<PAGE>
- ------------------------------------------------------
COLONIAL NEW YORK TAX-EXEMPT FUND Semiannual report
- ------------------------------------------------------
July 31, 1998
[graphic omitted]
----------------------------
Not FDIC May Lose Value
Insured No Bank Guarantee
----------------------------
<PAGE>
COLONIAL NEW YORK TAX-EXEMPT FUND HIGHLIGHTS
FEBRUARY 1, 1998 - JULY 31, 1998
INVESTMENT OBJECTIVE: Colonial New York 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 New York state and city personal income tax. The
Fund also provides opportunities for long-term appreciation from a portfolio
primarily invested in investment-grade municipal bonds.
PORTFOLIO MANAGER COMMENTARY: "The Fund was positioned for a declining interest
rate environment. Interest rates varied considerably, but were essentially
unchanged between the beginning and the end of the period. While the lack of a
strong market direction restrained performance of the portfolio's more interest
rate sensitive bonds, New York's strong economy and the stable credit quality of
the state's issuers supported the prices of many of the Fund's holdings."
- Gary Swayze
COLONIAL NEW YORK TAX-EXEMPT FUND PERFORMANCE
CLASS A CLASS B CLASS C
Inception dates 9/26/86 8/4/92 8/1/97
- ----------------------------------------------------------------------------
Distributions declared per share(1) $0.191 $0.162 $0.174
- ----------------------------------------------------------------------------
SEC yields on 7/31/98(2) 4.09% 3.53% 3.83%
- ----------------------------------------------------------------------------
Taxable-equivalent SEC yields(3) 7.59% 6.55% 7.11%
- ----------------------------------------------------------------------------
Six-month total returns, assuming 1.54% 1.13% 1.30%
reinvestment of all distributions and
no sales charge or contingent deferred
sales charge (CDSC)(4)
- ----------------------------------------------------------------------------
Net asset value per share on 7/31/98 $7.30 $7.30 $7.30
(1) A portion of the Fund's income may be subject to the alternative minimum
tax.
(2) The 30-day SEC yields on July 31, 1998, reflect the portfolio's earning
power, net of expenses, and is expressed as an annualized percentage of the
public offering price at the end of the period. If the Advisor or
Distributor had not waived or borne certain Fund expenses, SEC yields would
have been 3.93% for Class A shares, 3.36% for Class B shares and 3.30% for
Class C shares.
(3) Taxable-equivalent SEC yields are based on the combined maximum effective
46.1% federal and New York state and city income tax rate.
(4) Performance results reflect any voluntary waivers or reimbursements of
expenses by the Advisor or Distributor. Absent these waivers or
reimbursement arrangements, performance results would have been lower.
The Fund may at times purchase tax-exempt securities at a discount. Some or
all of this discount may be included in the Fund's ordinary income, and
will be taxable when distributed.
QUALITY BREAKDOWN (as of 7/31/98) TOP FIVE SECTORS (as of 7/31/98)
- ------------------------------------------------------------------------------
AAA 37.4% BBB 7.8% State Appropriated 17.1%
AA 13.4% Non-rated 6.1% Special Non-Property Tax 13.5%
A 34.3% Municipal Electric Utilities 8.3%
Short-Term Obligations 1.0% Investor Owned Utilities 8.2%
Education 5.5%
Quality and sector breakdowns are calculated as a percentage of total
investments, including short-term obligations. Because the Fund is actively
managed, there can be no guarantee the Fund will continue to maintain these
quality and sector breakdowns in the future.
<PAGE>
PRESIDENT'S MESSAGE
TO FUND SHAREHOLDERS
[Photo of Stephen E. Gibson]
In June 1998, Harold Cogger retired as president of Colonial New York Tax-Exempt
Fund. I would like to take this opportunity to thank him for his guidance over
the past few years and wish him well. As the new president of the Fund, I am
pleased to present the semiannual report for Colonial New York Tax-Exempt Fund
for the six-month period ended July 31, 1998.
Conditions for fixed-income investments varied during the period. Early on,
interest rates were volatile, based on uncertainty over the effects of the Asian
economic crisis on the U.S. economy. However, reports of stronger-than-expected
economic growth during the spring had investors fearing the Federal Reserve
Board might raise rates. In response, bond prices fell. This environment
prevailed until the final months of the period, when weaker
economic numbers hinting at slower growth encouraged fixed-income investors.
The tax-exempt bond market experienced price volatility similar to that of the
broader U.S. government bond market. Early in the period, declines in long-term
interest rates that occurred in the fourth quarter of 1997 helped stimulate the
supply of municipal bonds. Many issuers rushed to take advantage of low rates to
refinance existing higher-coupon debt, as well as to finance new projects. The
market found it difficult to absorb the unusually large increase in supply, and
prices declined early in 1998. During the six-month period, municipal bond
yields became very attractive in comparison to Treasury bonds. The increased
investor demand that followed helped push municipal bond prices higher towards
the end of July.
For investors seeking competitive levels of tax-free income and the potential
for long-term price appreciation, Colonial New York Tax-Exempt Fund remains a
suitable option for their investment portfolios.
Respectfully,
/s/ Stephen E. Gibson
Stephen E. Gibson
President
September 11, 1998
Because market conditions change frequently, there can be no assurance that the
trends discussed above or on the following pages will continue.
<PAGE>
PORTFOLIO MANAGEMENT REPORT
GARY SWAYZE is portfolio manager of Colonial New York Tax-Exempt Fund and is
vice president of Colonial Management Associates, Inc.
VARIABLE ECONOMIC AND MARKET CONDITIONS PREVAILED
Conditions for fixed-income investments varied during the period as investors
weighed the fundamental strength of the U.S. economy against the potential for
an economic slowdown caused by the crisis in Southeast Asia. Market sentiment
regarding the likelihood of an interest rate increase by the Federal Reserve
Board changed several times during the period. Uncertainty about the domestic
economy's ability to produce continued growth without inflation caused bond
prices to alternately rise and fall for much of the period. Bond prices rallied
modestly near the end of July as the Federal Reserve Board signaled that no
change in interest rates was imminent.
Like the broader bond market, the tax-exempt market also experienced
alternately declining and rising prices. Supply and demand factors contributed
to this volatility. Declines in long-term interest rates during the fourth
quarter of 1997 led to an increased supply of municipal bonds that the market
initially found difficult to absorb. However, as prices declined, investor
demand increased again, pushing prices back up during the second half of the
period.
FUND WAS POSITIONED TO BENEFIT FROM DECLINING INTEREST RATES
Based on our long-term outlook for low inflation and modest economic growth, we
structured the portfolio to take advantage of a potential decline in interest
rates. As we expected, the bond market rally of late 1997 continued in early
1998. The portfolio benefited from its holdings in non-callable bonds, which
tend to perform well in a declining-rate environment. However, over the
remainder of the period, bond prices were volatile, reflecting investors'
changing expectations about the strength and direction of the nation's economy.
This unexpected volatility had a negative impact on the overall bond market and
had a somewhat dampening effect on the Fund's non-callable holdings.
During the six-month period, we sought to take advantage of attractive values
offered by selected bonds. For example, we purchased bonds issued by the Long
Island Power Authority (LIPA) (2.3% of total net assets). LIPA's debt offering
in excess of $3.5 billion represented the largest issuance in the history of the
municipal bond market. This deal was remarkable for several reasons. First, it
represented a new issuer in the municipal market. LIPA was formed through the
merger of the former Long Island Lighting Co. and Brooklyn Union Gas Co. Second,
all three nationally recognized bond rating agencies awarded the issue an
investment-grade rating despite the large size and complex structure of the
issue. Third, the market generated sufficient demand to "oversubscribe" the
issue by generating more orders than bonds available. Lastly, the historic
nature of the issue focused investors' attention on both the New York and
national municipal markets. This may have led to increased demand and price
appreciation for many other tax-exempt issues in the state and even the nation.
For the six months ended July 31, 1998, the total return for Class A shares was
1.54%, based on net asset value.
NEW YORK'S HEALTHY ECONOMY DRIVEN BY WALL STREET
The New York economy continued to benefit from New York City's position as the
financial capital of the world. Sustained increases in job and wealth creation
on Wall Street and in the financial services industry have translated into
growth in income, capital gains and sales tax revenues. However, while the
national economic expansion has had a positive effect on New York's
economy, the state still lags the nation in terms of employment growth.
This is due primarily to the permanent loss of manufacturing jobs in the upstate
region. These losses have not been wholly offset by job growth in the service
sector. We anticipate that any slowdown in the financial markets may have a
negative impact on the state's revenue collections. In order for the state to
maintain its financial position and its bond ratings, the New York state
legislature will need to pass and adhere to fiscally responsible budgets in the
future.
OUTLOOK FOR A POSITIVE ECONOMIC AND MARKET ENVIRONMENT
Our long-term outlook remains positive. We expect that low inflation and
modest economic growth will continue. Sustained high levels of productivity and
global competition are likely to keep inflation pressure low. The economic
slowdown in Asia should keep the U.S. economy from growing too fast. The current
federal budget surplus may limit the government's need to borrow money, and
thus, the need to issue Treasury securities. This could help
create higher demand for alternative fixed-income investments, including
tax-exempt bonds.
Considering these factors, the Fund will remain positioned for a declining
interest rate environment. However, we believe interest rates will continue to
vary in the months to come, given the vast changes occurring in economies
abroad. Nonetheless, indications continue to point towards declining yields for
municipal bonds.
<PAGE>
COLONIAL NEW YORK TAX-EXEMPT FUND'S INVESTMENT PERFORMANCE VS.
THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
Growth of $10,000 from 7/31/88 - 7/31/98
NAV POP LEHMAN
- -------------------------------------------------------------------------------
Jul 31, 88 $10,000 $ 9,525 $10,000
Oct 31, 88 10,426 9,930 10,369
Jan 31, 89 10,624 10,119 10,594
Apr 28, 89 10,712 10,204 10,697
Jul 31, 89 11,061 10,536 11,218
Oct 31, 89 11,004 10,481 11,210
Jan 31, 90 11,153 10,623 11,445
Apr 30, 90 11,141 10,612 11,467
Jul 31, 90 11,725 11,168 11,995
Oct 31, 90 11,614 11,063 12,042
Jan 31, 91 11,981 11,412 12,503
Apr 30, 91 12,318 11,732 12,785
Jul 31, 91 12,549 11,953 13,043
Oct 31, 91 13,123 12,499 13,507
Jan 31, 92 13,282 12,651 13,867
Apr 30, 92 13,502 12,860 14,000
Jul 31, 92 14,341 13,660 14,835
Oct 30, 92 14,063 13,395 14,641
Jan 29, 93 14,677 13,980 15,230
Apr 30, 93 15,194 14,472 15,772
Jul 30, 93 15,540 14,802 16,146
Oct 29, 93 16,078 15,315 16,702
Jan 31, 94 16,432 15,651 17,098
Apr 29, 94 15,298 14,571 16,112
Jul 29, 94 15,639 14,896 16,449
Oct 31, 94 15,035 14,321 15,975
Jan 31, 95 15,556 14,817 16,489
Apr 28, 95 16,244 15,472 17,184
Jul 31, 95 16,511 15,726 17,744
Oct 31, 95 17,159 16,344 18,345
Jan 31, 96 17,888 17,038 18,971
Apr 30, 96 17,393 16,567 18,550
Jul 31, 96 17,694 16,854 18,914
Oct 31, 96 18,126 17,265 19,391
Jan 31, 97 18,381 17,507 19,700
Apr 30, 97 18,454 17,578 19,780
Jul 31, 97 19,508 18,582 20,854
Oct 31, 97 19,634 18,701 21,038
Jan 30, 98 20,342 19,376 21,692
Apr 30, 98 20,150 19,193 21,620
Jul 31, 98 20,655 19,673 22,103
GROWTH OF A $10,000 INVESTMENT MADE ON 7/31/88
As of 7/31/98
- ---------------------------------------------------------------------------
CLASS A CLASS B CLASS C
NAV POP NAV W/CDSC NAV W/CDSC
- ---------------------------------------------------------------------------
$20,655 $19,673 $19,753 $19,753 $20,560 $20,560
- ---------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
As of 7/31/98
- -----------------------------------------------------------------------------
CLASS A CLASS B CLASS C
INCEPTION 9/26/86 8/4/92 8/1/97
NAV POP NAV W/CDSC NAV W/CDSC
- -----------------------------------------------------------------------------
1 YEAR 5.88% 0.85% 5.07% 0.07% 5.39% 4.39%
- -----------------------------------------------------------------------------
5 YEARS 5.86 4.83 5.06 4.73 5.76 5.76
- -----------------------------------------------------------------------------
10 YEARS 7.52 7.00 7.04 7.04 7.47 7.47
- -----------------------------------------------------------------------------
Past performance cannot predict future results. Returns and value of an
investment will vary, resulting in a gain or loss on sale. All results shown
assume reinvestment of distributions. Net asset value (NAV) returns do not
include sales charges or contingent deferred sales charges (CDSC). Public
offering price (POP) returns include the maximum sales charge of 4.75% for Class
A shares. The CDSC returns reflect the maximum charges of 5% for one year and 2%
for five years for Class B shares, and 1% for one year for Class C shares.
Performance results reflect any voluntary waivers or reimbursement of Fund
expenses by the Advisor or Distributor. Absent these waivers or reimbursement
arrangements, performance results would have been lower.
Performance for different share classes will vary based on differences in sales
charges and fees associated with each class.
Class B and Class C share (newer class shares) performance information includes
returns of the Fund's Class A shares (the oldest existing fund class) for
periods prior to the inception of the newer class shares. These Class A share
returns are not restated to reflect any expense differential (e.g., Rule 12b-1
fees) between Class A shares and the newer class shares. Had the expense
differential been reflected, the returns for periods prior to the inception of
the newer class shares would have been lower.
The Lehman Brothers Municipal Bond Index is a broad-based, unmanaged index that
tracks the performance of the municipal bond market. Unlike mutual funds,
indexes are not investments and do not incur fees or expenses. It is not
possible to invest directly in an index.
<PAGE>
INVESTMENT PORTFOLIO
JULY 31, 1998 (UNAUDITED, THOUSANDS)
MUNICIPAL BONDS - 97.1% PAR VALUE
- -------------------------------------------------------------------------------
EDUCATION - 5.4%
EDUCATION
NY State Dormitory Authority:
New York Medical College,
Series 1998,
5.250% 07/01/13 $ 1,000 $ 1,020
New York University,
6.000% 07/01/06 1,125 1,240
New York University
Series 1998-A,
5.750% 07/01/27 2,000 2,221
Pace University,
6.500% 07/01/11 1,000 1,172
Series 1985,
7.800% 12/01/05 130 134
--------
5,787
--------
- -------------------------------------------------------------------------------
HEALTHCARE - 1.7%
HOSPITAL
NY State Dormitory Authority:
Beth Israel Medical Center,
Series 1997-A,
5.125% 11/01/16 1,075 1,073
St. Clare's Hospital,
Series 1998-B,
5.300% 02/15/19 750 744
--------
1,817
--------
- -------------------------------------------------------------------------------
HOUSING - 5.5%
ASSISTED LIVING/SENIOR - 1.1%
Glen Cove Housing Authority,
8.250% 10/01/26 1,000 1,141
--------
MULTI-FAMILY - 3.4%
Hudson Housing Development Corp.,
Providence Hall-Schuyler Court Project,
Series 1992-A,
6.500% 01/01/22 750 787
NY State Housing Finance Agency:
Series 1989-B,
7.550% 11/01/29 230 240
Series 1996-A,
6.100% 11/01/15 1,230 1,333
Nyack Housing Assistance Corp.,
Nyack Plaza Apartments,
7.375% 06/01/21 1,265 1,267
--------
3,627
--------
SINGLE FAMILY - 1.0%
NY State Mortgage Agency:
Series BB-2,
7.950% 10/01/15 570 588
Series 10-A,
8.100% 04/01/14 105 107
Series MM-1,
7.950% 10/01/21 320 343
--------
1,038
--------
- -------------------------------------------------------------------------------
OTHER - 4.7%
REFUNDED/ESCROWED (A)
Commonwealth of Puerto Rico,
Series 1994,
6.500% 07/01/23 2,000 2,263
Monroe County Industrial
Development Agency,
Roberts Wesleyan College, Series 1991,
7.400% 09/01/11 750 767
NY State Dormitory Authority,
Menorah Campus,
Series 1991,
7.400% 02/01/31 245 273
NY State Housing Finance Agency,
Series 1990-A,
8.000% 11/01/08 205 227
NY State Medical Care Facilities,
Finance Agency,
Series 1990-B,
7.875% 08/15/08 395 433
NY State Power Authority,
Series 1991-Z,
6.500% 01/01/19 1,000 1,094
--------
5,057
--------
- -------------------------------------------------------------------------------
OTHER REVENUE - 3.5%
INDUSTRIAL - 1.0%
Monroe County Industrial
Development Agency,
Yorkmill Realty Assoc., Series 1986,
9.500% 12/01/06 1,010 1,036
--------
RECREATION - 2.5%
New York City Cultural Trust Resources,
American Museum of Natural History,
5.600% 04/01/18 1,000 1,047
New York City Industrial
Development Agency, United States Tennis
Association, Tennis Center Project, Series 1994,
6.375% 11/15/14 1,500 1,660
--------
2,707
--------
- -------------------------------------------------------------------------------
RESOURCE RECOVERY - 2.1%
DISPOSAL
Westchester County Industrial
Development Agency,
Westchester Resco Co. Project,
6.000% 07/01/09 2,000 2,195
--------
- -------------------------------------------------------------------------------
TAX-BACKED - 38.7%
LOCAL APPROPRIATED - 1.1%
NY State Dormitory Authority,
Judicial Facilities,
Series 1991-A,
9.500% 04/15/14 1,000 1,167
--------
LOCAL GENERAL OBLIGATIONS - 5.4%
New York City:
Series B,
6.000% 08/01/07 1,000 1,106
Series F,
6.000% 08/01/16 2,000 2,143
Series G,
5.750% 02/01/14 1,000 1,046
Series 1998-G,
5.000% 08/01/22 500 478
Series 1998-H,
5.000% 08/01/22 1,000 957
--------
5,730
--------
SPECIAL NON-PROPERTY TAX - 13.3%
NY Metropolitan Transportation Authority,
Series 1998-A,
4.500% 04/01/18 1,000 919
New York City Transitional Finance Authority,
Series 1998-C,
4.750% 05/01/23 3,000 2,813
NY State Local Government Assistance Corp.:
Series 1993-C,
5.500% 04/01/17 2,100 2,224
Series 1993-E:
5.000% 04/01/21 5,000 4,940
6.000% 04/01/14 2,945 3,303
--------
14,199
--------
STATE APPROPRIATED - 16.8%
NY State Dormitory Authority,
City University:
Series 1990-C,
7.500% 07/01/10 1,500 1,806
Series 1993-A:
5.500% 05/15/13 3,000 3,184
6.000% 07/01/20 2,000 2,216
NY State Housing Finance Agency:
Series 1990-A,
8.000% 11/01/08 45 49
NY State Medical Care Facilities,
Finance Agency:
Series 1987-A,
8.875% 08/15/07 110 112
Series 1990-B,
7.875% 08/15/08 80 87
Series 1994-D,
6.150% 02/15/15 2,000 2,166
NY State University Facilities,
5.000% 05/15/17 2,000 1,950
University of New York,
Series 1990-B,
7.500% 05/15/11 1,000 1,216
NY State Urban Development Corp.:
Correctional Facilities,
Series 1998,
5.000% 01/01/19 2,000 1,916
Series 1993-A,
5.500% 01/01/14 2,000 2,089
NY Triborough Bridge & Tunnel Authority,
Javits Convention Center Project,
Series-E,
7.250% 01/01/10 1,000 1,176
--------
17,967
--------
STATE GENERAL OBLIGATIONS - 2.1%
PR Commonwealth of Puerto Rico
Aqueduct & Sewer Authority,
Series 1995,
6.250% 07/01/12 $ 2,000 $ 2,268
--------
- -------------------------------------------------------------------------------
TRANSPORTATION - 11.7%
AIR TRANSPORTATION - 4.2%
New York City Industrial
Development Agency,
America Airlines, Inc., Series 1994,
6.900% 08/01/24 2,000 2,220
Port Authority of New York & New Jersey,
JFK International Air Terminal, Series 6,
6.250% 12/01/08 2,000 2,251
--------
4,471
--------
TOLL FACILITIES - 5.3%
NY State Thruway Authority,
Series 1998-E,
4.750% 01/01/19 1,500 1,417
Triborough Bridge & Tunnel Authority:
Series Y,
5.500% 01/01/17 1,000 1,058
Series 1991-B:
6.875% 01/01/15 2,000 2,155
6.875% 01/01/15 1,000 1,077
--------
5,707
--------
TRANSPORTATION - 2.2%
Albany Parking Authority,
Green and Hudson Garage Project,
Series 1991-A,
7.150% 09/15/16 250 269
Port Authority of New York & New Jersey,
Series 85,
5.375% 03/01/28 2,000 2,103
--------
2,372
--------
- -------------------------------------------------------------------------------
UTILITY - 23.8%
INDIVIDUAL POWER PRODUCER - 3.4%
New York City Industrial Development Agency,
Brooklyn Navy Yard Partners,
Series 1997,
6.200% 10/01/22 1,250 1,379
Port Authority of New York & New Jersey,
KIAC Partners,
Series 1996 IV,
6.750% 10/01/19 2,000 2,215
--------
3,594
--------
INVESTOR OWNED - 8.1%
NY State Energy Research & Development
Authority:
Brooklyn Union Gas Co:
Series 1989-A,
6.750% 02/01/24 3,000 3,264
Series 1993-B, IFRN (variable rate),
8.812% 04/01/20 1,500 1,851
Consolidated Edison Co.:
Series 1991-A,
7.500% 01/01/26 500 526
Series 1993-B,
5.250% 08/15/20 3,000 3,003
--------
8,644
--------
MUNICIPAL ELECTRIC - 8.1%
Long Island Power Authority,
Series 1998-A,
5.250% 12/01/26 2,470 2,434
Puerto Rico Electric Power Authority:
Series 1998-DD,
4.500% 07/01/19 1,000 923
Series 1998-EE,
4.500% 07/01/18 1,000 925
NY State Energy Research & Development
Authority, Long Island Lighting Co.,
Series 1992 A,
7.150% 02/01/22 2,000 2,188
NY State Power Authority:
Series 1991-Z,
6.625% 01/01/12 705 774
6.500% 01/01/19 1,330 1,455
--------
8,699
--------
WATER & SEWER - 4.2%
NY State Environmental Facilities Corp.,
New York City Municipal Water
Finance Authority:
5.375% 06/15/26 1,000 1,016
Series 1990-A,
7.500% 06/15/12 2,000 2,160
Suffolk County Industrial Development Agency,
Southwest Sewer Systems,
6.000% 02/01/07 1,245 1,373
--------
4,549
--------
TOTAL INVESTMENTS (cost of $95,667) (b) 103,772
--------
SHORT-TERM OBLIGATIONS - 1.0%
- ------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES (c)
LA State Offshore Terminal Authority,
Loop, Inc.,
3.700% 09/01/06 600 600
Farmington,
Arizona Public Service Co.,
Four Corners Project, Series 1994-B,
3.700% 09/01/24 500 500
TOTAL SHORT-TERM OBLIGATIONS 1,100
--------
OTHER ASSETS & LIABILITIES, NET - 1.9% 2,068
- -------------------------------------------------------------------------------
NET ASSETS - 100.0% $106,940
========
NOTES TO INVESTMENT PORTFOLIO:
- -------------------------------------------------------------------------------
(a) 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.
(b) Cost for federal income tax purposes is the same.
(c) 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 July 31, 1998.
Acronym Name
-------------- --------------------------------------------
IFRN Inverse Floating Rate Note
See notes to financial statements.
<PAGE>
STATEMENT OF ASSETS & LIABILITIES
JULY 31, 1998 (UNAUDITED)
(in thousands except for per share amounts and footnotes)
ASSETS
Investments at value (cost $95,667) $103,772
Short-term obligations 1,100
--------
104,872
Receivable
for:
Interest 1,531
Investments sold 700
Fund shares sold 113
Other 37 2,381
------ --------
Total 107,253
Assets
LIABILITIES
Payable for:
Distributions 142
Fund shares repurchased 88
Accrued:
Deferred Trustees fees 2
Other 81
------
Total Liabilities 313
--------
NET ASSETS $106,940
========
Net asset value & redemption price per share -
Class A ($54,506/7,467) $7.30(a)
========
Maximum offering price per share -
Class A ($7.30/0.9525) $7.66(b)
========
Net asset value & offering price per
share -Class B ($52,039/7,129) $7.30(a)
========
Net asset value & offering price per
share - Class C ($395/54) $7.30(a)
========
COMPOSITION OF NET ASSETS
Capital paid in $102,110
Overdistributed net investment income (179)
Accumulated net realized loss (3,096)
Net unrealized appreciation 8,105
--------
$106,940
========
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
(b) On sales of $50,000 or more the offering price is reduced.
See notes to financial statements.
<PAGE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JULY 31, 1998
(UNAUDITED)
(in thousands)
INVESTMENT INCOME
Interest $2,960
------
EXPENSES
Management fee $ 263
Service fee 74
Distribution fee - Class B 195
Distribution fee - Class C (a)
Transfer agent 77
Bookkeeping fee 23
Registration fee 11
Custodian fee 1
Audit fee 10
Trustees fee 7
Reports to shareholders 4
Legal fee 2
Other 4
-----
671
Fees waived by the Adviser (87)
Fees waved by the Distributor - Class C (a) 584
----- ------
Net Investment Income 2,376
------
NET REALIZED & UNREALIZED GAIN ON PORTFOLIO POSITIONS
Net realized gain 273
Change in net unrealized depreciation (1,255)
------
Net Loss (982)
------
Increase in Net Assets from Operations $1,394
======
(a) Rounds to less than one.
See notes to financial statements.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
(Unaudited)
Six months ended Year ended
(in thousands) July 31 January 31
-------- ---------
INCREASE (DECREASE) IN NET ASSETS 1998 1997 (a)
Operations:
Net investment income $ 2,376 $ 5,040
Net realized gain 273 1,344
Net unrealized appreciation (depreciation) (1,255) 3,611
-------- ---------
Net Increase from Operations 1,394 9,995
Distributions:
From net investment income - Class A (1,297) (2,680)
In excess of net investment income - Class A (92) (38)
From net investment income - Class B (1,075) (2,429)
In excess of net investment income - Class B (76) (35)
From net investment income - Class C (4) (2)
In excess of net investment income - Class C (b) (b)
-------- ---------
(1,150) 4,811
-------- ---------
Fund Share Transactions :
Receipts for shares sold - Class A 9,321 5,959
Value of distributions reinvested - Class A 783 1,318
Cost of shares repurchased - Class A (6,757) (8,522)
-------- ---------
3,347 (1,245)
-------- ---------
Receipts for shares sold - Class B 2,695 3,969
Value of distributions reinvested - Class B 683 1,344
Cost of shares repurchased - Class B (3,089) (8,329)
-------- ---------
289 (3,016)
-------- ---------
Receipts for shares sold - Class C 296 115
Value of distributions reinvested - Class C 4 2
Cost of shares repurchased - Class C (7) (15)
-------- ---------
293 102
-------- ---------
Net Increase (Decrease) from
Fund Share Transactions 3,929 (4,159)
-------- ---------
Total Increase 2,779 652
NET ASSETS
Beginning of period 104,161 103,509
-------- ---------
End of period (net of overdistributed
net investment income of $179 and
$11, respectively) $106,940 $ 104,161
======== =========
(a) Class C shares were initially offered on August 1, 1997.
(b) Rounds to less than one.
See notes to financial statements.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS - CONT.
(Unaudited)
Six months ended Year ended
(in thousands) July 31 January 31
-------- ---------
NUMBER OF FUND SHARES: 1998 1997 (a)
Sold - Class A 1,273 829
Issued for distributions reinvested - Class A 107 185
Repurchased - Class A (925) (1,198)
-------- ---------
455 (184)
-------- ---------
Sold - Class B 369 556
Issued for distributions reinvested - Class B 93 188
Repurchased - Class B (422) (1,165)
-------- ---------
40 (421)
-------- ---------
Sold - Class C 40 16
Issued for distributions reinvested - Class C 1 (b)
Repurchased - Class C (1) (2)
-------- ---------
40 14
-------- ---------
(a) Class C shares were initially offered on August 1, 1997.
(b) Rounds to less than one.
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1998 (UNAUDITED)
NOTE 1. INTERIM FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
In the opinion of management of Colonial New York Tax-Exempt Fund
(the Fund), a series of Colonial Trust V, the accompanying financial
statements contain all normal and recurring adjustments necessary for
the fair presentation of the financial position of the Fund at July 31, 1998,
and the results of its operations, the changes in its net assets and the
financial highlights for the six months then ended.
NOTE 2. ACCOUNTING POLICIES
- -------------------------------------------------------------------------------
ORGANIZATION: The Fund is a non-diversified portfolio of a Massachusetts
business trust, registered under the Investment Company Act of 1940, as amended,
as an open-end management investment company. The Fund's investment objective is
to seek as high a level of after-tax total return, as is consistent with prudent
risk, by pursuing current income exempt from federal and New York state and city
personal income tax. The Fund also provides opportunities for long-term
appreciation from a portfolio primarily invested in investment-grade municipal
bonds. The Fund may issue an unlimited number of shares. The Fund offers three
classes of shares: Class A, Class B, and Class C. Class A shares are sold with a
front-end sales charge and a 1.00% contingent deferred sales charge on
redemptions made within eighteen months on an original purchase of $1 million to
$5 million. Class B shares are subject to an annual distribution fee and a
contingent deferred sales charge and will convert to Class A shares when they
have been outstanding approximately eight years. Class C shares are subject to a
contingent deferred sales charge on redemptions made within one year after
purchase and an annual distribution fee.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. The following is a summary of
significant accounting policies that are consistently followed by the Fund in
the preparation of its financial statements.
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.
Options are valued at the last reported sale price, or in the absence of a sale,
the mean between the last quoted bid and asking price.
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 for which market quotations are not readily available are
valued at fair value under procedures approved by the Trustees.
Security transactions are accounted for on the date the securities are
purchased, sold or mature.
Cost is determined and gains (losses) are based upon the specific
identification method for both financial statement and federal income tax
purposes.
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 and Class C distribution fees), and 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 and Class C 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 and Class C 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. Reclassifications are made to the Fund's capital accounts
to reflect income and gains available for distribution (or available capital
loss carryforwards) under income tax regulations.
NOTE 3. 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 based on the Fund's pro-rata portion of the
combined average net assets of the funds constituting Trust V as follows:
Average Net Assets Annual Fee Rate
------------------ ---------------
First $2 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 FEE: Colonial Investors Service Center, Inc., (the Transfer
Agent), an affiliate of the Adviser, provides shareholder services for a monthly
fee equal to 0.13% annually of the Fund's average net assets and receives
reimbursement for certain out of pocket expenses.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES: Liberty Funds
Distributor, Inc., formerly Liberty Financial Investments, Inc. (the
Distributor), a subsidiary of the Adviser, is the Fund's principal underwriter.
During the six months ended July 31, 1998, the Fund has been advised that the
Distributor retained net underwriting discounts of $6,153 on sales of the Fund's
Class A shares and received contingent deferred sales charges (CDSC) none,
$52,038 and none on Class A, Class B and Class C share redemptions,
respectively.
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 Fund's average net assets
attributable to Class B and Class C shares. The Distributor has voluntarily
agreed, until further notice, to waive a portion of the Class C share
distribution fee so that it will not exceed 0.45% annually. The Plan also
requires the payment of a service fee to the Distributor as follows:
Valuation of shares Annual
outstanding on the 20th of Fee
each month which were issued Rate
---------------------------- --------
Prior to December 1, 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 4. PORTFOLIO INFORMATION
- -------------------------------------------------------------------------------
INVESTMENT ACTIVITY: For the six months ended July 31, 1998, purchases and sales
of investments, other than short-term obligations were $18,204,579 and
$15,512,076, respectively.
Unrealized appreciation (depreciation) at July 31, 1998, based on cost of
investments for both financial statement and federal income tax purposes was:
Gross unrealized appreciation $ 8,165,910
Gross unrealized depreciation (61,063)
-----------
Net unrealized appreciation $ 8,104,847
===========
CAPITAL LOSS CARRYFORWARDS: At January 31, 1998, 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
---------- ------------
2004 $ 2,149,000
2005 79,000
------------
$ 2,228,000
============
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 may purchase or sell municipal and Treasury bond futures contracts and
purchase and write options on futures. The Fund will invest in these instruments
to hedge against the effects of changes in the value of portfolio securities due
to anticipated changes in interest rates and/or market conditions, for duration
management, or when the transactions are economically appropriate to the
reduction of risk inherent in the management of the Fund and not for trading
purposes. The use of futures contracts and options involves certain risks which
include (1) imperfect correlation between the price movement of the instruments
and the underlying securities, (2) inability to close out a position due to
different trading hours, or the temporary absence of a liquid market for either
the instrument 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 variation margin recognized in the Fund's
Statement of Assets and Liabilities at any given time.
NOTE 5. LINE OF CREDIT
- -------------------------------------------------------------------------------
The Fund may borrow up to 33 1/3% of its net assets under a line of credit for
temporary or emergency purposes. Any borrowings bear interest at one of
the following options determined at the inception of the loan: (1) federal
funds rate plus 1/2 of 1%, (2) the lending bank's base rate or (3) IBOR
offshore loan rate plus 1/2 of 1%. There were no borrowings under the line of
credit during the six months ended July 31, 1998.
<PAGE>
FINANCIAL HIGHLIGHTS
Selected data for a share of each class outstanding throughout each period are
as follows:
(Unaudited)
Six months ended July 31
-------------------------------
1998
Class A Class B Class C
------- ------- -------
Net asset value - Beginning of period $ 7.380 $ 7.380 $ 7.380
------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment
income(a) 0.180 0.151 0.163(b)
Net realized and
unrealized gain (loss) (0.069) (0.069) (0.069)
------- ------- -------
Total from Investment
Operations 0.111 0.082 0.094
------- ------- -------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.178) (0.151) (0.163)
In excess of net invesment income (0.013) (0.011) (0.011)
------- ------- -------
Total Distributions
Declared to Shareholders (0.191) (0.162) (0.174)
------- ------- -------
Net asset value - End of period $ 7.300 $ 7.300 $ 7.300
======= ======= =======
Total return(c)(d)(e) 1.54% 1.13% 1.30%
======= ======= =======
RATIOS TO AVERAGE NET ASSETS
Expenses(f)(g) 0.74% 1.49% 1.19%(b)
Net investment income(f)(g) 4.89% 4.14% 4.44%(b)
Fees and expenses waived or borne by the
Adviser(f)(g) 0.17% 0.17% 0.17%
Portfolio turnover(e) 15% 15% 15%
Net assets at end of period (000) $54,506 $52,039 $ 395
(a) Net of fees and expenses waived or borne by the Adviser which amounted to:
$ 0.006 $ 0.006 $ 0.006
(b) Net of fees waived by the Distributor which amounted to $0.011 per share
and 0.30%.
(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 and Distributor not waived or reimbursed a portion of
expenses, total return would have been reduced.
(e) Not annualized
(f) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
(g) Annualized
<PAGE>
FINANCIAL HIGHLIGHTS
Selected data for a share of each class outstanding throughout each period are
as follows:
<TABLE>
<CAPTION>
Year ended January 31
- --------------------------------------------------------------------------------
1998 1997
Class A Class B Class C (b) Class
A Class B
----------- ----------- ----------- -----------
- -----------
<S> <C> <C> <C> <C>
<C>
Net asset value -
Beginning of period $ 7.040 $ 7.040 $ 7.270 $ 7.250
$ 7.250
----------- ----------- ----------- -----------
- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment
income(a) 0.383 0.330 0.171(c)
0.393 0.340
Net realized and
unrealized gain (loss) 0.346 0.346 0.118
(0.207) (0.207)
----------- ----------- ----------- -----------
- -----------
Total from Investment
Operations 0.729 0.676 0.289
0.186 0.133
----------- ----------- ----------- -----------
- -----------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net
investment income (0.384) (0.331) (0.179)
(0.396) (0.343)
From capital paid in (0.005) (0.005) --
- -- --
----------- ----------- ----------- -----------
- -----------
Total Distributions
Declared to
Shareholders (0.389) (0.336) (0.179)
(0.396) (0.343)
----------- ----------- ----------- -----------
- -----------
Net asset value -
End of period $ 7.380 $ 7.380 $ 7.380 $ 7.040
$ 7.040
=========== =========== =========== ===========
===========
Total return(d)(e) 10.67% 9.85% 4.04%(f)
2.76% 1.99%
=========== =========== =========== ===========
===========
RATIOS TO AVERAGE NET ASSETS
Expenses 0.67%(g) 1.42%(g) 1.12%(c)(g)(h)
0.65%(g) 1.40%(g)
Net investment
income 5.31%(g) 4.56%(g) 4.72%(c)(g)(h)
5.56%(g) 4.81%(g)
Fees and expenses waived
or borne by the
Adviser 0.28%(g) 0.28%(g) 0.29%(g)(h)
0.29%(g) 0.29%(g)
Portfolio turnover 38% 38% 38%
78% 78%
Net assets at end
of period (000) $ 51,744 $ 52,313 $ 104 $ 50,648
$ 52,861
(a) Net of fees and expenses waived or borne by the Adviser which amounted to:
$ 0.020 $ 0.020 $ 0.021 $ 0.020
$ 0.020
(b) Class C shares were initially offered on August 1, 1997. Per share amounts reflect activity from that date.
(c) Net of fees waived by the Distributor which amounted to $0.011 per share and 0.30%.
(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 and Distributor not waived or reimbursed a portion of expenses, total return would have been
reduced.
(f) Not annualized.
(g) The benefits derived from custody credits and directed brokerage arrangements had no impact. Prior years'
ratios are net
of benefits received, if any.
(h) Annualized.
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS - CONT.
Selected data for a share of each class outstanding throughout each period are
as follows:
Year ended January 31
-----------------------------------------------------------
1996 1995
Class A Class B Class A Class B
----------- ----------- ----------- -----------
$ 6.680 $ 6.680 $ 7.500 $ 7.500
----------- ----------- ----------- -----------
0.401 0.349 0.427 0.376
0.576 0.576 (0.834) (0.834)
----------- ----------- ----------- -----------
0.977 0.925 (0.407) (0.458)
----------- ----------- ----------- -----------
(0.407) (0.355) (0.413) (0.362)
-- -- -- --
----------- ----------- ----------- -----------
(0.407) (0.355) (0.413) (0.362)
----------- ----------- ----------- -----------
$ 7.250 $ 7.250 $ 6.680 $ 6.680
=========== =========== =========== ===========
14.99% 14.15% (5.32)% (6.04)%
=========== =========== =========== ===========
0.58%(g) 1.33%(g) 0.42% 1.17%
5.72%(g) 4.97%(g) 6.25% 5.50%
0.38%(g) 0.38%(g) 0.46% 0.46%
39% 39% 65% 65%
$ 56,795 $ 53,505 $ 53,322 $ 43,166
$ 0.026 $ 0.026 $ 0.032 $ 0.032
<PAGE>
FINANCIAL HIGHLIGHTS - CONT.
Selected data for a share of each class outstanding throughout each period are
as follows:
Year ended January 31
---------------------------
1994
Class A Class B
----------- -----------
Net asset value -
Beginning of period $ 7.090 $ 7.090
----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment 0.421 0.368
income (a)
Net realized and 0.407 0.407
----------- -----------
unrealized gain (loss)
Total from Investment 0.828 0.775
----------- -----------
Operations
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net
investment income (0.418) (0.365)
----------- -----------
Net asset value -
End of period $ 7.500 $ 7.500
=========== ===========
Total return(b)(c) 11.95% 11.14%
=========== ===========
RATIOS TO AVERAGE NET ASSETS
Expenses 0.62% 1.37%
Net investment income 5.68% 4.93%
Fees and expenses waived
or borne by
the Adviser 0.29% 0.29%
Portfolio turnover 25% 25%
Net assets at end
of period (000) $ 63,527 $ 45,061
(a) Net of fees and expenses waived or borne by the Adviser which amounted to:
$ 0.021 $ 0.021
(b) Total return at net asset value assuming all distributions reinvested and no
initial sales charge or contingent deferred sales charge.
(c) Had the Adviser not waived or reimbursed a portion of expenses, total return
would have been reduced.
<PAGE>
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Colonial New York Tax-Exempt Fund is:
Liberty Funds Services, Inc.*
P.O. Box 1722
Boston, MA 02105-1722
1-800-345-6611
Colonial New York Tax-Exempt Fund mails one shareholder report to each
shareholder address. If you would like more than one report, please call
1-800-426-3750 and additional reports will be sent to you.
This report has been prepared for shareholders of Colonial New York Tax-Exempt
Fund. This report may also be used as sales literature when
preceded or accompanied by the current prospectus which provides details about
sales charges, investment objectives and operating policies of the Fund.
*Effective October 1, 1998, Colonial Investors Service Center, Inc. - the
Transfer Agent for Colonial, Stein Roe Advisor and Newport Funds - will change
its name to Liberty Funds Services, Inc.
<PAGE>
TRUSTEES
ROBERT J. BIRNBAUM
Consultant (formerly Special Counsel, Dechert, Price & Rhoads; President and
Chief Operating Officer, New York Stock Exchange, Inc.; President, American
Stock Exchange, Inc.)
TOM BLEASDALE
Retired (formerly Chairman of the Board and Chief Executive Officer, Shore Bank
& Trust Company)
LORA S. COLLINS
Attorney (formerly Attorney, Kramer, Levin, Naftalis, & Frankel)
JAMES E. GRINNELL
Private Investor (formerly Senior Vice President-Operations, The Rockport
Company)
RICHARD W. LOWRY
Private Investor (formerly Chairman and Chief Executive Officer, U.S. Plywood
Corporation)
WILLIAM E. MAYER
Partner, Development Capital, L.L.C. (formerly Dean, College of Business and
Management, University of Maryland; Dean, Simon Graduate School of Business,
University of Rochester; Chairman and Chief Executive Officer, CS First Boston
Merchant Bank; and President and Chief Executive Officer, The First Boston
Corporation)
JAMES L. MOODY, JR.
Retired (formerly Chairman of the Board, Chief Executive Officer and Director,
Hannaford Bros. Co.)
JOHN J. NEUHAUSER
Dean, Boston College School of Management
ROBERT L. SULLIVAN
Retired Partner, KPMG Peat Marwick LLP (formerly Management Consultant, Saatchi
and Saatchi Consulting Ltd. and Principal and International Practice Director,
Management Consulting, Peat Marwick Main & Co.)
[logo] L I B E R T Y
COLONIAL FUNDS o STEIN ROE ADVISOR FUNDS o NEWPORT FUNDS
Libert Funds Distributor, Inc. (C) 1998
One Financial Center, Boston, MA 02111-2621, 1-800-426-3750
Visit us at www.libertyfunds.com
NY-03/741F-0798 (9/98) 98/933
