<PAGE> 1
- --------------------------------- --------------------------------
COLONIAL NEW YORK TAX-EXEMPT FUND Semiannual Report
- --------------------------------- --------------------------------
July 31, 1999
[PICTURE OF BUILDING]
<PAGE> 2
Table of Contents
1 Highlights
2 Portfolio Manager's Report
4 Performance
5 Portfolio of Investments
8 Financial Statements
10 Notes to Financial Statements
12 Financial Highlights
- --------------------------------------------------------------------------------
COLONIAL NEW YORK TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
[PHOTOGRAPH OF
Mr. Stephen E. Gibson]
PRESIDENT'S MESSAGE
Dear Shareholder:
During the six months ended July 31, 1999, the bond market experienced
significant volatility. Over the period, the yield on 30-year Treasury bonds
increased almost a full percentage point in response to investors' fears that
strong economic growth in the U.S., in concert with stabilizing economies
overseas, would result in higher inflation. Interest rates rose on all types of
fixed-income investments, which resulted in falling bond prices. Fortunately,
tax-exempt bonds lost less value than Treasurys as prices fell.
These challenging bond market conditions were reflected in the Fund's negative
total return. However, while past performance cannot predict future results, it
is important to remember that the Fund has provided above-average returns for
the one-, three- and five-year periods ended July 31, 1999, according to Lipper,
Inc.(1)
The following report will provide you with more specific information about
your Fund's performance and the strategies employed during the period. As
always, we thank you for choosing Colonial New York Tax-Exempt Fund and for
giving us the opportunity to serve your investment needs.
Respectfully,
/s/ Stephen E. Gibson
- ------------------------------
Stephen E. Gibson
President
September 14, 1999
(1) Lipper, Inc., a widely respected data provider in the industry, calculates
an average total return for mutual funds with similar investment objectives as
the Fund. The total return calculated for the Lipper New York Municipal Debt
Funds category was negative 2.77% for the six months ended July 31, 1999. The
Fund's Class A shares were ranked in the third quartile for the six-month
period (55 out of 101), in the first quartile for the one year (14 out of 97),
in the first quartile for the three years (21 out of 87), in the second
quartile for the five years (21 out of 64) and in the third quartile for the 10
years (18 out of 32). Rankings do not include sales charges. Performance for
different share classes will vary with fees associated with each class. Past
performance cannot predict future results.
Because economic and market conditions change frequently, there can be no
assurance that the trends described in this report will continue or come to
pass.
- ----------------------------
Not FDIC | May Lose Value
Insured |------------------
| No Bank Guarantee
- ----------------------------
<PAGE> 3
- --------------------------------------------------------------------------------
HIGHLIGHTS
- --------------------------------------------------------------------------------
* INTEREST RATE VOLATILITY CHALLENGED BOND MARKET INVESTORS.
Long-term interest rates rose more than three-quarters of a percentage
point to 6.1% between February and the end of July in response to fears
that strong economic growth in the U.S. and signs of increased growth
worldwide could cause higher inflation.
* FEDERAL RESERVE BOARD PREEMPTIVELY RAISED SHORT-TERM RATES.
Midway through the period, Federal Reserve Board policy makers switched
from a neutral stance to one biased towards raising interest rates, causing
bond prices to fall further. As expected, the Board acted in June,
increasing short-term interest rates by one-quarter point in a preemptive
strike against inflation.
* TAX-EXEMPT BONDS OUTPERFORMED TREASURYS AS INTEREST RATES ROSE.
Within the municipal bond market, prices fell in sympathy with the Treasury
market during the period. However, higher yields generated increased demand
for tax-exempt bonds. With supply low, municipal bonds outperformed
Treasurys, losing less of their market value as interest rates rose.
TREASURY VS. MUNICIPAL BOND PERFORMANCE
Change in value of $10,000 from 1/31/99 - 7/31/99
[LINE GRAPH]
<TABLE>
<CAPTION>
Municipal Bond 30-Year Treasury Bond
-------------- ---------------------
<S> <C> <C>
1/31/99 10,000 10,000
2/28/99 9,290 9,956
3/31/99 9,250 9,970
4/30/99 9,217 9,995
5/31/99 9,075 9,937
6/30/99 8,899 9,794
7/31/99 8,805 9,829
</TABLE>
Performance of the 30-year Treasury bond is illustrated by the Salomon 30-Year
Treasury Bond Index, a broad-based, unmanaged index that tracks the performance
of the 30-Year on-the-run Treasury market. Performance of municipal bonds is
illustrated by the Lehman Brothers Municipal Bond Index, a broad-based,
unmanaged index that tracks the performance of the municipal bond market. Unlike
mutual funds, indexes are not investments and do not incur fees or expenses. It
is not possible to invest directly in an index.
NET ASSET VALUE PER SHARE ON 7/31/99
Class A $7.11
Class B $7.11
Class C $7.11
DISTRIBUTIONS DECLARED PER SHARE FROM 2/1/99 TO 7/31/99
Class A $0.170
Class B $0.143
Class C $0.154
A portion of the Fund's income may be subject to the alternative minimum tax.
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 is taxable
when distributed.
30-DAY SEC YIELDS ON 7/31/99
Class A 4.24%
Class B 3.68%
Class C 3.98%
30-day SEC yields reflect the portfolio's earning power net of expenses,
expressed as an annualized percentage of the public offering price per share. If
the Advisor or its affiliates had not borne certain expenses, the SEC yield
would have been 4.08% for Class A shares, 3.51% for Class B shares and 3.47% for
Class C shares.
TAXABLE-EQUIVALENT SEC YIELDS ON 7/31/99
Class A 7.87%
Class B 6.83%
Class C 7.38%
Taxable-equivalent SEC yields are based on the combined maximum effective 46.1%
federal and New York state and city income tax rate. This tax rate does not
reflect the phase out of exemptions or the reduction of otherwise allowable
deductions which occurs when Adjusted Gross Income exceeds certain levels.
1
<PAGE> 4
SEMIANNUAL REPORT: COLONIAL NEW YORK TAX-EXEMPT FUND
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PORTFOLIO MANAGER'S REPORT
- --------------------------------------------------------------------------------
Quality Breakdown as of 7/31/99
AAA 45.5%
AA 9.2%
A 25.5%
BBB 10.3%
Non-rated 8.7%
Short-term obligations 0.8%
Quality breakdowns are calculated as a percentage of total investments,
including short-term obligations. Ratings shown in the Quality Breakdowns
represent the highest rating assigned to a particular bond by one of the
following respected rating agencies: Standard & Poor's, Moody's or Fitch.
Because the Fund is actively managed, there can be no guarantee the Fund will
continue to maintain this quality breakdown in the future.
BOUGHT
NYC MUNICIPAL WATER FINANCE AUTHORITY
We purchased NYC Municipal Water Finance Authority (0.85% of net assets), which
is secured by revenues generated from the city's water and sewer system. We
believe the bond represents growth potential as the state's economy continues to
grow.
MARKET VOLATILITY PROMPTED DEFENSIVE STRATEGIES
As the period began, the Fund was structured to take advantage of declining
interest rates. However, during the past six months a series of government
reports detailing the economy's strength caused investors to become increasingly
nervous about inflation and potentially higher interest rates -- both negatives
for bond prices. To offset rising interest rates, we took steps to cushion the
Fund's share price. As the economy grew strongly throughout the first part of
the period, we reduced the Fund's sensitivity to the negative impact of rising
interest rates.
TOTAL RETURN CUSHIONED BY DEFENSIVE MEASURES
During the six-month period, the Fund's Class A shares generated a total return
of negative 2.82%, without a sales charge. This performance echoes the difficult
fixed-income conditions that prevailed throughout the period. Although the
Fund's return was cushioned by the defensive actions taken during the period,
its overall structure reflected our long-term investment outlook for modest
economic growth, low inflation and declining interest rates.
NEW YORK'S ECONOMY DRIVEN BY DOWNSTATE FINANCIAL SERVICES INDUSTRY
Continued strength in business and financial services -- particularly on Wall
Street -- resulted in employment gains and accelerating real income growth that
substantially boosted the state's budget surplus. In response, the portfolio has
made a substantial investment in state-appropriated bonds that tend to have good
price appreciation potential in strong budget environments. In contrast, the
decline of upstate New York's manufacturing-based economy, which was fueled by
less expensive overseas labor, continued. However, over the past year,
manufacturing has seen some improvement in response to a strong national
economy. Despite recent economic strength, New York's lack of employment
diversity and a significant reliance on financial services -- which has begun
consolidating and reducing jobs -- represents potential vulnerability in the
event of a bear market and limits future growth potential.
FAVORABLE LONG-TERM MARKET OUTLOOK
We have a favorable long-term market outlook. Although we expect continued
interest rate volatility and some increase in rates over the next few months, we
believe that the Federal Reserve Board's proactive approach should have a
positive
2
<PAGE> 5
long-term effect on the bond market by reducing economic growth to a sustainable
level and keeping inflation in check. These conditions should create a more
favorable long-term environment for fixed-income securities, including municipal
bonds, and we expect to actively manage the portfolio's interest rate
sensitivity as market conditions warrant.
While our outlook is for continued economic growth in New York, we believe
favorable conditions are likely to depend on the success of the national economy
and Wall Street, as well as the state's ability to increase its competitiveness
and employment growth.
/s/ Gary Swayze
- -----------------------
Gary Swayze
GARY SWAYZE is portfolio manager of Colonial New York Tax-Exempt Fund and is a
senior vice president of Colonial Management Associates, Inc. (CMA).
CHANGE IN TOP FIVE SECTOR BREAKDOWNS 7/31/99 vs. 1/31/99
[GRAPH]
<TABLE>
<CAPTION>
7/31/99 1/31/99
------- -------
<S> <C> <C>
Special Non-Property Tax 16.3% 15.7%
State Appropriated 14.1% 16.4%
Refunded/Escrowed 7.3% 3.7%
Education 6.3% 6.4%
Local General Obligations 5.9% 5.0%
</TABLE>
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 this breakdown in the future.
HELD
- --------------------------------------------------------------------------------
NY DORMITORY AUTHORITY CUNY
We maintained our position in NY Dormitory Authority CUNY (2.02% of net assets),
a bond backed by New York City and the state, as it continues to finance the
construction of new facilities.
3
<PAGE> 6
- ------------------------------------------------------------------------------
PERFORMANCE INFORMATION
- ------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 7/31/99
<TABLE>
<CAPTION>
Share Class A B C
Inception 9/26/86 8/4/92 8/1/97
- ----------------------------------------------------------------------------------------------------
Without With Sales Without With Sales Without With Sales
Sales Charge Charge Sales Charge Charge Sales Charge Charge
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
6 months
(cumulative return) (2.82)% (7.44)% (3.19)% (7.93)% (3.04)% (3.99)%
- ----------------------------------------------------------------------------------------------------
1 year 2.04 (2.81) 1.28 (3.59) 1.58 0.61
- ----------------------------------------------------------------------------------------------------
5 years 6.15 5.12 5.36 5.03 5.95 5.95
- ----------------------------------------------------------------------------------------------------
10 years 6.66 6.14 6.10 6.10 6.56 6.56
- ----------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 6/30/99
<CAPTION>
Share Class A B C
- ----------------------------------------------------------------------------------------------------
Without With Sales Without With Sales Without With Sales
Sales Charge Charge Sales Charge Charge Sales Charge Charge
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 year 1.90% (2.94)% 1.12% (3.74)% 1.43% 0.46%
- ----------------------------------------------------------------------------------------------------
5 years 6.54 5.50 5.74 5.42 6.35 6.35
- ----------------------------------------------------------------------------------------------------
10 years 6.70 6.18 6.15 6.15 6.61 6.61
- ----------------------------------------------------------------------------------------------------
</TABLE>
Past performance cannot predict future investment results. Returns and value of
an investment will vary, resulting in a gain or loss on sale. All results shown
assume reinvestment of distributions. The "with sales charge" returns include
the maximum sales charge of 4.75% for Class A shares and the maximum applicable
contingent deferred sales charge of 5% for both six months and one year, 2% for
five years for Class B shares and 1% for both six months and one year for Class
C shares. Performance results reflect any voluntary waivers or reimbursement of
Fund expenses by the Advisor or its affiliates. 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 C share (newer class shares) performance information includes
returns of the Fund's Class A shares (the oldest existing fund class) for
periods prior to the inception of the newer class shares. These Class A share
returns were 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 the periods prior to the inception
of the newer class shares would have been lower.
4
<PAGE> 7
- ----------------------
INVESTMENT PORTFOLIO
- ----------------------
July 31, 1999 (Unaudited)
(In thousands)
<TABLE>
<CAPTION>
MUNICIPAL BONDS - 97.4% PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
EDUCATION - 6.2%
EDUCATION
St. Lawrence University,
Series 1998-B,
5.250% 07/01/13 $1,000 $1,001
State Dormitory Authority,
Series 1985,
7.800% 12/01/05 30 31
State Dormitory Authority,
New York University,
6.000% 07/01/06 1,125 1,218
Pace University,
6.500% 07/01/11 1,000 1,131
State Dormitory Authority;
New York Medical College,
Series 1998,
5.250% 07/01/13 1,000 997
New York University,
Series 1998-A,
5.750% 07/01/27 2,000 2,100
------
6,478
------
- --------------------------------------------------------------------------------
HEALTHCARE - 1.7%
HOSPITALS
State Dormitory Authority:
Beth Israel Medical Center,
Series 1997-A,
5.125% 11/01/16 1,075 1,038
St. Clare's Hospital,
Series 1998-B,
5.300% 02/15/19 750 707
------
1,745
------
- --------------------------------------------------------------------------------
HOUSING - 7.4%
ASSISTED LIVING/SENIOR - 4.0%
Glen Cove Housing Authority,
8.250% 10/01/26 1,000 1,115
Huntington Housing Authority,
Gurwin Jewish Senior Center,
Series 1999,
5.875% 05/01/19 1,500 1,457
Mount Veron Ida Wartburg:
6.150% 06/01/19 1,000 1,001
6.200% 06/01/29 615 616
------
4,189
------
MULTI-FAMILY - 3.4%
Hudson Housing Development Corp.,
Providence Hall-Schuyler Court Project,
Series 1992-A,
6.500% 01/01/22(a) 750 780
Nyack Housing Assistance Corp.,
Nyack Plaza Apartments,
7.375% 06/01/21 1,188 1,189
NY State Housing Finance Agency:
Series 1989-B,
7.550% 11/01/29 230 236
Series 1996-A,
6.100% 11/01/15 1,230 1,311
------
3,516
------
- --------------------------------------------------------------------------------
INDUSTRIAL - 1.9%
MANUFACTURING - 0.9%
Monroe County Industrial
Development Agency,
Yorkmill Realty Association,
Series 1986,
9.500% 12/01/06 $ 935 $ 960
------
OIL & GAS - 1.0%
Energy Central Hudson Gas,
5.450% 08/01/27(b) 1,000 990
------
- --------------------------------------------------------------------------------
OTHER - 7.2%
REFUNDED/ESCROWED (c)
PR Commonwealth of Puerto Rico,
Aqueduct & Sewer Authority,
Series 1994,
6.500% 07/01/23 2,000 2,222
State Dormitory Authority,
Menorah Campus,
Series 1991,
7.400% 02/01/31 245 265
State Energy Research &
Development Authority,
Long Island Lighting Co.,
Series 1992-A,
7.150% 02/01/22 2,000 2,183
State Housing Finance Agency,
Series 1990-A,
8.000% 11/01/08 205 220
State Medical Care Facilities
Finance Agency:
Series 1990-B,
7.875% 08/15/08 395 420
Series 1994-D,
6.150% 02/15/15 2,000 2,189
------
7,499
------
- --------------------------------------------------------------------------------
OTHER REVENUE - 3.0%
RECREATION
Hamilton Industrial Development Agency,
Adirondack Historical Association,
Series 1998-A,
5.250% 11/01/18 500 472
New York City Cultural Trust,
American Museum of Natural History,
5.600% 04/01/18 1,000 1,018
New York City Industrial Development
Agency, United States Tennis Association,
Tennis Center Project,
Series 1994,
6.375% 11/15/14 1,500 1,622
------
3,112
------
- --------------------------------------------------------------------------------
RESOURCE RECOVERY - 2.0%
Disposal
Westchester County Industrial
Development Agency,
Westchester Resco Co. Project,
6.000% 07/01/09 2,000 2,137
------
</TABLE>
5
<PAGE> 8
- --------------------------------------------------------------------
INVESTMENT PORTFOLIO
- --------------------------------------------------------------------
July 31, 1999 (Unaudited)
(In thousands)
<TABLE>
<CAPTION>
PAR VALUE
- --------------------------------------------------------------------
<S> <C> <C>
TAX-BACKED - 39.2%
LOCAL APPROPRIATED - 1.5%
State Dormitory Authority,
Judicial Facilities,
Series 1991-A,
9.500% 04/15/14 $1,000 $ 1,154
Westchester County,
Series 1998,
(d) 08/01/19 1,200 404
-------
1,558
-------
LOCAL GENERAL OBLIGATIONS - 5.8%
City of Yonkers Schenectady
Series 1999-A,
4.500% 12/01/17 1,000 875
New York City,
Series-B,
6.000% 08/01/07(a) 1,000 1,080
New York City,
Series-F,
6.000% 08/01/16(a) 2,000 2,108
New York City,
Series-G,
5.750% 02/01/14(a) 1,000 1,023
New York City,
Series 1999-H,
5.250% 03/15/12(a) 1,000 994
-------
6,080
-------
SPECIAL NON-PROPERTY TAX - 16.0%
Metropolitan Transportation Authority,
Series 1998-A,
4.500% 04/01/18 2,000 1,758
New York City Transitional
Finance Authority:
Series 1998-A,
5.250% 11/15/13 1,000 1,002
Series 1998-C,
4.750% 05/01/23 3,000 2,667
State Local Government Assistance Corp:
Series 1993-C,
5.500% 04/01/17 2,100 2,145
Series 1993-E:
5.000% 04/01/21 5,150 4,863
6.000% 04/01/14 3,945 4,295
-------
16,730
-------
STATE APPROPRIATED - 13.8%
State Dormitory Authority,
Mental Health Services,
Series 1998,
5.250% 02/15/13 1,000 997
State Dormitory Authority:
City University,
Series 1990-C,
7.500% 07/01/10 1,500 1,740
Series 1993-A,
6.000% 07/01/20 2,000 2,110
State Housing Finance Agency,
Series 1990-A,
8.000% 11/01/08 45 47
State University Educational Facilities,
Series 1998-B,
4.500% 05/15/20 1,000 858
State University of New York:
Series 1990-B,
7.500% 05/15/11 $1,000 $ 1,170
Series 1993-A,
5.500% 05/15/13(a) 3,000 3,097
State Medical Care Facilities
Finance Agency:
Series 1987-A,
8.875% 08/15/07 110 110
Series 1990-B,
7.875% 08/15/08 80 85
State Urban Development Corp:
Series 1993-A,
5.500% 01/01/14 2,000 2,075
Series 1998-B,
5.250% 01/01/13 1,000 1,001
Triborough Bridge & Tunnel Authority,
Javits Convention Center Project,
Series-E,
7.250% 01/01/10 1,000 1,135
-------
14,425
-------
STATE GENERAL OBLIGATIONS - 2.1%
PR Commonwealth of Puerto Rico
Aqueduct & Sewer Authority,
Series 1995,
6.250% 07/01/12 2,000 2,216
-------
- --------------------------------------------------------------------
TRANSPORTATION - 11.7%
AIR TRANSPORTATION - 4.2%
New York City Industrial
Development Agency,
America Airlines, Inc.,
Series 1994,
6.900% 08/01/24 2,000 2,155
Port Authority of New York & New Jersey,
JFK International Air Terminal,
Series 6,
6.250% 12/01/08 2,000 2,194
-------
4,349
-------
TOLL FACILITIES - 5.4%
State Thruway Authority,
Highway & Bridge Trust Fund,
Series 1999-A,
5.125% 04/01/13 1,500 1,488
Triborough Bridge & Tunnel Authority,
Series 1991-B:
6.875% 01/01/15 2,000 2,107
6.875% 01/01/15 1,000 1,054
Triborough Bridge & Tunnel Authority,
Series-Y,
5.500% 01/01/17 1,000 1,026
-------
5,675
-------
TRANSPORTATION - 2.1%
Albany Parking Authority,
Green and Hudson Garage Project,
Series 1991-A,
7.150% 09/15/16 250 263
Port Authority of New York & New Jersey,
Series 85,
5.375% 03/01/28 2,000 1,992
-------
2,255
-------
</TABLE>
6
<PAGE> 9
- --------------------------------------------------------------------
INVESTMENT PORTFOLIO CONTINUED
- --------------------------------------------------------------------
July 31, 1999 (Unaudited)
(In thousands)
<TABLE>
<CAPTION>
PAR VALUE
- ----------------------------------------------------------------------------
<S> <C> <C>
UTILITY - 17.1%
INDEPENDENT POWER PRODUCER - 3.8%
New York City Industrial
Development Agency,
Brooklyn Navy Yard Partners,
Series 1997,
6.200% 10/01/22 $ 1,250 $ 1,320
Port Authority of New York & New Jersey,
KIAC Partners,
Series 1996-IV,
6.750% 10/01/19 2,000 2,150
Suffolk County Industrial
Development Agency,
Nissequogue Stoneybrook Partners,
Series 1998,
5.500% 01/01/23 500 474
--------
3,944
--------
INVESTOR OWNED - 5.3%
State Energy Research &
Development Authority:
Brooklyn Union Gas Co.,
Series 1989-A,
6.750% 02/01/24 3,000 3,212
Brooklyn Union Gas Co.,
Series 1993-A, IFRN
8.974% 04/01/20 1,500 1,785
State Energy Research &
Development Authority,
Consolidated Edison Co.,
Series 1991-A,
7.500% 01/01/26 500 512
--------
5,509
--------
MUNICIPAL ELECTRIC - 3.9%
Long Island Power Authority,
Series 1998-A,
5.250% 12/01/26(a) 2,470 2,320
PR Puerto Rico Electric Power Authority:
Series 1998-DD,
4.500% 07/01/19 1,000 893
Series 1998-EE,
4.500% 07/01/18 1,000 899
--------
4,112
--------
WATER & SEWER - 4.1%
New York City Municipal Water
Finance Authority,
Series 1998-D,
4.750% 06/15/25 1,000 888
State Environmental Facilities Corp.,
New York City Municipal Water
Finance Authority,
Series 1990-A,
7.500% 06/15/12 2,000 2,099
Suffolk County Industrial
Development Agency,
Southwest Sewer Systems,
6.000% 02/01/07 1,245 1,342
--------
4,329
--------
TOTAL MUNICIPAL BONDS (cost of $97,918) (e) 101,808
--------
</TABLE>
<TABLE>
<CAPTION>
SHORT-TERM OBLIGATIONS - 0.8% PAR VALUE
- ---------------------------------------------------------------------------
<S> <C> <C>
VARIABLE RATE DEMAND NOTES (f)
CA Irvine Improvement Bond Act of 1915,
Series 1998,
3.300% 09/02/23 $ 69 $ 69
CA Irvine Ranch
Water District,
3.300% 01/01/21 400 400
ID State Health Facilities Authority,
St. Lukes Regional Medical Facility,
Series 1995,
3.400% 05/01/22 400 400
--------
TOTAL SHORT TERM OBLIGATIONS 869
--------
OTHER ASSETS & LIABILITIES, NET - 1.8% 1,832
- --------------------------------------------------------------------------
NET ASSETS - 100.0% $104,509
========
</TABLE>
- --------------------------------------------------------------------------------
NOTES TO INVESTMENT PORTFOLIO
- --------------------------------------------------------------------------------
(a) These securities, or a portion thereof, with a total market value of
$8,967, are being used to collateralize the delayed delivery purchase
indicated in note (b) and open futures contracts.
(b) This security has been purchased on a delayed delivery basis for settlement
at a future date beyond the customary settlement date.
(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
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, 1999.
Futures contracts open at July 31, 1999:
<TABLE>
<CAPTION>
UNREALIZED
PAR VALUE APPRECIATION
COVERED BY EXPIRATION (DEPRECIATION)
TYPE CONTRACTS MONTH AT 7/31/99
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Treasury Bond $45 September $6
</TABLE>
ACRONYM NAME
------- --------------------------
IFRN Inverse Floating Rate Note
See notes to financial statements.
7
<PAGE> 10
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
July 31, 1999 (Unaudited)
(In thousands except for per share amounts and footnotes)
<TABLE>
<S> <C> <C>
Assets
Investments at value (cost $97,918) $101,808
Short-term obligations 869
--------
102,677
Receivable for:
Investments sold $1,741
Interest 1,484
Fund shares sold 77
Other 32 3,334
------ --------
Total Assets 106,011
Liabilities
Payable for:
Investments purchased 998
Fund shares repurchased 306
Distributions 140
Payable to Advisor 44
Accrued:
Deferred Trustees fees 2
Other 12
------
Total Liabilities 1,502
--------
Net Assets $104,509
========
Class A
Net asset value & redemption price per share
($51,668/7,266) $ 7.11(a)
--------
Maximum offering price per share
($7.11/0.9525) $ 7.46(b)
--------
Class B
Net asset value & offering price per share
($52,042/7,319) $ 7.11(a)
--------
Class C
Net asset value & offering price per share
($799/112) $ 7.11(a)
--------
Composition of Net Assets
Capital paid in $102,428
Overdistributed net investment income (58)
Accumulated net realized loss (1,757)
Net unrealized appreciation on:
Investments 3,890
Futures contracts 6
--------
$104,509
========
</TABLE>
(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.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
For the Six Months Ended July 31, 1999 (Unaudited)
(In thousands)
<TABLE>
<S> <C> <C>
Investment Income
Interest $ 2,975
Expenses
Management fee $ 270
Service fee 102
Distribution fee -- Class B 199
Distribution fee -- Class C 3
Transfer agent 80
Bookkeeping fee 24
Trustees fee 6
Custodian fee 1
Audit fee 10
Legal fee 2
Registration fee 8
Reports to shareholders 4
Other 8
-------
717
Fees waived by the Advisor (89)
Fees waived by the Distributor (1) 627
------- -------
Net Investment Income 2,348
-------
Net Realized & Unrealized Gain (Loss)
on Portfolio Positions
Net realized gain on:
Investments 697
Closed futures contracts 41
-------
Net realized gain 738
Net Change in Unrealized Appreciation/
Depreciation
during the period on:
Investments (6,417)
-------
Open futures contracts 6
Net Loss (6,411)
-------
Decrease in Net Assets from Operations $(3,325)
=======
</TABLE>
8 See notes to financial statements.
<PAGE> 11
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
(In thousands)
<TABLE>
<CAPTION>
(UNAUDITED)
SIX MONTHS YEAR
ENDED ENDED
JULY 31, JANUARY 31,
INCREASE (DECREASE) IN NET ASSETS 1999 1999
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 2,348 $ 4,695
Net realized gain 738 874
Net change in unrealized appreciation/depreciation (6,411) 947
--------- ---------
Net Increase (Decrease) from Operations (3,325) 6,516
DISTRIBUTIONS:
From net investment income -- Class A (1,258) (2,564)
In excess of net investment income -- Class A -- (83)
From net investment income -- Class B (1,036) (2,114)
In excess of net investment income -- Class B -- (69)
From net investment income -- Class C (19) (15)
In excess of net investment income -- Class C -- (a)
--------- ---------
(5,638) 1,671
--------- ---------
FUND SHARE TRANSACTIONS:
Receipts for shares sold -- Class A 2,485 11,737
Value of distributions reinvested -- Class A 699 1,452
Cost of shares repurchased -- Class A (4,043) (10,427)
--------- ---------
(859) 2,762
--------- ---------
Receipts for shares sold -- Class B 5,141 6,567
Value of distributions reinvested -- Class B 553 1,232
Cost of shares repurchased -- Class B (4,962) (6,852)
--------- ---------
732 947
--------- ---------
Receipts for shares sold -- Class C 402 616
Value of distributions reinvested -- Class C 18 15
Cost of shares repurchased -- Class C (293) (25)
--------- ---------
127 606
--------- ---------
Net Increase (Decrease) from Fund Share Transactions -- 4,315
--------- ---------
Total Increase (5,638) 5,986
NET ASSETS
Beginning of period 110,147 104,161
--------- ---------
End of period (net of overdistributed net investment income of $58 and $93, respectively) $ 104,509 $ 110,147
========= =========
NUMBER OF FUND SHARES
Sold -- Class A 338 1,598
Issued for distributions reinvested -- Class A 96 197
Repurchased -- Class A (555) (1,420)
--------- ---------
(121) 375
--------- ---------
Sold -- Class B 705 891
Issued for distributions reinvested -- Class B 76 167
Repurchased -- Class B (679) (930)
--------- ---------
102 128
--------- ---------
Sold -- Class C 54 83
Issued for distributions reinvested -- Class C 3 2
Repurchased -- Class C (41) (3)
--------- ---------
16 82
--------- ---------
</TABLE>
(a) Rounds to less than one.
See notes to financial statements. 9
<PAGE> 12
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
July 31, 1999 (Unaudited)
NOTE 1. INTERIM FINANCIAL STATEMENTS
In the opinion of management of Colonial New York Tax-Exempt Fund (the Fund), a
series of Liberty Funds Trust V (formerly 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, 1999,
and the results of its operations, the changes in its net assets and the
financial highlights for the six months then ended.
NOTE 2. ACCOUNTING POLICIES
ORGANIZATION
The Fund is a non-diversified portfolio of a Massachusetts business trust,
registered under the Investment Company Act of 1940, as amended, as an open-end
management investment company. The Fund's investment objective is to seek as
high a level of after-tax total return, as is consistent with prudent risk, by
pursuing current income exempt from federal and New York state and city personal
income tax. The Fund also provides opportunities for long-term appreciation from
a portfolio primarily invested in investment-grade municipal bonds. The Fund may
issue an unlimited number of shares. The Fund offers three classes of shares:
Class A, Class B and Class C. Class A shares are sold with a front-end sales
charge. A 1.00% contingent deferred sales charge is assessed 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. Class B shares will convert to Class A shares when they
have been outstanding approximately eight years. Class C shares are subject to a
contingent deferred sales charge on redemptions made within one year after
purchase and an annual distribution fee.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. The following is a summary of
significant accounting policies that are consistently followed by the Fund in
the preparation of its financial statements.
SECURITY VALUATION AND TRANSACTIONS
Debt securities generally are valued by a pricing service based upon market
transactions for normal, institutional-size trading units of similar securities.
When management deems it appropriate, an over-the-counter or exchange bid
quotation is used. Options are valued at the last reported sale price, or in the
absence of a sale, the mean between the last quoted bid and asking price.
Futures contracts are valued based on the difference between the last sale price
and the opening price of the contract.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
Portfolio positions for which market quotations are not readily available are
valued at fair value under procedures approved by the Trustees.
Security transactions are accounted for on the date the securities are
purchased, sold or mature.
Cost is determined and gains (losses) are based upon the specific identification
method for both financial statement and federal income tax purposes.
The Fund may trade securities on other than normal settlement terms. This may
increase the risk if the other party to the transaction fails to deliver and
causes the Fund to subsequently invest at less advantageous prices.
DETERMINATION OF CLASS NET ASSET VALUES AND FINANCIAL HIGHLIGHTS
All income, expenses (other than the Class B and Class C distribution fees), and
realized and unrealized gains (losses), are allocated to each class
proportionately on a daily basis for purposes of determining the net asset value
of each class.
Class B and Class C per share data and ratios are calculated by adjusting the
expense and net investment income per share data and ratios for the Fund for the
entire period by the distribution fee applicable to Class B and Class C shares
only.
FEDERAL INCOME TAXES
Consistent with the Fund's policy to qualify as a regulated investment company
and to distribute all of its taxable and tax-exempt income, no federal income
tax has been accrued.
INTEREST INCOME, DEBT DISCOUNT AND PREMIUM
Interest income is recorded on the accrual basis. Original issue discount is
accreted to interest income over the life of a security with a corresponding
increase in the cost basis; market discount is not accreted. Premium is
amortized against interest income with a corresponding decrease in the cost
basis.
DISTRIBUTIONS TO SHAREHOLDERS
The Fund declares and records distributions daily and pays monthly.
10
<PAGE> 13
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS CONTINUED
- --------------------------------------------------------------------------------
July 31, 1999 (Unaudited)
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 Advisor) is the investment Advisor 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:
<TABLE>
<CAPTION>
AVERAGE NET ASSETS ANNUAL FEE RATE
------------------ ---------------
<S> <C>
First $2 billion 0.50%
Over $2 billion 0.45%
</TABLE>
BOOKKEEPING FEE
The Advisor provides bookkeeping and pricing services for a monthly fee equal to
$27,000 annually plus 0.035% of the Fund's average net assets over $50 million.
TRANSFER AGENT FEE
Liberty Funds Services, Inc., (the Transfer Agent), an affiliate of the Advisor,
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., (the Distributor), a subsidiary of the Advisor,
is the Fund's principal underwriter. During the six months ended July 31, 1999,
the Fund has been advised that the Distributor retained net underwriting
discounts of $6,230 on sales of the Fund's Class A shares and received
contingent deferred sales charges (CDSC) of none, $34,656 and none on Class A,
Class B and Class C share redemptions, respectively.
The Fund has adopted a 12b-1 plan which requires the payment of a distribution
fee to the Distributor equal to 0.75% annually of the Fund's average net assets
attributable to Class B and Class C shares. The Distributor has voluntarily
agreed, until further notice, to waive a portion of the Class C share
distribution fee so that it will not exceed 0.45% annually. The plan also
requires the payment of a service fee to the Distributor as follows:
<TABLE>
<CAPTION>
VALUATION OF SHARES ANNUAL
OUTSTANDING ON THE 20TH OF FEE
EACH MONTH WHICH WERE ISSUED RATE
---------------------------- ------
<S> <C>
Prior to December 1, 1994 0.10%
On or after December 1, 1994 0.25%
</TABLE>
The CDSC and the fees received from the 12b-1 plan are used principally as
repayment to the Distributor for amounts paid by the Distributor to dealers who
sold such shares.
EXPENSE LIMITS
The Advisor has agreed, until further notice, to waive fees and bear certain
Fund expenses to the extent that total expenses (exclusive of service and
distribution fees, brokerage commissions, interest, taxes, and extraordinary
expenses, if any) exceed 0.60% annually of the Fund's average net assets.
OTHER
The Fund pays no compensation to its officers, all of whom are employees of the
Advisor.
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.
The Fund has an agreement with its Custodian Bank under which $1,389 of
custodian fees were reduced by balance credits applied during the six months
ended July 31, 1999. The Fund could have invested a portion of the assets
utilized in connection with the expense offset arrangements in an income
producing asset if it had not entered such agreements.
NOTE 4. PORTFOLIO INFORMATION
INVESTMENT ACTIVITY
For the six months ended July 31, 1999, purchases and sales of investments,
other than short-term obligations were $9,525,590 and $8,002,559, respectively.
Unrealized appreciation (depreciation) at July 31, 1999, based on cost of
investments for both financial statement and federal income tax purposes was:
<TABLE>
<S> <C>
Gross unrealized appreciation $5,250,240
Gross unrealized depreciation (1,360,312)
----------
Net unrealized appreciation $3,889,928
==========
</TABLE>
CAPITAL LOSS CARRYFORWARDS:
At January 31, 1999, Capital loss carryforwards, available (to the extent
provided in regulations) to offset future realized gains were approximately as
follows:
<TABLE>
<CAPTION>
YEAR OF CAPITAL LOSS
EXPIRATION CARRYFORWARD
---------- ------------
<S> <C>
2004 $1,254,000
2005 79,000
----------
$1,333,000
==========
</TABLE>
Expired capital loss carryforwards, if any, are recorded as a reduction of
capital paid in.
To the extent loss carryforwards are used to offset any future realized gains,
it is unlikely that such gains would be distributed since they may be taxable to
shareholders as ordinary income.
11
<PAGE> 14
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS CONTINUED
- --------------------------------------------------------------------------------
July 31, 1999 (Unaudited)
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 Advisor 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, 1999.
12
<PAGE> 15
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for a share of each class outstanding throughout
each period are as follows:
<TABLE>
<CAPTION>
(UNAUDITED)
SIX MONTHS ENDED JULY 31, 1999
--------------------------------------------
CLASS A CLASS B CLASS C
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 7.490 $ 7.490 $ 7.490
-------- -------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) 0.172 0.145 0.156(b)
Net realized and unrealized loss (0.382) (0.382) (0.382)
-------- -------- --------
Total from Investment Operations (0.210) (0.238) (0.226)
-------- -------- --------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.170) (0.143) (0.154)
-------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 7.110 $ 7.110 $ 7.110
======== ======== ========
Total return (c)(d) (2.82%)(e) (3.19%)(e) (3.04%)(e)
======== ======== ========
RATIOS TO AVERAGE NET ASSETS
Expenses (f)(g) 0.79% 1.54% 1.24%(b)
Net investment income (f)(g) 4.73% 3.98% 4.28%(b)
Fees and expenses waived or borne by the Advisor (f)(g) 0.16% 0.16%
0.16%
Portfolio turnover (e) 7% 7% 7%
Net Assets at End of Period (000) $ 51,668 $ 52,042 $ 799
(a) Net of fees and expenses waived or borne by the Advisor which amounted to: $ 0.006 $ 0.006 $ 0.006
(b) Net of fees waived by the Distributor which amounted to $0.011 per share
and 0.30% (annualized).
(c) Total return at net asset value assuming all distributions reinvested and no
initial sales charge or contingent deferred sales charge.
(d) Had the Advisor 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>
13
<PAGE> 16
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS CONTINUED
- --------------------------------------------------------------------------------
Selected data for a share of each class outstanding throughout each period
are as follows:
<TABLE>
<CAPTION>
YEAR ENDED JANUARY 31, 1999
----------------------------------------
CLASS A CLASS B CLASS C
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 7.380 $ 7.380 $ 7.380
------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) 0.358 0.301 0.324(b)
Net realized and unrealized gain 0.115 0.115 0.115
------- ------- -------
Total from Investment Operations 0.473 0.416 0.439
------- ------- -------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.352) (0.296) (0.320)
In excess of net investment income (0.011) (0.010) (0.010)
------- ------- -------
Total Distributions Declared to Shareholders (0.363) (0.306) (0.329)
------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 7.490 $ 7.490 $ 7.490
======= ======= =======
Total return (c)(d) 6.61% 5.80% 6.13%
======= ======= =======
RATIOS TO AVERAGE NET ASSETS
Expenses (e) 0.77% 1.52% 1.22%(b)
Net investment income (e) 4.78% 4.03% 4.33%(b)
Fees and expenses waived or borne by the Advisor (e) 0.16% 0.16% 0.16%
Portfolio turnover 28% 28% 28%
Net Assets at End of Period (000) $55,348 $54,079 $ 720
(a) Net of fees and expenses waived or borne by the Advisor which amounted to: $ 0.012 $ 0.012 $ 0.012
(b) Net of fees waived by the Distributor which amounted to $0.022 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 Advisor and Distributor not waived or reimbursed a portion of
expenses, total return would have been reduced.
(e) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
</TABLE>
14
<PAGE> 17
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS CONTINUED
- --------------------------------------------------------------------------------
Selected data for a share of each class outstanding throughout each period
are as follows:
<TABLE>
<CAPTION>
Year Ended January 31
-------------------------------------------------------------------------------------------------
1998 1997 1996 1995
------------------------------ ------------------ ----------------- -----------------
CLASS A CLASS B CLASS C(b) CLASS A CLASS B CLASS A CLASS B CLASS A CLASS B
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD $ 7.040 $ 7.040 $7.270 $7. 250 $ 7.250 $ 6.680 $ 6.680 $ 7.500 $ 7.500
------- ------- ------ ------- ------- ------- ------- ------- -------
Income From Investment Operations
Net investment income (a) 0.383 0.330 0.171(c) 0.393 0.340 0.401 0.349 0.427 0.376
Net realized and unrealized
gain (loss) 0.346 0.346 0.118 (0.207) (0.207) 0.576 0.576 (0.834) (0.834)
------- ------- ------ ------- ------- ------- ------- ------- -------
Total from Investment
Operations 0.729 0.676 0.289 0.186 0.133 0.977 0.925 (0.407) (0.458)
------- ------- ------ ------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
From net investment income (0.384) (0.331) (0.179) (0.396) (0.343) (0.407) (0.355) (0.413) (0.362)
From capital paid in (0.005) (0.005) -- -- -- -- -- -- --
------- ------- ------ ------- ------- ------- ------- ------- -------
Total Distributions Declared
to Shareholders (0.389) (0.336) (0.179) (0.396) (0.343) (0.407) (0.355) (0.413) (0.362)
------- ------- ------ ------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 7.380 $7.380 $7.380 $ 7.040 $ 7.040 $ 7.250 $ 7.250 $ 6.680 $ 6.680
======= ======= ====== ======= ======= ======= ======= ======= =======
Total return(d)(e) 10.67% 9.85% 4.04%(f) 2.76% 1.99% 14.99% 14.15%(g) (5.32)% (6.04)%
======= ======= ====== ======= ======= ======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS
Expenses 0.67%(g) 1.42%(g) 1.12%(c)(g)(h) 0.65%(g) 1.40%(g) 0.58%(g) 1.33%(g) 0.42% 1.17%
Net investment income 5.31%(g) 4.56%(g) 4.72%(c)(g)(h) 5.56%(g) 4.81%(g) 5.72%(g) 4.97%(g) 6.25% 5.50%
Fees and expenses waived or borne
by the Advisor 0.28%(g) 0.28%(g) 0.29%(g)(h) 0.29%(g) 0.29%(g) 0.38%(g) 0.38%(g) 0.46% 0.46%
Portfolio turnover 38% 38% 38% 78% 78% 39% 39% 65% 65%
Net assets at End of Period (000) $51,744 $52,313 $ 104 $50,648 $52,861 $56,795 $53,505 $53,322 $43,166
(a) Net of fees and expenses waived or borne by the Advisor which
amounted to: $ 0.020 $ 0.020 $0.021 $0.020 $ 0.020 $ 0.026 $ 0.026 $ 0.032 $ 0.032
(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% (annualized).
(d) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred
sales charge.
(e) Had the Advisor and Distributor not waived or reimbursed a portion of expenses, total return would have been reduced.
(f) Not annualized.
(g) The benefits derived from custody credits and directed brokerage arrangements had no impact. Prior years' ratios are net
of benefits received, if any.
(h) Annualized.
</TABLE>
15
<PAGE> 18
This page left intentionally blank.
<PAGE> 19
TRUSTEES & TRANSFER AGENT
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)
JOHN V. CARBERRY
Senior Vice President of Liberty Financial Companies, Inc. (formerly Managing
Director, Salomon Brothers)
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)
SALVATORE MACERA
Private Investor (formerly Executive Vice President of Itek Corp. and President
of Itek Optical & Electronic Industries, Inc.)
WILLIAM E. MAYER
Partner, Development Capital, LLC (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
THOMAS E. STITZEL
Professor of Finance, College of Business, Boise State University; Business
Consultant and Author
ROBERT L. SULLIVAN
Retired Partner, KPMG LLP (formerly Management Consultant, Saatchi and Saatchi
Consulting Ltd. and Principal and International Practice Director, Management
Consulting, Peat Marwick Main & Co.)
ANNE-LEE VERVILLE
Consultant (formerly General Manager, Global Education Industry, and President,
Applications Solutions Division, IBM Corporation)
- --------------------------------------------------------------------------------
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Colonial New York Tax-Exempt Fund is:
Liberty Funds Services, Inc.
P.O. Box 1722
Boston, MA 02105-1722
1-800-345-6611
The Fund mails one shareholder report to each shareholder address. If you would
like more than one report, please call 1-800-426-3750 and additional reports
will be sent to you.
This report has been prepared for shareholders of Colonial New York Tax-Exempt
Fund. This report may also be used as sales literature when preceded or
accompanied by the current prospectus which provides details of sales charges,
investment objectives and operating policies of the Fund and with the most
recent copy of the Liberty Funds Distributor, Inc. Performance Update.
<PAGE> 20
- --------------------------------------------------------------------------------
CHOOSE LIBERTY
- --------------------------------------------------------------------------------
BECAUSE NO SINGLE INVESTMENT MANAGER CAN BE ALL THINGS TO ALL INVESTORS.(SM)
- --------------------------------------------------------------------------------
LIBERTY
- --------------------------------------------------------------------------------
COLONIAL Colonial has long been a recognized leader in fixed-income
MANAGEMENT investing. In addition, Colonial has distinguished itself
ASSOCIATES, INC. with both a traditional value and a more contemporary
approach to equity investing.
CRABBE HUSON Crabbe Huson's contrarian investment style seeks long-term
performance by investing in stocks from high-quality,
out-of-favor companies. This risk-averse strategy
capitalizes on the potential of these companies to regain
market popularity.
LIBERTY LAMCO brings institutional money management to individual
ASSET MANAGEMENT investors through a disciplined multi-manager investment
COMPANY process that seeks to deliver consistent long-term returns.
NEWPORT A leader in Asian investing(TM), Newport has an unparalleled
FUND knowledge of Asian economies, business and culture.
MANAGEMENT
STEIN ROE & Stein Roe's growth management style emphasizes companies
FARNHAM INVESTMENT with the ability to create, maintain and grow earnings in
MANAGEMENT different market environments.
That's why each of these affiliated managers has excelled in a particular
investment style. These managers not only specialize in a distinct investment
style, they hold a passion for their style along with a demonstrated track
record.
Each of these managers is a member of the Liberty Financial Companies (NYSE: L),
a diversified asset accumulation and management organization with over $62.7
billion in assets under management for more than 1.7 million investors. Many of
the affiliated managers' products are offered by prospectus through Liberty
Funds Distributor, Inc.
Ask your financial advisor to help you develop an investment strategy that
blends the complementary disciplines of different managers into a well-balanced
program tailored to your goals.
- --------------------------------- -----------------
COLONIAL NEW YORK TAX-EXEMPT FUND SEMIANNUAL REPORT
- --------------------------------- -----------------
[LOGO] LIBERTY FUNDS
ALL-STAR * COLONIAL * CRABBE HUSON * NEWPORT * STEIN ROE ADVISOR
Liberty Funds Distributor, Inc. (C)1999
One Financial Center, Boston, MA 02111-2621, 1-800-426-3750
www.libertyfunds.com
--------------
BULK RATE
U.S. POSTAGE
PAID
HOLLISTON, MA
PERMIT NO. 20
--------------
NY-03/562H-0899 (9/99) 99/1109
