
INVESTMENT PORTFOLIO - CONTINUED
================================================================================
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
-----------------------------------------------------------------------------------
<S> <C> <C>
HOUSING - 6.9%
MULTI-FAMILY - 2.2%
Capital Corp. for Housing,
Multi-family housing, Series 1993-A,
7.500% 01/01/24.......................... $ 1,000 $ 1,051
Montgomery County,
Connifers Housing Project,
8.450% 06/01/28.......................... 1,000 1,031
State Housing Finance Agency:
Detroit Terrace, Series 1985,
10.150% 10/20/11.......................... 170 179
Series B-2,
6.700% 03/01/25.......................... 500 497
---------
2,758
---------
SINGLE-FAMILY - 4.7%
Columbus-Beckley Housing Corp.,
Section 8 Assisted Project,
7.375% 10/15/21.......................... 1,342 1,285
Columbus-Norton Housing Corp.,
Section 8 Assisted Project,
7.375% 07/15/21.......................... 1,382 1,323
Housing Finance Agency, Single-
family Mortgage, RIB (variable rate),
Series A-2,
9.111% 03/24/31.......................... 700 719
State Housing Finance Agency,
Single-family Housing:
Series 1988-A,
8.400% 02/01/20.......................... 840 873
Series 1988-B,
8.100% 12/15/08.......................... 325 336
Series 1990-F,
7.600% 09/01/16.......................... 1,300 1,336
---------
5,872
-----------------------------------------------------------------------------------
IN-SUBSTANCE DEFEASED (f) - 8.7%
Akron, Bath & Copley Joint
Townships, Children's Hospital,
Center of Akron,
7.450% 11/15/20.......................... 500 556
Canton,
7.875% 12/01/08.......................... 500 554
Carroll County,
Timken Mercy Medical Center,
7.125% 12/01/18 (a)...................... 1,000 1,105
Cleveland School District, Series 1991,
8.250% 12/01/08.......................... 500 583
Cuyahoga County,
7.000% 10/01/13.......................... 1,000 1,090
Delaware County,
7.250% 11/01/10.......................... 250 278
Franklin County, Mount Carmel
Health Center, Series 1990-B,
7.650% 06/01/10.......................... 500 555
Hamilton County:
Christ Hospital, Series 1987,
8.375% 01/01/07.......................... 425 467
Series 1988-B,
8.000% 10/15/22 (g)...................... 2,000 2,210
Lake County, Series 1987-2,
8.125% 12/01/10.......................... 1,000 1,089
Lakota Local School District,
Series 1988,
7.900% 12/01/11.......................... 500 544
Ross County,
8.200% 12/01/06.......................... 1,000 1,099
State Building Authority,
Series 1987-A,
7.350% 04/01/07.......................... 430 473
Warren,
8.625% 11/15/13.......................... 250 283
---------
10,886
-----------------------------------------------------------------------------------
NURSING HOMES - 2.5%
Cuyahoga County, Judson
Retirement Community,
8.875% 11/15/19.......................... 500 529
Franklin County,
Columbus West Health Care Co.,
Series 1986,
10.000% 09/01/16.......................... 100 98
Greene County,
Fairview Extended Care Service,
Series 1990-A,
10.125% 01/01/11.......................... 230 247
Lucas County,
Villa North Nursing Home,
Series 1988-B,
10.500% 06/01/18.......................... 500 450
Marion County,
United Church Homes, Inc.,
Series 1993,
6.375% 11/15/10.......................... 1,000 891
Montgomery County,
Grafton Oaks Project, Series 1986,
9.750% 12/01/16(h)....................... 735 720
Westerville,
Health Care & Retirement Project,
10.000% 01/01/08.......................... 220 225
---------
3,160
-----------------------------------------------------------------------------------
POLLUTION CONTROL REVENUE - 1.0%
State Air Quality Development Authority,
5.625% 11/15/29.......................... 1,500 1,333
-----------------------------------------------------------------------------------
</TABLE>
See notes to investment portfolio.
5
<PAGE>
INVESTMENT PORTFOLIO - CONTINUED
================================================================================
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
-----------------------------------------------------------------------------------
<S> <C> <C>
PUBLIC FACILITY & IMPROVEMENT - 9.6%
Cuyahoga County,
Joy Technologies, Inc.,
8.750% 09/15/07.................... $ 500 $ 523
Fairborn,
Series 1991,
7.200% 10/01/11 (a)................ 1,170 1,261
Franklin County Convention
Facilities Authority,
5.850% 12/01/19.................... 1,200 1,127
Gateway Economic Development
Corp. of Greater Cleveland,
Series 1990-A,
6.875% 09/01/05.................... 750 799
Lake County Economic Development,
North Madison Properties, Series 1993:
8.069% 09/01/01.................... 420 414
8.819% 09/01/11.................... 200 200
Ohio State Building Authority:
Administration Building Fund,
Series 1993-A,
5.500% 10/01/12.................... 1,500 1,367
William Green Building,
4.750% 04/01/14.................... 5,750 4,650
State Development Financing
Commission, Sponge, Inc. Project,
Series 1989-5A,
8.375% 06/01/14.................... 740 798
State Public Facilities Commission,
Series II-1993-A,
4.700% 06/01/08 (a)................ 1,000 845
Virgin Islands Public Finance
Authority, Series 1992-A,
7.000% 10/01/02.................... 125 130
--------
12,114
-----------------------------------------------------------------------------------
TRANSPORTATION - 1.5%
Cleveland, Cleveland Hopkins
International Airport,
Series 1990-B,
7.250% 01/01/20.................... 500 527
Puerto Rico Commonwealth,
Highway & Transportation Authority:
4.040% 07/01/09 (c)................ 205(d) 80
5.500% 07/01/09.................... 410 373
State Turnpike Commission,
Series 1994-A,
5.750% 02/15/24.................... 1,000 912
--------
1,892
-----------------------------------------------------------------------------------
WATER & SEWER - 13.0%
Bellefontaine,
7.050% 06/01/11.................... 250 262
Clermont County Sewer System,
5.200% 12/01/21 (a)................ 1,750 1,496
Clermont County,
5.700% 12/01/13.................... 1,000 931
Cleveland,
Series 1993-G,
5.500% 01/01/21 (a)................ 6,750 6,126
Fostoria,
5.350% 12/01/23.................... 1,735 1,492
Hamilton County,
Metropolitan Sewer District:
Series 1993-A,
5.000% 12/01/14.................... 1,000 855
5.450% 12/01/09.................... 500 470
Montgomery County,
Moraine-Beaver Creek Water & Sewer,
5.300% 11/15/08.................... 495 444
Springboro,
7.875% 06/01/18.................... 500 546
State Water Development Authority:
5.500% 12/01/18.................... 2,490 2,219
6.000% 12/01/16.................... 1,000 964
Toledo Waterworks,
Series B,
7.750% 11/15/17.................... 500 549
--------
16,354
-----------------------------------------------------------------------------------
Total investments (cost $127,768) (i)................ 124,469
-----------------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS - 0.5%
-----------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES (J)
Franklin County,
3.950% 07/01/15.................... 100 100
Hamilton County,
Franciscan Sisters Poor Health
Project, Series A,
3.950% 03/01/17.................... 300 300
Ohio State University,
Series 1985-B,
3.900% 12/01/01.................... 225 225
-----------------------------------------------------------------------------------
Total short-term obligations............................................ 625
-----------------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES - 0.5%....................................... 576
-----------------------------------------------------------------------------------
NET ASSETS - 100.0%..................................................... $125,670
-----------------------------------------------------------------------------------
</TABLE>
Notes to investment portfolio:
(a) These securities, or a portion thereof, with a market value of $31,832 are
being used to collateralize open futures contracts.
(b) Zero coupon bond.
See notes to investment portfolio.
6
<PAGE>
INVESTMENT PORTFOLIO - CONTINUED
===============================================================================
Notes to investment portfolio cont.:
(c) This security is a variable rate instrument; on July 1, 1998 it will change
to a fixed rate instrument. Interest income is accrued daily on the
notional amount at the applicable interest rates.
(d) Notional amount.
(e) This security has been purchased on a delayed delivery basis, for settlement
at a future date beyond the customary settlement time.
(f) The Fund has been informed that each issuer has placed direct obligations of
the U.S. Government in an irrevocable trust, solely for the payment of the
interest and principal.
(g) This security, or a portion thereof, with a market value of $2,210 is being
used to collateralize the delayed delivery purchase indicated in note (e)
above.
(h) This issuer is in default of certain debt covenants. Income is not being
accrued.
(i) Cost for federal income tax purposes is the same.
(j) Variable rate demand notes are considered short-term obligations. Interest
rates change periodically on specified dates. These securities are payable
on demand and are secured by either letters of credit or other credit
support agreements from banks. The rates listed are as of January 31, 1995.
Short futures contracts open at January 31, 1995:
<TABLE>
<CAPTION>
Par value Unrealized
covered by Expiration depreciation
Type contracts month at 1/31/95
-------------------------------------------------------------------------------
<S> <C> <C> <C>
Treasury bonds $23,400 March $815
-------------------------------------------------------------------------------
</TABLE>
Acronym Name
------- -----------------------
RIB Residual Interest Bonds
See notes to financial statements.
7
<PAGE>
FINANCIAL STATEMENTS
===============================================================================
STATEMENT OF ASSETS & LIABILITIES
January 31, 1995
(in thousands except for per share amounts and footnote)
-------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments at value (cost $127,768)........................ $ 124,469
Short-term investments...................................... 625
---------
125,094
Receivable for:
Interest..................................... $ 1,765
Fund shares sold............................. 142
Investments sold............................. 30
Other........................................... 410 2,347
------- --------
Total assets....................................... 127,441
LIABILITIES
Payable for:
Investments purchased........................ 936
Distributions................................ 553
Fund shares repurchased...................... 161
Variation margin on futures.................. 110
Accrued:
Deferred Trustees fees....................... 2
Other........................................ 9
-------
Total liabilities...................................... 1,771
---------
NET ASSETS...................................................... $ 125,670
---------
Net asset value & redemption price per share -
Class A ($72,123/10,406).................................... $ 6.93
---------
Maximum offering price per share - Class A
($6.93/0.9525)............................................... $ 7.28*
---------
Net asset value & offering price per share -
Class B ($53,547/7,726)..................................... $ 6.93
---------
COMPOSITION OF NET ASSETS
Capital paid in.............................................. $ 130,820
Undistributed net investment income.......................... 42
Accumulated net realized loss................................ (1,078)
Net unrealized depreciation on:
Investments................................................ (3,299)
Open futures contracts..................................... (815)
---------
$ 125,670
=========
</TABLE>
STATEMENT OF OPERATIONS
Year ended January 31, 1995
(in thousands)
-------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest........................................................ $ 8,189
EXPENSES
Management fee.................................. $ 720
Service fee..................................... 23
Distribution fee - Class B...................... 399
Transfer agent.................................. 213
Bookkeeping fee................................. 54
Trustees fees................................... 14
Custodian fee................................... 8
Audit fee....................................... 30
Legal fee....................................... 5
Registration fees............................... 29
Reports to shareholders......................... 5
Other........................................... 16
-------
1,516
Fees waived by the adviser...................... (202) 1,314
------- ---------
Net investment income............................... 6,875
---------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON PORTFOLIO POSITIONS
Net realized gain (loss) on :
Investments................................... (668)
Closed futures contracts...................... 1,171
-------
Net realized gain...................................... 503
Net unrealized depreciation
during the period on:
Investments................................... (12,937)
Open futures contracts........................ (815)
-------
Net unrealized depreciation............................ (13,752)
---------
Net loss............................................ (13,249)
---------
Net decrease in net assets from
operations............................................... $ (6,374)
=========
</TABLE>
* On sales of $50,000 or more the offering price is reduced.
See notes to financial statements.
8
<PAGE>
FINANCIAL STATEMENTS - CONTINUED
===============================================================================
STATEMENT OF CHANGES IN NET ASSETS
(in thousands)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year ended January 31
---------------------
1995 1994
--------- --------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income................................................. $ 6,875 $ 5,370
Net realized gain (loss).............................................. 503 (141)
Net unrealized appreciation (depreciation)............................ (13,752) 5,314
-------- --------
Net increase (decrease) from operations......................... (6,374) 10,543
Distributions
From net investment income - Class A.................................. (4,183) (3,969)
In excess of net investment income - Class A........................... - (40)
From net investment income - Class B.................................. (2,598) (1,464)
In excess of net investment income- Class B........................... - (15)
-------- --------
(13,155) 5,055
Fund share transactions
Receipts for shares sold - Class A.................................... 7,374 16,539
Value of distributions reinvested - Class A........................... 2,438 2,303
Cost of shares repurchased - Class A.................................. (9,299) (5,518)
-------- --------
513 13,324
-------- --------
Receipts for shares sold - Class B.................................... 13,206 42,982
Value of distributions reinvested - Class B........................... 1,655 889
Cost of shares repurchased - Class B.................................. (7,155) (1,376)
-------- --------
7,706 42,495
-------- --------
Net increase from Fund share transactions....................... 8,219 55,819
-------- --------
Total increase (decrease)................................. (4,936) 60,874
NET ASSETS
Beginning of period................................................... 130,606 69,732
-------- --------
End of period (including undistributed and net of overdistributed
net investment income of $42 and $55, respectively).................. $125,670 $130,606
NUMBER OF FUND SHARES ======== ========
Sold - Class A........................................................ 1,035 2,210
Issued for distributions reinvested - Class A......................... 347 307
Repurchased - Class A................................................. (1,328) (735)
-------- --------
54 1,782
-------- --------
Sold - Class B........................................................ 1,845 5,742
Issued for distributions reinvested - Class B......................... 236 118
Repurchased - Class B................................................. (1,033) (183)
-------- --------
1,048 5,677
-------- --------
Net increase in shares outstanding.............................. 1,102 7,459
Outstanding at
Beginning of period................................................ 17,030 9,571
-------- --------
End of period...................................................... 18,132 17,030
======== ========
</TABLE>
See notes to financial statements.
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS
===============================================================================
NOTE 1. ACCOUNTING POLICIES
Colonial Ohio Tax-Exempt Fund (the Fund), a series of Colonial Trust V, is
a Massachusetts business trust, registered under the Investment Company Act of
1940, as amended, as a non-diversified, open-end, management investment company.
The Fund may issue an unlimited number of shares. The Fund offers Class A shares
sold with a front-end sales charge and Class B shares which are subject to an
annual distribution fee and a contingent deferred sales charge. Class B shares
will convert to Class A shares when they have been outstanding approximately
eight years. The following significant accounting policies are consistently
followed by the Fund in the preparation of its financial statements and conform
to generally accepted accounting principles.
-------------------------------------------------------------------------------
SECURITY VALUATION AND TRANSACTIONS
Debt securities generally are valued by a pricing service based upon market
transactions for normal, institutional-size trading units of similar securities.
When management deems it appropriate, an over-the-counter or exchange bid
quotation is used.
Futures contracts are valued based on the difference between the last sale
price and the opening price of the contract.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
Portfolio positions which cannot be valued as set forth above are valued at
fair value under procedures approved by the Trustees.
Security transactions are accounted for on the date the securities are
purchased or sold.
Cost is determined and gains and losses are based upon the specific
identification method for both financial statement and federal income tax
purposes.
The Fund may trade securities on other than normal settlement terms. This
may increase the risk if the other party to the transaction fails to deliver and
causes the Fund to subsequently invest at less advantageous prices.
-------------------------------------------------------------------------------
DETERMINATION OF CLASS NET ASSET VALUES AND FINANCIAL HIGHLIGHTS
All income, expenses (other than the Class B distribution fee), realized
and unrealized gains (losses) are allocated to each class proportionately on a
daily basis for purposes of determining the net asset value of each class.
Class B per share data and ratios are calculated by adjusting the expense
and net investment income per share data and ratios for the Fund for the entire
period by the distribution fee applicable to Class B shares only.
-------------------------------------------------------------------------------
FEDERAL INCOME TAXES
Consistent with the Fund's policy to qualify as a regulated investment
company and to distribute all of its taxable and tax-exempt income, no federal
income tax has been accrued.
-------------------------------------------------------------------------------
INTEREST INCOME, DEBT DISCOUNT AND PREMIUM
Interest income is recorded on the accrual basis. Original issue discount
is accreted to interest income over the life of a security with a corresponding
increase in the cost basis; market discount is not accreted. Premium is
amortized against interest income with a corresponding decrease in the cost
basis.
-------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
The Fund declares and records distributions daily and pays monthly.
The amount and character of income and gains to be distributed are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles.
-------------------------------------------------------------------------------
NOTE 2. FEES AND COMPENSATION PAID TO AFFILIATES
MANAGEMENT FEE
Colonial Management Associates, Inc. (the Adviser) is the investment
adviser of the Fund and furnishes accounting and other services and office
facilities for a monthly fee. Through June 30, 1994,
10
<PAGE>
NOTES TO FINANCIAL STATEMENTS - CONTINUED
================================================================================
this fee was 0.60% annually of the Fund's average net assets. Effective
July 1, 1994, the monthly fee is based on each Fund's pro rata portion of the
combined average net assets of Trust V as follows:
<TABLE>
<CAPTION>
Average Net Assets Annual Fee Rate
------------------ ---------------
<S> <C>
First $1 billion 0.55%
Next $1 billion 0.50%
Over $2 billion 0.45%
</TABLE>
-------------------------------------------------------------------------------
BOOKKEEPING FEE
The Adviser provides bookkeeping and pricing services for $27,000 per year
plus 0.035% of the Fund's average net assets over $50 million.
-------------------------------------------------------------------------------
TRANSFER AGENT
Colonial Investors Service Center, Inc. (the Transfer Agent), an affiliate
of the Adviser, provides shareholder services for a monthly fee equal to 0.14%
annually of the Fund's average net assets and receives a reimbursement for
certain out of pocket expenses.
-------------------------------------------------------------------------------
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES
The Adviser, through Colonial Investment Services, Inc. (the Distributor),
is the Fund's principal underwriter. During the year ended January 31, 1995,
the Distributor retained net underwriting discounts of $20,569 on sales of the
Fund's Class A shares and received contingent deferred sales charges (CDSC) of
$181,182 on Class B share redemptions.
The Fund has adopted a 12b-1 plan which requires the payment of a
distribution fee to the Distributor equal to 0.75% annually of the average net
assets attributable to Class B shares. Effective December 1, 1994, the plan was
amended to include payment by the Fund of a service fee applicable to both Class
A and Class B, to the Distributor as follows:
<TABLE>
<CAPTION>
Valuation of shares Annual
outstanding on the 20th of Fee
each month which were issued Rate
------------------------------------------------- ------
<S> <C>
Prior to November 30, 1994....................... 0.10%
On or after December 1, 1994..................... 0.25%
</TABLE>
The CDSC and the fees received from the 12b-1 plan are used principally as
repayment to the Distributor for amounts paid by the Distributor to dealers who
sold such shares.
-------------------------------------------------------------------------------
EXPENSE LIMITS
The Adviser has agreed, until further notice to waive fees and bear
certain Fund expenses to the extent that total expenses (exclusive of service
and distribution fees, brokerage commissions, interest, taxes, and extraordinary
expenses, if any) exceed 0.70% annually of the Fund's average net assets.
-------------------------------------------------------------------------------
OTHER
The Fund pays no compensation to its officers, all of whom are employees of
the Adviser.
The Fund's Trustees may participate in a deferred compensation plan which
may be terminated at any time. Obligations of the plan will be paid solely out
of the Fund's assets.
-------------------------------------------------------------------------------
NOTE 3. PORTFOLIO INFORMATION
During the year ended January 31, 1995, purchases and sales of
investments, other than short-term obligations, were $51,658,171 and
$41,279,931, respectively.
Unrealized appreciation (depreciation) at January 31, 1995, based on
cost of investments for both financial statements and federal income tax
purposes was:
<TABLE>
<S> <C>
Gross unrealized appreciation................... $ 2,743,687
Gross unrealized depreciation................... (6,042,995)
------------
Net unrealized depreciation................... $ (3,299,308)
============
--------------------------------------------------------------------------------
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS - CONTINUED
================================================================================
CAPITAL LOSS CARRYFORWARDS
At January 31, 1995, capital loss carryforwards available (to the extent
provided in regulations) to offset future realized gains were approximately as
follows:
</TABLE>
<TABLE>
<CAPTION>
Year of Capital loss
expiration carryforward
------------ ------------
<S> <C>
1996........ $213,000
1998........ 78,000
1999........ 8,000
2001........ 21,000
2002........ 112,000
------------
$432,000
============
</TABLE>
Expired capital loss carryforwards, if any, are recorded as a reduction of
capital paid in.
To the extent loss carryforwards are used to offset any future realized
gains, it is unlikely that such gains would be distributed since they may be
taxable to shareholders as ordinary income.
--------------------------------------------------------------------------------
OTHER
There are certain risks arising from geographic concentration in any state.
Certain revenue or tax related events in a state may impair the ability of
certain issuers of municipal securities to pay principal and interest on their
obligations.
The Fund may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
The Fund sells municipal and Treasury bond futures contracts to manage
overall portfolio interest rate exposure and not for trading purposes. The use
of futures contracts involves certain risks, which include (1) imperfect
correlation between the price movement of the contracts and the underlying
securities, (2) inability to close out positions due to different trading hours,
or the temporary absence of a liquid market, for either the contract or the
underlying securities, or (3) an inaccurate prediction by the Adviser of the
future direction of interest rates. Any of these risks may involve amounts
exceeding the initial or variation margin recorded in the Fund's Statement of
Assets and Liabilities at any given time.
--------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION (UNAUDITED)
All of the distributions will be treated as exempt income for federal
income tax purposes.
--------------------------------------------------------------------------------
12
<PAGE>
FINANCIAL HIGHLIGHTS
Selected data for a share of each class outstanding throughout each period are
as follows:
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED JANUARY 31
---------------------------------------------------------------------------------------------
1995 1994 1993 1992 1991
---------------------- ------------------ ------------------ -----------------
CLASS A CLASS B CLASS A CLASS B CLASS A CLASS B(B) CLASS A CLASS A
-------- ------- ------- ------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value - Beginning
of period........................ $ 7.670 $ 7.670 $ 7.290 $ 7.290 $ 7.090 $ 7.330 $ 6.880 $ 6.750
------- ------- ------- ------- -------- ------- ------- -------
Income (loss) from investment
operations:
Net investment income (a)........ 0.401 0.348 0.406 0.351 0.444 0.185 0.457 0.462
Net realized and unrealized
gain (loss) on investments..... (0.745) (0.745) 0.389 0.389 0.204 (0.033) 0.208 0.138
------- ------- ------- ------- -------- ------- ------- -------
Total from investment
operations..................... (0.344) (0.397) 0.795 0.740 0.648 0.152 0.665 0.600
------- ------- ------- ------- -------- ------- ------- -------
Less distributions declared
to shareholders:
From net investment income....... (0.396) (0.343) (0.411) (0.356) (0.448) (0.192) (0.455) (0.470)
In excess of net
investment income.............. -- -- (0.004) (0.004) -- -- -- --
------- ------- ------- ------- -------- ------- ------- -------
Total distributions
declared to shareholders....... (0.396) (0.343) (0.415) (0.360) (0.448) (0.192) (0.455) (0.470)
------- ------- ------- ------- -------- ------- ------- -------
Net asset value - End of period.... $ 6.930 $ 6.930 $ 7.670 $ 7.670 $ 7.290 $ 7.290 $ 7.090 $ 6.880
------- ------- ------- ------- -------- ------- ------- -------
Total return (c)(d)................ (4.38)% (5.10)% 11.17% 10.36% 9.41% 0.85% (f) 10.00% 9.21%
======= ======= ======= ======= ======== ======= ======= =======
Ratios to average net assets:
Expenses......................... 0.72% (e) 1.47% (e) 0.82% 1.57% 1.00% 1.75% (g) 1.00% 1.00%
Net investment income............ 5.71% 4.96% 5.34% 4.59% 6.18% 5.43% (g) 6.57% 6.83%
Fees and expenses waived
or borne by the adviser........ 0.16% 0.16% 0.09% 0.09% 0.03% 0.03% 0.09% 0.15%
Portfolio turnover................. 33% 33% 3% 3% 13% 13% 13% 11%
Net assets at end of period
(000)............................ $ 72,123 $ 53,547 $ 79,394 $51,212 $62,439 $ 7,293 $50,281 $41,158
(a) Net of fees and expenses waived
or borne by the adviser which
amounted to.................... $0.011 $0.011 $0.007 $0.007 $0.002 -- $0.006 $0.010
(b) Class B shares were initially offered on August 4, 1992. Per share amounts
reflect activity from that date.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or CDSC.
(d) Had the adviser not waived or reimbursed a portion of expenses total return
would have been reduced.
(e) Includes service fee since its inception on December 1, 1994, of 0.02%
(not annualized).
(f) Not annualized.
(g) Annualized.
</TABLE>
13
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE TRUSTEES OF COLONIAL TRUST V AND THE SHAREHOLDERS OF COLONIAL OHIO
TAX-EXEMPT FUND
In our opinion, the accompanying statement of assets and liabilities,
including the investment portfolio, and the related statements of operations and
of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Colonial Ohio Tax-Exempt Fund (a
series of Colonial Trust V) at January 31, 1995, the results of its operations,
the changes in its net assets and the financial highlights for the periods
indicated, in conformity with generally accepted accounting principles. These
financial statements and the financial highlights (hereafter referred to as
financial statements) are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of portfolio positions
at January 31, 1995 by correspondence with the custodian and brokers, and the
application of alternative auditing procedures where confirmations from brokers
were not received, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
March 10, 1995
Part C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Included in Part A
Summary of expenses
The Funds' financial history
Summary of expenses (for Colonial Texas Tax-
Exempt Fund, incorporated by reference to Part A
of Post-Effective Amendment No. 6 filed with the
Commission on August 12, 1991)
The Funds' financial history (Not applicable for
Colonial Texas Tax-Exempt Fund)
Included in Part B
Colonial California Tax-Exempt Fund (CCATEF)
Investment portfolio, January 31, 1995
Statement of assets and liabilities, January 31, 1995
Statement of operations, Year ended January 31, 1995
Statement of changes in net assets, Years ended January 31, 1995
and 1994
Notes to Financial Statements
Financial Highlights
Report of Independent Accountants
Colonial Connecticut Tax-Exempt Fund (CCTTEF)
Investment portfolio, January 31, 1995
Statement of assets and liabilities, January 31, 1995
Statement of operations, Year ended January 31, 1995
Statement of changes in net assets, Years ended January 31, 1995
and 1994
Notes to Financial Statements
Financial Highlights
Report of Independent Accountants
Colonial Florida Tax-Exempt Fund (CFLTEF)
Investment portfolio, January 31, 1995
Statement of assets and liabilities, January 31, 1995
Statement of operations, Year ended January 31, 1995
Statement of changes in net assets, Years ended
January 31, 1995 and 1994
Notes to Financial Statements
Financial Highlights
Report of Independent Accountants
Colonial Massachusetts Tax-Exempt Fund (CMATEF)
Investment portfolio, January 31, 1995
Statement of assets and liabilities, January 31, 1995
Statement of operations, Year ended January 31, 1995
Statement of changes in net assets, Years ended
January 31, 1995 and 1994
Notes to Financial Statements
Financial Highlights
Report of Independent Accountants
Colonial Michigan Tax-Exempt Fund (CMITEF)
Investment portfolio, January 31, 1995
Statement of assets and liabilities, January 31, 1995
Statement of operations, Year ended January 31, 1995
Statement of changes in net assets, Years ended
January 31, 1995 and 1994
Notes to Financial Statements
Financial Highlights
Report of Independent Accountants
Colonial Minnesota Tax-Exempt Fund (CMNTEF)
Investment portfolio, January 31, 1995
Statement of assets and liabilities, January 31, 1995
Statement of operations, Year ended January 31, 1995
Statement of changes in net assets, Years ended
January 31, 1995 and 1994
Notes to Financial Statements
Financial Highlights
Report of Independent Accountants
Colonial New York Tax-Exempt Fund (CNYTEF)
Investment portfolio, January 31, 1995
Statement of assets and liabilities, January 31, 1995
Statement of operations, Year ended January 31, 1995
Statement of changes in net assets, Years ended
January 31, 1995 and 1994
Notes to Financial Statements
Financial Highlights
Report of Independent Accountants
Colonial North Carolina Tax-Exempt Fund (CNCTEF)
Investment portfolio, January 31, 1995
Statement of assets and liabilities, January 31, 1995
Statement of operations, Year ended January 31, 1995
Statement of changes in net assets, Years ended
January 31, 1995 and 1994
Notes to Financial Statements
Financial Highlights
Report of Independent Accountants
Colonial Ohio Tax-Exempt Fund (COHTEF)
Investment portfolio, January 31, 1995
Statement of assets and liabilities, January 31, 1995
Statement of operations, Year ended January 31, 1995
Statement of changes in net assets, Years ended
January 31, 1995 and 1994
Notes to Financial Statements
Financial Highlights
Report of Independent Accountants
Not applicable for Colonial Texas Tax-Exempt
Fund (CTXTEF)
(b) Exhibits:
1. (a) Agreement and Declaration of Trust (1)
(b) Amendment No. 1 to the Agreement and
Declaration of Trust (2)
(c) Amendment No. 2 to the Agreement and
Declaration of Trust (9)
(d) Amendment No. 3 to the Agreement and
Declaration of Trust (12)
2. Amended By-Laws (10/9/92) (13)
3. Not Applicable
4. Form of Specimen Share Certificate
(12)
5. Form of Management Agreement between
Colonial Trust V and Colonial
Management Associates, Inc.
6. (a) Form of Distributor's Contract with
Colonial Investment Services, Inc.
(incorporated herein by reference to
Exhibit 6 (i)(b) to Post-Effective
Amendment No. 39 to the Registration
Statement of Colonial Trust I,
Registration Nos. 2-41251 & 811-2214,
filed with the Commission on April 20,
1995)
(b) Form of Selling Agreement with
Colonial Investment Services
(incorporated herein by reference to
Exhibit 6(b) to Post-Effective
Amendment No. 87 to the Registration
Statement of Colonial Trust III,
Registration Nos. 2-15184 and 811-881,
filed with the Commission on February
9, 1994)
(c) Form of Bank and Bank Affiliated
Selling Agreement (incorporated herein
by reference to Exhibit 6(c) to Post-
Effective Amendment No. 5 to the
Registration Statement of Colonial
Trust VI, Registration Nos. 35-45117
and 811-6529, filed with the
Commission on October 11, 1994)
(d) Investment Account Application
(incorporated herein by reference to
Prospectus)
(e) Mutual Fund Agreement with NCNB
Securities, Inc., and Colonial
Investment Services, Inc.
(Incorporated herein by reference to
Exhibit 6(f) to Post-Effective
Amendment No. 23 to the Registration
Statement of Colonial Massachusetts
Tax-Exempt Trust Registration Nos. 33-
12109 and 811-5030 filed with the
Commission on May 11, 1989)
(f) Colonial Fundamatic Check Program
Application (9)
(g) Form of Asset Retention Agreement
(incorporated herein by reference to
Exhibit 6(e) to Post-Effective
Amendment No. 5 to the Registration
Statement of Colonial Trust VI,
Registration Nos. 33-45117 and 811-
6529 filed with the Commission on
October 11, 1994)
7. Not Applicable
8. (a) Form of proposed Custody Agreement
with United Missouri Bank, n.a.
(incorporated herein by reference to
Exhibit 8(j) to Post-Effective
Amendment No. 36 to the Registration
Statement of Colonial Trust IV,
Registration Nos. 2-62492 & 811-2865,
filed with the Commission on March 12,
1993)
(b) Sub-Custodian Agreement between State
Street Bank and Trust Company and The
First National Bank of Boston (3)
(c) Sub-Custodian Agreement between State
Street Bank and Trust Company and
Irving Trust Company (incorporated
herein by reference to Exhibit 8.(c)
to Post-Effective Amendment No. 2 to
the Registration Statement of Colonial
California Tax-Exempt Trust,
Registration Nos. 33-2640 and
811-4557, filed with the Commission on
January 29, 1988)
9. (a) Form of Amended and Restated
Shareholders' Servicing and Transfer
Agent Agreement with Colonial
Investors Service Center, Inc. (f/k/a/
Citadel Service Company, Inc.) and
Colonial Management Associates, Inc.
(incorporated by reference to Exhibit
9.(a) to Post-Effective Amendment No.
5 to the Registration Statement of
Colonial Trust VI, Registration Nos.
33-45117 and 811-6529, filed with the
Commission on October 11, 1994)
(b) Form of Amendment No. 1 to the Amended
and Restated Shareholders' Servicing
and Transfer Agent Agreement (13)
(c) Form of Amendment No. 2 to the Amended
and Restated Shareholders' Servicing
and Transfer Agent Agreement (14)
(d) Form of Pricing and Bookkeeping
Agreement (13)
(e) Form of Agreement and Plan of
Reorganization (CCATEF, CMITEF,
CMNTEF, CNYTEF, COHTEF) (12)
10. Opinion and Consent of Counsel
(CMATEF) (2)
(a) Opinion and Consent of Counsel
(CCATEF) (incorporated herein by
reference to Exhibit 10. to Pre-
Effective Amendment No. 1 to the
Registration Statement of Colonial
California Tax-Exempt Trust,
Registration Nos. 811-4557 and 33-
2640, filed with the Commission on
March 13, 1986)
(b) Opinion and Consent of Counsel
(CMITEF) (incorporated herein by
reference to Exhibit 10. to Pre-
Effective Amendment No. 1 to the
Registration Statement of Colonial
Michigan Tax-Exempt Trust,
Registration Nos. 811-4793 and 33-
7842, filed with the Commission on
September 25, 1986)
(c) Opinion and Consent of Counsel
(CMNTEF) (incorporated herein by
reference to Exhibit 10. to Pre-
Effective Amendment No. 1 to the
Registration Statement of Colonial
Minnesota Tax-Exempt Trust,
Registration Nos. 811-4794 and 33-
7944, filed with the Commission on
September 25, 1986)
(d) Opinion and Consent of Counsel
(CNYTEF) (incorporated herein by
reference to Exhibit 10. to Pre-
Effective Amendment No. 1 to the
Registration Statement of Colonial New
York Tax-Exempt Trust, Registration
Nos. 811-4792 and 33-7931, filed with
the Commission on September 25, 1986)
(e) Opinion and Consent of Counsel
(COHTEF) (incorporated herein by
reference to Exhibit 10. to Pre-
Effective Amendment No. 1 to the
Registration Statement of Colonial
Ohio Tax-Exempt Trust, Registration
Nos. 811-4795 and 33-7943, filed with
the Commission on September 25, 1986)
11. Consent of Independent Accountants for
CCATEF, CCTEF, CCFLTEF, CMATEF,
CMITEF, CMNTEF, CNYTEF, CNCTEF, COHTEF
12. Not Applicable
13. Investment letter of Colonial
Management Associates, Inc. (CMATEF)
(2)
(a) Investment letter of Colonial
Management Associates, Inc. (CMITEF)
(incorporated herein by reference to
Exhibit 13. to Pre-Effective Amendment
No. 1 to the Registration Statement of
Colonial Michigan Tax-Exempt Trust,
Registration Nos. 811-4793 and 33-
7842, filed with the Commission on
September 25, 1986)
(b) Investment letter of Colonial
Management Associates, Inc. (CMNTEF)
(incorporated herein by reference to
Exhibit 13. to Pre-Effective Amendment
No. 1 to the Registration Statement of
Colonial Minnesota Tax-Exempt Trust,
Registration Nos. 811-4794 and 33-
7944, filed with the Commission on
September 25, 1986)
(c) Investment letter of Colonial
Management Associates, Inc. (CNYTEF)
(incorporated herein by reference to
Exhibit 13. to Pre-Effective Amendment
No. 1 to the Registration Statement of
Colonial New York Tax-Exempt Trust,
Registration Nos. 811-4792 and 33-
7931, filed with the Commission on
September 25, 1986)
(d) Investment letter of Colonial
Management Associates, Inc. (COHTEF)
(incorporated herein by reference to
Exhibit 13. to Pre-Effective Amendment
No. 1 to the Registration Statement of
Colonial Ohio Tax-Exempt Trust,
Registration Nos. 811-4795 and 33-
7943, filed with the Commission on
September 25, 1986)
14. Not Applicable
15. Distribution Plan adopted pursuant to
Section 12b-1 of the Investment
Company Act of 1940 (incorporated
herein by reference to Exhibit 6.(a)
hereto.
16.(a)(1) Calculation of Performance Information (CCATEF)
(a)(2) Calculation of Yield (CCATEF)
16.(b)(1) Calculation of Performance Information (CCTTEF)
(b)(2) Calculation of Yield (CCTTEF)
16.(c)(1) Calculation of Performance Information (CFLTEF)
(c)(2) Calculation of Yield (CFLTEF)
16.(d)(1) Calculation of Performance Information (CMATEF)
(d)(2) Calculation of Yield (CMATEF)
16.(e)(1) Calculation of Performance Information (CMITEF)
(e)(2) Calculation of Yield (CMITEF)
16.(f)(1) Calculation of Performance Information (CMNTEF)
(f)(2) Calculation of Yield (CMNTEF)
16.(g)(1) Calculation of Performance Information (CNYTEF)
(g)(2) Calculation of Yield (CNYTEF)
16.(h)(1) Calculation of Performance Information (CNCTEF)
(h)(2) Calculation of Yield (CNCTEF)
16.(i)(1) Calculation of Performance Information (COHTEF)
(i)(2) Calculation of Yield (COHTEF)
17.(a) Financial Data Schedule (Class A) (CCATEF)
(b) Financial Data Schedule (Class B) (CCATEF)
(c) Financial Data Schedule (Class A) (CCTTEF)
(d) Financial Data Schedule (Class B) (CCTTEF)
(e) Financial Data Schedule (Class A) (CFLTEF)
(f) Financial Data Schedule (Class B) (CFLTEF)
(g) Financial Data Schedule (Class A) (CMATEF)
(h) Financial Data Schedule (Class B) (CMATEF)
(i) Financial Data Schedule (Class A) (CMITEF)
(j) Financial Data Schedule (Class B) (CMITEF)
(k) Financial Data Schedule (Class A) (CMNTEF)
(l) Financial Data Schedule (Class B) (CMNTEF)
(m) Financial Data Schedule (Class A) (CNYTEF)
(n) Financial Data Schedule (Class B) (CNYTEF)
(o) Financial Data Schedule (Class A) (CNCTEF)
(p) Financial Data Schedule (Class B) (CNCTEF)
(q) Financial Data Schedule (Class A) (COHTEF)
(r) Financial Data Schedule (Class B) (COHTEF)
18. Power of Attorney for: Tom Bleasdale,
Lora S. Collins, William D. Ireland,
Jr., William E. Mayer, John A.
McNeice, Jr., James L. Moody, Jr.,
John J. Neuhauser, George L. Shinn,
Robert L. Sullivan and Sinclair Weeks,
Jr. (incorporated herein by reference
to Exhibit 16 to Post-Effective
Amendment No. 38 to the Registration
Statement of Colonial Trust IV,
Registration Nos. 2-62492 and 811-
2865, filed with the Commission on
March 11, 1994)
18.(a) Power of Attorney for: Robert J.
Birnbaum, James E. Grinnell and
Richard W. Lowry
_________________________________
(1) Incorporated by reference to the
Registrant's Registration Statement on Form
N-1A (File Nos. 33-12109 and 811-5030),
filed on February 19, 1987.
(2) Incorporated by reference to Pre-Effective
Amendment No. 1 to the Registration
Statement filed on April 10, 1987.
(3) Incorporated by reference to Post-Effective
Amendment No. 1 to the Registration
Statement filed on October 6, 1987.
(4) Incorporated by reference to Post-Effective
Amendment No. 2 to the Registration
Statement filed on March 31, 1988.
(5) Incorporated by reference to Post-Effective
Amendment No. 3 to the Registration
Statement filed on or about May 15, 1989.
(6) Incorporated by reference to Post-Effective
Amendment No. 4 to the Registration
Statement filed on or about April 3, 1990.
(7) Incorporated by reference to Post-Effective
Amendment No. 5 to the Registration
Statement filed on or about May 15, 1991.
(8) Incorporated by reference to Post-Effective
Amendment No. 6 to the Registration
Statement filed on or about August 12,
1991.
(9) Incorporated by reference to Post-Effective
Amendment No. 7 to the Registration
Statement filed on or about October 10,
1991.
(10) Incorporated by reference to Post-Effective
Amendment No. 8 to the Registration
Statement filed on or about March 20, 1992.
(11) Incorporated by reference to Post-Effective
Amendment No. 9 to the Registration
Statement filed on or about April 3, 1992.
(12) Incorporated by reference to Post-Effective
Amendment No. 10 to the Registration
Statement filed on or about June 5, 1992.
(13) Incorporated by reference to Post-Effective
Amendment No. 11 to the Registration
Statement filed on or about November 13,
1992.
(14) Incorporated by reference to Post-Effective
Amendment No. 13 to the Registration
Statement filed on or about May 13, 1993.
(15) Incorporated by reference to Post-Effective
Amendment No. 14 to the Registration
Statement filed on or about June 7, 1993.
(16) Incorporated by reference to Post-Effective
Amendment No. 17 to the Registration
Statement filed on or about April 1, 1994.
Item 25. Persons Controlled by or Under Common Control with
Registrant
None
Item 26. Number of Holders of Securities
(1) (2)
Title of Class Number of Record Holders at April 30, 1995
Shares of beneficial 5,584 Class A (CCATEF)
Interest 2,422 Class B
Shares of beneficial 1,842 Class A (CCTTEF)
Interest 1,800 Class B
Shares of beneficial 648 Class A (CFLTEF)
Interest 733 Class B
Shares of beneficial 4,622 Class A (CMATEF)
Interest 1,789 Class B
Shares of beneficial 1,410 Class A (CMITEF)
Interest 434 Class B
Shares of beneficial 1,464 Class A (CMNTEF)
Interest 600 Class B
Shares of beneficial 1,418 Class A (CNYTEF)
Interest 1,108 Class B
Shares of beneficial 601 Class A (CNCTEF)
Interest 553 Class B
Shares of beneficial 2,760 Class A (COHTEF)
Interest 2,126 Class B
Item Indemnification
27.
See Article VIII of Amendment No. 3 to the
Agreement and Declaration of Trust filed as
Exhibit 1 (c) hereto.
Item Business and Other Connections of Investemtn
28. Adviser
The following sets forth business and other
connections of each director and officer of
Colonial Management Associates, Inc. (see next
page):
ITEM 28
--------
Registrant's investment adviser, Colonial Management Associates, Inc., is
registered as an investment adviser under the Investment Advisers Act of 1940
(1940 Act). Colonial Advisory Services, Inc. (CASI), an affiliate of Colonial
Management Associates, Inc., is also registered as an investment adviser under
the 1940 Act. As of the end of its fiscal year December 31, 1994, CASI had one
institutional, corporate or other accounts under management or supervision, the
market value of which was approximately $265.3 million. Colonial Management
Associates, Inc. was the investment adviser to the 36 mutual funds in the
Colonial Group of Funds, the market value of which investment companies was
approximately $13,327.8 million. Colonial Investment Services, Inc., a
subsidiary of Colonial Management Associates, Inc., is the principal underwriter
and the national distributor of all of the funds in the Colonial Group of Funds,
including the Registrant.
The following sets forth the business and other connections of each
director and officer of Colonial Management Associates, Inc.:
(1) (2) (3) (4)
Name and principal
business addresses Affiliation
of officers and with Period is through 3/1/95. Other
directors of investment business, profession, vocation or
investment adviser adviser employment connection Affiliation
------------------ --------- ---------------------------------- -----------
Archer, Joseph A. V.P.
Augustine, Jeffrey B. V.P.
Berliant, Allan V.P.
Bertelson, Lisa V.P.
Bissonette, Michael V.P.
Boatman, Bonny E. Dir.;
Sr.V.P.;
IPC Mbr.
Carnabucci, Dominick V.P.
Carroll, Sheila A. Sr.V.P.;
Dir.
Citrone, Frank V.P.
Cogger, Harold W. Dir.; The Colonial Group, Inc. Dir.;Pres.
Pres.; & CEO
CEO;IPC Colonial Trusts I through VI V.P.
Mbr;Exe. Colonial High Income Municipal
Cmte. Trust V.P.
Colonial InterMarket Income Trust I V.P.
Colonial Intermediate High Income
Fund V.P.
Colonial Investment Grade Municipal
Trust V.P.
Colonial Municipal Income Trust V.P.
Liberty Financial Companies, Inc. Exec
VP; Dir.
Collins, Anne V.P.
Conlin, Nancy V.P.; Colonial Investors Service Center,
Asst.Sec.; Inc. Ast. Clrk
Asst. The Colonial Group, Inc. Ast. Clrk
Clrk & Colonial Advisory Services, Inc. Ast. Clrk
Counsel Colonial Investment Services, Inc. Ast. Clrk
Cordes, Susan V.P.
Daniszewski, Joseph J. V.P. Colonial Investment Services, Inc. V.P.
DiSilva, Linda V.P.
Emilson, C. Herbert Dir.; Colonial Investors Service Center, Dir.;
Vice Chm. Inc. Ex. VP
Exe. Cmte. The Colonial Group, Inc. Dir.; V.
Chrmn.;
Colonial Advisory Services, Inc. Dir.
Ericson, Carl C. V.P. Colonial Intermediate High Income
Fund V.P.
Evans, C. Frazier Dir.; Colonial Investment Services, Inc. Sr. V.P.
Sr.V.P.
Feingold, Andrea V.P. Colonial Intermediate High Income
Fund V.P.
Finnemore, Leslie W. V.P.
Gerokoulis, Stephen A. V.P. Colonial Investment Services, Inc. Sr. V.P.
Harasimowicz, Stephen V.P.
Hartford, Brian V.P.
Haynie, James P. V.P. Colonial Advisory Services, Inc. V.P.
Koonce, Michael H. V.P.; Colonial Trusts I through VI Ast. Sec.
Asst.Sec.; Colonial High Income Municipal
Asst. Trust Ast. Sec.
Clrk & Colonial InterMarket Income Trust I Ast. Sec.
Counsel Colonial Intermediate High Income
Fund Ast. Sec.
Colonial Investment Grade Municipal
Trust Ast. Sec.
Colonial Municipal Income Trust Ast. Sec.
Colonial Investment Services, Inc. Ast. Clrk
Colonial Investors Service Center,
Inc. Ast. Clrk
The Colonial Group, Inc. Ast. Clrk
Colonial Advisory Services, Inc. Ast. Clrk
Lennon, John E. V.P. Colonial Advisory Services, Inc. V.P.
Lenzi, Sharon V.P.
Lilienfeld, Jonathan V.P.
Loring, William C. V.P.
Lydecker, Peter L. V.P.; Colonial Trusts I through VI Controller
Asst. Colonial High Income Municipal
Treas. Trust Controller
Colonial InterMarket Income Trust I Controller
Colonial Intermediate High Income
Fund Controller
Colonial Investment Grade Municipal
Trust Controller
Colonial Municipal Income Trust Controller
MacKinnon, Donald S. Dir.;
Sr.V.P.
McCue, Gerard A. V.P. Colonial Advisory Services, Inc. V.P.
McGregor, Jeffrey L. Dir.; Colonial Investment Services, Inc. Pres.;CEO;
Sr.V.P. Dir.
McNeice, Jr., John A. Chrmn.; Boston College Trustee
Dir.; Boston College High School Trustee
Exe.Cmte. Carney Hospital Foundation Mbr.-the
Chm. Carney Fnd
Colonial Advisory Services, Inc. Dir.;Chm.;
CEO & Pres
Colonial High Income Municipal
Trust Ttee; Pres
Colonial InterMarket Income Trust I Ttee; Pres
Colonial Intermediate High
Income Fund Ttee; Pres
Colonial Investment Grade Municipal
Trust Ttee; Pres
Colonial Municipal Income Trust Ttee; Pres
The Colonial Group, Inc. Ttee; Pres
Colonial Trusts I through VI Ttee; Pres
Colonial Investors Service Center,
Inc. Ttee; Pres
Nativity Preparatory School Chm., Bd.
of Ttees
Northeastern University Crp.Bd.Mbr
Wentworth Institute of Technology Crp.Bd.Mbr
Colonial Investment Services, Inc. Dir.; Chm.
of the Bd.
Board of Visitors - Peter Drucker
Graduate Center Bd. Mbr.
St. John's Seminary Bd. Mbr.
Third Century Foundation Ttee; Pres
Peter F. Drucker Foundation Dir.
United Way of Mass Bay Bd. Mbr.
American Ireland Fund Bd. Mbr.
Catholic Charities -
Archdiocese of Boston Bd. Mbr.
Liberty Financial Companies, Inc. Dir.
O'Neill, Charles A. Sr.V.P.; Colonial Investment Services, Inc. Exec. V.P.
Dir.
Palmer, Elizabeth V.P.
Peters, Helen F. Dir.;
Sr.V.P.;
IPC Mbr.
Rie, Daniel Sr.V.P.; Colonial Advisory Services, Inc. Sr. V.P.
IPC Mbr.;
Dir.
Scoon, Davey S. Dir.; Colonial Advisory Services, Inc. Treas.
Exe.V.P.; Colonial High Income Municipal
IPC Mbr. Trust V.P.
Colonial InterMarket Income Trust I V.P.
Colonial Intermediate High Income
Fund V.P.
Colonial Investment Grade Municipal
Trust V.P.
Colonial Municipal Income Trust V.P.
Colonial Trusts I through VI V.P.
Colonial Investors Service Center,
Inc. Treas.
The Colonial Group, Inc. COO
Shore, Janet V.P. and Colonial High Income Municipal
Compliance Trust Ast. Sec.
Offr.; Colonial InterMarket Income Trust I Ast. Sec.
IPC Mbr. Colonial Intermediate High Income
Fund Ast. Sec.
Colonial Investment Grade Municipal
Trust Ast. Sec.
Colonial Municipal Income Trust Ast. Sec.
Colonial Trusts I through VI Ast. Sec.
Colonial Investment Services, Inc. Ast. Clrk
Silver, Richard A. Dir.; Colonial Advisory Services, Inc. Controller
Sr.V.P.; Colonial High Income Municipal
Treas. Trust Treas; CFO
& CFO Colonial InterMarket Income Trust I Treas; CFO
Colonial Intermediate High Income
Fund Treas; CFO
Colonial Investment Grade Municipal
Trust Treas; CFO
Colonial Municipal Income Trust Treas; CFO
Colonial Trusts I through VI Treas; CFO
Colonial Investors Service Center,
Inc. Asst.Treas
The Colonial Group, Inc. Treas; CFO
Colonial Investment Services, Inc. Treas; CFO
Stern, Arthur O. Exe.V.P.; Colonial Advisory Services, Inc. Clerk
Dir.; Colonial High Income Municipal
Sec.; Trust Secretary
Clrk.& Colonial InterMarket Income Trust I Secretary
Gnrl. Colonial Intermediate High Income
Counsel; Fund Secretary
IPC Mbr. Colonial Investment Grade Municipal
Trust Secretary
Colonial Municipal Income Trust Secretary
Colonial Trusts I through VI Secretary
Colonial Investors Service Center,
Inc. Clerk
The Colonial Group, Inc. Clerk;
V.P. Lgl.
Colonial Investment Services, Inc. Clerk;
Counsel
Wallace, John V.P.-Corp.
Finance
and
Controller
Yacovoni, Priscilla V.P.
----------------------
* The Principal address of all of the officers and directors of the investment
adviser is One Financial Center, Boston, MA 02111.
Item 29 Principal Underwriter
(a) Colonial Investment Services, Inc. a subsidiary of Colonial
Management Associates, Inc., Registrant's principal
underwriter, also acts in the same capacity to Colonial Trust
I, Colonial Trust II, Colonial Trust III, Colonial Trust IV and
Colonial Trust VI:
sponsor for Colony Growth Plans (public offering of which were
discontinued June 14, 1971).
(b) The table below lists each director or officer of the principal
underwriter named in the answer to Item 21.
(1) (2) (3)
Name and Principal Position and Offices with Positions and Offices
Business Address* Principal Underwriter with Registrant
Ballou, Rich Regional V.P. None
Balzano, Christine R. V.P. None
Barsokas, David Regional V.P. None
Buckley, Anne P. Compliance Officer None
Cairns, David Regional V.P. None
Chrzanowski, Daniel Regional V.P. None
Clapp, Elizabeth A. V.P. None
Clark, Cynthia V.P. None
Daniszewski, Joseph J. V.P. None
Davey, Cynthia Sr. V.P. None
Eckelman, Bryan Sr. V.P. None
Eldridge, Kenneth Sr. V.P. None
Emerson, Kim P. Regional V.P. None
Erickson, Cynthia G. V.P. None
Evans, C. Frazier Sr. V.P. None
Feldman, David Regional V.P. None
Flaherty, Michael Regional V.P. None
Gerokoulis, Stephen A. Sr. V.P. None
Goldberg, Matthew Regional V.P. None
Guillette, Andrew V.P. None
Hanselman, J. Michael Regional V.P. None
Harasimowicz, Stephen V.P. None
Hayes, Mary Elizabeth V.P. None
Hodgkins, Joseph Regional V.P. None
Howard, Craig Sr. V.P. None
Judge, Dana V.P. None
Karagiannis, Marilyn Sr. V.P. None
Kelley, Terry M. Regional V.P. None
Kelson, David W. Sr. V.P. None
Kilkenny Ann R. Sr. V.P. None
Lloyd, Judith H. Sr. V.P. None
Mahoney, D. Scott Sr. V.P. None
McCabe, Joanne Regional V.P. None
Mc Gregor, Jeffrey L. Director, CEO, None
President, COO
McNeice, John A. Director, Chairman Trustee,
President
Meyer, Wayne Regional V.P. None
Murphy, Robert F. Sr. V.P. None
Norwood, Steve Regional V.P. None
O'Neill, Charles A. Exec. V.P. None
Penitsch, Marilyn L. Regional V.P. None
Potter, Cheryl Regional V.P. None
Reed, Christopher B. Regional V.P. None
Ross, Gary J. Regional V.P. None
Rubin, James Regional V.P. None
Scott, Michael W. Sr. V.P. None
Silver, Richard A. Director, Treasurer, Treasurer,
CFO CFO
Sorrells, Elizabeth Sr. V.P. None
Stern, Arthur O. Clerk and Counsel Secretary
VanEtten, Keith H. V.P. None
Villanova, Paul Regional V.P. None
Wallace, John V.P. None
* The address for each individual is One Financial Center,
Boston, MA 02111.
Item Location of Accounts and Records
30.
The Trust's accounts and records required to be
maintained by Section 31(a) of the Investment
Company Act of 1940 and the Rules thereunder are in
the physical possession of the following:
Registrant:
Rule 31a-1(b),(4)
Rule 31a-2(a),(1)
Colonial Management Associates, Inc.
One Financial Center, Boston, Massachusetts 02111
Rule 31a-1(b), (1), (2), (3), (5), (6), (7), (8),
(9), (10), (11), (12)
Rule 31a-1(d),(f)
Rule 31a-2(a),(1),(2),(c),(e)
Colonial Investment Services, Inc.
One Financial Center, Boston, Massachusetts 02111
Rule 31a-1(d)
Rule 31a-2(c)
United Missouri Bank, n.a.
928 Grand Avenue, Kansas City, Missouri 64106
Rule 31a-1(b), (2), (3)
Rule 31a-2(a), (2)
Colonial Investors Service Center, Inc.
P.O. Box 1722, Boston, Massachusetts 02105-1722
Rule 31a-1(b),(2)
Rule 31a-2(a),(2)
Item Management Services
31.
See Item 5(c) as discussed in Part A and Item 16(d)
as discussed in Part B.
Item Undertakings
32.
(1) The Registrant hereby undertakes to promptly
call a meeting of shareholders for the purpose
of voting upon the question of removal of any
trustee when requested in writing to do so by
the record holders of not less than 10 per cent
of the Registrant's outstanding shares and to
assist its shareholders in the communicating
with other shareholders in accordance with the
requirements of Section 16(c) of the Investment
Company Act of 1940.
(2) The Registrant undertakes to comply with
Section 16(c) of the Investment Company Act of
1940 as though such provisions of the Act were
applicable to the Fund, except that the request
referred to in the third full paragraph thereof
may only be made by shareholders who hold in
the aggregate at least 1% of the outstanding
shares of the Fund, regardless of the net asset
value of shares held by such requesting
shareholders.
(3) The Registrant hereby undertakes to furnish
free of charge to each person to whom a
prospectus is delivered, a copy of the
applicable series' annual report to
shareholders containing the information
required by Item 5A of Form N-1A.
************
NOTICE
A copy of the Agreement and Declaration of Trust, as
amended, of Colonial Trust V (Trust) is on file with the
Secretary of The Commonwealth of Massachusetts and notice is
hereby given that this amendment to the Trust's Registration
Statement has been executed on behalf of the Trust by an officer
of the Trust as an officer and by its Trustees as trustees and
not individually and the obligations of or arising out of this
Registration Statement are not binding upon any of the Trustees,
officers or shareholders individually but are binding only upon
the assets and property of the Trust.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, the Registrant certifies that
it meets all the requirements for effectiveness of the
Registration Statement pursuant to Rule 485(b) and has duly
caused this Post-Effective Amendment No. 18 to its Registration
Statement under the Securities Act of 1933 and Amendment No. 19
to its Registration Statement under the Investment Company Act of
1940, to be signed in this City of Boston and The Commonwealth of
Massachusetts on the day of May, 1995.
COLONIAL TRUST V
JOHN A. MCNEICE, JR.
-----------------------
By: /s/ John A. McNeice, Jr.
President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment has been signed below by the following
persons in their capacities and on the date indicated.
SIGNATURES TITLE DATE
JOHN A. MCNEICE, JR. President
John A. McNeice, Jr. and Trustee
RICHARD A. SILVER Treasurer and
Richard A. Silver Chief Officer
PETER L. LYDECKER Controller
Peter L. Lydecker
ROBERT J. BIRNBAUM Trustee
Robert J. Birnbaum
JAMES E. GRINNELL
James E. Grinnell Trustee
RICHARD W. LOWRY Trustee
Richard W. Lowry
TOM BLEASDALE Trustee
Tom Bleasdale
LORA S. COLLINS
Lora S. Collins Trustee
WILLIAM D. IRELAND, JR. Trustee MICHAEL H.KOONCE
William D. Ireland, Jr. ----------------
Michael H.Koonce
Attorney-in-fact
WILLIAM E. MAYER Trustee
William E. Mayer
JAMES L. MOODY, JR. Trustee
James L. Moody, Jr.
JOHN J. NEUHAUSER Trustee
John J. Neuhauser
GEORGE L. SHINN Trustee
George L. Shinn
ROBERT L. SULLIVAN Trustee
Robert L. Sullivan
SINCLAIR WEEKS, JR. Trustee
Sinclair Weeks, Jr.
EXHIBIT INDEX
Exhibit Page No.
5. Form of Management Agreement between
Colonial Management Associates, Inc.
11. Consent of Independent Accountants for
CCATEF, CCTTEF, CFLTEF, CMATEF,
CMITEF, CMNTEF, CNYTEF, CNCTEF and
COHTEF
16.(a)(1) Calculation of Performance Information (CCATEF)
(a)(2) Calculation of Yield (CCATEF)
(b)(1) Calculation of Performance Information (CCTTEF)
(b)(2) Calculation of Yield (CCTTEF)
(c)(1) Calculation of Performance Information (CFLTEF)
(c)(2) Calculation of Yield (CFLTEF)
(d)(1) Calculation of Performance Information (CMATEF)
(d)(2) Calculation of Yield (CMATEF)
(e)(1) Calculation of Performance Information (CMITEF)
(e)(2) Calculation of Yield (CMITEF)
(f)(1) Calculation of Performance Information (CMNTEF)
(f)(2) Calculation of Yield (CMNTEF)
(g) (1) Calculation of Performance Information (CNYTEF)
(g) (2) Calculation of Yield (CNYTEF)
(h)(1) Calculation of Performance Information (CNCTEF)
(h)(2) Calculation of Yield (CNCTEF)
(i)(1) Calculation of Performance Information (COHTEF)
(i)(2) Calculation of Yield (COHTEF)
17.(a) Financial Data Schedule (Class A) (CCATEF)
(b) Financial Data Schedule (Class B) (CCATEF)
(c) Financial Data Schedule (Class A) (CCTEF)
(d) Financial Data Schedule (Class B) (CCTEF)
(e) Financial Data Schedule (Class A) (CFLTEF)
(f) Financial Data Schedule (Class B) (CFLTEF)
(g) Financial Data Schedule (Class A) (CMATEF)
(h) Financial Data Schedule (Class B) (CMATEF)
(i) Financial Data Schedule (Class A) (CMITEF)
(j) Financial Data Schedule (Class B) (CMITEF)
(k) Financial Data Schedule (Class A) (CMNTEF)
(l) Financial Data Schedule (Class B) (CMNTEF)
(m) Financial Data Schedule (Class A) (CNYTEF)
(n) Financial Data Schedule (Class B) (CNYTEF)
(o) Financial Data Schedule (Class A) (CNCTEF)
(p) Financial Data Schedule (Class B) (CNCTEF)
(q) Financial Data Schedule (Class A) (COHTEF)
(r) Financial Data Schedule (Class B) (COHTEF)
18.(a) Power of Attorney for: Robert J. Birnbaum,
James E. Grinnell and Richard W. Lowry
2
MANAGEMENT AGREEMENT
AGREEMENT dated as of March 27, 1995, between COLONIAL TRUST V, a
Massachusetts business trust (Trust), with respect to COLONIAL
MASSACHUSETTS TAX-EXEMPT FUND, COLONIAL MICHIGAN TAX-EXEMPT FUND,
COLONIAL MINNESOTA TAX-EXEMPT FUND, COLONIAL NEW YORK TAX-EXEMPT
FUND, COLONIAL OHIO TAX-EXEMPT FUND, COLONIAL CALIFORNIA TAX-
EXEMPT FUND, COLONIAL CONNECTICUT TAX-EXEMPT FUND, COLONIAL
FLORIDA TAX-EXEMPT FUND, COLONIAL NORTH CAROLINA TAX-EXEMPT FUND
(Funds), and COLONIAL MANAGEMENT ASSOCIATES, INC., a
Massachusetts corporation (Adviser).
In consideration of the promises and covenants herein, the
parties agree as follows:
1. The Adviser will manage the investment of the assets of the
Funds in accordance with its prospectus and statement of
additional information and will perform the other services
herein set forth, subject to the supervision of the Board of
Trustees of the Trust. The Adviser may delegate its
investment responsibilities to a sub-adviser.
2. In carrying out its investment management obligations, the
Adviser shall:
(a) evaluate such economic, statistical and financial
information and undertake such investment research as it
shall believe advisable; (b) purchase and sell securities and
other investments for the Funds in accordance with the
procedures described in its prospectus and statement of
additional information; and (c) report results to the Board
of Trustees of the Trust.
3. The Adviser shall furnish at its expense the following:
(a) office space, supplies, facilities and equipment; (b)
executive and other personnel for managing the affairs of the
Funds (including preparing financial information of the Funds
and reports and tax returns required to be filed with public
authorities, but exclusive of those related to custodial,
transfer, dividend and plan agency services, determination of
net asset value and maintenance of records required by
Section 31(a) of the Investment Company Act of 1940, as
amended, and the rules thereunder (1940 Act)); and (c)
compensation of Trustees who are directors, officers,
partners or employees of the Adviser or its affiliated
persons (other than a registered investment company).
4. The Adviser shall be free to render similar services to
others so long as its services hereunder are not impaired
thereby.
5. The Funds shall pay the Adviser monthly a fee at the annual
rate of 0.55% of the first $1 billion, 0.50% in excess of $1
billion and 0.45% in excess of $2 billion of the combined
average daily net assets of Colonial California Tax-Exempt
Fund, Colonial Connecticut Tax-Exempt Fund, Colonial Florida
Tax-Exempt Fund, Colonial Massachusetts Tax-Exempt Fund,
Colonial Michigan Tax-Exempt Fund, Colonial Minnesota Tax-
Exempt Fund, Colonial New York Tax-Exempt Fund, Colonial
North Carolina Tax-Exempt Fund and Colonial Ohio Tax-Exempt
Fund.
6. If the operating expenses of the Funds for any fiscal year
exceed the most restrictive applicable expense limitation for
any state in which shares are sold, the Adviser's fee shall
be reduced by the excess but not to less than zero.
Operating expenses shall not include brokerage, interest,
taxes, deferred organization expenses, Rule 12b-1
distribution fees, service fees and extraordinary expenses,
if any. The Adviser may waive its compensation (and bear
expenses of the Funds) to the extent that expenses of the
Funds exceed any expense limitation the Adviser declares to
be effective.
7. This Agreement shall become effective as of the date of its
execution, and
(a) unless otherwise terminated, shall continue until two
years from its date of execution and from year to year
thereafter so long as approved annually in accordance with
the 1940 Act; (b) may be terminated without penalty on
sixty days' written notice to the Adviser either by vote of
the Board of Trustees of the Trust or by vote of a majority
of the outstanding shares of the Funds; (c) shall
automatically terminate in the event of its assignment; and
(d) may be terminated without penalty by the Adviser on
sixty days' written notice to the Trust.
8. This Agreement may be amended in accordance with the 1940
Act.
9. For the purpose of the Agreement, the terms "vote of a
majority of the outstanding shares", "affiliated person" and
"assignment" shall have their respective meanings defined in
the 1940 Act and exemptions and interpretations issued by the
Securities and Exchange Commission under the 1940 Act.
10 In the absence of willful misfeasance, bad faith or gross
. negligence on the part of the Adviser, or reckless disregard
of its obligations and duties hereunder, the Adviser shall
not be subject to any liability to the Trust or the Funds, to
any shareholder of the Trust or the Funds or to any other
person, firm or organization, for any act or omission in the
course of, or connected with, rendering services hereunder.
COLONIAL TRUST V on behalf of
COLONIAL MASSACHUSETTS TAX-EXEMPT FUND
COLONIAL MICHIGAN TAX-EXEMPT FUND
COLONIAL MINNESOTA TAX-EXEMPT FUND
COLONIAL NEW YORK TAX-EXEMPT FUND
COLONIAL OHIO TAX-EXEMPT FUND
COLONIAL CALIFORNIA TAX-EXEMPT FUND
COLONIAL CONNECTICUT TAX-EXEMPT FUND
COLONIAL FLORIDA TAX-EXEMPT FUND
COLONIAL NORTH CAROLINA TAX-EXEMPT FUND
By: __________________________
Title: Controller
COLONIAL MANAGEMENT ASSOCIATES, INC.
By: __________________________
Title: Executive Vice President
A copy of the document establishing the Trust is filed with the
Secretary of The Commonwealth of Massachusetts. This Agreement
is executed by officers not as individuals and is not binding
upon any of the Trustees, officers or shareholders of the Trust
individually but only upon the assets of the Funds.
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Prospectus and Statement of Additional Information constituting
parts of this Post-Effective Amendment No. 18 to the registration
statement on Form N-1A (the "Registration Statement") of our reports
dated March 10, 1995, relating to the financial statements and financial
highlights appearing in the January 31, 1995 Annual Reports to Shareholders
of Colonial California Tax-Exempt Fund, Colonial Connecticut Tax-Exempt Fund,
Colonial Florida Tax-Exempt Fund, Colonial Massachusetts Tax-Exempt Fund,
Colonial Michigan Tax-Exempt Fund, Colonial Minnesota Tax-Exempt Fund,
Colonial New York Tax-Exempt Fund, Colonial North Carolina Tax-Exempt Fund
and Colonial Ohio Tax-Exempt Fund, each a series of Colonial Trust V,
which are also incorporated by reference into the Registration Statement.
We also consent to the references to us under the headings "Independent
Accountants" in the Statement of Additional Information and "The Funds'
Financial History" in the Prospectus.
PRICE WATERHOUSE LLP
--------------------------
PRICE WATERHOUSE LLP
Boston, Massachusetts
May 16, 1995
<TABLE>
WLK/ 3/24/95 PERFORMANCE CALCULATION
COLONIAL CALIFORNIA TAX EXEMPT FUND - CLASS A
Fiscal Year End: 1/31/95
Inception Date: 6/16/86
<CAPTION>
SINCE INCEPTION
ONE YEAR ENDING 1/31/95 FIVE YEARS ENDING 1/31/95 6/16/86 TO 1/31/95
Standard Non-Standard Standard Non-Standard Standard Non-Standard
-------- ---------- -------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Initial Inv. $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
Max. Load 4.75% 4.75% 4.75%
Amt. Invested $952.50 $1,000.00 $952.50 $1,000.00 $952.50 $1,000.00
Initial NAV $7.66 $7.66 $7.05 $7.05 $7.14 $7.14
Initial Shares 124.347 130.548 135.106 141.844 133.403 140.056
Shares From Dist. 7.596 7.975 53.357 55.995 104.115 109.297
End of Period NAV $6.87 $6.87 $6.87 $6.87 $6.87 $6.87
Total Return -9.35% -4.83% 29.47% 35.92% 63.18% 71.31%
Average Annual
Total Return -9.35% -4.83% 5.30% 6.33% 5.83% 6.43%
</TABLE>
<TABLE>
WLK/ 3/24/95 PERFORMANCE CALCULATION
COLONIAL CALIFORNIA TAX-EXEMPT FUND - CLASS B
Fiscal Year End: 1/31/95
Inception Date: 8/4/92
<CAPTION>
SINCE INCEPTION
ONE YEAR ENDING 1/31/95 8/4/92 TO 1/31/95
Standard Non-Standard Standard Non-Standard
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Initial Inv. $1,000.00 $1,000.00 $1,000.00 $1,000.00
Amt. Invested $1,000.00 $1,000.00 $1,000.00 $1,000.00
Initial NAV $7.66 $7.66 $7.41 $7.41
Initial Shares 130.548 130.548 134.953 134.953
Shares From Dist. 6.922 6.922 18.678 18.678
End of Period NAV $6.87 $6.87 $6.87 $6.87
CDSC 4.48% 2.78%
Total Return -10.04% -5.55% 2.77% 5.54%
Average Annual
Total Return -10.04% -5.55% 1.10% 2.19%
</TABLE>
COLONIAL CALIFORNIA TAX-EXEMPT FUND
FUND YIELD CALCULATION
(CALENDAR MONTH-END METHOD)
30-DAY BASE PERIOD ENDED 1/31/95
a - b 6
FUND YIELD = 2 ------- + 1 - 1
cd
ADJUSTED
YIELD YIELD*
a = dividends and interest earned during --------- ---------
the month ................................ $2,186,161 $2,186,161
b = expenses (exclusive of distribution fee)
accrued during the month.................. 281,723 291,679
c = average dividend shares outstanding
during the month ......................... 58,560,544 58,560,544
d = class A maximum offering price per share
on the last day of the month ............. $7.21 $7.21
CLASS A YIELD ........................... 5.48% 5.45%
===== =====
Class A yield/(1-Load)
ie: 5.48/(1-.0475)=yield on NAV= 5.75%
Less: Distribution fee (.75)
-----
CLASS B YIELD ........................... 5.00% 4.97%
====== ======
TAX-EQUIVALENT YIELD: CLASS A............ 10.19%
======
CLASS B............ 9.30%
======
* Without voluntary expense limit.
<TABLE>
WLK/ 3/24/95 PERFORMANCE CALCULATION
COLONIAL CONNECTICUT TAX-EXEMPT FUND - CLASS A
Fiscal Year End: 1/31/95
Inception Date: 11/1/91
<CAPTION>
SINCE INCEPTION
1 YEAR ENDING 1/31/95 11/1/91 TO 1/31/95
Standard Non-Standard Standard Non-Standard
-------- ------------ ---------- ----------
<S> <C> <C> <C> <C>
Initial Inv. $1,000.00 $1,000.00 $1,000.00 $1,000.00
Max. Load 4.75% 4.75%
Amt. Invested $952.50 $1,000.00 $952.50 $1,000.00
Initial NAV $7.89 $7.89 $7.14 $7.14
Initial Shares 120.722 126.743 133.403 140.056
Shares From Dist. 7.279 7.643 28.878 30.319
End of Period NAV $7.08 $7.08 $7.08 $7.08
Total Return -9.37% -4.85% 14.90% 20.63%
Average Annual
Total Return -9.37% -4.85% 4.36% 5.93%
</TABLE>
<TABLE>
WLK/ 3/24/95 PERFORMANCE CALCULATION
COLONIAL CONNECTICUT TAX-EXEMPT FUND - CLASS B
Fiscal Year End: 1/31/95
Inception Date: 6/8/92
<CAPTION>
SINCE INCEPTION
1 YEAR ENDED 1/31/95 6/8/92 TO 1/31/95
Standard Non-Standard Standard Non-Standard
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Initial Inv. $1,000.00 $1,000.00 $1,000.00 $1,000.00
Amt. Invested $1,000.00 $1,000.00 $1,000.00 $1,000.00
Initial NAV $7.89 $7.89 $7.20 $7.20
Initial Shares 126.743 126.743 138.889 138.889
Shares From Dist. 6.621 6.621 20.557 20.557
End of Period NAV $7.08 $7.08 $7.08 $7.08
CDSC 4.49% 2.95%
Total Return -10.06% -5.57% 9.94% 12.89%
Average Annual
Total Return -10.06% -5.57% 3.64% 4.68%
</TABLE>
COLONIAL CONNECTICUT TAX-EXEMPT FUND
FUND YIELD CALCULATION
(CALENDAR MONTH-END METHOD)
30-DAY BASE PERIOD ENDED 1/31/95
a - b 6
FUND YIELD = 2 ------- + 1 - 1
cd
ADJUSTED
YIELD YIELD*
a = dividends and interest earned during --------- ---------
the month ................................ $782,677 $782,677
b = expenses (exclusive of distribution fee)
accrued during the month.................. 44,297 112,931
c = average dividend shares outstanding
during the month ......................... 20,987,442 20,987,442
d = class A maximum offering price per share
on the last day of the month ............. $7.43 $7.43
CLASS A YIELD ........................... 5.72% 5.47%
===== =====
Class A yield/(1-Load)
ie: 5.72%/(1-.0475)=yield on NAV= 6.04%
Less: Distribution fee (.75)
-----
CLASS B YIELD ........................... 5.29% 4.72%
====== ======
TAX-EQUIVALENT YIELD: CLASS A............ 9.92%
======
CLASS B............ 9.17%
======
* Without voluntary expense limit.
<TABLE>
WLK/ 3/29/95 PERFORMANCE CALCULATION
COLONIAL FLORIDA TAX-EXEMPT FUND - CLASS A
Year End: 1/31/95
Inception Date: 02/01/93
<CAPTION>
SINCE INCEPTION
1 YEAR ENDED 1/31/95 2/1/93 TO 1/31/95
Standard Non-Standard Standard Non-Standard
--------- --------- ---------- ----------
<S> <C> <C> <C> <C>
Initial Inv. $1,000.00 $1,000.00 $1,000.00 $1,000.00
Max. Load 4.75% 4.75%
Amt. Invested $952.50 $1,000.00 $952.50 $1,000.00
Initial NAV $7.93 $7.93 $7.50 $7.50
Initial Shares 120.113 126.103 127.000 133.333
Shares From Dist. 7.176 7.538 15.134 15.885
End of Period NAV $7.10 $7.10 $7.10 $7.10
Total Return -9.62% -5.11% 0.92% 5.95%
Average Annual
Total Return -9.62% -5.11% 0.46% 2.93%
</TABLE>
<TABLE>
WLK/ 3/29/95 PERFORMANCE CALCULATION
COLONIAL FLORIDA TAX-EXEMPT FUND - CLASS B
Year End: 1/31/95
Inception Date: 2/01/93
<CAPTION>
SINCE INCEPTION
1 YEAR ENDED 1/31/95 2/1/93 TO 1/31/95
Standard Non-Standard Standard Non-Standard
--------- ------------ ---------- ----------
<S> <C> <C> <C> <C>
Initial Inv. $1,000.00 $1,000.00 $1,000.00 $1,000.00
Amt. Invested $1,000.00 $1,000.00 $1,000.00 $1,000.00
Initial NAV $7.93 $7.93 $7.50 $7.50
Initial Shares 126.103 126.103 133.333 133.333
Shares From Dist. 6.523 6.523 13.688 13.688
End of Period NAV $7.10 $7.10 $7.10 $7.10
CDSC 4.48% 3.79%
Total Return -10.31% -5.83% 0.61% 4.39%
Average Annual
Total Return -10.31% -5.83% 0.30% 2.17%
</TABLE>
COLONIAL FLORIDA TAX-EXEMPT FUND
FUND YIELD CALCULATION
(CALENDAR MONTH-END METHOD)
30-DAY BASE PERIOD ENDED 1/31/95
a - b 6
FUND YIELD = 2 ------- + 1 - 1
cd
ADJUSTED
YIELD YIELD*
a = dividends and interest earned during --------- ---------
the month ................................ $312,786 $312,786
b = expenses (exclusive of distribution fee)
accrued during the month.................. 14,962 48,908
c = average dividend shares outstanding
during the month ......................... 8,408,628 8,408,628
d = class A maximum offering price per share
on the last day of the month ............. $7.45 $7.45
CLASS A YIELD ........................... 5.78% 5.11%
===== =====
Class A yield/(1-Load)
ie: 5.78%/(1-.0475)=yield on NAV= 6.06%
Less: Distribution fee (.75)
-----
CLASS B YIELD ........................... 5.31% 4.61%
====== ======
TAX-EQUIVALENT YIELD: CLASS A............ 9.57%
======
CLASS B............ 8.79%
======
* Without voluntary expense limit.
<TABLE>
WLK/ 3/29/95 PERFORMANCE CALCULATION
COLONIAL MASSACHUSETTS TAX-EXEMPT FUND - CLASS A
Fiscal Year End: 1/31/95
Inception Date: 4/10/87
<CAPTION>
SINCE INCEPTION
1 YEAR ENDED 1/31/95 5 YEARS ENDED 1/31/95 4/10/87 TO 1/31/95
Standard Non-Standard Standard Non-Standard Standard Non-Standard
--------- ------------ ---------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Initial Inv. $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
Max. Load 4.75% 4.75% 4.75%
Amt. Invested $952.50 $1,000.00 $952.50 $1,000.00 $952.50 $1,000.00
Initial NAV $8.13 $8.13 $7.08 $7.08 $7.14 $7.14
Initial Shares 117.159 123.001 134.534 141.243 133.403 140.056
Shares From Dist. 7.233 7.588 51.942 54.529 93.221 97.867
End of Period NAV $7.39 $7.39 $7.39 $7.39 $7.39 $7.39
Total Return -8.07% -3.49% 37.81% 44.68% 67.48% 75.83%
Average Annual
Total Return -8.07% -3.49% 6.62% 7.67% 6.82% 7.48%
</TABLE>
<TABLE>
WLK/ 3/29/95 PERFORMANCE CALCULATION
COLONIAL MASSACHUSETTS TAX-EXEMPT FUND - CLASS B
Fiscal Year End: 1/31/95
Inception Date: 6/8/92
<CAPTION>
SINCE INCEPTION
1 YEAR ENDED 1/31/95 6/8/92 TO 1/31/95
Standard Non-Standard Standard Non-Standard
---------- ------------ ---------- ----------
<S> <C> <C> <C> <C>
Initial Inv. $1,000.00 $1,000.00 $1,000.00 $1,000.00
Amt. Invested $1,000.00 $1,000.00 $1,000.00 $1,000.00
Initial NAV $8.13 $8.13 $7.45 $7.45
Initial Shares 123.001 123.001 134.228 134.228
Shares From Dist. 6.605 6.605 20.420 20.420
End of Period NAV $7.39 $7.39 $7.39 $7.39
CDSC 4.54% 2.98%
Total Return -8.76% -4.21% 11.31% 14.28%
Average Annual
Total Return -8.76% -4.21% 4.12% 5.16%
</TABLE>
COLONIAL MASSACHUSETTS TAX-EXEMPT FUND
FUND YIELD CALCULATION
(CALENDAR MONTH-END METHOD)
30-DAY BASE PERIOD ENDED 1/31/95
a - b 6
FUND YIELD = 2 ------- + 1 - 1
cd
ADJUSTED
YIELD YIELD*
a = dividends and interest earned during --------- ---------
the month ................................ $1,375,118 $1,375,118
b = expenses (exclusive of distribution fee)
accrued during the month.................. 163,517 182,659
c = average dividend shares outstanding
during the month ......................... 33,444,582 33,444,582
d = class A maximum offering price per share
on the last day of the month ............. $7.76 $7.76
CLASS A YIELD ........................... 5.68% 5.58%
===== =====
Class A yield/(1-Load)
ie: 5.68%/(1-.0475)=yield on NAV= 5.96%
Less: Distribution fee (.75)
-----
CLASS B YIELD ........................... 5.21% 5.11%
====== ======
TAX-EQUIVALENT YIELD: CLASS A............ 10.69%
======
CLASS B............ 9.80%
======
* Without voluntary expense limit.
<TABLE>
WLK/ 3/29/95 PERFORMANCE CALCULATION
COLONIAL MICHIGAN TAX EXEMPT FUND - CLASS A
Fiscal Year End: 1/31/95
Inception Date: 9/26/86
<CAPTION>
SINCE INCEPTION
1 YEAR ENDED 1/31/95 5 YEARS ENDED 1/31/95 9/26/86 TO 1/31/95
Standard Non-Standard Standard Non-Standard Standard Non-Standard
--------- ------------ ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Initial Inv. $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
Max. Load 4.75% 4.75% 4.75%
Amt. Invested $952.50 $1,000.00 $952.50 $1,000.00 $952.50 $1,000.00
Initial NAV $7.34 $7.34 $6.52 $6.52 $7.14 $7.14
Initial Shares 129.768 136.240 146.089 153.374 133.403 140.056
Shares From Dist 8.005 8.408 52.523 55.132 94.803 99.532
End of Period NA $6.66 $6.66 $6.66 $6.66 $6.66 $6.66
Total Return -8.24% -3.66% 32.28% 38.87% 51.99% 59.57%
Average Annual
Total Return -8.24% -3.66% 5.75% 6.79% 5.14% 5.75%
</TABLE>
<TABLE>
WLK/ 3/29/95 PERFORMANCE CALCULATION
COLONIAL MICHIGAN TAX-EXEMPT FUND - CLASS B
Fiscal Year End: 1/31/95
Inception Date: 8/4/92
<CAPTION>
SINCE INCEPTION
1 YEAR ENDED 1/31/95 8/4/92 TO 1/31/95
Standard Non-Standard Standard Non-Standard
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Initial Inv. $1,000.00 $1,000.00 $1,000.00 $1,000.00
Amt. Invested $1,000.00 $1,000.00 $1,000.00 $1,000.00
Initial NAV $7.34 $7.34 $6.95 $6.95
Initial Shares 136.240 136.240 143.885 143.885
Shares From Dist. 7.319 7.319 19.104 19.104
End of Period NAV $6.66 $6.66 $6.66 $6.66
CDSC 4.54% 2.87%
Total Return -8.92% -4.39% 5.68% 8.56%
Average Annual
Total Return -8.92% -4.39% 2.24% 3.34%
</TABLE>
COLONIAL MICHIGAN TAX-EXEMPT FUND
FUND YIELD CALCULATION
(CALENDAR MONTH-END METHOD)
30-DAY BASE PERIOD ENDED 1/31/95
a - b 6
FUND YIELD = 2 ------- + 1 - 1
cd
ADJUSTED
YIELD YIELD*
a = dividends and interest earned during --------- ---------
the month ................................ $308,025 $308,025
b = expenses (exclusive of distribution fee)
accrued during the month.................. 32,452 40,911
c = average dividend shares outstanding
during the month ......................... 8,409,475 8,409,475
d = class A maximum offering price per share
on the last day of the month ............. $6.99 $6.99
CLASS A YIELD ........................... 5.69% 5.52%
===== =====
Class A yield/(1-Load)
ie: 5.69%/(1-.0475)=yield on NAV= 5.97%
Less: Distribution fee (.75)
-----
CLASS B YIELD ........................... 5.22% 5.04%
====== ======
TAX-EQUIVALENT YIELD: CLASS A............ 9.87%
======
CLASS B............ 9.06%
======
* Without voluntary expense limit.
<TABLE>
WLK 3/29/95 PERFORMANCE CALCULATION
COLONIAL MINNESOTA TAX EXEMPT FUND - CLASS A
Fiscal Year End: 1/31/95
Inception Date: 9/26/86
<CAPTION>
SINCE INCEPTION
1 YEAR ENDED 1/31/95 5 YEARS ENDED 1/31/95 9/26/86 TO 1/31/95
Standard Non-Standard Standard Non-Standard Standard Non-Standard
--------- --------- ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Initial Inv. $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
Max. Load 4.75% 4.75% 4.75%
Amt. Invested $952.50 $1,000.00 $952.50 $1,000.00 $952.50 $1,000.00
Initial NAV $7.48 $7.48 $6.82 $6.82 $7.14 $7.14
Initial Shares 127.340 133.690 139.663 146.628 133.403 140.056
Shares From Dist. 7.844 8.235 51.251 53.804 95.289 100.040
End of Period NAV $6.84 $6.84 $6.84 $6.84 $6.84 $6.84
Total Return -7.53% -2.92% 30.59% 37.10% 56.43% 64.23%
Average Annual
Total Return -7.53% -2.92% 5.48% 6.51% 5.50% 6.12%
</TABLE>
<TABLE>
WLK/ 3/29/95 PERFORMANCE CALCULATION
COLONIAL MINNESOTA TAX-EXEMPT FUND - CLASS B
Fiscal Year End: 1/31/95
Inception Date: 8/4/92
<CAPTION>
SINCE INCEPTION
1 YEAR ENDED 1/31/95 8/4/92 TO 1/31/95
Standard Non-Standard Standard Non-Standard
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Initial Inv. $1,000.00 $1,000.00 $1,000.00 $1,000.00
Amt. Invested $1,000.00 $1,000.00 $1,000.00 $1,000.00
Initial NAV $7.48 $7.48 $7.21 $7.21
Initial Shares 133.690 133.690 138.696 138.696
Shares From Dist. 7.164 7.164 19.104 19.104
End of Period NAV $6.84 $6.84 $6.84 $6.84
CDSC 4.57% 2.85%
Total Return -8.22% -3.65% 5.09% 7.93%
Average Annual
Total Return -8.22% -3.65% 2.01% 3.11%
</TABLE>
COLONIAL MINNESOTA TAX-EXEMPT FUND
FUND YIELD CALCULATION
(CALENDAR MONTH-END METHOD)
30-DAY BASE PERIOD ENDED 1/31/95
a - b 6
FUND YIELD = 2 ------- + 1 - 1
cd
ADJUSTED
YIELD YIELD*
a = dividends and interest earned during --------- ---------
the month ................................ $273,455 $273,455
b = expenses (exclusive of distribution fee)
accrued during the month.................. 34,501 44,362
c = average dividend shares outstanding
during the month ......................... 7,415,229 7,415,229
d = class A maximum offering price per share
on the last day of the month ............. $7.18 $7.18
CLASS A YIELD ........................... 5.45% 5.22%
===== =====
Class A yield/(1-Load)
ie: 5.45%/(1-.0475)=yield on NAV= 5.72%
Less: Distribution fee (.75)
-----
CLASS B YIELD ........................... 4.97% 4.73%
====== ======
TAX-EQUIVALENT YIELD: CLASS A............ 9.86%
======
CLASS B............ 8.99%
======
* Without voluntary expense limit.
<TABLE>
WLK/ 3/29/95 PERFORMANCE CALCULATION
COLONIAL NEW YORK TAX EXEMPT FUND - CLASS A
Fiscal Year End: 1/31/95
Inception Date: 9/26/86
<CAPTION>
SINCE INCEPTION
1 YEAR ENDED 1/31/95 5 YEARS ENDED 1/31/95 9/26/86 TO 1/31/95
Standard Non-Standard Standard Non-Standard Standard Non-Standard
---------- ---------- ---------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Initial Inv. $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
Max. Load 4.75% 4.75% 4.75%
Amt. Invested $952.50 $1,000.00 $952.50 $1,000.00 $952.50 $1,000.00
Initial NAV $7.50 $7.50 $6.59 $6.59 $7.14 $7.14
Initial Shares 127.000 133.333 144.537 151.745 133.403 140.056
Shares From Dist. 7.993 8.396 54.348 57.065 96.989 101.823
End of Period NAV $6.68 $6.68 $6.68 $6.68 $6.68 $6.68
Total Return -9.82% -5.32% 32.86% 39.49% 53.90% 61.58%
Average Annual
Total Return -9.82% -5.32% 5.85% 6.88% 5.30% 5.91%
</TABLE>
<TABLE>
WLK/ 3/29/95 PERFORMANCE CALCULATION
COLONIAL NEW YORK TAX-EXEMPT FUND - CLASS B
Fiscal Year End: 1/31/95
Inception Date: 8/4/92
<CAPTION>
SINCE INCEPTION
1 YEAR ENDED 1/31/95 8/4/92 TO 1/31/95
Standard Non-Standard Standard Non-Standard
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Initial Inv. $1,000.00 $1,000.00 $1,000.00 $1,000.00
Amt. Invested $1,000.00 $1,000.00 $1,000.00 $1,000.00
Initial NAV $7.50 $7.50 $7.13 $7.13
Initial Shares 133.333 133.333 140.252 140.252
Shares From Dist. 7.318 7.318 19.525 19.525
End of Period NAV $6.68 $6.68 $6.68 $6.68
CDSC 4.45% 2.81%
Total Return -10.49% -6.04% 3.92% 6.73%
Average Annual
Total Return -10.49% -6.04% 1.55% 2.64%
</TABLE>
COLONIAL NEW YORK TAX-EXEMPT FUND
FUND YIELD CALCULATION
(CALENDAR MONTH-END METHOD)
30-DAY BASE PERIOD ENDED 1/31/95
a - b 6
FUND YIELD = 2 ------- + 1 - 1
cd
ADJUSTED
YIELD YIELD*
a = dividends and interest earned during --------- ---------
the month ................................ $537,687 $537,687
b = expenses (exclusive of distribution fee)
accrued during the month.................. 41,159 75,912
c = average dividend shares outstanding
during the month ......................... 14,498,809 14,498,809
d = class A maximum offering price per share
on the last day of the month ............. $7.01 $7.01
CLASS A YIELD ........................... 5.94% 5.52%
===== =====
Class A yield/(1-Load)
ie: 5.94%/(1-.0475)=yield on NAV= 6.23%
Less: Distribution fee (.75)
-----
CLASS B YIELD ........................... 5.48% 5.04%
====== ======
TAX-EQUIVALENT YIELD: CLASS A............ 11.18%
======
CLASS B............ 10.32%
======
* Without voluntary expense limit.
<TABLE>
WLK/ 3/29/95 PERFORMANCE CALCULATION
COLONIAL NORTH CAROLINA TAX-EXEMPT FUND - CLASS A
Period End: 1/31/95
Inception Date: 9/1/93
<CAPTION>
SINCE INCEPTION
1 YEAR ENDED 1/31/95 9/1/93 TO 1/31/95
Standard Non-Standard Standard Non-Standard
---------- --------- ---------- ----------
<S> <C> <C> <C> <C>
Initial Inv. $1,000.00 $1,000.00 $1,000.00 $1,000.00
Max. Load 4.75% 4.75%
Amt. Invested $952.50 $1,000.00 $952.50 $1,000.00
Initial NAV $7.50 $7.50 $7.50 $7.50
Initial Shares 127.000 133.333 127.000 133.333
Shares From Dist. 7.664 8.052 10.650 11.183
End of Period NAV $6.68 $6.68 $6.68 $6.68
Total Return -10.04% -5.55% -8.05% -3.46%
Average Annual
Total Return -10.04% -5.55% -5.74% -2.45%
</TABLE>
<TABLE>
WLK/ 3/29/95 PERFORMANCE CALCULATION
COLONIAL NORTH CAROLINA TAX-EXEMPT FUND - CLASS B
Period End: 1/31/95
Inception Date: 9/1/93
<CAPTION>
SINCE INCEPTION
1 YEAR ENDED 1/31/95 9/1/93 TO 1/31/95
Standard Non-Standard Standard Non-Standard
--------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Initial Inv. $1,000.00 $1,000.00 $1,000.00 $1,000.00
Amt. Invested $1,000.00 $1,000.00 $1,000.00 $1,000.00
Initial NAV $7.50 $7.50 $7.50 $7.50
Initial Shares 133.333 133.333 133.333 133.333
Shares From Dist. 6.977 6.977 9.654 9.654
End of Period NAV $6.68 $6.68 $6.68 $6.68
CDSC 4.45% 3.56%
Total Return -10.72% -6.27% -8.04% -4.48%
Average Annual
Total Return -10.72% -6.27% -5.74% -3.18%
</TABLE>
COLONIAL NORTH CAROLINA TAX-EXEMPT FUND
FUND YIELD CALCULATION
(CALENDAR MONTH-END METHOD)
30-DAY BASE PERIOD ENDED 1/31/95
a - b 6
FUND YIELD = 2 ------- + 1 - 1
cd
ADJUSTED
YIELD YIELD*
a = dividends and interest earned during --------- ---------
the month ................................ $161,563 $161,563
b = expenses (exclusive of distribution fee)
accrued during the month.................. 5,268 30,536
c = average dividend shares outstanding
during the month ......................... 4,650,910 4,650,910
d = class A maximum offering price per share
on the last day of the month ............. $7.01 $7.01
CLASS A YIELD ........................... 5.82% 4.87%
===== =====
Class A yield/(1-Load)
ie: 5.82%/(1-.0475)=yield on NAV= 6.11%
Less: Distribution fee (.75)
-----
CLASS B YIELD ........................... 5.36% 4.36%
====== ======
TAX-EQUIVALENT YIELD: CLASS A............ 10.45%
======
CLASS B............ 9.62%
======
* Without voluntary expense limit.
<TABLE>
WLK/ 3/29/95 PERFORMANCE CALCULATION
COLONIAL OHIO TAX EXEMPT FUND - CLASS A
Fiscal Year End: 1/31/95
Inception Date: 9/26/86
<CAPTION>
SINCE INCEPTION
1 YEAR ENDED 1/31/95 5 YEARS ENDED 1/31/95 9/26/86 TO 1/31/95
Standard Non-Standard Standard Non-Standard Standard Non-Standard
---------- ------------ ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Initial Inv. $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
Max. Load 4.75% 4.75% 4.75%
Amt. Invested $952.50 $1,000.00 $952.50 $1,000.00 $952.50 $1,000.00
Initial NAV $7.67 $7.67 $6.85 $6.85 $7.14 $7.14
Initial Shares 124.185 130.378 139.051 145.985 133.403 140.056
Shares From Dist. 7.239 7.596 52.985 55.635 95.685 100.457
End of Period NAV $6.93 $6.93 $6.93 $6.93 $6.93 $6.93
Total Return -8.92% -4.38% 33.08% 39.72% 58.76% 66.68%
Average Annual
Total Return -8.92% -4.38% 5.88% 6.92% 5.69% 6.30%
</TABLE>
<TABLE>
WLK/ 3/29/95 PERFORMANCE CALCULATION
COLONIAL OHIO TAX-EXEMPT FUND - CLASS B
Fiscal Year End: 1/31/95
Inception Date: 8/4/92
<CAPTION>
SINCE INCEPTION
1 YEAR ENDED 1/31/95 8/4/92 TO 1/31/95
Standard Non-Standard Standard Non-Standard
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Initial Inv. $1,000.00 $1,000.00 $1,000.00 $1,000.00
Amt. Invested $1,000.00 $1,000.00 $1,000.00 $1,000.00
Initial NAV $7.67 $7.67 $7.33 $7.33
Initial Shares 130.378 130.378 136.426 136.426
Shares From Dist. 6.569 6.569 17.928 17.928
End of Period NAV $6.93 $6.93 $6.93 $6.93
CDSC 4.52% 2.84%
Total Return -9.61% -5.10% 4.13% 6.97%
Average Annual
Total Return -9.61% -5.10% 1.63% 2.74%
</TABLE>
COLONIAL OHIO TAX-EXEMPT FUND
FUND YIELD CALCULATION
(CALENDAR MONTH-END METHOD)
30-DAY BASE PERIOD ENDED 1/31/95
a - b 6
FUND YIELD = 2 ------- + 1 - 1
cd
ADJUSTED
YIELD YIELD*
a = dividends and interest earned during --------- ---------
the month ................................ $669,100 $669,100
b = expenses (exclusive of distribution fee)
accrued during the month.................. 83,531 92,733
c = average dividend shares outstanding
during the month ......................... 18,175,561 18,175,561
d = class A maximum offering price per share
on the last day of the month ............. $7.28 $7.28
CLASS A YIELD ........................... 5.65% 5.57%
===== =====
Class A yield/(1-Load)
ie: 5.65/(1-.0475)=yield on NAV= 5.94%
Less: Distribution fee (.75)
-----
CLASS B YIELD ........................... 5.19% 5.10%
====== ======
TAX-EQUIVALENT YIELD: CLASS A............ 10.11%
======
CLASS B............ 9.29%
======
* Without voluntary expense limit.
POWER OF ATTORNEY FOR SIGNATURE
The undersigned constitutes Truman S. Casner, Nancy L. Conlin,
Ellen Harrington, Peter L. Lydecker, Michael H. Koonce, Peter
MacDougall, John A. McNeice, Jr., Janet E. Shore, Richard A.
Silver and Arthur O. Stern individually, as my true and lawful
attorney, with full power to each of them to sign for me and in
my name, any and all registration statements and any and all
amendments to the registration statements filed under the
Securities Act of 1933 or the Investment Company Act of 1940 with
the Securities and Exchange Commission for the purpose of
complying with such registration requirements in my capacity as a
trustee or officer of certain mutual funds, in existence at the
date of this Power of Attorney, for which Colonial Management
Associates, Inc. serves as principal underwriter (Colonial Mutual
Funds). This Power of Attorney authorizes the above individuals
to sign my name and will remain in full force and effect until
specifically rescinded by me.
I specifically permit this Power of Attorney to be filed, as an
exhibit to a registration statement or amendment to registration
statement, of any or all Colonial Mutual Funds, with the
Securities and Exchange Commission and I request that this Power
of Attorney then constitute authority to sign additional
amendments and registration statements by virtue of its
incorporation by reference into the registration statements and
amendments for Colonial Mutual Funds.
In witness, I have signed this Power of Attorney on this 21st day
of April, 1995.
________________________________
Robert J. Birnbaum
POWER OF ATTORNEY FOR SIGNATURE
The undersigned constitutes Truman S. Casner, Nancy L. Conlin,
Ellen Harrington, Peter L. Lydecker, Michael H. Koonce, Peter
MacDougall, John A. McNeice, Jr., Janet E. Shore, Richard A.
Silver and Arthur O. Stern individually, as my true and lawful
attorney, with full power to each of them to sign for me and in
my name, any and all registration statements and any and all
amendments to the registration statements filed under the
Securities Act of 1933 or the Investment Company Act of 1940 with
the Securities and Exchange Commission for the purpose of
complying with such registration requirements in my capacity as a
trustee or officer of certain mutual funds, in existence at the
date of this Power of Attorney, for which Colonial Management
Associates, Inc. serves as principal underwriter (Colonial Mutual
Funds). This Power of Attorney authorizes the above individuals
to sign my name and will remain in full force and effect until
specifically rescinded by me.
I specifically permit this Power of Attorney to be filed, as an
exhibit to a registration statement or amendment to registration
statement, of any or all Colonial Mutual Funds, with the
Securities and Exchange Commission and I request that this Power
of Attorney then constitute authority to sign additional
amendments and registration statements by virtue of its
incorporation by reference into the registration statements and
amendments for Colonial Mutual Funds.
In witness, I have signed this Power of Attorney on this 21st day
of April, 1995.
________________________________
James E. Grinnell
POWER OF ATTORNEY FOR SIGNATURE
The undersigned constitutes Truman S. Casner, Nancy L. Conlin,
Ellen Harrington, Peter L. Lydecker, Michael H. Koonce, Peter
MacDougall, John A. McNeice, Jr., Janet E. Shore, Richard A.
Silver and Arthur O. Stern individually, as my true and lawful
attorney, with full power to each of them to sign for me and in
my name, any and all registration statements and any and all
amendments to the registration statements filed under the
Securities Act of 1933 or the Investment Company Act of 1940 with
the Securities and Exchange Commission for the purpose of
complying with such registration requirements in my capacity as a
trustee or officer of certain mutual funds, in existence at the
date of this Power of Attorney, for which Colonial Management
Associates, Inc. serves as principal underwriter (Colonial Mutual
Funds). This Power of Attorney authorizes the above individuals
to sign my name and will remain in full force and effect until
specifically rescinded by me.
I specifically permit this Power of Attorney to be filed, as an
exhibit to a registration statement or amendment to registration
statement, of any or all Colonial Mutual Funds, with the
Securities and Exchange Commission and I request that this Power
of Attorney then constitute authority to sign additional
amendments and registration statements by virtue of its
incorporation by reference into the registration statements and
amendments for Colonial Mutual Funds.
In witness, I have signed this Power of Attorney on this 21st day
of April, 1995.
________________________________
Richard W. Lowry
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS OF COLONIAL CALIFORNIA TAX-EXEMPT FUND, CLASS A YEAR END JAN-31-1995
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS OF
COLONIAL CALIFORNIA TAX-EXEMPT FUND, CLASS A YEAR END JAN-31-1995.
</LEGEND>
<CIK> 0000810891
<NAME> COLONIAL TRUST V
<SERIES>
<NUMBER> 8
<NAME> COLONIAL CALFORNIA TAX-EXEMPT FUND, CLASS A
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-END> JAN-31-1995
<INVESTMENTS-AT-COST> 405284
<INVESTMENTS-AT-VALUE> 398626
<RECEIVABLES> 8475
<ASSETS-OTHER> 23
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 407124
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6237
<TOTAL-LIABILITIES> 6237
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 316974
<SHARES-COMMON-STOCK> 43919
<SHARES-COMMON-PRIOR> 49611
<ACCUMULATED-NII-CURRENT> 257
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (9865)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (8373)
<NET-ASSETS> 400887
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 28972
<OTHER-INCOME> 0
<EXPENSES-NET> 4086
<NET-INVESTMENT-INCOME> 24886
<REALIZED-GAINS-CURRENT> (5120)
<APPREC-INCREASE-CURRENT> (45638)
<NET-CHANGE-FROM-OPS> (25872)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 19603
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3184
<NUMBER-OF-SHARES-REDEEMED> (10141)
<SHARES-REINVESTED> 1265
<NET-CHANGE-IN-ASSETS> (83678)
<ACCUMULATED-NII-PRIOR> 187
<ACCUMULATED-GAINS-PRIOR> (10217)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2457
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4327
<AVERAGE-NET-ASSETS> 332123
<PER-SHARE-NAV-BEGIN> 7.66
<PER-SHARE-NII> 0.413
<PER-SHARE-GAIN-APPREC> (0.791)
<PER-SHARE-DIVIDEND> 0.412
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 6.870
<EXPENSE-RATIO> 0.77
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS OF COLONIAL CALIFORNIA TAX-EXEMPT FUND, CLASS B YEAR END JAN-31-1995
AND IS QUALFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS OF
COLONIAL CALIFORNIA TAX-EXEMPT FUND, CLASS B YEAR END JAN-31-1995.
</LEGEND>
<CIK> 0000810891
<NAME> COLONIAL TRUST V
<SERIES>
<NUMBER> 8
<NAME> COLONIAL CALIFORNIA TAX-EXEMPT FUND, CLASS B
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-END> JAN-31-1995
<INVESTMENTS-AT-COST> 405284
<INVESTMENTS-AT-VALUE> 398626
<RECEIVABLES> 8475
<ASSETS-OTHER> 23
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 407124
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6237
<TOTAL-LIABILITIES> 6237
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1107366
<SHARES-COMMON-STOCK> 14398
<SHARES-COMMON-PRIOR> 13653
<ACCUMULATED-NII-CURRENT> 257
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (9865)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (8373)
<NET-ASSETS> 400887
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 28972
<OTHER-INCOME> 0
<EXPENSES-NET> 4086
<NET-INVESTMENT-INCOME> 24886
<REALIZED-GAINS-CURRENT> (5120)
<APPREC-INCREASE-CURRENT> (45638)
<NET-CHANGE-FROM-OPS> (25872)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 5218
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3198
<NUMBER-OF-SHARES-REDEEMED> (2845)
<SHARES-REINVESTED> 392
<NET-CHANGE-IN-ASSETS> (83678)
<ACCUMULATED-NII-PRIOR> 187
<ACCUMULATED-GAINS-PRIOR> (10217)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2457
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4327
<AVERAGE-NET-ASSETS> 101601
<PER-SHARE-NAV-BEGIN> 7.66
<PER-SHARE-NII> 0.360
<PER-SHARE-GAIN-APPREC> (0.791)
<PER-SHARE-DIVIDEND> 0.359
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 6.870
<EXPENSE-RATIO> 1.52
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS OF COLONIAL CONNECTICUT TAX-EXEMPT FUND, CLASS A YEAR END JAN-31-1995
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS OF
COLONIAL CONNECTICUT TAX-EXEMPT FUND, CLASS A YEAR END JAN-31-1995.
</LEGEND>
<CIK> 0000810891
<NAME> COLONIAL TRUST V
<SERIES>
<NUMBER> 2
<NAME> COLONIAL CONNECTICUT TAX-EXEMPT FUND, CLASS A
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-END> JAN-31-1995
<INVESTMENTS-AT-COST> 150827
<INVESTMENTS-AT-VALUE> 146394
<RECEIVABLES> 3263
<ASSETS-OTHER> 6
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 151663
<PAYABLE-FOR-SECURITIES> 1500
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1967
<TOTAL-LIABILITIES> 3467
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 7147
<SHARES-COMMON-STOCK> 10539
<SHARES-COMMON-PRIOR> 11588
<ACCUMULATED-NII-CURRENT> 91
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (3801)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (4500)
<NET-ASSETS> 148196
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 9422
<OTHER-INCOME> 0
<EXPENSES-NET> 1028
<NET-INVESTMENT-INCOME> 8394
<REALIZED-GAINS-CURRENT> (2357)
<APPREC-INCREASE-CURRENT> (15133)
<NET-CHANGE-FROM-OPS> (9096)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (4752)
<DISTRIBUTIONS-OF-GAINS> (12)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1375
<NUMBER-OF-SHARES-REDEEMED> (2800)
<SHARES-REINVESTED> 376
<NET-CHANGE-IN-ASSETS> (15031)
<ACCUMULATED-NII-PRIOR> 80
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 870
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1869
<AVERAGE-NET-ASSETS> 81798
<PER-SHARE-NAV-BEGIN> 7.89
<PER-SHARE-NII> 0.418
<PER-SHARE-GAIN-APPREC> (0.809)
<PER-SHARE-DIVIDEND> (0.418)
<PER-SHARE-DISTRIBUTIONS> (0.001)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 7.080
<EXPENSE-RATIO> 0.32
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INOFRMATION EXTRACTED FROM FINANCIAL
STATEMENTS OF COLONIAL CONNECTICUT TAX-EXEMPT FUND, CLASS B YEAR END
JAN-31-1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS OF COLONIAL CONNECTICUT TAX-EXEMPT FUND, CLASS B YEAR END
JAN-31-1995.
</LEGEND>
<CIK> 0000810891
<NAME> COLONIAL TRUST V
<SERIES>
<NUMBER> 2
<NAME> COLONIAL CONNECTICUT TAX-EXEMPT FUND, CLASS B
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-END> JAN-31-1995
<INVESTMENTS-AT-COST> 150827
<INVESTMENTS-AT-VALUE> 146394
<RECEIVABLES> 3263
<ASSETS-OTHER> 6
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 151663
<PAYABLE-FOR-SECURITIES> 1500
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1967
<TOTAL-LIABILITIES> 3467
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 9620
<SHARES-COMMON-STOCK> 10393
<SHARES-COMMON-PRIOR> 9099
<ACCUMULATED-NII-CURRENT> 91
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (3801)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (4500)
<NET-ASSETS> 148196
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 9422
<OTHER-INCOME> 0
<EXPENSES-NET> 1028
<NET-INVESTMENT-INCOME> 8394
<REALIZED-GAINS-CURRENT> (2357)
<APPREC-INCREASE-CURRENT> (15133)
<NET-CHANGE-FROM-OPS> (9096)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (3634)
<DISTRIBUTIONS-OF-GAINS> (9)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2223
<NUMBER-OF-SHARES-REDEEMED> (1240)
<SHARES-REINVESTED> 311
<NET-CHANGE-IN-ASSETS> (15031)
<ACCUMULATED-NII-PRIOR> 80
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 870
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1869
<AVERAGE-NET-ASSETS> 71980
<PER-SHARE-NAV-BEGIN> 7.890
<PER-SHARE-NII> 0.363
<PER-SHARE-GAIN-APPREC> (0.809)
<PER-SHARE-DIVIDEND> (0.363)
<PER-SHARE-DISTRIBUTIONS> (0.001)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 7.080
<EXPENSE-RATIO> 1.07
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS OF COLONIAL FLORIDA TAX-EXEMPT FUND, CLASS A AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS OF COLONIAL FLORIDA
TAX-EXEMPT FUND, CLASS A YEAR END JAN-31-1995.
</LEGEND>
<CIK> 0000810891
<NAME> COLONIAL TRUST V
<SERIES>
<NUMBER> 9
<NAME> COLONIAL FLORIDA TAX-EXEMPT FUND, CLASS A
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-END> JAN-31-1995
<INVESTMENTS-AT-COST> 60627
<INVESTMENTS-AT-VALUE> 58353
<RECEIVABLES> 2001
<ASSETS-OTHER> 27
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 61281
<PAYABLE-FOR-SECURITIES> 1084
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1583
<TOTAL-LIABILITIES> 2667
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 29164
<SHARES-COMMON-STOCK> 3871
<SHARES-COMMON-PRIOR> 3003
<ACCUMULATED-NII-CURRENT> 169
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (1621)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (2713)
<NET-ASSETS> 58614
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3434
<OTHER-INCOME> 0
<EXPENSES-NET> 359
<NET-INVESTMENT-INCOME> 3075
<REALIZED-GAINS-CURRENT> (1324)
<APPREC-INCREASE-CURRENT> (4781)
<NET-CHANGE-FROM-OPS> (3030)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1413
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2002
<NUMBER-OF-SHARES-REDEEMED> 1209
<SHARES-REINVESTED> 75
<NET-CHANGE-IN-ASSETS> 3299
<ACCUMULATED-NII-PRIOR> 71
<ACCUMULATED-GAINS-PRIOR> (297)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 316
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 770
<AVERAGE-NET-ASSETS> 24468
<PER-SHARE-NAV-BEGIN> 7.93
<PER-SHARE-NII> 0.423
<PER-SHARE-GAIN-APPREC> (0.839)
<PER-SHARE-DIVIDEND> (0.414)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 7.10
<EXPENSE-RATIO> 0.22
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS OF COLONIAL FLORIDA TAX-EXEMPT FUND, CLASS B YEAR END JAN-31-1995
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS OF
COLONIAL FLORIDA TAX-EXEMPT FUND, CLASS B YEAR END JAN-31-1995
</LEGEND>
<CIK> 0000810891
<NAME> COLONIAL TRUST V
<SERIES>
<NUMBER> 9
<NAME> COLONIAL FLORIDA TAX-EXEMPT FUND, CLASS B
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-END> JAN-31-1995
<INVESTMENTS-AT-COST> 60627
<INVESTMENTS-AT-VALUE> 58353
<RECEIVABLES> 2001
<ASSETS-OTHER> 27
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 61281
<PAYABLE-FOR-SECURITIES> 1084
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1583
<TOTAL-LIABILITIES> 2667
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 33624
<SHARES-COMMON-STOCK> 4382
<SHARES-COMMON-PRIOR> 3977
<ACCUMULATED-NII-CURRENT> 169
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (1621)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (2713)
<NET-ASSETS> 58614
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3434
<OTHER-INCOME> 0
<EXPENSES-NET> 359
<NET-INVESTMENT-INCOME> 3075
<REALIZED-GAINS-CURRENT> (1324)
<APPREC-INCREASE-CURRENT> (4781)
<NET-CHANGE-FROM-OPS> (3030)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1574
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1192
<NUMBER-OF-SHARES-REDEEMED> 868
<SHARES-REINVESTED> 81
<NET-CHANGE-IN-ASSETS> 3299
<ACCUMULATED-NII-PRIOR> 71
<ACCUMULATED-GAINS-PRIOR> (297)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 316
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 770
<AVERAGE-NET-ASSETS> 31457
<PER-SHARE-NAV-BEGIN> 7.93
<PER-SHARE-NII> 0.369
<PER-SHARE-GAIN-APPREC> (0.839)
<PER-SHARE-DIVIDEND> (0.360)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 7.10
<EXPENSE-RATIO> 0.97
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS OF COLONIAL MASSACHUSETTS TAX-EXEMPT FUND, CLASS A YEAR END
JAN-31-1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS OF COLONIAL MASSACHUSETTS TAX-EXEMPT FUND, CLASS A YEAR END
JAN-31-1995.
</LEGEND>
<CIK> 0000810891
<NAME> COLONIAL TRUST V
<SERIES>
<NUMBER> 1
<NAME> COLONIAL MASSACHUSETTS TAX-EXEMPT FUND, CLASS A
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-END> JAN-31-1995
<INVESTMENTS-AT-COST> 240272
<INVESTMENTS-AT-VALUE> 244818
<RECEIVABLES> 4080
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<TOTAL-ASSETS> 248927
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1651
<TOTAL-LIABILITIES> 1651
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 191133
<SHARES-COMMON-STOCK> 26175
<SHARES-COMMON-PRIOR> 27749
<ACCUMULATED-NII-CURRENT> 31
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (4579)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3498
<NET-ASSETS> 247276
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 16977
<OTHER-INCOME> 0
<EXPENSES-NET> 2228
<NET-INVESTMENT-INCOME> 14749
<REALIZED-GAINS-CURRENT> (2999)
<APPREC-INCREASE-CURRENT> (22859)
<NET-CHANGE-FROM-OPS> (11109)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 12074
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3110
<NUMBER-OF-SHARES-REDEEMED> 5556
<SHARES-REINVESTED> 872
<NET-CHANGE-IN-ASSETS> (30179)
<ACCUMULATED-NII-PRIOR> 98
<ACCUMULATED-GAINS-PRIOR> (1580)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1446
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2526
<AVERAGE-NET-ASSETS> 202568
<PER-SHARE-NAV-BEGIN> 8.130
<PER-SHARE-NII> 0.444
<PER-SHARE-GAIN-APPREC> (0.738)
<PER-SHARE-DIVIDEND> 0.446
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 7.390
<EXPENSE-RATIO> 0.72
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS OF COLONIAL MASSACHUSETTS TAX-EXEMPT FUND, CLASS B, JAN-31-1995 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS OF
COLONIAL MASSACHUSETTS TAX-EXEMPT FUND, CLASS B YEAR END JAN-31-1995.
</LEGEND>
<CIK> 0000810891
<NAME> COLONIAL TRUST V
<SERIES>
<NUMBER> 1
<NAME> COLONIAL MASSACHUSETTS TAX-EXEMPT FUND, CLASS B
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-END> JAN-31-1995
<INVESTMENTS-AT-COST> 240272
<INVESTMENTS-AT-VALUE> 244818
<RECEIVABLES> 4080
<ASSETS-OTHER> 29
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 248927
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1651
<TOTAL-LIABILITIES> 1651
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 57193
<SHARES-COMMON-STOCK> 7308
<SHARES-COMMON-PRIOR> 6373
<ACCUMULATED-NII-CURRENT> 31
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (4579)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3498
<NET-ASSETS> 247276
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 16977
<OTHER-INCOME> 0
<EXPENSES-NET> 2228
<NET-INVESTMENT-INCOME> 14749
<REALIZED-GAINS-CURRENT> (2999)
<APPREC-INCREASE-CURRENT> (22859)
<NET-CHANGE-FROM-OPS> (11109)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2748
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1841
<NUMBER-OF-SHARES-REDEEMED> 1111
<SHARES-REINVESTED> 205
<NET-CHANGE-IN-ASSETS> (30179)
<ACCUMULATED-NII-PRIOR> 98
<ACCUMULATED-GAINS-PRIOR> (1580)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1446
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2526
<AVERAGE-NET-ASSETS> 52906
<PER-SHARE-NAV-BEGIN> 8.130
<PER-SHARE-NII> 0.388
<PER-SHARE-GAIN-APPREC> (0.738)
<PER-SHARE-DIVIDEND> 0.390
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 7.390
<EXPENSE-RATIO> 1.47
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS OF COLONIAL MICHIGAN TAX-EXEMPT FUND, CLASS A YEAR END JAN-31-1995
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS OF
COLONIAL MICHIGAN TAX-EXEMPT FUND, CLASS A YEAR END JAN-31-1995.
</LEGEND>
<CIK> 0000810891
<NAME> COLONIAL TRUST V
<SERIES>
<NUMBER> 4
<NAME> COLONIAL MICHIGAN TAX-EXEMPT FUND, CLASS A
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-END> JAN-31-1995
<INVESTMENTS-AT-COST> 55614
<INVESTMENTS-AT-VALUE> 54959
<RECEIVABLES> 849
<ASSETS-OTHER> 17
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 56425
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 437
<TOTAL-LIABILITIES> 437
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 43211
<SHARES-COMMON-STOCK> 6282
<SHARES-COMMON-PRIOR> 6209
<ACCUMULATED-NII-CURRENT> 134
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (1322)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (1014)
<NET-ASSETS> 55988
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3851
<OTHER-INCOME> 0
<EXPENSES-NET> 467
<NET-INVESTMENT-INCOME> 3384
<REALIZED-GAINS-CURRENT> 404
<APPREC-INCREASE-CURRENT> (6303)
<NET-CHANGE-FROM-OPS> (2515)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2541
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 638
<NUMBER-OF-SHARES-REDEEMED> 773
<SHARES-REINVESTED> 208
<NET-CHANGE-IN-ASSETS> (4612)
<ACCUMULATED-NII-PRIOR> 58
<ACCUMULATED-GAINS-PRIOR> (1726)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 326
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 652
<AVERAGE-NET-ASSETS> 42677
<PER-SHARE-NAV-BEGIN> 7.34
<PER-SHARE-NII> 0.410
<PER-SHARE-GAIN-APPREC> (0.689)
<PER-SHARE-DIVIDEND> (0.401)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 6.660
<EXPENSE-RATIO> 0.62
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS OF COLONIAL MICHIGAN TAX-EXEMPT FUND YEAR END JAN-31-1995 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS OF COLONIAL
MICHIGAN TAX-EXEMPT FUND, CLASS B YEAR END JAN-31-1995.
</LEGEND>
<CIK> 0000810891
<NAME> COLONIAL TRUST V
<SERIES>
<NUMBER> 4
<NAME> COLONIAL MICHIGAN TAX-EXEMPT FUND, CLASS B
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-END> JAN-31-1995
<INVESTMENTS-AT-COST> 55614
<INVESTMENTS-AT-VALUE> 54959
<RECEIVABLES> 849
<ASSETS-OTHER> 17
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 56425
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 437
<TOTAL-LIABILITIES> 437
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 14979
<SHARES-COMMON-STOCK> 2123
<SHARES-COMMON-PRIOR> 2048
<ACCUMULATED-NII-CURRENT> 134
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (1322)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (1014)
<NET-ASSETS> 55988
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3851
<OTHER-INCOME> 0
<EXPENSES-NET> 467
<NET-INVESTMENT-INCOME> 3384
<REALIZED-GAINS-CURRENT> 404
<APPREC-INCREASE-CURRENT> (6303)
<NET-CHANGE-FROM-OPS> (2515)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 770
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 480
<NUMBER-OF-SHARES-REDEEMED> 461
<SHARES-REINVESTED> 56
<NET-CHANGE-IN-ASSETS> (4612)
<ACCUMULATED-NII-PRIOR> 58
<ACCUMULATED-GAINS-PRIOR> (1726)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 326
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 652
<AVERAGE-NET-ASSETS> 14861
<PER-SHARE-NAV-BEGIN> 7.340
<PER-SHARE-NII> 0.359
<PER-SHARE-GAIN-APPREC> (0.689)
<PER-SHARE-DIVIDEND> (0.350)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 6.660
<EXPENSE-RATIO> 1.37
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS OF COLONIAL MINNESOTA TAX-EXEMPT FUND, CLASS A YEAR END JAN-31-1995
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS OF
COLONIAL MINNESOTA TAX-EXEMPT FUND, CLASS A YEAR END JAN-31-1995.
</LEGEND>
<CIK> 0000810891
<NAME> COLONIAL TRUST V
<SERIES>
<NUMBER> 5
<NAME> COLONIAL MINNESOTA TAX-EXEMPT FUND, CLASS A
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-END> JAN-31-1995
<INVESTMENTS-AT-COST> 50953
<INVESTMENTS-AT-VALUE> 50110
<RECEIVABLES> 1169
<ASSETS-OTHER> 88
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 52267
<PAYABLE-FOR-SECURITIES> 1404
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 286
<TOTAL-LIABILITIES> 1690
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 36842
<SHARES-COMMON-STOCK> 5242
<SHARES-COMMON-PRIOR> 5528
<ACCUMULATED-NII-CURRENT> 39
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (738)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (1096)
<NET-ASSETS> 50577
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3492
<OTHER-INCOME> 0
<EXPENSES-NET> 473
<NET-INVESTMENT-INCOME> 3019
<REALIZED-GAINS-CURRENT> 30
<APPREC-INCREASE-CURRENT> (4777)
<NET-CHANGE-FROM-OPS> (1728)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (2325)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 708
<NUMBER-OF-SHARES-REDEEMED> (1226)
<SHARES-REINVESTED> 232
<NET-CHANGE-IN-ASSETS> (1066)
<ACCUMULATED-NII-PRIOR> 23
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 295
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 610
<AVERAGE-NET-ASSETS> 38992
<PER-SHARE-NAV-BEGIN> 7.480
<PER-SHARE-NII> 0.415
<PER-SHARE-GAIN-APPREC> (0.642)
<PER-SHARE-DIVIDEND> (0.413)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 6.840
<EXPENSE-RATIO> 0.72
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS OF COLONIAL MINNESOTA TAX-EXEMPT FUND, CLASS B YEAR END JAN-31-1995
ANS IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS OF
FUND YEAR END JAN-31-1995.
</LEGEND>
<CIK> 0000810891
<NAME> COLONIAL TRUST V
<SERIES>
<NUMBER> 5
<NAME> COLONIAL MINNESOTA TAX-EXEMPT FUND, CLASS B
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-END> JAN-31-1995
<INVESTMENTS-AT-COST> 50953
<INVESTMENTS-AT-VALUE> 50110
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<ASSETS-OTHER> 88
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<TOTAL-ASSETS> 52267
<PAYABLE-FOR-SECURITIES> 1404
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 286
<TOTAL-LIABILITIES> 1690
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 15533
<SHARES-COMMON-STOCK> 2154
<SHARES-COMMON-PRIOR> 1380
<ACCUMULATED-NII-CURRENT> 39
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (738)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (1096)
<NET-ASSETS> 50577
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3492
<OTHER-INCOME> 0
<EXPENSES-NET> 473
<NET-INVESTMENT-INCOME> 3019
<REALIZED-GAINS-CURRENT> 30
<APPREC-INCREASE-CURRENT> (4777)
<NET-CHANGE-FROM-OPS> (1728)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (681)
<DISTRIBUTIONS-OF-GAINS> 0
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<NUMBER-OF-SHARES-SOLD> 869
<NUMBER-OF-SHARES-REDEEMED> 157
<SHARES-REINVESTED> 62
<NET-CHANGE-IN-ASSETS> (1066)
<ACCUMULATED-NII-PRIOR> 23
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
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<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 610
<AVERAGE-NET-ASSETS> 13175
<PER-SHARE-NAV-BEGIN> 7.480
<PER-SHARE-NII> 0.363
<PER-SHARE-GAIN-APPREC> (0.642)
<PER-SHARE-DIVIDEND> (0.361)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 6.840
<EXPENSE-RATIO> 1.47
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS OF COLONIAL NEW YORK TAX-EXEMPT FUND, CLASS A YEAR END JAN-31-1995
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS OF
COLONIAL NEW YORK TAX-EXEMPT FUND, CLASS A YEAR END JAN-31-1995.
</LEGEND>
<CIK> 0000810891
<NAME> COLONIAL TRUST V
<SERIES>
<NUMBER> 6
<NAME> COLONIAL NEW YORK TAX-EXEMPT FUND, CLASS A
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-END> JAN-31-1995
<INVESTMENTS-AT-COST> 92998
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<TOTAL-ASSETS> 97625
<PAYABLE-FOR-SECURITIES> 0
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<OTHER-ITEMS-LIABILITIES> 1137
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<SHARES-COMMON-STOCK> 7988
<SHARES-COMMON-PRIOR> 8467
<ACCUMULATED-NII-CURRENT> 199
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<ACCUMULATED-NET-GAINS> (5797)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (810)
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<EXPENSES-NET> 753
<NET-INVESTMENT-INCOME> 5998
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<APPREC-INCREASE-CURRENT> (9199)
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<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 3470
<DISTRIBUTIONS-OF-GAINS> 0
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<NUMBER-OF-SHARES-SOLD> 1059
<NUMBER-OF-SHARES-REDEEMED> 1792
<SHARES-REINVESTED> 254
<NET-CHANGE-IN-ASSETS> (12100)
<ACCUMULATED-NII-PRIOR> 2
<ACCUMULATED-GAINS-PRIOR> (2423)
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<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1224
<AVERAGE-NET-ASSETS> 57264
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<PER-SHARE-NII> 0.427
<PER-SHARE-GAIN-APPREC> (0.834)
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<PER-SHARE-DISTRIBUTIONS> 0
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<PER-SHARE-NAV-END> 6.680
<EXPENSE-RATIO> 0.42
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHUDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS OF COLONIAL NEW YORK TAX-EXEMPT FUND, CLASS B YEAR END JAN-31-1995
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS OF
COLONIAL NEW YORK TAX-EXEMPT FUND, CLASS B YEAR END JAN-31-1995.
</LEGEND>
<CIK> 0000810891
<NAME> COLONIAL TRUST V
<SERIES>
<NUMBER> 6
<NAME> COLONIAL NEW YORK TAX-EXEMPT FUND, CLASS B
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<S> <C>
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<ACCUMULATED-NII-PRIOR> 2
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<PER-SHARE-NAV-BEGIN> 7.50
<PER-SHARE-NII> 0.376
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<PER-SHARE-NAV-END> 6.680
<EXPENSE-RATIO> 1.17
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS OF COLONIAL NORTH CAROLINA TAX-EXEMPT FUND, CLASS A YEAR END
JAN-31-1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS OF COLONIAL NORTH CAROLINA TAX-EXEMPT FUND, CLASS A YEAR END
JAN-31-1995
</LEGEND>
<CIK> 0000810891
<NAME> COLONIAL TRUST V
<SERIES>
<NUMBER> 10
<NAME> COLONIAL NORTH CAROLINA TAX-EXEMPT FUND, CLASS A
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-END> JAN-31-1995
<INVESTMENTS-AT-COST> 33444
<INVESTMENTS-AT-VALUE> 31091
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<SHARES-COMMON-PRIOR> 1828
<ACCUMULATED-NII-CURRENT> 12
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<NET-INVESTMENT-INCOME> 1603
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<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (889)
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<AVERAGE-NET-ASSETS> 15264
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<PER-SHARE-GAIN-APPREC> (0.822)
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<EXPENSE-RATIO> 0.12
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS OF COLONIAL NORTH CAROLINA TAX-EXEMPT FUND, CLASS A END JAN-31-1995
ANS IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS OF
COLONIAL NORTH CAROLINA TAX-EXEMPT FUND, CLASS B YEAR END JAN-31-1995
</LEGEND>
<CIK> 0000810891
<NAME> COLONIAL TRUST V
<SERIES>
<NUMBER> 10
<NAME> COLONIAL NORTH CAROLINA TAX-EXEMPT FUND, CLASS B
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-END> JAN-31-1995
<INVESTMENTS-AT-COST> 33444
<INVESTMENTS-AT-VALUE> 31091
<RECEIVABLES> 1618
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<OTHER-ITEMS-LIABILITIES> 399
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<SHARES-COMMON-STOCK> 2571
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<DISTRIBUTIONS-OF-INCOME> (707)
<DISTRIBUTIONS-OF-GAINS> 0
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<NUMBER-OF-SHARES-REDEEMED> (317)
<SHARES-REINVESTED> 63
<NET-CHANGE-IN-ASSETS> 7714
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (43)
<OVERDISTRIB-NII-PRIOR> 0
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<GROSS-EXPENSE> 139
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<PER-SHARE-NAV-BEGIN> 7.50
<PER-SHARE-NII> 0.345
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<PER-SHARE-NAV-END> 6.68
<EXPENSE-RATIO> 0.87
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS OF COLONIAL OHIO TAX-EXEMPT FUND, CLASS A YEAR END JAN-31-1995 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS OF
COLONIAL OHIO TAX-EXEMPT FUND, CLASS A YEAR END JAN-31-1995.
</LEGEND>
<CIK> 0000810891
<NAME> COLONIAL TRUST V
<SERIES>
<NUMBER> 7
<NAME> COLONIAL OHIO TAX-EXEMPT FUND, CLASS A
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-END> JAN-31-1995
<INVESTMENTS-AT-COST> 127768
<INVESTMENTS-AT-VALUE> 124469
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<ASSETS-OTHER> 410
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<TOTAL-ASSETS> 127441
<PAYABLE-FOR-SECURITIES> 936
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<OTHER-ITEMS-LIABILITIES> 835
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<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 73379
<SHARES-COMMON-STOCK> 10406
<SHARES-COMMON-PRIOR> 10352
<ACCUMULATED-NII-CURRENT> 42
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<ACCUMULATED-NET-GAINS> (1078)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (4114)
<NET-ASSETS> 125670
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<EXPENSES-NET> 1314
<NET-INVESTMENT-INCOME> 6875
<REALIZED-GAINS-CURRENT> 503
<APPREC-INCREASE-CURRENT> (13752)
<NET-CHANGE-FROM-OPS> (6374)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 4183
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1035
<NUMBER-OF-SHARES-REDEEMED> 1328
<SHARES-REINVESTED> 347
<NET-CHANGE-IN-ASSETS> (4936)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (1581)
<OVERDISTRIB-NII-PRIOR> (55)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 720
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1516
<AVERAGE-NET-ASSETS> 74174
<PER-SHARE-NAV-BEGIN> 7.670
<PER-SHARE-NII> 0.401
<PER-SHARE-GAIN-APPREC> (0.745)
<PER-SHARE-DIVIDEND> 0.396
<PER-SHARE-DISTRIBUTIONS> 0
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<PER-SHARE-NAV-END> 6.930
<EXPENSE-RATIO> 0.72
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS OF COLONIAL OHIO TAX-EXEMPT FUND, CLASS B YEAR END JAN-31-1995 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS OF COLONIAL
OHIO TAX-EXEMPT FUND, CLASS B YEAR END JAN-31-1995.
</LEGEND>
<CIK> 0000810891
<NAME> COLONIAL TRUST V
<SERIES>
<NUMBER> 7
<NAME> COLONIAL OHIO TAX-EXEMPT FUND, CLASS B
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-END> JAN-31-1995
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<SHARES-COMMON-STOCK> 7726
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<ACCUMULATED-NII-CURRENT> 42
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<ACCUMULATED-NET-GAINS> (1078)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (4114)
<NET-ASSETS> 125670
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 8189
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<EXPENSES-NET> 1314
<NET-INVESTMENT-INCOME> 6875
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<APPREC-INCREASE-CURRENT> (13752)
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<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2598
<DISTRIBUTIONS-OF-GAINS> 0
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<NUMBER-OF-SHARES-SOLD> 1845
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<NET-CHANGE-IN-ASSETS> (4936)
<ACCUMULATED-NII-PRIOR> 0
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<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
