[cover]
[graphic omitted: picture of tiger]
NEWPORT TIGER FUND Semiannual report
June 30, 1998
- --------------------------------
Not FDIC May Lose Value
Insured No Bank Guarantee
- --------------------------------
<PAGE>
NEWPORT TIGER FUND HIGHLIGHTS
JANUARY 1, 1998 - JUNE 30, 1998
Investment Objective: Newport Tiger Fund seeks 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.
Portfolio Manager Commentary: "While much of Southeast Asia struggled through
difficult economic times during the period, select Tiger markets continued to
offer favorable characteristics for the long-term investor. In response, we
focused our investments almost exclusively in "blue-chip" stocks within what we
believe are the strongest and most fundamentally sound Tiger markets. This has
resulted in a highly focused portfolio of stocks from Hong Kong, Singapore and
mainland China." -- Jack Mussey & Tim Tuttle
Newport Tiger Fund Performance (1)
<TABLE>
<CAPTION>
Six-month total returns, Net asset value
Inception dates assuming no sales charge per share on 6/30/98
<S> <C> <C> <C>
Class A 5/31/89 (30.81)% $6.23
Class B 4/1/95 (31.05)% $6.15
Class C 4/1/95 (31.10)% $6.16
Class T 5/31/89 (30.63)% $6.24
Class Z 5/31/89 (30.74)% $6.23
</TABLE>
<TABLE>
<CAPTION>
Top Five Markets(2) Top Five Sectors(2)
(as of 6/30/98) (as of 6/30/98)
<S> <C> <C> <C>
1. Hong Kong and China 70.7% 1. Financials 39.7%
2. Singapore 21.3% 2. Consumer Cyclicals 22.5%
3. Philippines 4.5% 3. Utilities 22.4%
4. Malaysia 2.4% 4. Technologies 6.9%
5. Thailand 0.7% 5. Transportation 2.3%
</TABLE>
(1) The Fund was originally introduced on 5/31/89. Class T shares were available
at that time. On 4/1/95 Class A, B, C and Z shares were offered.
Performance may reflect any voluntary waivers or reimbursement of Fund expenses
by the Advisor or Distributor. Absent these waivers or reimbursement
arrangements, performance results may have been lower. Please note, a portion of
certain Fund's income may be subject to the alternative minimum tax.
(2) Market 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 market and 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.
2
<PAGE>
PRESIDENT'S MESSAGE
TO FUND SHAREHOLDERS
[graphic ommitted: Photo of Stephen E. Gibson]
In June 1998, Harold Cogger retired as president of Newport Tiger Fund. I would
like to take this opportunity to thank him for his guidance over the past few
years and wish him well. As the new president of the Fund, I am presenting the
semiannual report for Newport Tiger Fund for the six-month period ended June 30,
1998.
The first half of 1998 continued to be a difficult period for Asian investors.
Volatility that initially began during the Asian currency crisis in October
1997 persisted over the past six months. Falling currency values and rising
interest rates within the region had a noticeable impact on local stock prices
as well as Newport Tiger Fund.
We understand that shareholders who have participated in this decline may feel
discouraged, as no one likes to see the value of their investment fall. While
your investment managers remain keenly aware of events in Southeast Asia, they
also must search for pockets of opportunity and remain focused on the long-term
growth potential within the region. Few investment managers possess the
experience, level of knowledge and strong local relationships that Newport Fund
Management has developed over the past 20 years. Participating in numerous
economic and market cycles has given them patience and expertise.
One of the more positive stories is President Clinton's recent visit to China.
More than 1,000 people accompanied the president -- many of them U.S. business
leaders interested in establishing new commerce agreements with China. The visit
not only highlighted some of the challenges and political differences our two
countries face, but also the possible growth potential for organizations looking
to expand their operations within this increasingly capitalistic and
consumer-driven country.
For those who continue to believe, as Newport does, in the long-term growth
prospects of Southeast Asia, we thank you for choosing Newport Tiger Fund and
for giving us the opportunity to serve your investment needs.
Respectfully,
/s/ Stephen E. Gibson
- ----------------------
Stephen E. Gibson
President
August 11, 1998
Because market and economic conditions change, there can be no assurance that
the trends described above or on the following pages will continue.
3
<PAGE>
PORTFOLIO MANAGEMENT REPORT
[graphic ommitted: Photo of Jack Mussey]
[grpahic ommitted: Photo of Tim Tuttle]
Jack Mussey and Tim Tuttle are portfolio co-managers of Newport Tiger Fund. Mr.
Mussey is president and chief executive officer of Newport Fund Management, Inc.
and has more than 25 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 B.A. from the University of Redlands in 1963
and an M.B.A. from the University of California at Berkeley in 1965. Mr. Tuttle
is managing director of Newport Fund Management, Inc. and also has more than 20
years of experience investing in Asian markets. He is a Chartered Financial
Analyst and he received a B.A. from Williams College in 1964.
Continued volatility created a challenging environment
The first half of 1998 presented a formidable task for investment managers
seeking growth opportunities in Southeast Asia. Together, falling stock prices
and lower currency values served to further depress the economies of countries
throughout the region. While a few bright spots can be found in some of the
stronger Tiger markets, it is fair to say that some of the weaker Asian
countries such as Malaysia, Thailand, South Korea and Indonesia have slipped
into a recession. The stronger, more-developed Tiger markets such as Hong Kong,
China and Singapore fared better than their weaker neighbors and remain
financially sound. In this environment, we focused our efforts on identifying
high-quality stocks of well-established companies within the strongest Tiger
markets. During the period, the Fund generated a negative total return of 30.81%
for Class A shares, based on net asset value.
Positive trends in select Tiger countries
We believe that China is the Tiger market currently offering the most favorable
potential for future growth. China's government has demonstrated the ability to
stimulate consumer demand within the world's largest population and
significantly expand their economy. As a result, China has been able to remain a
"self-sustaining" country. With low current inflation and only 5% of its GDP
coming from net exports, China has exhibited a strong inclination not to devalue
its currency. These characteristics, coupled with improved systems for bringing
new products to the consumer market, demonstrate China's desire to attract
foreign investors. Moreover, they have enabled China to maintain relative
economic stability while putting it in a strong position for future growth.
We believe that Hong Kong also has a healthy foundation for future growth. As
the financial capital of Asia, Hong Kong is home to some of the region's largest
and best-capitalized businesses. Its financial markets remain solid despite the
turbulence that surrounds them. Hong Kong's past success was based in part on
its ability to service demand created in China. We believe that its recovery and
potential future success will remain closely tied to the growth of China's
economy.
Singapore is another Tiger market that has been able to sidestep deep economic
distress. One of Singapore's most promising prospects for future
4
<PAGE>
growth lies in its ability to attract businesses that bypass weaker Asian
economies. As global companies look to set up new factories in Southeast Asia,
they will consider countries that offer a pro-business government, a
well-established financial infrastructure, a skilled and educated work force,
and reasonably priced labor -- important attributes that Singapore has to offer.
A strategic focus on high-quality companies in the strongest markets
Despite challenging economic conditions across Southeast Asia, we continued to
find a number of quality investment opportunities offering strong long-term
growth potential.
One notable holding at the end of the period was China Telecom (3% of total net
assets), a major supplier of mobile telephone services with over 5.5 million
subscribers. Amid the turmoil in Southeast Asia, China Telecom actually grew its
customer base more than 20% in the first six months of 1998. While currently
providing cellular service coverage in China's three fastest-growing regions,
the company has no debt, profit margins of 50%, an excellent management team and
no effective competition. Their stock actually represents 10% of Hong Kong's
total stock market capitalization.
Sun Hung Kai Properties (4.3% of total net assets), the premier
property developer in Hong Kong, was another attractive stock held by the
portfolio at the end of the period. The company has sold more than $2 billion in
property since October 1997. While previously selling homes at a 50% profit
margin, Sun Hung Kai has been able to maintain healthy margins of 30-35% despite
a 40% decline in home prices. By maintaining relatively low debt, they have also
been able to take advantage of falling land prices throughout Hong Kong. A
well-established company with an impressive history, Sun Hung Kai has grown its
earnings at an annual rate of 20% over the past 20 years. Despite this success,
the stock's price/earnings multiple is only six, making it relatively cheap for
such a high-quality growth company.
Hong Kong & China Gas (7.3% of total net assets) also appeared strong during the
six-month period on a relative basis. As the dominant provider of household gas
services in Hong Kong, the company is well positioned to profit from the
residential plans that Hong Kong has in place. Potential demand from China is
also a positive. Hong Kong & China Gas has already established three joint
ventures in China, and appears poised to take advantage of the growth potential
on the mainland.
Maintain a long-term view of Asian markets
Newport Tiger Fund continues to focus on what we consider to be the strongest
companies in the stronger markets of Asia. Until the outlook for the weaker
Tiger countries improves, we will likely continue to avoid all but the strongest
potential investment opportunities in these markets. At the same time, we remain
optimistic about opportunities in Hong Kong, China and Singapore. Thus, the
nature of the portfolio will continue to reflect large, "blue-chip" stocks from
these countries. In Hong Kong, several well-managed companies continue to
generate healthy revenues despite the economic and financial uncertainty within
the region. With the help of declining interest rates, Hong Kong is showing some
signs of economic improvement.
5
<PAGE>
Newport Tiger Fund's Investment Performance vs.
The Morgan Stanley Capital International EAFE (GDP) Index
Change in Value of $10,000 from 5/31/89 - 6/30/98
[graphic ommitted: Line Chart]
Class A Shares
Based on NAV and POP
$30,000
$25,000
$20,000
$15,000
$10,000
MSCI EAFE
$22,696
NAV
$13,154
POP
$12,397
5/89 6/98
Plot Points
<TABLE>
<CAPTION>
Label
NAV POP MSCI EAFE
<S> <C> <C> <C>
June 30, 89 9940 9368.45 10186
Jul 31, 89 10240 9651.2 11339
Aug 31, 89 10040 9462.7 11081
Sep 30, 89 10310 9717.175 11509
Oct 31, 89 10060 9481.55 10965
Nov 30, 89 10420 9820.85 11533
Dec 31, 89 11080 10442.9 12404
Jan 31, 90 11200 10556 12180
Feb 28, 90 11360.21 10707 11637
Mar 31, 90 11179.57 10536.75 11260
Apr 30, 90 10537.3 9931.405 11111
May 31, 90 11560.92 10896.17 11940
June 30 90 11841.92 11161.01 12062
July 31, 90 12494.23 11775.81 12369
Aug 31, 90 10687.83 10073.28 11024
Sept 30, 90 9011.901 8493.716 9496
Oct 31, 90 9664.21 9108.518 10678
Nov 30, 90 9242.718 8711.261 10210
Dec 31, 90 9402.687 8862.032 10216
Jan 31, 91 9756.551 9195.55 10497
Feb 28, 91 10626.05 10015.05 11596
Mar 31, 91 10990.02 10358.1 10817
Apr 30, 91 11364.11 10710.67 10849
May 31, 91 11657.31 10987.01 11090
June 30, 91 11434.88 10777.37 10226
July 31, 91 11677.53 11006.07 10652
Aug 31, 91 11202.34 10558.21 10580
Sep 30, 91 10990.02 10358.1 11037
Oct 31, 91 11151.79 10510.56 11005
Nov 30, 91 11495.54 10834.55 10696
Dec 31, 91 11849.41 11168.07 11312
Jan 31, 92 12557.14 11835.1 11216
Feb 29, 92 12951.44 11206.73 11064
Mar 31, 92 12617.8 11892.28 10519
Apr 30, 92 13335.64 12568.84 10610
May 31, 92 14215.24 13397.87 11235
Jun 30, 92 14245.58 13426.46 10869
Jul 31, 92 13822.04 13121.53 10484
Aug 31, 92 13386.19 12616.48 11006
Sep 30, 92 13527.74 12749.89 10602
Oct 31, 92 14963.42 14103.02 10172
Nov 30, 92 14811.76 13960.08 10222
Dec 31, 92 14458.14 13626.8 10220
Jan 31, 93 14914.72 14057.12 10338
Feb 28, 93 15746.69 14841.26 10700
Mar 31, 93 15817.72 14908.2 11430
Apr 30, 93 17025.1 16046.16 12483
May 31, 93 17491.82 16486.04 12678
Jun 30, 93 17126.56 16141.78 12459
Jul 31, 93 17106.27 16122.66 12834
Aug 31, 93 18141.17 17098.05 13774
Sep 30, 93 18506.42 17442.31 13485
Oct 31, 93 21479.22 20244.17 13856
Nov 30, 93 21083.53 19871.22 12752
Dec 31, 93 25350.11 23892.47 13649
Jan 31, 94 24188.56 22797.72 14693
Feb 28, 94 22945.51 21626.15 14612
Mar 31, 94 20622.43 19436.64 14403
Apr 30, 94 22069.26 20800.28 15130
May 31, 94 32108.54 21779.8 14783
Jun 30, 94 21865.48 20608.22 14776
Jul 31, 94 23006.65 21683.76 15119
Aug 31, 94 24351.59 22951.37 15376
Sep 30 94 24208.94 22816.93 14835
Oct 31, 94 24514.61 23105.02 15286
Nov 30, 94 22558.33 21261.23 14605
Dec 31, 94 22317.23 21033.99 14715
Jan 31, 95 20106.17 18950.07 14338
Feb 28, 95 21986.61 20722.38 14322
Mar 31, 95 22462.39 21770.8 14971
Apr 28, 95 22503.76 21209.79 15640
May 31, 95 25151.26 23705.06 15489
Jun 30, 95 24820.32 23393.15 15316
Jul 31, 95 25420.14 23958.48 16317
Aug 31, 95 24572.12 23159.22 15636
Sep 29 95 25027.15 23588.09 15821
Oct 31, 95 24861.69 23432.14 15363
Nov 30, 95 24923.74 23490.62 15686
Dec 29, 95 25948.12 24456.1 16358
Jan 31, 96 28447.14 26811.43 16565
Feb 29, 96 28447.14 26811.43 16615
Mar 29, 96 28238.88 26615.15 16835
Apr 30, 96 28134.76 26517.01 17359
May 31, 96 27988.98 26379.62 17103
Jun 28, 96 27364.23 25790.79 17237
Jul 31, 96 25823.17 24338.34 16742
Aug 30, 96 26760.3 25221.58 16733
Sep 30, 96 27551.65 25967.43 17193
Oct 31, 96 27364.23 25790.79 17005
Nov 29, 96 28801.16 27145.1 17732
Dec. 31, 96 28785.79 27130.61 17605
Jan 31, 97 28597.38 26953.03 17274
Feb 28, 97 28555.51 26913.57 17394
Mar 31, 97 26796.96 25256.13 17725
Apr 30, 97 26315.45 24802.31 17682
May 30, 97 28660.18 27012.22 18603
June 30, 97 29858.36 28141.5 19711
Jul 31, 97 30320.3 28576.88 20145
Aug 29, 97 25133.93 23688.73 18700
Sep 30, 97 26099.82 24599.08 19901
Oct 31, 97 19737.59 18602.68 18431
Nov 28, 97 19212.66 18107.93 18355
Dec 31, 97 19011.88 17918.7 18621
Jan 30, 98 15934.57 15018.33 19589
Feb 27, 98 19328.04 18216.68 20715
Mar 31, 98 19138.35 10837.89 21843
Apr 30, 98 17388.92 16389.05 22171
May 29, 98 14754.23 13905.86 22485
Jun 30, 98 13153.61 12397.28 22696
</TABLE>
Change in Value of $10,000 from 5/31/89 - 6/30/98
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Class A Class B Class C Class T Class Z
NAV POP NAV w/CDSC NAV w/CDSC NAV POP NAV
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$13,154 $12,397 $12,830 $12,830 $12,848 $12,848 $13,264 $12,501 $13,243
</TABLE>
Average Annual Total Returns
As of 6/30/98
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
1 year 5 years Since inception
- ----------------------------------------------------------------------------------
Class A (Inception 5/31/89
<S> <C> <C> <C>
NAV (55.95)% (5.14)% 3.06%
POP (58.48)% (6.26)% 2.39%
- ----------------------------------------------------------------------------------
Class B (Inception 4/1/95)
NAV (56.26)% (5.61)% 2.78%
w/CDSC (58.45)% (5.98)% 2.78%
- ----------------------------------------------------------------------------------
Class C(4) (Inception 4/1/95)
NAV (56.25)% (5.59)% 2.80%
w/CDSC (56.69)% (5.59)% 2.80%
- ----------------------------------------------------------------------------------
Class T (Inception 5/31/89)
NAV (55.87)% (5.01)% 3.14%
POP (58.41)% (6.13)% 2.47%
- ----------------------------------------------------------------------------------
Class Z (Inception 5/31/89)
NAV (55.94)% (5.04)% 3.12%
- ----------------------------------------------------------------------------------
</TABLE>
Past performance cannot predict future results. Returns and value of an
investment will vary, resulting in a gain or loss on sale. All results shown
assume reinvestment of distributions. Net asset value (NAV) returns do not
include sales charges or contingent deferred sales charges (CDSC). The public
offering price (POP) returns include the maximum charges of 5.75% for Classes A
and T. The CDSC returns reflect the maximum applicable charges of 5% for one
year and 2% for five years for Class B shares; and 1% for one year for Class C
shares.
Performance results reflect any voluntary waivers or reimbursement of Fund
expenses by the Distributor. Absent these waivers or reimbursement arrangements,
performance results would have been lower. Performance for different share
classes will vary based on differences in sales charges and fees associated with
each class.
The Fund was originally introduced on 5/31/89 and became Colonial Newport Tiger
Fund on 4/1/95 when Class A, B and D shares were offered. As of 4/30/98, the
Fund was renamed Newport Tiger Fund. Please see the Fund's prospectus for
additional details. Class A performance includes average annual total returns
prior to Fund conversion. Class B and C share performance information includes
returns of the Fund's Class A shares for periods prior to the inception dates of
those classes. These Class A share returns are not restated to reflect any
expense differential (e.g., Rule 12b-1 fees) between Class A shares and the
Class B and C shares. Had the expense differential been reflected, the returns
for periods prior to the inception date of the Class B and C shares would have
been lower.
6
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT PORTFOLIO
JUNE 30, 1998 (UNAUDITED, IN THOUSANDS)
COMMON STOCKS - 94.5% COUNTRY SHARES VALUE
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
FINANCE, INSURANCE & REAL ESTATE - 58.3%
Depository Institutions - 22.4%
Development Bank of Singapore Ltd. Si 6,718 $ 37,247
HSBC Holdings PLC HK 2,400 58,116
Hang Seng Bank HK 5,000 28,269
Oversea-Chinese Banking Corp. Ltd Si 7,768 26,485
Thai Farmers Bank Ltd. Th 5,364 4,735
------------
154,852
------------
Holding Companies - 17.8%
Cheung Kong Holdings Ltd. HK 9,500 46,721
Citic Pacific Ltd. HK 14,095 24,926
Hutchison Whampoa Ltd. HK 9,000 47,515
Singapore Technologies Engineering Ltd. Si 5,000 3,528
------------
122,690
------------
Insurance Carriers - 0.5%
National Mutual Asia Ltd. HK 5,000 3,195
------------
Investment Companies - 0.3%
Taiwan Fund, Inc. Tw 177 2,372
------------
Real Estate - 17.3%
Ayala Land, Inc., Class B Ph 4,500 1,295
China Resources Enterprises Ltd. HK 10,000 10,326
City Developments Ltd. Si 7,993 22,370
Filinvest Development Corp. Ph 23,000 1,158
New World Development Co., Ltd. HK 12,170 23,564
SM Prime Holdings, Inc. Ph 28,000 4,432
Sun Hung Kai Properties Ltd. HK 7,000 29,728
Swire Pacific Ltd., Series A HK 7,000 26,430
------------
119,303
------------
- ---------------------------------------------------------------------------
MANUFACTURING - 5.4%
Fabricated Metal - 0.4%
Kian Joo Can Factory Berhad Ma 3,180 2,921
------------
Measuring & Analyzing Instruments - 0.6%
China Hong Kong Photo Products
Holdings Ltd. HK 30,100 4,235
------------
Printing & Publishing - 4.3%
Singapore Press Holdings Ltd. Si 4,466 29,923
------------
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
Investment Portfolio/June 30, 1998
- -----------------------------------------------------------------------------
COMMON STOCKS - CONT. COUNTRY SHARES VALUE
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
MANUFACTURING - CONT.
Rubber & Plastic - 0.1%
Nylex Malaysia Berhad Ma 3,436 $ 863
------------
- ---------------------------------------------------------------------------
RETAIL TRADE - 1.1%
Apparel & Accessory Stores - 0.6%
Giordano International Ltd. HK 20,000 4,053
------------
Auto Dealers & Gas Stations - 0.5%
Cycle & Carriage Ltd. Si 1,302 3,181
------------
- ---------------------------------------------------------------------------
SERVICES - 2.9%
Hotels, Camps & Lodging - 0.6%
Genting Berhad Ma 2,166 3,926
------------
Miscellaneous Repair Services - 2.3%
Keppel Corp. Si 10,625 16,002
------------
- ---------------------------------------------------------------------------
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES - 25.3%
Electric Services - 6.3%
Hong Kong Electric Holdings Ltd. HK 14,000 43,371
------------
Gas Services - 8.4%
Hong Kong and China Gas Co., Ltd. HK 44,000 49,981
Petronas Gas Berhad Ma 4,180 7,779
------------
57,760
------------
Telecommunication - 10.6%
China Telecom Ltd. (a) HK 12,000 20,834
Hong Kong Telecommunications Ltd. HK 15,711 29,752
Philippine Long Distance Telephone ADR Ph 1,000 22,625
------------
73,211
------------
- ---------------------------------------------------------------------------
WHOLESALE TRADE - 1.5%
Durable Goods
Li & Fung Ltd. HK 6,228 10,049
------------
TOTAL COMMON STOCKS (cost of $1,070,245) 651,907
------------
WARRANTS (a) - 0.0%
- ---------------------------------------------------------------------------
Gas Services
Hong Kong and China Gas HK 2,000 137
(cost of $0) ------------
TOTAL INVESTMENTS - 94.5% (cost of $1,070,245)(b) 652,044
------------
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Investment Portfolio/June 30, 1998
- ---------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS - 3.3% PAR VALUE
- ---------------------------------------------------------------------------
<S> <C> <C>
Repurchase agreement with ABN AMRO Chicago Corp.,
dated 06/30/98 due 07/01/98 at 6.100% collateralized
by U.S. Treasury bills and notes with maturities to
2027, market value $23,360 (repurchase
proceeds $22,869) $ 22,865 $ 22,865
------------
FORWARD CURRENCY CONTRACTS (c) - 0.0% (24)
- ---------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES, NET - 2.2% 15,098
- ---------------------------------------------------------------------------
NET ASSETS - 100.0% $689,983
============
</TABLE>
NOTES TO INVESTMENT PORTFOLIO:
- ---------------------------------------------------------------------------
(a) Non-income producing.
(b) Cost for federal income tax purposes is the same.
(c) As of June 30, 1998, the Fund has entered into the following
forward currency exchange contracts:
<TABLE>
<CAPTION>
Net Unrealized
Contracts In Exchange Settlement Depreciation
to Deliver For Date (U.S$)
----------------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C>
MR 7,320 US$ 1,745 07/02/1998 24
MR 3,367 US$ 813 07/03/1998 (d)
------------
24
============
</TABLE>
(d) Rounds to less than one.
<TABLE>
<CAPTION>
Summary of Securities
by Country Country Value % of Total
----------------------------------------------------------------------------
<S> <C> <C> <C>
Hong Kong HK $ 461,202 70.7
Singapore Si 138,736 21.3
Phillippines Ph 29,510 4.5
Malaysia (MR) Ma 15,489 2.4
Thailand Th 4,735 0.7
Taiwan Tw 2,372 0.4
------------ ------------
$ 652,044 100.0
============ ============
</TABLE>
Certain securities are listed by country of underlying exposure but
may trade predominantly on other exchanges.
<TABLE>
<CAPTION>
Acronym Name
----------------- ------------
<S> <C>
ADR American Depositary Receipt
</TABLE>
See notes to financial statements.
9
<PAGE>
STATEMENT OF ASSETS & LIABILITIES
JUNE 30, 1998 (UNAUDITED)
(in thousands except for per share amounts and footnotes)
<TABLE>
<S> <C> <C>
ASSETS
Investments at value (cost $1,070,245) $ 652,044
Short-term obligations 22,865
-----------
674,909
Cash including foreign currencies
(cost $76) $ 75
Receivable for:
Investments sold 11,329
Fund shares sold 9,645
Dividends 3,017
Interest 4
Other 150 24,220
----------- -----------
Total Assets 699,129
LIABILITIES
Cash including foreign currencies
(cost $4,195) $4,288
Unrealized depreciation on forward
currency contracts 24
Payable for:
Fund shares repurchased 2,911
Distributions 664
Accrued:
Management fee 450
Administration fee 143
Service fee - Class A, Class B, Class C 112
Distribution fee - Class B 153
Distribution fee - Class C 28
Transfer agent fee 137
Bookkeeping fee 21
Deferred Trustees fees 10
Other 205
-----------
Total Liabilities 9,146
-----------
NET ASSETS $ 689,983
===========
</TABLE>
See notes to financial statements.
10
<PAGE>
STATEMENT OF ASSETS & LIABILITIES - CONT.
<TABLE>
<S> <C>
Net asset value & redemption price per share -
Class A ($236,545/37,946) $6.23
===========
Maximum offering price per share - Class A
($6.23/0.9425) $6.61(a)
===========
Net asset value & offering price per share -
Class B ($242,655/39,460) $6.15(b)
===========
Net asset value & offering price per share -
Class C ($44,204/7,174) $6.16(b)
===========
Net asset value & redemption price per share -
Class T ($48,831/7,830) $6.24
===========
Maximum offering price per share - Class T
($6.24/0.9425) $6.62(a)
===========
Net asset value, offering & redemption price
per share - Class Z ($117,748/18,911) $6.23
===========
COMPOSITION OF NET ASSETS
Capital paid in $1,290,626
Undistributed net investment income 6,805
Accumulated net realized loss (189,177)
Net unrealized depreciation on:
Investments (418,201)
Foreign currency transactions (70)
-----------
$ 689,983
===========
</TABLE>
(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.
11
<PAGE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
(in thousands)
INVESTMENT INCOME
Dividends:
Cheung Kong Holdings Ltd. $ 1,508
Citic Pacific Ltd. 910
Hang Seng Bank 1,564
Hong Kong Electric Holdings Ltd. 1,693
Hong Kong Telecommunications Ltd. 745
HSBC Holdings PLC 1,217
Hong Kong and China Gas Co., Ltd. 1,187
Hutchison Whampoa Ltd. 1,277
Swire Pacific Ltd., Series A 1,342
Other 5,198
Interest 909
-----------
Total Investment Income (net of nonreclaimable
foreign taxes withheld at source which
amounted to $863) 17,550
EXPENSES
Management fee $ 3,494
Administration fee 1,123
Service fee - Class A, Class B, Class C 849
Distribution fee - Class B 1,203
Distribution fee - Class C 218
Transfer agent fee 1,376
Bookkeeping fee 162
Trustees fee 37
Custodian fee 412
Audit fee 10
Legal fee 6
Registration fee 102
Reports to shareholders 25
Other 94 9,111
----------- -----------
Net Investment Income 8,439
-----------
NET REALIZED & UNREALIZED LOSS ON PORTFOLIO POSITIONS
Net realized loss on:
Investments (73,453)
Foreign currency transactions (92)
-----------
Net Realized Loss (73,545)
Net unrealized depreciation
during the period on:
Investments (236,507)
Foreign currency transactions (2)
-----------
Net Unrealized Depreciation (236,509)
-----------
Net Loss (310,054)
-----------
Decrease in Net Assets from Operations $ (301,615)
===========
</TABLE>
See notes to financial statements.
12
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
(Unaudited)
Six months
ended Year ended
(in thousands) June 30 December 31
----------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS 1998 1997 (a)
Operations:
Net investment income $ 8,439 $ 6,757
Net realized loss (73,545) (119,897)
Net unrealized depreciation (236,509) (471,123)
--------- ---------
Net Decrease from Operations (301,615) (584,263)
--------- ---------
Distributions:
From net investment income - Class A (380) (1,296)
From net realized gains - Class A - (1,835)
In excess of net realized gains - Class A - (3)
From net realized gains - Class B - (1,973)
In excess of net realized gains - Class B - (3)
From net realized gains - Class C - (347)
In excess of net realized gains - Class C - (b)
From net investment income - Class T (82) (654)
From net realized gains - Class T - (497)
In excess of net realized gains - Class T - (1)
From net investment income - Class Z (201) (1,444)
From net realized gains - Class Z - (1,024)
In excess of net realized gains - Class Z - (2)
--------- ---------
(302,278) (593,342)
--------- ---------
Fund Share Transactions:
Receipts for shares sold - Class A 253,306 688,564
Value of distributions reinvested - Class A (b) 2,747
Cost of shares repurchased - Class A (245,453) (748,862)
--------- ---------
7,853 (57,551)
--------- ---------
Receipts for shares sold - Class B 89,518 285,774
Value of distributions reinvested - Class B (b) 1,820
Cost of shares repurchased - Class B (98,797) (285,671)
--------- ---------
(9,279) 1,923
--------- ---------
Receipts for shares sold - Class C 24,026 72,752
Value of distributions reinvested - Class C - 320
Cost of shares repurchased - Class C (22,860) (84,050)
--------- ---------
1,166 (10,978)
--------- ---------
Receipts for shares sold - Class T 2,128 4,180
Value of distributions reinvested - Class T - 969
Cost of shares repurchased - Class T (11,958) (60,405)
--------- ---------
(9,830) (55,256)
--------- ---------
</TABLE>
(a) Class D shares were redesignated Class C shares on July 1, 1997.
(b) Rounds to less than one.
Continued on next page.
See notes to financial statements.
13
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS - CONT.
<TABLE>
<CAPTION>
(Unaudited)
Six months
ended Year ended
June 30 December 31
----------- ------------------
1998 1997 (a)
<S> <C> <C>
Receipts for shares sold - Class Z 59,148 77,647
Value of distributions reinvested - (b) 2,048
Class Z
Cost of shares repurchased - Class Z (68,276) (156,891)
----------- -----------
(9,128) (77,196)
----------- -----------
Net Decrease from Fund
Share Transactions (19,218) (199,058)
----------- -----------
Total Decrease (321,496) (792,400)
NET ASSETS
Beginning of period 1,011,479 1,803,879
----------- -----------
End of period (including undistributed
and net of overdistributed net
investment income of $6,805 and
$872, respectively) $ 689,983 $1,011,479
=========== ===========
NUMBER OF FUND SHARES
Sold - Class A 32,860 56,469
Issued for distributions reinvested -
Class A (b) 241
Repurchased - Class A (30,767) (62,212)
----------- -----------
2,093 (5,502)
----------- -----------
Sold - Class B 11,368 23,200
Issued for distributions reinvested -
Class B (b) 130
Repurchased - Class B (12,541) (24,648)
----------- -----------
(1,173) (1,318)
----------- -----------
Sold - Class C 3,065 6,098
Issued for distributions reinvested -
Class C - 23
Repurchased - Class C (2,908) (7,069)
----------- -----------
157 (948)
----------- -----------
Sold - Class T 257 346
Issued for distributions reinvested -
Class T - 91
Repurchased - Class T (1,534) (4,977)
----------- -----------
(1,277) (4,540)
----------- -----------
Sold - Class Z 7,554 6,329
Issued for distributions reinvested -
Class Z (b) 194
Repurchased - Class Z (8,713) (13,127)
----------- -----------
(1,159) (6,604)
----------- -----------
</TABLE>
(a) Class D shares were redesignated Class C shares on July 1, 1997.
(b) Rounds to less than one.
See notes to financial statements.
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998 (UNAUDITED)
NOTE 1. INTERIM FINANCIAL STATEMENTS
- -----------------------------------------------------------
In the opinion of management of Newport Tiger Fund (the Fund), a series of
Colonial Trust VII, 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, 1998, and the results of its operations, the
changes in its net assets and the financial highlights for the six months then
ended.
NOTE 2. ACCOUNTING POLICIES
- -----------------------------------------------------------
Organization: The Fund is a diversified portfolio of a Massachusetts business
trust, registered under the Investment Company Act of 1940, as amended, as an
open-end management investment company. The Fund's investment objective is to
seek 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 Phillipines). The
Fund may issue an unlimited number of shares. The Fund offers five classes of
shares: Class A, Class B, Class C, 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 C shares are subject to a contingent
deferred sales charge on redemptions made within one year after purchase and
an annual 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 generally 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. In addition, if the values of foreign securities have been
materially affected by events occurring after the closing
15
<PAGE>
Notes to Financial Statements/June 30, 1998
-------------------------------------------------------------
NOTE 2. ACCOUNTING POLICIES - CONT.
- -----------------------------------------------------------
of the market, the foreign securities may be valued at their current value.
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 for which market quotations
are not readily available. 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 C service fees and Class
B and Class C distribution fees), and realized and unrealized gains (losses),
are allocated to each class proportionately on a daily basis for purposes of
determining the net asset value of each class.
The per share data was calculated using average shares outstanding during the
period. In addition, Class A, Class B and Class C net investment income per
share data reflects the service fee per share applicable to Class A, Class B
and Class C shares and the distribution fee applicable to Class B and Class C
shares only.
Class A, Class B and Class C 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 C shares and the
distribution fee applicable to Class B and Class C shares only.
Federal income taxes: Consistent with the Fund's policy to qualify as a
regulated investment company and to distribute all of its taxable 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 gains (losses) arising from the
fluctuation in exchange rates between trade and settlement dates on
securities transactions, gains (losses) arising from the disposition of
foreign currency
16
<PAGE>
Notes to Financial Statements/June 30, 1998
-------------------------------------------------------------
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 nonreclaimable 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 3. 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:
<TABLE>
<CAPTION>
Average Net Assets Annual Fee Rate
- ----------------------- -------------------
<S> <C>
First $100 million 1.00%
Next $1.4 billion 0.75%
Next $1.0 billion 0.70%
Over $2.5 billion 0.65%
</TABLE>
17
<PAGE>
Notes to Financial Statements/June 30, 1998
-------------------------------------------------------------
NOTE 3. FEES AND COMPENSATION PAID TO AFFILIATES - CONT.
.....................................................................
Administration fee: Colonial Management Associates, Inc. (the Administrator) an
affiliate of the Adviser, 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.
<TABLE>
<CAPTION>
Average Net Assets Annual Fee Rate
- ----------------------- -------------------
<S> <C>
First $50 million No charge
Next $950 million 0.035%
Next $1 billion 0.025%
Next $1 billion 0.015%
Over $3 billion 0.001%
</TABLE>
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.
Effective October 1, 1997 and continuing through September 1998, the Transfer
Agent fee will be reduced by 0.0012% in cumulative monthly increments,
resulting in a decrease in the fee from 0.25% to 0.236% annually.
Underwriting discounts, service and distribution fees: Liberty Funds
Distributor, Inc., formerly Liberty Financial Investments, Inc. (the
Distributor), a subsidiary of the Administrator, is the Fund's principal
underwriter. For the six months ended June 30, 1998, the Fund has been
advised that the Distributor retained net underwriting discounts of $162,680
on sales of the Fund's Class A, Class C and Class T shares and received
contingent deferred sales charges (CDSC) of $1,103,946 and $48,226 on Class B
and Class C 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 C 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% of the average net assets
attributable to Class B and Class C 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 six months ended June 30, 1998, the Fund's operating expenses did not
exceed the 1.55% expense limit.
18
<PAGE>
Notes to Financial Statements/June 30, 1998
-------------------------------------------------------------
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 4. PORTFOLIO INFORMATION
- -----------------------------------------------------------
Investment activity: During the six months ended June 30, 1998, purchases and
sales of investments, other than short-term obligations, were $52,655,432 and
$76,269,783, respectively.
Unrealized appreciation (depreciation) at June 30, 1998, based on cost of
investments for both financial statement and federal income tax purposes was:
<TABLE>
<S> <C>
Gross unrealized appreciation $ 43,643,112
Gross unrealized depreciation (461,843,616)
---------------
Net unrealized depreciation $(418,200,504)
===============
</TABLE>
Capital loss carryforwards: At December 31, 1998, 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>
2005 $81,206,000
</TABLE>
Expired capital loss carryforwards, if any, are recorded as a reduction of
capital paid in.
To the extent loss carryforwards are used to offset any future realized
gains, it is unlikely that such gains would be distributed since they may be
taxable to shareholders as ordinary income.
Other: There are certain 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 5. LINE OF CREDIT
- -----------------------------------------------------------
The Fund may borrow up to 33-1/3% of its net assets under a line of credit
for temporary or emergency purposes. Any borrowings bear interest at one of
the following options determined at the inception of the loan: (1) federal
funds rate plus 1/2 of 1%, (2) the lending bank's base rate or (3) IBOR
offshore loan rate plus 1/2 of 1%. There were no borrowings under the line of
credit during the six months ended June 30, 1998.
19
<PAGE>
FINANCIAL HIGHLIGHTS
Selected data for a share of each class outstanding throughout each period
are as follows:
<TABLE>
<CAPTION>
(Unaudited)
Six months ended June 30
-----------------------------------------------------------
1998
Class A Class B Class C Class T Class Z
--------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value -
Beginning of period $ 9.020 $ 8.920 $ 8.940 $ 9.010 $ 9.010
--------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment
income (loss) (b)(c) 0.085 0.052 0.052 0.095 0.095
Net realized and
unrealized loss (2.864) (2.822) (2.832) (2.854) (2.864)
--------- -------- -------- -------- --------
Total from Investment
Operations (2.779) (2.770) (2.780) (2.769) (2.769)
--------- -------- -------- -------- --------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net
investment income (0.011) - - (0.011) (0.011)
From net
realized gains - - - - -
--------- -------- -------- -------- --------
Total Distributions
Declared to
Shareholders (0.011) - - (0.011) (0.011)
--------- -------- -------- -------- --------
Net asset value -
End of period $ 6.230 $ 6.150 $ 6.160 $ 6.240 $ 6.230
========= ======== ======== ======== ========
Total return (d) (30.81)%(e) (31.05)%(e) (31.10)%(e) (30.63)%(e) (30.74)%(e)
========= ======== ======== ======== ========
RATIOS TO AVERAGE NET ASSETS
Operating expenses (f) 1.77%(g) 2.52%(g) 2.52%(g) 1.52%(g) 1.52%(g)
Interest Expense - - - - -
Total expenses (f) 1.77%(g) 2.52%(g) 2.52%(g) 1.52%(g) 1.52%(g)
Net investment
income (loss) (f) 2.14%(g) 1.39%(g) 1.39%(g) 2.39%(g) 2.39%(g)
Portfolio turnover 6%(e) 6%(e) 6%(e) 6%(e) 6%(e)
Net assets at end
of period (000) $ 236,545 $242,655 $ 44,204 $48,831 $117,748
</TABLE>
(a) Class D shares were redesignated Class C shares on July 1, 1997.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) 1997 information includes distribution from Hong Kong Electric
Holdings Ltd. which amounted to $0.015 per share in 1997. 1998 information
includes distributions from securities listed on Statement of Operations
which amounted to $0.013, $0.008, $0.014, $0.016, $0.008, $0.011, $0.010,
$0.011 and $0.012 per share, respectively.
d) Total return at net asset value assuming all distributions reinvested and no
initial sales charge or contingent deferred sales charge.
(e) Not annualized.
20
<PAGE>
FINANCIAL HIGHLIGHTS - CONT.
Selected data for a share of each class outstanding throughout
each period are as follows:
<TABLE>
<CAPTION>
Year ended December 31
------------------------------------------------
1997
Class A Class B Class C (a Class T Class Z
--------- -------- -------- ---------- --------
<S> <C> <C> <C> <C> <C>
$ 13.750 $ 13.640 $ 13.660 $ 13.750 $ 13.750
--------- -------- -------- -------- --------
0.081 (0.011) (0.012) 0.112 0.112
(4.735) (4.667) (4.666) (4.740) (4.740)
--------- -------- -------- -------- --------
(4.654) (4.678) (4.678) (4.628) (4.628)
--------- -------- -------- -------- --------
(0.034) - - (0.070) (0.070)
(0.042) (0.042) (0.042) (0.042) (0.042)
--------- -------- -------- -------- --------
(0.076) (0.042) (0.042) (0.112) (0.112)
--------- -------- -------- -------- --------
$ 9.020 $ 8.920 $ 8.940 $ 9.010 $ 9.010
========= ======== ======== ======== ========
(33.95)% (34.41)% (34.36)% (33.76)% (33.76)%
========= ======== ======== ======== ========
1.73% 2.48% 2.48% 1.48% 1.48%
(h) (h) (h) (h) (h)
1.73% 2.48% 2.48% 1.48% 1.48%
0.64% (0.11)% (0.11)% 0.89% 0.89%
12% 12% 12% 12% 12%
$ 323,407 $362,442 $ 62,703 $ 82,095 $180,832
</TABLE>
(f) The benefits derived from custody credits and directed
brokerage arrangements had no impact.
(g) Annualized.
(h) Rounds to less than 0.01%.
21
<PAGE>
FINANCIAL HIGHLIGHTS - CONT.
Selected data for a share of each class outstanding throughout each period
are as follows:
<TABLE>
<CAPTION>
Year ended December 31
------------------------------------------------
1996
Class A Class B Class C 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 (loss)(c) 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 (e) 10.94% 10.16% 10.11% 11.24% 11.24%
========= ======== ======== ======== ========
RATIOS TO AVERAGE NET ASSETS
Expenses (g) 1.74% 2.49% 2.49% 1.49% 1.49%
Net investment
income (g) 0.62% (0.13)% (0.13)% 0.87% 0.87%
Portfolio turnover 6% 6% 6% 6% 6%
Net assets at end
of period (000) $ 568,497 $572,089 $108,785 $187,659 $366,849
</TABLE>
(a) Class A, Class B and Class C shares were initially offered on April 1,
1995. Per share data reflects activity from that date.
(b) 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.
(c) Per share data was calculated using average shares outstanding during the
period.
(d) Includes distribution from Taiwan Fund which amounted to $ 0.013
per share.
(e) Total return at net asset value assuming all distributions
reinvested and no initial sales charge or contingent deferred sales charge.
22
<PAGE>
FINANCIAL HIGHLIGHTS - CONT.
Selected data for a share of each class outstanding throughout each period
are as follows:
<TABLE>
<CAPTION>
Year ended December 31
-----------------------------------------------------
1995
Class A (a) Class B (a) Class C (a) Class T (b) Class Z (b)
--------- -------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 10.860 $ 10.860 $ 10.860 $ 10.800 $ 10.800
--------- -------- --------- -------- --------
0.067 (0.003) (0.003) 0.099(d) 0.099(d)
1.617 1.594 1.615 1.656 1.656
--------- -------- --------- -------- --------
1.684 1.591 1.612 1.755 1.755
--------- -------- --------- -------- --------
(0.060) (0.037) (0.038) (0.081) (0.081)
(0.024) (0.024) (0.024) (0.024) (0.024)
--------- -------- --------- -------- --------
(0.084) (0.061) (0.062) (0.105) (0.105)
--------- -------- --------- -------- --------
$ 12.460 $12.390 $ 12.410 $ 12.450 $ 12.450
========= ======== ========= ======== ========
15.52%(f) 14.65%(f) 14.85%(f) 16.28% 16.28%
========= ======== ========= ======== ========
1.37%(f) 1.93%(f) 1.93%(f) 1.60% 1.60%
0.28%(f) (0.28)%(f) (0.28)%(f) 0.75% 0.75%
4% 4% 4% 4% 4%
$ 196,870 $112,588 $ 21,420 $195,986 $345,583
</TABLE>
(f) Not annualized.
(g) The benefits derived from custody credits and directed brokerage
arrangements had no impact in 1996. In 1995, the benefits derived from
custody credits and directed brokerage arrangements had an impact of
0.07% on Class A, Class B and Class C: 0.11% on Class T and Class Z.
23
<PAGE>
FINANCIAL HIGHLIGHTS - CONT.
Selected data for a share of each class outstanding throughout each
period are as follows:
<TABLE>
<CAPTION>
Year ended December 31
-------------------
1994 1993 (a)
-------- --------
<S> <C> <C>
Net asset value -
Beginning of period $ 2.440 $ 7.120
-------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment
income (b) 0.060 0.040
Net realized and
unrealized gain (loss) (1.550) 5.330
-------- --------
Total from Investment
Operations (1.490) 5.370
-------- --------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net
investment income (0.040) (0.040)
From net
realized gains (0.110) (0.010)
-------- --------
Total Distributions Declared to
Shareholders (0.150) (0.050)
-------- --------
Net asset value -
End of period $ 10.800 $ 12.440
-------- --------
Total return (c) (11.96)% 75.45%
-------- --------
RATIOS TO AVERAGE NET ASSETS
Expenses 1.29% 1.56%
Net investment income 0.57% 0.59%
Portfolio turnover 8% 11%
Net assets at end
of period (000) $456,241 $394,883
</TABLE>
(a) Reflects the 2 for 1 stock split effective November 29, 1993.
(b) Per share data was calculated using average shares outstanding
during the period.
(c) Total return at net asset value assuming all distributions
reinvested and no initial sales charge or contingent deferred sales
charge.
24
<PAGE>
HOW TO REACH COLONIAL
BY PHONE OR BY MAIL
BY TELEPHONE
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:
<TABLE>
<S> <C>
For fund prices, dividends and capital gains information .......press 1
For account information ........................................press 2
To speak to a service 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 *
</TABLE>
To speak with a shareholder services representative about your account, call
Monday to Friday, 8:00 a.m. to 8:00 p.m. ET, and Saturdays from February through
mid-April, 10:00 a.m. to 2:00 p.m. ET.
Colonial Telephone Transaction Department - 1-800-422-3737
To purchase, exchange or sell shares by telephone, call Monday to Friday, 9:00
a.m. to 7:00 p.m. 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 fund distributed by Liberty Funds Distributor,
Inc., call Monday to Friday, 8:30 a.m. to 6:30 p.m. ET.
BY MAIL
Colonial Investors Service Center, Inc.
P.O. Box 1722
Boston, MA 02105-1722
25
<PAGE>
SHAREHOLDER SERVICES
TO MAKE INVESTING EASIER
Your Fund has one of the most extensive selections of shareholder services
available. Your financial advisor can help you arrange for any of these
services, or you can call Colonial Investors Service Center 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(1): Exchange all or part of your account into the same share
class of another fund distributed by Liberty Funds Distributor, Inc. by phone or
mail.
Easy Access to Your Money(1): 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 within one year, you can reinvest in any fund distributed by
Liberty Funds Distributor, Inc., 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 Fund 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 calendar day of each month unless the 10th falls on a
non-business day or the first business day of the week. If this occurs, the
processing date will be the previous business day. Dividends and capital gains
must be reinvested.
Automated Dollar Cost Averaging: Transfer money on a monthly basis from any fund
with a balance of $5,000 into the same share class of up to four other funds
distributed by Liberty Funds Distributor, Inc. Minimum for each transfer is
$100.
Retirement Plans: Choose from a broad range of retirement plans, including IRAs.
(1) Redemptions and exchanges are made at the next determined net asset value
after the request is received by the Transfer Agent. 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 C shares, or $1 million or more of Class A shares, may be subject
to a contingent deferred sales charge.
26
<PAGE>
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Newport Tiger Fund is:
Colonial Investors Service Center, Inc.
P.O. Box 1722
Boston, MA 02105-1722
1-800-345-6611
Newport Tiger Fund mails one shareholder report to each shareholder address. If
you would like more than one report, please call 1-800-426-3750 and additional
reports will be sent to you.
This report has been prepared for shareholders of 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 and the most recent copy of
Liberty Funds Distributor's Performance Update.
27
<PAGE>
TRUSTEES
ROBERT J. BIRNBAUM
Consultant (formerly Special Counsel, Dechert, Price & Rhoads; President and
Chief Operating Officer, New York Stock Exchange, Inc.; President, American
Stock Exchange, Inc.)
TOM BLEASDALE
Retired (formerly Chairman of the Board and Chief Executive Officer, Shore Bank
& Trust Company)
LORA S. COLLINS
Attorney (formerly Attorney, Kramer, Levin, Naftalis & Frankel)
JAMES E. GRINNELL
Private Investor (formerly Senior Vice President-Operations, The Rockport
Company)
RICHARD W. LOWRY
Private Investor (formerly Chairman and Chief Executive Officer, U.S. Plywood
Corporation)
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, CS First Boston
Merchant Bank; and President and Chief Executive Officer, The First Boston
Corporation)
JAMES L. MOODY, JR.
Retired (formerly Chairman of the Board, Chief Executive Officer and Director,
Hannaford Bros. Co.)
JOHN J. NEUHAUSER
Dean, Boston College School of Management
ROBERT L. SULLIVAN
Retired Partner, KPMG Peat Marwick LLP (formerly Management Consultant, Saatchi
and Saatchi Consulting Ltd. and Principal and International Practice Director,
Management Consulting, Peat Marwick Main & Co.)
[graphic ommitted: Liberty Logo] LIBERTY
COLONIAL FUNDS (bullet) STEIN ROE ADVISOR FUNDS (bullet) NEWPORT FUNDS
Liberty Funds Distributor, Inc. [copyright] 1998
One Financial Center, Boston, MA 02111-2621, 1-800-426-3750
Visit us at www.libertyfunds.com NT-03/624F-0698 (8/98)98/809