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COLONIAL MINNESOTA TAX-EXEMPT FUND Annual report
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[GRAPHIC OMITTED]
January 31, 1998
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Not FDIC May Lose Value
Insured No Bank Guarantee
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COLONIAL MINNESOTA TAX-EXEMPT FUND HIGHLIGHTS
FEBRUARY 1, 1997 - JANUARY 31, 1998
Investment Objective: Colonial Minnesota 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 Minnesota state 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: "Bond market conditions improved during the period
and the Fund was well-positioned to take advantage of declining interest rates.
In addition, Minnesota's vibrant economy, strong management and substantial cash
reserves supported good price performance for many of the State's bond
issuers." -- Brian Hartford
Colonial Minnesota Tax-Exempt Fund Performance
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Class A Class B Class C(1)
Inception dates 9/26/86 8/4/92 8/1/97
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Distributions declared per share(2) $0.407 $0.353 $0.209
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SEC yields on 1/31/98(3) 4.17% 3.62% 3.91%
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Taxable-equivalent SEC yields(4) 7.54% 6.55% 7.07%
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12-month total returns, assuming
reinvestment of all distributions and 11.04% 10.22% 3.13%(5)
no sales charge or contingent deferred
sales charge (CDSC)
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Net asset value per share on 1/31/98 $7.49 $7.49 $7.49
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(1) Class C share total return is cumulative since inception on August 1, 1997.
(2) A portion of the Fund's income may be subject to the alternative minimum
tax.
(3) The 30-day SEC yields on January 31, 1998 reflect the portfolio's earning
power, net of expenses, expressed as an annualized percentage of the public
offering price per share at the end of the period. If the Distributor had not
waived certain Fund expenses, the SEC yield for Class C shares would have been
3.66%.
(4) Taxable-equivalent SEC yields are based on the maximum effective 44.7%
federal and Minnesota income tax rates.
(5) Performance results reflect any voluntary waivers or reimbursements of Fund
expenses by the Adviser 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, and some or
all of this discount may be included in the Fund's ordinary income which will be
taxable when distributed.
Quality Breakdown (as of 1/31/98)
.......................................
AAA...............................53.5%
AA................................23.5%
A..................................9.7%
BBB................................5.0%
CCC................................1.2%
Non-rated..........................6.3%
Short-term obligations.............0.8%
Top Five Sectors (as of 1/31/98)
.......................................
General Obligations...............25.8%
Hospitals.........................16.4%
Joint Power Authority.............12.7%
Education.........................12.0%
Refunded...........................9.1%
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.
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2
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PRESIDENT'S MESSAGE
TO FUND SHAREHOLDERS
I am pleased to present the annual report for Colonial Minnesota Tax-Exempt
Fund. This report reflects on the investment environment for the 12 months ended
January 31, 1998.
[PHOTO]
The strength of the economy during the first quarter of 1997 led the Federal
Reserve Board to raise short-term interest rates in March for the first time in
two years. This action was a response to growing concern about future wage and
price inflation. By mid-April, economic growth appeared to slow while inflation
remained under control. During the second half of the period, interest rates
declined and bond prices rose. As the year ended, there was good news for the
bond markets: the smallest annual increase in inflation since 1964 and the first
predicted Federal budget surplus in nearly 30 years. Strong consumer confidence,
rising employment and controlled inflation point to a firm foundation for
further economic expansion. However, the rate of economic growth in 1998 may be
tempered by the slowdown in the Asian economies and its impact on the global
marketplace.
Investments in municipal bonds outperformed most alternative fixed income
investments, including Treasury bonds, on an after-tax basis during the first
half of the period. However, during the second half, a seasonal surge in
municipal supply combined with increased refundings caused municipal bonds to
slightly underperform Treasurys, and the market's performance to lag. On a more
positive note, this surge offered higher relative yields and positioned the
market for positive performance in the months ahead as the supply is absorbed.
The long-term benefits of investing in any municipal bond fund include tax-free
income as well as the opportunity to diversify your fixed-income portfolio.
Colonial Minnesota Tax-Exempt Fund continues to offer you competitive tax-free
income and the potential for long-term total return as well as an opportunity to
participate in Minnesota's economic expansion.
Respectfully,
/s/ Harold W. Cogger
Harold W. Cogger
President
March 11, 1998
Because market conditions change frequently, there can be no assurance that the
trends described in this report will continue.
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3
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PORTFOLIO MANAGEMENT REPORT
Brian Hartford is portfolio manager of Colonial Minnesota Tax-Exempt Fund. Mr.
Hartford is vice president of Colonial Management Associates, Inc. and is the
Quantitative Risk Manager for Colonial's tax-exempt investments.
Fund was poised to take advantage of improving investment environment
During the beginning of the period, interest rates rose in response to
unanticipated strength in the auto, housing and manufacturing sectors. However,
by mid-April we saw signs of improving conditions for bond prices -- economic
growth was slowing and inflation continued to be low. In addition, Congress
agreed to a balanced budget plan that further calmed fixed-income markets.
Because many signs suggested that the rising interest rate environment was
behind us, we shifted the Fund's focus to investments that were more sensitive
to changes in interest rates, such as bonds with longer maturities. We expected
that as rates fell, these bonds would outperform, which they did. However, near
the end of the period, some of these securities became overpriced. As this
became apparent, we sold some of our holdings to take advantage of the mismatch
between price and value.
Fund's increased sensitivity to interest rates translated into above -
average performance
The Fund generated a 12-month total return of 11.04% for Class A shares, based
on net asset value. In comparison, the average Minnesota municipal bond fund as
measured by Lipper Analytical Services, Inc. was 9.03%.(1) The Fund's benchmark,
the Lehman Brothers Municipal Bond Index, had a total return of 10.11%. The Fund
outperformed as a result of the Fund's strategic shift into a
larger-than-average concentration in securities that have a relatively high
sensitivity to interest rates. These bonds experienced larger price gains as
interest rates declined.
Minnesota continued to enjoy top bond ratings and a vibrant economy
Minnesota's top bond rating of Aaa by Moody's Investors Service reflects the
State's well-diversified and growing economy, conservative budgetary practices,
significant financial reserves and low levels of debt. Despite expectations for
a slowdown in economic activity, Minnesota continued to experience growth in
many sectors. In 1997, estimates for the State's economic output have been
revised upward, the unemployment rate remained below that of the nation, and
construction and housing activity were strong, particularly in the
Minneapolis/St. Paul area. Further signs of vibrant economic activity include
increased corporate earnings and State tax revenue collections ahead of
estimates. We believe that Minnesota's economy will continue to expand, although
the tight labor supply poses a potential restriction to future growth and we
will watch wage and employment activity closely.
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4
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Positive outlook ahead for the economy
We do not expect any major changes in either the national or State economy over
the next few months. We believe that growth will continue, although at a slower
pace than 1997. This is due in part to the financial crisis in Asia and its
anticipated impact on the worldwide marketplace. However, we expect that
inflation will remain subdued and that interest rates may continue to decline
somewhat, as they did during the second half of the year. Declining interest
rates are positive for bond prices. When interest rates go down, bond prices
generally increase, and that has been the case in the current market rally. This
effect has been reflected in your Fund as well, with the net asset value of your
shares rising, while dividend distributions have gradually declined. With slower
economic growth, low inflation and the possibility of a balanced Federal budget
all forecast for 1998, we expect this trend in the bond market to continue. Even
with a decreased yield, current income outpaces inflation even before the
tax-exemption is factored in. In fact, the Fund's inflation-adjusted yield, in
which the inflation rate is subtracted from the actual yield, is attractive by
historical standards. Our goal remains unchanged: to increase your total return
by carefully researching and selecting a portfolio of primarily investment-grade
municipal bonds.
As the heavy level of refunding and year-end tax-exempt supply is absorbed by
the market, we expect new issuance to be steady and more manageable. We could
see another round of refunding issues if interest rates fall significantly
lower. Currently, municipal bonds represent excellent value when compared to
other fixed-income investments, including Treasury bonds, and we believe that
tax-exempt bonds will continue to offer good after-tax returns.
(1) Source: Lipper Analytical Services, Inc. Lipper rankings are based on the
Lipper Minnesota Municipal Debt category. The Fund's (Class A shares) ranking
for the one-year period is in the 1st quartile (rated 2 out of 45 funds), in the
1st quartile for the five-year period (rated 4 out of 19 funds) and in the 3rd
quartile for the 10-year period (rated 8 out of 11 funds). Rankings do not
include any sales charges. Performance for different share classes will vary
with fees associated with each class. Past performance cannot guarantee future
results.
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5
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Colonial Minnesota Tax-Exempt Fund's Investment Performance
Change in Value of $10,000 from 1/31/88 to 1/31/98
Based on NAV and POP for Class A Shares
[The following table was originally a mountain graph in the printed materials.]
CMNTEF NAV POP Lehman
- ------ ----- ----- ------
Jan-88 10000 9525 10000
Apr-88 10048 9571 10064
Jul-88 10197 9713 10248
Oct-88 10500 10001 10627
Jan-89 10715 10206 10857
Apr-89 10855 10339 10962
Jul-89 11218 10686 11496
Oct-89 11200 10668 11488
Jan-90 11369 10829 11729
Apr-90 11445 10901 11752
Jul-90 11933 11366 12293
Oct-90 11980 11410 12341
Jan-91 12359 11772 12814
Apr-91 12602 12003 13102
Jul-91 12795 12187 13366
Oct-91 13120 12497 13842
Jan-92 13389 12753 14211
Apr-92 13544 12900 14348
Jul-92 14208 13533 15203
Oct-92 13991 13327 15004
Jan-93 14514 13825 15608
Apr-93 14963 14252 16163
Jul-93 15242 14518 16547
Oct-93 15707 14961 17117
Jan-94 16056 15293 17522
Apr-94 15229 14505 16512
Jul-94 15546 14807 16857
Oct-94 15110 14392 16371
Jan-95 15587 14846 16898
Apr-95 16179 15410 17610
Jul-95 16338 15562 18184
Oct-95 16942 16138 18800
Jan-96 17690 16850 19442
Apr-96 17097 16285 19010
Jul-96 17473 16643 19384
Oct-96 17898 17048 19872
Jan-97 18073 17214 20189
Apr-97 18100 17240 20271
Jul-97 19417 18495 21371
Oct-97 19446 18523 21560
Jan-98 20069 19116 22230
A hypothetical $10,000 investment in Class B shares made on August 4, 1992
(inception) at net asset value (NAV) would have been valued at $13,590 on
January 31, 1998. The same investment after deducting the applicable contingent
deferred sales charge (CDSC) would have grown to $13,490 on January 31, 1998.
A hypothetical $10,000 investment in Class C shares made on August 1, 1997
(inception) at net asset value (NAV) would have been valued at $10,313 on
January 31, 1998. The same investment after deducting the applicable contingent
deferred sales charge (CDSC) would have grown to $10,213 on January 31, 1998.
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, do not incur fees or expenses, and it is not
possible to invest in an index.
Average Annual Total Returns
as of January 31, 1998
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Class A Shares Class B Shares Class C Shares(1)
Inception 9/26/86 8/4/92 8/1/97
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NAV POP NAV w/CDSC NAV w/CDSC
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1 year 11.04% 5.77% 10.22% 5.22% -- --
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5 years 6.70 5.66 5.90 5.58 -- --
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10 years (or life) 7.21 6.69 5.74 5.59 3.13% 2.13%
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(1) Class C share total returns are cumulative since inception on August 1,
1997.
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. NAV returns do not include sales charges
or CDSC. Public offering price (POP) returns include the maximum sales charge of
4.75%. The applicable CDSC for Class B shares is 5% for 1 year, 2% for 5 years
and 1% since inception. The CDSC for Class C shares is 1% since inception.
Performance results reflect any voluntary waivers or reimbursements of Fund
expenses by the Adviser 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.
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6
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INVESTMENT PORTFOLIO
JANUARY 31, 1998 (IN THOUSANDS)
MUNICIPAL BONDS - 96.9% PAR VALUE
===================================================================
EDUCATION - 11.8%
Education
State Higher Education Facilities
Authority:
Carleton College,
5.000% 11/01/18 $ 2,000 $ 1,997
Macalester College, Series 4-N,
5.550% 03/01/17 500 527
St. Johns University, Series 4-L,
5.350% 10/01/17 1,000 1,025
University of Minnesota,
Series 1996-A:
5.750% 07/01/14 500 554
5.750% 07/01/17 1,000 1,106
University of St. Thomas:
Series 4-M,
5.350% 04/01/17 500 512
Series 4-P,
5.375% 04/01/18 525 539
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6,260
---------
...................................................................
HEALTH - 16.0%
Hospitals
Minneapolis-St. Paul Housing &
Redevelopment Authority, Healthspan,
Series 1993-A,
4.750% 11/15/18 3,410 3,258
Princeton,
Fairview Hospital,
Series 1991-C,
6.250% 01/01/21 300 324
Red Wing,
River Region Group,
Series 1993-A:
6.400% 09/01/12 200 215
6.500% 09/01/22 300 324
Rochester,
Mayo Medical Center,
Series 1992-I,
5.900% 11/15/09 1,000 1,133
St. Cloud,
St. Cloud Hospital,
Series 1996-B,
5.000% 07/01/20 2,800 2,744
7
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Investment Portfolio/January 31, 1998
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MUNICIPAL BONDS - CONT. PAR VALUE
===================================================================
HEALTH - CONT.
Hospitals - Cont.
St. Paul Housing & Redevelopment
Authority, Healthcast Project:
Series 1993-A,
6.625% 11/01/17 $ 250 $ 269
Series 1997-A,
5.500% 11/01/09 250 257
---------
8,524
---------
...................................................................
HOUSING - 5.7%
Assisted Living/Senior - 0.6%
Roseville,
Care Institute, Inc.,
Series 1993,
7.750% 11/01/23 300 305
---------
Multi-Family - 1.6%
Lakeville,
Southfork Apartment Project,
Series 1989-A,
9.875% 02/01/20 200 203
Minneapolis,
Riverplace Project,
Series 1987-A,
7.100% 01/01/20 240 246
Washington County Housing &
Redevelopment Authority,
Cottages of Aspen,
Series 1992,
9.250% 06/01/22 180 201
White Bear Lake,
Birch Lake Townhomes Project,
Series 1989-A,
9.750% 07/15/19 200 204
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854
---------
Single Family - 3.5%
Chisago & Stearns Counties,
Series 1994-B,
7.050% 09/01/27 1,175 1,272
Dakota County Housing &
Redevelopment Authority,
Series 1986,
7.200% 12/01/09 65 67
8
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Investment Portfolio/January 31, 1998
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Minneapolis-St. Paul Housing
Board,
Series 1987-C,
8.875% 11/01/18 $ 335 $ 346
State Housing Finance Agency,
Series 1988-D,
8.050% 08/01/18 130 135
Washington County Housing &
Redevelopment Authority,
City of Cottage Grove,
Series 1986,
7.600% 12/01/11 75 75
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1,895
---------
...................................................................
OTHER - 9.4%
Pool/Bond Bank - 0.5%
Minneapolis Community Development Agency,
Series 1991-1,
8.000% 12/01/16 250 280
---------
Refunded/Escrowed (a) - 8.9%
Burnsville, Fairview Community Hospital,
Series 1982-A,
(b) 05/01/12 2,145 983
Dakota & Washington Counties
Housing & Redevelopment Authority,
Series 1988,
8.150% 09/01/16 235 307
Moorhead Residential,
7.100% 08/01/11 20 24
Owatonna Independent School
District No. 761, Series 1990:
7.100% 02/01/09 115 119
7.100% 02/01/10 120 124
7.100% 02/01/11 130 134
Rockford Independent School
District No. 883,
Series A,
7.100% 12/15/10 400 409
State Higher Education Facilities Authority:
Hamline University,
Series 3-K,
6.600% 06/01/08 250 274
9
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Investment Portfolio/January 31, 1998
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MUNICIPAL BONDS - CONT. PAR VALUE
===================================================================
OTHER - CONT.
Refunded/Escrowed (a) - Cont.
University of St. Thomas:
Series 2-O,
7.600% 10/01/07 $ 200 $ 205
Series 3-C,
7.100% 09/01/10 100 109
State Public Facilities Authority:
Series 1989-A,
7.000% 03/01/09 100 105
Series 1991-A,
6.950% 03/01/13 200 221
St. Louis Park,
Methodist Hospital,
Series 1990-C,
7.250% 07/01/18 165 181
Western Minnesota Municipal
Power Agency,
Series 1983-A,
9.750% 01/01/16 1,000 1,542
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4,737
---------
...................................................................
OTHER REVENUE - 8.4%
Hotels - 0.5%
Minneapolis,
Holiday Inn Metrodome Project,
Series 1997,
6.000% 12/01/01 250 253
---------
Industrial - 5.8%
Brooklyn Park,
TL Systems Corp.,
Series 1991,
10.000% 09/01/16 255 317
Buffalo,
Von Ruden Manufacturing, Inc.,
Series 1989,
10.500% 09/01/14 525 573
Cloquet,
Diamond Brands, Inc.,
9.000% 06/01/02 600 606
Duluth Seaway Port Authority,
Cargill, Inc.,
Series 1993-A,
5.750% 12/01/16 1,500 1,571
---------
3,067
---------
10
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Investment Portfolio/January 31, 1998
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Paper Products - 1.5%
Hubbard County,
Potlach Corp.,
Series 1987-A,
7.375% 08/01/13 $ 285 $ 302
International Falls,
Boise Cascade Corp. Project,
5.650% 12/01/22 500 515
---------
817
---------
Recreation - 0.6%
Metropolitan Council,
Hubert H. Humphrey Metrodome,
Series 1992,
6.000% 10/01/09 300 323
---------
...................................................................
TAX-BACKED - 30.7%
Local Appropriated - 1.5%
Hibbing Economic Development
Authority Lease,
6.400% 02/01/12 300 313
Minneapolis Special School District,
Series 1998-A,
4.750% 02/01/18 500 481
---------
794
---------
Local General Obligations - 23.2%
Bagley Independent School
District No. 162,
Series 1994,
4.850% 02/01/12 750 753
Brainerd Independent School
District No. 181,
Series 1991-A,
7.000% 06/01/11 200 217
Columbia Heights Independent
School District No. 13,
5.250% 02/01/17 1,755 1,792
Delano Independent School
District No. 879,
Series 1990:
7.250% 02/01/09 100 109
7.250% 02/01/10 100 109
Minneapolis St. Paul Metropolitan
Airports Commission,
Series 7,
7.800% 01/01/11 300 316
11
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Investment Portfolio/January 31, 1998
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MUNICIPAL BONDS - CONT. PAR VALUE
===================================================================
TAX-BACKED - CONT.
Local General Obligations - Cont.
New Prague Independent School
District No. 721,
Series 1996-A,
5.000% 02/01/16 $ 2,000 $ 2,004
New York Mills Independent School
District No. 553,
Series 1992-A,
6.850% 02/01/18 210 229
North St. Paul & Maplewood Unified
School District,
Series 1996-A,
5.125% 02/01/25 2,000 2,002
Roseau Independent School
District No. 682,
Series 1991,
7.000% 02/01/14 200 212
Rosemount Independent School
District No. 196,
Series 1994-B,
(b) 06/01/10 2,765 1,564
St. Cloud Hydroelectric,
Series 1996-D,
5.250% 12/01/18 2,000 2,023
Waseca Independent School
District No. 829,
5.500% 04/01/17 1,000 1,034
---------
12,364
---------
State Appropriated - 4.1%
State,
Duluth Airport,
Series 1995-B,
6.250% 08/01/14 2,000 2,170
---------
State General Obligations - 1.9%
State,
Series 1995,
5.250% 08/01/14 1,000 1,027
---------
12
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Investment Portfolio/January 31, 1998
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TRANSPORTATION - 1.2%
Transportation
St. Paul Port Authority,
Series F:
9.125% 12/01/00 $ 25 $ 25
9.125% 12/01/01 25 26
9.125% 12/01/02 25 25
9.125% 12/01/14 575 548
---------
624
---------
...................................................................
UTILITY - 13.7%
Investor Owned - 0.8%
Anoka County,
United Power Association,
Series 1987-A,
6.950% 12/01/08 400 430
---------
Joint Power Authority - 12.4%
Northern Municipal Power Agency,
Minnesota Power & Light Co.,
Series 1989-A,
7.250% 01/01/16 700 733
Southern Minnesota Municipal
Power Agency:
Series 1993-A:
4.750% 01/01/16 2,000 1,944
5.000% 01/01/12 750 751
Series 1994-A,
(b) 01/01/27 9,500 2,183
Series A,
5.000% 01/01/16 1,000 992
---------
6,603
---------
Water & Sewer - 0.5%
St. Paul,
Series 1988-A,
8.000% 12/01/08 250 261
---------
TOTAL MUNICIPAL BONDS (cost of $47,572) 51,588
---------
OPTIONS - 0.0% CONTRACTS
===================================================================
March 1998 Treasury Bond Put,
Strike price 116, Expiration 02/21/98
(cost of $33) 3,800 1
13
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Investment Portfolio/January 31, 1998
- ------------------------------------------------------------------
OPTIONS - CONT. CONTRACTS VALUE
===================================================================
March 1998 Treasury Bond Put,
Strike price 118, Expiration 02/21/98
(cost of $30) 4,000 $ 2
---------
TOTAL OPTIONS (cost of $63) 3
---------
TOTAL INVESTMENTS - 96.9% (cost of $47,635) (c) 51,591
---------
SHORT-TERM OBLIGATIONS - 0.8% PAR
===================================================================
VARIABLE RATE DEMAND NOTES (d)
CA Newport Beach Presbyterian
Hospital, Series 1992,
3.600% 10/01/22 $ 400 400
---------
OTHER ASSETS & LIABILITIES, NET - 2.3% 1,247
===================================================================
NET ASSETS - 100.0% $ 53,238
=========
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) Zero coupon bond.
(c) Cost for federal income tax purposes is the same.
(d) 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,
1998.
See notes to financial statements.
14
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STATEMENT OF ASSETS & LIABILITIES
JANUARY 31, 1998
(in thousands except for per share amounts and footnotes)
ASSETS
Investments at value (cost $47,635) $ 51,591
Short-term obligations 400
-----------
51,991
Receivable for:
Investments sold $ 1,168
Interest 735
Fund shares sold 57
Other 99 2,059
---------- -----------
Total Assets 54,050
LIABILITIES
Payable for:
Investments purchased 479
Distributions 200
Fund shares repurchased 121
Payable to Adviser 6
Accrued:
Deferred Trustees fees 3
Other 3
----------
Total Liabilities 812
-----------
NET ASSETS $ 53,238
===========
Net asset value & redemption price per share -
Class A ($32,824/4,380) $7.49
===========
Maximum offering price per share - Class A
($7.49/0.9525) $7.86(a)
===========
Net asset value & offering price per share -
Class B ($20,278/2,706) $7.49(b)
===========
Net asset value & offering price per share -
Class C ($136/18) $7.49(b)
===========
COMPOSITION OF NET ASSETS
Capital paid in $ 49,603
Undistributed net investment income 7
Accumulated net realized loss (328)
Net unrealized appreciation 3,956
-----------
$ 53,238
===========
(a) On sales of $50,000 or more the offering price is reduced.
(b) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
See notes to financial statements.
15
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STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JANUARY 31, 1998
(in thousands)
INVESTMENT INCOME
Interest $ 3,112
EXPENSES
Management fee $ 265
Service fee 84
Distribution fee - Class B 147
Distribution fee - Class C (a)
Transfer agent 85
Bookkeeping fee 28
Registration fee 18
Custodian fee 5
Audit fee 22
Trustees fee 11
Reports to shareholders 3
Legal fee 7
Other 11
----------
686
Fees and expenses waived or borne
by the Adviser (58)
Fees waived by the Distributor -
Class C (a) 628
---------- -----------
Net Investment Income 2,484
-----------
NET REALIZED & UNREALIZED GAIN (LOSS) ON PORTFOLIO POSITIONS
Net realized gain (loss) on:
Investments 630
Closed futures contracts (151)
----------
Net Realized Gain 479
Net unrealized appreciation
during the period on:
Investments 2,464
Open futures contracts 10
----------
Net Unrealized Appreciation 2,474
-----------
Net Gain 2,953
-----------
Increase in Net Assets from Operations $ 5,437
===========
(a) Rounds to less than one.
See notes to financial statements.
16
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STATEMENT OF CHANGES IN NET ASSETS
(in thousands) Year ended January 31
=======================
INCREASE (DECREASE) IN NET ASSETS 1998 (a) 1997
Operations:
Net investment income $ 2,484 $ 2,718
Net realized gain 479 156
Net unrealized appreciation (depreciation) 2,474 (1,821)
---------- -----------
Net Increase from Operations 5,437 1,053
Distributions:
From net investment income - Class A (1,658) (1,850)
From net realized gains - Class A (201) --
From net investment income - Class B (825) (856)
From net realized gains - Class B (122) --
From net investment income - Class C (2) --
From net realized gains - Class C (1) --
---------- -----------
2,628 (1,653)
---------- -----------
Fund Share Transactions :
Receipts for shares sold - Class A 2,735 4,533
Value of distributions reinvested - Class A 1,237 1,255
Cost of shares repurchased - Class A (7,779) (6,290)
---------- -----------
(3,807) (502)
---------- -----------
Receipts for shares sold - Class B 1,912 2,571
Value of distributions reinvested - Class B 639 564
Cost of shares repurchased - Class B (2,644) (2,274)
---------- -----------
(93) 861
---------- -----------
Receipts for shares sold - Class C 132 --
Value of distributions reinvested - Class C 3 --
---------- -----------
135 --
---------- -----------
Net Increase (Decrease) from Fund Share
Transactions (3,765) 359
---------- -----------
Total Decrease (1,137) (1,294)
NET ASSETS
Beginning of period 54,375 55,669
---------- -----------
End of period (including undistributed
net investment income of $7 and $4,
respectively) $ 53,238 $ 54,375
========== ===========
(a) Class C shares were initially offered on August 1, 1997.
Statement of Changes in Net Assets continued on following page.
See notes to financial statements.
17
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS - CONT.
(in thousands) Year ended January 31
=====================
NUMBER OF FUND SHARES 1998 (a) 1997
Sold - Class A 378 635
Issued for distributions reinvested - Class A 170 177
Repurchased - Class A (1,074) (886)
--------- ---------
(526) (74)
--------- ---------
Sold - Class B 262 362
Issued for distributions reinvested - Class B 88 80
Repurchased - Class B (363) (320)
--------- ---------
(13) 122
--------- ---------
Sold - Class C 18 --
Issued for distributions reinvested - Class C (b) --
--------- ---------
18 --
--------- ---------
(a) Class C shares were initially offered on August 1, 1997.
(b) Rounds to less than one.
See notes to financial statements.
18
<PAGE>
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1998
NOTE 1. ACCOUNTING POLICIES
................................................................................
Organization: Colonial Minnesota Tax-Exempt Fund (the Fund), a series of
Colonial Trust V, 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 Minnesota state
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 Class B shares are subject to an annual distribution
fee and a contingent deferred sales charge. Class B shares will convert to Class
A shares when they have been outstanding approximately eight years. Effective
August 1, 1997, the Fund began offering Class C shares which 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 revenue 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.
19
<PAGE>
Notes to Financial Statements/January 31, 1998
- --------------------------------------------------------------------------------
NOTE 1. ACCOUNTING POLICIES - CONT.
................................................................................
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 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.
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 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 based on the Fund's pro rata portion of the
combined average net assets of the funds constituting Trust V as follows:
20
<PAGE>
Notes to Financial Statements/January 31, 1998
- --------------------------------------------------------------------------------
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: 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.
Effective January 1, 1997 and continuing through calendar year 1997, the
Transfer Agent fee was reduced by 0.01% in cumulative monthly increments,
resulting in a decrease in the fee from 0.14% to 0.13% annually.
Underwriting discounts, service and distribution fees: Liberty Financial
Investments, Inc., formerly Colonial Investment Services, Inc. (the
Distributor), an affiliate of the Adviser, is the Fund's principal underwriter.
For the year ended January 31 1998, the Fund has been advised that the
Distributor retained net underwriting discounts of $4,874 on sales of the Fund's
Class A shares and received contingent deferred sales charges (CDSC) of $62,667
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 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 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 0.75% annually of the Fund's average net
assets.
21
<PAGE>
Notes to Financial Statements/January 31, 1998
- --------------------------------------------------------------------------------
NOTE 2. FEES AND COMPENSATION PAID TO AFFILIATES - CONT.
................................................................................
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
................................................................................
Investment activity: For the year ended January 31, 1998, purchases and sales of
investments, other than short-term obligations, were $9,801,282 and $14,928,654,
respectively.
Unrealized appreciation (depreciation) at January 31, 1998, based on cost of
investments for both financial statement and federal income tax purposes was:
Gross unrealized appreciation $ 4,065,146
Gross unrealized depreciation (109,216)
------------
Net unrealized appreciation $ 3,955,930
===========
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 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 positions 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 amount recorded in the Fund's Statement of Assets
and Liabilities at any given time.
NOTE 4. LINE OF CREDIT
................................................................................
The Fund may borrow up to 10% of its net assets under a line of credit for
temporary or emergency purposes. Any borrowings bear interest at one
22
<PAGE>
Notes to Financial Statements/January 31, 1998
- --------------------------------------------------------------------------------
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 year ended January 31, 1998.
23
<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 $ 7.130 $ 7.130 $ 7.470 $ 7.350 $ 7.350
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment
income(a) 0.362 0.308 0.163(c) 0.369 0.316
Net realized and
unrealized gain (loss) 0.405 0.405 0.066 (0.222) (0.222)
------- ------- ------- ------- -------
Total from Investment
Operations 0.767 0.713 0.229 0.147 0.094
------- ------- ------- ------- -------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net
investment income (0.362) (0.308) (0.164) (0.367) (0.314)
From net
realized gains (0.045) (0.045) (0.045) -- --
------- ------- ------- ------- -------
Total Distributions
Declared to
Shareholders (0.407) (0.353) (0.209) (0.367) (0.314)
------- ------- ------- ------- -------
Net asset value -
End of period $ 7.490 $ 7.490 $ 7.490 $ 7.130 $ 7.130
======= ======= ======= ======= =======
Total return(d)(e) 11.04% 10.22% 3.13%(f) 2.16% 1.40%
======= ======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS
Expenses 0.91%(g) 1.66%(g) 1.36%(c)(g)(h) 0.90%(g) 1.65%(g)
Net investment
income 4.97%(g) 4.22%(g) 4.40%(c)(g)(h) 5.19%(g) 4.44%(g)
Fees and expenses
waived or borne
by the Adviser 0.11%(g) 0.11%(g) 0.12%(g)(h) 0.13%(g) 0.13%(g)
Portfolio turnover 19% 19% 19% 27% 27%
Net assets at end
of period (000) $32,824 $20,278 $ 136 $34,986 $19,389
<FN>
(a) Net of fees and expenses waived or borne by the Adviser which amounted to:
$ 0.008 $ 0.008 $ 0.008 $ 0.009 $ 0.009
(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 not waived or reimbursed a portion of expenses, total
return would have been reduced.
(f) Not annualized.
</FN>
</TABLE>
24
<PAGE>
FINANCIAL HIGHLIGHTS - CONT.
Year ended January 31
=================================================
1996 1995
Class A Class B Class A Class B
------- ------- ------- -------
$ 6.840 $ 6.840 $ 7.480 $ 7.480
------- ------- ------- -------
0.384 0.332 0.415 0.363
0.516 0.516 (0.642) (0.642)
------- ------- ------- -------
0.900 0.848 (0.227) (0.279)
------- ------- ------- -------
(0.390) (0.338) (0.413) (0.361)
-- -- -- --
------- ------- ------- -------
(0.390) (0.338) (0.413) (0.361)
------- ------- ------- -------
$ 7.350 $ 7.350 $ 6.840 $ 6.840
======= ======= ======= =======
13.50% 12.66% (2.92)% (3.65)%
======= ======= ======= =======
0.85%(g) 1.60%(g) 0.72% 1.47%
5.41%(g) 4.66%(g) 5.98% 5.23%
0.24%(g) 0.24%(g) 0.26% 0.26%
42% 42% 26% 26%
$36,586 $19,083 $35,846 $14,731
$ 0.016 $ 0.016 $ 0.018 $ 0.018
(g) The benefits derived from custody credits and directed brokerage arrange-
ments had no impact. Prior years' ratios are net of benefits received, if
any.
(h) Annualized.
- -----------------------------------------------------------------
Federal Income Tax Information (unaudited)
Approximately 99.97% of the income distributions will be treated as
exempt for federal income tax purposes.
- -----------------------------------------------------------------
25
<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 $ 7.160 $ 7.160
------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (a) 0.419 0.364
Net realized and
unrealized gain (loss) 0.323 0.323
------- -------
Total from Investment
Operations 0.742 0.687
------- -------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment
income (0.422) (0.367)
------- -------
Net asset value -
End of period $ 7.480 $ 7.480
======= =======
Total return (b)(c) 10.62% 9.81%
======= =======
RATIOS TO AVERAGE NET ASSETS
Expenses 0.82% 1.57%
Net investment income 5.69% 4.94%
Fees and expenses
waived or borne
by the Adviser 0.20% 0.20%
Portfolio turnover 9% 9%
Net assets at end
of period (000) $41,326 $10,317
(a) Net of fees and expenses waived or borne by the Adviser which amounted to:
$ 0.015 $ 0.015
(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.
26
<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
(the "Fund") (a series of Colonial Trust V) at January 31, 1998, 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, 1998 by correspondence with
the custodian and brokers, provide a reasonable basis for the opinion expressed
above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
March 11, 1998
27
<PAGE>
SHAREHOLDER SERVICES
TO MAKE INVESTING EASIER
Your Fund has one of the most extensive selections of shareholder services
available. Your financial advisor can help you arrange for any of these
services, or you can call Colonial Investors Service Center directly at
1-800-345-6611.
Affordable Additional Investments: Add to your account with as little as $50 on
most funds; $25 for an IRA account.
Free Exchanges(1): Exchange all or part of your account into the same share
class of another fund distributed by Liberty Financial Investments, Inc. by
phone or mail.
Easy Access to Your Money(1): Make withdrawals from your account by phone, by
mail or, for certain funds, by check.
One-Year Reinstatement Privilege: If you need access to your money, but then
choose to return it within one year, you can reinvest in any fund distributed by
Liberty Financial Investments of the same share class without any penalty or
sales charge.
Fundamatic: Make periodic investments as low as $50 from your checking account
to your Fund account.
Systematic Withdrawal Plan (SWP): Receive monthly, quarterly or semiannual
payments via check or bank transmission. There is a $5,000 account value
required, but no minimum for the payment amount. The maximum annual withdrawal
is 12% of account balance at time SWP is established. SWPs by check are
processed on the 10th calendar day of each month unless the 10th falls on a
non-business day or the first business day of the week. If this occurs, the
processing date will be the previous business day. Dividends and capital gains
must be reinvested.
Automated Dollar Cost Averaging: Transfer money on a monthly basis from any fund
with a balance of $5,000 into the same share class of up to four other funds
distributed by Liberty Financial Investments. Minimum for each transfer is $100.
Retirement Plans: Choose from a broad range of retirement plans, including IRAs.
(1) Redemptions and exchanges are made at the next determined net asset value
after the request is received by the Transfer Agent. Proceeds may be more or
less than your original cost. The exchange privilege may be terminated at any
time. Exchanges are not available on all funds. Investors who purchase Class B
or C shares, or $1 million or more of Class A shares, may be subject to a
contingent deferred sales charge.
28
<PAGE>
HOW TO REACH COLONIAL
BY PHONE OR BY MAIL
BY TELEPHONE
Customer Connection - 1-800-345-6611
For 24-hour account information, call from your touch-tone phone. (Rotary
callers will be automatically connected to a representative during business
hours.) A recorded message will guide you through the menu:
For fund prices, dividends and capital gains information ............press 1
For account information .............................................press 2
To speak to a service representative ................................press 3
For yield and total return information ..............................press 4
For duplicate statements or new supply of checks ....................press 5
To order duplicate tax forms and year-end statements ................press 6
(February through May)
To review your options at any time during your call ................press *
To speak with a shareholder services representative about your account, call
Monday to Friday, 8:00 a.m. to 8:00 p.m. ET, and Saturdays from February through
mid-April, 10:00 a.m. to 2:00 p.m. ET.
Colonial Telephone Transaction Department - 1-800-422-3737
To purchase, exchange or sell shares by telephone, call Monday to Friday, 9:00
a.m. to 7:00 p.m. ET. Transactions received after the close of the New York
Stock Exchange will receive the next business day's closing price.
Literature - 1-800-426-3750
To request literature on any fund distributed by Liberty Financial Investments,
call Monday to Friday, 8:30 a.m. to 6:30 p.m. ET.
BY MAIL
Colonial Investors Service Center, Inc.
P.O. Box 1722
Boston, MA 02105-1722
29
<PAGE>
SHAREHOLDER COMMUNICATIONS
TO KEEP YOU INFORMED
To make recordkeeping easy and keep you up-to-date on the performance of your
investments, you can expect to receive the following information about your
account:
Transaction Confirmations: Each time you make a purchase, sale or exchange, you
receive a confirmation statement within just a few days.
Quarterly Statements: Every three months, if any transactions are made that
affect your share balance, this statement reports on your account activity
during the quarter (including any reinvestment of dividends). This statement
also provides year-to-date information.
Liberty Financial Investments Investor Opportunities: Mailed with your quarterly
account statements, this newsletter highlights timely investment strategies,
portfolio manager commentary and shareholder service updates.
Tax Forms and Year-End Tax Guide: Easy-to-use forms and timely information are
designed to make tax reporting simpler. (Usually mailed in January.)
Average Cost Basis Statements: If you sold or exchanged shares during the year,
this statement may help you calculate your gain/loss for tax purposes. (Usually
mailed in February.)
30
<PAGE>
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Colonial Minnesota Tax-Exempt Fund is:
Colonial Investors Service Center, Inc.
P.O. Box 1722
Boston, MA 02105-1722
1-800-345-6611
Colonial Minnesota 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 Minnesota Tax-Exempt
Fund. This report may also be used as sales literature when preceded or
accompanied by the current prospectus which provides details of sales charges,
investment objectives, and operating policies of the Fund.
31
<PAGE>
- --------------------------------------------------------------------------------
TRUSTEES
ROBERT J. BIRNBAUM
Retired (formerly Special Counsel, Dechert, Price & Rhoads; President and Chief
Operating Officer, New York 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, Nessen, Kamin & Frankel)
JAMES E. GRINNELL
Private Investor (formerly Senior Vice President-Operations, The Rockport
Company)
WILLIAM D. IRELAND, JR.
Retired (formerly Chairman of the Board, Bank of New England-Worcester)
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 and Chief Executive Officer, Hannaford
Bros. Co.)
JOHN J. NEUHAUSER
Dean, Boston College School of Management
GEORGE L. SHINN
Financial Consultant (formerly Chairman, Chief Executive Officer and Consultant,
The First Boston Corporation)
ROBERT L. SULLIVAN
Retired Partner, Peat Marwick Main & Co. (formerly Management Consultant,
Saatchi and Saatchi Consulting Ltd. and Principal and International Practice
Director, Management Consulting, Peat Marwick Main & Co.)
SINCLAIR WEEKS, JR.
Chairman of the Board, Reed & Barton Corporation
[LOGO] LIBERTY FINANCIAL INVESTMENTS, INC. (C) 1998
Distributor for Colonial Funds, Stein Roe Advisor Funds and Newport Funds
One Financial Center, Boston, MA 02111-2621
Visit us at www.libertyfunds.com MN-02/793E-0198 M (3/98) 98/234
- --------------------------------------------------------------------------------
