<PAGE>
[Graphic Omitted]
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COLONIAL NEWPORT
TIGER FUND
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ANNUAL REPORT
DECEMBER 31, 1996
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[Graphic Omitted]
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NOT FDIC- MAY LOSE VALUE
INSURED NO BANK GUARANTEE
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<PAGE>
COLONIAL NEWPORT TIGER FUND HIGHLIGHTS
JANUARY 1, 1996 - DECEMBER 31, 1996
INVESTMENT OBJECTIVE: Colonial Newport Tiger Fund seeks capital appreciation by
investing primarily in equity securities of companies located in the nine
"Tigers" of Asia -- Hong Kong, China, Singapore, Malaysia, Thailand, Indonesia,
the Philippines, South Korea and Taiwan.
THE FUND IS DESIGNED TO OFFER:
[X] Access to the world's fastest-growing economies
[X] Long-term growth potential
[X] Experienced management
PORTFOLIO MANAGER COMMENTARY: "The Fund's performance in 1996 was driven by a
strong Hong Kong market. We believe that performance in 1997 will continue to be
paced by Hong Kong. However, we expect a rebound in other Tiger countries such
as Singapore and Thailand. This rebound should refocus institutional investor
attention on these growth markets, which could result in stronger investment
performance." -- Jack Mussey & Tim Tuttle
COLONIAL NEWPORT TIGER FUND PERFORMANCE*
CLASS A CLASS T CLASS Z
Inception dates 5/31/89 5/31/89 5/31/89
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12-month total returns, assuming 10.94% 11.24% 11.24%
reinvestment of all distributions and
no sales charge
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Net asset value per share on 12/31/96 $13.75 $13.75 $13.75
*The Fund was originally introduced on 5/31/89 and became Colonial Newport
Tiger Fund on 4/1/95. Class A, B, D, T and Z shares were offered at that time.
Performance for Class B and D shares appears on page 6.
TOP FIVE COUNTRIES** TOP FIVE SECTORS**
(as of 12/31/96) (as of 12/31/96)
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1. Hong Kong 50.9% 1. Financial Services 36.0%
2. Singapore 21.0% 2. Consumer Cyclicals 17.6%
3. Malaysia 12.1% 3. Utilities 16.5%
4. Thailand 4.4% 4. Technologies 6.2%
5. Indonesia 4.3% 5. Capital Goods 3.8%
**Country and sector weightings are calculated as a percentage of total net
assets. Because the Fund is actively managed, there can be no guarantee it will
continue to maintain these sector weightings in the future. Industry sectors in
the following financial statements are based upon the standard industrial
classifications (SIC) published by the U.S. Office of Management and Budget. The
sector classifications used on this page are based upon Newport's defined
criteria used in the investment process.
<PAGE>
PRESIDENT'S MESSAGE
TO FUND SHAREHOLDERS
[Photo of Harold W. Cogger]
I am pleased to present your Fund's annual report for the fiscal year ended
December 31, 1996. This report reflects on the investment environment of the
past 12 months and on the performance of your Fund.
While the Federal Reserve Board lowered short-term interest rates early in the
period, stronger than expected economic reports in February 1996 brought the
Fed's easing trend to a halt. As a result, long-term interest rates were rising
during most of the period, having a negative effect on fixed income investments.
However, with recent statistics suggesting an easing pace of economic activity
and a continued benign inflation outlook, we are hopeful that bond market
volatility will be somewhat reduced in the months ahead.
There was some good news for the tax-exempt sector. Low supply and strong retail
market support enabled municipal bonds to outperform Treasury bonds for much of
the year. The post-election conditions should promote a period of stability for
the tax-exempt market as the flat tax initiative is now a receding memory.
In the domestic stock market, generally favorable conditions prevailed until
July, when a price-based correction took place. Since then, the market has
rebounded nicely with the Dow Jones Industrial Average setting several new
records. Internationally, the Tiger countries of the Pacific Rim continue to
offer a good combination of growth and value. In the European markets,
short-term interest rates continue to be much lower than long-term rates. We
expect these conditions to prevail until we see an increase in economic
activity.
Our economic expectations include growth continuing at a slower, but more
sustainable rate, and our outlook for 1997 is relatively bright.
The following report will provide you with specific information on your Fund's
performance as well as an in-depth discussion with your portfolio manager. As
always, we thank you for the opportunity to help you meet your investment goals
through the Colonial family of funds.
Respectfully,
/s/ Harold W. Cogger
Harold W. Cogger
President
February 10, 1997
Because market conditions change frequently, there can be no assurance that the
trends described here will continue, come to pass or affect Fund performance.
<PAGE>
PORTFOLIO MANAGEMENT REPORT
JACK MUSSEY is president and chief executive officer of Newport Fund Management,
Inc. and portfolio co-manager of Colonial Newport Tiger Fund. Mr. Mussey has
more than 20 years of experience investing in Asian markets. He is a Chartered
Financial Analyst and a member of the Security Analysts of San Francisco. Mr.
Mussey received a BA from the University of Redlands in 1963 and an MBA from the
University of California at Berkeley in 1965.
TIM TUTTLE is managing director of Newport Fund Management, Inc. and portfolio
co-manager of Colonial Newport Tiger Fund. He has more than 20 years of
experience investing in Asian markets and is a Chartered Financial Analyst. He
received a BA from Williams College in 1964.
Q. WHAT WAS THE FUND'S STRATEGY DURING THE PAST YEAR?
A. We maintained our long-term, large capitalization investment approach and
continued to focus on the high quality companies of the Asian markets, primarily
those of Hong Kong, Singapore and Malaysia. While the first half of the year saw
small capitalization stocks outperform large caps for the first time in seven
years, we continued to focus on the large cap stocks because we expect them to
benefit from long-term secular trends. During the second half of 1996, the Tiger
markets once again favored these large company stocks and the Fund's
shareholders were rewarded.
Q. WHAT WAS THE FUND'S PERFORMANCE RELATIVE TO THE MORGAN STANLEY CAPITAL
INTERNATIONAL EAFE (GDP) INDEX?
A. Colonial Newport Tiger Fund outperformed the Morgan Stanley Capital
International EAFE (GDP) Index for the 12-month period. The total return for
Class A shares, based on net asset value, was 10.94% while the total return for
the Index was 7.62%. This strong performance can be attributed to the rebound of
the Asian large-cap market in the second half of the year and to our significant
investment in the Hong Kong market (50.9% of Fund assets) that returned 33.53%
for the year.
Q. WHAT IMPACT DID THE MAJOR TIGER COUNTRIES HAVE ON THE FUND'S PERFORMANCE AND
WHAT IS YOUR OUTLOOK FOR THEM FOR THE FUTURE?
A. The greatest contributor to performance was Hong Kong. Increased investor
enthusiasm for this market resulted from two trends. The first was a liquidity
shift as American, European and Japanese assets flowed into Asian blue chip
stocks, many of which are located in Hong Kong and held by the Fund. The second
was a growing acceptance that the June 30, 1997 transfer of Hong Kong's control
from the British to the Chinese will stimulate the local economy since both
infrastructure spending and direct investment spending should increase
significantly. The Fund also benefited from institutional investors' discovery
of "red chips," those companies that are based in Hong Kong but are dependent on
mainland China for their revenues and earnings, serving as a barometer for the
Chinese economy. We had a significant investment in one such stock, Citic
Pacific, which performed very well. We anticipate that interest in these stocks
will continue well into 1997. Overall, we believe that Hong Kong securities
continue to be somewhat undervalued and we will continue to maintain our large
position.
In contrast, other Asian markets were held back during the year, particularly
THAILAND (4.4% of Fund assets). Thailand was down 35% for the year, due in part
to the attractiveness of the Hong Kong market; investors pulled their cash from
other Asian markets in a scramble to invest in Hong Kong. Thailand was also
hampered by diminished economic growth driven by a short-term cyclical downturn
in the electronics market, a principal export market for the nation. However,
the Big Three auto makers have all selected Thailand as their Asian
manufacturing base. The SINGAPORE market (21.0% of Fund assets) also fell victim
to the electronics sector set back, losing 2.2% of its value in 1996. Singapore
continues to enjoy the best managed economy in Asia, and the electronics market
has begun to turn around. Accordingly, we have an optimistic outlook for both of
these markets for 1997. We believe that Thailand, in particular, is undervalued
and we will likely be adding to our investments there.
Both MALAYSIA (12.1% of Fund assets) and INDONESIA (4.3% of Fund assets) had
strong performance, with gains of 24% for the year reflecting their governments'
successful efforts to manage the cyclical export slowdown.
Q. WHAT IS YOUR INVESTMENT OUTLOOK FOR 1997?
A. We are confident that the first half of 1997 will provide the Fund with an
opportunity to further enhance its performance because we anticipate a strong
rebound by the Thai and Singapore markets. As we discussed earlier, we are
positive on the Hong Kong market and the economic surge that we expect to
develop as control changes hands in June. We view the resulting economic
vitality to be sustainable for at least three years. We also expect to see
continued capital flows to the Tiger countries as a result of their relatively
large sustainable growth rates, which should translate into strong stock market
performance.
<PAGE>
COLONIAL NEWPORT TIGER FUND INVESTMENT PERFORMANCE VS.
THE MORGAN STANLEY CAPITAL INTERNATIONAL EAFE (GDP) INDEX
Change in Value of $10,000 from 6/1/89 - 12/31/96
Based on NAV and MOP
NAV $28,786
MOP $27,131
MSCI EAFE $17,605
CLASS A SHARES
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Date Class A NAV Class A MOP MSCI
- ------------------------------------------------------------------------------
Jun 1, 89* 10,000 9,425 10,000
Jun 30, 89 9,940 9,368.45 10,186
Jul 31, 89 10,240 9,651.20 11,339
Aug 31, 89 10,040 9,462.70 11,081
Sep 30, 89 10,310 9,717.175 11,509
Oct 31, 89 10,060 9,481.55 10,965
Nov 30, 89 10,420 9,820.85 11,533
Dec 31, 89 11,080 10,442.90 12,404
Jan 31, 90 11,200 10,556 12,180
Feb 28, 90 11,360.21 10,707 11,637
Mar 31, 90 11,179.57 10,536.75 11,260
Apr 30, 90 10,537.30 9,931.405 11,111
May 31, 90 11,560.92 10,896.17 11,940
Jun 30, 90 11,841.92 11,161.01 12,062
Jul 31, 90 12,494.23 11,775.81 12,369
Aug 31, 90 10,687.83 10,073.28 11,024
Sep 30, 90 9,011.90 8,493.716 9,496
Oct 31, 90 9,664.21 9,108.518 10,678
Nov 30, 90 9,242.718 8,711.262 10,210
Dec 31, 90 9,402.687 8,862.032 10,216
Jan 31, 91 9,756.552 9,195.55 10,497
Feb 28, 91 10,626.05 10,015.05 11,596
Mar 31, 91 10,990.02 10,358.10 10,817
Apr 30, 91 11,364.11 10,710.67 10,849
May 31, 91 11,657.31 10,987.01 11,090
Jun 30, 91 11,434.88 10,777.38 10,226
Jul 31, 91 11,677.53 11,006.07 10,652
Aug 31, 91 11,202.34 10,558.21 10,580
Sep 30, 91 10,990.02 10,358.10 11,037
Oct 31, 91 11,151.79 10,510.56 11,005
Nov 30, 91 11,495.54 10,834.55 10,696
Dec 31, 91 11,849.41 11,168.07 11,312
Jan 31, 92 12,557.14 11,835.10 11,216
Feb 29, 92 12,951.44 12,206.73 11,064
Mar 31, 92 12,617.80 11,892.28 10,519
Apr 30, 92 13,335.64 12,568.84 10,610
May 31, 92 14,215.25 13,397.87 11,235
Jun 30, 92 14,245.58 13,426.46 10,869
Jul 31, 92 13,922.04 13,121.53 10,484
Aug 31, 92 13,386.19 12,616.48 11,006
Sep 30, 92 13,527.74 12,749.89 10,602
Oct 31, 92 14,963.42 14,103.02 10,172
Nov 30, 92 14,811.76 13,960.08 10,222
Dec 31, 92 14,458.14 13,626.80 10,220
Jan 31, 93 14,914.72 14,057.12 10,338
Feb 28, 93 15,746.69 14,841.26 10,700
Mar 31, 93 15,817.72 14,908.20 11,430
Apr 30, 93 17,025.10 16,046.16 12,483
May 31, 93 17,491.82 16,486.04 12,678
Jun 30, 93 17,126.56 16,141.78 12,459
Jul 31, 93 17,106.27 16,122.66 12,834
Aug 31, 93 18,141.17 17,098.05 13,774
Sep 30, 93 18,506.42 17,442.30 13,485
Oct 31, 93 21,479.22 20,244.17 13,856
Nov 30, 93 21,083.53 19,871.22 12,752
Dec 31, 93 25,350.11 23,892.47 13,649
Jan 31, 94 24,188.56 22,797.72 14,693
Feb 28, 94 22,945.51 21,626.15 14,612
Mar 31, 94 20,622.43 19,436.64 14,403
Apr 30, 94 22,069.26 20,800.28 15,130
May 31, 94 23,108.54 21,779.80 14,783
Jun 30, 94 21,865.48 20,608.22 14,776
Jul 31, 94 23,006.65 21,683.76 15,119
Aug 31, 94 24,351.59 22,951.37 15,376
Sep 30, 94 24,208.94 22,816.93 14,835
Oct 31, 94 24,514.61 23,105.02 15,286
Nov 30, 94 22,558.33 21,261.23 14,605
Dec 31, 94 22,317.23 21,033.99 14,715
Jan 31, 95 20,106.17 18,950.07 14,338
Feb 28, 95 21,986.61 20,722.38 14,322
Mar 31, 95 22,462.39 21,170.80 14,971
Apr 30, 95 22,503.76 21,209.79 15,640
May 31, 95 25,151.26 23,705.06 15,489
Jun 30, 95 24,820.32 23,393.15 15,316
Jul 31, 95 25,420.14 23,958.48 16,317
Aug 31, 95 24,572.12 23,159.22 15,636
Sep 30, 95 25,027.15 23,588.09 15,821
Oct 31, 95 24,861.69 23,432.14 15,363
Nov 30, 95 24,923.74 23,490.62 15,686
Dec 31, 95 25,948.12 24,456.10 16,358
Jan 31, 96 28,447.13 26,811.42 16,565
Feb 29, 96 28,447.13 26,811.42 16,615
Mar 31, 96 28,238.88 26,615.15 16,835
Apr 30, 96 28,134.76 26,517.01 17,359
May 31, 96 27,988.98 26,379.62 17,103
Jun 30, 96 27,364.23 25,790.79 17,237
Jul 31, 96 25,823.17 24,338.34 16,742
Aug 31, 96 26,760.30 25,221.58 16,733
Sep 30, 96 27,551.65 25,967.43 17,193
Oct 31, 96 27,364.23 25,790.79 17,005
Nov 30, 96 28,801.16 27,145.10 17,732
Dec 31, 96 28,785.79 27,130.61 17,605
CLASS T SHARES
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Date Class T NAV Class T MOP MSCI
- ------------------------------------------------------------------------------
Jun 1, 89* 10,000 9,425 10,000
Jun 30, 89 9,940 9,368.45 10,186
Jul 31, 89 10,240 9,651.20 11,339
Aug 31, 89 10,040 9,462.70 11,081
Sep 30, 89 10,310 9,717.175 11,509
Oct 31, 89 10,060 9,481.55 10,965
Nov 30, 89 10,420 9,820.85 11,533
Dec 31, 89 11,080 10,442.90 12,404
Jan 31, 90 11,200 10,556 12,180
Feb 28, 90 11,360.21 10,707 11,637
Mar 31, 90 11,179.57 10,536.75 11,260
Apr 30, 90 10,537.30 9,931.405 11,111
May 31, 90 11,560.92 10,896.17 11,940
Jun 30, 90 11,841.92 11,161.01 12,062
Jul 31, 90 12,494.23 11,775.81 12,369
Aug 31, 90 10,687.83 10,073.28 11,024
Sep 30, 90 9,011.90 8,493.716 9,496
Oct 31, 90 9,664.21 9,108.518 10,678
Nov 30, 90 9,242.718 8,711.262 10,210
Dec 31, 90 9,402.687 8,862.032 10,216
Jan 31, 91 9,756.552 9,195.55 10,497
Feb 28, 91 10,626.05 10,015.05 11,596
Mar 31, 91 10,990.02 10,358.10 10,817
Apr 30, 91 11,364.11 10,710.67 10,849
May 31, 91 11,657.31 10,987.01 11,090
Jun 30, 91 11,434.88 10,777.38 10,226
Jul 31, 91 11,677.53 11,006.07 10,652
Aug 31, 91 11,202.34 10,558.21 10,580
Sep 30, 91 10,990.02 10,358.10 11,037
Oct 31, 91 11,151.79 10,510.56 11,005
Nov 30, 91 11,495.54 10,834.55 10,696
Dec 31, 91 11,849.41 11,168.07 11,312
Jan 31, 92 12,557.14 11,835.10 11,216
Feb 29, 92 12,951.44 12,206.73 11,064
Mar 31, 92 12,617.80 11,892.28 10,519
Apr 30, 92 13,335.64 12,568.84 10,610
May 31, 92 14,215.25 13,397.87 11,235
Jun 30, 92 14,245.58 13,426.46 10,869
Jul 31, 92 13,922.04 13,121.53 10,484
Aug 31, 92 13,386.19 12,616.48 11,006
Sep 30, 92 13,527.74 12,749.89 10,602
Oct 31, 92 14,963.42 14,103.02 10,172
Nov 30, 92 14,811.76 13,960.08 10,222
Dec 31, 92 14,458.14 13,626.80 10,220
Jan 31, 93 14,914.72 14,057.12 10,338
Feb 28, 93 15,746.69 14,841.26 10,700
Mar 31, 93 15,817.72 14,908.20 11,430
Apr 30, 93 17,025.10 16,046.16 12,483
May 31, 93 17,491.82 16,486.04 12,678
Jun 30, 93 17,126.56 16,141.78 12,459
Jul 31, 93 17,106.27 16,122.66 12,834
Aug 31, 93 18,141.17 17,098.05 13,774
Sep 30, 93 18,506.42 17,442.30 13,485
Oct 31, 93 21,479.22 20,244.17 13,856
Nov 30, 93 21,083.53 19,871.22 12,752
Dec 31, 93 25,350.11 23,892.47 13,649
Jan 31, 94 24,188.56 22,797.72 14,693
Feb 28, 94 22,945.51 21,626.15 14,612
Mar 31, 94 20,622.43 19,436.64 14,403
Apr 30, 94 22,069.26 20,800.28 15,130
May 31, 94 23,108.54 21,779.80 14,783
Jun 30, 94 21,865.48 20,608.22 14,776
Jul 31, 94 23,006.65 21,683.76 15,119
Aug 31, 94 24,351.59 22,951.37 15,376
Sep 30, 94 24,208.94 22,816.93 14,835
Oct 31, 94 24,514.61 23,105.02 15,286
Nov 30, 94 22,558.33 21,261.23 14,605
Dec 31, 94 22,317.23 21,033.99 14,715
Jan 31, 95 20,106.17 18,950.07 14,338
Feb 28, 95 21,986.61 20,722.38 14,322
Mar 31, 95 22,483.07 21,190.29 14,971
Apr 30, 95 22,483.07 21,190.29 15,640
May 31, 95 25,130.57 23,685.56 15,489
Jun 30, 95 24,799.63 23,373.66 15,316
Jul 31, 95 25,420.14 23,958.48 16,317
Aug 31, 95 24,572.12 23,159.22 15,636
Sep 30, 95 25,027.15 23,588.09 15,821
Oct 31, 95 24,861.69 23,432.14 15,363
Nov 30, 95 24,944.42 23,510.12 15,686
Dec 31, 95 25,950.29 24,458.15 16,358
Jan 31, 96 28,472.37 26,835.21 16,565
Feb 29, 96 28,472.37 26,835.21 16,615
Mar 31, 96 28,263.94 26,638.76 16,835
Apr 30, 96 28,180.56 26,560.18 17,359
May 31, 96 28,034.66 26,422.66 17,103
Jun 30, 96 27,430.19 25,852.96 17,237
Jul 31, 96 25,887.76 24,399.22 16,742
Aug 31, 96 26,804.88 25,263.60 16,733
Sep 30, 96 27,617.78 26,029.76 17,193
Oct 31, 96 27,451.04 25,872.60 17,005
Nov 30, 96 28,868.40 27,208.47 17,732
Dec 31, 96 28,865.89 27,206.10 17,605
A $10,000 investment in the following share classes, based on the maximum sales
charge for each class, would have been valued at the amount shown on 12/31/96:
Class B w/CDSC (inception 4/1/95) $12,230; Class D at MOP w/CDSC (inception
4/1/95) $12,519; Class Z (inception 5/31/89) $28,866. The Morgan Stanley Capital
International Europe, Australia and Far East GDP Index is a broad-based,
unmanaged index that tracks the performance of foreign stocks. Unlike mutual
funds, an index is not an investment, does not incur fees or charges and is not
professionally managed.
AVERAGE ANNUAL TOTAL RETURNS*
as of December 31, 1996 (Most Recent Quarter End)
- -------------------------------------------------------------------------------
1 YEAR 5 YEARS SINCE INCEPTION
- -------------------------------------------------------------------------------
CLASS A (Inception 5/31/89)
NAV 10.94% 19.43% 14.94%
MOP 4.56% 18.02% 14.05%
- -------------------------------------------------------------------------------
CLASS B (Inception 4/1/95)
NAV 10.16% -- 14.22%
w/CDSC 5.16% -- 12.15%
- -------------------------------------------------------------------------------
CLASS D (Inception 4/1/95)
NAV 10.11% -- 14.30%
MOP w/CDSC 8.01% -- 13.65%
- -------------------------------------------------------------------------------
CLASS T (Inception 5/31/89)
NAV 11.24% 19.49% 14.99%
MOP 4.84% 18.08% 14.09%
- -------------------------------------------------------------------------------
CLASS Z (Inception 5/31/89)
NAV 11.24% 19.49% 14.99%
- -------------------------------------------------------------------------------
*The Fund was originally introduced on 5/31/89 and became Colonial Newport Tiger
Fund on 4/1/95. Class A,B, D, T and Z shares were offered at that time. Total
returns shown for Class A,T, and Z shares include performance prior to Fund
conversion, at which time there was no 12b-1 fee.
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. Net asset value (NAV) returns do not
include sales charges or contingent sales charges (CDSC). Maximum offering price
(MOP) returns include the maximum sales charges for Class A shares of 5.75% and
Class D shares of 1%. The CDSC returns reflect the maximum applicable charges of
5% for one year and 4% since inception for Class B shares and 1% for one year
for Class D shares.
<PAGE>
INVESTMENT PORTFOLIO
DECEMBER 31, 1996 (IN THOUSANDS)
COMMON STOCKS - 96.0% COUNTRY SHARES VALUE
- ------------------------------------------------------------------------------
AGRICULTURE, FORESTRY & FISHING - 2.2%
AGRICULTURE - CROPS
Sime Darby Berhad Ma 10,000 $ 39,398
-----------
- ------------------------------------------------------------------------------
CONSTRUCTION - 4.5%
HEAVY CONSTRUCTION - NON BUILDING CONSTRUCTION
Citic Pacific Ltd. HK 14,095 81,824
-----------
- ------------------------------------------------------------------------------
FINANCE, INSURANCE & REAL ESTATE - 51.0%
DEPOSTITORY INSTITUTIONS - 22.5%
Bank of Ayudhya Ltd. Th 6,008 14,169
Development Bank of Singapore Ltd. Si 4,668 63,040
Guoco Group Ltd. HK 7,300 40,867
HSBC Holdings PLC HK 3,950 84,521
Hang Seng Bank HK 6,000 72,920
Oversea-Chinese Banking Corp. Ltd Si 5,140 63,907
Public Bank Berhad Ma 15,805 33,482
Public Bank Berhad Si 3,333 6,812
Thai Farmers Bank Ltd. Th 4,364 27,220
-----------
406,938
-----------
HOLDING & OTHER INVESTMENT COMPANIES - 6.7%
Ayala Land Inc., Class B Ph 3,000 3,422
Hutchison Whampoa Ltd. HK 10,220 80,272
Singapore Technologies
Industrial Corp. Si 13,000 32,512
Taiwan Fund, Inc. Tw 227 5,040
-----------
121,246
-----------
NONDEPOSITORY CREDIT INSTITUTIONS - 0.6%
Manhattan Card Co., Ltd. HK 21,000 10,657
-----------
REAL ESTATE - 21.2%
China Overseas Land & Investment HK 10,000 5,075
Cheung Kong Holdings Ltd. HK 9,500 84,443
City Developments Ltd. Si 6,993 62,959
Filinvest Development Corp. Ph 23,000 6,821
Land and House Co. Ltd. Th 1,233 8,989
New World Development Co. Ltd. HK 8,670 58,570
SM Prime Holdings, Inc. Ph 20,000 5,171
Sun Hung Kai Properties Ltd. HK 6,000 73,502
Swire Pacific Ltd., Series A HK 8,000 76,282
-----------
381,812
-----------
MANUFACTURING - 9.6%
CHEMICALS & ALLIED PRODUCTS - 0.7%
PT Kalbe Farma Reg. In 6,338 7,245
PT Darya Varia Laboratoria In 3,800 6,113
-----------
13,358
-----------
ELECTRONIC & ELECTRICAL EQUIPMENT - 0.6%
Nylex Malaysia Berhad Ma 4,500 10,156
-----------
FABRICATED METAL - 0.9%
Kian Joo Can Factory Berhad Ma 2,800 15,522
-----------
FOOD & KINDRED PRODUCTS - 2.7%
Guangdong Investments HK 40,000 38,529
PT Mayora Indah Reg. In 23,855 11,109
-----------
49,638
-----------
MEASURING & ANALYZING INSTRUMENTS - 1.1%
China Hong Kong Photo Product HK 26,100 8,774
PT Modern Photo Film Reg. In 3,505 11,129
-----------
19,903
-----------
PRINTING & PUBLISHING - 3.0%
Singapore Press Holdings Ltd. Si 2,750 54,234
-----------
STONE, CLAY, GLASS & CONCRETE - 0.6%
Siam Cement Co., Ltd. Th 318 9,967
-----------
- ------------------------------------------------------------------------------
RETAIL TRADE - 3.0%
APPAREL & ACCESSORY STORES - 1.2%
Giordano International Ltd. HK 24,739 21,110
-----------
AUTO DEALERS & GAS STATIONS - 1.8%
Cycle & Carriage Ltd. Si 2,665 32,563
-----------
- ------------------------------------------------------------------------------
SERVICES - 6.6%
HOTELS, CAMPS & LODGING - 3.1%
Genting Berhad Ma 8,251 56,844
-----------
MISCELLANEOUS REPAIR SERVICES - 3.5%
Keppel Corp. Si 8,000 62,308
-----------
- ------------------------------------------------------------------------------
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES - 19.1%
COMMUNICATIONS - 9.5%
Advanced Information Services Th 2,303 19,208
Hong Kong Telecommunications Ltd. HK 25,711 41,386
PT Indosat In 6,000 16,511
PT Telekomunikasi Indonesia In 14,500 25,016
Philippine Long Distance Telephone ADR Ph 500 25,500
Telekom Malaysia Berhad Ma 5,000 44,546
-----------
172,167
-----------
ELECTRIC SERVICES - 4.1%
Hong Kong Electric Holdings Ltd. HK 18,000 59,810
Korea Electric Power Corp. Ko 447 13,025
-----------
72,835
-----------
GAS SERVICES - 5.5%
Hong Kong and China Gas Co., Ltd. HK 41,640 80,486
Petronas Gas Berhad Ma 4,590 19,083
-----------
99,569
-----------
TOTAL COMMON STOCKS (cost of $1,442,679)(a) 1,732,049
-----------
SHORT-TERM OBLIGATIONS - 4.5% PAR
- ------------------------------------------------------------------------------
Repurchase agreement with Lehman Brothers, Inc.,
dated 12/31/96 due 01/02/97 at 6.900% collateralized
by U.S. Treasury notes with maturities to 2015,
market value $82,094 (repurchase proceeds $80,420) $ 80,389 80,389
-----------
FORWARD CURRENCY CONTRACTS (b) - 0.0% 1
- ------------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES, NET - (0.5)% (8,560)
- ------------------------------------------------------------------------------
NET ASSETS - 100% $ 1,803,879
-----------
NOTES TO INVESTMENT PORTFOLIO:
- ------------------------------------------------------------------------------
(a) Cost for federal income tax purposes is the same.
(b) As of December 31, 1996, the Fund had entered into the following
forward currency exchange contracts:
Net Unrealized
Contracts In Exchange Settlement Appreciation
to Receive For Date (US $)
---------- ----------- ---------- --------------
MR 1,654 US $ 654 01/02/97 $ 1
Summary of Securities
by Country Country Value % of Total
- -------------------------------------------------------------------------------
Hong Kong HK $ 919,028 53.1
Singapore Si 378,335 21.8
Malaysia (MR) Ma 219,031 12.6
Thailand Th 79,553 4.6
Indonesia In 77,123 4.4
Philippines Ph 40,914 2.4
Korea Ko 13,025 0.8
Taiwan Tw 5,040 0.3
---------- -----------
$1,732,049 100.0
---------- -----------
Certain securities are listed by country of underlying exposure but
may trade predominantly on other exchanges.
Acronym Name
-------------- -------------------------
ADR American Depository Receipt
See notes to financial statements.
<PAGE>
STATEMENT OF ASSETS & LIABILITIES
DECEMBER 31, 1996
(in thousands except for per share amounts and footnotes)
ASSETS
Investments at value (cost $1,442,679) $ 1,732,049
Short-term obligations 80,389
-----------
1,812,438
Cash including foreign currencies (cost $4,567) $ 4,556
Unrealized appreciation on forward
currency contracts 1
Receivable for:
Fund shares sold 7,523
Dividends 1,064
Interest 15
Foreign tax reclaims 9
Other 35 13,203
----------- -----------
Total Assets 1,825,641
LIABILITIES
Foreign currencies (cost $415) 414
Payable for:
Fund shares repurchased 13,126
Investments purchased 3,253
Distribution to shareholders 1,676
Accrued:
Management fee 1,132
Administration fee 370
Service fee - Class A, Class B, Class D 246
Distribution fee - Class B 347
Distribution fee - Class D 67
Transfer agent fee 551
Bookkeeping fee 53
Deferred Trustees fees 3
Other 524
-----------
Total Liabilities 21,762
-----------
NET ASSETS $ 1,803,879
===========
Continued on next page.
See notes to financial statements.
<PAGE>
STATEMENT OF ASSETS & LIABILITIES - CONT.
Net asset value & redemption price per share -
Class A ($568,497/41,355) $ 13.75
-----------
Maximum offering price per share - Class A
($13.75/0.9425) $ 14.59(a)
-----------
Net asset value & offering price per share -
Class B ($572,089/41,951) $ 13.64(b)
-----------
Net asset value & redemption price per share -
Class D ($108,785/7,965) $ 13.66(b)
-----------
Maximum offering price per share - Class D
($13.66/0.9900) $ 13.80
-----------
Net asset value & redemption price per share -
Class T ($187,659/13,647) $ 13.75
-----------
Maximum offering price per share - Class T
($13.75/0.9425) $ 14.59(a)
-----------
Net asset value, offering & redemption price
per share - Class Z ($366,849/26,674) $ 13.75
-----------
COMPOSITION OF NET ASSETS
Capital paid in $ 1,508,902
Overdistributed net investment income (60)
Accumulated net realized gain 5,676
Net unrealized appreciation (depreciation) on:
Investments 289,370
Foreign currency transactions (9)
-----------
$ 1,803,879
===========
(a) On sales of $50,000 or more the offering price is reduced.
(b) Redemption price per share is equal to net asset value less any
applicable contingent deferred sales charge.
See notes to financial statements.
<PAGE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(in thousands)
INVESTMENT INCOME
Dividends $ 27,990
Interest 5,864
-----------
Total Investment Income (net of nonrebatable
foreign taxes withheld at source which
amounted to $1,819) 33,854
EXPENSES
Management fee $ 11,000
Administration fee 3,583
Service fee - Class A, Class B, Class D 2,207
Distribution fee - Class B 2,788
Distribution fee - Class D 553
Transfer agent fee 4,169
Bookkeeping fee 511
Trustees fee 69
Custodian fee 1,501
Audit fee 41
Legal fee 10
Registration fee 276
Reports to shareholders 27
Other 146 26,881
---------- -----------
Net Investment Income 6,973
-----------
NET REALIZED & UNREALIZED GAIN (LOSS) ON PORTFOLIO POSITIONS
Net realized gain (loss) on:
Investments 7,284
Foreign currency transactions (223)
----------
Net Realized Gain 7,061
Net unrealized appreciation (depreciation)
during the period on:
Investments 113,052
Foreign currency transactions (9)
----------
Net Unrealized Appreciation 113,043
-----------
Net Gain 120,104
-----------
Net Increase in Net Assets from Operations $ 127,077
===========
See notes to financial statements.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
Year ended
(in thousands) December 31
---------------------------
INCREASE (DECREASE) IN NET ASSETS 1996 1995
Operations:
Net investment income $ 6,973 $ 4,700
Net realized gain 7,061 329
Net unrealized appreciation 113,043 90,365
---------- ----------
Net Increase from Operations 127,077 95,394
---------- ----------
Distributions:
From net investment income - Class A (2,861) (904)
From net realized gains - Class A (174) (356)
From net investment income - Class B (204) (308)
From net realized gains - Class B (173) (200)
From net investment income - Class D (1) (61)
From net realized gains - Class D (33) (38)
From net investment income - Class T (1,264) (1,295)
From net realized gains - Class T (56) (373)
From net investment income - Class Z (2,480) (2,234)
From net realized gains - Class Z (109) (657)
---------- ----------
119,722 88,968
---------- ----------
Fund Share Transactions (a)(b):
Receipts for shares sold - Class A 929,445 303,747
Value of distributions reinvested - Class A 2,555 1,039
Cost of shares repurchased - Class A (593,997) (116,002)
----------- -----------
338,003 188,784
---------- ----------
Receipts for shares sold - Class B 662,217 119,409
Value of distributions reinvested - Class B 342 463
Cost of shares repurchased - Class B (228,641) (11,187)
---------- ----------
433,918 108,685
---------- ----------
Receipts for shares sold - Class D 102,136 21,584
Value of distributions reinvested - Class D 31 90
Cost of shares repurchased - Class D (19,435) (985)
---------- ----------
82,732 20,689
---------- ----------
Receipts for shares sold - Class T 12,366 38,724
Value of distributions reinvested - Class T 1,077 1,402
Cost of shares repurchased - Class T (41,025) (67,684)
---------- ----------
(27,582) (27,558)
---------- ----------
(a) Class A, Class B and Class D shares were initially offered on April 1, 1995.
(b) See Note 4 in Notes to Financial Statements.
Continued on next page.
See notes to financial statements.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS - CONT.
Year ended
December 31
--------------------------
1996 1995
Receipts for shares sold - Class Z 187,095 247,737
Value of distributions reinvested - Class Z 1,995 2,257
Cost of shares repurchased - Class Z (204,451) (213,356)
----------- ----------
(15,361) 36,638
----------- ----------
Net Increase from Fund Share Transactions 811,710 327,238
----------- ----------
Total Increase 931,432 416,206
NET ASSETS
Beginning of period 872,447 456,241
----------- ----------
End of period (net of overdistributed and
including undistributed net investment
income of $60 and $110, respectively) $ 1,803,879 $ 872,447
=========== ==========
NUMBER OF FUND SHARES (a)(b)
Sold - Class A 69,916 25,291
Issued for distributions reinvested - Class A 189 84
Repurchased - Class A (44,553) (9,572)
----------- ----------
25,552 15,803
----------- ----------
Sold - Class B 50,191 9,978
Issued for distributions reinvested - Class B 26 38
Repurchased - Class B (17,351) (931)
----------- ----------
32,866 9,085
----------- ----------
Sold - Class D 7,708 1,802
Issued for distributions reinvested - Class D 2 7
Repurchased - Class D (1,471) (83)
----------- ----------
6,239 1,726
----------- ----------
Sold - Class T 924 3,591
Issued for distributions reinvested - Class T 80 116
Repurchased - Class T (3,095) (6,016)
----------- ----------
(2,091) (2,309)
----------- ----------
Sold - Class Z 14,054 22,635
Issued for distributions reinvested - Class Z 148 187
Repurchased - Class Z (15,283) (19,250)
----------- ----------
(1,081) 3,572
----------- ----------
(a) Class A, Class B and Class D shares were initially offered on April 1, 1995.
(b) See Note 4 in Notes to Financial Statements.
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
NOTE 1. ACCOUNTING POLICIES
................................................................................
ORGANIZATION: Colonial Newport Tiger Fund (the Fund), a series of Colonial Trust
VII, 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 capital
appreciation by investing primarily in equity securities of companies located in
the nine Tigers of Asia ( Hong Kong, Singapore, South Korea, Taiwan, Malaysia,
Thailand, Indonesia, China and the Philippines). The Fund may issue an unlimited
number of shares. The Fund offers five classes of shares: Class A, Class B,
Class D, Class T and Class Z. Class A shares are sold with a front-end sales
charge and Class B shares are subject to an annual distribution fee and a
contingent deferred sales charge. Class B shares will convert to Class A shares
when they have been outstanding approximately eight years. Class D shares are
subject to a reduced front-end sales charge, a contingent deferred sales charge
on redemptions made within one year after purchase and a continuing distribution
fee. Class T shares are sold with a front-end sales charge and Class Z shares
are offered continuously at net asset value. There are certain restrictions on
the purchase of Class T shares and Class Z shares; please refer to a prospectus.
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 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: Equity securities are valued at the last
sale price or, in the case of unlisted or listed securities for which there were
no sales during the day, at current quoted bid prices. In certain countries, the
Fund may hold foreign designated shares. If the foreign share prices are not
readily available as a result of limited share activity, the securities are
valued at the last sale price of the local shares in the principal market in
which such securities are normally traded. Korean equity securities that have
reached the limit for aggregate foreign ownership and for which premiums to the
local exchange prices may be paid by foreign investors are valued by applying a
broker quoted premium to the local share price.
Forward currency contracts are valued based on the weighted value of the
exchange traded contracts with similar durations.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
The value of all assets and liabilities quoted in foreign currencies are
translated into U.S. dollars at that day's exchange rates. In certain countries,
the Fund may hold portfolio positions which cannot be valued as set forth above.
Such securities 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.
DETERMINATION OF CLASS NET ASSET VALUES AND FINANCIAL HIGHLIGHTS: All
income, expenses (other than the Class A, Class B and Class D service fee
and Class B and Class D distribution fee), 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.
The per share data was calculated using average shares outstanding during
the period. In addition, Class A, Class B and Class D net investment
income per share data reflects the service fee per share applicable to Class
A, Class B and Class D shares and the distribution fee applicable to Class B
and Class D shares only.
Class A, Class B and Class D ratios are calculated by adjusting the expense
and net investment income ratios for the Fund for the entire period by the
service fee applicable to Class A, Class B and Class D shares and the
distribution fee applicable to Class B and Class D 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 income, no
federal income tax has been accrued.
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. 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.
FOREIGN CURRENCY TRANSACTIONS: Net realized and unrealized gains (losses) on
foreign currency transactions includes the fluctuation in exchange rates on
gains (losses) between trade and settlement dates on securities transactions,
gains (losses) arising from the disposition of foreign currency, and currency
gains (losses) between the accrual and payment dates on dividends and interest
income and foreign withholding taxes.
The Fund does not distinguish that portion of gains (losses) on investments
which is due to changes in foreign exchange rates from that which is due to
changes in market prices of the investments. Such fluctuations are included with
the net realized and unrealized gains (losses) from investments.
FORWARD CURRENCY CONTRACTS: The Fund may enter into forward currency contracts
to purchase or sell foreign currencies at predetermined exchange rates in
connection with the settlement of purchases and sales of securities.
The Fund may also enter into forward currency contracts to hedge certain other
foreign currency denominated assets. The contracts are used to minimize the
exposure to foreign exchange rate fluctuations during the period between trade
and settlement date of the contracts. All contracts are marked-to-market daily,
resulting in unrealized gains (losses) which become realized at the time the
forward currency contracts are closed or mature. Realized and unrealized gains
(losses) arising from such transactions are included in net realized and
unrealized gains (losses) on foreign currency transactions. Forward currency
contracts do not eliminate fluctuations in the prices of the Fund's portfolio
securities. While the maximum potential loss from such contracts is the
aggregate face value in U.S. dollars at the time the contract is opened, the
actual exposure is typically limited to the change in value of the contract (in
U.S. dollars) over the period it remains open. Risks may also arise if
counterparties fail to perform their obligations under the contracts.
OTHER: Corporate actions are recorded on the ex-date (except for certain foreign
securities which are recorded as soon after ex-date as the Fund becomes aware of
such), net of nonrebatable tax withholdings. Where a high level of uncertainty
as to collection exists, income on securities is recorded net of all tax
withholdings with any rebates recorded when received.
The Fund's custodian takes possession through the federal book-entry system of
securities collateralizing repurchase agreements. Collateral is marked-to-market
daily to ensure that the market value of the underlying assets remains
sufficient to protect the Fund. The Fund may experience costs and delays in
liquidating the collateral if the issuer defaults or enters bankruptcy.
NOTE 2. FEES AND COMPENSATION PAID TO AFFILIATES
................................................................................
MANAGEMENT FEE: Newport Fund Management (the Adviser) is the investment Adviser
of the Fund and receives a monthly fee based on the Fund's average net assets as
follows:
Average Net Assets Annual Fee Rate
- ------------------------ -------------------
First $100 million 1.00%
Over $100 million 0.75%
ADMINISTRATION FEE: Colonial Management Associates, Inc. (the Administrator)
provides accounting and other services for a monthly fee equal to 0.25% annually
of the Fund's average net assets.
BOOKKEEPING FEE: The Administrator provides bookkeeping and pricing services for
$27,000 per year plus 0.035% of the Fund's average net assets over $50 million.
Average Net Assets Annual Fee Rate
- ------------------------ -------------------
First $50 million No charge
Next $950 million 0.035%
Next $1 billion 0.025%
Next $1 billion 0.015%
TRANSFER AGENT: Colonial Investors Service Center, Inc. (the Transfer Agent), an
affiliate of the Administrator, provides shareholder services for a monthly fee
equal to 0.25% annually of the Fund's average net assets and receives
reimbursement for certain out of pocket expenses.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES: Colonial Investment
Services, Inc. (the Distributor), an affiliate of the Administrator, is the
Fund's principal underwriter. For the year ended December 31, 1996, the Fund has
been advised that the Distributor retained net underwriting discounts of
$1,635,033 on sales of the Fund's Class A, Class D and Class T shares and
received contingent deferred sales charges (CDSC) of $771,392 and $38,464 on
Class B and Class D share redemptions, respectively.
The Fund has adopted a 12b-1 plan which requires it to pay the Distributor a
service fee equal to 0.25% annually on Class A, Class B and Class D net assets
as of the 20th of each month. The plan also requires the payment of a
distribution fee to the Distributor equal to 0.75% annually of the average net
assets attributable to Class B and Class D shares.
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 Administrator has agreed, until further notice, to waive
fees and bear certain Fund expenses to the extent that total expenses (exclusive
of service fees, distribution fees, brokerage commissions, interest, taxes and
extraordinary expenses, if any) exceed 1.55% annually of the Fund's average net
assets
For the year ended December 31, 1996, the Fund's operating expenses did not
exceed the 1.55% expense limit.
OTHER: The Fund pays no compensation to its officers, all of whom are employees
of the Adviser or Administrator.
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 3. PORTFOLIO INFORMATION
................................................................................
INVESTMENT ACTIVITY: During the year ended December 31, 1996, purchases and
sales of investments, other than short-term obligations, were $877,383,921 and
$76,391,595, respectively.
Unrealized appreciation (depreciation) at December 31, 1996, based on cost of
investments for both financial statement and federal income tax purposes
was:
Gross unrealized appreciation $ 401,318,544
Gross unrealized depreciation (111,948,462)
-------------
Net unrealized appreciation $ 289,370,082
=============
OTHER: There are certain additional risks involved when investing in foreign
securities that are not inherent with investments in domestic securities. These
risks may involve foreign currency exchange rate fluctuations, adverse political
and economic developments and the possible prevention of currency exchange or
other foreign governmental laws or restrictions.
The Fund may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
NOTE 4. REORGANIZATION
................................................................................
Newport Tiger Fund, a series of The World Funds, Inc., a Maryland Corporation,
was reorganized on April 1, 1995 as the Colonial Newport Tiger Fund, a series of
Colonial Trust VII (formerly Liberty Financial Trust) a Massachusetts business
trust. Under the plan of reorganization all of the Newport Tiger Fund's assets
were transferred, subject to its liabilities, in exchange for shares in the
Colonial Newport Tiger Fund. Under the plan, existing Newport Tiger Fund
shareholders received newly issued Class T or Class Z shares of Colonial Newport
Tiger Fund. The Financial Highlights and capital stock activity for Class T and
Class Z shares is presented as if the reorganization occurred on January 1,
1995.
NOTE 5. LINE OF CREDIT
................................................................................
The Fund may borrow up to 10% of its net assets under a line of credit for
temporary or emergency purposes. Any borrowings bear interest at one of the
following options determined at the inception of the loan: (1) federal funds
rate plus 1/2 of 1%, (2) the lending bank's base rate or (3) IBOR offshore loan
rate plus 1/2 of 1%. There were no borrowings under the line of credit during
the year ended December 31, 1996.
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (a)
Selected data for a share of each class outstanding throughout each period are as follows:
Year ended December 31
-----------------------------------------------------------
1996
Class A Class B Class D Class T Class Z
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value - Beginning of period $ 12.460 $ 12.390 $ 12.410 $ 12.450 $ 12.450
--------- --------- --------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.083 (0.016) (0.016) 0.116 0.116
Net realized and unrealized gain 1.278 1.275 1.270 1.281 1.281
--------- --------- --------- --------- ---------
Total from Investment Operations 1.361 1.259 1.254 1.397 1.397
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.067) (0.005) - (0.093) (0.093)
From net realized gains (0.004) (0.004) (0.004) (0.004) (0.004)
--------- --------- --------- --------- ---------
Total Distributions Declared to Shareholders (0.071) (0.009) (0.004) (0.097) (0.097)
--------- --------- --------- --------- ---------
Net asset value - End of period $ 13.750 $ 13.640 $ 13.660 $ 13.750 $ 13.750
========= ========= ========= ========= =========
Total return (b) 10.94% 10.16% 10.11% 11.24% 11.24%
========= ========= ========= ========= =========
RATIOS TO AVERAGE NET ASSETS
Expenses (c) 1.74% 2.49% 2.49% 1.49% 1.49%
Net investment income (c) 0.62% (0.13)% (0.13%) 0.87% 0.87%
Portfolio turnover 6% 6% 6% 6% 6%
Average commission rate (d) $ 0.0179 $ 0.0179 $ 0.0179 $ 0.0179 $ 0.0179
Net assets at end of period (000) $ 568,497 $ 572,089 $ 108,785 $ 187,659 $ 366,849
(a) Per share data was calculated using average shares outstanding during the period.
(b) Total return at net asset value assuming all distributions reinvested and no initial sales charge or
contingent deferred sales charge.
(c) The benefits derived from custody credits and directed brokerage arrangements had no impact.
(d) For fiscal years beginning on or after September 1, 1995, a fund is required to disclose its average
commission rate per share for trades on which commissions are charged.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (a) - CONT.
Selected data for a share of each class outstanding throughout each period are as follows:
Year ended December 31
----------------------------------------------------------------------
1995
Class A (b) Class B (b) Class D (b) Class T (c) Class Z (c)
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value - Beginning of period $ 10.860 $ 10.860 $ 10.860 $ 10.800 $ 10.800
-------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.067 (0.003) (0.003) 0.099(e) 0.099(e)
Net realized and unrealized gain(loss) 1.617 1.594 1.615 1.656 1.656
-------- -------- -------- -------- --------
Total from Investment Operations 1.684 1.591 1.612 1.755 1.755
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.060) (0.037) (0.038) (0.081) (0.081)
From net realized gains (0.024) (0.024) (0.024) (0.024) (0.024)
In excess of net investment income - - - - -
-------- -------- -------- -------- --------
Total Distributions Declared to Shareholders (0.084) (0.061) (0.062) (0.105) (0.105)
-------- -------- -------- -------- --------
Net asset value - End of period $ 12.460 $ 12.390 $ 12.410 $ 12.450 $ 12.450
======== ======== ======== ======== ========
Total return (f) 15.52%(g) 14.65%(g) 14.85%(g) 16.28% 16.28%
======== ======== ======== ======== ========
RATIOS TO AVERAGE NET ASSETS
Expenses 1.37%(g)(h) 1.93%(g)(h) 1.93%(g)(h) 1.60%(h) 1.60%(h)
Net investment income 0.28%(g)(h) (0.28)%(g)(h) (0.28%)(g)(h) 0.75%(h) 0.75%(h)
Portfolio turnover 4% 4% 4% 4% 4%
Net assets at end of period (000) $196,870 $112,588 $ 21,420 $195,986 $345,583
(a) Per share data was calculated using average shares outstanding during the period.
(b) Class A, Class B and Class D shares were initially offered on April 1, 1995. Per share data reflects
activity from that date.
(c) Newport Tiger Fund was reorganized as Colonial Newport Tiger Fund on April 1, 1995. Under the plan of
reorganization, existing shareholders of Newport Tiger Fund received Class T or Class Z shares of
Colonial Newport Tiger Fund. The financial highlights for Classes T and Z are presented as if the
reorganization had occurred on January 1, 1995.
(d) Reflects the 2-for-1 stock split effective November 29, 1993.
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS (a) - CONT.
Selected data for a share of each class outstanding throughout each period
are as follows:
Year ended December 31
----------------------------------------------------------
1994 1993(d) 1992(d)
-------- -------- --------
$ 12.440 $ 7.120 $ 5.860
-------- -------- --------
0.060 0.040 0.020
(1.550) 5.330 1.270
-------- -------- --------
(1.490) 5.370 1.290
-------- -------- --------
(0.040) (0.040) (0.020)
(0.110) (0.010) ---
--- --- (0.010)
-------- -------- --------
(0.150) (0.050) (0.030)
-------- -------- --------
$ 10.800 $ 12.440 $ 7.120
======== ======== ========
(11.96)% 75.45% 22.02%
======== ======== ========
1.29% 1.56% 1.85%
0.57% 0.59% 0.36%
8% 11% 17%
$456,241 $394,883 $ 98,836
(e) Includes distribution from Taiwan Fund which amounted to $ 0.013 per share.
(f) Total return at net asset value assuming all distributions reinvested and no
initial sales charge or contingent deferred sales charge.
(g) Not annualized.
(h) The benefits derived from custody credits and directed brokerage
arrangements had an impact of 0.07% on Class A, Class B and Class D: 0.11%
on Class T and Class Z. Prior years' ratios are net of benefits received, if
any.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE TRUSTEES OF COLONIAL TRUST VII AND THE SHAREHOLDERS OF
COLONIAL NEWPORT TIGER FUND
In our opinion, the accompanying statement of assets and liabilities,
including the investment portfolio, and the related statements of operations and
of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Colonial Newport Tiger Fund (the
"Fund") (a series of Colonial Trust VII) at December 31, 1996, the results of
its operations, the changes in its net assets and the financial highlights for
the periods ended December 31, 1996 and 1995, in conformity with generally
accepted accounting principles. These financial statements and the financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of portfolio positions at December 31, 1996
by correspondence with the custodian and brokers, and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above. The
financial highlights for each of the periods ended December 31, 1994 were
audited by another Independent Accountant whose report, dated January 25, 1995
expressed an unqualified opinion on those statements.
PRICE WATERHOUSE LLP
Boston, Massachusetts
February 10, 1997
<PAGE>
SHAREHOLDER SERVICES
TO MAKE INVESTING EASIER
Colonial has one of the most extensive selections of shareholder services
available. Your financial adviser can help you arrange for any of these
services, or you can call Colonial directly at 1-800-345-6611.
AFFORDABLE ADDITIONAL INVESTMENTS: Add to your account with as little as $50 on
most funds; $25 for an IRA account.
FREE EXCHANGES*: Exchange all or part of your account into the same share class
of another Colonial fund, by phone or mail.
EASY ACCESS TO YOUR MONEY*: Make withdrawals from your account by phone, by mail
or, for certain funds, by check.
ONE-YEAR REINSTATEMENT PRIVILEGE: If you need access to your money, but then
choose to return it to Colonial within one year, you can reinvest in any
Colonial fund of the same share class without any penalty or sales charge.
FUNDAMATIC: Make periodic investments as low as $50 from your checking account
to your Colonial account.
SYSTEMATIC WITHDRAWAL PLAN (SWP): Receive monthly, quarterly or semiannual
payments via check or bank transmission. There is a $5,000 account value
required, but no minimum for the payment amount. The maximum annual withdrawal
is 12% of account balance at time SWP is established. SWPs by check are
processed on the 10th of each month. Dividends and capital must be reinvested.
AUTOMATED DOLLAR COST AVERAGING: Transfer money on a monthly basis from any
Colonial fund with a balance of $5,000 into the same share class of up to four
other Colonial funds. Minimum for each transfer is $100.
LOW COST IRAS: Choose from a broad range of retirement plans, including IRAs.
* Redemptions and exchanges are made at the next determined net asset value
after the request is received by Colonial. Proceeds may be more or less than
your original cost. The exchange privilege may be terminated at any time.
Exchanges are not available on all funds. Investors who purchase Class B or
Class D shares (for applicable funds), or $1 million or more of Class A shares,
may be subject to a contingent deferred sales charge.
<PAGE>
HOW TO REACH COLONIAL
BY PHONE OR BY MAIL
BY TELEPHONE
COLONIAL CUSTOMER CONNECTION - 1-800-345-6611
For 24-hour account information, call from your touch-tone phone. (Rotary
callers will be automatically connected to a representative during business
hours.) A recorded message will guide you through the menu:
For fund prices, dividends, and capital gains information ............press [1]
For account information ..............................................press [2]
To speak to a Colonial representative ................................press [3]
For yield and total return information ...............................press [4]
For duplicate statements or new supply of checks .....................press [5]
To order duplicate tax forms and year-end statements .................press [6]
(February through May)
To review your options at any time during your call .................press [*]
To speak with a shareholder services representative about your account, call
Monday to Friday, 8:00 am to 8:00 pm ET, and Saturdays from February through
mid-April, 10:00 am to 2:00 pm ET.
COLONIAL TELEPHONE TRANSACTION DEPARTMENT - 1-800-422-3737
To purchase, exchange, or sell shares by telephone, call Monday to Friday, 9:00
am to 7:00 pm ET. Transactions received after the close of the New York Stock
Exchange will receive the next business day's closing price.
LITERATURE - 1-800-426-3750
To request literature on any Colonial fund, call Monday to Friday, 8:30 am to
6:30 pm ET.
BY MAIL
COLONIAL INVESTORS SERVICE CENTER, INC.
P.O. BOX 1722
BOSTON, MA 02105-1722
<PAGE>
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Colonial Newport Tiger Fund is:
Colonial Investors Service Center, Inc.
P.O. Box 1722
Boston, MA 02105-1722
1-800-345-6611
Colonial Newport Tiger Fund mails one shareholder report to each shareholder
address. If you would like more than one report, please call Colonial at
1-800-426-3750 and additional reports will be sent to you.
This report has been prepared for shareholders of Colonial Newport Tiger 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.
IMPORTANT NOTICE REGARDING TELEPHONE REDEMPTIONS: Because of a change in policy,
shareholders of Class T and Z shares wishing to make telephone redemptions of
values in excess of $50,000 must send a letter to Colonial requesting telephone
redemption privileges. Telephone redemptions may only be made by wiring the
proceeds to a predesignated bank account. Please send your request, with a
signature guarantee, to Colonial Investors Service Center, Inc., P.O. Box 1722,
Boston, MA 02175-1722. Please include the name of the recipient bank, a blank
check marked void, and the signatures that match the registration of your
Colonial account. Please refer any questions to a Colonial shareholder services
representative at 1-800-345-6611.
<PAGE>
[logo] COLONIAL
MUTUAL FUNDS
Mutual Funds for
Planned Portfolios
TRUSTEES
ROBERT J. BIRNBAUM
Retired (formerly Special Counsel, Dechert, Price & Rhoads; President and Chief
Operating Officer, New York Stock Exchange, Inc.)
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, Nessen, Kamin & Frankel)
JAMES E. GRINNELL
Private Investor (formerly Senior Vice President-Operations, The Rockport
Company)
WILLIAM D. IRELAND, JR.
Retired (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
Partner, Development Capital, L.L.C. (formerly Dean, College of Business and
Management, University of Maryland; 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)
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
COLONIAL INVESTMENT SERVICES, INC., Distributor (C) 1997
A Liberty Financial Company (NYSE: L)
One Financial Center, Boston, Massachusetts 02111-2621, 617-426-3750
NT-02/192D-1296 M (2/97)
