COLONIAL NEW YORK TAX-EXEMPT FUND Annual Report
January 31, 2000
[GRAPHIC OMITTED]
<PAGE>
President's Message
Dear Shareholder:
Amid the pressure of rising interest rates, virtually all bonds - including
municipal securities - posted significant losses for the 12-month period ended
January 31, 2000. This was due to the U.S. economy growing better than expected
and foreign economies rebounding throughout most of 1999. Both of these
occurrences stirred up inflationary fears, which prompted bond yields to move
higher. As bond yields rose, their prices declined. In response to this
environment, the Federal Reserve implemented three interest-rate hikes, the
first of which was in June, to slow down the economy and to address growing
fears of inflation.
A combination of stronger demand and reduced supply helped municipals lose less
ground than their Treasury counterparts during the year. Investors were lured
back to the municipal market after a long hiatus to capture the attractive
higher yields. Meanwhile, the supply of municipal bonds dwindled as issuers
reduced their refinancing activity in response to rising interest rates. Under
these circumstances, municipal bond investors experienced a tax-exempt yield
that was attractive compared to their taxable counterparts without having to
compromise quality.
Despite the difficulty rising interest rates presented, the Fund outperformed
its peer group average for the 12 months.1 Although past performance cannot
predict future results, it is important to maintain a long-term perspective when
making investment decisions. Colonial New York Tax-Exempt Fund continues to seek
competitive levels of tax-exempt income and the potential for long-term price
appreciation for its investors.
The Portfolio Manager's 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 10, 2000
(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 6.63% for the 12 months ended January 31,
2000. The Fund's Class A shares were ranked in the second quartile for one
year (45 out of 102), in the second quartile for three years (ranked 23 out
of 89), in the second quartile for five years (ranked 25 out of 75) and in
the third quartile for ten years (23 out of 33). 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 con tinue or come to
pass.
- -------------------------------
Not FDIC May Lose Value
Insured No Bank Guarantee
- -------------------------------
<PAGE>
Highlights
> Federal Reserve Board raised rates to slow the economy.
In June of 1999, the Federal Reserve Board made its first of three
interest-rate hikes in an attempt to slow a fast-growing economy and keep
inflation under control. Despite this anti-inflationary effort, the first
interest rate hike did little to slow the economy which resulted in the
Federal Reserve Board raising rates again in August and November. As interest
rates increased, the yields on bonds increased, causing their prices to
decline - since bond prices and interest rates move in opposite directions.
> Municipals held up better than Treasurys amid rising rates.
Compared to their U.S. Treasury counterparts, municipal bonds provided a
historically generous yield during this challenging period in the bond
market. Rising bond yields attracted more investors while supply diminished,
which provided municipals with a measure of insulation from rising interest
rates.
> Short-term obligations outperformed long-term issues as interest rates rose.
Securities such as short-term municipals outperformed long-term issues later
in the period. This was expected as bonds with shorter maturities are less
sensitive to changes in interest rates.
[BEGIN SIDEBAR]
Net asset value per share
as of 1/31/00
Class A $6.68
- -----------------------
Class B $6.68
- -----------------------
Class C $6.68
- -----------------------
Distributions declared from
2/1/99 to 1/31/00
Class A $0.345
- ------------------------
Class B $0.291
- ------------------------
Class C $0.313
- ------------------------
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.
SEC yields on 1/31/00
Class A 4.92%
- -----------------------
Class B 4.40%
- -----------------------
Class C 4.71%
- -----------------------
The 30-day SEC yields reflect the portfolio's earning power, net of expenses,
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 certain Fund
expenses, the SEC yield would have been 4.74%, 4.21%, 4.21% for Class A, B and C
shares, respectively.
Taxable-equivalent SEC yields
on 1/31/00
Class A 9.13%
- -----------------------
Class B 8.16%
- -----------------------
Class C 8.74%
- -----------------------
Taxable-equivalent SEC yields are based on the maximum effective 46.1% federal,
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 occur when
Adjusted Gross Income exceeds certain levels.
[END SIDEBAR]
Municipal vs. Treasury Bond Performance
1/31/99-1/31/00
[LINE CHART]
Lehman Brothers Municipal Bond Index (3.63)%
Salomon 30-Year Treasury Index (15.00)%
Performance of municipal bonds as illustrated by the Lehman Brothers Municipal
Bond Index, a broad-based, unmanaged index that tracks the performance of the
municipal bond market. 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. Unlike mutual
funds, indexes are not investments and do not incur fees or expenses. It is not
possible to invest directly in an index.
1
<PAGE>
Portfolio Manager's Report
Rising interest rates and inflation fears agitated bond markets
Bonds lost considerable ground during the period, plagued by rising interest
rates and persistent inflation worries. Against this unfavorable investment
environment, the Fund's Class A shares returned negative 6.34% without a sales
charge for the 12 months ended January 31, 2000, outperforming its Lipper peer
group average of negative 6.63%.
Fund adopted defensive short-term posture
At the beginning of the period, our outlook called for low inflation and modest
economic growth, in part due to the global economic and market turmoil during
the fall of 1998. Based on those expectations, we had structured the portfolio
with a larger-than-average proportion of bonds that tend to do well during
periods of declining interest rates and emphasized bonds that would help
maintain the Fund's income level over the long term.
To the surprise of most economists and market observers, the global turmoil
quickly abated, setting the stage for better economic growth around the world.
Rather than restructure the portfolio and sell bonds we believed ultimately
would serve the Fund well, we pursued some short-term strategies aimed at
temporarily cushioning the Fund against raising rates. One of our interim
defenses against rising rates was a position in short-term municipal notes.
Because of their short life span, municipal notes are the least susceptible to
changes in price due to changes in interest rates.
Fund pursued yield enhancing measures
Rising rates and bond yields afforded us selected opportunities to purchase some
attractively priced, longer-maturity bonds consistent with our long-term
outlook. We concentrated on issues with a maturity range of 20-30 years. The
Fund enjoyed attractive yields on these longer issues.
New York economy and fiscal position strengthened
New York's economy enjoyed its best performance in over a decade during the
period. Per capita income growth was on par with the national average, the
unemployment rate was at its lowest level in eight years and housing markets
exhibited strong growth. Wall Street continued to be the state's biggest
economic driver. The state's fiscal situation also improved, marked by year-end
surpluses and restrained social service spending.
[BEGIN SIDEBAR]
BOUGHT
New York Huntington Housing Authority
We purchased New York Huntington Housing Authority bonds (Gurwin Jewish Senior
Residences Project, 1.4% of net assets). The project enjoys strong management
attractive facilities and considerable financial support from the Gurwin Jewish
Geriatric Foundation. The high-yielding bonds were purchased at attractive
prices and represent good total return potential.
[BAR CHART]
Top Five Sectors
1/31/00 vs. 1/31/99
- - Special Non-Property Tax 16.4%
- -- 15.7%
- - State Appropriated 14.3%
- -- 16.4%
- - Education 5.6%
- -- 6.4%
- - Recreation 5.5%
- -- 3.0%
- - Investor Owned Utilities 5.3%
- -- 8.2%
- - Fund as of 1/31/00
- -- Fund as of 1/31/99
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 sector breakdowns in the
future.
[END SIDEBAR]
2
<PAGE>
Portfolio Manager's Report (continued)
Outlook calls for a more favorable environment
Our outlook for the municipal bond market is reasonably favorable, calling for
lower interest rates over the long term. That said, we wouldn't rule out the
possibility of the Fed raising short-term interest rates again to keep inflation
in check. Given a scenario characterized by moderate economic growth, low
inflation and stable to declining long-term interest rates, we believe that the
Fund is well positioned. If interest rates appear to us to be heading
significantly higher, we will adjust our strategy accordingly.
In our view, one of New York's biggest assets could be its biggest liability.
The state's economy is considerably reliant on the fortunes of the financial
services sector. A significant and protracted downturn in the stock market could
result in widespread layoffs in the financial services sector and may have
ramifications for a host of related sectors such as real estate, entertainment
and business services. As long as the equity market avoids a significant
correction and the national economy continues to grow, the state's economy
should continue to expand. Furthermore, New York is in its best financial and
economic position since the late 1980s.
/s/ 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.
Effective August 20, 1999, the Board of Trustees approved an increase in the
internal limit that the Fund's Advisor has set regarding investment in inverse
floating rate obligations. These obligations represent interest in tax-exempt
bonds and carry interest rates that vary inversely to changes in short-term
interest rates. Although floating rate obligations may have greater price
volatility and offer additional yield, the Fund's Advisor will from time to time
use futures contracts to mitigate the additional duration. The Advisor has set a
policy to invest no more than 15% of the Fund's total assets in inverse floating
rate obligations.
Tax-exempt investing offers current tax-free income, but also involves certain
risks. The value of the Fund will be affected by interest rate changes and the
creditworthiness of the issues held in the Fund. The Fund's management,
including risk management specialists and credit analysts, identifies problems
and opportunities and reacts quickly to market changes.
[BEGIN SIDEBAR]
Quality Breakdown
as of 1/31/00
AAA 44.8%
- ----------------------
AA 22.6%
- ----------------------
A 18.1%
- ----------------------
BBB 3.0%
- ----------------------
Non-rated 9.8%
- ----------------------
Cash equivalents 1.7%
- ----------------------
Quality breakdowns are calculated as a percentage of total investments,
including short-term obligations. Ratings shown in the quality breakdown
represent the highest rating assigned to a particular bond by one of the
following respected rating agencies: Standard & Poor's Corporation, Moody's
Investors Service, Inc. or Fitch Investors Service, Inc.
Because the Fund is actively managed, there can be no guarantee the Fund will
continue to maintain these quality breakdowns in the future.
SOLD
- ----------------------
New York State Power
Authority Bonds
We sold some New York State Power Authority bonds after they had been prefunded,
a process where the issuer backs the bonds with U.S. Treasury securities. After
the price boost from the prerefunding, the bonds offered less total return
potential.
[END SIDEBAR]
3
<PAGE>
Performance Information
[BEGIN SIDEBAR]
Performance of a
$10,000 investment
in all share classes from
1/31/90 - 1/31/00
Without With
Sales Sales
Charge Charge
Class A $18,213 $17,348
- --------------------------
Class B $17,220 $17,220
- --------------------------
Class C $18,006 $18,006
- --------------------------
[END SIDEBAR]
Performance of a $10,000 investment in Class A shares from 1/31/90 - 1/31/00
[MOUNTAIN CHART]
Lehman Brothers
Municipal Bond Index Without sales charge With sales charge
$19,479 $18,213 $17,348
The Lehman Brothers Municipal Bond Index is an 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.
Average Annual Total Returns as of 1/31/00
Share Class A B C
Inception Date 9/26/86 8/4/92 8/1/97
- -------------------------------------------------------------------------------
Without With Without With Without With
sales sales sales sales sales sales
charge charge charge charge charge charge
- -------------------------------------------------------------------------------
1 year (6.34)% (10.79)% (7.04)% (11.50)% (6.76)% (7.66)%
- -------------------------------------------------------------------------------
5 years 5.48 4.46 4.69 4.36 5.24 5.24
- -------------------------------------------------------------------------------
10 years 6.18 5.66 5.59 5.59 6.06 6.06
- -------------------------------------------------------------------------------
Average Annual Total Returns as of 12/31/99
Share Class A B C
- -------------------------------------------------------------------------------
Without With Without With Without With
sales sales sales sales sales sales
charge charge charge charge charge charge
- -------------------------------------------------------------------------------
1 year (4.52)% (9.06)% (5.24)% (9.79)% (4.96)% (5.87)%
- -------------------------------------------------------------------------------
5 years 6.43 5.39 5.64 5.31 6.19 6.19
- -------------------------------------------------------------------------------
10 years 6.16 5.64 5.57 5.57 6.04 6.04
- -------------------------------------------------------------------------------
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 4.75% charge for Class A shares and the maximum contingent deferred
sales charges (CDSC) of 5% for one year and 2% for five years for Class B shares
and 1% for one year for Class C shares.
Performance results reflect any voluntary waivers or reimbursement of Fund
expenses by the Advisor or 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 their inception dates. 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 the periods prior to the inception of Class B and
Class C shares would have been lower.
4
<PAGE>
Investment Portfolio
January 31, 2000
(In thousands)
Municipal Bonds - 97.6% Par Value
- ------------------------------------------------
EDUCATION - 5.6%
Education
State Dormitory Authority,
Series 1985,
7.800% 12/01/05 $ 25 $ 26
State Dormitory Authority,
Pace University,
6.500% 07/01/11 1,000 1,088
State Dormitory Authority:
New York University
Series 1998-A,
5.750% 07/01/27 2,000 1,926
New York Medical College,
Series 1998,
5.250% 07/01/13 1,000 944
State Dormitory Authority,
Series 1999,
6.000% 07/01/24 1,000 959
------
4,943
------
- ------------------------------------------------
HEALTHCARE - 3.8%
Congregate Care Retirement - 0.7%
Suffolk County Industrial
Development Agency,
Jefferson Ferry,
Series 1999 A,
7.200% 11/01/19 600 576
------
Hospital - 3.1%
State Dormitory Authority:
Beth Israel Medical Center,
Series 1997-A,
5.125% 11/01/16 1,075 949
St. Clare's Hospital,
Series 1998-B,
5.300% 02/15/19 750 655
State Dormitory Authority,
New Island Hospital,
Series 1999-A,
5.750% 07/01/19 1,215 1,155
------
2,759
------
- ------------------------------------------------
HOUSING - 7.9%
Assisted Living/Senior - 4.1%
Glen Cove Housing Authority,
8.250% 10/01/26 1,000 1,049
Huntington Housing Authority,
Gurwin Jewish Senior Center,
Series 1999,
5.875% 05/01/19 1,500 1,228
Par Value
- ------------------------------------------------
Mount Vernon Industrial
Development Agency,
Series 1999:
6.150% 06/01/19 $1,000 $ 863
6.200% 06/01/29 615 514
------
3,654
------
Multi-Family - 3.8%
Hudson Housing Development Corp.,
Providence Hall-Schuyler
Court Project,
Series 1992-A,
6.500% 11/01/22(a) 750 763
Nyack Housing Assistance Corp.,
Nyack Plaza Apartments,
7.375% 06/01/21(b) 1,157 1,141
State Housing Finance Agency:
Series 1989-B,
7.550% 11/01/29 230 235
Series 1996-A,
6.100% 11/01/15 1,230 1,239
------
3,378
------
- ------------------------------------------------
INDUSTRIAL - 2.5%
Forest Products - 0.5%
Essex County Industrial
Development Agency,
International Paper Corp.,
Series 1999-A,
6.450% 11/15/23 500 485
------
Manufacturing - 1.0%
Monroe County Industrial
Development Agency,
Yorkmill Realty Association,
Series 1986,
9.500% 12/01/06 855 875
------
Oil & Gas - 1.0%
State Energy Research &
Development Authority,
Central Hudson Gas &
Electric Corp.,
Series 1999,
5.450% 08/01/27 1,000 894
------
- ------------------------------------------------
OTHER - 5.4%
Other - 1.1%
TSASC, Inc., Series 1999-1,
6.250% 07/15/34 1,000 947
------
See notes to financial statements.
5
<PAGE>
Investment Portfolio (continued)
January 31, 2000
(In thousands)
Municipal Bonds - continued Par Value
- ------------------------------------------------
Refunded/Escrowed (c) - 4.3%
PR Commonwealth of Puerto Rico,
Series 1994,
6.500% 07/01/23 $2,000 $ 2,162
State Housing Finance Agency,
Series 1990-A,
8.000% 11/01/08 205 215
State Medical Care Facilities
Finance Agency:
Series 1994-D,
6.150% 02/15/15 1,000 1,064
Series 1990-B,
7.875% 08/15/08 395 411
-------
3,852
-------
- ------------------------------------------------
OTHER REVENUE - 5.4%
Recreation
Hamilton Industrial Development Agency,
Adirondack Historical Association,
Series 1998-A,
5.250% 11/01/18 500 438
New York City Cultural Trust,
American Museum of Natural History:
Series 1997-A,
5.600% 04/01/18 1,000 945
Series 1999-A,
5.750% 07/01/29(a) 2,000 1,887
New York City Industrial
Development Agency,
United States Tennis Association,
Tennis Center Project,
Series 1994,
6.375%, 11/15/14 1,500 1,565
-------
4,835
-------
- ------------------------------------------------
RESOURCE RECOVERY - 2.3%
Disposal
Westchester County Industrial
Development Agency,
Westchester Resco Co. Project,
6.000% 07/01/09 2,000 2,071
-------
- ------------------------------------------------
TAX-BACKED - 37.7%
Local Appropriated - 0.6%
State Dormitory Authority,
Judicial Facilities,
Series 1991-A,
9.500% 04/15/14 100 115
Par Value
- ------------------------------------------------
State Dormitory Authority,
Westchester County,
Series 1998,
(d) 08/01/19 $1,200 $ 363
-------
478
- ------------------------------------------------
Local General Obligations - 4.2%
New York City:
Series F,
6.000% 08/01/16(a) 2,000 1,980
Series 1999-H,
5.250% 03/15/12 1,000 948
City of Yonkers,
Series 1999-A,
4.500% 12/01/17 1,000 812
-------
3,740
-------
Special Non-Property Tax - 16.3%
Metropolitan Transportation Authority,
Series 1998-A,
4.500% 04/01/18 2,000 1,610
New York City Transitional
Finance Authority,
Series 1998-C,
4.750% 05/01/23 3,000 2,405
State Local Government
Assistance Corp:
Series 1993-C,
5.500% 04/01/17 2,100 2,019
Series 1993-E,
5.000% 04/01/21 5,150 4,400
Series 1993-E,
6.000% 04/01/14 3,945 4,070
-------
14,504
-------
State Appropriated - 14.2%
State Dormitory Authority:
City University,
Series 1990-C,
7.500% 07/01/10 1,500 1,678
University of New York,
Series 1990-B,
7.500% 05/15/11 1,000 1,127
State Dormitory Authority:
Series 1993-A,
5.500% 05/15/13 3,000 2,931
City University,
Series 1993-A,
6.000% 07/01/20 2,000 1,963
See notes to financial statements.
6
<PAGE>
Investment Portfolio (continued)
January 31, 2000
(In thousands)
Municipal Bonds - continued Par Value
- ------------------------------------------------
State Dormitory Authority,
State University Educational Facilities,
Series 1998-B,
4.500% 05/15/20 $1,000 $ 770
State Dormitory Authority,
Mental Health Services,
Series 1998,
5.250% 02/15/13 1,000 947
State Dormitory Authority,
State University,
Series 1999,
5.250% 05/15/18 1,000 900
State Housing Finance Agency,
Series 1990-A,
8.000% 11/01/08 45 46
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 83
State Urban Development Corp.,
Series 1993-A,
5.500% 11/01/14(a) 1,000 984
Triborough Bridge & Tunnel
Authority, Javits Convention
Center Project, Series E,
7.250% 11/01/10 1,000 1,101
-------
12,640
-------
State General Obligations - 2.4%
PR Commonwealth of Puerto Rico
Aqueduct & Sewer Authority,
Series 1995,
6.250% 07/01/12 2,000 2,113
-------
- ------------------------------------------------
TRANSPORTATION - 10.2%
Air Transportation - 4.1%
New York City Industrial
Development Agency,
America Airlines, Inc.
Series 1994,
6.900% 08/01/24 2,000 2,014
Port Authority of New York &
New Jersey, JFK International
Air Terminal, Series 6,
6.250% 12/01/08 1,500 1,583
-------
3,597
-------
Par Value
- ------------------------------------------------
Toll Facilities - 3.8%
State Thruway Authority,
Highway & Bridging Trust Fund,
Series 1999-A,
5.125% 04/01/13 $1,500 $ 1,402
Triborough Bridge & Tunnel
Authority, Series Y,
5.500% 11/01/17 1,000 967
Triborough Bridge & Tunnel
Authority, Series 1991-B,
6.875% 11/01/15 1,000 1,037
-------
3,406
-------
Transportation - 2.3%
Albany Parking Authority,
Green and Hudson Garage Project,
Series 1991-A,
7.150% 09/15/16 250 252
Port Authority of New York &
New Jersey,
Series 85,
5.375% 03/01/28 2,000 1,785
-------
2,037
-------
- ------------------------------------------------
UTILITY - 16.8%
Independent Power Producer - 2.7%
Port Authority of New York &
New Jersey,
KIAC Partners,
Series 1996 IV,
6.750% 10/01/19 2,000 1,990
Suffolk County Industrial
Development Agency,
Nissequogue Cogen Partners,
Series 1998,
5.500% 11/01/23 500 419
-------
2,409
-------
Investor Owned - 5.2%
State Energy Research &
Development Authority:
Brooklyn Union Gas Co:
Series 1989-A,
6.750% 02/01/24 3,000 3,138
Series 1993-A, IFRN,
8.396% 04/01/20 1,500 1,524
-------
4,662
-------
See notes to financial statements.
7
<PAGE>
Investment Portfolio (continued)
January 31, 2000
(In thousands)
Municipal Bonds - continued Par Value
- ------------------------------------------------
Municipal Electric - 4.2%
Long Island Power Authority,
Series 1998-A,
5.250% 12/01/26 $2,470 $ 2,091
PR Electric Power Authority:
Series 1998-DD,
4.500% 07/01/19 1,000 811
Series 1998-EE,
4.500% 07/01/18 1,000 819
-------
3,721
-------
Water & Sewer - 4.7%
New York City Municipal Water
Finance Authority,
Series 1998-D,
4.750% 06/15/25(a) 1,000 798
State Environmental Facilities
Corp.,
New York City Municipal
Water Finance Authority,
Series 1990-A,
7.500% 06/15/12 2,000 2,061
Suffolk County Industrial
Development Agency,
Southwest Sewer Systems,
6.000% 02/01/07 1,245 1,298
-------
4,157
-------
Total Municipal Bonds
(cost of $88,627)(e) 86,733
-------
Short-Term Obligations - 1.7%
- ------------------------------------------------
Variable Rate Demand Notes (f) Par Value
- ------------------------------------------------
District of Columbia,
Series 1991 B-1,
3.650% 06/01/03 $400 $ 400
IL Galesburg, Knox College
Series 1999,
3.300% 07/01/24 200 200
IL Sauget, Monsanto County
Series 1996,
3.450% 09/01/14 900 900
-------
Total Short Term Obligations 1,500
-------
Other Assets & Liabilities, Net - 0.7% 639
- ------------------------------------------------
Net Assets - 100% $88,872
=======
Notes to Investment Portfolio:
(a) These securities, or a portion thereof, with a total market value of $3,787
are being used to collateralize open futures contracts.
(b) 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,
2000, the value of this security amounted to $1,141 or 1.3% of net assets.
(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 January 31, 2000.
Futures contracts open at January 31, 2000:
Par Unrealized
value appreciation
covered by Expiration (depreciation)
Type contracts month at 01/31/00
- ----------------------------------------------------------------------
Municipal Bond $2,700 March $ (112)
Acronym Name
---------- --------------------------
IFRN Inverse Floating Rate Note
See notes to financial statements.
8
<PAGE>
Statement of Assets and Liabilities
January 31, 2000
(in thousands except for per share amounts and footnotes)
Assets
Investments at value (cost $88,627) $86,733
Short-term obligations 1,500
-------
88,233
Receivable for:
Interest $ 1,303
Fund shares sold 178
Expense reimbursement due
from the Advisor 21
Other 61 1,563
------- -------
Total Assets 89,796
Liabilities
Payable for:
Fund shares repurchased 658
Distributions 128
Variation margin on futures 10
Accrued:
Management fee 38
Deferred Trustees fees 2
Other 88
-------
Total Liabilities 924
-------
Net Assets $88,872
=======
Net asset value & redemption price per share
-- Class A ($43,471/6,506) $ 6.68(a)
=======
Maximum offering price per share
-- Class A ($6.68/0.9525) $ 7.01(b)
=======
Net asset value & offering price per share
-- Class B ($44,747/6,696) $ 6.68(a)
=======
Net asset value & offering price per share
-- Class C ($654/98) $ 6.68(a)
=======
Composition of Net Assets
Capital paid in $92,880
Overdistributed net investment income (2)
Accumulated net realized loss (2,000)
Net unrealized depreciation on:
Investments (1,894)
Futures contracts (112)
-------
$88,872
=======
(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 Year Ended January 31, 2000
(in thousands)
Investment Income
Interest $ 5,809
Expenses
Management fee $ 511
Service fee 194
Distribution fee -- Class B 381
Distribution fee -- Class C 6
Transfer agent fee 156
Bookkeeping fee 45
Trustees fee 11
Custodian fee 4
Audit fee 18
Legal fee 8
Registration fee 15
Reports to shareholders 18
Other 13
-------
1,380
Fees waived by the Advisor (182)
Fees waived by the
Distributor -- Class C (2)
Custodian credits earned (4) 1,192
------- --------
Net Investment Income 4,617
--------
Net Realized & Unrealized Gain (loss)
on Portfolio Positions
Net realized gain on:
Investments and options 351
Closed futures contracts 192
--------
Net realized gain 543
Net change in unrealized
appreciation/depreciation
during the period on:
Investments (12,201)
Open futures contracts (112)
--------
Net Loss (12,313)
--------
Decrease in Net Assets from Operations $ (7,153)
========
See notes to financial statements.
9
<PAGE>
Statement of Changes in Net Assets
Years Ended January 31
------------------------
Increase (Decrease) in Net Assets 2000 1999
- --------------------------------------------------------------------------
Operations:
Net investment income $ 4,617 $ 4,695
Net realized gain 543 874
Net change in unrealized
appreciation/depreciation (12,313) 947
-------- --------
Net Increase (Decrease) from Operations (7,153) 6,516
Distributions:
From net investment income -- Class A (2,454) (2,564)
In excess of net investment income
-- Class A -- (83)
From net investment income -- Class B (2,084) (2,114)
In excess of net investment income
-- Class B -- (69)
From net investment income -- Class C (36) (15)
In excess of net investment income
-- Class C -- (a)
-------- --------
(11,727) 1,671
-------- --------
Fund Share Transactions:
Receipts for shares sold -- Class A 3,769 11,737
Value of distributions reinvested
-- Class A 1,343 1,452
Cost of shares repurchased -- Class A (11,164) (10,427)
-------- --------
(6,052) 2,762
-------- --------
Receipts for shares sold -- Class B 6,728 6,567
Value of distributions reinvested
-- Class B 1,115 1,232
Cost of shares repurchased -- Class B (11,367) (6,852)
-------- --------
(3,524) 947
-------- --------
Receipts for shares sold -- Class C 402 616
Value of distributions reinvested
-- Class C 35 15
Cost of shares repurchased -- Class C (409) (25)
-------- --------
28 606
-------- --------
(a) Rounds to less than one.
Years Ended January 31
------------------------
2000 1999
- -------------------------------------------------------------------------
Net Increase (Decrease) from Fund Share
Transactions (9,548) 4,315
-------- --------
Total Increase (Decrease) (21,275) 5,986
Net Assets
Beginning of period 110,147 104,161
-------- --------
End of period (net of overdistributed
net investment income
of $2 and $93, respectively) $ 88,872 $110,147
======== ========
Number of Fund Shares
Sold -- Class A 526 1,598
Issued for distributions reinvested
-- Class A 190 197
Repurchased -- Class A (1,597) (1,420)
-------- --------
(881) 375
-------- --------
Sold -- Class B 937 891
Issued for distributions reinvested
-- Class B 158 167
Repurchased -- Class B (1,616) (930)
-------- --------
(521) 128
-------- --------
Sold -- Class C 55 83
Issued for distributions reinvested
-- Class C 5 2
Repurchased -- Class C (58) (3)
-------- --------
2 82
-------- --------
See notes to financial statements.
10
<PAGE>
Notes to Financial Statements
January 31, 2000
Note 1. Accounting Policies
Organization
Colonial New York Tax Exempt Fund (the Fund), a series of Liberty Funds Trust V
(formerly 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 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
as follows:
Converts to
Original Purchase Class A Shares
---------------- --------------
Less than $250,000 8 years
$250,000 to less than $500,000 4 years
$500,000 to less than $1,000,000 3 years
Class C shares are subject to a contingent deferred sales charge on redemptions
made within one year after purchase and an annual distribution fee.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. The following is a summary of
significant accounting policies that are consistently followed by the Fund in
the preparation of its financial statements.
Security valuation and transactions
Debt securities generally are valued by a pricing service based upon market
transactions for normal, institutional-size trading units of similar securities.
When management deems it appropriate, an over-the-counter or exchange bid
quotation is used.
Options are valued at the last reported sale price, or in the absence of a sale,
the mean between the last quoted bid and asking price.
Futures contracts are valued based on the difference between the last sale price
and the opening price of the contract.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
Portfolio positions for which market quotations are not readily available are
valued at fair value under procedures approved by the Trustees.
Security transactions are accounted for on the date the securities are
purchased, sold or mature.
Cost is determined and gains (losses) are based upon the specific identification
method for both financial statement and federal income tax purposes.
The Fund may trade securities on other than normal settlement terms. This may
increase the risk if the other party to the transaction fails to deliver and
causes the Fund to subsequently invest at less advantageous prices.
Determination of class net asset values and financial highlights
All income, expenses (other than the Class B and Class C distribution fees), and
realized and unrealized gains (losses), are allocated to each class
proportionately on a daily basis for purposes of determining the net asset value
of each class.
Class B and Class C per share data and ratios are calculated by adjusting the
expense and net investment income per share data and ratios for the Fund for the
entire period by the distribution fee applicable to Class B and Class C shares
only.
Federal income taxes
Consistent with the Fund's policy to qualify as a regulated investment company
and to distribute all of its taxable and tax-exempt income, no federal income
tax has been accrued.
Interest income, debt discount and premium
Interest income is recorded on the accrual basis. Original issue discount is
accreted to interest income over the life of a security with a corresponding
increase in the cost basis; market discount is not accreted. Premium is
amortized against interest income with a corresponding decrease in the cost
basis.
Distributions to Shareholders
The Fund declares and records distributions daily and pays monthly.
The amount and character of income and gains to be distributed are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles. Reclassifications are made to the Fund's capital accounts
to reflect income and gains available for distribution (or available capital
loss carryforwards) under income tax regulations.
11
<PAGE>
Notes to Financial Statements (continued)
January 31, 2000
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 the Fund's pro-rata portion of the combined average net
assets of the funds constituting Trust V as follows:
Average Net Assets Annual Fee Rate
------------------ ---------------
First $2 billion 0.50%
Over $2 billion 0.45%
Bookkeeping fee
The Advisor provides bookkeeping and pricing services for $27,000 annually plus
0.035% annually 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.
Effective January 1, 2000, the Transfer Agent fee was changed to a fee comprised
of 0.07% annually of average net assets plus charges based on the number of
shareholder accounts and transactions.
Underwriting discounts, service and distribution fees
Liberty Funds Distributor, Inc., (the Distributor), a subsidiary of the Advisor,
is the Fund's principal underwriter. For the year ended January 31, 2000, the
Fund has been advised that the Distributor retained net underwriting discounts
of $11,644 on sales of the Fund's Class A shares and received contingent
deferred sales charges (CDSC) of none, $100,051 and $1,691 on Class A, Class B
and Class C share redemptions, respectively.
The Fund has adopted a 12b-1 plan which requires the payment of a distribution
fee to the Distributor equal to 0.75% annually of the Fund's average net assets
attributable to Class B and Class C shares. The Distributor has voluntarily
agreed, until further notice, to waive a portion of the Class C share
distribution fee so that it will not exceed 0.45% annually. The Plan also
requires the payment of a service fee to the Distributor as follows:
Valuation of shares Annual
outstanding on the 20th of Fee
each month which were issued Rate
- ---------------------------- ------
Prior to December 1, 1994 0.10%
On or after December 1, 1994 0.25%
The CDSC and the fees received from the 12b-1 plan are used principally as
repayment to the Distributor for amounts paid by the Distributor to dealers who
sold such shares.
Expense limits
The 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 $3,742 of
custodian fees were reduced by balance credits applied during the year ended
January 31, 2000. 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
For the year ended January 31, 2000, purchases and sales of investments, other
than short-term obligations were $16,748,111 and $24,145,790, respectively.
Unrealized appreciation (depreciation) at January 31, 2000, based on cost of
investments for both financial statement and federal income tax purposes was:
Gross unrealized appreciation $ 2,330,796
Gross unrealized depreciation (4,224,915)
-----------
Net unrealized depreciation $(1,894,119)
===========
Capital loss carryforwards
At January 31, 2000, 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
2008 99,000
----------
$1,432,000
==========
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.
12
<PAGE>
Notes to Financial Statements (continued)
January 31, 2000
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 4. Line of Credit
The Fund may borrow up to 331/3% 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, 2000.
13
<PAGE>
Financial Highlights
Selected data for a share of each class outstanding throughout each period are
as follows:
<TABLE>
<CAPTION>
Year ended January 31
-----------------------------
2000
-----------------------------
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)(b) 0.347 0.293 0.315(c)
Net realized and unrealized loss (0.812) (0.812) (0.812)
------- ------- -------
Total from Investment Operations (0.465) (0.519) (0.497)
------- ------- -------
Less Distributions Declared to Shareholders:
From net investment income (0.345) (0.291) (0.313)
------- ------- -------
Net asset value -- End of period $ 6.680 $ 6.680 $ 6.680
======= ======= =======
Total return (d)(e) (6.34)% (7.04) % (6.76)%
======= ======= =======
Ratios to Average Net Assets
Expenses (f) 0.79% 1.54% 1.24%(c)
Net investment income (f) 4.90% 4.15% 4.45%(c)
Fees and expenses waived or borne by the Advisor (f) 0.18% 0.18% 0.18%
Portfolio turnover 17% 17% 17%
Net assets at end of period (000) $43,471 $44,747 $ 654
(a) Net of fees and expenses waived or borne by the Advisor
which amounted to: $ 0.013 $ 0.013 $ 0.013
(b) The per share net investment income amounts do not reflect the period's
reclassification of differences between book and tax basis net investment income.
(c) Net of fees waived by the Distributor which amounted to $0.021 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/or Distributor not waived or reimbursed a portion of
expenses, total return would have been reduced.
(f) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
</TABLE>
- --------------------------------------------------------------------------------
2000 Federal Tax Information (unaudited)
Approximately 99.1% of the income distribution will be treated as exempt income
for federal income tax purposes.
- --------------------------------------------------------------------------------
<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>
Financial Highlights
Selected data for a share of each class outstanding throughout each period are
as follows:
<TABLE>
<CAPTION>
Years 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 (g) 0.67% 1.42% 1.12%(c)(h) 0.65% 1.40%
Net investment income (g) 5.31% 4.56% 4.72%(c)(h) 5.56% 4.81%
Fees and expenses waived or borne
by the Advisor (g) 0.28% 0.28% 0.29%(h) 0.29% 0.29%
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 data reflects 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.
(h) Annualized.
</TABLE>
Year ended January 31
-----------------------
1996
-----------------------
Class A Class B
- -----------------------------------------------------------------------------
Net asset value -- Beginning of period $ 6.680 $ 6.680
------- -------
Income From Investment Operations:
Net investment income (a) 0.401 0.349
Net realized and unrealized gain 0.576 0.576
------- -------
Total from Investment Operations 0.977 0.925
------- -------
Less Distributions Declared to Shareholders:
From net investment income (0.407) (0.355)
------- -------
Net asset value -- End of period $ 7.250 $ 7.250
------- -------
Total return (b)(c) 14.99% 14.15%
------- -------
Ratios to Average Net Assets
Expenses (d) 0.58% 1.33%
Net investment income (d) 5.72% 4.97%
Fees and expenses waived or borne by the Adviser (d) 0.38% 0.38%
Portfolio turnover 39% 39%
Net assets at end of period (000) $56,795 $53,505
(a) Net of fees and expenses waived or borne by the
Adviser which amounted to: $ 0.026 $ 0.026
(b) Total return at net asset value assuming all distributions reinvested and no
initial sales charge or contingent deferred sales charge.
(c) Had the Adviser not waived or reimbursed a portion of expenses, total return
would have been reduced.
(d) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
15
<PAGE>
Report of Independent Accountants
To the Trustees of Liberty Funds 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
(the "Fund") (a series of Liberty Funds Trust V, formerly Colonial Trust V), at
January 31, 2000, the results of its operations, the changes in its net assets
and the financial highlights for the periods indicated, in conformity with
accounting principles generally accepted in the United States. 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 auditing
standards generally accepted in the United States 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, 2000 by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
March 10, 2000
16
<PAGE>
Trustees & Transfer Agent
- --------------------------------------------------------------------------------
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
Academic Vice President and Dean of Faculties, Boston College (former 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.
Annual Report:
Colonial New York Tax-Exempt Fund
<PAGE>
Liberty offers the independent thinking and collective strength of six financial
specialists. Our distinguished product line helps financial advisors and their
clients build diversified investment portfolios for long-term financial goals.
LIBERTY
-------
FUNDS
ALL-STAR Institutional money management approach for individual investors.
COLONIAL Fixed income and value style equity investing.
CRABBE A contrarian approach to fixed income and equity investing.
HUSON
NEWPORT A leader in international investing.(SM)
STEIN ROE Solutions for growth and income investing.
ADVISOR
KEYPORT A leading provider of innovative annuity products.
[LOGO]
Liberty's mutual funds are offered by prospectus through Liberty Funds
Distributor, Inc.
Before you invest, consult your financial advisor.
Your financial advisor can help you develop a long-term plan for reaching your
financial goals.
COLONIAL NEW YORK TAX-EXEMPT FUND Annual Report
[LIBERTY LOGO] LIBERTY
-------
FUNDS
ALL-STAR * COLONIAL * CRABBE HUSON * NEWPORT * STEIN ROE ADVISOR
Liberty Funds Distributor, Inc. [Copyright]2000
One Financial Center, Boston, MA 02111-2621, 1-800-426-3750
www.libertyfunds.com
774-02/378A-0200 (3/00) 00/343
