November 15, 2000
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Liberty Funds Trust VII
Liberty Newport Europe Fund (formerly Newport Europe Fund)
Registration File Nos. 33-41559 & 811-6347
Dear Sir/Madam:
Pursuant to the requirements of Rule 497(e), submitted for filing via EDGAR is
the form of Prospectus Supplements dated November 10, 2000 now being
used in connection with the public offering and sale of shares of the Fund.
Sincerely,
LIBERTY FUNDS TRUSTS VII
Tracy S. DiRienzo
Assistant Secretary
Enclosures
<PAGE>
NEWPORT EUROPE FUND
Class A, B and C Shares
Supplement to Prospectus dated
November 8, 1999 (Replacing Supplements dated
December 28, 1999, June 23, 2000 and August 1, 2000)
The Fund's Prospectus is revised as follows:
(1) Effective July 14, 2000, the Fund changed its name from Newport Europe
Fund to Liberty Newport Europe Fund.
(2) The Shareholder Fees table under the caption YOUR EXPENSES is amended
and restated as follows:
Shareholder Fees (1) (paid directly from your investment)
<TABLE>
<CAPTION>
Class A Class B Class C
<S> <C> <C> <C>
Maximum sales charge (load) on purchases (%) (as
a percentage of the offering price) 5.75 0.00 0.00
--------------------------------------------------- ----------------- ------------------ -----------------
Maximum deferred sales charge (load) on
redemptions (%) (as a percentage of the lesser of
purchase price or redemption price) 1.00(2) 5.00 1.00
--------------------------------------------------- ----------------- ------------------ -----------------
Redemption fee (as a percentage of amount
redeemed, if applicable) (3) (3) (3)
--------------------------------------------------- ----------------- ------------------ -----------------
</TABLE>
(1) A $10 annual fee is deducted from accounts of less than $1,000 and paid
to the transfer agent. (2) This charge applies only to certain Class A shares
bought without an initial sales charge
that are sold within 18 months of purchase.
(3) There is a $7.50 charge for wiring sale proceeds to your bank.
(3) The second paragraph in the sidebar, UNDERSTANDING EXPENSES, under the
caption YOUR EXPENSES is deleted in its entirety.
(4) The footnote to the table "Class A Sales Charges" under the subcaption
SALES CHARGES under the section YOUR ACCOUNT is revised as follows:
Class A shares bought without an initial sales charge in accounts aggregating $1
million to $25 million at the time of purchase are subject to a 1.00% CDSC if
the shares are sold within 18 months of the time of purchase. Subsequent Class A
share purchases that bring your account value above $1 million are subject to a
CDSC if redeemed within 18 months of the date of purchase. The 18-month period
begins on the first day of the month following each purchase. The CDSC does not
apply to retirement plans purchased through a fee-based program.
<PAGE>
(5) The following replaces the table called "Purchases Over $1
Million" under the subcaption SALES CHARGES under the section
YOUR ACCOUNT:
Amount purchased Commission %
First $3 million 1.00
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$3 million to less than $5 million 0.80
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$5 million to less than $25 million 0.50
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$25 million or more 0.25
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The commission to financial advisors for Class A share purchases of $25 million
or more is paid over 12 months but only to the extent the shares remain
outstanding.
For Class A share purchases by participants in certain group retirement plans
offered through a fee-based program, financial advisors receive a 1.00%
commission from the distributor on all purchases of less than $3 million.
(6) The last three paragraphs under the caption SALES CHARGES are deleted
in their entirety.
(7) The following information supplements the information in the SALES
CHARGES section:
The contingent deferred sales charges (CDSCs) for larger purchases of Class B
shares of the Fund through participating financial advisor firms are reduced as
follows:
- The reductions apply only to customers of financial advisor firms
that have elected to participate in these reductions. (Some
financial advisors firms are not able to participate because their
record keeping or transaction processing systems are not designed
to accommodate these reductions.) Consult your financial advisor
to see whether it participates in these reductions.
The CDSC, the holding period between your purchase of shares and the automatic
conversion of those shares to Class A shares, and the commission the Fund's
distributor pays to your financial advisor firm when you buy the shares will be
as follows:
Purchases of less than $250,000:
Holding period after purchase % deducted when shares sold
Through first year 5.00
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Through second year 4.00
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Through third year 3.00
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Through fourth year 3.00
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Through fifth year 2.00
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Through sixth year 1.00
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Longer than six years 0.00
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Commission to the financial advisors is 5.00%.
Automatic conversion to Class A shares is eight years after purchase.
<PAGE>
Purchases of $250,000 to less than $500,000:
Holding period after purchase % deducted when shares sold
Through first year 3.00
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Through second year 2.00
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Through third year 1.00
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Longer than three years 0.00
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Commission to financial advisors is 2.50%.
Automatic conversion to Class A shares is four years after purchase.
Purchases of $500,000 to less than $1 million:
Holding period after purchase CDSC as % deducted
when shares sold
Through first year 3.00
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Through second year 2.00
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Through third year 1.00
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Commission to financial advisors is 1.75%.
Automatic conversion to Class A shares is three years after purchase.
For purchases through financial advisor firms that do not participate in the
Class B discount program, the CDSC, conversion period and commission to the
financial advisor will continue to be as described in the Prospectus.
If your financial advisor firm participates in the Class B discount program,
purchases of $1 million or more can only be made in Class A or Class C shares.
If your financial advisor firm does not participate in the Class B discount
program, purchases of $250,000 or more but less than $1 million can be made only
in Class A or Class C shares. Purchases of $1 million or more can be made only
in Class A shares.
If a shareholder exchanges from any Fund not participating in this Class B
purchase program into any other Fund which does so participate, or transfers any
Fund account from a financial advisor firm that does not participate in the
Class B discount program to a financial advisor firm that does participate, the
exchanged or transferred shares will retain their pre-existing CDSC and
conversion schedule, but additional purchases of shares which cause the
exchanged or transferred Fund account to exceed the applicable discount level
will receive the lower CDSC and reduced holding period for amounts exceeding the
discount level and the financial advisor firm will receive the lower commission.
An additional way shareholders can pay a lower CDSC and be subject to the
applicable reduced holding period when purchasing Class B shares through
participating financial advisor firms is through Rights of Accumulation. If the
combined value of the Fund accounts maintained by a shareholder, the
shareholder's spouse and minor children reaches a discount level, any additional
shares purchased in any of the accounts will be subject to the applicable lower
CDSC and reduced holding period.
738-36/748D-1100 November 10, 2000
<PAGE>
NEWPORT EUROPE FUND
Class Z Shares
Supplement to Prospectus dated November 8, 1999
(Replacing Supplements dated April 13, 2000,
June 23, 2000 and August 15, 2000)
The Prospectus is revised as follows:
Effective July 14, 2000, the Fund changed its name from Newport Europe Fund to
Liberty Newport Europe Fund.
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UNDERSTANDING EXPENSES
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Annual Fund Operating Expenses are deducted from the Fund. They include
management fees and administrative costs including pricing and custody services.
Example Expenses help you compare the cost of investing in the Fund to the
cost of investment in other mutual funds. The table does not take into
account any expense reduction arrangements discussed in the footnotes to the
Annual Fund Operating Expenses table. It uses the following hypothetical
conditions:
- $10,000 initial investment
- 5% total return for each year
- Fund operating expenses remain the same
- Assumes reinvestment of all dividends and distributions
--------------------------------------------------------------------------------
Your Expenses
-------------------------------------------------------------------------------
Expenses are one of several factors to consider before you invest in a mutual
fund. The tables below describe the fees and expenses you may pay when you buy,
hold and sell shares of the Fund.
Shareholder Fees(1) (paid directly from your investment)
Maximum sales charge (load) on purchases (%)
(as a percentage of the offering price) 0.00
---------------------------------------------------------------------- ---------
Maximum deferred sales charge (load) on redemptions (%)
(as a percentage of the lesser of purchase price or redemption price) 0.00
---------------------------------------------------------------------- ---------
Redemption fee (%) (as a percentage of amount redeemed, if applicable) (2)
Annual Fund Operating Expenses (deducted directly from Fund assets)
Management and administration fee (%) 0.95
---------------------------------------------------------------------- ---------
Distribution and service (12b-1) fees (%) 0.00
---------------------------------------------------------------------- ---------
Other expenses(3)(4) (%) 1.20
---------------------------------------------------------------------- ---------
Total annual fund operating expenses (%) 2.15
Example Expenses (your actual costs may be higher or lower)
1 Year 3 Years
------- --------
$218 $673
(1) A $10 annual fee is deducted from accounts of less than $1,000 and paid
to the transfer agent.
(2) There is a $7.50 charge for wiring sales proceeds to your bank.
(3) "Other expenses" are based on estimated amounts for the current fiscal
year.
(4) The Fund's advisor has agreed to bear the Fund's expenses such that
"Other expenses" do not exceed 0.55% annually. These payments made by
the advisor on behalf of the Fund are subject to reimbursement by the Fund
to the advisor. This will be accomplished by the payment of an expense
reimbursement fee by the Fund to the advisor computed and paid monthly,
with a limitation that immediately after such payment the Fund's
"Other expenses" will not exceed 0.55% annually. This arrangement
terminates on the earlier of (i) the date on which expense reimbursement
payments by the Fund equal to the prior payment of such reimbursable
expenses by the advisor, or (ii) three years from the date the Fund's
shares are offered for sale. This arrangement may be terminated at an
earlier date by the advisor.
<PAGE>
The categories of investors who are eligible to purchase Class Z shares are
revised as follows:
The following investors are now eligible to purchase Class Z shares: (i) clients
of broker-dealers or registered investment advisors that both recommend the
purchase of Fund shares and charge such clients an asset-based fee; (ii) a
retirement plan (or the custodian for such plan) with aggregate plan assets of
at least $5 million at the time of purchase and which purchases shares directly
from Liberty Funds Distributor, Inc., the Fund's distributor, or through a third
party broker-dealer; (iii) any insurance company, trust company or bank
purchasing shares for its own account; (iv) any endowment, investment company or
foundation; (v) clients of investment advisory affiliates of the distributor
provided that the clients meet certain criteria established by the distributor
and its affiliates; (vi) any shareholder (or family member of such shareholder)
who owned shares of any of the funds of Liberty Acorn Trust on September 29,
2000 (when all of the then outstanding shares of Liberty Acorn Trust were
re-designated Class Z shares) and who has since then continued to own shares of
any funds distributed by Liberty Funds Distributor, Inc.; (vii) any person
investing all or part of the proceeds of a distribution, roll over or transfer
of assets into a Liberty IRA, from any deferred compensation plan which was a
shareholder of any of the funds of Liberty Acorn Trust on September 29, 2000, in
which the investor was a participant and through which the investor invested in
one or more of the funds of Liberty Acorn Trust immediately prior to the
distribution, roll over or transfer; (viii) any trustee of Liberty Acorn Trust,
any employee of Liberty Wanger Asset Management, L.P., or a member of the family
of such trustee or employee; and (ix) any person or entity listed in the account
registration for any account (such as joint owners, trustees, custodians, and
designated beneficiaries) that held shares of any of the funds of Liberty Acorn
Trust on September 29, 2000 and that has since then continued to hold shares of
any fund distributed by Liberty Funds Distributor, Inc.
Initial purchases of Class Z shares are subject to a minimum purchase amount of
$100,000, except that purchases by (a) retirement plans described in clause (ii)
above are not subject to any initial investment minimum, and (b) investors
described in clauses (vi), (viii) and (ix) above are subject to a minimum
purchase amount of $1,000. The Fund reserves the right to change the investment
minimums.
The last three paragraphs under the caption SALES CHARGES are deleted in their
entirety.
738-36/291D-1000 November 10, 2000
