<PAGE>
- -----------------------------------------------
COLONIAL NEW YORK TAX-EXEMPT FUND ANNUAL REPORT
- -----------------------------------------------
January 31, 1999
[graphic omitted]
------------------------------
Not FDIC May Lose Value
Insured No Bank Guarantee
------------------------------
<PAGE>
COLONIAL NEW YORK TAX-EXEMPT FUND HIGHLIGHTS
FEBRUARY 1, 1998 - JANUARY 31, 1999
PORTFOLIO MANAGER COMMENTARY: "Interest rate volatility, low nominal
interest rates and a near-record level of supply created challenging
conditions for tax-exempt investors. Despite these hurdles, the Fund was well
positioned. We took advantage of slightly declining interest rates and a strong
New York economy, generating attractive performance relative to the Fund's
Lipper peers.(1)"
-- Gary Swayze
COLONIAL NEW YORK TAX-EXEMPT FUND PERFORMANCE
CLASS A CLASS B CLASS C
- --------------------------------------------------------------------------------
Inception dates 9/26/86 8/4/92 8/1/97
- --------------------------------------------------------------------------------
12-month distributions declared per share(2) $0.363 $0.306 $0.329
- --------------------------------------------------------------------------------
SEC yields on 1/31/99(3) 3.74% 3.17% 3.47%
- --------------------------------------------------------------------------------
Taxable-equivalent SEC yields(4) 6.94% 5.88% 6.44%
- --------------------------------------------------------------------------------
12-month total returns, assuming 6.61% 5.80% 6.13%
reinvestment of all distributions and
no sales charge or contingent deferred
sales charge (CDSC)(5)
- --------------------------------------------------------------------------------
Net asset value per share on 1/31/99 $7.49 $7.49 $7.49
- --------------------------------------------------------------------------------
QUALITY BREAKDOWN (as of 1/31/99)(6) TOP FIVE SECTORS (as of 1/31/99)(6)
- ------------------------------------ -----------------------------------
AAA ...........................48.0% State Appropriated ...........16.4%
AA .............................9.3% Special Non-Property Tax .....15.7%
A .............................27.0% Municipal Electric ............8.3%
BBB ............................8.2% Investor Owned Utilities ......8.2%
Nonrated .......................5.6% Education .....................6.4%
Short-Term Obligations .........1.9%
(1) Please see page 3 for complete Lipper rankings.
(2) 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 will be taxable when distributed.
(3) The 30-day SEC yields on January 31, 1999, reflect the portfolio's earning
power, net of expenses, and are expressed as an annualized percentage of the
public offering price at the end of the period. If the Advisor or its
affiliates had not waived or borne certain Fund expenses, SEC yields would
have been 3.60% for Class A shares, 3.03% for Class B shares and 3.14% for
Class C shares.
(4) Taxable-equivalent SEC yields are based on the 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.
(5) Performance results reflect any voluntary waivers or reimbursement of
expenses by the Advisor or its affiliates. Absent these waivers or
reimbursement arrangements, performance results would have been lower.
(6) Quality and sector breakdowns are calculated as a percentage of total
investments, including short-term obligations. Because the Fund is actively
managed, there can be no guarantee the Fund will continue to maintain these
quality and sector breakdowns in the future.
<PAGE>
PRESIDENT'S MESSAGE
TO FUND SHAREHOLDERS
[Photo of Stephen E. Gibson]
I am pleased to present the annual report for Colonial New York Tax-Exempt Fund
for the 12 months ended January 31, 1999.
The past 12 months were generally positive for bonds, although conditions varied
considerably as domestic and international events affected all sectors of the
bond market. Despite some economic uncertainty early in the year, the economy
continued to grow and inflation remained low, creating a positive climate for
bonds.
International events played a role in the strong U.S. bond market.
The economic turmoil in Asia that began in 1997 gradually spread to other
less-developed markets, most notably Russia and Latin America. During
periods of increased volatility, investors around the world sought the relative
quality and stability of U.S. Treasury bonds. Although demand for safety made
Treasurys the bond market's biggest winner, municipal bonds also benefited.
Colonial's disciplined bond fund management style and long-term investment
orientation served shareholders well during this volatile period, helping the
Fund outperform the majority of its peers over the past 12 months.(1) For
investors seeking competitive levels of tax-free income and the potential for
long-term price appreciation, Colonial New York Tax-Exempt Fund may
provide an attractive option.
The Portfolio Manager Report on the following pages will provide you with more
specific information on your Fund's performance and the market in which your
Fund invests. 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
March 11, 1999
(1) Source: Lipper, Inc. Lipper rankings are based on the New York Tax-Exempt
Municipal Funds universe. The Fund (Class A shares) ranked in the first
quartile (10 out of 99 funds) for the one-year period, in the second
quartile (15 out of 58 funds) for the five-year period and in the third
quartile (22 out of 30 funds) for the ten-year period. Rankings do not
include any sales charges. Performance for different share classes will vary
with fees associated with each class. Past performance cannot guarantee
future results.
Because economic and market conditions change frequently, there can be no
assurance that the trends described in this report will continue.
<PAGE>
PORTFOLIO MANAGER REPORT
GARY SWAYZE is portfolio manager of Colonial New York Tax-Exempt Fund and is a
senior vice president of Colonial Management Associates, Inc.
TAX-EXEMPT MARKET GENERATED MODEST GAINS
The period began on a positive note, with the U.S. economy strong and no clear
signs of inflation. Throughout the year a series of international crises
manifested domestically, affecting both stock and bond prices. Instability in
Asia, Russia and Latin America contributed to an increase in the U.S. trade
deficit and concerns about corporate profitability. This fall, the Federal
Reserve Board lowered short-term interest rates three times in an effort to
renew investor confidence. Sentiment about how these events might impact the
U.S. economy in the long run shifted throughout the period, taking fixed-income
investors on a roller coaster ride through much of the year. Overall, bond
prices rose during the period.
Like the broader bond market, municipal bond prices were affected by global
events and interest rate volatility. In addition, the tax-exempt market
experienced a near-record level of issuance in 1998, as issuers took advantage
of lower interest rates to refinance existing debt and to finance new projects.
At times, the market found it difficult to absorb this supply.
FUND'S PERFORMANCE REFLECTS INVESTMENT STRATEGY
For the 12-month period, the Fund generated a total return of 6.61% for Class A
shares, based on net asset value. This compares favorably with the performance
of the Fund's Lipper competitive peer group, which averaged 5.79% for the same
time period. We attribute this performance to the Fund's investment strategy.
Our forecast for modest economic growth and low inflation led us to believe that
interest rates would decline. Since bond prices tend to rise when interest rates
fall, we emphasized bonds with a higher sensitivity to interest rate changes for
most of the year. These included noncallable bonds, which cannot be refinanced
at a lower rate of interest prior to maturity. The longer life span of these
bonds increases their sensitivity to changes in interest rates, often producing
attractive price gains when interest rates decline.
In the final months of the year we targeted purchases in intermediate
maturity bonds with premium coupons, which were available at attractive prices.
We believe they offered relative value to investors and positioned the Fund well
for the market environment. We will continue to actively manage the portfolio in
search of other relative value opportunities.
NEW ISSUERS IN NEW YORK PROVIDED OPPORTUNITIES
During the past year, bonds issued by two new market participants provided
attractive values. The first, Long Island Power Authority (LIPA) (4.39% of net
assets), came to market with the largest municipal bond issue in history. The
$3.5 billion deal represented the merger of the former Long Island Lighting Co.
and Brooklyn Union Gas Co. The historic nature of this transaction focused
investors' attention on both the New York and national municipal markets.
Despite the issue's size, demand for LIPA bonds exceeded supply and prices rose
significantly. The second new issuer, the Transitional Finance Authority (TFA)
(3.61% of net assets), was created to finance infrastructure projects in New
York City. Issues backed by TFA were well received by the market based on strong
security provisions and favorable, investment-grade bond ratings.
NEW YORK ENJOYS A STRONG ECONOMY, BUT CONDITIONS ARE MIXED
New York's economic health improved over the period. Per capita income rose, the
state unemployment rate fell to its lowest level in eight years, and housing
markets boomed. However, a gap remained between the service-oriented downstate
region and the manufacturing-intensive upstate region. Downstate continued to do
well, driven by low unemployment and a buoyant financial services sector.
However, we expect that a bear market could result in widespread layoffs in this
and other sectors. Furthermore, continued downsizing by major corporations
headquartered in New York City may restrict growth going forward, particularly
in the commercial banking sector, where mergers tend to produce job losses.
Upstate rebounded modestly over the past year, with fewer layoffs, but
competitive pressure from cheaper overseas labor markets may restrict future
improvement. The state's fiscal position is good, with a budget surplus.
However, the state's overwhelming reliance on the financial services sector and
a lack of commitment from its legislature to fund education and infrastructure
limits the likelihood of a bond rating upgrade.
POSITIVE OUTLOOK FOR MUNICIPAL MARKET CONDITIONS
Looking ahead, inflation should remain low, as we expect productivity gains and
a worldwide surplus in manufacturing capacity to limit the potential for
substantial price increases. In the municipal market, we expect positive supply
and demand dynamics. We doubt total issuance will match 1998's near-record level
of $280 billion, partially because refinancing volume should slow down as many
issuers have already refinanced. Overall, lower supply combined with generally
positive expectations for the economic environment should have a positive impact
on municipal bond prices. However, as we end the eighth consecutive year of
economic expansion in the U.S., we will watch for events and trends that could
change our expectations and possibly lead us to alter our investment strategy.
<PAGE>
COLONIAL NEW YORK TAX-EXEMPT FUND'S INVESTMENT PERFORMANCE
VS. THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
Change in Value of $10,000 from 1/31/89 to 1/31/99
Based on NAV and POP for Class A Shares
AS_OF_DATE NAV POP Lehman
Jan 31, 89 $10,000 $10,000 $10,000
Mar 31, 89 9,910 9,439 9,862
Jun 30, 89 10,342 9,851 10,446
Sep 30, 89 10,303 9,814 10,453
Dec 31, 89 10,597 10,094 10,854
Mar 31, 90 10,570 10,086 10,903
Jun 30, 90 10,841 10,326 11,157
Sep 30, 90 10,801 10,288 11,164
Dec 31, 90 11,163 10,632 11,645
Mar 31, 91 11,391 10,849 11,908
Jun 30, 91 11,658 11,104 12,163
Sep 30, 91 12,213 11,633 12,636
Dec 31, 91 12,580 11,982 13,059
Mar 31, 92 12,603 12,004 13,098
Jun 30, 92 13,109 12,487 13,595
Sep 30, 92 13,433 12,795 13,956
Dec 31, 92 13,648 13,000 14,210
Mar 31, 93 14,172 13,498 14,738
Jun 30, 93 14,660 13,964 15,221
Sep 30, 93 15,126 14,407 15,735
Dec 31, 93 15,315 14,587 15,956
Mar 31, 94 14,349 13,667 15,080
Jun 30, 94 14,415 13,731 15,246
Sep 30, 94 14,504 13,815 15,351
Dec 31, 94 14,110 13,439 15,131
Mar 31, 95 15,279 14,554 16,201
Jun 30, 95 15,418 14,686 16,591
Sep 30, 95 15,826 15,074 17,068
Dec 31, 95 16,738 15,943 17,772
Mar 31, 96 16,388 15,609 17,558
Jun 30, 96 16,531 15,745 17,693
Sep 30, 96 16,910 16,107 18,098
Dec 31, 96 17,319 16,496 18,559
Mar 31, 97 17,242 16,423 18,515
Jun 30, 97 17,829 16,982 19,153
Sep 30, 97 18,348 17,477 19,730
Dec 31, 97 18,962 18,061 20,265
Mar 31, 98 19,150 18,240 20,499
Jun 30, 98 19,416 18,493 20,811
Sep 30, 98 19,890 18,945 21,450
Dec 31, 98 20,204 19,244 21,578
Jan 31, 99 20,414 19,445 21,835
VALUE OF A $10,000 INVESTMENT MADE ON 1/31/89
As of 1/31/99
- --------------------------------------------------------------------------------
Class A Class B Class C
NAV POP NAV w/CDSC NAV w/CDSC
- --------------------------------------------------------------------------------
$20,414 $19,445 $19,451 $19,451 $20,275 $20,275
AVERAGE ANNUAL TOTAL RETURNS
As of January 31, 1999
- --------------------------------------------------------------------------------
CLASS A SHARES CLASS B SHARES CLASS C SHARES
INCEPTION 9/26/86 8/4/92 8/1/97
NAV POP NAV w/CDSC NAV w/CDSC
- --------------------------------------------------------------------------------
1 YEAR 6.61% 1.55% 5.80% 0.80% 6.13% 5.13%
- --------------------------------------------------------------------------------
5 YEARS 5.71 4.68 4.92 4.58 5.56 5.56
- --------------------------------------------------------------------------------
10 YEARS 7.40 6.88 6.88 6.88 7.32 7.32
- --------------------------------------------------------------------------------
Past performance cannot predict future results. Returns and value of an
investment will vary, resulting in a gain or loss on sale. All results shown
assume reinvestment of distributions. NAV returns do not include sales charges
or contingent deferred sales charges (CDSC). Public offering price (POP) returns
include the maximum sales charge of 4.75% for Class A shares. The applicable
CDSC for Class B shares is 5% for one year and 2% for five years. The CDSC for
one year for Class C shares is 1%. Performance results reflect any voluntary
waivers or reimbursement of 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 Class C share (newer class shares) performance information includes
returns of the Fund's Class A shares (the oldest existing fund class) for
periods prior to the inception of the newer class shares. These Class A share
returns are not restated to reflect any expense differential (e.g., Rule 12b-1
fees) between Class A shares and the newer class shares. Had the expense
differential been reflected, the returns for periods prior to the inception of
the newer class shares would have been lower.
The Lehman Brothers Municipal Bond Index is a broad-based, unmanaged index that
tracks the performance of the municipal bond market. Unlike mutual funds,
indexes are not investments and do not incur fees or expenses. It is not
possible to invest directly in an index.
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO
JANUARY 31, 1999 (IN THOUSANDS)
<CAPTION>
MUNICIPAL BONDS - 96.3% PAR VALUE
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EDUCATION - 6.3%
EDUCATION
St. Lawrence University,
5.250% 7/1/13 $1,000 $ 1,070
State Dormitory Authority,
Series 1985,
7.800% 12/1/05 35 36
State Dormitory Authority:
New York University,
6.000% 7/1/06 1,125 1,278
Pace University,
6.500% 7/1/11 1,000 1,213
State Dormitory Authority:
New York Medical College,
Series 1998,
5.250% 7/1/13 1,000 1,062
New York University,
Series 1998-A,
5.750% 7/1/27 2,000 2,290
--------
6,949
--------
..........................................................................................
HEALTHCARE - 1.7%
HOSPITALS
State Dormitory Authority:
Beth Israel Medical Center,
Series 1997-A,
5.125% 11/1/16 1,075 1,099
St. Clare's Hospital,
Series 1998-B,
5.300% 2/15/19 750 759
--------
1,858
--------
..........................................................................................
HOUSING - 4.3%
ASSISTED LIVING/SENIOR - 1.0%
Glen Cove Housing Authority,
8.250% 10/1/26 1,000 1,140
--------
Multi-Family - 3.3%
Hudson Housing Development Corp.,
Providence Hall-Schuyler Court Project,
Series 1992-A,
6.500% 1/1/22 750 792
Nyack Housing Assistance Corp.,
Nyack Plaza Apartments,
7.375% 6/1/21(a) 1,218 1,221
State Housing Finance Agency:
Series 1989-B,
7.550% 11/1/29 230 239
Series 1996-A,
6.100% 11/1/15 1,230 1,342
--------
3,594
--------
...........................................................................................
OTHER - 3.6%
REFUNDED/ESCROWED(B)
PR Commonwealth of Puerto Rico,
Series 1994,
6.500% 7/1/23 2,000 2,309
State Dormitory Authority,
Menorah Campus,
Series 1991,
7.400% 2/1/31 245 273
State Housing Finance Agency,
Series 1990-A,
8.000% 11/1/08 205 226
State Medical Care Facilities Finance Agency,
Series 1990-B,
7.875% 8/15/08 395 431
State Power Authority,
6.625% 1/1/12 705 780
--------
4,019
--------
..........................................................................................
OTHER REVENUE - 3.7%
INDUSTRIAL - 0.8%
Monroe County Industrial Development Agency,
Yorkmill Realty Association, Series 1986,
9.500% 12/1/06 935 966
--------
RECREATION - 2.9%
Hamilton Industrial Development Agency,
Adirondack Historical Association,
5.250% 11/1/18 500 503
New York City Cultural Trust,
American Museum of Natural History,
5.600% 4/1/18 1,000 1,066
New York City Industrial Development Agency,
Development Agency, United States Tennis Association,
Tennis Center Project, Series 1994,
6.375% 11/15/14 1,500 1,693
--------
3,262
--------
- ------------------------------------------------------------------------------------------
RESOURCE RECOVERY - 2.1%
DISPOSAL
Westchester County Industrial
Development Agency,
Westchester Resco Co. Project,
6.000% 7/1/09 2,000 2,281
--------
..........................................................................................
TAX-BACKED - 40.2%
LOCAL APPROPRIATED - 1.5%
Dormitory Westchester County,
(c) 8/1/19 1,200 438
State Dormitory Authority,
Judicial Facilities,
Series 1991-A,
9.500% 4/15/14 1,000 1,167
--------
1,605
--------
LOCAL GENERAL OBLIGATIONS - 4.9%
City of Yonkers Schenectady,
4.500% 12/1/17 1,000 956
New York City,
Series-B,
6.000% 8/1/07 1,000 1,141
New York City,
Series-F,
6.000% 8/1/16 2,000 2,181
New York City,
Series-G,
5.750% 2/1/14 1,000 1,079
--------
5,357
--------
SPECIAL NON-PROPERTY TAX - 15.5%
Metropolitan Transportation Authority,
Series 1998-A,
4.500% 4/1/18 1,000 961
New York City Transitional Finance Authority:
Series 1998-A,
5.250% 11/15/13 1,000 1,066
Series 1998-C,
4.750% 5/1/23 3,000 2,907
State Local Government Assistance Corp:
Series 1993-C,
5.500% 4/1/17 2,100 2,301
Series 1993-E:
5.000% 4/1/21 5,150 5,219
6.000% 4/1/14 3,945 4,581
--------
17,035
--------
STATE APPROPRIATED - 16.1%
State Dormitory Authority,
State University of New York,
4.500% 5/15/20 1,000 932
State Dormitory Authority,
Mental Health Service Facilities,
5.250% 2/15/13 1,000 1,063
State Dormitory Authority:
City University,
Series 1990-C,
7.500% 7/1/10 1,500 1,861
University of New York,
Series 1990-B,
7.500% 5/15/11 1,000 1,260
State Dormitory Authority:
Series 1993-A,
5.500% 5/15/13 3,000 3,307
City University,
Series 1993-A,
6.000% 7/1/20 2,000 2,287
State Housing Finance Agency,
Series 1990-A,
8.000% 11/1/08 45 49
State Medical Care Facilities Finance Agency:
Series 1987-A,
8.875% 8/15/07 110 112
Series 1990-B,
7.875% 8/15/08 80 87
Series 1994-D,
6.150% 2/15/15 2,000 2,279
State Urban Development, Series-A,
5.500% 1/1/14 2,000 2,211
Triborough Bridge & Tunnel Authority,
Javits Convention Center Project,
Series-E,
7.250% 1/1/10 1,000 1,207
Urban Development Corp.,
5.125% 4/1/12 1,000 1,059
--------
17,714
--------
STATE GENERAL OBLIGATIONS - 2.2%
PR Commonwealth of Puerto Rico
Aqueduct & Sewer Authority,
Series 1995,
6.250% 7/1/12 2,000 2,370
--------
TRANSPORTATION - 10.2%
AIR TRANSPORTATION - 4.1%
New York City Industrial Development Agency,
American Airlines, Inc., Series 1994,
6.900% 8/1/24 2,000 2,214
Port Authority of New York & New Jersey,
JFK International Air Terminal, Series 6,
6.250% 12/1/08 2,000 2,342
--------
4,556
--------
TOLL FACILITIES - 3.9%
Triborough Bridge & Tunnel Authority,
Series 1991-B:
6.875% 1/1/15 1,000 1,076
6.875% 1/1/15 2,000 2,153
Triborough Bridge & Tunnel Authority,
Series-Y,
5.500% 1/1/17 1,000 1,101
--------
4,330
--------
TRANSPORTATION - 2.2%
Albany Parking Authority,
Green and Hudson Garage Project,
Series 1991-A,
7.150% 9/15/16 250 268
Port Authority of New York & New Jersey,
Series 85,
5.375% 3/1/28 2,000 2,175
--------
2,443
--------
..........................................................................................
UTILITY - 24.2%
INDIVIDUAL POWER PRODUCERS - 3.8%
New York City Industrial Development Agency,
Brooklyn Navy Yard Partners,
Series 1997,
6.200% 10/1/22 1,250 1,412
Port Authority of New York & New Jersey,
KIAC Partners,
Series 1996 IV,
6.750% 10/1/19 2,000 2,225
Suffolk Nissequo/Stoneybrook,
5.500% 1/1/23 500 502
--------
4,139
--------
INVESTOR OWNED - 8.0%
State Energy Research & Development Authority,
Consolidated Edison Co., Series 1991-A,
7.500% 1/1/26 500 522
State Energy Research & Development Authority:
Brooklyn Union Gas Co.,
Series 1989-A,
6.750% 2/1/24 3,000 3,291
Brooklyn Union Gas Co.,
Series 1993-A, IFRN,
9.335% 4/1/20 1,500 1,973
State Energy Research & Development Authority,
Consolidated Edison Co.,
Series 1993-B,
5.250% 8/15/20 3,000 3,059
--------
8,845
--------
MUNICIPAL ELECTRIC - 8.2%
Long Island Power Authority:
Series 1998,
5.125% 4/1/12 500 530
Series 1998-A:
5.000% 12/1/18 1,800 1,815
5.250% 12/1/26 2,470 2,495
PR Puerto Rico Electric Power Authority:
Series 1998-DD,
4.500% 7/1/19 1,000 965
Series 1998-EE,
4.500% 7/1/18 1,000 968
State Energy Research & Development Authority,
Long Island Lighting Co., Series 1992-A,
7.150% 2/1/22 2,000 2,257
--------
9,030
--------
WATER & SEWER - 4.2%
New York City Municipal Water Finance Authority,
5.375% 6/15/26 1,000 1,032
State Environmental Facilities Corp.,
New York City Municipal Water Finance Authority,
Series 1990-A,
7.500% 6/15/12 2,000 2,150
Suffolk County Industrial Development Agency,
Southwest Sewer Systems,
6.000% 2/1/07 1,245 1,413
--------
4,595
--------
TOTAL MUNICIPAL BONDS (cost of $95,781)(d) 106,088
--------
- ------------------------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS - 1.9%
- ------------------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES (e)
CA Irvine Improvement Bond Act of 1915,
Series 1998,
3.000% 9/2/23 500 500
CA Irvine Ranch Water District,
3.000% 1/1/21 400 400
ID State Health Facilities Authority,
St. Lukes Regional Medical Facility,
Series 1995,
3.200% 5/1/22 200 200
LA State Offshore Terminal Authority,
Loop, Inc.,
3.150% 9/1/06 200 200
MS Perry County,
Leaf River Forest Project,
3.150% 3/1/02 400 400
NM Farmington,
Arizona Public Service Co.,
Four Corners Project, Series 1994-B,
3.150% 9/1/24 100 100
Long Island Power Authority,
Sub-Series 1998-5,
3.150% 5/1/33 300 300
--------
TOTAL SHORT-TERM OBLIGATIONS 2,100
--------
OTHER ASSETS & LIABILITIES, NET - 1.8% 1,959
- ------------------------------------------------------------------------------------------
NET ASSETS - 100% $110,147
--------
NOTES TO INVESTMENT PORTFOLIO:
- ------------------------------------------------------------------------------------------
(a) This security is exempt from registration under Rule 144A of the Securities Act of
1933. This security may be resold in transactions exempt from registration, normally
to qualified institutional buyers. At January 31, 1999, the value of this security
amounted to $1,221 or 1.2% of net assets.
(b) The fund has been informed that each issuer has placed direct obligations of the U.S.
Government in an irrevocable trust, solely for the payment of the interest and
principal.
(c) Zero coupon bond.
(d) Cost for federal income tax purposes is the same.
(e) Variable rate demand notes are considered short-term obligations. Interest rates
change periodically on specified dates. These securities are payable on demand and are
secured either by letters of credit or other credit support agreements from banks. The
rates listed are as of January 31, 1999.
Acronym Name
---------------- --------------------------------------
IFRN Inverse Floating Rate Note
See notes to financial statements.
</TABLE>
<PAGE>
STATEMENT OF ASSETS & LIABILITIES
JANUARY 31, 1999
(in thousands except for per share amounts and footnotes)
ASSETS
Investments at value (cost $95,781) $106,088
Short-term obligations 2,100
--------
108,188
Receivable for:
Interest $1,470
Fund shares sold 682
Investments sold 9
Other 8 2,169
------ --------
Total Assets 110,357
LIABILITIES
Payable for:
Distributions 132
Fund shares repurchased 60
Payable to Advisor 5
Accrued:
Deferred Trustees fees 4
Other 9
------
Total Liabilities 210
--------
NET ASSETS $110,147
--------
Net asset value & redemption price per share -
Class A ($55,348/7,387) $ 7.49(a)
--------
Maximum offering price per share - Class A
($7.49/0.9525) $ 7.86(b)
--------
Net asset value & offering price per share -
Class B ($54,079/7,217) $ 7.49(a)
--------
Net asset value & offering price per share -
Class C ($720/96) $ 7.49(a)
--------
COMPOSITION OF NET ASSETS
Capital paid in $102,428
Overdistributed net investment income (93)
Accumulated net realized loss (2,495)
Net unrealized appreciation 10,307
--------
$110,147
--------
(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 YEAR ENDED JANUARY 31, 1999
(in thousands)
INVESTMENT INCOME
Interest $ 5,916
EXPENSES
Management fee $ 533
Service fee 186
Distribution fee - Class B 394
Distribution fee - Class C 4
Transfer agent 159
Bookkeeping fee 47
Trustees fee 12
Custodian fee 4
Audit fee 18
Legal fee 4
Registration fee 15
Reports to shareholders 8
Other 11
------
1,395
Fees waived by the Advisor (169)
Fees waived by the Distributor - Class C (1)
Custody credits earned (4) 1,221
----- ------
Net Investment Income 4,695
------
NET REALIZED & UNREALIZED GAIN ON PORTFOLIO POSITIONS
Net realized gain on:
Investments 799
Closed futures contracts 75
------
Net Realized Gain 874
Net Change in Unrealized Appreciation 947
------
Net Gain 1,821
------
Increase in Net Assets from Operations $6,516
------
See notes to financial statements.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
(in thousands) Year ended January 31
----------------------
INCREASE (DECREASE) IN NET ASSETS 1999 1998(a)
Operations:
Net investment income $ 4,695 $ 5,040
Net realized gain 874 1,344
Net unrealized appreciation 947 3,611
-------- --------
Net Increase from Operations 6,516 9,995
Distributions:
From net investment income - Class A (2,564) (2,680)
In excess of net investment income - Class A (83) (38)
From net investment income - Class B (2,114) (2,429)
In excess of net investment income - Class B (69) (35)
From net investment income - Class C (15) (2)
In excess of net investment income - Class C (b) (b)
-------- --------
1,671 4,811
-------- --------
Fund Share Transactions:
Receipts for shares sold - Class A 11,737 5,959
Value of distributions reinvested - Class A 1,452 1,318
Cost of shares repurchased - Class A (10,427) (8,522)
-------- --------
2,762 (1,245)
-------- --------
Receipts for shares sold - Class B 6,567 3,969
Value of distributions reinvested - Class B 1,232 1,344
Cost of shares repurchased - Class B (6,852) (8,329)
-------- --------
947 (3,016)
-------- --------
Receipts for shares sold - Class C 616 115
Value of distributions reinvested - Class C 15 2
Cost of shares repurchased - Class C (25) (15)
-------- --------
606 102
-------- --------
Net Increase (Decrease) from Fund Share
Transactions 4,315 (4,159)
-------- --------
Total Increase 5,986 652
NET ASSETS
Beginning of period 104,161 103,509
-------- --------
End of period (net of overdistributed
net investment income of $93 and $11,
respectively) $110,147 $104,161
-------- --------
(a) Class C shares were initially offered on August 1, 1997.
(b) Rounds to less than one.
See notes to financial statements.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS - CONT.
Year ended January 31
----------------------
(in thousands) 1999 1998(a)
NUMBER OF FUND SHARES
Sold - Class A 1,598 829
Issued for distributions reinvested - Class A 197 185
Repurchased - Class A (1,420) (1,198)
-------- --------
375 (184)
-------- --------
Sold - Class B 891 556
Issued for distributions reinvested - Class B 167 188
Repurchased - Class B (930) (1,165)
-------- --------
128 (421)
-------- --------
Sold - Class C 83 16
Issued for distributions reinvested - Class C 2 (b)
Repurchased - Class C (3) (2)
-------- --------
82 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
JANUARY 31, 1999
NOTE 1. ACCOUNTING POLICIES
- --------------------------------------------------------------------------------
ORGANIZATION: Colonial New York Tax-Exempt Fund (the Fund), a series of Colonial
Trust V, is a non-diversified portfolio of a Massachusetts business trust,
registered under the Investment Company Act of 1940, as amended, as an open-end
management investment company. The Fund's investment objective is to seek as
high a level of after-tax total return as is consistent with prudent risk, by
pursuing current income exempt from federal and New York state and city personal
income tax and provides opportunities for long-term appreciation from a
portfolio primarily invested in investment-grade municipal bonds. The Fund may
issue an unlimited number of shares. The Fund offers three classes of shares:
Class A, Class B, and Class C. Class A shares are sold with a front-end sales
charge and a 1.00% contingent deferred sales charge on redemptions made within
eighteen months on an original purchase of $1 million to $5 million. Class B
shares are subject to an annual distribution fee and a contingent deferred sales
charge. 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.
Futures contracts are valued based on the difference between the last sale price
and the opening price of the contract.
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.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
Portfolio positions which cannot be valued as set forth above are valued at fair
value under procedures approved by the Trustees.
Security transactions are accounted for on the date the securities are
purchased, 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), 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 2. 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 each Fund's pro-rata portion of the
combined average net assets of the funds consisting of Trust V as follows:
Average Net Assets Annual Fee Rate
------------------ ---------------
First $2 billion 0.50%
Over $2 billion 0.45%
BOOKKEEPING FEE: The Advisor 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: Liberty Funds Services, Inc., formerly Colonial Investors
Services Center, 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., formerly Liberty Financial Investments, Inc. (the
Distributor), a subsidiary of the Advisor, is the Fund's principal underwriter.
During the year ended January 31, 1999, the Fund has been advised that the
Distributor retained net underwriting discounts of $13,272 on sales of the
Fund's Class A shares and received contingent deferred sales charges (CDSC) of
$9,933, $100,077, 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 shares 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 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 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 $4,421 of
custodian fees were reduced by balance credits applied during the year ended
January 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 3. PORTFOLIO INFORMATION
- --------------------------------------------------------------------------------
INVESTMENT ACTIVITY: During the year ended January 31, 1999, purchases and sales
of investments, other than short-term obligations were $31,615,032 and
$29,301,745, respectively.
Unrealized appreciation (depreciation) at January 31, 1999, based on cost of
investments for both financial statement and federal income tax purposes was:
Gross unrealized appreciation $10,345,871
Gross unrealized depreciation (39,314)
-----------
Net unrealized appreciation $10,306,557
-----------
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:
Year of Capital loss
expiration carryforward
---------- ------------
2004 $ 1,254,000
2005 79,000
-----------
$ 1,333,000
-----------
Expired capital loss carryforwards, if any, are recorded as a reduction of
capital paid in.
To the extent loss carryforwards are used to offset any future realized gains,
it is unlikely that such gains would be distributed since they may be taxable to
shareholders as ordinary income.
OTHER: There are certain risks arising from geographic concentration in any
state. Certain revenue or tax related events in a state may impair the ability
of certain issuers of municipal securities to pay principal and interest on
their obligations.
The Fund may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
The Fund may purchase or sell municipal and Treasury bond futures contracts and
purchase and write options on futures. The Fund will invest in these instruments
to hedge against the effects of changes in the value of portfolio securities due
to anticipated changes in interest rates and/or market conditions, for duration
management, or when the transactions are economically appropriate to the
reduction of risk inherent in the management of the Fund and not for trading
purposes. The use of futures contracts and options involves certain risks which
include (1) imperfect correlation between the price movement of the instruments
and the underlying securities, (2) inability to close out a position due to
different trading hours, or the temporary absence of a liquid market for either
the instrument or the underlying securities or (3) an inaccurate prediction by
the Advisor of the future direction of interest rates. Any of these risks may
involve amounts exceeding the variation margin recorded in the Fund's Statement
of Assets and Liabilities at any given time.
NOTE 4. LINE OF CREDIT
- --------------------------------------------------------------------------------
The Fund may borrow up to 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 year ended January 31, 1999.
NOTE 5. SPECIAL MEETING OF SHAREHOLDERS (UNAUDITED)
- --------------------------------------------------------------------------------
On October 30, 1998, a Special Meeting of Shareholders of the Fund was held to
approve the following items, all as described in the Proxy Statement for the
Meeting. On August 21, 1998, the record date for the Meeting, the Fund had
outstanding 14,630,761 shares of beneficial interest. The votes cast at the
meeting were as follows:
AUTHORITY
FOR WITHHELD
--- --------
To elect a Board of Trustees:
Robert J. Birnbaum 7,907,055 252,465
Tom Bleasdale 7,906,364 253,155
John Carberry 7,906,980 252,539
Lora S. Collins 7,907,055 252,465
James E. Grinnell 7,907,055 252,465
Richard W. Lowry 7,907,671 251,849
Salvatore Macera 7,906,881 252,638
William E. Mayer 7,907,671 251,849
James L. Moody, Jr 7,906,364 253,155
John J. Neuhauser 7,907,671 251,849
Thomas E. Stitzel 7,907,671 251,849
Robert L. Sullivan 7,892,601 252,465
Anne-Lee Verville 7,906,881 252,638
To amend fundamental investment policies regarding borrowing and lending:
FOR AGAINST ABSTAIN
--- ------- -------
5,920,626 203,150 415,938
To approve policies for a master fund/feeder fund structure:
FOR AGAINST ABSTAIN
--- ------- -------
5,895,291 260,192 383,809
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
Selected data for a share of each class outstanding throughout each period are as follows:
<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.
- -----------------------------------------------------------------------------------------------
Federal Income Tax Information (unaudited)
Approximately 98.5% of the income distributions will be treated as exempt income for federal
income tax purposes.
- -----------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS - CONT.
Selected data for a share of each class outstanding throughout each period are as follows:
<CAPTION>
Year ended January 31
-----------------------------------------------------------------------------
1998 1997
Class A Class B Class C(b) Class A Class B
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value -
Beginning of period $ 7.040 $ 7.040 $ 7.270 $ 7.250 $ 7.250
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (a) 0.383 0.330 0.171(c) 0.393 0.340
Net realized and
unrealized gain (loss) 0.346 0.346 0.118 (0.207) (0.207)
------- ------- ------- ------- -------
Total from Investment
Operations 0.729 0.676 0.289 0.186 0.133
------- ------- ------- ------- -------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.384) (0.331) (0.179) (0.396) (0.343)
From capital paid in (0.005) (0.005) -- -- --
------- ------- ------- ------- -------
Total Distributions
Declared to Shareholders (0.389) (0.336) (0.179) (0.396) (0.343)
------- ------- ------- ------- -------
Net asset value -
End of period $ 7.380 $ 7.380 $ 7.380 $ 7.040 $ 7.040
------- ------- ------- ------- -------
Total return (d)(e) 10.67% 9.85% 4.04%(f) 2.76% 1.99%
------- ------- ------- ------- -------
RATIOS TO AVERAGE NET ASSETS
Expenses 0.67%(g) 1.42%(g) 1.12%(c)(g)(h) 0.65%(g) 1.40%(g)
Net investment income 5.31%(g) 4.56%(g) 4.72%(c)(g)(h) 5.56%(g) 4.81%(g)
Fees and expenses waived
or borne by the Advisor 0.28%(g) 0.28%(g) 0.29%(g)(h) 0.29%(g) 0.29%(g)
Portfolio turnover 38% 38% 38% 78% 78%
Net assets at end
of period (000) $51,744 $52,313 $ 104 $50,648 $52,861
(a) Net of fees and expenses waived or borne by the Advisor which amounted to:
$ 0.020 $ 0.020 $ 0.021 $ 0.020 $ 0.020
(b) Class C shares were initially offered on August 1, 1997. Per share amounts reflect activity from that
date.
(c) Net of fees waived by the Distributor which amounted to $0.011 per share and 0.30%.
(d) Total return at net asset value assuming all distributions reinvested and no initial sales charge or
contingent deferred sales charge.
(e) Had the 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
year's ratios are net of benefits received, if any.
(h) Annualized.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS - CONT.
<CAPTION>
Year ended January 31
------------------------------------------------------------
1996 1995
Class A Class B Class A Class B
------- ------- ------- -------
<S> <C> <C> <C> <C>
$ 6.680 $ 6.680 $ 7.500 $ 7.500
------- ------- ------- -------
0.401 0.349 0.427 0.376
0.576 0.576 (0.834) (0.834)
------- ------- ------- -------
0.977 0.925 (0.407) (0.458)
------- ------- ------- -------
(0.407) (0.355) (0.413) (0.362)
------- ------- ------- -------
(0.407) (0.355) (0.413) (0.362)
------- ------- ------- -------
$ 7.250 $ 7.250 $ 6.680 $ 6.680
------- ------- ------- -------
14.99% 14.15% (5.32)% (6.04)%
------- ------- ------- -------
0.58%(g) 1.33%(g) 0.42% 1.17%
5.72%(g) 4.97%(g) 6.25% 5.50%
0.38%(g) 0.38%(g) 0.46% 0.46%
39% 39% 65% 65%
$56,795 $53,505 $53,322 $43,166
$ 0.026 $ 0.026 $ 0.032 $ 0.032
</TABLE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE TRUSTEES OF COLONIAL TRUST V AND THE SHAREHOLDERS OF
COLONIAL NEW YORK TAX-EXEMPT FUND
In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Colonial New York Tax-Exempt Fund
(a series of Colonial Trust V) at January 31, 1999, the results of its
operations, the changes in its net assets and the financial highlights for the
periods indicated, in conformity with generally accepted accounting principles.
These financial statements and the financial highlights (hereafter referred to
as "financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of portfolio positions
at January 31, 1999 by correspondence with the custodian, provide a reasonable
basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
March 11, 1999
<PAGE>
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Colonial New York Tax-Exempt Fund is:
Liberty Funds Services, Inc.*
P.O. Box 1722
Boston, MA 02105-1722
1-800-345-6611
Colonial New York Tax-Exempt Fund mails one shareholder report to each
shareholder address. If you would like more than one report, please call
1-800-426-3750 and additional reports will be sent to you.
This report has been prepared for shareholders of Colonial New York Tax-Exempt
Fund. This report may also be used as sales literature when preceded or
accompanied by the current prospectus which provides details about sales
charges, investment objectives and operating policies of the Fund and the most
recent copy of the Liberty Funds Distributor, Inc. Performance Update.
* Effective October 1, 1998, Colonial Investors Service Center, Inc. -- the
Transfer Agent for Colonial, Crabbe Huson, Newport and Stein Roe Advisor Funds
-- changed 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)
JOHN 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)
[logo] L I B E R T Y
COLONIAL o CRABBE HUSON o NEWPORT o STEIN ROE ADVISOR
Liberty Funds Distributor, Inc. (C)1999
One Financial Center, Boston, MA 02111-2621, 1-800-426-3750
Visit us at www.libertyfunds.com
NY-02/598G-0199 (3/99) 99/277
