<PAGE> 1
LIBERTY NEW YORK TAX-EXEMPT FUND Semiannual Report
July 31, 2000
[BACKGROUND GRAPHIC]
<PAGE> 2
President's Message
Dear Shareholder:
You may have noticed that your Fund has a new name. As of July 14, the names of
our funds were changed to include Liberty. Rest assured, the investment
objectives and strategies employed by the Fund's managers are not affected by
this name change. We believe the new name better reflects your Fund is part of
Liberty Funds, a diverse family of funds representing a wide selection of
investment styles and specialized money management. The goal of all Liberty
funds is to help you reach for financial freedom -- however you define it.
Although the municipal bond markets exhibited considerable volatility during the
six months ended July 31, 2000, the overall result was positive. As the Federal
Reserve (the Fed) repeatedly raised key short-term interest rates -- by 0.25% in
both February and March and by 0.50% in May -- two things became quite clear.
First, the Fed was concerned that the rapidly expanding U.S. economy could
trigger higher rates of inflation; and second, the Fed was determined to keep
inflation firmly in hand.
At the beginning of the period, longer-term municipal bond prices rose. Prices
then fell as interest rates rose. However, the Fed's persistence -- coupled with
indications by the second quarter of the calendar year that the economy may be
slowing -- appears to have convinced investors that inflation will not become a
major obstacle to the bond market in the foreseeable future. Municipal bond
prices rallied in the final two months of the period.
As always, thank you for choosing Liberty New York Tax-Exempt Fund and for
giving us the opportunity to serve your investment needs.
Respectfully,
/s/Stephen E. Gibson
Stephen E. Gibson
President
September 11, 2000
Not FDIC Insured
May Lose Value
-----------------
No Bank Guarantee
Because economic and market conditions change frequently, there can be no
assurance that the trends described in this report will continue or come to
pass.
<PAGE> 3
HIGHLIGHTS
- POSITIVE RESULTS FOR MUNICIPAL BONDS WERE BOLSTERED BY REDUCED SUPPLY
Due partly to high tax revenues and budget surpluses, state and local
governments issued fewer municipal bonds during the first six months of
calendar year 2000. New bond issues were 22% below the 1999 level, and
refundings of existing bonds declined nearly 70%. At the same time, higher
yields prompted an increase in individual demand for municipal bonds. The
combination of reduced supply and increased demand helped to keep prices
for municipal bonds higher than they might otherwise have been.
- THE MUNICIPAL BOND YIELD CURVE FLATTENED DURING THE SIX-MONTH PERIOD
Between February and July, yields for short-term municipal bonds declined
slightly (0.10% to 0.20%). Meanwhile, rates for intermediate- and long-term
municipals fell by as much as 0.54% as investors responded to early signs
that the U.S. economy may be slowing and that inflation may not soon become
a serious problem. As yields fell, bond prices rose, and the gains were
largest for bonds in the 25- to 30-year maturity range.
MUNICIPAL VS. TREASURY BOND PERFORMANCE
1/31/00 - 7/31/00
[LINE GRAPH]
<TABLE>
SALOMON 30-YEAR LEHMAN BROTHERS
TREASURY BOND MUNICIPAL BOND
INDEX (%) INDEX (%)
<S> <C> <C>
1/31/00 0 % 0 %
2/29/00 1.16% 3.7 %
3/31/00 3.37% 8.56%
4/30/00 2.76% 7.23%
5/31/00 2.22% 7.02%
6/30/00 4.93% 9.36%
7/31/00 6.4 % 11.48%
</TABLE>
Performance of municipal bonds is illustrated by the Lehman Brothers Municipal
Bond Index, a broad-based, unmanaged index that tracks the performance of the
municipal bond market. 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.
Past performance is no guarantee of future results.
NET ASSET VALUE PER SHARE AS OF
7/31/00
<TABLE>
<S> <C>
Class A $7.01
------------------------------
Class B $7.01
------------------------------
Class C $7.01
------------------------------
</TABLE>
DISTRIBUTIONS DECLARED PER
SHARE FROM 2/1/00 TO 7/31/00
<TABLE>
<S> <C>
Class A $.178
------------------------------
Class B $.153
------------------------------
Class C $.163
------------------------------
</TABLE>
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 7/31/00
<TABLE>
<S> <C>
Class A 4.76%
------------------------------
Class B 4.22%
------------------------------
Class C 4.54%
------------------------------
</TABLE>
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 4.57% for Class A shares, 4.01% for
Class B shares, and 4.03% for Class C shares.
<TABLE>
<CAPTION>
Taxable-equivalent SEC yields on 7/31/00
<S> <C>
Class A 8.83%
Class B 7.83%
Class C 8.42%
</TABLE>
Taxable-equivalent SEC yields are based on the maximum effective combined 46.1%
federal and New York State and city income tax rate. This tax rate does not
reflect the phaseout of exemptions or the reduction of otherwise allowable
deductions which occurs when Adjusted Gross Income exceeds certain levels.
1
<PAGE> 4
PORTFOLIO MANAGER'S REPORT
QUALITY BREAKDOWN AS OF 7/31/00
<TABLE>
<S> <C>
AAA 42.2%
------------------------------
AA 24.8%
------------------------------
A 16.2%
------------------------------
BBB 4.9%
------------------------------
Nonrated 10.1%
------------------------------
Cash Equivalents 1.8%
------------------------------
</TABLE>
Quality breakdowns are calculated as a percentage of total investments,
including short-term obligations. Ratings shown in the quality breakdowns
represent the highest rating assigned to a particular bond by one of the
following respected rating agencies: Standard & Poor's 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.
BOUGHT
We purchased Long Island, NY Power Authority zero coupon, noncallable, insured
bonds due in 2018 (0.42% of net assets). If interest rates fall, these 20-year
bonds may provide the lion's share of the appreciation potential of comparable
30-year bonds, but with less downside risk.
RISING LONG-TERM BOND PRICES CONTRIBUTED TO MODEST BUT SOLID GAINS FOR THE FUND
Against a backdrop of falling yields and rising prices for intermediate- and
long-term municipal bonds, Class A shares of Liberty New York Tax-Exempt Fund
posted a total return of 7.69% without a sales charge for the six months ended
July 31, 2000.
FUND SHIFTED EMPHASIS TO BETTER LONG-TERM POSITIONING
Over the period, the Fund was invested primarily in bonds that do well during
periods of declining interest rates -- that is, bonds in the 15- to 25-year
maturity range, bonds with long-term call protection and deep-discount
securities. However, higher-than-anticipated economic growth and fears of more
rapid inflation sent interest rates higher for part of the six months. To help
protect the Fund from these interest rate increases, we adopted temporary
defensive measures while keeping the bulk of the portfolio positioned for an
environment of slower economic growth, low rates of inflation and lower interest
rates.
Later in the period, we were able to reduce these defensive measures and refocus
our efforts on maintaining a portfolio that could prosper in a falling interest
rate environment. More specifically, we sold prerefunded bonds, short-maturity
issues and bonds with shorter call protection. Such bonds generally do not
appreciate as greatly as other bonds when yields are falling. We purchased a
variety of bonds in the 15- to 25-year maturity range, bonds with 10 or more
years of call protection (i.e., securities that can be called for redemption by
the issuers not sooner than 10 years from date of issue) and noncallable bonds,
to "lock in" what we believe will be viewed as attractive rates.
NEW YORK REMAINS STRONG DESPITE STOCK MARKET TURMOIL
New York's close ties to the financial services sector, particularly the equity
markets, are undoubtedly both an asset and a potential liability. However, it
appears to date that turbulence on Wall Street since March 2000 has not had a
significant effect on the city or state, and economic trends remain positive.
Per capita income growth is on par with the nation, unemployment stands at the
lowest level in eight years, and the housing markets are showing strong growth.
From a fiscal standpoint, conditions are improving as well, and the State of New
York is presently in a position to use budget surpluses to pay down its debt.
SIGNS OF A POSITIVE ENVIRONMENT FOR BONDS ARE GROWING
Our outlook for the municipal bond market has improved considerably. As the
six-month period came to a close, we had already seen the first signs of more
temperate U.S. economic growth, including a reduction in new housing starts and
softening of
2
<PAGE> 5
PORTFOLIO MANAGER'S REPORT (CONTINUED)
retail sales. Slower growth could set the stage for lower interest rates in
12 to 15 months. The Fund is well positioned to perform should that occur. In
addition to a sizable investment in long-term and call-protected issues, the
Fund owns zero coupon and discount bonds that may reap a larger-than-average
benefit should interest rates fall.
Ultimately, we believe that much depends upon the state's biggest source of
economic growth, the stock market. A large-scale and lingering downturn for
stocks could impact many areas of New York's economy. However, absent such an
event, we believe the outlook is very encouraging. The national economy appears
to be headed toward a more stable, noninflationary rate of growth, and New York
is in its best financial and economic position in more than a decade.
/s/ Gary Swayze
GARY SWAYZE is portfolio manager of Liberty New York Tax-Exempt Fund and is a
senior vice president of Colonial Management Associates, Inc.
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.
TOP FIVE SECTORS
7/31/00 VS. 1/31/00
[BAR CHART}
<TABLE>
<CAPTION>
7/31/00 1/31/00
<S> <C> <C>
Special Non-Property Tax 19.2% 16.3%
State Appropriated 13.9% 14.2%
Education 6.6% 5.6%
Hospital 6.3% 3.1%
Investor Owned Utility 5.4% 5.2%
</TABLE>
Sector weightings are calculated as a percentage of total net assets. Because
the Fund is actively managed, there can be no guarantee the Fund will continue
to maintain these sector breakdowns in the future.
SOLD
One goal during the period was to lengthen the Fund's duration, so we sold
Puerto Rico Commonwealth general obligation bonds due in 2023, but prefunded to
date within a few years. Though they were highly rated and had a 6.50% coupon,
they had been prerefunded. In a prerefunding, Treasury bonds are purchased and,
when they mature, the proceeds are used to pay the principal due on the original
municipal bonds. Prerefunding effectively shortens the period until the bonds
are paid or maturity for the original bonds to just a few years.
3
<PAGE> 6
PERFORMANCE INFORMATION
AVERAGE ANNUAL TOTAL RETURNS AS OF 7/31/00
<TABLE>
<CAPTION>
Share Class A B C
Inception 9/26/86 8/4/92 8/1/97
Without With sales Without With sales Without With sales
sales charge charge sales charge charge sales charge charge
<S> <C> <C> <C> <C> <C> <C>
6 month
(cumulative) 7.69% 2.58% 7.31% 2.31% 7.46% 6.46%
1 year 3.79 (1.14) 3.03 (1.90) 3.33 2.34
5 years 5.79 4.77 4.99 4.66 5.50 5.50
10 years 6.43 5.92 5.80 5.80 6.29 6.29
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS AS OF 6/30/00
<TABLE>
<CAPTION>
Share Class A B C
Without With sales Without With sales Without With sales
sales charge charge sales charge charge sales charge charge
<S> <C> <C> <C> <C> <C> <C>
6 month
(cumulative) 5.36% 0.35% 4.96% (0.04)% 5.11% 4.11%
1 year 2.59 (2.28) 1.84 (3.04) 2.13 1.15
5 years 5.66 4.63 4.86 4.52 5.37 5.37
10 years 6.47 5.95 5.84 5.84 6.33 6.33
</TABLE>
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. The "with sales charge" returns include
the maximum 4.75% sales charge for Class A shares, the appropriate Class B
contingent deferred sales charge for the holding period after purchase as
follows: through first year -- 5%, second year -- 4%, third year -- 3%, fourth
year -- 3%, fifth year -- 2%, sixth year -- 1%, thereafter -- 0% and the Class C
contingent deferred sales charge of 1% for the first year only. Performance for
different share classes will vary based on differences in sales charges and fees
associated with each class.
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.
Class B and C share (newer class shares) performance information includes
returns of the Fund's Class A shares (the oldest existing fund class) for
periods prior to the inception of the newer class shares. These Class A share
returns were not restated to reflect any expense differential (e.g., Rule 12b-1
fees) between Class A shares and the newer class shares. Had the expense
differential been reflected, the returns for the periods prior to the inception
of the newer classes would have been lower.
4
<PAGE> 7
INVESTMENT PORTFOLIO
July 31, 2000 (Unaudited, In thousands)
<TABLE>
<CAPTION>
MUNICIPAL BONDS - 96.9% PAR VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
EDUCATION - 6.6%
EDUCATION
State Dormitory Authority,
Series 1985,
7.800% 12/01/05 $ 20 $ 20
State Dormitory Authority,
Pace University,
6.500% 07/01/11 1,000 1,128
State Dormitory Authority:
New York University
Series 1998-A,
5.750% 07/01/27 2,000 2,051
University of Rochester:
Series 2000, (a) 07/01/14 1,000 584
Series 1999,
6.000% 07/01/24 1,000 1,020
Tompkins County Industrial
Development Agency,
Cornell University,
Series 2000,
5.625% 07/01/20 1,000 1,007
------
5,810
------
--------------------------------------------------------------------------------
HEALTHCARE - 9.7%
CONGREGATE CARE RETIREMENT - 1.9%
Suffolk County Industrial Development Agency,
Jefferson Ferry,
Series 1999-A,
7.200% 11/01/19 600 587
State Dormitory Authority,
Miriam Osborn Memorial Home,
Series 2000-B,
6.875% 07/01/19 1,000 1,096
------
1,683
------
HOSPITAL - 6.3%
State Dormitory Authority:
Beth Israel Medical Center,
Series 1997-A,
5.125% 11/01/16 1,075 1,032
City University,
Series 1999-1,
5.500% 07/01/29 1,000 970
Mount Sinai Health Obligation Group,
Series 2000,
6.000% 07/01/11 1,500 1,573
New Island Hospital,
Series 1999-A,
5.750% 07/01/19 1,215 1,230
St. Clares Hospital,
Series 1998-B,
5.300% 02/15/19 750 717
------
5,522
------
NURSING HOME - 1.5%
Essex County Industrial Development Agency,
Moses Ludington Nursing Home,
Series 2000,
6.200% 02/01/30 (b) 1,250 1,294
------
--------------------------------------------------------------------------------
HOUSING - 8.1%
ASSISTED LIVING/SENIOR - 4.2%
Glen Cove Housing Authority,
8.250% 10/01/26 1,000 1,056
Huntington Housing Authority,
Gurwin Jewish Senior Center,
Series 1999,
5.875% 05/01/19 1,500 1,247
Mount Vernon Industrial Development Agency,
Series 1999:
6.150% 06/01/19 1,000 878
6.200% 06/01/29 615 524
------
3,705
------
MULTI-FAMILY - 3.9%
Hudson Housing Development Corp.,
Providence Hall-Schuyler Court Project,
Series 1992-A,
6.500% 01/01/22 750 765
Nyack Housing Assistance Corp.,
Nyack Plaza Apartments,
7.375% 06/01/21 (c) 1,126 1,126
State Housing Finance Agency:
Series 1989-B,
7.550% 11/01/29 230 233
Series 1996-A,
6.100% 11/01/15 1,230 1,264
------
3,388
------
--------------------------------------------------------------------------------
INDUSTRIAL - 2.7%
FOREST PRODUCTS - 0.6%
Essex County Industrial Development Agency,
International Paper Corp.,
Series 1999-A,
6.450% 11/15/23 500 507
------
</TABLE>
See notes to investment portfolio.
5
<PAGE> 8
INVESTMENT PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
MUNICIPAL BONDS (CONTINUED) PAR VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
MANUFACTURING - 1.0%
Monroe County Industrial
Development Agency,
Yorkmill Realty Association.,
Series 1986,
9.500% 12/01/06 $ 855 $ 872
-------
OIL AND GAS - 1.1%
State Energy Research & Development
Authority, Central Hudson Gas &
Electric Corp.,
Series 1999,
5.450% 08/01/27 1,000 966
-------
--------------------------------------------------------------------------------
OTHER - 1.1%
OTHER
TSASC, Inc.
Series 1999-1,
6.250% 07/15/34 1,000 999
-------
--------------------------------------------------------------------------------
OTHER REVENUE - 2.8%
RECREATION
Hamilton Industrial Development Agency,
Adirondack Historical Association,
Series 1998-A,
5.250% 11/01/18 500 456
New York City Cultural Trust,
American Museum of Natural History
Series 1999-A,
5.750% 07/01/29 2,000 2,010
-------
2,466
-------
--------------------------------------------------------------------------------
RESOURCE RECOVERY - 2.4%
DISPOSAL
Westchester County Industrial
Development Agency,
Westchester Resco Co. Project,
6.000% 07/01/09 2,000 2,131
-------
--------------------------------------------------------------------------------
TAX-BACKED - 37.2%
LOCAL APPROPRIATED - 0.6%
State Dormitory Authority,
Judicial Facilities,
Series 1991-A,
9.500% 04/15/14 100 114
State Dormitory Authority,
Westchester County,
Series 1998,
(a) 08/01/19 1,200 409
-------
523
-------
LOCAL GENERAL OBLIGATIONS - 1.0%
City of Yonkers,
Series 1999-A,
4.500% 12/01/17 1,000 864
-------
SPECIAL NON-PROPERTY TAX - 19.2%
Metropolitan Transportation Authority,
Series, 1998-A,
4.500% 04/01/18 2,000 1,721
New York City Transitional Finance Authority,
Series 1998-C,
4.750% 05/01/23 3,000 2,611
State Local Government Assistance Corp:
Series 1993-C,
5.500% 04/01/17 2,100 2,123
Series 1993-E,
6.000% 04/01/14 3,945 4,243
Series 1993-E,
5.000% 04/01/21 6,650 6,188
-------
16,886
-------
STATE APPROPRIATED - 13.9%
State Dormitory Authority:
City University,
Series 1990-C,
7.500% 07/01/10 1,500 1,712
University of New York,
Series 1990-B,
7.500% 05/15/11 1,000 1,159
State Dormitory Authority:
Series 1993-A,
5.500% 05/15/13 3,000 3,069
City University,
Series 1993-A,
6.000% 07/01/20 2,000 2,083
State Dormitory Authority,
State University Educational Facilities,
Series 1998-B,
4.500% 05/15/20 1,000 836
State Dormitory Authority,
State University,
Series 1999,
5.250% 05/15/18 1,000 968
State Housing Finance Agency,
Series 1990-A,
8.000% 11/01/08 35 36
State Medical Care Facilities
Finance Agency:
Series 1987-A,
8.875% 08/15/07 105 107
Series 1990-B,
7.875% 08/15/08 80 82
</TABLE>
See notes to investment portfolio.
6
<PAGE> 9
INVESTMENT PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
MUNICIPAL BONDS (CONTINUED) PAR VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
State Urban Development Corp.,
Series 1993-A,
5.500% 01/01/14 $ 1,000 $ 1,026
Triborough Bridge & Tunnel Authority,
Javits Convention Center Project,
Series E,
7.250% 01/01/10 1,000 1,122
-------
12,200
-------
STATE GENERAL OBLIGATIONS - 2.5%
PR Commonwealth of Puerto Rico
Aqueduct & Sewer Authority,
Series 1995,
6.250% 07/01/12 2,000 2,224
-------
--------------------------------------------------------------------------------
TRANSPORTATION - 11.9%
AIR TRANSPORTATION - 4.2%
New York City Industrial
Development Agency,
America Airlines, Inc. Series 1994,
6.900% 08/01/24 2,000 2,055
Port Authority of New York & New Jersey,
JFK International Air Terminal, Series 6,
6.250% 12/01/08 1,500 1,634
-------
3,689
-------
TOLL FACILITIES - 5.2%
State Thruway Authority,
Highway & Bridging Trust Fund:
Series 1999-A,
5.125% 04/01/13 1,500 1,488
Series 2000-A,
5.750% 04/01/17 1,000 1,025
Series 2000-B,
5.500% 04/01/10 1,000 1,045
Triborough Bridge & Tunnel Authority,
Series Y,
5.500% 01/01/17 1,000 1,015
-------
4,573
-------
TRANSPORTATION - 2.5%
Albany Parking Authority,
Green and Hudson Garage Project,
Series 1991-A,
7.150% 09/15/16 250 259
Port Authority of New York & New Jersey,
Series 85,
5.375% 03/01/28 2,000 1,934
-------
2,193
-------
UTILITY - 14.4%
INDEPENDENT POWER PRODUCER - 2.8%
Port Authority of New York &
New Jersey,
KIAC Partners,
Series 1996 IV,
6.750% 10/01/19 $ 2,000 $ 2,048
Suffolk County Industrial Development
Agency,
Nissequogue Cogen Partners,
Series 1998,
5.500% 01/01/23 500 421
-------
2,469
-------
INVESTOR OWNED - 5.4%
State Energy Research & Development
Authority,
Brooklyn Union Gas Co.:
Series 1989-A,
6.750% 02/01/24 3,000 3,141
Series 1993-B, IFRN (variable rate),
7.788% 04/01/20 1,500 1,622
-------
4,763
-------
MUNICIPAL ELECTRIC - 5.0%
Long Island Power Authority:
Series 1998-A,
5.250% 12/01/26 2,470 2,257
Series 2000-A,
(a) 06/01/18 1,000 370
PR Electric Power Authority:
Series 1998-DD,
4.500% 07/01/19 1,000 872
Series 1998-EE,
4.500% 07/01/18 1,000 879
-------
4,378
-------
WATER & SEWER - 1.2%
Albany Municipal Water Finance Authority,
Series 2000-A,
6.375% 12/01/17 200 217
New York City Municipal Water
Finance Authority,
Series 1998-D,
4.750% 06/15/25 1,000 866
-------
1,083
-------
TOTAL MUNICIPAL BONDS
(cost of $82,960) (d) 85,188
-------
</TABLE>
See notes to investment portfolio.
7
<PAGE> 10
INVESTMENT PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
MUNICIPAL BONDS (CONTINUED) PAR VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM OBLIGATIONS - 1.8%
--------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES (e)
IA Ottumwa Regional Health Center, Inc.,
Series 1998,
4.300% 10/01/06 $ 100 $ 100
IA Woodbury County,
Siouxland Medical Educational Foundation,
Series 1996,
4.350% 11/01/16 100 100
IL Galesburg,
Knox College,
Series 1999,
4.250% 7/01/24 200 200
MN Minneapolis,
Series 1999-A,
4.150% 3/01/12 $ 1,200 1,200
-------
TOTAL SHORT-TERM OBLIGATIONS 1,600
-------
OTHER ASSETS & LIABILITIES, NET - 1.3% 1,153
-------
NET ASSETS - 100.0% $87,941
=======
</TABLE>
NOTES TO INVESTMENT PORTFOLIO:
(a) Zero coupon bond.
(b) These securities, or a portion thereof, with a total market value of $233
are being used to collateralize open futures contracts.
(c) 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 July 31, 2000,
the value of this security amounted to $1,126 or 1.3% of net assets.
(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 by either letters of credit or other credit
support agreements from banks. The rates listed are as of July 31, 2000.
Long futures contract open at July 31, 2000:
<TABLE>
<CAPTION>
Par value Unrealized
covered by Expiration appreciation
Type contracts month at 07/31/00
<S> <C> <C> <C>
Treasury Note $1,400 September $45
</TABLE>
<TABLE>
<CAPTION>
Acronym Name
------- ----
<S> <C>
IFRN Inverse Floating Rate Note
</TABLE>
See notes to financial statements.
8
<PAGE> 11
STATEMENT OF ASSETS AND LIABILITIES
July 31, 2000 (Unaudited)
(In thousands except for per share amounts and footnotes)
<TABLE>
<S> <C> <C>
ASSETS
Investments at value (cost $82,960) $ 85,188
Short-term obligations 1,600
--------
86,788
Receivable for:
Investments sold $ 1,620
Interest 1,123
Fund shares sold 45
Expense reimbursement due
from the Advisor 22
Other 17 2,827
-------- --------
Total Assets 89,615
LIABILITIES
Payable for:
Investments purchased 1,415
Distributions 125
Fund shares repurchased 14
Accrued:
Management fee 36
Transfer Agent fee 13
Bookkeeping fee 3
Deferred Trustees fees 4
Other 64
--------
Total Liabilities 1,674
--------
NET ASSETS $ 87,941
==========
Net asset value & redemption price per share --
Class A ($44,001/6,276) $ 7.01(a)
==========
Maximum offering price per share --
Class A ($7.01/0.9525) $ 7.36(b)
==========
Net asset value & offering price per share --
Class B ($43,383/6,188) $ 7.01(a)
==========
Net asset value & offering price per share --
Class C ($557/80) $ 7.01(a)
==========
COMPOSITION OF NET ASSETS
Capital paid in $ 87,770
Overdistributed net investment income (33)
Accumulated net realized loss (2,069)
Net unrealized appreciation on:
Investments 2,228
Futures contracts 45
----------
$ 87,941
==========
</TABLE>
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
(b) On sales of $50,000 or more the offering price is reduced.
STATEMENT OF OPERATIONS
For the Six Months Ended July 31, 2000
(In thousands)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Interest $2,593
EXPENSES
Management fee $ 218
Service fee 85
Distribution fee -- Class B 162
Distribution fee -- Class C 2
Transfer agent fee 65
Bookkeeping fee 20
Trustees fee 5
Audit fee 18
Legal fee 3
Registration fee 8
Reports to shareholders 10
Other 9
--------
605
Fees waived or borne by the Advisor (93)
Custodian credits earned (2)
Fees waived by the Distributor -- Class C (1) 509
-------- -------
Net Investment Income 2,084
-------
NET REALIZED & UNREALIZED GAIN (LOSS)
ON PORTFOLIO POSITIONS
Net realized gain (loss) on:
Investments (103)
Closed futures contracts 34
--------
Net realized loss (69)
Net change in unrealized appreciation/
depreciation during the period on:
Investments 4,122
Open futures contracts 157
--------
Net change in unrealized appreciation/
depreciation 4,279
-------
Net Gain 4,210
Increase in Net Assets from Operations $ 6,294
=======
</TABLE>
See notes to financial statements
9
<PAGE> 12
STATEMENT OF CHANGES IN NET ASSETS
(In thousands)
<TABLE>
<CAPTION>
(UNAUDITED)
SIX MONTHS YEAR
ENDED ENDED
JULY 31, JANUARY 31,
----------- -----------
INCREASE (DECREASE) IN NET ASSETS 2000 2000
--------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 2,084 $ 4,617
Net realized gain (loss) (69) 543
Net change in unrealized appreciation/
depreciation 4,279 (12,313)
--------- ---------
Net Increase (Decrease) from Operations 6,294 (7,153)
DISTRIBUTIONS:
From net investment income -- Class A (1,138) (2,454)
From net investment income -- Class B (964) (2,084)
From net investment income -- Class C (13) (36)
--------- ---------
4,179 (11,727)
--------- ---------
FUND SHARE TRANSACTIONS:
Receipts for shares sold -- Class A 950 3,769
Value of distributions reinvested -- Class A 557 1,343
Cost of shares repurchased -- Class A (3,058) (11,164)
--------- ---------
(1,551) (6,052)
--------- ---------
Receipts for shares sold -- Class B 1,818 6,728
Value of distributions reinvested -- Class B 515 1,115
Cost of shares repurchased -- Class B (5,768) (11,367)
--------- ---------
(3,435) (3,524)
--------- ---------
Receipts for shares sold -- Class C (a) 402
Value of distributions reinvested -- Class C 13 35
Cost of shares repurchased -- Class C (137) (409)
--------- ---------
(124) 28
--------- ---------
Net Decrease from Fund Share
Transactions (5,110) (9,548)
--------- ---------
Total Decrease (931) (21,275)
NET ASSETS
Beginning of period 88,872 110,147
--------- ---------
End of period (net of overdistributed
net investment income of $33 and
$2, respectively) $ 87,941 $ 88,872
========= =========
</TABLE>
(a) Rounds to less than one.
<TABLE>
<CAPTION>
(UNAUDITED)
SIX MONTHS YEAR
ENDED ENDED
JULY 31, JANUARY 31,
----------- -----------
NUMBER OF FUND SHARES 2000 2000
--------------------------------------------------------------------------------
<S> <C> <C>
Sold -- Class A 138 526
Issued for distributions reinvested -- Class A 81 190
Repurchased -- Class A (449) (1,597)
---- ------
(230) (881)
---- ------
Sold -- Class B 265 937
Issued for distributions reinvested -- Class B 75 158
Repurchased -- Class B (848) (1,616)
---- ------
(508) (521)
---- ------
Sold -- Class C (a) 55
Issued for distributions reinvested -- Class C 2 5
Repurchased -- Class C (20) (58)
---- ------
(18) 2
---- ------
</TABLE>
See notes to financial statements.
10
<PAGE> 13
NOTES TO FINANCIAL STATEMENTS
July 31, 2000 (Unaudited)
NOTE 1. INTERIM FINANCIAL STATEMENTS
In the opinion of management of Liberty New York Tax Exempt Fund, (formerly
Colonial New York Tax Exempt Fund) (the Fund), a series of Liberty Trust V, the
accompanying financial statements contain all normal and recurring adjustments
necessary for the fair presentation of the financial positions of the Fund at
July 31, 2000, and the results of its operations, the changes in its net assets
and the financial highlights for the six months then ended.
NOTE 2. ACCOUNTING POLICIES
ORGANIZATION:
The Fund is a 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 personal income
tax and opportunities for long-term appreciation from a portfolio primarily
invested in investment-grade municipal bonds. The Fund may issue an unlimited
number of shares. The Fund offers three classes of shares: Class A, Class B and
Class C. Class A shares are sold with a front-end sales charge. A 1.00%
contingent deferred sales charge is assessed to Class A shares purchased without
an initial sales charge on redemptions made within eighteen months on an
original purchase of $1 million to $25 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 in three, four or eight years after purchase,
depending on the program under which shares were purchased. Class C shares are
subject to a contingent deferred sales charge on redemptions made within one
year after purchase and an annual distribution fee.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. The following is a summary of
significant accounting policies that are consistently followed by the Fund in
the preparation of its financial statements.
SECURITY VALUATION AND TRANSACTIONS:
Debt securities generally are valued by a pricing service based upon market
transactions for normal, institutional-size trading units of similar securities.
When management deems it appropriate, an over-the-counter or exchange bid
quotation is used.
Options are valued at the last reported sale price, or in the absence of a sale,
the mean between the last quoted bid and asking price.
Futures contracts are valued based on the difference between the last sale price
and the opening price of the contract.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
Portfolio positions for which market quotations are not readily available are
valued at fair value under procedures approved by the Trustees.
Security transactions are accounted for on the date the securities are
purchased, sold or mature.
Cost is determined and gains and losses are based upon the specific
identification method for both financial statement and federal income tax
purposes.
The Fund may trade securities on other than normal settlement terms. This may
increase the risk if the other party to the transaction fails to deliver and
causes the Fund to subsequently invest at less advantageous prices.
DETERMINATION OF CLASS NET ASSET VALUES AND FINANCIAL HIGHLIGHTS:
All income, expenses (other than the Class B and Class C distribution fees),
realized and unrealized gains (losses), are allocated to each class
proportionately on a daily basis for purposes of determining the net asset value
of each class.
Class B and Class C per share data and ratios are calculated by adjusting the
expense and net investment income per share data and ratios for the Fund for the
entire period by the distribution fee applicable to Class B and Class C shares
only.
FEDERAL INCOME TAXES:
Consistent with the Fund's policy to qualify as a regulated investment company
and to distribute all of its taxable and tax-exempt income, no federal income
tax has been accrued.
INTEREST INCOME, DEBT DISCOUNT AND PREMIUM:
Interest income is recorded on the accrual basis. Original issue discount is
accreted to interest income over the life of a security with a corresponding
increase in the cost basis; market discount is not accreted. Premium is
amortized against interest income with a corresponding decrease in the cost
basis.
DISTRIBUTIONS TO SHAREHOLDERS:
The Fund declares and records distributions daily and pays monthly.
The amount and character of income and gains to be distributed are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles. Reclassifications are made to the Fund's capital accounts
to reflect income and gains available for distribution (or available capital
loss carryforwards) under income tax regulations.
NOTE 3. FEES AND COMPENSATION PAID TO AFFILIATES
MANAGEMENT FEE:
Colonial Management Associates, Inc. (the Advisor) is the investment Advisor of
the Fund and furnishes accounting and other services and office facilities for a
monthly fee based on the Fund's pro-rata portion of the combined average net
assets of the funds constituting Trust V as follows:
<TABLE>
<CAPTION>
AVERAGE NET ASSETS ANNUAL FEE RATE
<S> <C>
First $2 billion 0.50%
Over $2 billion 0.45%
</TABLE>
11
<PAGE> 14
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
July 31, 2000 (Unaudited)
BOOKKEEPING FEE:
The Advisor provides bookkeeping and pricing services for a monthly fee equal to
$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 comprised of 0.07% annually of
the Fund's average net assets plus charges based on the number of shareholder
accounts and transactions and receives reimbursement for certain out of pocket
expenses.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES:
Liberty Funds Distributor, Inc. (the Distributor), a subsidiary of the Advisor,
is the Fund's principal underwriter. For the six months ended July 31, 2000, the
Fund has been advised that the Distributor retained net underwriting discounts
of $26,375 on sales of the Fund's Class A shares and received contingent
deferred sales charges (CDSC) of none, $56,991, 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 monthly
service fee to the Distributor. The fee is calculated by adding (1) 0.10% of the
net assets attributable to shares issued prior to November 30, 1994 and (2)
0.25% of net assets attributable to shares issued thereafter. This arrangement
results in a rate of service fee payable by the Fund that is a blend between the
0.10% and 0.25% rates. For the six months ended July 31, 2000, the Fund's
service fee was 0.19%.
The plan also requires the payment of a monthly 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 to waive a portion of the Class C distribution fee so that it will not
exceed 0.45% annually.
The CDSC and the fees received from the 12b-1 plan are used principally as
repayment to the Distributor for amounts paid by the Distributor to dealers who
sold such shares.
EXPENSE LIMITS:
The Advisor has agreed, until further notice, to waive fees and bear certain
Fund expenses to the extent that total expenses (exclusive of service and
distribution fees, brokerage commissions, interest, taxes, and extraordinary
expenses, if any) exceed 0.60% annually of the Fund's average net assets.
OTHER:
The Fund pays no compensation to its officers, all of whom are employees of the
Advisor.
The Fund's Trustees may participate in a deferred compensation plan which may be
terminated at any time. Obligations of the plan will be paid solely out of the
Fund's assets.
The Fund has an agreement with its custodian bank under which $1,672 of
custodian fees were reduced by balance credits applied during the six months
ended July 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 into such agreements.
NOTE 4. PORTFOLIO INFORMATION
INVESTMENT ACTIVITY:
For the six months ended July 31, 2000, purchases and sales of investments,
other than short-term obligations were $10,905,190 and $16,472,764,
respectively.
Unrealized appreciation (depreciation) at July 31, 2000, based on cost of
investments for both financial statement and federal income tax purposes was:
Gross unrealized appreciation $4,153,886
Gross unrealized depreciation (1,925,778)
----------
Net unrealized appreciation $2,228,108
==========
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:
<TABLE>
<CAPTION>
YEAR OF EXPIRATION CAPITAL LOSS CARRYFORWARD
------------------ -------------------------
<S> <C>
2004 $1,254,000
2005 79,000
2008 99,000
----------
$1,432,000
----------
</TABLE>
Expired capital loss carryforwards, if any, are recorded as a reduction of
capital paid in.
To the extent loss carryforwards are used to offset any future realized gains,
it is unlikely that such gains would be distributed since they may be taxable to
shareholders as ordinary income.
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.
12
<PAGE> 15
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
July 31, 2000 (Unaudited)
NOTE 5. LINE OF CREDIT
The Fund may borrow up to 33 1/3% of its net assets under a line of credit for
temporary or emergency purposes. Any borrowings bear interest at one of the
following options determined at the inception of the loan: (1) federal funds
rate plus 1/2 of 1%, (2) the lending bank's base rate or (3) IBOR offshore loan
rate plus 1/2 of 1%. There were no borrowings under the line of credit for the
six months ended July 31, 2000.
13
<PAGE> 16
FINANCIAL HIGHLIGHTS
Selected data for a share of each class outstanding throughout each period are
as follows:
<TABLE>
<CAPTION>
(UNAUDITED)
SIX MONTHS ENDED JULY 31, 2000
----------------------------------------
CLASS A CLASS B CLASS C
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 6.680 $ 6.680 $ 6.680
-------- -------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (a)(b) 0.175 0.150 0.160(c)
Net realized and unrealized gain 0.333 0.333 0.333
-------- -------- ---------
Total from Investment Operations 0.508 0.483 0.493
-------- -------- ---------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.178) (0.153) (0.163)
-------- -------- ---------
NET ASSET VALUE, END OF PERIOD $ 7.010 $ 7.010 $ 7.010
======== ======== ========
Total return (d)(e) 7.69% 7.31% 7.46%(f)
======== ======== ========
RATIOS TO AVERAGE NET ASSETS
Expenses (g)(h) 0.79% 1.54% 1.24%(c)
Net investment income (g)(h) 5.15% 4.40% 4.70%(c)
Fees and expenses waived or borne by the Advisor (g)(h) 0.21% 0.21% 0.21%
Portfolio turnover 13% 13% 13%
Net assets at end of period (000) $44,001 $43,383 $ 557
(a) Net of fees and expenses waived or borne by the Advisor which amounted to: $ 0.007 $ 0.007 $ 0.007
</TABLE>
(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 $0.010 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>
<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
</TABLE>
(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 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.
14
<PAGE> 17
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for a share of each class outstanding throughout each period are
as follows:
<TABLE>
<CAPTION>
Year ended January 31, 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
</TABLE>
(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>
<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
</TABLE>
(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.
15
<PAGE> 18
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for a share of each class outstanding throughout each period are
as follows:
<TABLE>
<CAPTION>
YEAR ENDED JANUARY 31, 1996
---------------------------
CLASS A CLASS B
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
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 Advisor (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
</TABLE>
(b) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(c) Had the Advisor 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.
16
<PAGE> 19
TRUSTEES & TRANSFER AGENT
TOM BLEASDALE
Retired (formerly Chairman of the Board and Chief Executive Officer, Shore Bank
& Trust Company)
LORA S. COLLINS
Attorney (formerly Attorney, Kramer, Levin, Naftalis & Frankel)
JAMES E. GRINNELL
Private Investor (formerly Senior Vice President - Operations, The Rockport
Company)
RICHARD W. LOWRY
Private Investor (formerly Chairman and Chief Executive Officer, U.S. Plywood
Corporation)
SALVATORE MACERA
Private Investor (formerly Executive Vice President of Itek Corp. and President
of Itek Optical & Electronic Industries, Inc.)
WILLIAM E. MAYER
Partner, Park Avenue Equity Partners (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 (formerly Dean,
Boston College School of Management)
JOSEPH R. PALOMBO
Chief Operations Officer, Mutual Funds, Liberty Financial Companies, Inc.,
Executive Vice President and Director of Colonial Management Associates, Inc.
and Executive Vice President and Chief Administrative Officer of Liberty Funds
Group LLC (formerly Vice President of Liberty Funds Group - Boston and Chief
Operating Officer, Putnam Mutual Funds)
THOMAS E. STITZEL
Business Consultant and Chartered Financial Analyst (formerly Professor of
Finance, College of Business, Boise State University)
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 Liberty 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 Liberty 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 Performance Update.
SEMIANNUAL REPORT:
LIBERTY NEW YORK TAX-EXEMPT FUND
<PAGE> 20
CHOOSE LIBERTY
BECAUSE NO SINGLE INVESTMENT MANAGER CAN BE ALL THINGS TO ALL INVESTORS.(SM)
[LIBERTY FUNDS GRAPHIC]
ALL-STAR INSTITUTIONAL MONEY MANAGEMENT APPROACH FOR INDIVIDUAL INVESTORS.
COLONIAL FIXED INCOME AND VALUE STYLE EQUITY INVESTING.
CRABBE
HUSON A CONTRARIAN APPROACH TO FIXED INCOME AND EQUITY INVESTING.
NEWPORT A LEADER IN INTERNATIONAL INVESTING.(SM)
STEIN ROE
ADVISOR INNOVATIVE SOLUTIONS FOR GROWTH AND INCOME INVESTING.
[KEYPORT LOGO] A LEADING PROVIDER OF INNOVATIVE ANNUITY PRODUCTS.
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.
LIBERTY NEW YORK TAX-EXEMPT FUND SEMIANNUAL REPORT
[LIBERTY FUNDS GRAPHIC]
Liberty Funds Distributor, Inc. (Copyright) 2000
One Financial Center, Boston, MA 02111-2621, 1-800-426-3750
www.libertyfunds.com
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