<PAGE>
- -----------------------------------------------------
COLONIAL MICHIGAN TAX-EXEMPT FUND Semiannual report
- -----------------------------------------------------
July 31, 1998
[graphic omitted]
----------------------------
Not FDIC May Lose Value
Insured No Bank Guarantee
----------------------------
<PAGE>
COLONIAL MICHIGAN TAX-EXEMPT FUND HIGHLIGHTS
FEBRUARY 1, 1998 - JULY 31, 1998
INVESTMENT OBJECTIVE: Colonial Michigan 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 Michigan state personal income tax and
opportunities for long-term appreciation from a portfolio primarily invested in
investment-grade municipal bonds. Fund shares are also intended to be exempt
from the Michigan intangibles tax.
PORTFOLIO MANAGER COMMENTARY: "The Fund was positioned for a declining interest
rate environment. While interest rates did decline modestly during parts of the
period, they experienced significant variability. Although the lack of strong
market direction restrained performance of the portfolio's more interest rate
sensitive bonds, Michigan's increasingly diversified economy, responsible fiscal
management and significant financial reserves have helped support the prices of
many of the Fund's holdings." - William Loring
COLONIAL MICHIGAN 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) $0.199 $0.171 $0.182
- -----------------------------------------------------------------------------
SEC yields on 7/31/98(2) 3.94% 3.37% 3.67%
- -----------------------------------------------------------------------------
Taxable-equivalent SEC yields(3) 6.82% 5.84% 6.36%
- -----------------------------------------------------------------------------
Six-month total returns, assuming 1.24% 0.84% 1.00%
reinvestment of all distributions and no
sales charge or contingent deferred
sales charge (CDSC)(4)
- -----------------------------------------------------------------------------
Net asset value per share on 7/31/98 $7.21 $7.21 $7.21
Quality Breakdown(5) (as of 7/31/98) Top Five Sectors(5) (as of 7/31/98)
- -----------------------------------------------------------------------------
AAA 58.5% Hospitals 18.6%
AA 14.4% Local General Obligations 17.4%
A 14.8% Investor Owned 9.1%
BBB 7.0% Refunded 6.1%
Non-rated 3.5% Water & Sewer 5.4%
Short-term Obligations 1.8%
(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 per share at the end of the period. If the Advisor or
Distributor had not waived or borne certain Fund expenses, SEC yields would
have been 3.88% for Class A shares, 3.31% for Class B shares and 3.31% for
Class C shares.
(3) Taxable-equivalent SEC yields are based on the combined maximum effective
42.3% federal and Michigan income tax rates.
(4) Performance results reflect any voluntary waivers or reimbursements of Fund
expenses by the Advisor or Distributor. Absent these waivers or
reimbursement arrangements, performance results would have been lower.
(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.
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.
<PAGE>
PRESIDENT'S MESSAGE
TO FUND SHAREHOLDERS
[Photo of Stephen E. Gibson]
In June 1998, Harold Cogger retired as president of Colonial Michigan 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 Michigan 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. In response, bond prices rose. 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 early on in the period. 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 this
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 toward the end of July.
For investors seeking competitive levels of tax-free income and the potential
for long-term price appreciation, Colonial Michigan Tax-Exempt Fund remains a
suitable option for their investment portfolio.
The following report will provide you with more specific information on your
Fund's performance and the municipal bond market. Thank you for choosing
Colonial Michigan Tax-Exempt Fund and for giving us the opportunity to serve
your investment needs.
Respectfully,
/s/ Stephen E. Gibson
Stephen E. Gibson
President
September 10, 1998
Because market and economic conditions change frequently, there can be no
assurance that the trends described above or on the following pages will
continue.
<PAGE>
PORTFOLIO MANAGEMENT REPORT
WILLIAM LORING is portfolio manager of Colonial Michigan Tax-Exempt Fund. Mr.
Loring is vice president of Colonial Management Associates, Inc. and has managed
various Colonial municipal bond funds since 1986.
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, and municipal bonds
became more attractive to Treasury bonds, investor demand increased again,
pushing prices back up during the second half of the period.
FUND 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 low-income and 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 low-income and non-callable
holdings.
For the six months ended July 31, 1998, the total return for Class A shares was
1.24%, based on net asset value.
MICHIGAN ECONOMY CONTINUES TO DIVERSIFY
Michigan continued to make progress towards a more diversified economy. Various
types of service-oriented employment such as business services, engineering and
software development have increased in importance during the past decade.
However, automotive-related businesses still account for about 14% of the
State's employment base. This sector is particularly vulnerable to the economic
crisis in Southeast Asia, as demand for relatively expensive American-produced
autos may decline in favor of Asian imports. This threat to Michigan's economic
expansion may restrict tax revenue growth in the months ahead. We have
emphasized both industrial and geographic diversification among the portfolio's
investments, to lessen any potential overdependence on sectors or regions with
strong relationships to the automotive industry. Furthermore, we have
significant holdings of revenue-backed bonds that should be less affected by
declining tax receipts. We also believe that Michigan's conservative fiscal
management, large budget surplus and substantial cash reserves may provide a
cushion for a potential economic downturn.
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 do anticipate some variability in
interest rates in the months to come. Therefore, we will continue to actively
manage all aspects of the Fund to decrease the potential negative effects of
rate volatility.
<PAGE>
COLONIAL MICHIGAN TAX-EXEMPT FUND INVESTMENT PERFORMANCE
VS. THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
Growth of $10,000 from 7/31/88 to 7/31/98
Based on NAV and POP for Class A Shares
NAV POP LEHMAN
- --------------------------------------------------------------
Jul 31, 88 $10,000 $ 9,525 $10,000
Oct 31, 88 10,332 9,841 10,369
Jan 31, 89 10,592 10,089 10,594
Apr 28, 89 10.696 10,188 10,697
Jul 31, 89 10,851 10,335 11,218
Oct 31, 89 10,892 10,374 11,210
Jan 31, 90 11,005 10,482 11,445
Apr 30, 90 10,953 10,453 11,467
Jul 31, 90 11,471 10,926 11,995
Oct 31, 90 11,350 10,811 12,042
Jan 31, 91 11,776 11,217 12,503
Apr 30, 91 12,118 11,542 12,785
Jul 31, 91 12,318 11,733 13,043
Oct 31, 91 12,689 12,086 13,507
Jan 31, 92 12,968 12,352 13,867
Apr 30, 92 13,074 12,453 14,000
Jul 31, 92 13,852 13,194 14,835
Oct 30, 92 13,561 12,917 14,641
Jan 29, 93 14,270 13,592 15,230
Apr 30, 93 14,715 14,016 15,772
Jul 30, 93 14,981 14,269 16,146
Oct 29, 93 15,461 14,726 16,702
Jan 31, 94 15,863 15,110 17,098
Apr 29, 94 14,842 14,137 16,112
Jul 29, 94 15,232 14,509 16,449
Oct 31, 94 14,714 14,015 15,975
Jan 31, 95 15,282 14,556 16,489
Apr 28, 95 15,804 15,053 17,184
Jul 31, 95 15,865 15,112 17,744
Oct 31, 95 16,612 15,823 18,345
Jan 31, 96 17,289 16,467 18,971
Apr 30, 96 16,782 15,985 18,550
Jul 31, 96 17,152 16,337 18,914
Oct 31, 96 17,523 16,691 19,391
Jan 31, 97 17,694 16,854 19,700
Apr 30, 97 17,712 16,871 19,780
Jul 31, 97 18,848 17,952 20,854
Oct 31, 97 18,972 18,071 21,038
Jan 30, 98 19,629 18,697 21,692
Apr 30, 98 19,454 18,530 21,620
Jul 31, 98 19,873 18,929 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
- ---------------------------------------------------------------------------
$19,873 $18,929 $19,005 $19,005 $19,782 $19,782
- ---------------------------------------------------------------------------
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 5.44% 0.43% 4.63% (0.37)% 4.96% 3.96%
- -----------------------------------------------------------------------------
5 YEARS 5.81 4.79 5.02 4.69 5.72 5.72
- -----------------------------------------------------------------------------
10 YEARS 7.11 6.59 6.63 6.63 7.06 7.06
- -----------------------------------------------------------------------------
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 charge (CDSC). Public
offering price (POP) returns include the maximum sales charge of 4.75% for Class
A shares. 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 reimbursements 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 dates 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 date
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 in an index.
<PAGE>
INVESTMENT PORTFOLIO
JULY 31, 1998 (UNAUDITED, IN THOUSANDS)
MUNICIPAL BONDS - 99.8% PAR VALUE
- ----------------------------------------------------------------------------
EDUCATION - 5.3%
EDUCATION - 3.3%
Oakland County Economic Development Corp.,
Cranbrook Educational Community Project, Series B,
5.000% 11/01/17 $ 1,000 $ 985
Western Michigan University,
Series 1993-A,
5.000% 07/15/21 (a) 750 729
----------
1,714
----------
STUDENT LOAN - 2.0%
Higher Education Student Loan Authority,
Series 17-A,
5.450% 06/01/07 1,000 1,045
----------
- ----------------------------------------------------------------------------
HEALTHCARE - 21.5%
HOSPITALS- 18.8%
Chippewa County Hospital Finance Authority,
County War Memorial Hospital, Series B,
5.625% 11/01/14 500 504
Dickinson County,
Memorial Hospital System,
Series 1994,
8.125% 11/01/24 550 636
Kalamazoo Hospital Finance Authority:
Bronson Methodist Hospital,
Series 1992-A,
6.250% 05/15/12 1,500 1,655
Borgess Medical Center,
Series 1994-A,
6.250% 06/01/14 1,785 2,048
Petosky Hospital Finance Authority,
Northern Michigan Hospitals, Inc.,
Series 1998,
5.000% 11/15/18 1,000 971
Royal Oak Hospital Finance Authority,
William Beaumont Hospital,
Series 1993-G,
5.250% 11/15/19 2,000 1,985
Saginaw Hospital Finance Authority,
Saginaw General Hospital,
Series 1989,
7.625% 10/01/19 175 184
State Hospital Finance Authority:
Central Michigan Community Hospital,
Series 1993-A,
6.000% 10/01/08 500 527
Crittenton Hospital,
Series 1992-A,
6.700% 03/01/07 750 817
Detroit Medical Center,
Series 1988-A,
8.125% 08/15/12 50 51
Tawas City Finance Authority,
St. Joseph Health System,
Series 1998-A,
5.600% 02/15/13 250 260
----------
9,638
----------
LIFECARE - 0.5%
Strategic Holland Home,
5.750% 11/15/18 (b) 250 247
----------
NURSING HOMES - 2.2%
Cheboygan County Economic
Development Corp.,
Metro Health Foundation Project, Series 1993,
10.000% 11/01/22 600 600
Warren Economic Development Corp,
Autumn Woods Project,
Series 1992,
6.900% 12/20/22 500 530
----------
1,130
----------
- ----------------------------------------------------------------------------
HOUSING - 7.8%
MULTI-FAMILY - 4.5%
Grand Rapids Housing Finance Authority,
Series A,
7.625% 09/01/23 1,500 1,645
State Housing Development Authority:
Series 1990-A,
7.700% 04/01/23 500 535
Series 1991-B,
7.050% 10/01/12 130 140
----------
2,320
----------
SINGLE FAMILY - 3.3%
State Housing Development Authority,
Series 1994-D,
6.850% 06/01/26 1,580 1,692
----------
- ----------------------------------------------------------------------------
OTHER - 9.7%
POOL/BOND BANK - 3.6%
State Municipal Bond Authority,
Local Government Loan Program,
Series 1992-D,
6.650% 05/01/12 1,000 1,086
State Municipal Bond Authority,
Revolving Fund,
5.125% 10/01/20 750 743
----------
1,829
----------
REFUNDED/ESCROWED (C) - 6.1%
Battle Creek,
7.650% 05/01/22 750 886
Redford Township Building Authority,
Series 1992,
6.500% 11/01/13 675 744
Rockford Public Schools,
Series 1990,
7.375% 05/01/19 250 267
State Hospital Finance Authority,
Daughters of Charity-Providence,
Series 1991,
7.000% 11/01/21 1,000 1,106
Virgin Islands Public Finance
Authority,
Series 1992-A,
7.000% 10/01/02 125 139
----------
3,142
----------
- ----------------------------------------------------------------------------
OTHER REVENUE - 1.6%
HOTELS
Detroit Economic Development Corp.,
E.H. Assoc. Limited Partnership,
Series 1992,
7.000% 06/01/12 750 803
----------
- ----------------------------------------------------------------------------
TAX-BACKED - 35.2%
LOCAL APPROPRIATED - 3.9%
Wayne County Building Authority,
Series 1996-A,
5.250% 06/01/16 2,000 2,020
----------
LOCAL GENERAL OBLIGATIONS - 17.6%
Lincoln Park School District:
5.000% 05/01/20 1,000 975
Series 1998,
5.000% 05/01/18 1,000 983
Okemos Public School District,
Series 1993,
(d) 05/01/12 500 253
Parchment School District,
Series 1998,
5.000% 05/01/25 (b) 1,000 983
Redford Unified School District,
Series 1997,
5.000% 05/01/22 1,000 989
Rochester Community School District,
5.000% 05/01/19 1,000 997
St. Johns Public School District,
5.000% 05/01/21 1,000 989
Western Townships Utilities
Authority,
Series 1989,
8.200% 01/01/18 1,000 1,037
Williamston Community School District,
Series 1996,
5.500% 05/01/25 1,725 1,828
----------
9,034
----------
SPECIAL NON-PROPERTY TAX - 2.3%
Commonwealth of Puerto Rico
Highway & Transportation Authority, Series Y,
6.250% 07/01/14 1,000 1,156
----------
SPECIAL PROPERTY TAX - 4.9%
Detroit Downtown Development Authority,
Area No. 1 Projects:
Series 1996-C,
6.200% 07/01/17 1,000 1,086
Series 1996-D,
6.500% 07/01/10 700 758
Oakland County,
Preeble Creek Drainage District,
5.000% 05/01/11 100 101
Romulus Tax Increment
Finance Authority,
Series 1994,
6.750% 11/01/19 500 551
----------
2,496
----------
STATE APPROPRIATED - 4.2%
Commonwealth of Puerto Rico
Public Buildings Authority:
Series 1993-M,
5.700% 07/01/16 750 784
Series 1995-A,
6.250% 07/01/14 1,200 1,388
----------
2,172
----------
STATE GENERAL OBLIGATIONS - 2.3%
Commonwealth of Puerto Rico
Aqueduct & Sewer Authority,
6.250% 07/01/12 1,000 1,153
----------
- ----------------------------------------------------------------------------
TRANSPORTATION - 4.0%
AIRPORT
Wayne Charter County,
Detroit Metropolitan Airport:
Series 1994-B,
6.125% 12/01/24 1,000 1,078
Series 1998-A,
5.000% 12/01/22 1,000 959
----------
2,037
----------
- ----------------------------------------------------------------------------
UTILITY - 14.7%
INVESTOR OWNED - 9.3%
St. Clair County Economic
Development Corp.,
Detroit Edison Co., Series 1993-AA,
6.400% 08/01/24 2,000 2,239
State Strategic Fund,
Detroit Edison Co.,
Series BB,
7.000% 05/01/21 2,000 2,499
----------
4,738
----------
WATER & SEWER - 5.4%
Detroit Water Supply System:
Series A,
5.750% 07/01/12 1,310 1,434
Series 1995-B,
5.550% 07/01/12 (a) 1,250 1,343
----------
2,777
----------
TOTAL MUNICIPAL BONDS (cost of $47,733) 51,143
----------
OPTIONS - 0.0% CONTRACTS VALUE
- ----------------------------------------------------------------------------
September 1998 Treasury Bond Puts,
Strike price 120, expiration 8/22/98 3,000 $ 2
September 1998 Treasury Bond Calls,
Strike price 124, expiration 8/22/98 3,500 10
----------
TOTAL OPTIONS (cost of $62) 12
----------
TOTAL INVESTMENTS - 99.8% (cost of $47,795) (e) 51,155
----------
SHORT-TERM OBLIGATIONS - 1.4% PAR
- ----------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES (f)
CA Newport Beach Hoag Hospital,
3.450% 10/01/22 300 300
IL State Educational Facilities Authority,
3.800% 12/01/25 100 100
NM Farmington,
Arizona Public Service Co.,
Four Corners Project, Series 1994-B,
3.650% 09/01/24 200 200
NY Niagara Mohawk, Series 1985-A,
3.600% 07/01/15 100 100
----------
TOTAL SHORT-TERM OBLIGATIONS 700
----------
OTHER ASSETS & LIABILITIES, NET - (1.2)% (630)
- ----------------------------------------------------------------------------
NET ASSETS - 100.0% $ 51,225
==========
NOTES TO INVESTMENT PORTFOLIO:
- ----------------------------------------------------------------------------
(a) These securities, or a portion thereof, with a total market value of $1,435,
are being used to collateralize the delayed delivery purchases indicated in
note (b) below and open calls on futures.
(b) These securities have been purchased on a delayed delivery basis for
settlement at a future date beyond the customary settlement time.
(c) The Fund has been informed that each issuer has placed direct obligations of
the U.S. Government in an irrevocable trust, solely for the payment of the
interest and principal.
(d) Zero coupon bond.
(e) Cost for federal income tax purposes is the same.
(f) Variable rate demand notes are considered short-term obligations. Interest
rates change periodically on specified dates. These securities are payable
on demand and are secured by either letters of credit or other credit
support agreements from banks. The rates listed are as of July 31, 1998.
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 $47,795) $ 51,155
Short-term obligations 700
---------
51,855
Receivable for:
Interest $ 642
Fund shares sold 19
Other 6 667
------- ---------
Total Assets 52,522
LIABILITIES
Payable for:
Investments purchased 1,227
Distributions 68
Accrued:
Deferred Trustees fees 1
Other 1
-------
Total Liabilities 1,297
---------
NET ASSETS $ 51,225
========
Net asset value & redemption price per share -
Class A ($37,748/5,233) $7.21(a)
========
Maximum offering price per share - Class A
($7.21/0.9525) $7.57(b)
========
Net asset value & offering price per share -
Class B ($12,525/1,736) $7.21(a)
========
Net asset value & offering price per share -
Class C ($952/132) $7.21(a)
========
COMPOSITION OF NET ASSETS
Capital paid in $ 48,370
Overdistributed net investment income (30)
Accumulated net realized loss (475)
Net unrealized appreciation 3,360
---------
$ 51,225
========
(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 $ 1,451
EXPENSES
Management fee $ 129
Service fee 39
Distribution fee - Class B 47
Distribution fee - Class C 2
Transfer agent fee 39
Bookkeeping fee 14
Trustees fee 5
Audit fee 10
Legal fee 3
Custodian fee 2
Registration fee 8
Reports to shareholders 4
Other 3
-----
305
Fees waived by the Adviser (23)
Fees waived by the Distributor - Class C (1) 281
----- ------
Net Investment Income 1,170
-------
NET REALIZED & UNREALIZED GAIN (LOSS) ON PORTFOLIO POSITIONS
Net realized gain (loss) on:
Investments 307
Closed futures contracts (143)
-----
Net Realized Gain 164
Net unrealized depreciation
during the period (711)
-------
Net Loss (547)
-------
Increase in Net Assets from Operations $ 623
=======
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 1998(a)
Operations:
Net investment income $ 1,170 $ 2,473
Net realized gain 164 665
Net unrealized appreciation (depreciation) (711) 2,110
-------- --------
Net Increase from Operations 623 5,248
Distributions:
From net investment income - Class A (927) (1,914)
In excess of net investment income - Class A (33) -
In excess of net realized gains - Class A (92) -
From net investment income - Class B (257) (544)
In excess of net investment income - Class B (9) -
In excess of net realized gains - Class B (30) -
From net investment income - Class C (12) (2)
In excess of net investment income - Class C (1) -
In excess of net realized gains - Class C (2) -
-------- --------
(740) 2,788
-------- --------
Fund Share Transactions:
Receipts for shares sold - Class A 614 1,091
Value of distributions reinvested - Class A 668 1,079
Cost of shares repurchased - Class A (2,023) (4,816)
-------- --------
(741) (2,646)
-------- --------
Receipts for shares sold - Class B 323 649
Value of distributions reinvested - Class B 162 263
Cost of shares repurchased - Class B (542) (2,213)
-------- --------
(57) (1,301)
-------- --------
Receipts for shares sold - Class C 845 100
Value of distributions reinvested - Class C 14 2
Cost of shares repurchased - Class C (9) -
-------- --------
850 102
-------- --------
Net Increase (Decrease) from Fund Share
Transactions 52 (3,845)
-------- --------
Total Decrease (688) (1,057)
NET ASSETS
Beginning of period 51,913 52,970
-------- --------
End of period (net of overdistributed
and including undistributed net investment
income of $30 and $32, respectively) $ 51,225 $ 51,913
======== ========
(a) Class C shares were initially offered on August 1, 1997.
Continued on next page.
See notes to financial statements.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS - CONT.
(Unaudited)
Six months
ended Year ended
July 31 January 31
-------- --------
(in thousands) 1998 1998(a)
NUMBER OF FUND SHARES
Sold - Class A 85 154
Issued for distributions reinvested - Class A 92 153
Repurchased - Class A (279) (684)
-------- --------
(102) (377)
-------- --------
Sold - Class B 45 93
Issued for distributions reinvested - Class B 22 37
Repurchased - Class B (75) (313)
-------- --------
(8) (183)
-------- --------
Sold - Class C 117 14
Issued for distributions reinvested - Class C 2 (b)
Repurchased - Class C (1) -
-------- --------
118 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 Michigan 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 Michigan state personal
income tax and 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 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
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 $3,410 on sales of the Fund's
Class A shares and received contingent deferred sales charges (CDSC) of none,
$6,240, 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% 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.
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 $5,352,353 and
$3,424,512, 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 $3,413,534
Gross unrealized depreciation (53,198)
----------
Net unrealized appreciation $3,360,336
==========
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>
<TABLE>
<CAPTION>
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
----------- ----------- -----------
<S> <C> <C> <C>
Net asset value - Beginning of period $ 7.320 $ 7.320 $ 7.320
----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income(a) 0.173 0.145 0.156(b)
Net realized and unrealized gain (loss) (0.084) (0.084) (0.084)
----------- ----------- -----------
Total from Investment Operations 0.089 0.061 0.072
----------- ----------- -----------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.175) (0.148) (0.158)
In excess of net investment income (0.006) (0.005) (0.006)
In excess of net realized gains (0.018) (0.018) (0.018)
----------- ----------- -----------
Total Distributions Declared to Shareholders (0.199) (0.171) (0.182)
----------- ----------- -----------
Net asset value - End of period $ 7.210 $ 7.210 $ 7.210
=========== =========== ===========
Total return(c)(d)(e) 1.24% 0.84% 1.00%
=========== =========== ===========
RATIOS TO AVERAGE NET ASSETS
Expenses(f)(g) 0.90% 1.65% 1.35%(b)
Net investment income(f)(g) 4.74% 3.99% 4.29%(b)
Fees and expenses waived or borne by the Adviser(f)(g) 0.09% 0.09% 0.09%
Portfolio turnover(e) 7% 7% 7%
Net assets at end of period (000) $ 37,748 $ 12,525 $ 952
(a) Net of fees and expenses waived or borne by
the Adviser which amounted to:
$ 0.003 $ 0.003 $ 0.003
(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
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
Selected data for a share of each class outstanding throughout each period are as follows:
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 $ 6.930 $ 6.930 $ 7.200 $ 7.130 $
7.130
-------- ------- ------- -------
- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income(a) 0.352 0.299 0.156(c) 0.354
0.302
Net realized and unrealized gain (loss) 0.386 0.386 0.122 (0.198)
(0.198)
-------- ------- ------- -------
- -------
Total from Investment Operations 0.738 0.685 0.278 0.156
0.104
-------- ------- ------- -------
- -------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.348) (0.295) (0.158) (0.354)
(0.303)
In excess of net investment income -- -- -- (0.002)
(0.001)
-------- ------- ------- -------
- -------
Total Distributions Declared to Shareholders (0.348) (0.295) (0.158) (0.356)
(0.304)
-------- ------- ------- -------
- -------
Net asset value - End of period $ 7.320 $ 7.320 $ 7.320 $ 6.930 $
6.930
======== ======= ======= =======
=======
Total return(d)(e) 10.93% 10.11% 3.92%(f)
2.35% 1.58%
======== ======= ======= =======
=======
RATIOS TO AVERAGE NET ASSETS
Expenses 0.90%(g) 1.65%(g) 1.35%(c)(g)(h)
0.89%(g) 1.64%(g)
Net investment income 4.95%(g) 4.20%(g) 4.35%(c)(g)(h)
5.12%(g) 4.37%(g)
Fees and expenses waived or borne by the Adviser 0.13%(g) 0.13%(g) 0.15%(g)(h)
0.12%(g) 0.12%(g)
Portfolio turnover 32% 32% 32%
25% 25%
Net assets at end of period (000) $ 39,048 $12,762 $ 103 $39,606
$13,364
(a) Net of fees and expenses waived or borne by the Adviser which amounted to:
$ 0.009 $ 0.009 $ 0.010 $ 0.008 $
0.008
(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.
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS - CONT.
Year ended January 31
----------------------------------------------------------
1996 1995
Class A Class B Class A Class B
------- ------- ------- -------
$ 6.660 $ 6.660 $ 7.340 $ 7.340
------- ------- ------- -------
0.368 0.317 0.410 0.359
0.484 0.484 (0.689) (0.689)
------- ------- ------- -------
0.852 0.801 (0.279) (0.330)
------- ------- ------- -------
(0.382) (0.331) (0.401) (0.350)
- - - -
------- ------- ------- -------
(0.382) (0.331) (0.401) (0.350)
------- ------- ------- -------
$ 7.130 $ 7.130 $ 6.660 $ 6.660
======= ======= ======= =======
13.13% 12.30% (3.66)% (4.39)%
======= ======= ======= =======
0.80%(g) 1.55%(g) 0.62% 1.37%
5.34%(g) 4.59%(g) 6.08% 5.33%
0.25%(g) 0.25%(g) 0.32% 0.32%
48% 48% 40% 40%
$43,308 $15,236 $41,844 $ 14,144
$ 0.017 $ 0.017 $ 0.022 $ 0.022
(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.
<PAGE>
FINANCIAL HIGHLIGHTS
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 $ 6.970 $ 6.970
-------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income(a) 0.404 0.351
Net realized and unrealized gain (loss) 0.356 0.356
-------- -------
Total from Investment
Operations 0.760 0.707
-------- -------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.390) (0.337)
-------- -------
Net asset value -
End of period $ 7.340 $ 7.340
======== =======
Total return(b)(c) 11.16% 10.36%
======== =======
RATIOS TO AVERAGE NET ASSETS
Expenses 0.66% 1.41%
Net investment income 5.61% 4.86%
Fees and expenses waived or borne by
the Adviser 0.33% 0.33%
Portfolio turnover 7% 7%
Net assets at end
of period (000) $ 45,570 $15,030
(a) Net of fees and expenses waived or borne by the Adviser which amounted to:
$ 0.024 $ 0.024
(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 and Distributor not waived or reimbursed a portion of
expenses, total return would have been reduced.
<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 us 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 Funds Distributor, 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 Funds Distributor 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 Funds Distributor. 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.
<PAGE>
HOW TO REACH US
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.
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 Funds Distributor,
Inc., call Monday to Friday, 8:30 a.m. to 6:30 p.m. ET.
BY MAIL
LIBERTY FUNDS SERVICES, INC.
P.O. BOX 1722
BOSTON, MA 02105-1722
<PAGE>
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Colonial Michigan Tax-Exempt Fund is:
Liberty Funds Services, Inc.*
P.O. Box 1722
Boston, MA 02105-1722
1-800-345-6611
Colonial Michigan 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 Michigan 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 and with the most
recent copy of Liberty Funds Distributor's Performance Update.
* 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
Liberty Funds Distributor, Inc. (C) 1998
One Financial Center, Boston, MA 02111-2621, 1-800-426-3750
Visit us at www.libertyfunds.com
MI-03/727F-09 98 (9/98) 98/931
