<PAGE>
LETTER FROM THE PRESIDENT
Dear Shareholder:
Following is Colonial Investment Grade Municipal Trust's semiannual report
for the six months ended June 30, 1995. During the fiscal period, your Fund met
its objective of providing investors with both an attractive level of tax-
exempt income and a competitive total return, primarily through investments in
investment-grade municipal bonds.
FUND PERFORMANCE (1/1/95 - 6/30/95)
<TABLE>
<S> <C>
Distributions declared
per share(1) $0.320
- ----------------------------------------------------
Annualized distribution rate
on 6/30/95, based on net
asset value 6.02%
- ----------------------------------------------------
Taxable-equivalent distribution
rate on 6/30/95, based on
market price(2) 9.97%
- ----------------------------------------------------
Six-month total return, based on
NAV and assuming reinvestment
of all distributions 8.74%
- ----------------------------------------------------
Six-month total return, based on
6/30/95 closing NYSE market
price, assuming reinvestment
of all distributions 13.07%
- ----------------------------------------------------
Net asset value per share
on 6/30/95 $10.46
- ----------------------------------------------------
NYSE market price per share
on 6/30/95 $9.875
- ----------------------------------------------------
</TABLE>
ECONOMIC/MARKET OVERVIEW
The U.S. economy may be coming in for the "soft landing" that has been the
Federal Reserve Board's goal for the last two years. Annualized gross domestic
product (GDP) for the first three months of 1995 was 2.8%, down significantly
from the annualized GDP of 5.1% for the final quarter of 1994. This weakness in
the U.S. economy, which translated into lower interest rates, had a favorable
impact on the municipal bond market. As the pace of economic growth diminished,
interest rates moved lower and prices in the municipal bond market improved.
SUPPLY AND DEMAND
Although interest rates have declined in recent months, there has not been
a significant increase in refinancing activity. At the same time, the new issue
supply of municipal bonds remains limited. Colonial management believes that
the supply of new issue bonds may go as low as $114 billion by the end of 1995,
down from a high of $292 billion in 1993.
[PHOTO]
John A. McNeice, Jr.
President
INVESTMENT STRATEGY
On June 30, the Fund owned 101 individual issues in 19 public sectors.
Almost 80% of the securities in the portfolio were rated. The rated bonds
included some higher-yielding, lower-rated securities. More than 40% of the
Fund's rated investments were rated AAA, the highest quality rating available
from the major bond rating agencies. Additionally, approximately 20% of your
Fund's assets are invested in non-rated bonds.
Some of the Fund's industrial revenue bonds are issued by corporations. At
a time when corporate profits are historically high, such bonds have been a
source of attractive returns.
During the semiannual period there was a decrease in non-rated and higher
yielding rated investments, with a corresponding increase in investments in
investment-grade bonds. While higher yielding bonds may offset price declines
during periods of rising interest rates, when interest rates decline, higher
quality bonds may offer greater potential for capital appreciation.
As expected, interest rates have moved lower during 1995. Although there
may be periods of consolidation when rates move slightly higher, we believe the
overall interest rate trend will continue to favor municipal bonds.
Sincerely,
/s/ John A. McNeice, Jr.
John A. McNeice, Jr.
President
August 11, 1995
(1) A portion of the Fund's income may be subject to the alternative minimum
tax.
(2) The taxable-equivalent distribution rate is based on the maximum federal
income tax rate of 39.6%.
<PAGE>
INVESTMENT PORTFOLIO (UNAUDITED, IN THOUSANDS) JUNE 30, 1995
<TABLE>
<CAPTION>
MUNICIPAL BONDS - 98.1% PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
EDUCATION - 8.5%
IL State Educational Facilities Authority,
University of Chicago,
5.700% 12/01/25............................. $ 1,000 $ 934
NE Higher Educational Loan Program,
Series 1993, Subseries A-6,
6.450% 06/01/18............................. 1,000 989
NH State Higher Educational & Health
Facilities Authority, Dartmouth College,
5.375% 06/01/23............................. 4,000 3,650
NY New York State Dormitory Authority,
Consolidation City University,
Series 1993-A,
5.750% 07/01/18............................. 5,000 4,656
--------
10,229
- --------------------------------------------------------------------------------
GENERAL OBLIGATION - 9.2%
CA State of California,
5.750% 03/01/19............................. 2,000 1,890
MA General Obligation Bonds,
Consolidated Loan,
Series 1991-A,
6.000% 06/01/11............................. 1,000 1,000
ME State Municipal Bond Bank,
Series A,
5.800% 11/01/20............................. 1,000 961
MI Marquette Area Public Schools,
5.250% 05/01/21............................. 2,000 1,747
PR Commonwealth of Puerto Rico,
Series 1993,
3.725% 07/01/08 (a)......................... 4,360 (b) 1,651
TN Metropolitan Government Nashville
& Davidson County,
6.150% 05/15/25............................. 1,000 1,005
TX Harris County,
5.125% 10/01/14............................. 1,000 906
WA State, Series B,
5.500% 05/01/18............................. 2,000 1,875
--------
11,035
- --------------------------------------------------------------------------------
HEALTH - 17.6%
HOSPITAL - 5.8%
AL Alabama Special Care Facilities Authority,
Montgomery Health Care, Series 1989,
11.000% 10/01/19............................. 1,245 1,226
DE State Economic Development,
Riverside Hospital, Series 1992-A,
9.500% 01/01/22............................. 245 274
IL Health Facilities Authority,
Edgewater Medical Center,
Series A,
9.250% 07/01/24............................. 315 327
IL Health Facility Authority,
RIB (variable rate),
Series 1992-B,
9.274% 05/01/21............................. 700 768
MO Hannibal Industrial Development,
Medical Systems of Northeast Missouri,
Series 1992,
9.500% 03/01/22............................. 500 581
NC Lincoln County,
9.000% 05/01/07............................. 190 210
NH Higher Educational and Health Facilities,
Catholic Medical Center, Series 1989,
6.000% 07/01/17............................. 2,500 2,309
PA Eries County Hospital Authority,
Metro Health Center, Series 1992
7.375% 07/01/22............................. 1,225 1,233
--------
6,928
--------
HUMAN SERVICES PROVIDERS - 3.2%
IN Wabash First Mortgage, Hoosier
Care, Inc., Series 1989-A,
9.750% 08/01/19............................. 1,500 1,603
NY State Medical Care Facilities
Finance Agency, Mental Health Services:
Series 1991-A,
7.500% 02/15/21............................. 270 298
Series 1993-F,
5.250% 02/15/19............................. 1,000 856
TN Shelby County, Health Education,
& Housing Facilities Board, Open Arms
Development Center:
Series 1992-A,
9.750% 08/01/19............................. 490 564
Series 1992-C,
9.750% 08/01/19............................. 490 564
--------
3,885
--------
NURSING HOME - 8.6%
CO Health Care Facilities Authority:
Denver,
10.500% 05/01/19 (c)......................... 1,400 868
Pioneer Health Care, Series 1989,
10.500% 05/01/19............................. 1,710 1,659
DE State Economic Development
Health Care Facility,
10.000% 03/01/21............................. 1,000 1,127
FL Broward County,
Beverly Enterprises,
9.800% 11/01/10............................. 265 295
FL Escambia County,
Beverly Enterprises, Series 1985-I,
9.800% 06/01/11............................. 210 233
</TABLE>
See notes to investment portfolio.
2
<PAGE>
INVESTMENT PORTFOLIO - CONTINUED
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
HEALTH - CONT.
NURSING HOME - CONT.
FL Leon County, Beverly Enterprises,
Series 1985,
9.800% 06/01/11............................. $ 25 $ 28
IA Finance Authority Health Care Facility,
Mercy Health Initiatives,
Series 1989,
9.950% 07/01/19............................. 2,500 2,450
KY Jefferson County Health Facilities,
Beverly Enterprises, Inc., Series 1985-B,
9.750% 08/01/07............................. 775 855
PA Chester County Industrial Development,
Pennsylvania Nursing Home, Inc.,
Series 1989,
10.125% 05/01/19............................. 1,250 1,287
PA Delaware County Authority,
Main Line and Haverford Nursing Home,
Series 1992,
9.000% 08/01/22............................. 600 636
WI State Health and Educational Facilities,
Metro Health Foundation, Inc.,
10.000% 11/01/22 (c)......................... 1,300 910
--------
10,348
- --------------------------------------------------------------------------------
HOUSING - 18.1%
ASSISTED LIVING/SENIOR - 0.4%
TX Bell County Health Facilities
Development Corp., Care Institutions, Inc.,
9.000% 11/01/24............................. 500 526
--------
MULTI-FAMILY - 7.0%
FL Clearwater,
Hampton Apartments,
8.250% 05/01/24............................. 700 730
FL Hialeah Housing Authority,
Series 1991,
9.500% 11/01/21............................. 500 517
FL Palm Beach County Housing Development,
Multi-family Housing, Riviera Beach,
Series 1988-A,
9.750% 07/15/18 (d)......................... 1,500 525
FL State Housing Finance Agency,
Windsong Apartments, Series 1993-C,
9.250% 01/01/19............................. 240 240
FL West Palm Beach Housing, Inc.,
Multi-family Housing, Cypress Run,
10.500% 03/15/19 (d)......................... 2,000 700
MN White Bear Lake,
Birch Lake Townhome Project:
Series 1989-A,
10.250% 07/15/19............................. 775 775
Series 1989-B,
10.250% 07/15/19 (e)......................... 780 1,149
NC Durham Urban Development Authority,
Durham Hosiery Mill Project,
7.500% 08/01/29............................. 1,175 1,253
Pass Through Certificates, Series
1993-A,
8.500% 12/01/16 (f)......................... 2,124 2,177
VA Roanoke Redevelopment & Housing
Authority, First Mortgage, Mountain
Ridge,
9.250% 11/01/22............................. 300 304
--------
8,370
--------
SINGLE-FAMILY - 10.7%
IN State Housing Finance Authority,
Single-family Mortgage-GNMA,
Series 1990-D,
7.800% 01/01/22............................. 165 170
LA Housing Financing Agency:
Series 1988,
8.300% 11/01/20............................. 1,325 1,376
Series 1992,
7.500% 09/01/13............................. 1,250 1,272
MA State Housing Finance Agency,
Series B,
8.100% 08/01/23............................. 255 266
NE State Investment Finance Authority,
7.550% 03/15/22............................. 6,900 7,202
NY New York State Mortgage Agency,
8.000% 10/01/17............................. 365 389
OH Housing Finance Agency, Single-family
Mortgage Revenue, RIB (variable rate),
Series B-4,
9.294% 03/31/31............................. 2,115 2,223
--------
12,898
- --------------------------------------------------------------------------------
MANUFACTURING - 1.9%
MEASURING & ANALYZING INSTRUMENTS - 0.9%
MN Brooklyn Park,
TL Systems Corp., Series 1991,
10.000% 09/01/16............................. 980 1,007
--------
TRANSPORTATION EQUIPMENT - 1.0%
MN Buffalo, Ruden Manufacturing, Inc.,
10.500% 09/01/14............................. 1,155 1,230
- --------------------------------------------------------------------------------
</TABLE>
See notes to investment portfolio.
3
<PAGE>
INVESTMENT PORTFOLIO - CONTINUED
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
POLLUTION CONTROL REVENUE - 3.2%
IN Petersburg Pollution Control,
Indianapolis Power & Light Company,
Series 1993-B,
5.400% 08/01/17............................. $ 3,000 $ 2,741
NH State Turnpike Systems,
RIB (variable rate), Series 1991-C,
9.232% 11/01/17............................. 1,000 1,141
--------
3,882
- --------------------------------------------------------------------------------
PUBLIC FACILITIES IMPROVEMENT - 1.4%
MN Mille Lacs Capital Improvement
Infrastructure, Band of Chippewa,
Series 1992-A,
9.250% 11/01/12............................. 285 321
SC State Public Service Authority,
Series C,
5.000% 01/01/18............................. 1,500 1,314
--------
1,635
- --------------------------------------------------------------------------------
PUBLIC INFRASTRUCTURE - 14.8%
Airport - 4.6%
CO Denver City and County Airport,
Stapleton International Airport:
Series 1990-A,
8.500% 11/15/23............................. 2,000 2,222
Series 1992-B,
7.250% 11/15/23............................. 1,000 1,033
IL Regional Transportation Authority,
Series C,
7.750% 06/01/20............................. 1,000 1,219
IN Airport Authority,
7.100% 01/15/17............................. 1,000 1,033
--------
5,507
--------
TURNPIKE/TOLL ROAD/BRIDGE - 10.2%
CA Foothill Eastern Transportation
Corridor Agency, State Toll Road,
Senior Lien, Series A,
5.000% 01/01/35............................. 1,000 761
CA San Joaquin Hills Transportation
Agency, Senior Lien Toll Road:
Series 1993, CABS,
(g) 01/01/23............................. 5,250 761
Series 1993, Current Interest,
6.750% 01/01/32............................. 500 497
FL Orlando & Orange County Expressway,
Series A,
5.125% 07/01/20............................. 5,000 4,463
PR Commonwealth of Puerto Rico,
Highway & Transportation Authority:
3.980% 07/01/09 (a)......................... 1,450 (b) 578
5.500% 07/01/09............................. 2,900 2,842
TX Harris County,
Series 1994,
5.375% 08/15/20 (h)......................... 2,640 2,396
--------
12,298
- --------------------------------------------------------------------------------
REFUNDED/ESCROW/SPECIAL OBLIGATION (I) - 3.1%
DC Hospital,
Washington Hospital Center
Corp., Series 1990-A,
8.750% 01/01/15............................. 615 733
DE Wilmington, Riverside Hospital,
Series 1988-A,
10.000% 10/01/03............................. 50 60
FL Pinellas County Health Facilities,
SunCoast Health System,
Suncoast Hospital, Series 1990-A,
8.500% 03/01/20............................. 840 990
MI Wayne County Limited Tax General
Obligation Building Authority,
Series 1992-A,
8.000% 03/01/17............................. 250 298
NY State Dormitory Authority,
City University, Series 1990-A,
7.625% 07/01/20............................. 750 865
NY State Medical Care Facilities
Finance Agency, Mental Health
Facilities Improvement, Series 1991-A
7.500% 02/15/21............................. 730 845
--------
3,791
- --------------------------------------------------------------------------------
SOLID WASTE - 3.0%
LANDFILL - 0.2%
MA State Industrial Finance Agency,
Peabody Monofill Associates, Inc. Project,
9.000% 09/01/05............................. 250 264
--------
RESOURCE RECOVERY - 2.8%
MA State Industrial Finance Agency,
Refusetech, Series 1993-A,
6.300% 07/01/05............................. 500 508
SC Charleston County Recovery,
Foster Wheeler, Charleston, Series 1987-A,
9.250% 01/01/10............................. 2,640 2,904
--------
3,412
- --------------------------------------------------------------------------------
TAX ALLOCATION - 3.7%
CA Contra Costa County Public Financing
Authority, Series 1992-A,
7.100% 08/01/22............................. 1,000 1,015
CA Los Angeles County Transportation,
Authority, Proposition A, Series 1993-A,
5.000% 07/01/21............................. 1,000 858
</TABLE>
See notes to investment portfolio.
4
<PAGE>
INVESTMENT PORTFOLIO - CONTINUED
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
TAX ALLOCATION - CONT.
NY State Local Government Assistance
Corp., Series 1993-E,
5.000% 04/01/21............................. $ 3,000 $ 2,565
--------
4,438
- --------------------------------------------------------------------------------
UTILITY - 5.8%
CO-GENERATION - 0.9%
FL Martin County Industrial
Development Authority, Indiantown
Co-generation Project,
7.875% 12/15/25............................. 1,000 1,084
--------
MUNICIPAL ELECTRIC - 4.9%
CA Los Angeles Department, Water & Power
Electric Plant, Series 1994,
5.300% 02/15/25............................. 2,000 1,780
FL Jacksonville Electric Authority,
Series 1993-A,
5.250% 10/01/28 1,000 885
FL Orlando Utilities Commission,
5.000% 10/01/23............................. 1,000 859
SC State Public Service Authority,
Series A,
6.250% 01/01/22 (j)......................... 1,500 1,509
UT Intermountain Power Agency,
Series A,
5.000% 07/01/23............................. 1,000 866
--------
5,899
- --------------------------------------------------------------------------------
WATER & SEWER - 7.8%
CA Los Angeles Wastewater Systems:
Series B,
5.600% 06/01/20............................. 2,000 1,872
Series 1993 D,
5.200% 11/01/21............................. 1,000 883
CA San Diego,
Series 1993-A,
5.250% 05/15/20............................. 1,000 891
CA West Sacramento Finance Authority,
Water System Improvement Project,
5.500% 08/01/24............................. 2,000 1,838
MA State Water Resources Authority:
Series 1992-B,
5.500% 11/01/15............................. 1,000 919
Series 1993-B,
5.000% 03/01/22............................. 1,000 844
MD Northeast Maryland Waste Disposal
Authority, Solid Waste, Montgomery
County Resource Recovery Project,
Series 1993-A,
6.300% 07/01/16............................. 500 494
MS Five Lakes Utility District,
8.250% 07/15/24............................. 140 143
TX Bexar Metropolitan Water District,
5.000% 05/01/19............................. 1,775 1,538
--------
9,422
- --------------------------------------------------------------------------------
Total investments (cost $116,937) (k) 118,088
- --------------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS - 0.8%
- --------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES (L)
CA Pollution Control Revenue,
Malaga, Series 88-B,
4.300% 04/01/17............................. 300 300
IL Health Facilities Authority,
Elmhurst Hospital,
4.350% 01/01/20............................. 200 200
NY New York City General Obligation,
Series 1991-E,
4.500% 09/01/95............................. 400 400
- --------------------------------------------------------------------------------
Total short-term obligation 900
- --------------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES, NET - 1.1% 1,376
- --------------------------------------------------------------------------------
NET ASSETS - 100.0% $120,364
- --------------------------------------------------------------------------------
</TABLE>
Notes to investment portfolio:
(a) This security is a variable rate instrument; on July 1, 1998 it will change
to a fixed rate instrument. Interest income is accrued daily on the
notional amount at the applicable interest rates.
(b) Notional amount.
(c) This issuer is in default of certain debt covenants. Income is not being
accrued.
(d) This issuer has filed under Chapter 11 of the Federal Bankruptcy Code.
Income is not being accrued.
(e) Accrued interest accumulates in the value of the security and is payable at
redemption.
(f) This is a restricted security which was acquired on August 27, 1993 at a
cost of $2,168. This security represents 1.8% of the Fund's net assets at
June 30, 1995.
(g) Zero coupon bond.
(h) A portion of this security is being used to collateralize a delayed delivery
purchase indicated in note (j) below.
(i) The Fund has been informed that the issuer has placed direct obligations of
the U.S. Government in an irrevocable trust, solely for the payment of the
interest and principal.
(j) This security has been purchased on a delayed delivery basis for settlement
at a future date beyond the customary settlement time.
See notes to financial statements.
5
<PAGE>
INVESTMENT PORTFOLIO - CONTINUED
Notes to investment portfolio - cont.
(k) Cost for federal income tax purposes is the same.
(l) 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 June 30, 1995.
<TABLE>
<CAPTION>
Acronym Name
------- ----
<S> <C>
RIB Residual Interest Bonds
CABS Capital Appreciation Bonds
</TABLE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 1. INTERIM FINANCIAL STATEMENTS
In the opinion of management of Colonial Investment Grade Municipal Trust
(the Fund), the accompanying financial statements contain all normal and
recurring adjustments necessary for the fair presentation of the financial
position of the Fund at June 30, 1995, 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
The Fund is a Massachusetts business trust, registered under the Investment
Company Act of 1940, as amended, as a diversified, closed-end, management
investment company. The Fund may issue an unlimited number of shares. The
following significant accounting policies are consistently followed by the Fund
in the preparation of its financial statements and conform to generally accepted
accounting principles.
- --------------------------------------------------------------------------------
SECURITY VALUATION AND TRANSACTIONS
Debt securities generally are valued by a pricing service based upon market
transactions for normal institutional-size units of similar securities. When
management deems it appropriate, an over-the-counter or exchange bid quotation
is used.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
Portfolio positions which cannot be valued as set forth above are valued
at fair value under procedures approved by the Trustees.
Futures contracts are valued based on the difference between the last sale
price and the opening price of the contract.
Security transactions are accounted for on the date the securities are
purchased or sold.
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.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
6
<PAGE>
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
STATEMENT OF ASSETS & LIABILITIES (UNAUDITED)
June 30,1995
(in thousands except for per shares amounts)
- -----------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments at value (cost $116,937)............................. $118,088
Short-term obligations........................................... 900
--------
118,988
Cash............................................ $1,295
Receivable for:
Interest..................................... 2,460
Investments sold............................. 25
Other........................................... 90 3,870
------ --------
Total assets........................................... 122,858
LIABILITIES
Payable for investments bought.................. 1,454
Accrued deferred Trustees fees.................. 1
Other........................................... 1,039
------
Total liabilities...................................... 2,494
--------
Net Assets at Value for 11,509
shares of beneficial interest outstanding...................... $120,364
========
Net asset value per share........................................ $ 10.46
========
COMPOSITION OF NET ASSETS
Capital paid in............................................... 127,938
Undistributed net investment income........................... 368
Accumulated net realized loss................................. (9,093)
Net unrealized appreciation................................... 1,151
--------
$120,364
========
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS (UNAUDITED)
Six months ended June 30, 1995
(in thousands)
- --------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Interest......................................................... $ 4,534
EXPENSES
Management fee.................................. $ 390
Transfer agent.................................. 23
Bookkeeping fee................................. 17
Audit fee....................................... 20
Custodian fee................................... 3
Trustees fees................................... 6
Legal fee....................................... 27
Reports to shareholders......................... 3
NYSE fee........................................ 12
Other........................................... 17 518
------ -------
Net investment income.................................. 4,016
-------
NET REALIZED & UNREALIZED GAIN (LOSS)
ON PORTFOLIO POSITIONS
Net realized loss on:
Investments.................................. (3,462)
Closed futures contracts..................... (331)
-------
Net realized loss......................................... (3,793)
Net unrealized appreciation during
the period on:
Investments.................................. 9,521
Open futures contracts....................... 37
------
Net unrealized gain....................................... 9,558
-------
Net gain............................................. 5,765
-------
Net increase in net assets from operations....................... $ 9,781
=======
</TABLE>
See notes to financial statements.
7
<PAGE>
FINANCIAL STATEMENTS - CONTINUED
STATEMENT OF CHANGES IN NET ASSETS
(in thousands)
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
(unaudited)
Six Months
ended Year ended
June 30 December 31
----------- -----------
1995 1994
----------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income................................................ $ 4,016 $ 7,743
Net realized loss.................................................... (3,793) (2,008)
Net unrealized appreciation (depreciation)........................... 9,558 (10,954)
-------- --------
Net increase (decrease) from operations........................ 9,781 (5,219)
Distributions
From net investment income........................................... (3,677) (7,734)
-------- --------
Total increase (decrease)................................ 6,104 (12,953)
NET ASSETS
Beginning of period.................................................. 114,260 127,213
-------- --------
End of period (including undistributed
net investment income of $368 and $27, respectively)................ $120,364 $114,260
======== ========
NUMBER OF FUND SHARES
Outstanding at end of period....................................... 11,509 11,509
======== ========
</TABLE>
See notes to financial statements.
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded on the ex-date.
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.
- --------------------------------------------------------------------------------
NOTE 3. FEES AND COMPENSATION PAID TO AFFILIATES
MANAGEMENT FEE
Colonial Management Associates, Inc. (the Adviser) is the investment
adviser of the Fund and furnishes accounting and other services and office
facilities for a monthly fee equal to 0.65% annually of the Fund's average
weekly net assets.
- --------------------------------------------------------------------------------
BOOKKEEPING FEE
The Adviser provides bookkeeping and pricing services for $18,000 per year
plus 0.0233% of the Fund's average weekly net assets over $50 million.
- --------------------------------------------------------------------------------
OTHER
The Fund pays no compensation to its officers, all of whom are employees of
the Adviser.
The Fund's Trustees may participate in a deferred compensation plan which
may be terminated at any time. Obligations of the plan will be paid solely out
of the Fund's assets.
- --------------------------------------------------------------------------------
NOTE 4. PORTFOLIO INFORMATION
During the six months ended June 30, 1995, purchases and sales of
investments, other than short-term obligations, were $25,191,201 and
$24,324,644, respectively.
Unrealized appreciation (depreciation) at June 30, 1995, based on cost of
investments for both financial statement and federal income tax purposes was:
<TABLE>
<CAPTION>
<S> <C>
Gross unrealized appreciation.............. $ 5,754,051
Gross unrealized depreciation.............. (4,603,241)
Net unrealized appreciation............. -----------
$ 1,150,810
===========
</TABLE>
- --------------------------------------------------------------------------------
CAPITAL LOSS CARRYFORWARDS
At December 31, 1994, capital loss carryforwards available (to the extent
provided in regulations) to offset future realized gains were approximately
as follows:
<TABLE>
<CAPTION>
YEAR OF CAPITAL LOSS
EXPIRATION CARRYFORWARD
---------- ------------
<S> <C>
1998............................ $ 629,000
2000............................ 611,000
2001............................ 2,041,000
2002............................ 2,046,000
----------
$5,327,000
==========
</TABLE>
Expire 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
The Fund has greater than 10% of its net assets at June 30, 1995 invested
in California.
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 sells Municipal and Treasury bond futures contracts to manage
overall portfolio interest rate exposure and not for trading purposes. The use
of futures contracts involves certain risks, which include (1) imperfect
correlation between the price movement of the contracts and the underlying
securities, (2) inability to close out positions due to different trading
hours, or the temporary
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS - CONTINUED
absence of a liquid market, for either the contract or the underlying
securities, or (3) an inaccurate prediction by the Adviser of the future
direction of interest rates. Any of these risks may involve amounts exceeding
the initial or variation margin recorded in the Fund's Statement of Assets and
Liabilities at any given time.
- --------------------------------------------------------------------------------
NOTE 5. RESULTS OF SPECIAL SHAREHOLDERS MEETING
On February 15, 1995, a special meeting of shareholders was held and a new
Management Agreement between the Trust and Colonial Management Associates, Inc.
was approved that became effective upon the completion of the merger of The
Colonial Group, Inc. and Apple Merger Corporation, a subsidiary of Liberty
Financial Companies, Inc. on March 24, 1995. Out of the shares of beneficial
interest outstanding on December 9, 1994, 7,442,476 voted for the new Management
Agreement, 77,751 voted against and 247,257 abstained. Of the shares of
beneficial interest outstanding that abstained, 183,920 represented broker
non-votes.
- --------------------------------------------------------------------------------
NOTE 6. RESULTS OF ANNUAL SHAREHOLDER MEETING
On May 31, 1995, the Annual Meeting of Shareholders (Meeting) of Colonial
Investment Grade Municipal Trust was held to elect six Trustees and to ratify
the selection of Price Waterhouse LLP as independent accountants for the fiscal
year ending December 31, 1995. On March 6, 1995, the record date for the
Meeting, the Fund had outstanding 11,509,000.000 shares of beneficial interest.
The votes cast at the Meeting were as follows:
Election of six Trustees:
<TABLE>
<CAPTION>
FOR AGAINST
--- -------
<S> <C> <C>
Robert J. Birnbaum 8,790,789 197,573
James E. Grinnell 8,792,281 196,081
Richard W. Lowry 8,793,491 194,871
George L. Shinn 8,787,986 200,377
Robert L. Sullivan 8,790,729 197,633
Sinclair Weeks, Jr. 8,786,666 201,697
</TABLE>
The Board of Trustees also consists of Tom Bleasdale, Lora S. Collins, William
D. Ireland, Jr., John A. McNeice, Jr., William E. Mayer, James L. Moody, Jr.,
and John J. Neuhauser.
Ratification of the selection of Price Waterhouse LLP as independent
accountants:
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C>
8,703,483 53,374 231,506
</TABLE>
10
<PAGE>
FINANCIAL HIGHLIGHTS
Selected per share data, total return, ratios and supplemental data throughout
each period are as follows:
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED)
SIX MONTHS
ENDED
JUNE 30 YEAR ENDED DECEMBER 31
----------- ----------------------------------------------------------
1995 1994 1993 1992 1991 1990
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value - Beginning of period............ $9.930 $11.050 $10.960 $11.090 $10.850 $11.020
--------- -------- ------- -------- -------- --------
Income (loss) from investment operations:
Net investment income........................... 0.349 0.673 0.788 0.848 0.886 0.942 (a)
Net realized and unrealized gain (loss)
on investments................................ 0.501 (1.121) 0.090 (0.132) 0.248 (0.167)
--------- -------- ------- -------- -------- --------
Total from investment operations............ 0.850 (0.448) 0.878 0.716 1.134 0.775
--------- -------- ------- -------- -------- --------
Less distributions declared to shareholders
From net investment income..................... (0.320) (0.672) (0.788) (0.846) (0.894) (0.945)
--------- -------- ------- -------- -------- --------
Net asset value - End of period.................. $10.460 $9.930 $11.050 $10.960 $11.090 $10.850
--------- -------- ------- -------- -------- --------
Total return based on net asset value (b)........ 8.74% (c) (4.08)% 7.85% 6.17% 10.12% 6.83%
========= ======== ======= ======== ======== ========
Total return based on market value............... 13.07% (c) (8.12)% (2.16)% 7.43% 12.55% 2.83%
========= ======== ======= ======== ======== ========
Ratios to average net assets:
Expenses ..................................... 0.87% (d) 0.94% (d) 0.87% 0.86% 0.87% 0.45% (a)
Net investment income ........................ 6.70% (d) 6.46% 7.08% 7.76% 8.11% 8.66% (a)
Portfolio turnover............................... 42% (d) 34% 35% 18% 15% 22%
Net assets at end of period (000)................ $120,364 $114,260 $127,213 $126,169 $127,589 $124,871
</TABLE>
(a) Net of fees and expenses waived or borne by the adviser which amounted
to $0.046 and 0.43%.
(b) Total return at net asset value assuming all distributions reinvested.
(c) Not annualized.
(d) Annualized.
11
<PAGE>
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30, 1995 MARCH 31, 1995
------------------ -------------------
(000) PER SHARE (000) PER SHARE
------ --------- ------ ---------
<S> <C> <C> <C> <C>
Total investment income......................................................... $2,443 $ 0.212 $2,091 $ 0.182
Net investment income........................................................... $2,173 $ 0.189 $1,843 $ 0.160
Net realized and
unrealized gain (loss)......................................................... $ (455) $(0.039) $6,220 $ 0.540
Market value per share:
High.......................................................................... $10.125 $10.125
Low........................................................................... $ 9.375 $ 9.375
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED
--------------------------------------------------------------------------------------
DECEMBER 31, 1994 SEPTEMBER 30, 1994 JUNE 30, 1994 MARCH 31, 1994
----------------- ------------------ ----------------- ------------------
(000) PER SHARE (000) PER SHARE (000) PER SHARE (000) PER SHARE
----- ---------- ----- ---------- ------ --------- ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total investment income............. $ 2,126 $ 0.185 $ 2,173 $ 0.189 $ 2,235 $ 0.194 $ 2,340 $ 0.203
Net investment income............... $ 1,789 $ 0.155 $ 1,912 $ 0.166 $ 1,974 $ 0.172 $ 2,068 $ 0.180
Net realized and
unrealized loss.................... $(3,672) $(0.318) $(1,324) $(0.114) $(1,100) $(0.094) $(6,866) $(0.595)
Market value per share:
High......................................... $10.250 $10.625 $10.500 $11.625
Low.......................................... $ 8.625 $ 9.500 $ 9.625 $10.250
</TABLE>
At June 30, 1995 there were 2,527 shareholder accounts.
12
<PAGE>
DIVIDEND REINVESTMENT PLAN (UNAUDITED)
The Trust generally distributes net investment income monthly and capital
gains annually. Under the Trust's Dividend Reinvestment Plan (the "Plan") all
distributions are reinvested automatically in additional shares of the Trust,
unless the shareholder elects to receive cash or the shares are held in broker
or nominee name and a reinvestment service is not provided by the broker or
nominee.
All cash distributions are by check mailed directly to the record holder by
the dividend paying agent.
Distributions payable to Plan participants will be applied as soon as
practicable by the dividend paying agent to the purchase of Trust shares in the
open market for Plan participants' accounts.
All Plan accounts receive monthly written confirmations of all transactions.
Shares purchased under the Plan are ordinarily held in uncertificated form,
although participants have the right to receive certificates for whole shares
held in their account.
Each shareholder's proxy includes shares purchased pursuant to the Plan. The
automatic reinvestment of distributions does not relieve participants of any
income tax payable on the distributions. Participants may recognize capital
gain or ordinary income for federal income tax purposes in an amount equal to
the market value of shares received under the Plan.
Fees and expenses of the Plan other than brokerage charges will be paid by
the Trust. Participants will bear a pro-rata share of brokerage charges
incurred on open market purchases.
A Plan participant may terminate his or her participation by written notice
to the Plan administrator. The Plan may be amended or terminated on 90 days
written notice to the Plan participants. Upon withdrawal by any participant or
any termination of the Plan, certificates for whole shares will be issued and
cash payments will be made for any fractional shares. All correspondence
concerning the Plan, including requests for information, should be directed to
The First National Bank of Boston, the Trust's dividend disbursing agent and
administrator of the Plan, at P.O. Box 1681, Boston, Massachusetts 02105,
Attention: Dividend Reinvestment Department.
13
<PAGE>
TRUSTEES
ROBERT J. BIRNBAUM
Trustee (formerly Special Counsel, Dechert, Price & Rhoads; President and Chief
Operating Officer, New York Stock Exchange, Inc.)
TOM BLEASDALE
Trustee (formerly Chairman of the Board and Chief Executive Officer, Shore Bank
& Trust Company)
LORA S. COLLINS
Attorney, Kramer, Levin, Naftalis, Nessen, Kamin & Frankel
JAMES E. GRINNELL
Private Investor (formerly Senior Vice President-Operations, The Rockport
Company)
WILLIAM D. IRELAND, JR.
Trustee (formerly Chairman of the Board, Bank of New England-Worcester)
RICHARD W. LOWRY
Private Investor (formerly Chairman and Chief Executive Officer, U.S. Plywood
Corporation)
WILLIAM E. MAYER
Dean, College of Business and Management, University of Maryland (formerly Dean,
Simon Graduate School of Business, University of Rochester; Chairman and Chief
Executive Officer, C.S. First Boston Merchant Bank; and President and Chief
Executive Officer, The First Boston Corporation)
JOHN A. MCNEICE, JR.
Chairman of the Board and Director, The Colonial Group, Inc. and Colonial
Management Associates, Inc. (formerly Chief Executive Officer, The Colonial
Group, Inc. and Colonial Management Associates, Inc.)
JAMES L. MOODY, JR.
Chairman of the Board, Hannaford Bros. Co. (formerly Chief Executive Officer,
Hannaford Bros. Co.)
JOHN J. NEUHAUSER
Dean, Boston College School of Management
GEORGE L. SHINN
Financial Consultant (formerly Chairman, Chief Executive Officer and Consultant,
The First Boston Corporation)
ROBERT L. SULLIVAN
Management Consultant (formerly Management Consultant, Saatchi and Saatchi
Consulting Ltd. and Principal and International Practice Director, Management
Consulting, Peat Marwick Main & Co.)
SINCLAIR WEEKS, JR.
Chairman of the Board, Reed & Barton Corporation
14
<PAGE>
- --------------------------------------------------------------------------------
ABOUT OUR COVER...
[GRAPHIC]
The symbol on the cover of this Report represents the Fund's primary investment
focus on municipal bonds.
- --------------------------------------------------------------------------------
Colonial Investment Grade Municipal Trust mails one shareholder report to each
shareholder address. If you would like more than one report, please call our
Literature Department at 1-800-248-2828 and additional reports will be sent to
you.
TRANSFER AGENT, REGISTRAR AND DIVIDEND DISBURSING AGENT
The First National Bank of Boston
100 Federal Street
Boston, MA 02110
1-617-575-2900
CUSTODIAN
United Missouri Bank, N.A.
928 Grand Avenue
Kansas City, MO 64106
1-816-860-7000
15
<PAGE>
[LOGO]
COLONIAL
MUTUAL FUNDS
[GRAPHIC]
COLONIAL
INVESTMENT GRADE
MUNICIPAL TRUST
- ---------------------------
SEMIANNUAL REPORT
JUNE 30, 1995
[LOGO]
COLONIAL
MUTUAL FUNDS
[LOGO] Printed on recycled paper.
IG-03/166B-0895
