<PAGE> 1
- --------------------------------------------------------------------------------
NEWPORT TIGER FUND ANNUAL REPORT
- --------------------------------------------------------------------------------
DECEMBER 31, 1999
[TIGER GRAPHIC BACKGROUND]
The Tiger markets of Asia play an
important role in the world's economy,
offering growth opportunities for
long-term global investors.
<PAGE> 2
Dear Shareholder:
The 12-month period ended December 31, 1999 was very good for investors in
Southeast Asia, as the region experienced a strong economic recovery in concert
with a worldwide economic rebound. The economies in the region benefited from a
level of renewal and improved management. In Hong Kong and China, the private
sector has shown unprecedented growth, driven by an entrepreneurial boom in the
high technology and telecommunications sectors. These industries are benefiting
from surging use of the Internet by both businesses and consumers around the
world. Singapore's banking industry continued to thrive, and Taiwan's
world-class semiconductor sector emerged from a major earthquake in very good
shape. In short, a wide range of factors in the region and worldwide converged
to produce what we believe is a solid foundation for future prosperity.
Although we are encouraged by these developments, it is important to note that
the region is still in the early stages of recovery from the devastating impact
of recession in 1997 and 1998. Much of the growth has been driven by exports --
particularly to the U.S. -- and internally generated growth is just beginning to
appear. Nevertheless, we are very pleased with the progress that we saw
throughout the region in 1999.
Newport Tiger Fund continued to benefit from the positive economic trends that
occurred during the year, outperforming the average return of its Lipper peer
group.1 The following report will provide you with more specific information
about your Fund's performance and the strategies used during the period. As
always, we thank you for choosing Newport Tiger Fund and for giving us the
opportunity to serve your investment needs.
Sincerely,
/s/ Stephen E. Gibson
- -----------------------------
Stephen E. Gibson
President
February 11, 2000
1 Lipper, Inc., a widely respected data provider for the industry, calculates
an average total return for mutual funds with similar investment objectives
as the Fund. The average total return calculated for funds in the Lipper
Pacific Ex-Japan Funds category was 73.21% for the 12 months ended December
31, 1999. The Fund's Class A shares ranked in the second quartile for one
year (ranked 38 out of 84 funds) and in the second quartile for three years
(ranked 28 out of 70 funds). Rankings do not include any sales charges.
Performance for different share classes will vary with fees associated with
each class. Past performance cannot guarantee future results.
Because market and economic conditions change, there can be no assurance
that the trends described in this report will continue or come to pass.
- -----------------------------
Not FDIC May Lose Value
Insured -------------------
No Bank Guarantee
- -----------------------------
<PAGE> 3
HIGHLIGHTS
* STRONG ECONOMIC RECOVERY IN ASIA IN 1999
Asian stock markets were propelled by a recovering regional economy and
continued strength in the global economy. Stock markets in all of the major
Asian nations rose.
* BOOMING HIGH-TECHNOLOGY AND TELECOMMUNICATIONS INDUSTRIES DROVE GROWTH
Surging growth in the Internet and generally improving global economies
propelled companies in the high-technology and telecommunications sectors
to new highs. Fund holdings in these industries showed good performance
during the period.
* FUND'S RETURNS REFLECTED STRONG ECONOMY
Newport Tiger Fund's total return for the 12-month period reflected the
positive investment environment, which also benefited many of its peers.
NET ASSET VALUE PER SHARE AS OF 12/31/1999
<TABLE>
<S> <C>
Class A $13.47
------------------------------
Class B $13.23
------------------------------
Class C $13.25
------------------------------
Class T $13.48
------------------------------
Class Z $13.46
------------------------------
</TABLE>
NEWPORT TIGER FUND PERFORMANCE
VS. LIPPER PACIFIC EX-JAPAN FUNDS CATEGORY AVERAGE
12/31/98 - 12/31/99
[GRAPH PERFORMANCE]
<TABLE>
<S> <C>
Newport Tiger Fund, Class A (without sales charge) 73.14%
Lipper Pacific Ex-Japan Funds Category Average 73.21%
</TABLE>
Past performance cannot predict future results. Returns and values of an
investment will vary, resulting in a gain or loss on sale. All results shown
assume reinvestment of distributions.
Returns are computed at net asset value.
1
<PAGE> 4
PORTFOLIO MANAGERS' REPORT
FUND PERFORMED WELL ON STRENGTH OF ASIAN ECONOMIC RECOVERY
For the 12-month period, Newport Tiger Fund's Class A shares had a total return
of 73.14% without a sales charge. The Fund ranked in the second quartile in the
Lipper Pacific Ex-Japan Funds category, which had an average return for the same
period of 73.2 1%. The Fund's return reflects the strong economic recovery
throughout Asia in 1999, and the particular strength of its holdings in the
high-technology and telecommunications industries. The economic and financial
crises of 1997 and 1998 encouraged corporations to streamline their operations
and focus on profitability. In addition, companies realized the benefit of
increased financial disclosure. These factors along with economic recovery in
the region improved investor confidence and attracted investors back to the
region.
GROWTH IN TECHNOLOGY AND TELECOMMUNICATIONS LEADING THE WAY
As in the United States in 1999, investors in Southeast Asia have shown
tremendous excitement about the growth in the high technology and
telecommunications industries. The surging use of the Internet by both business
and consumers has been no less a phenomenon in Asia than in the U.S., and both
of these industries have been direct beneficiaries. Moreover, many entrepreneurs
are building successful businesses in these industries, expanding the base of
growth to the small- and mid-size company level, and contributing to the
phenomenal growth of private enterprise that we have seen.
The technology boom has allowed Asian countries to "leapfrog" stages of
technological development. For example, the wireless telecommunications industry
has seen tremendous growth in some of the emerging countries, most importantly
China, because there are not nearly as many fixed telephone lines per capita as
there are in the U.S. This has allowed companies like China Telecom (9.2% of net
assets) to rapidly grow its wireless business.
FUND BROADENS HORIZONS
As the Asian recovery becomes more clear and its capital markets become more
mature, the Fund broadened its investment horizons to include the exciting
growth economics of Taiwan, Korea and India. Taiwan and Korea have benefitted
from their increasing global presence in semi-conductor and PC manufacturing.
India has enjoyed a boom in software development that has significantly impacted
its economy. While we are excited about diversifying the portfolio, we retain
many of our core Hong Kong and Singapore investments, which we believe still
represent some of the best ways to benefit from Asia's growth.
TOP FIVE SECTOR BREAKDOWNS 12/31/99 VS 12/31/98
[GRAPH PERFORMANCE]
<TABLE>
<CAPTION>
12/31/99 12/31/98
-------- --------
<S> <C> <C>
Financial 30.0% 49.4%
Consumer Cyclical 28.7% 17.2%
Technology 16.8% 7.5%
Utilities 9.4% 16.1%
Capital Goods 6.5% 7.5%
</TABLE>
Sector breakdowns are calculated as a percentage of net assets. Because the Fund
is actively managed, there can be no guarantee the Fund will continue to
maintain the current sector breakdown in the future.
Industry sectors in the following financial statements are based upon the
standard industrial classifications (SIC) is published by the U.S. Office of
Management and Budget. The sector classifications used on this page are based
upon the advisors defined criteria as used in the investment process.
TOP COUNTRY BREAKDOWN AS OF 12/31/99
Hong Kong 58.3%
- ----------------------------
Singapore 24.8%
- ----------------------------
Taiwan 4.3%
- ----------------------------
India 3.2%
- ----------------------------
South Korea 2.3%
- ----------------------------
Philippines 0.9%
- ----------------------------
Country breakdown is calculated as a percentage of net assets. Because the Fund
is actively managed, there can be no guarantee the Fund will continue to
maintain the current country breakdown in the future.
2
<PAGE> 5
PORTFOLIO MANAGERS' REPORT (continued)
OUTLOOK: ONGOING ECONOMIC RECOVERY
We believe the year 2000 will bring continued economic growth to the Asian
region, driven by investment in productivity-enhancing technologies and rising
consumer spending. There may be some volatility in the global financial markets,
which may spill over into Asia -- especially if the volatility originates in the
highly influential U.S. stock market. But the regions' domestic economic trends,
that have been discussed, are expected to continue, and this may be good news
for investors in the Asian markets.
/s/ Tim Tuttle /s/ Chris Legallet
- ---------------------- ----------------------
Tim Tuttle Chris Legallet
Tim Tuttle and Chris Legallet are portfolio co-managers of Newport Tiger Fund.
Mr. Tuttle is President of Newport Fund Management, Inc. and Mr. Legallet is
Chief Investment Officer and Senior Vice President of Newport Fund Management,
Inc.
<TABLE>
<CAPTION>
TOP 10 HOLDINGS AS OF 12/31/99
<C> <C>
1. China Telecom Ltd. 9.2%
- -----------------------------------------------------
2. DBS Group Holdings Ltd. 7.5%
- -----------------------------------------------------
3. Hutchinson Whampoa Ltd. 7.1%
- -----------------------------------------------------
4. Cheung Kong Holdings 6.5%
- -----------------------------------------------------
5. Singapore Press Holdings Ltd. 6.5%
- -----------------------------------------------------
6. Sun Hung Kai Properties Ltd. 5.4%
- -----------------------------------------------------
7. Hong Kong and China Gas 4.9%
- -----------------------------------------------------
8. HSBC Holdings PLC 4.4%
- -----------------------------------------------------
9. Oversea-Chinese Banking Corp., Ltd. 3.4%
- -----------------------------------------------------
10. Li & Fung Ltd. 3.2%
- -----------------------------------------------------
</TABLE>
Holdings are calculated as a percentage of net assets. Because the Fund is
actively managed, there can be no guarantee the Fund will continue to hold these
securities in the future.
BOUGHT
- --------------------------------------------------------------------------------
TAIWAN SEMICONDUCTOR MANUFACTURING CO. (2.8% of net assets) provides foundry
services and specialized manufacturing expertise for companies that design
semiconductors, such as Intel and AMD. We believe the company is on the leading
edge of an industry that is experiencing explosive growth.
KOREA TELECOM CORP. (2.3% of net assets) is the largest fixed-line telephone
company in Korea and has the second-largest wireless business in the country. In
addition, Korea Telecom has the largest Internet business in Korea, providing
diversity and growth potential for the company.
- ----------
International investing offers significant long-term growth potential, but also
involves certain risks. Because many of the Tiger countries are considered
emerging markets, they are subject to a greater degree of social, political,
currency and economic instability.
3
<PAGE> 6
PERFORMANCE INFORMATION
PERFORMANCE OF A $10,000 INVESTMENT IN NEWPORT TIGER FUND CLASS A SHARES
12/31/89 - 12/31/99
[GRAPH PERFORMANCE]
Newport Tiger Fund Newport Tiger Fund
MSCI EAFE Index Without sales charge With sales charge
12/31/89 10,000 10,000 9,425
12/31/90 7,655 8,486 7,998
12/31/91 8,584 10,694 10,079
12/31/92 7,539 13,049 12,299
12/31/93 9,994 22,883 21,567
12/31/94 10,771 20,146 18,987
12/31/95 11,979 23,426 22,079
12/31/96 12,703 25,988 24,494
12/31/97 12,929 17,165 16,178
12/31/98 15,515 15,092 14,224
12/31/99 19,698 26,120 24,618
PERFORMANCE OF A $10,000 INVESTMENT IN NEWPORT TIGER FUND IN ALL SHARE CLASSES
12/31/89 - 12/31/99
<TABLE>
<CAPTION>
Without With
sales sales
charge charge
------ ------
<S> <C> <C>
Class A $26,120 $24,618
- --------------------------------------------------------------
Class B $25,173 $25,173
- --------------------------------------------------------------
Class C $25,193 $25,193
- --------------------------------------------------------------
Class T $26,383 $24,866
- --------------------------------------------------------------
Class Z $26,345
- --------------------------------------------------------------
</TABLE>
The Morgan Stanley Capital International (MSCI) EAFE (GDP) Index is an unmanaged
index that tracks the performance of equity securities of developed countries
outside North America, including Hong Kong and Singapore. Unlike mutual funds,
indexes are not investments and do not incur fees or expenses. It is not
possible to invest directly in an index.
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/1999
<TABLE>
<CAPTION>
Share Class A B C T Z
Inception 4/1/95 4/1/95 4/1/95 5/31/89 5/31/89
- --------------------------------------------------------------------------------------------------------------------------
w/o sales with sales w/o sales with sales w/o sales with sales w/o sales with sales w/o sales
charge charge charge charge charge charge charge charge charge
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 year 73.14% 63.18% 71.82% 66.82% 71.85% 70.85% 73.49% 63.51% 73.68%
- --------------------------------------------------------------------------------------------------------------------------
5 years 5.34 4.09 4.56 4.22 4.58 4.58 5.55 4.30 5.52
- --------------------------------------------------------------------------------------------------------------------------
10 years 10.08 9.43 9.67 9.67 9.68 9.68 10.19 9.54 10.17
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
Past performance cannot predict future investment results. Returns and value of
an investment will vary, resulting in a gain or loss on sale. All results shown
assume reinvestment of distributions. The "with sales charge" returns include
the maximum 5.75% charge for Class A and T shares and the maximum contingent
deferred sales charges (CDSC) of 5% for one year and 2% for five years for Class
B shares and 1% for one year for Class C shares. Performance for different share
classes will vary based on differences in sales charges and fees associated with
each class.
Performance results reflect any voluntary waivers or reimbursement of Fund
expenses by the Advisor or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower.
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 (since designated as C) 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, B, and C share performance
information includes returns of the Fund's Class T shares for periods prior to
the inception dates of those classes. These Class T share returns are not
restated to reflect any expense differential (e.g., Rule 12b-1 fees) between
Class T shares and the Class A, B, and C shares. Had the expense differential
been reflected, the returns for periods prior to the inception date of the Class
A, B and C shares would have been lower. Performance of a $10,000 investment in
Newport Tiger Fund in all share classes 12/31/89 -- 12/31/99
4
<PAGE> 7
INVESTMENT PORTFOLIO
December 31, 1999
(In thousands)
<TABLE>
<CAPTION>
COMMON STOCKS 94.7% COUNTRY SHARES VALUE
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
FINANCE, INSURANCE & REAL ESTATE 51.2%
DEPOSITORY INSTITUTIONS 18.5%
Bangkok Bank Ltd. (a) Th 578 $ 1,463
Bank of Philippine Islands Ph 1,075 3,094
DBS Group Holdings Ltd. Si 5,348 87,659
HSBC Holdings PLC (b) HK 3,653 50,928
Hang Seng Bank HK 2,941 33,577
Oversea-Chinese Banking Corp., Ltd. Si 4,315 39,641
---------
216,362
---------
Citic Pacific Ltd. HK 8,221 30,934
Hutchison Whampoa Ltd. HK 5,694 82,771
Singapore Technologies Engineering Ltd. Si 21,825 33,809
---------
147,514
---------
NONDEPOSITORY CREDIT INSTITUTIONS 0.1%
Housing Development Finance Ltd. Id 102 671
---------
REAL ESTATE 20.0%
Ayala Land, Inc. Ph 398 104
Cheung Kong Holdings Ltd. HK 5,997 76,182
China Resources Enterprises Ltd. HK 14,000 22,422
City Developments Ltd. Si 6,361 37,238
HKR International Ltd. HK 6,000 4,207
SM Prime Holdings, Inc. Ph 37,534 7,078
Sun Hung Kai Properties Ltd. HK 6,070 63,250
Swire Pacific Ltd., Series A HK 3,992 23,571
---------
234,052
---------
MANUFACTURING 7.2%
ELECTRICAL COMPONENTS 0.2%
Chartered Semiconductor
Manufacturing Ltd., ADR (a) Si 6 402
United Microelectronics Corp., Ltd. Tw 620 2,213
---------
2,615
---------
FOOD & KINDRED PRODUCTS 0.2%
Hindustan Lever Ltd. Id 35 1,818
---------
MEASURING & ANALYZING INSTRUMENTS 0.3%
China Hong Kong Photo
Products Holdings, Ltd. HK 31,400 4,039
---------
PRINTING & PUBLISHING 6.5%
Singapore Press Holdings Ltd. Si 3,491 75,677
---------
MINING & ENERGY 0.1%
OIL & GAS EXTRACTION
Gulf Indonesia Resources Ltd. In 200 1,625
---------
RETAIL TRADE 3.0%
APPAREL & ACCESSORY STORES 1.6%
Esprit Holdings Ltd. HK 808 $ 873
Giordano International Ltd. HK 17,382 17,888
---------
18,761
---------
FOOD STORES 1.4%
President Chain Store Corp. Tw 3,650 16,106
---------
SERVICES 7.0%
COMPUTER RELATED SERVICES 1.3%
Datacraft Asia Ltd. Si 1,792 14,874
---------
COMPUTER SOFTWARE 5.7%
Infosys Technologies Ltd. Id 104 34,539
Taiwan Semiconductor
Manufacturing Co., ADR (a) Tw 6,065 32,272
---------
66,811
---------
TRANSPORTATION, COMMUNICATION,
ELECTRIC, GAS & SANITARY SERVICES 20.9%
COMMUNICATIONS 0.6%
Advanced Information Services Th 386 6,508
---------
ELECTRICAL SERVICES 2.3%
CLP Holdings Ltd. HK 3,502 16,128
Hong Kong Electric
Holdings Ltd. HK 3,608 11,279
---------
27,407
---------
GAS SERVICES 4.9%
Hong Kong and
China Gas Co., Ltd. HK 42,150 57,747
---------
TELECOMMUNICATION 13.1%
Cable & Wireless HKT Ltd. (b) HK 6,136 17,908
China Telecom Ltd. (a)(b) HK 16,606 106,901
Korea Telecom Corp., ADR Ko 363 27,161
PT Indonesian Satellite Corp. In 522 1,165
---------
153,135
---------
WHOLESALE TRADE 5.1%
DURABLE GOODS
Johnson Electric Holdings Ltd. HK 3,444 22,110
Li & Fung Ltd. HK 15,120 37,929
---------
60,039
---------
TOTAL COMMON STOCKS
(cost of $706,301) (c) 1,105,761
---------
</TABLE>
5
<PAGE> 8
INVESTMENT PORTFOLIO (continued)
December 31, 1999
(In thousands)
<TABLE>
<CAPTION>
SHORT-TERM OBLIGATIONS 6.1% PAR VALUE
- ----------------------------------------------------------------------
<S> <C> <C>
Repurchase agreement with
SBC Warburg Ltd.,
dated 12/31/99, due 01/03/00
at 2.500%, collateralized by U.S.
Treasury bonds and/or
notes with maturities to 2021,
market value $39,638
(repurchase proceeds $38,843) $38,835 $38,835
Federal Home Loan Bank
Discount Note,
1.500% 01/03/00 (d) 32,189 32,185
----------
TOTAL SHORT-TERM OBLIGATIONS 71,020
----------
OTHER ASSETS & LIABILITIES, NET (0.8%) (9,481)
----------
NET ASSETS 100.0% $1,167,300
----------
</TABLE>
NOTES TO INVESTMENT PORTFOLIO:
(a) Non-income producing.
(b) The value of this security represents fair value as determined in good
faith under the direction of the Trustees.
(c) Cost for federal income tax purposes is $706,559.
(d) Rate represents yield at date of purchase.
<TABLE>
<CAPTION>
Summary of Securities
by Country Country Value % of Total
- ------------------------------------------------------------------------
<S> <C> <C> <C>
Hong Kong HK $ 680,644 61.6
Singapore Si 289,300 26.2
Taiwan Tw 50,591 4.6
India Id 37,028 3.3
Korea Ko 27,161 2.5
Philippines Ph 10,276 0.9
Thailand Th 7,971 0.7
Indonesia In 2,790 0.2
---------- -----
$1,105,761 100.0
========== =====
</TABLE>
Certain securities are listed by country of underlying exposure but may trade
predominantly on other exchanges.
Acronym Name
------- ---------------------------
ADR American Depositary Receipt
See notes to financial statements.
6
<PAGE> 9
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999
(In thousands except for per share amounts and footnotes)
<TABLE>
<S> <C> <C>
ASSETS
Investments at value (cost $706,301) $1,105,761
Short-term obligations 71,020
----------
1,176,781
Cash including foreign currencies (cost $115) $ 116
Receivable for:
Fund shares sold 1,512
Dividends 139
Interest 3
Other 1 1,771
------ ----------
Total Assets 1,178,552
LIABILITIES
Payable due to custodian bank 4
Payable for:
Fund shares repurchased 8,047
Accrued:
Distribution fee -- Class B 17
Distribution fee -- Class C 3
Transfer Agent fee 17
Deferred Trustees fees 12
Other 3,152
Total Liabilities ------ 11,252
----------
NET ASSETS $1,167,300
==========
Net asset value & redemption price per share--
Class A ($403,082/29,923) $ 13.47(a)
==========
Maximum offering price per share--
Class A ($13.47/0.9425) $ 14.29(b)
==========
Net asset value & offering price per share--
Class B ($407,179/30,774) $ 13.23(a)
==========
Net asset value & offering price per share--
Class C ($73,038/5,513) $ 13.25(a)
==========
Net asset value & redemption price per share--
Class T ($69,503/5,154) $ 13.48(a)
==========
Maximum offering price per share--
Class T ($13.48/0.9425) $ 14.30(b)
==========
Net asset value, offering & redemption price
per share-- Class Z ($214,498/15,939) $ 13.46
==========
COMPOSITION OF NET ASSETS
Capital paid in $1,104,452
Accumulated net investment loss (151)
Accumulated net realized loss (333,707)
Net unrealized appreciation on:
Investments 396,705
Foreign currency transactions 1
----------
$1,167,300
==========
STATEMENTS OF OPERATIONS
For the year ended December 31, 1999
(In thousands)
INVESTMENT INCOME
Dividends $ 22,822
Interest 1,192
----------
Total Investment Income (net of
nonrebatable foreign taxes at source
which amounted to $1,070) 24,014
EXPENSES
Management fee $6,778
Administration fee 2,176
Service fee -- Class A, Class B, Class C 1,669
Distribution fee -- Class B 2,360
Distribution fee -- Class C 424
Transfer agent fee 2,863
Bookkeeping fee 314
Trustees fee 41
Custodian fee 665
Audit fee 54
Legal fee 104
Registration fee 105
Reports to shareholders 86
Other 200 17,839
------ ----------
Net Investment Income 6,175
----------
NET REALIZED & UNREALIZED GAIN (LOSS) ON
PORTFOLIO POSITIONS
Net realized loss on:
Investments (22,613)
Foreign currency transactions (241)
-------
Net Realized Loss (22,854)
Net change in unrealized appreciation/
depreciation during the period on:
Investments 522,829
Foreign currency transactions 1
-------
Net Change in Unrealized
Appreciation/Depreciation 522,830
----------
Net Gain 499,976
----------
Increase in Net Assets from Operations $ 506,151
----------
</TABLE>
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
(b) On sales of $50,000 or more the offering price is reduced.
See notes to financial statements.
7
<PAGE> 10
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
(In thousands)
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
-------------------------
INCREASE (DECREASE) IN NET ASSETS 1999 1998
---------- ----------
<S> <C> <C>
Operations:
Net investment income $ 6,175 $ 13,928
Net realized loss (22,854) (203,334)
Net change in unrealized
appreciation/depreciation 522,830 55,638
---------- ----------
Net Increase (Decrease) from
Operations 506,151 (133,768)
---------- ----------
Distributions:
From net investment income -- Class A -- (4,839)
From net investment income -- Class B -- (3,032)
From net investment income -- Class C -- (503)
From net investment income -- Class T -- (1,162)
From net investment income -- Class Z -- (3,078)
---------- ----------
506,151 (146,382)
---------- ----------
Fund Share Transactions:
Receipts for shares sold -- Class A 337,545 390,952
Value of distributions reinvested --
Class A -- 3,964
Cost of shares repurchased -- Class A (351,949) (423,839)
---------- ----------
(14,404) (28,923)
---------- ----------
Receipts for shares sold -- Class B 44,246 118,738
Value of distributions reinvested --
Class B -- 2,739
Cost of shares repurchased -- Class B (95,444) (150,324)
---------- ----------
(51,198) (28,847)
---------- ----------
Receipts for shares sold -- Class C 16,627 36,392
Value of distributions reinvested --
Class C -- 463
Cost of shares repurchased -- Class C (24,040) (41,371)
---------- ----------
(7,413) (4,516)
---------- ----------
Receipts for shares sold -- Class T 977 3,578
Value of distributions reinvested --
Class T -- 994
Cost of shares repurchased -- Class T (14,788) (22,132)
---------- ----------
(13,811) (17,560)
---------- ----------
Receipts for shares sold -- Class Z 248,592 149,223
Value of distributions reinvested --
Class Z -- 2,303
Cost of shares repurchased -- Class Z (269,699) (167,695)
---------- ----------
(21,107) (16,169)
---------- ----------
Net Decrease from Fund
Share Transactions (107,933) (96,015)
---------- ----------
Total Increase (Decrease) 398,218 (242,397)
NET ASSETS
Beginning of period 769,082 1,011,479
---------- ----------
End of period (including accumulated
net investment loss and net of
overdistributed net investment income
of $151 and $7,483, respectively) $1,167,300 $ 769,082
========== ==========
<CAPTION>
YEARS ENDED
DECEMBER 31,
-------------------------
NUMBER OF FUND SHARES 1999 1998
---------- ----------
<S> <C> <C>
Sold -- Class A 34,856 53,978
Issued for distributions reinvested --
Class A -- 511
Repurchased-- Class A (37,079) (58,196)
---------- ----------
(2,223) (3,707)
---------- ----------
Sold -- Class B 4,753 16,083
Issued for distributions reinvested --
Class B -- 348
Repurchased -- Class B (10,384) (20,659)
---------- ----------
(5,631) (4,228)
---------- ----------
Sold -- Class C 1,768 4,975
Issued for distributions reinvested --
Class C -- 59
Repurchased -- Class C (2,524) (5,782)
---------- ----------
(756) (748)
---------- ----------
Sold -- Class T 108 492
Issued for distributions reinvested --
Class T -- 128
Repurchased -- Class T (1,589) (3,092)
---------- ----------
(1,481) (2,472)
---------- ----------
Sold -- Class Z 30,097 20,851
Issued for distributions reinvested --
Class Z -- 297
Repurchased -- Class Z (32,091) (23,285)
---------- ----------
(1,994) (2,137)
---------- ----------
</TABLE>
(a) Rounds to less than one.
See notes to financial statements.
8
<PAGE> 11
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1. ACCOUNTING POLICIES
ORGANIZATION:
Newport Tiger Fund (the Fund), a series of Liberty Funds Trust VII, formerly
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 C, Class T and Class Z. Class A shares are sold with a
front-end sales charge. 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. A 1.00% contingent deferred sales charge is assessed
on Class A and Class T share redemptions made within eighteen months on an
original purchase of $1 million to $5 million. 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, as described in the Fund's 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 of a foreign
market, the foreign securities may be valued at their fair value under
procedures approved by the Trustees.
Forward currency contracts are valued based on the weighted value of the
contracts with similar maturities. 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 is
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), 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 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 and currency gains (losses)
between the accrual and payment dates on dividends and interest income and
foreign withholding taxes.
9
<PAGE> 12
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
December 31, 1999
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.
FOREIGN 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 2. FEES AND COMPENSATION PAID TO AFFILIATES
MANAGEMENT FEE:
Newport Fund Management (the Advisor) is the investment Advisor 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>
ADMINISTRATION FEE:
Colonial Management Associates, Inc. (the Administrator), an affiliate of the
Advisor, 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 a monthly fee
equal to $27,000 annually plus a percentage of the Fund's average net assets as
follows:
<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 FEE:
Liberty Funds Services, Inc. (the Transfer Agent), an affiliate of the
Administrator, provides shareholder services for a monthly fee equal to 0.236%
annually of the Fund's average net assets and receives reimbursement for certain
out-of-pocket expenses.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES:
Liberty Funds Distributor, Inc. (the Distributor), a subsidiary of the
Administrator, is the Fund's principal underwriter. For the year ended December
31, 1999, the Fund has been advised that the Distributor retained net
underwriting discounts of $84,919 on sales of the Fund's Class A and Class T
shares and received contingent deferred sales charges (CDSC) of $21,609,
$1,965,895, $27,407 and none on Class A, Class B, Class C and Class T 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 year ended December 31, 1999, the Fund's operating expenses, as defined
above, did not exceed the 1.55% expense limit.
OTHER:
The Fund pays no compensation to its officers, all of whom are employees of the
Advisor or Administrator.
10
<PAGE> 13
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
December 31, 1999
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, 1999, purchases and sales of investments,
other than short-term obligations, were $115,947,773 and $264,649,968,
respectively.
Unrealized appreciation (depreciation) at December 31, 1999, based on cost of
investments for federal income tax purposes was approximately:
<TABLE>
<S> <C>
Gross unrealized appreciation $456,404,000
Gross unrealized depreciation (57,202,000)
------------
Net unrealized appreciation $399,202,000
============
</TABLE>
CAPITAL LOSS CARRYFORWARDS:
At December 31, 1999, capital loss carryforwards available (to the extent
provided in regulations) to offset future realized gains were approximately as
follows:
<TABLE>
<CAPTION>
YEAR OF EXPIRATION CAPITAL LOSS CARRYFORWARD
- ------------------ -------------------------
<S> <C>
2005 $ 81,206,000
2006 229,760,000
2007 22,165,000
------------
$333,131,000
============
</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 4. LINE OF CREDIT
The Fund may borrow up to 331 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 1/2 of 1%, (2) the lending bank's base rate or (3) IBOR offshore
loan rate plus 1 1/2 of 1%. There were no borrowings under the line of credit
during the year ended December 31, 1999.
11
<PAGE> 14
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for a share of each class outstanding
throughout each period are as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1999
---------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS T CLASS Z
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD
INCOME FROM INVESTMENT OPERATIONS: $ 7.780 $ 7.700 $ 7.710 $ 7.770 $ 7.750
-------- --------- ------- ------- --------
Net investment income (a) 0.091 0.021 0.020 0.116 0.116
Net realized and unrealized gain 5.599 5.509 5.520 5.594 5.594
-------- --------- ------- ------- --------
Total from Investment Operations 5.690 5.530 5.540 5.710 5.710
-------- --------- ------- ------- --------
NET ASSET VALUE, END OF PERIOD $ 13.470 $ 13.230 $13.250 $13.480 $ 13.460
======== ========= ======= ======= ========
Total return (b) 73.14% 71.82% 71.85% 73.49% 73.68%
======== ========= ======= ======= ========
RATIOS TO AVERAGE NET ASSETS
Expenses (c) 1.77% 2.52% 2.52% 1.52% 1.52%
Net investment income (c) 0.97% 0.22% 0.22% 1.22% 1.22%
Portfolio turnover 14% 14% 14% 14% 14%
Net assets at end of period (000) $403,082 $407,179 $73,038 $69,503 $214,498
</TABLE>
(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.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1998
---------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS T CLASS Z
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD
INCOME FROM INVESTMENT OPERATIONS: $ 9.020 $ 8.920 $ 8.940 $ 9.010 $ 9.010
-------- --------- ------- ------- --------
Net investment income (a) 0.145 0.091 0.091 0.163 0.163
Net realized and unrealized loss (1.234) (1.228) (1.241) (1.232) (1.252)
-------- --------- ------- ------- --------
Total from Investment Operations (1.089) (1.137) (1.150) (1.070) (1.090)
-------- --------- ------- ------- --------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.151) (0.083) (0.080) (0.171) (0.171)
-------- --------- ------- ------- --------
NET ASSET VALUE, END OF PERIOD $ 7.780 $ 7.700 $ 7.710 $ 7.770 $ 7.750
======== ========= ======= ======= ========
Total return (b) (12.08)% (12.77)% (12.89)% (11.87)% (12.09)%
======== ========= ======= ======= ========
RATIOS TO AVERAGE NET ASSETS
Expenses (c) 1.78% 2.53% 2.53% 1.53% 1.53%
Net investment income (c) 2.02% 1.27% 1.27% 2.27% 2.27%
Portfolio turnover 15% 15% 15% 15% 15%
Net assets at end of period (000) $250,089 $280,163 $48,316 $51,526 $138,988
</TABLE>
(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.
12
<PAGE> 15
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
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 CLASS T CLASS Z
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD
INCOME FROM INVESTMENT OPERATIONS: $ 13.750 $ 13.640 $13.660 $13.750 $ 13.750
-------- --------- ------- ------- --------
Net investment income (loss) (b) 0.081 (0.011) (0.012) 0.112 0.112
Net realized and unrealized loss (4.735) (4.667) (4.666) (4.740) (4.740)
-------- --------- ------- ------- --------
Total from Investment Operations (4.654) (4.678) (4.678) (4.628) (4.628)
-------- --------- ------- ------- --------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.034) -- -- (0.070) (0.070)
From net realized gains (0.042) (0.042) (0.042) (0.042) (0.042)
-------- --------- ------- ------- --------
Total Distributions Declared to Shareholders (0.076) (0.042) (0.042) (0.112) (0.112)
======== ========= ======= ======= ========
NET ASSET VALUE, END OF PERIOD $ 9.020 $ 8.920 $ 8.940 $ 9.010 $ 9.010
======== ========= ======= ======= ========
Total return (c) (33.95)% (34.41)% (34.36)% (33.76)% (33.76)%
======== ========= ======= ======= ========
RATIOS TO AVERAGE NET ASSETS
Operating expenses (d) 1.73% 2.48% 2.48% 1.48% 1.48%
Interest expense (e) (e) (e) (e) (e)
Total expenses (d) 1.73% 2.48% 2.48% 1.48% 1.48%
Net investment income (loss) (d) 0.64% (0.11)% (0.11)% 0.89% 0.89%
Portfolio turnover 12% 12% 12% 12% 12%
Net assets at end of period (000) $323,407 $ 362,442 $62,703 $82,095 $180,832
</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) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(d) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
(e) Rounds to less than 0.01%.
<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
INCOME FROM INVESTMENT OPERATIONS: $ 12.460 $ 12.390 $ 12.410 $ 12.450 $ 12.450
-------- --------- ------- ------- --------
Net investment income (loss) (a) 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%
Net assets at end of period (000) $568,497 $572,089 $108,785 $187,659 $366,849
</TABLE>
(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.
13
<PAGE> 16
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
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>
NET ASSET VALUE, BEGINNING OF PERIOD
INCOME FROM INVESTMENT OPERATIONS: $ 10.860 $ 10.860 $10.860 $ 10.800 $ 10.800
-------- --------- ------- ------- --------
Net investment income (loss) (c) 0.067 (0.003) (0.003) 0.099 0.099
Net realized and unrealized gain 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)
-------- --------- ------- ------- --------
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 (d) 15.52%(e) 14.65%(e) 14.85%(e) 16.28% 16.28%
======== ========= ======= ========= ========
RATIOS TO AVERAGE NET ASSETS
Expenses(f) 1.37%(e) 1.93%(e) 1.93%(e) 1.60% 1.60%
Net investment income(f) 0.28%(e) (0.28)%(e) (0.28)%(e) 0.75% 0.75%
Portfolio turnover 4% 4% 4% 4% 4%
Net assets at end of period (000) $196,870 $112,588 $21,420 $195,986 $345,583
</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) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(e) Not annualized.
(f) The benefits derived from custody credits and directed brokerage
arrangements had an impact of 0.07% on Class A, Class B and Class C and
0.11% on Class T and Class Z.
14
<PAGE> 17
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
TO THE TRUSTEES OF LIBERTY FUNDS TRUST VII AND
SHAREHOLDERS OF 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 Newport Tiger Fund (the "Fund"), (a
series of Liberty Funds Trust VII, formerly Colonial Trust VII), at December 31,
1999 the results of its operations, the changes in its net assets and the
financial highlights for the periods indicated in conformity with accounting
principles generally accepted in the United States. 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 auditing
standards generally accepted in the United States 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, 1999 by correspondence with the custodian, provide a reasonable
basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
February 11, 2000
15
<PAGE> 18
- --------------------------------------------------------------------------------
SHAREHOLDER SERVICE
- --------------------------------------------------------------------------------
TO MAKE INVESTING
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 Financial Investments, 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 Financial Investments 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 Financial Investments. Minimum for each transfer is $100.
RETIREMENT PLANS: Choose from a broad range of retirement plans, including IRAs
- --------------------------------------------------------------------------------
SHAREHOLDER COMMUNICATIONS
- --------------------------------------------------------------------------------
To make recordkeeping easy and keep you up-to-date on the performance of your
investments, you can expect to receive the following information about your
account:
TRANSACTION CONFIRMATIONS: Each time you make a purchase, sale or exchange, you
receive a confirmation statement within just a few days.
QUARTERLY STATEMENTS: Every three months, if any transactions are made that
affect your share balance, this statement reports on your account activity
during the quarter (including any reinvestment of dividends). This statement
also provides year-to-date information.
LIBERTY FINANCIAL INVESTMENTS INVESTOR OPPORTUNITIES: Mailed with your quarterly
account statements, this newsletter highlights timely investment strategies,
portfolio manager commentary and shareholder service updates.
TAX FORMS AND YEAR-END TAX GUIDE: Easy-to-use forms and timely information are
designed to make tax reporting simpler. (Usually mailed in January.)
AVERAGE COST BASIS STATEMENTS: If you sold or exchanged shares during the year,
this statement may help you calculate your gain/loss for tax purposes. (Usually
mailed in February.)
- ----------
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.
<PAGE> 19
- --------------------------------------------------------------------------------
TRUSTEES & TRANSFER AGENT
- --------------------------------------------------------------------------------
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)
JOHN V. CARBERRY
Senior Vice President of Liberty Financial Companies, Inc. (formerly Managing
Director, Salomon Brothers)
LORA S. COLLINS
Attorney (formerly Attorney, Kramer, Levin, Naftalis & Frankel)
JAMES E. GRINNELL
Private Investor (formerly Senior Vice President-Operations, The Rockport
Company)
RICHARD W. LOWRY
Private Investor (formerly Chairman and Chief Executive Officer, U.S. Plywood
Corporation)
SALVATORE MACERA
Private Investor (formerly Executive Vice President of Itek Corp. and President
of Itek Optical & Electronic Industries, Inc.)
WILLIAM E. MAYER
Partner, Development Capital, LLC (formerly Dean, College of Business and
Management, University of Maryland; Dean, Simon Graduate School of Business,
University of Rochester; Chairman and Chief Executive Officer, CS First Boston
Merchant Bank; and President and Chief Executive Officer, The First Boston
Corporation)
JAMES L. MOODY, JR.
Retired (formerly Chairman of the Board, Chief Executive Officer and Director
Hannaford Bros. Co.)
JOHN J. NEUHAUSER
Academic Vice President and Dean of Faculties, Boston College (former Dean,
Boston College School of Management)
THOMAS E. STITZEL
Professor of Finance, College of Business, Boise State University; Business
Consultant and Author
ROBERT L. SULLIVAN
Retired Partner, KPMG LLP (formerly Management Consultant, Saatchi and Saatchi
Consulting Ltd. and Principal and International Practice Director, Management
Consulting, Peat Marwick Main & Co.)
ANNE-LEE VERVILLE
Consultant (formerly General Manager, Global Education Industry, and President,
Applications Solutions Division, IBM Corporation)
IMPORTANT INFORMATION ABOUT THIS REPORT The Transfer Agent for Newport Tiger
Fund is:
Liberty Funds Services, Inc.
P.O. Box 1722
Boston, MA 02105-1722
1-800-345-6611
The Fund mails one shareholder report to each shareholder address. If you would
like more than one report, please call 1-800-426-3750 and additional reports
will be sent to you.
This report has been prepared for shareholders of 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 with the most recent copy of
the Liberty Funds Distributor, Inc. Performance Update.
ANNUAL REPORT
<PAGE> 20
Liberty offers the independent thinking and collective strength of six financial
specialists. Our distinguished product line helps financial advisors and their
clients build diversified investment portfolios for long-term financial goals.
- --------------------------------------------------------------------------------
LIBERTY FUNDS
- --------------------------------------------------------------------------------
ALL-STAR Institutional money management approach for individual investors.
COLONIAL Fixed income and value style equity investing.
A contrarian approach to fixed income and equity investing.
NEWPORT A leader in international investing.SM
STEIN ROE Innovative solutions for growth and income investing.
ADVISOR
KEYPORT A leading provider of innovative annuity products.
Liberty's mutual funds are offered by prospectus through Liberty
Funds Distributor, Inc.
BEFORE YOU INVEST, CONSULT YOUR FINANCIAL ADVISOR.
Your financial advisor can help you develop a long-term plan for reaching your
financial goals.
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NEWPORT TIGER FUND ANNUAL REPORT
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[LIBERTY FUNDS LOGO] BULK RATE
U.S. POSTAGE
PAID
Holliston, MA
PERMIT NO. 20
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