COLONIAL HIGH YIELD SECURITIES FUND
COLONIAL INCOME FUND
COLONIAL STRATEGIC INCOME FUND
COLONIAL MONEY MARKET FUND
COLONIAL U.S. GOVERNMENT FUND
COLONIAL ADJUSTABLE RATE U.S. GOVERNMENT FUND
COLONIAL GROWTH SHARES FUND
THE COLONIAL FUND
COLONIAL FEDERAL SECURITIES FUND
COLONIAL GLOBAL EQUITY FUND
COLONIAL NATURAL RESOURCES FUND
COLONIAL STRATEGIC BALANCED FUND
COLONIAL INTERNATIONAL FUND FOR GROWTH
COLONIAL TAX-EXEMPT FUND
COLONIAL TAX-EXEMPT INSURED FUND
COLONIAL TAX-EXEMPT MONEY MARKET FUND
COLONIAL HIGH YIELD MUNICIPAL FUND
COLONIAL UTILITIES FUND
C0LONIAL INTERMEDIATE TAX-EXEMPT FUND
COLONIAL SHORT-TERM TAX-EXEMPT FUND
COLONIAL MASSACHUSETTS TAX-EXEMPT FUND
COLONIAL MICHIGAN TAX-EXEMPT FUND
COLONIAL MINNESOTA TAX-EXEMPT FUND
COLONIAL NEW YORK TAX-EXEMPT FUND
COLONIAL OHIO TAX-EXEMPT FUND
COLONIAL CALIFORNIA TAX-EXEMPT FUND
COLONIAL CONNECTICUT TAX-EXEMPT FUND
COLONIAL FLORIDA TAX-EXEMPT FUND
COLONIAL NORTH CAROLINA TAX-EXEMPT FUND
COLONIAL U.S. FUND FOR GROWTH
COLONIAL SMALL STOCK FUND
Prospectus Supplement
The Colonial Group, Inc. (TCG) and Liberty Financial Companies, Inc.
(Liberty), a wholly-owned subsidiary of Liberty Mutual Insurance
Company, have entered into a defintive agreement through which TCG
became a subsidiary of Liberty (Transaction). Please note that once
this Transaction is completed, Colonial Management Associates, Inc.
(Manager) will remain a separate organization. There are no plans to
change the management structure of any Colonial fund as a consequence
of this merger. Please remember that the value of Fund shares would
not be affected by this Transaction.
The Transaction, if completed, would constitute a change of control of
the Manager (a subsidiary of TCG) and thus an assignment of the
Management Contract between each Trust, on behalf of each Fund, and
the Manager, as well as the Distributor's Contract between each Trust
and the Distributor, which according to the terms of such agreements
and in accordance with the Investment Company Act of 1940 (Act), would
result in their termination. The termination of the Management
Contracts would, in turn, automatically terminate the Sub-Adviser
Agreements with respect to Colonial International Fund for Growth and
Colonial U.S. Fund for Growth.
The Trustees of the Trusts are expected to meet in the near future to
consider whether to approve new Management and and Distributor
Contracts, and new Sub-Adviser Agreements, each to take effect upon
consummation of the Transaction and each to contain substantially the
same terms as the existing contracts, including the same fee
provisions.
Under the Act, each new Management Contract and Sub-Adviser Agreement
must be approved by the shareholders of the relevent Fund. If the
shareholders of a Fund do not approve the proposed new Mangement
Contract and, if applicable, the Sub-Adviser Agreement related to that
Fund, the Trustees of the relevant Trust will take such action as they
believe to be in the best interests of that Trust and its
shareholders.
Consummation of the Transaction is subject to certain conditions set
forth in the Agreement.
Colonial looks forward to serving your financial needs now and in the
future.
D-36/217A-1094
October 24, 1994
<PAGE>
October 28, 1994
Revised February 28, 1995
COLONIAL SMALL STOCK FUND
PROSPECTUS
BEFORE YOU INVEST
Colonial Management Associates, Inc. (Adviser) and your full-service
financial adviser want you to understand both the risks and benefits
of mutual fund investing.
While mutual funds offer significant opportunities and are
professionally managed, they also carry risk including possible loss
of principal. Unlike savings accounts and certificates of deposit,
mutual funds are not insured or guaranteed by any financial
institution or government agency.
Please consult your full-service financial adviser to determine how
investing in this mutual fund may suit your unique needs, time horizon
and risk tolerance.
Colonial Small Stock Fund (Fund), a diversified portfolio of Colonial
Trust VI (Trust), an open-end management investment company, seeks
long-term growth by investing primarily in smaller capitalization
equities. The Fund is managed by the Adviser, an investment adviser
since 1931.
This Prospectus explains concisely what you should know before
investing in the Fund. Read it carefully and retain it for future
reference.
SS-01/665A-0295
More detailed information about the Fund is in the October 28, 1994
Statement of Additional Information which has been filed with the
Securities and Exchange Commission and is obtainable free of charge by
calling the Adviser at 1-800-248-2828. The Statement of Additional
Information is incorporated by reference in (which means it is
considered to be a part of) this Prospectus.
The Fund offers two classes of shares. Class A shares are offered at
net asset value plus a sales charge imposed at the time of purchase;
Class B shares are offered at net asset value plus an annual
distribution fee for eight years and a declining contingent deferred
sales charge on redemptions made within six years after purchase.
Class B shares automatically convert to Class A shares after eight
years. See "How to buy shares."
Contents Page
Summary of expenses 2
The Fund's financial history 3
The Fund's investment objective 4
How the Fund pursues its objective 4
How the Fund measures its performance 5
How the Fund is managed 5
How the Fund values its shares 6
Distributions and taxes 6
How to buy shares 6
How to sell shares 7
How to exchange shares 8
Telephone transactions 9
12b-1 plans 9
Organization and history 9
FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED,
ENDORSED OR INSURED BY, ANY BANK OR GOVERNMENT AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
SUMMARY OF EXPENSES
Expenses are one of several factors to consider when investing in the
Fund. The following tables summarize your maximum transaction costs
and estimated annual expenses for an investment in each class of the
Fund's shares.
Shareholder Transaction Expenses (1)(2)
Class A Class B
Maximum Initial Sales Charge
Imposed on a Purchase
(as a % of offering price)(3) 5.75% 0.00%(5)
Maximum Contingent Deferred
Sales Charge
(as a % of offering price)(3) 1.00%(4) 5.00%
(1)For accounts less than $1,000 an annual fee of $10 may be deducted.
See "How to sell shares."
(2)Redemption proceeds exceeding $5,000 sent via federal funds wire
will be subject to a $7.50 charge per transaction.
(3)Does not apply to reinvested distributions.
(4)Only with respect to any portion of purchases of $1 million to $5
million redeemed within approximately 18 months after purchase. See
"How to buy shares."
(5)Because of the 0.75% distribution fee applicable to Class B
shares, long-term Class B shareholders may pay more in aggregate
sales charges than the maximum initial sales charge permitted by the
National Association of Securities Dealers, Inc. However, because
the Fund's Class B shares automatically convert to Class A after 8
years, this is less likely than for a class without a conversion
feature.
Annual Operating Expenses (as a % of net assets)
Class A Class B
Management fee 0.60% 0.60%
12b-1 fee 0.25 1.00
Other expenses 0.71 0.71
---- ----
Total expenses 1.56% 2.31%
==== ====
Example
The following Example shows the cumulative expenses attributable to a
hypothetical $1,000 investment in each Class for the periods
specified, assuming a 5% annual return and, unless otherwise noted,
redemption at period end. The 5% return and expenses used in this
Example should not be considered indicative of actual or expected Fund
performance or expenses, both of which will vary:
Class A Class B
Period: (6)
1 year $ 72 $ 74 $ 24
3 years $104 $103 $ 73
5 years $137 $145 $125
10 years $232 $248(7) $248(7)
(6)Assumes no redemption.
(7)Class B shares convert to Class A shares after 8 years; therefore,
years 9 and 10 reflect Class A expenses.
THE FUND'S FINANCIAL HISTORY
The following schedule of financial highlights for a share outstanding
throughout each period has been examined by Price Waterhouse LLP, independent
accountants. Their unqualified report is included in the Fund's 1994 Annual
Report, and is incorporated by reference into the Statement of Additional
Information. The Fund adopted its current objective of seeking long-term
capital growth on November 2, 1992. The data presented for the Fund prior to
November 2, 1992, represent operations under earlier objectives and policies of
the Fund's predecessor, Colonial Small Stock Index Trust.
<TABLE>
<CAPTION> Year ended June 30
1994 1993 1992 1991
Class A Class B Class A Class B(b) Class A Class A
<S> <C> <C> <C> <C> <C> <C>
Net asset value - Beginning of period... $15.860 $15.790 $12.330 $13.010 $11.570 $13.560
------ ------ ------ ------ ------ ------
Income from investment operations:
Net investment income (loss)(a)...... (0.047) (0.176) (0.083) (0.100) (0.127) 0.045
Net realized and unrealized
gain (loss) on investments......... 0.857 0.856 3.163 2.880 0.887 (1.992)
----- ----- ----- ----- ----- -----
Total from investment
operations(a)..................... 0.810 0.680 3.530 2.780 0.760 (1.947)
----- ----- ----- ----- ----- -----
Less distributions declared to
shareholders:
From net investment income............. 0.000 0.000 0.000 0.000 0.000 (0.043)
From net realized gain on investments.. 0.000 0.000 0.000 0.000 0.000 0.000
----- ----- ----- ----- ----- -----
Total distributions declared to
shareholders..................... 0.000 0.000 0.000 0.000 0.000 (0.043)
----- ----- ----- ----- ----- -----
Net asset value - End of period......... $16.670 $16.470 $15.860 $15.790 $12.330 $11.570
====== ====== ====== ====== ====== ======
Total return(e)......................... 5.11% 4.31% 28.63% 21.37%(b) 6.57% (14.34)%
---- ---- ----- ----- ---- -----
Ratios to average net assets:
Operating expenses(a).............. 1.56% 2.31% 1.88% 2.63%(c) 2.13% 1.91%
Interest expense................... --- --- 0.01% 0.01% 0.06% 0.03%
Net investment income (loss)(a).... (0.27)% (1.02)% (0.60)% (1.35)%(c) (0.91)% 0.33%
Fees and expenses waived or
or borne by the Adviser........... 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Portfolio turnover..................... 35% 35% 29% 29% 0% 79%
Net assets at end of period (000)...... $24,760 $8,489 $23,716 $1,655 $22,002 $28,943
(a) Net of fees and expenses waived or
borne by the Adviser which amounted to $0.000 $0.000 $0.000 $0.000 $0.000 $0.000
</TABLE>
<TABLE>
<CAPTION>
Year ended June 30
1990 1989 1988 1987(d)
Class A Class A Class A Class A
<S> <C> <C> <C> <C>
Net asset value - Beginning of period... $13.540 $12.940 $13.810 $12.140
------ ------ ------ ------
Income from investment operations:
Net investment income (loss)(a)...... 0.048 0.061 0.066 0.057
Net realized and unrealized
gain (loss) on investments......... 0.017 0.929 (0.357) 1.643
----- ----- ----- -----
Total from investment
operations(a)..................... 0.065 0.990 (0.291) 1.700
----- ----- ----- -----
Less distributions declared to
shareholders:
From net investment income............. (0.045) (0.060) (0.074) (0.030)
From net realized gain on investments.. 0.000 (0.330) (0.505) 0.000
----- ----- ----- -----
Total distributions declared to
shareholders..................... (0.045) (0.390) (0.579) (0.030)
----- ----- ----- -----
Net asset value - End of period......... $13.560 $13.540 $12.940 $13.810
====== ====== ====== ======
Total return(e)......................... 0.49% 8.07% (2.18)%(f) 14.04%(f)
---- ---- ---- -----
Ratios to average net assets:
Operating expenses(a).............. 1.67% 1.69% 1.48% 1.33%
Interest expense................... 0.02% 0.00% 0.01% 0.02%
Net investment income (loss)(a).... 0.35% 0.48% 0.54% 0.61%
Fees and expenses waived or
or borne by the Adviser........... 0.00% 0.00% 0.23% 0.66%
Portfolio turnover..................... 17% 25% 42% 34%
Net assets at end of period (000)...... $42,888 $46,415 $44,596 $38,193
(a) Net of fees and expenses waived or
borne by the Adviser which amounted to $0.000 $0.000 $0.028 $0.062
</TABLE>
(b) Class B shares were initially offered on November 9, 1992. Per share
amounts and total return (not annualized) reflect activity from that
date.
(c) Annualized
(d) Investment operations commenced July 25, 1986 and ratios for the period
are annualized
(e) Total return is calculated assuming reinvestment of all distributions and
no initial or contingent deferred sales charges.
(f) Had the Adviser not waived or borne certain expenses, the Fund's total
return would have been lower.
Further performance information is contained in the Fund's Annual Report to
shareholders, which is obtainable free of charge by calling 1-800-248-2828.
THE FUND'S INVESTMENT OBJECTIVE
The Small Stock Fund seeks long-term growth by investing primarily in
smaller capitalization equities.
HOW THE FUND PURSUES ITS OBJECTIVE
The Fund normally invests at least 65% of its total assets in U.S.
common stocks selected from the universe of stocks traded on the New
York Stock Exchange, American Stock Exchange and NASDAQ with market
values between $20 million and $400 million (Small Stocks). In
selecting investments, the Adviser uses quantitative sampling
techniques designed to produce a portfolio whose performance (before
expenses) is representative of the performance of the Small Stock
universe. However, there is no assurance that the portfolio's
performance will match that of the universe, or that the Fund will
achieve its objective.
Small Stocks may offer greater opportunities for capital appreciation
than the securities of larger, better established companies, but may
also involve certain special risks related to limited product lines,
markets or financial resources and dependence on a small management
group. Small Stocks may trade less frequently, in smaller volumes,
and fluctuate more sharply in value than securities of larger
companies.
Other Investment Practices. The Fund may engage in the following
investment practices, some of which are described in more detail in
the Statement of Additional Information.
The Fund may purchase stock index futures contracts (index futures).
Under an index future, the Fund will either receive or pay cash on a
specified maturity date, based on the value of a specified stock index
on that date. The Fund may also seek to "close out" an index futures
position before the maturity date, realizing either a gain or a loss,
by entering into an offsetting transaction on a futures exchange. The
Fund may invest in index futures to invest cash temporarily in
anticipation of a market advance, but not to hedge against market
declines. The Fund will not make additional investments in index
futures at times when net Fund obligations under index futures exceed
5% of the Fund's net assets.
Temporarily available cash may be invested in certificates of deposit,
bankers' acceptances, high quality commercial paper, Treasury bills
and repurchase agreements. Some or all of the Fund's assets also may
be invested in such investments during periods of unusual market
conditions. Under a repurchase agreement, the Fund buys a security
from a bank or dealer, which is obligated to buy it back at a fixed
price and time. The security is held in a separate account at the
Fund's custodian and constitutes the Fund's collateral for the bank's
or dealer's repurchase obligation. Additional collateral will be
added so that the obligation will at all times be fully
collateralized. However, if the bank or dealer defaults or enters
bankruptcy, the Fund may experience costs and delays in liquidating
the collateral, and may experience a loss if it is unable to
demonstrate its right to the collateral in a bankruptcy proceeding.
Not more than 15% of the Fund's total assets will be invested in
repurchase agreements maturing in more than 7 days and other illiquid
assets.
Other. The Fund's investment objective and non-fundamental policies
may be changed without shareholder approval. The Fund will notify
investors at least 30 days prior to any material change in the Fund's
investment objective. If there is a change in investment objective,
shareholders should consider whether the Fund remains an appropriate
investment in light of their then current financial position and
needs. Shareholders may incur a contingent deferred sales charge if
shares are redeemed in response to a change in objective. The Fund's
fundamental investment policies listed in the Statement of Additional
Information cannot be changed without the approval of a majority of
the Fund's outstanding voting securities. The Statement of Additional
Information describes other investment techniques that the Fund may
use but currently has no intention of using in the foreseeable future.
HOW THE FUND MEASURES ITS PERFORMANCE
Performance may be quoted in sales literature and advertisements.
Average annual total returns are calculated in accordance with the
Securities and Exchange Commission's formula and assume the
reinvestment of all distributions, the maximum initial sales charge of
5.75% on Class A shares and the contingent deferred sales charge
applicable to the time period quoted on Class B shares. Other total
returns differ from average annual total returns in that they may
relate to different time periods, represent aggregate as opposed to
average annual total returns, and may not reflect the initial or
contingent deferred sales charges.
Each Class's yield, which differs from total return because it does
not consider changes in net asset value, is calculated in accordance
with the Securities and Exchange Commission's formula. Each Class's
distribution rate is calculated by dividing the most recent twelve
months' distributions by the maximum offering price of that Class.
Each Class's performance may be compared to various indices.
Quotations from various publications may be included in sales
literature and advertisements. See "Performance Measures" in the
Statement of Additional Information for more information.
All performance information is historical and does not predict future
results.
HOW THE FUND IS MANAGED
The Trustees formulate the Fund's general policies and oversee the
Fund's affairs as conducted by the Adviser.
The Adviser is a subsidiary of The Colonial Group, Inc. and serves as
the distributor for the Fund's shares through its Colonial Investment
Services Division (Distributor). The Colonial Group, Inc. is the
parent of Colonial Investors Service Center, Inc. (Transfer Agent),
which serves as the shareholder services and transfer agent for the
Fund. John A. McNeice, Jr. is deemed to be a controlling person of
The Colonial Group, Inc.
The Adviser furnishes the Fund with investment management, accounting
and administrative personnel and services, office space and other
equipment and services at the Adviser's expense. For these services,
the Fund pays the Adviser a fee at the annual rate of 0.60% of the
Fund's average net assets .
James P. Haynie, Vice President of the Adviser, has managed the Fund
since 1993. Prior to joining the Adviser in 1993, Mr. Haynie was a
Vice President at Massachusetts Financial Services Company and a
Portfolio Manager at Trinity Investment Management.
The Adviser also provides pricing and bookkeeping services to the Fund
for a monthly fee of $2,250 plus 0.035% of the Fund's average net
assets over $50 million.
The Transfer Agent provides transfer agency and shareholder services
to the Fund for a fee of 0.25% annually of average net assets.
Each of the foregoing fees is subject to any reimbursement or fee
waiver to which the Adviser may agree.
The Adviser places all orders for the purchase and sale of portfolio
securities. In selecting broker-dealers, the Adviser may consider
research and brokerage services furnished to it and its affiliates.
Subject to seeking best execution, the Adviser may consider sales of
shares of the Fund (and of certain other Colonial funds) in selecting
broker-dealers for portfolio security transactions.
HOW THE FUND VALUES ITS SHARES
Per share net asset value is calculated by dividing the total value of
each Class's net assets by its number of outstanding shares. Shares
are valued each day the New York Stock Exchange is open as of
approximately 4:00 p.m. Eastern time. Portfolio securities for which
market quotations are readily available are valued at market. Short-
term investments maturing in 60 days or less are valued at amortized
cost when it is determined, pursuant to procedures adopted by the
Trustees, that such cost approximates market value. All other
securities and assets are valued at their fair value following
procedures approved by the Trustees.
DISTRIBUTIONS AND TAXES
The Fund intends to qualify as a "regulated investment company" under
the Internal Revenue Code and to distribute to shareholders virtually
all net income, and any net realized gain, at least annually.
The Fund generally declares and pays distributions semi-annually in
June and December. Distributions are invested in additional shares of
the same Class of the Fund at net asset value unless the shareholder
elects to receive cash. To change your election, call the Transfer
Agent for information. Whether you receive your distributions in cash
or in additional Fund shares, you must report them as taxable income
unless you are a tax-exempt institution. If you buy shares shortly
before a distribution is declared, the distribution will be taxable
although it is, in effect, a partial return of the amount invested.
Each January, information on the amount and nature of distributions
for the prior year is sent to shareholders.
HOW TO BUY SHARES
Shares are offered continuously. Orders received in good form prior
to 4:00 p.m. Eastern time (or placed with a financial service firm
before such time and transmitted by the financial service firm before
the Fund processes that day's share transactions) will be processed
based on that day's closing net asset value, plus any applicable
initial sales charge.
The minimum initial investment is $1,000; subsequent investments may
be as small as $50. The minimum initial investment for the Colonial
Fundamatic program or a Colonial retirement account is $50.
Certificates will not be issued for Class B shares and there are some
limitations on the issuance of Class A certificates. The Fund may
refuse any purchase order for its shares. See the Statement of
Additional Information for more information.
Class A Shares. Class A shares are offered at net asset value plus an
initial sales charge or contingent deferred sales charge as follows:
Initial Sales Charge
Retained by
Financial
Service Firm
as % of as % of
Amount Offering Offering
Amount Purchased Invested Price Price
Less than $50,000 6.10% 5.75% 5.00%
$50,000 to less than $100,000 4.71% 4.50% 3.75%
$100,000 to less than $250,000 3.63% 3.50% 2.75%
$250,000 to less than $500,000 2.56% 2.50% 2.00%
$500,000 to less than $1,000,000 2.04% 2.00% 1.75%
$1,000,000 or more 0.00% 0.00% 0.00%
On purchases of $1 million or more, the Distributor pays the financial
service firm a cumulative commission as follows:
Amount Purchased Commission
First $3,000,000 1.00%
Next $2,000,000 0.50%
Over $5,000,000 0.25%(1)
(1) Paid over 12 months but only as long as shares remain
outstanding.
Purchases of $1 million to $5 million are subject to a 1% contingent
deferred sales charge payable to the Distributor on redemptions within
18 months from the first day of the month following the purchase. The
contingent deferred sales charge does not apply to the excess of any
purchase over $5 million.
Class B Shares. Class B shares are offered at net asset value,
without an initial sales charge, subject to a 0.75% annual
distribution fee and a 0.25% annual service fee for 8 years (at which
time they convert to Class A shares without a distribution fee) and a
contingent deferred sales charge if redeemed within 6 years. As shown
below, the amount of the contingent deferred sales charge depends on
the number of years after purchase from which the redemption occurs:
Years Contingent Deferred
Since Purchase Sales Charge
0-1 5.00%
1-2 4.00
2-3 3.00
3-4 3.00
4-5 2.00
5-6 1.00
more than 6 0.00
Year one ends one year after the end of the month in which the
purchase was accepted and so on. The Distributor pays financial
service firms a commission of 4% on Class B share purchases.
General. All contingent deferred sales charges are deducted from the
redemption, not the amount remaining in the account, and are paid to
the Distributor. Shares issued upon distribution reinvestment and
amounts representing appreciation are not subject to a contingent
deferred sales charge. The contingent deferred sales charge is
imposed on redemptions which result in the account value falling below
its Base Amount (the total dollar value of purchase payments in the
account reduced by prior redemptions on which a contingent deferred
sales charge was paid and any exempt redemptions). See the Statement
of Additional Information for more information.
Which Class is more beneficial to an investor depends on the amount
and intended length of the investment. Large investments, qualifying
for a reduced sales charge, avoid the distribution fee. Investments
in Class B shares have 100% of the purchase invested immediately.
Purchases of $250,000 or more must be for Class A shares. Consult
your financial service firm.
Financial service firms may receive different compensation rates for
selling different classes of shares. The Distributor may pay
additional compensation to financial service firms which have made or
may make significant sales. Initial or contingent deferred sales
charges may be reduced or eliminated for certain groups or
organizations purchasing Fund shares alone or in combination with
certain other Colonial Funds.
Shareholder Services. A variety of shareholder services are
available. For more information about these services or your account,
call 1-800-345-6611. Some services are described in the attached
account application. A shareholder's manual explaining all available
services will be provided upon request.
HOW TO SELL SHARES
Shares may be sold on any day the New York Stock Exchange is open,
either directly to the Fund or through your financial service firm.
Sale proceeds generally are sent within seven days (usually on the
next business day after your request is received in good form).
However, for shares recently purchased by check, the Fund will send
proceeds only after the check has cleared (which may take up to 15
days).
Selling Shares Directly To The Fund. Send a signed letter of
instruction or stock power form to the Transfer Agent, along with any
certificates for shares to be sold. The sale price is the net asset
value (less any applicable contingent deferred sales charge) next
calculated after the Fund receives the request in proper form.
Signatures must be guaranteed by a bank, a member firm of a national
stock exchange or another eligible guarantor institution. Stock power
forms are available from financial service firms, the Transfer Agent
and many banks. Additional documentation is required for sales by
corporations, agents, fiduciaries, surviving joint owners and
individual retirement account holders. For details contact:
Colonial Investors Service Center, Inc.
P.O. Box 1722
Boston, MA 02105-1722
1-800-345-6611
Selling Shares Through Financial Service Firms. Financial service
firms must receive requests before 4:00 p.m. Eastern time to receive
that day's price, are responsible for furnishing all necessary
documentation to the Transfer Agent and may charge for this service.
General. The sale of shares is a taxable transaction for federal tax
purposes and may be subject to a contingent deferred sales charge.
Such charges may be reduced or eliminated for certain persons or
organizations purchasing Fund shares alone or in combination with
certain other Colonial Funds. The contingent deferred sales charge
may be waived under certain circumstances. See the Statement of
Additional Information for more information. Under unusual
circumstances, the Fund may suspend repurchases or postpone payment
for up to seven days or longer, as permitted by federal securities
law. In June of any year, the Fund may deduct $10 (payable to the
Transfer Agent) from accounts valued at less than $1,000 unless the
account value has dropped below $1,000 solely as a result of share
value depreciation. Shareholders will receive 60 days' written notice
to increase the account value before the fee is deducted.
HOW TO EXCHANGE SHARES
Exchanges at net asset value may be made among the same class of
shares of most Colonial funds. Shares will continue to age without
regard to the exchange for purposes of conversion and determining the
contingent deferred sales charge, if any, upon redemption. Carefully
read the prospectus of the fund into which you are exchanging before
submitting the request. Call 1-800-248-2828 to receive a prospectus
and an exchange authorization form. Call 1-800-422-3737 to exchange
shares by telephone. An exchange is a taxable capital transaction.
The exchange service may be changed, suspended or eliminated on 60
days' written notice.
Class A Shares. An exchange from a money market fund into a non-money
market fund will be at the applicable offering price next determined
(including sales charge), except for amounts on which an initial sales
charge was paid. Non-money market fund shares must be held for five
months before qualifying for exchange to a fund with a higher sales
charge, after which exchanges are made at the net asset value next
determined.
Class B Shares. Exchanges of Class B shares are not be subject to the
contingent deferred sales charge. However, if shares are redeemed
within six years after the original purchase, a contingent deferred
sales charge will be assessed using the schedule of the fund in which
the original investment was made.
TELEPHONE TRANSACTIONS
All shareholders may redeem up to $50,000 of Fund shares by telephone,
and may elect telephone redemption privileges for larger amounts on
the account application. All exchanges may be accomplished by
telephone. See the Statement of Additional Information for more
information. The Adviser, the Transfer Agent and the Fund will not be
liable when following telephone instructions reasonably believed to be
genuine and a shareholder may suffer a loss from unauthorized
transactions. The Fund will employ reasonable procedures to confirm
that instructions communicated by telephone are genuine. Shareholders
will be required to provide their name, address and account number.
Proceeds and confirmations of telephone transactions will be mailed or
sent to the address of record. Telephone redemptions are not
available on accounts with an address change in the preceding 60 days.
All telephone transactions are recorded. Shareholders are not
obligated to transact by telephone.
12B-1 PLANS
Under 12b-1 Plans, the Fund pays the Distributor an annual service fee
of 0.25% of the Fund's average net assets attributed to each Class of
shares. The Fund also pays the Distributor an annual distribution fee
not exceeding 0.75% of the average net assets attributed to its Class
B shares. Class B shares bear higher operating expenses than other
classes of certain funds because the Fund (1) is relatively small and
(2) pays a distribution fee rather than a front-end sales charge.
Because the Class B shares bear the additional distribution fee, their
dividends will be lower than the dividends of Class A shares. Class B
shares automatically convert to Class A shares, generally eight years
after the Class B shares were purchased. The multiple class structure
could be terminated should certain IRS rulings be rescinded. See the
Statement of Additional Information. The Distributor uses the fees to
defray the cost of commissions and service fees paid to financial
service firms which have sold Fund shares, and to defray other
expenses such as sales literature, prospectus printing and
distribution, shareholder servicing costs and compensation to
wholesalers. Should the fees exceed the Distributor's expenses in any
year, the Distributor would realize a profit. The Plans also
authorize other payments to the Adviser which may be construed to be
indirect financing of sales of Fund shares.
ORGANIZATION AND HISTORY
The Trust is a Massachusetts business trust organized in 1991. The
Fund represents the entire interest in a separate portfolio of the
Trust.
The Trust is not required to hold annual shareholder meetings, but
special meetings may be called for certain purposes. You receive one
vote for each of your Fund shares. Shares of the Trust vote together
except when required by law to vote separately by fund or by class.
Shareholders owning in the aggregate ten percent of Trust shares may
call meetings to consider removal of Trustees. Under certain
circumstances, the Trust will provide information to assist
shareholders in calling such a meeting. See the Statement of
Additional Information for more information.
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Investment Adviser
Colonial Management Associates, Inc.
One Financial Center
Boston, MA 02111-2621
Distributor
Colonial Investment Services
One Financial Center
Boston, MA 02111-2621
Custodian
Boston Safe Deposit and Trust Company
One Boston Place
Boston, MA 02108-2624
Shareholder Services and Transfer Agent
Colonial Investors Service Center, Inc.
One Financial Center
Boston, MA 02111-2621
800-345-6611
Independent Accountants
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110-2624
Legal Counsel
Ropes & Gray
One International Place
Boston, MA 02110-2624
Your financial service firm is:
Printed in U.S.A.
October 28, 1994
Revised February 28, 1995
COLONIAL SMALL
STOCK FUND
PROSPECTUS
Colonial Small Stock Fund seeks long-term growth by investing
primarily in smaller capitalization equities.
For more detailed information about the Fund, call the Adviser at 1-
800-248-2828 for the October 28, 1994 Statement of Additional
Information.
FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED,
ENDORSED OR INSURED BY, ANY BANK OR GOVERNMENT AGENCY.
Colonial Mutual Funds
_________________________________________________________________
Please send your completed application to:
Colonial Mutual Funds
P.O. Box 1722
Boston, Massachusetts 02105-1722
New Account Application/Revision to Existing Account
To open a new account, complete sections 1, 2, 3, & 8.
To apply for special services for a new or existing account,
complete sections 4, 5, 6, 7, or 9 as appropriate.
___ Please check here if this is a revision.
1-----------Account Ownership--------------
Please choose one of the following.
__Individual: Print your name, Social Security #, U.S.
citizen status.
__Joint Tenant: Print all names, the Social Security # for
the first person, and his/her U.S. citizen status.
__Uniform Gift to Minors: Name of custodian and minor,
minor's Social Security #, minor's U.S. citizen status.
__Corporation, Association, Partnership: Include full name,
Taxpayer I.D. #.
__Trust: Name of trustee, trust title & date, and trust's
Taxpayer I.D. #.
______________________________________
Name of account owner
______________________________________
Name of joint account owner
______________________________________
Street address
______________________________________
Street address
______________________________________
City, State, and Zip
______________________________________
Daytime phone number
______________________________________
Social Security # or Taxpayer I.D. #
Are you a U.S. citizen? Yes___ No___
______________________________________
If no, country of permanent residence
______________________________________
Owner's date of birth
______________________________________
Account number (if existing account)
2 -----Colonial Fund(s) You Are Purchasing--------
Your investment will be made in Class A shares if no class
is indicated. Certificates are not available for Class B shares.
If no distribution option is selected,
distributions will be reinvested in additional Fund shares.
Please consult your financial adviser to determine which
class of shares best suits your needs.
Fund Choice(s)
Fund
___ A Shares ___ B Shares (less than $250,000)
$______________________________________________
Amount
Method of Payment
Choose one for each fund
___Check payable to the Fund, enclosed
___Bank wired on (Date) ____/____/____
Wire confirmation #
___Dealer purchased on (Date) ____/____/____
Trade confirmation #
Ways to Receive Your Distributions
Choose one for each fund
___Reinvest dividends and capital gains
___Dividends in cash; reinvest capital gains
___Dividends and capital gains in cash
___Automatic Dividend Diversification See section 5A, inside
___Direct Deposit via Colonial Cash Connection See section
4B, inside
Fund Choice(s)
Fund
___ A Shares ___ B Shares (less than $250,000)
$______________________________________________
Amount
Method of Payment
Choose one for each fund
___Check payable to the Fund, enclosed
___Bank wired on (Date) ____/____/____
Wire confirmation #
___Dealer purchased on (Date) ____/____/____
Trade confirmation #
Ways to Receive Your Distributions
Choose one for each fund
___Reinvest dividends and capital gains
___Dividends in cash; reinvest capital gains
___Dividends and capital gains in cash
___Automatic Dividend Diversification See section 5A, inside
___Direct Deposit via Colonial Cash Connection See section
4B, inside
Fund Choice(s)
Fund
___ A Shares ___ B Shares (less than $250,000)
$______________________________________________
Amount
Method of Payment
Choose one for each fund
___Check payable to the Fund, enclosed
___Bank wired on (Date) ____/____/____
Wire confirmation #
___Dealer purchased on (Date) ____/____/____
Trade confirmation #
Ways to Receive Your Distributions
Choose one for each fund
___Reinvest dividends and capital gains
___Dividends in cash; reinvest capital gains
___Dividends and capital gains in cash
___Automatic Dividend Diversification See section 5A, inside
___Direct Deposit via Colonial Cash Connection See section
4B, inside
3---Your Signature & Taxpayer I.D. Number Certification----
Each person signing on behalf of an entity represents that
his/her actions are authorized.
I have received and read each appropriate Fund prospectus
and understand that its terms are incorporated by reference
into this application. I understand that this application
is subject to acceptance. I understand that certain
redemptions may be subject to a contingent deferred sales
charge. I certify, under penalties of perjury, that:
1. The Social Security # or Taxpayer I.D. # provided is
correct.
Cross out 2(a) or 2(b) if either is not true in your case.
2. I am not subject to 31% backup withholding because (a) I
have not been notified that I am subject to backup
withholding or (b) the Internal Revenue Service has notified
me that I am no longer subject to backup withholding.
It is agreed that the Fund, all Colonial companies and their
officers, directors, agents, and employees will not be
liable for any loss, liability, damage, or expense for
relying upon this application or any instruction believed
genuine.
X______________________________________________
Signature
_______________________________________________
Capacity, if applicable Date
X______________________________________________
Signature
_______________________________________________
Capacity, if applicable Date
4--------Ways to Withdraw from Your Fund-------
It may take up to 30 days to activate the following
features. Complete only the section(s) that apply to the
features you would like.
A. Systematic Withdrawal Plan (SWP)
You can receive monthly, quarterly, or semiannual checks
from your account in any amount you select, with certain
limitations. Your redemption checks can be sent to you at
the address of record for your account, to your bank
account, or to another person you choose. The value of the
shares in your account must be at least $5,000 and you must
reinvest all of your distributions. Checks will be processed
on the 10th calendar day of the month or the following
business day. Withdrawals in excess of 12% annually of your
current account value will not be accepted. Redemptions made
in addition to Plan payments may be subject to a contingent
deferred sales charge for Class B shares. Please
consult your financial or tax adviser before electing this
option.
Funds for Withdrawal:
______________________________________________
Name of fund
Withdrawal Amount
Redeem shares from account as follows:
Dollar amount of payment $___________
or
Total annual %_________
Frequency (choose one)
__Monthly __Quarterly __Semiannually
I would like payments to begin _________________ (month).
______________________________________________
Name of fund
Withdrawal Amount
Redeem shares from account as follows:
Dollar amount of payment $___________
or
Total annual %_________
Frequency (choose one)
__Monthly __Quarterly __Semiannually
I would like payments to begin _________________ (month).
______________________________________________
Name of fund
Withdrawal Amount
Redeem shares from account as follows:
Dollar amount of payment $___________
or
Total annual %_________
Frequency (choose one)
__Monthly __Quarterly __Semiannually
I would like payments to begin _________________ (month).
Payment Instructions
Send the payment to (choose one):
__My address of record.
__My bank account via Colonial Cash Connection. Please
complete Section 4B and the Bank Information section below.
__The payee listed at right.
______________________________________________
Name of payee
______________________________________________
Address of payee
______________________________________________
City
______________________________________________
State Zip
______________________________________________
Payee's bank account number, if applicable
X_____________________________________________
Signature of account owner(s)
X_____________________________________________
Signature of account owner(s)
Signatures of all owners must be guaranteed. Provide the
name, address, payment amount, and frequency for other
payees (maximum of 5) on a separate sheet.
B. Direct Deposit via Colonial Cash Connection
You can arrange to have distributions from your Colonial
fund account(s) or Systematic Withdrawal Plan checks
automatically deposited directly into your bank checking
account. Distribution deposits will be made 2 days after the
Fund's payable date. Please complete Bank Information below
and attach a blank check marked "VOID."
Please deposit my:
__Dividend distributions only
__Dividend and capital gain distributions
__Systematic Withdrawal Plan payments
I understand that my bank must be a member of the Automated
Clearing House system.
C. Telephone Withdrawal Options
All telephone transaction calls are recorded. These options
are not available for retirement accounts.
1. Fast Cash
You are automatically eligible for this service. You or
your financial adviser can withdraw up to $50,000 from your
account and have it sent to your address on our records. For
your protection, this service is only available on accounts
that have not had an address change within
60 days of the redemption request.
2. Telephone Redemption
__I would like the Telephone Redemption privilege.
You may withdraw shares from your fund account by telephone
and send your money to your bank account. If you are adding
this service to an existing account, complete the Bank
Information section below and have all shareholder
signatures guaranteed.
Colonial's and the Fund's liability is limited when
following telephone instructions; a shareholder may suffer a
loss from an unauthorized transaction reasonably believed by
Colonial to have been authorized. Telephone redemptions
exceeding $5,000 will be sent via Federal Fund Wire, usually
on the next business day ($7.50 will be deducted).
Redemptions of $5,000 or less will be sent by check to your
designated bank.
Bank Information (For A, B, or C Above)
I authorize deposits to the following bank account:
____________________________________________________________
____
Bank name City Bank account number
____________________________________________________________
____
Bank street address State Zip Bank routing # (your bank
can provide this)
5-----Ways to Make Additional Investments--------
These services involve continuous investments regardless of
varying share prices. Please consider your ability to
continue purchases through periods of price fluctuations.
Dollar cost averaging does not assure a profit or protect
against loss in declining markets.
A. Automatic Dividend Diversification
Please diversify my portfolio by investing fund
distributions in another Colonial fund. These investments
will be made in the same share class and without sales
charges. I have carefully read the prospectus for the
fund(s) listed below.
____________________________
From fund
____________________________
Account number (if existing)
____________________________
To fund
____________________________
Account number (if existing)
____________________________
From fund
____________________________
Account number (if existing)
____________________________
To fund
____________________________
Account number (if existing)
____________________________
From fund
____________________________
Account number (if existing)
____________________________
To fund
____________________________
Account number (if existing)
B. Automated Dollar Cost Averaging
This program allows you to automatically have money from any
Colonial fund in which you have a balance of at least
$5,000 transferred into the same share class of up to four
other Colonial funds, on a monthly basis. The minimum amount
for each transfer is $100. Please complete the section
below.
____________________________________
Fund from which shares will be sold
$_________________________
Amount to redeem monthly
____________________________________
Fund name
$_________________________
Amount to invest monthly
____________________________________
Fund name
$_________________________
Amount to invest monthly
____________________________________
Fund name
$_________________________
Amount to invest monthly
C. Fundamatic
Fundamatic automatically transfers the specified amount from
your bank checking account to your Colonial fund account.
Your bank needs to be a member of the Automated Clearing
House system. Please attach a blank check marked "VOID."
Also, complete the section below and Fundamatic
Authorization (Section 6).
____________________________________
Fund name
$_____________________ _________________
Amount to transfer Month to start
Frequency
__Monthly or __Quarterly
Date
__5th or __20th of the month
____________________________________
Fund name
$_____________________ _________________
Amount to transfer Month to start
Frequency
__Monthly or __Quarterly
Date
__5th or __20th of the month
____________________________________
Fund name
$_____________________ _________________
Amount to transfer Month to start
Frequency
__Monthly or __Quarterly
Date
__5th or __20th of the month
6 -------------Fundamatic Authorization--------------------
Authorization to honor checks drawn by Colonial Investors
Service Center. Do Not Detach. Make sure all depositors on
the bank account sign to the far right. Please attach a
blank check marked "VOID" here. See reverse for bank
instructions.
I authorize Colonial to draw on my bank account, by check or
electronic funds transfer, for an investment in a Colonial
fund. Colonial and my bank are not liable for any loss
arising from delays or dishonored draws. If a draw is not
honored, I understand that notice may not be given and
Colonial may reverse the purchase and charge my account $15.
______________________________________
Bank name
______________________________________
Bank street address
______________________________________
Bank street address
______________________________________
City State Zip
______________________________________
Bank account number
______________________________________
Bank routing #
X_____________________________________
Depositor's Signature(s)
Exactly as appears on bank records
X_____________________________________
Depositor's Signature(s)
Exactly as appears on bank records
7--Ways to Reduce Your Sales Charges for Class A Shares--
These services can help you reduce your sales charge while
increasing your share balance over the long term.
A. Right of Accumulation
If you, your spouse or your children own Class A, B or D
shares in other Colonial funds, you may be eligible for a
reduced sales charge. The combined value of your accounts
must be $50,000 or more. Class A shares of money market
funds are not eligible unless purchased by exchange from
another Colonial fund.
The sales charge for your purchase will be based on the sum
of the purchase added to the value of all shares in other
Colonial funds at the previous day's public offering price.
__Please link the accounts listed below for Right of
Accumulation privileges, so that this and future purchases
will receive any discount for which they are eligible.
_____________________________________
Name on account
_____________________________________
Account number
_____________________________________
Name on account
_____________________________________
Account number
B. Statement of Intent
If you agree in advance to invest at least $50,000 within 13
months, you'll pay a lower sales charge on every dollar you
invest. If you sign a Statement of Intent within 90 days
after you establish your account, you can receive a
retroactive discount on prior investments. The amount
required to receive a discount varies by fund; see the sales
charge table in the "How to Buy Shares" section of your fund
prospectus.
__I want to reduce my sales charge.
I agree to invest $ _______________
over a 13-month period starting ______/______/ 19______ (not
more than 90 days prior to this application). I understand
an additional sales charge must be paid if I do not complete
this Statement of Intent.
8-------------Financial Service Firm---------------------
To be completed by a Representative of your financial
service firm.
This application is submitted in accordance with our selling
agreement with Colonial Investment Services (CIS), the
Fund's prospectus, and this application. We will notify CIS
of any purchase made under a Statement of Intent, Right of
Accumulation, or Sponsored Arrangement. We guarantee the
signatures on this application and the legal capacity of the
signers.
_____________________________________
Representative's name
_____________________________________
Representative's number
_____________________________________
Representative's phone number
_____________________________________
Account # for client at financial
service firm
_____________________________________
Branch office address
_____________________________________
City
_____________________________________
State Zip
_____________________________________
Branch office number
_____________________________________
Name of financial service firm
_____________________________________
Main office address
_____________________________________
Main office address
_____________________________________
City
_____________________________________
State Zip
X____________________________________
Authorized signature
9--Request for a Combined Quarterly Statement Mailing--
Colonial can mail all of your quarterly statements in one
envelope. This option simplifies your record keeping and
helps reduce fund expenses.
__I want to receive a combined quarterly mailing for all my
accounts.
Fundamatic (See Reverse Side)
Applications must be received before the start date for
processing.
This program's deposit privilege can be revoked by Colonial
without prior notice if any check is not paid upon
presentation. Colonial has no obligation to notify the
shareholder of non-payment of any draw. This program may be
discontinued by Colonial by written notice at least 30
business days prior to the due date of any draw or by the
shareholder at any time.
To the Bank Named on the Reverse Side:
Your depositor has authorized Colonial Investors Service
Center to collect amounts due under an investment program
from his/her personal checking account. When you pay and
charge the draws to the account of your depositor executing
the authorization payable to the order of Colonial Investors
Service Center, Colonial Management Associates, Inc., hereby
indemnifies and holds you harmless from any loss (including
reasonable expenses) you may suffer from honoring such draw,
except any losses due to your payment of any draw against
insufficient funds.
D-461L-594
