<PAGE>
[LOGO]
COLONIAL U.S.
FUND FOR GROWTH
[GRAPHIC]
ANNUAL REPORT
JUNE 30,1995
<PAGE>
[COLONIAL MUTUAL FUNDS LOGO]
Earning Your Trust for
More Than 60 Years
TRUSTEES
ROBERT J. BIRNBAUM
Trustee (formerly Special Counsel, Dechert, Price & Rhoads; President and Chief
Operating Officer, New York Stock Exchange, Inc.)
TOM BLEASDALE
Trustee (formerly Chairman of the Board and Chief Executive Officer, ShoreBank &
Trust Company)
LORA S. COLLINS
Attorney, Kramer, Levin, Naftalis, Nessen, Kamin & Frankel
JAMES E. GRINNELL
Private Investor (formerly Senior Vice President-Operations, The Rockport
Company)
WILLIAM D. IRELAND, JR.
Trustee (formerly Chairman of the Board, Bank of New England-Worcester)
RICHARD W. LOWRY
Private Investor (formerly Chairman and Chief Executive Officer, U.S. Plywood
Corporation)
WILLIAM E. MAYER
Dean, College of Business and Management, University of Maryland (formerly Dean,
Simon Graduate School of Business, University of Rochester; Chairman and Chief
Executive Officer, C.S. First Boston Merchant Bank; and President and Chief
Executive Officer, The First Boston Corporation)
JOHN A. MCNEICE, JR.
Chairman of the Board and Director, The Colonial Group, Inc. and Colonial
Management Associates, Inc. (formerly Chief Executive Officer, The Colonial
Group, Inc. and Colonial Management Associates, Inc.)
JAMES L. MOODY, JR.
Chairman of the Board, Hannaford Bros. Co. (formerly Chief Executive Officer,
Hannaford Bros. Co.)
JOHN J. NEUHAUSER
Dean, Boston College School of Management
GEORGE L. SHINN
Financial Consultant (formerly Chairman, Chief Executive Officer and Consultant,
The First Boston Corporation)
ROBERT L. SULLIVAN
Management Consultant (formerly Management Consultant, Saatchi and Saatchi
Consulting Ltd. and Principal and International Practice Director, Management
Consulting, Peat Marwick Main & Co.)
SINCLAIR WEEKS, JR.
Chairman of the Board, Reed & Barton Corporation
COLONIAL INVESTMENT SERVICES, INC. (C)1995
One Financial Center, Boston, Massachusetts 02111-2621, 617-426-3750
US-02/146B-0695
<PAGE>
COLONIAL U.S. FUND FOR GROWTH HIGHLIGHTS
JULY 1, 1994 -- June 30, 1995
INVESTMENT OBJECTIVE: Colonial U.S. Fund for Growth seeks growth
exceeding the performance of the Standard & Poor's 500 Index of 500
common stocks.
STRATEGY: The Fund pursues its objective by investing primarily in U.S.
common stocks.
THE FUND IS DESIGNED TO:
- Manage risk to provide more consistent results
- Employ a disciplined, yet flexible, investment strategy attuned to
today's market
PORTFOLIO MANAGER COMMENTARY: "Favorable earnings reports over the first half of
the Fund's fiscal year sparked a surge in stock prices in the second half. The
large-capitalization 'blue chip' stocks that are your Fund's primary focus
especially benefited from this rally."
COLONIAL U.S. FUND FOR GROWTH PERFORMANCE
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS D
<S> <C> <C> <C>
Inception date 7/1/92 7/1/92 7/1/94
--------------------------------------------------------------------------------
Distributions declared per share* $0.8950 $0.8082 $0.8282
--------------------------------------------------------------------------------
Total returns, assuming
reinvestment of all distributions and no
sales charge or contingent deferred sales charge
- 6 months 19.10% 18.73% 18.81%
- 12 months 24.84% 23.94% 24.01%
--------------------------------------------------------------------------------
Net asset value per share at 6/30/95 $13.26 $13.18 $13.24
</TABLE>
* Includes $0.735 from capital gains.
<TABLE>
<CAPTION>
TOP FIVE HOLDINGS TOP FIVE SECTORS**
------------------------------- --------------------
<S> <C>
1. Exxon Corp. 1. Consumer Cyclical
2. Merck & Co. Inc. 2. Utilities
3. Hewlett Packard Co. 3. Consumer Staples
4. Intel Corp. 4. Financial
5. E.I. Dupont de Nemours & Co. 5. Technology
</TABLE>
** Industry sectors in the following financial statements are based upon the
standard industrial classifications (SIC) published by the U.S. Office of
Management and Budget. The sector classifications used on this page are based
upon Colonial defined criteria as used in the investment process.
2
<PAGE>
PRESIDENT'S MESSAGE
TO FUND SHAREHOLDERS
Investors benefited from favorable conditions in the stock market during the
12-month period ended June 30, 1995. Stocks maintained their strong performance
despite the slowing growth of the United States economy during the second half
of the fiscal year.
Almost all sectors of the stock market performed well during the period, which
was characterized by sharply rising earnings in the first half of the fiscal
year and strongly rising stock prices in the second half. The larger
capitalization U.S. companies that are the main investment focus of your Fund
benefited from the weakened dollar, as the relatively low price of U.S. goods
and services attracted the attention of foreign consumers. These companies also
did well as investors sought out the stability provided by these stocks as the
U.S. economy began to slow.
Your Fund's management committee believes that growth prospects for many U.S.
companies -- notably those with expanding international activities -- are
strong. But they believe the pace of growth may slow relative to the growth
of the most recent period. In the following report, the committee comments
on its management and stock selection strategies.
Respectfully,
/s/ John A. McNeice, Jr.
------------------------
John A. McNeice, Jr.
President
August 11, 1995
3
<PAGE>
PORTFOLIO MANAGEMENT REPORT
Portfolio management of U.S. Fund for Growth has been delegated to State Street
Global Advisors, a division of State Street Bank and Trust Company
(Sub-Adviser). Investment decisions regarding the Fund are made by a committee
of the Sub-Adviser, and no person is primarily responsible for making
recommendations to that committee.
EARNINGS GROWTH AND PRICE APPRECIATION BENEFIT FUND: Although most U.S.
companies were experiencing phenomenal growth at the start of Colonial U.S. Fund
for Growth's fiscal year, stock prices were flat or declining. Over the second
half of the fiscal year, however, stock prices rebounded. Because management had
remained fully invested in the stock market, your Fund participated when the
market rallied.
TECHNOLOGY STOCKS ENHANCE RETURNS: Technology stocks made a significant
contribution to the Fund's total return. In large measure, the recovery in these
stocks was driven by an increase in demand for semi-conductors. The Fund's
positions in Intel and Hewlett Packard benefited from this development.
DIVERSIFICATION SUPPORTS PERFORMANCE: Technology was not the only sector that
helped performance. In fact, stocks from many sectors contributed to the Fund's
performance. Among these was Philip Morris, a stock that our research indicated
was undervalued at the time we purchased it. This conclusion was borne out
during the fiscal year, as many of the company's diverse operations showed
strong earnings gains, a development that was reflected in significant stock
price appreciation.
SECTOR ALLOCATION REDUCES VOLATILITY: Colonial U.S. Fund for Growth is always
invested in the market sectors represented by the Standard & Poor's 500 Index.
This disciplined sector allocation strategy can act as a stabilizer against
economic and market volatility, and may have the potential to cushion the Fund
from severe negative performance in any one industry.
4
<PAGE>
COLONIAL U.S. FUND FOR GROWTH INVESTMENT PERFORMANCE
Change in Value of $10,000 from 7/92 - 6/95
Based on Maximum Offering Price for Class A Shares
and Applicable Contingent Deferred Sales Charge for Class B Shares
<TABLE>
<CAPTION>
CLASS A SHARES
<S> <C>
COLONIAL US FUND FOR GROWTH AT NAV $14,851
S&P 500 INDEX $14,520
COLONIAL US FUND FOR GROWTH AT MOP $13,997
</TABLE>
<TABLE>
<CAPTION>
CLASS B SHARES
<S> <C>
S&P 500 INDEX $14,520
COLONIAL US FUND FOR GROWTH AT NAV $14,501
COLONIAL US FUND FOR GROWTH W/CDSC $14,201
</TABLE>
A $10,000 investment in Class D shares made on July 1, 1994, (inception) at the
applicable contingent deferred sales charge would have grown to $12,177 on June
30,1995.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
----------------------------------------------------------------------------
CLASS A SHARES CLASS B SHARES CLASS D SHARES
Inception 7/1/92 Inception 7/1/92 Inception 7/1/94
NAV MOP NAV W/CDSC NAV W/CDSC
----------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
1 YEAR 24.84% 17.67% 23.94% 18.94% 24.01% 21.77%
----------------------------------------------------------------------------
SINCE INCEPTION 14.09% 11.86% 13.19% 12.40% 24.01% 21.77%
----------------------------------------------------------------------------
</TABLE>
The Standard & Poor's 500 Index is an unmanaged index that tracks the
performance of a selection of 500 widely held common stocks.
Past performance cannot predict future results. Return and value of an
investment will vary, resulting in a gain or loss on sale. All results shown
assume reinvestment of distributions. Net asset value (NAV) return does not
include sales charges or contingent deferred sales charges (CDSC). Maximum
offering price (MOP) return for Class A shares includes the maximum sales charge
of 5.75% and 1.00% for Class D shares. The CDSC return reflects the maximum
charge of 5.00% for one year, and 3.00% since inception for Class B shares and
1.00% for Class D for one year and since inception. Performance for different
share classes will vary based on differences in sales charges and fees
associated with each class.
5
<PAGE>
INVESTMENT PORTFOLIO
JUNE 30, 1995 (IN THOUSANDS)
<TABLE>
<CAPTION>
COMMON STOCKS - 96.3% SHARES VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
CONSTRUCTION - 0.2%
HEAVY CONSTRUCTION-NON BUILDING CONSTRUCTION - 0.2%
Halliburton Co. 23 $ 837
-------
--------------------------------------------------------------------------------
FINANCE, INSURANCE & REAL ESTATE - 11.2%
DEPOSITORY INSTITUTIONS - 5.5%
Banc One Corp. 43 1,400
Bank of New York Co., Inc. 1 32
BankAmerica Corp. 88 4,636
Corestates Financial Corp. 1 24
First Bank System, Inc. 43 1,747
First Union Corp. 163 7,371
NBD Bancorp, Inc. 2 64
Star Banc Corp. (a) 23
Wachovia Corp. 89 3,189
Wilmington Trust Corp. 20 559
-------
19,045
-------
INSURANCE CARRIERS - 3.8%
Aflac, Inc. 136 5,963
American General Corp. 165 5,555
Geico Corp. 16 889
St. Paul Cos., Inc. 18 872
-------
13,279
-------
SECURITY BROKERS & DEALERS - 1.9%
Bear Stearns Co., Inc. 203 4,348
Franklin Resources, Inc. 16 694
Salomon, Inc. 33 1,340
-------
6,382
-------
--------------------------------------------------------------------------------
MANUFACTURING - 53.4%
CHEMICALS - 14.4%
Abbott Laboratories 41 1,664
Bristol-Myers Squibb Co. 11 736
Clorox Co. 20 1,325
E.I. DuPont De Nemours & Co. 152 10,443
Goodrich (B.F.) Co. 22 1,158
Johnson & Johnson 107 7,216
Merck & Co., Inc. 225 11,005
Morton International, Inc. 144 4,200
Procter & Gamble Co. 30 2,178
Schering-Plough Corp. 159 6,998
Sherwin-Williams Co. 74 2,651
-------
49,574
-------
</TABLE>
6
<PAGE>
Investment Portfolio/June 30, 1995
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ELECTRONIC & ELECTRICAL EQUIPMENT - 5.7%
General Electric Co. 107 $ 6,026
Intel Corp. 168 10,662
Texas Instruments, Inc. 22 2,905
-------
19,593
-------
FABRICATED METAL - 1.4%
Newell Co. 192 4,696
Parker-Hannifin Corp. 3 109
-------
4,805
-------
FOOD & KINDRED PRODUCTS - 8.0%
Anheuser Busch Cos., Inc. 3 165
Archer Daniels Midland Co. 172 3,198
CPC International, Inc. 3 216
Campbell Soup Co. 6 313
Coca Cola Co. 44 2,786
Hormel Foods Corp. 123 3,208
Kellogg Co. 19 1,392
Lancaster Colony Corp. 88 3,135
PepsiCo, Inc. 210 9,595
Philip Morris Cos., Inc. 47 3,511
-------
27,519
-------
FURNITURE & FIXTURES - 1.2%
Leggett & Platt, Inc. 92 4,052
-------
MACHINERY & COMPUTER EQUIPMENT - 4.4%
Brunswick Corp. (a) 3
Cabletron Systems, Inc. (b) (a) 5
Cummins Engine Co., Inc. 8 362
Dover Corp. 42 3,077
Hewlett-Packard Co. 145 10,773
International Business Machines Corp. 7 662
Pall Corp. 10 227
Timken Co. 5 235
-------
15,344
-------
MEASURING & ANALYZING INSTRUMENTS - 2.9%
Emerson Electric Co. 31 2,188
Johnson Controls, Inc. 9 491
Litton Industries, Inc. (b) 9 332
Millipore Corp. 97 6,561
Raytheon Co. 6 458
-------
10,030
-------
PAPER & PAPER MILLS - 2.8%
Champion International Corp. 132 6,881
Longview Fibre Co. 71 1,207
Minnesota Mining & Manufacturing Co. 30 1,694
-------
9,782
-------
PETROLEUM REFINING - 7.1%
Amoco Corp. 72 4,770
Atlantic Richfield Co. 44 4,884
</TABLE>
7
<PAGE>
Investment Portfolio/June 30, 1995
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS - CONT. SHARES VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
MANUFACTURING - CONT.
PETROLEUM REFINING - CONT.
Exxon Corp. 199 $14,083
Louisiana Land and Exploration Co. 2 60
Mobil Corp. 9 874
-------
24,671
-------
PRIMARY METAL - 0.6%
Lukens, Inc. 14 442
Reynolds Metals Co. 10 497
Worthington Industries, Inc. 57 1,173
-------
2,112
-------
PRINTING & PUBLISHING - 1.8%
Belo (A.H.) Corp., Series A 16 502
Gannett Co., Inc. 65 3,505
Tribune Co. 36 2,185
-------
6,192
-------
TRANSPORTATION EQUIPMENT - 3.1%
Dana Corp. 36 1,031
Eaton Corp. 25 1,471
Echlin, Inc. 18 639
General Dynamics Corp. 62 2,755
OEA, Inc. 37 1,108
PACCAR, Inc. 52 2,412
Rockwell International Corp. 16 741
TRW, Inc. 1 112
Textron, Inc. 5 308
-------
10,577
-------
--------------------------------------------------------------------------------
RETAIL TRADE - 6.3%
FOOD STORES - 1.0%
Albertson's, Inc. 118 3,499
-------
GENERAL MERCHANDISE STORES - 2.4%
Sears, Roebuck & Co. 136 8,143
-------
MISCELLANEOUS RETAIL - 2.3%
Medicine Shoppe International, Inc. 5 165
Rite Aid Corp. 45 1,151
Walgreen Co. 129 6,486
-------
7,802
-------
RESTAURANTS - 0.6%
Luby's Cafeterias, Inc. 42 854
McDonald's Corp. 33 1,272
-------
2,126
-------
--------------------------------------------------------------------------------
SERVICES - 3.8%
AMUSEMENT & RECREATION - 0.2%
Mirage Resorts, Inc. (b) 1 31
The Walt Disney Co. 10 528
-------
559
-------
</TABLE>
8
<PAGE>
Investment Portfolio/June 30, 1995
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
BUSINESS SERVICES - 3.6%
Automatic Data Processing, Inc. 116 7,268
Ecolab, Inc. 46 1,122
Equifax, Inc. 11 377
Honeywell, Inc. 2 82
Interpublic Group of Cos., Inc. 72 2,685
Kelly Services, Inc., Class A 7 167
Omnicom Group, Inc. 14 837
-------
12,538
-------
--------------------------------------------------------------------------------
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES -19.8%
AIR TRANSPORTATION - 0.7%
AMR Corp. (b) 12 925
Delta Air Lines, Inc. 12 893
Federal Express Corp. (b) 9 565
-------
2,383
-------
COMMUNICATIONS - 9.0%
Alltel Corp. 25 627
Ameritech Corp. 175 7,714
BellSouth Corp. 29 1,810
Capital Cities ABC, Inc. 72 7,765
Century Telephone Enterprises, Inc. 102 2,889
Cincinnati Bell, Inc. 3 76
GTE Corp. (a) 7
SBC Communications, Inc. 188 8,973
Sprint Corp. 41 1,382
-------
31,243
-------
ELECTRIC SERVICES - 3.6%
Atlantic Energy, Inc. 135 2,546
Boston Edison Co. 10 256
Central & South West Corp. 182 4,765
Consolidated Edison Co. of New York, Inc. 22 649
General Public Utilities Corp. 19 574
Kansas City Power & Light Co. 10 231
Northeast Utilities 28 630
Northern States Power Co. 5 231
Ohio Edison Co. 81 1,837
San Diego Gas & Electric Co. 40 830
-------
12,549
-------
GAS SERVICES - 3.2%
Consolidated Natural Gas Co. 9 347
Panhandle Eastern Corp. 138 3,369
Williams Companies, Inc. 206 7,174
-------
10,890
-------
MOTOR FREIGHT & WAREHOUSING - 0.6%
Consolidated Freightways, Inc. 88 1,947
-------
</TABLE>
9
<PAGE>
Investment Portfolio/June 30, 1995
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS - CONT. SHARES VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES - CONT.
RAILROAD - 0.7%
Illinois Central Corp., Series A 71 $ 2,446
--------
SANITARY SERVICES - 1.0%
Browning Ferris Industries, Inc. 98 3,533
--------
WATER TRANSPORTATION - 1.0%
Tidewater, Inc. 140 3,510
--------
--------------------------------------------------------------------------------
WHOLESALE TRADE - 1.6%
DURABLE GOODS - 1.6%
Genuine Parts Co. 145 5,503
Wyle Electronics Co. 2 56
--------
5,559
--------
TOTAL INVESTMENTS (cost of $284,285)(c) 332,521
--------
SHORT-TERM OBLIGATIONS - 3.4% PAR
--------------------------------------------------------------------------------
Repurchase Agreement with Lehman Government
Securities, Inc., dated 06/30/95, due 07/03/95
at 6.210% collateralized by U.S. Treasury bills
and notes with various maturities to 1999, market
value $11,996 (repurchase proceeds $11,744) $ 11,738 11,738
--------
OTHER ASSETS & LIABILITIES, NET - 0.3% 1,141
--------------------------------------------------------------------------------
NET ASSETS - 100.0% $345,400
--------
</TABLE>
NOTES TO INVESTMENT PORTFOLIO:
--------------------------------------------------------------------------------
(a) Rounds to less than one.
(b) Non-income producing.
(c) Cost for federal income tax purposes is $284,385.
See notes to financial statements.
10
<PAGE>
STATEMENT OF ASSETS & LIABILITIES
JUNE 30, 1995
(In thousands except for per share amounts and footnote)
<TABLE>
<S> <C> <C>
ASSETS
Investments at value (cost $284,285) $332,521
Short-term obligations 11,738
--------
344,259
Receivable for:
Fund shares sold $ 1,045
Dividends 754
Investments sold 133
Interest 2
Other 50 1,984
-------- --------
Total Assets 346,243
LIABILITIES
Payable for:
Fund shares repurchased 565
Distributions 224
Accrued:
Deferred Trustees fees 3
Other 51
--------
Total Liabilities 843
--------
NET ASSETS $345,400
--------
Net asset value & redemption price per share - Class A
($124,171/9,363) $13.26
--------
Maximum offering price per share - Class A
($13.26/0.9425) $14.07 (a)
--------
Net asset value & offering price per share - Class B
($218,201/16,559) $13.18 (b)
--------
Net asset value per share - Class D
($3,028/229) $13.24 (b)
--------
Maximum offering price per share - Class D
($13.24/0.9900) $13.37
--------
COMPOSITION OF NET ASSETS
Capital paid in $284,914
Undistributed net investment income 32
Accumulated net realized gain 12,218
Net unrealized appreciation 48,236
--------
$345,400
--------
</TABLE>
(a) On sales of $50,000 or more the offering price is reduced.
(b) Redemption price per share is equal to net asset value less
any applicable contingent deferred sales charge.
See notes to financial statements.
11
<PAGE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 1995
(in thousands)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Dividends $ 7,752
Interest 274
-------
8,026
EXPENSES
Management fee $ 2,266
Service fee 707
Distribution fee - Class B 1,319
Distribution fee - Class D 11
Transfer agent 864
Bookkeeping fee 109
Trustees fee 36
Custodian fee 15
Audit fee 32
Legal fee 9
Registration fee 71
Reports to shareholders 7
Amortization of deferred
organization expense 18
Other 16 5,480
------- -------
Net Investment Income 2,546
-------
NET REALIZED & UNREALIZED GAIN ON PORTFOLIO POSITIONS
Net realized gain 13,643
Net unrealized appreciation during
the period 47,177
-------
Net Gain 60,820
-------
Net Increase in Net Assets From Operations $63,366
-------
</TABLE>
See notes to financial statements.
12
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
(in thousands) Year ended June 30
----------------------
INCREASE (DECREASE) IN NET ASSETS 1995 1994
<S> <C> <C>
Operations:
Net investment income $ 2,546 $ 1,466
Net realized gain 13,643 18,065
Net unrealized appreciation (depreciation) 47,177 (24,112)
--------- ---------
Net Increase (Decrease) from Operations 63,366 (4,581)
Distributions:
From net investment income - Class A (1,420) (876)
From net realized gains - Class A (6,157) (1,098)
From net investment income - Class B (1,133) (644)
From net realized gains - Class B (10,279) (2,556)
From net investment income - Class D (16)
From net realized gains - Class D (76)
--------- ---------
44,285 (9,755)
--------- ---------
Fund Share Transactions: (a)
Receipts for shares sold - Class A 25,072 33,129
Receipts for shares issued in the merger
with Colonial U.S. Equity Index Trust 42,693
Value of distributions reinvested - Class A 7,015 1,860
Cost of shares repurchased - Class A (21,509) (20,534)
--------- ---------
10,578 57,148
--------- ---------
Receipts for shares sold - Class B 53,700 77,544
Value of distributions reinvested - Class B 10,796 3,057
Cost of shares repurchased - Class B (24,021) (14,439)
--------- ---------
40,475 66,162
--------- ---------
Receipts for shares sold - Class D 2,741
Value of distributions reinvested - Class D 90
Cost of shares repurchased - Class D (70)
--------- ---------
2,761
--------- ---------
Net Increase from Fund Share Transactions 53,814 123,310
--------- ---------
Total Increase 98,099 113,555
NET ASSETS
Beginning of period 247,301 133,746
--------- ---------
End of period (including undistributed net
investment income of $32 and $15, respectively) $ 345,400 $ 247,301
--------- ---------
</TABLE>
Continued on next page.
See notes to financial statements.
13
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
(continued)
<TABLE>
<CAPTION>
Year ended June 30
------------------
1995 1994
<S> <C> <C>
NUMBER OF FUND SHARES (A)
Sold - Class A 2,049 2,762
Issued in the merger with Colonial U.S. Equity Index Trust 3,552
Issued for distributions reinvested - Class A 614 155
Repurchased - Class A (1,779) (1,713)
------ ------
884 4,756
------ ------
Sold - Class B 4,431 6,508
Issued for distributions reinvested - Class B 957 254
Repurchased - Class B (2,000) (1,218)
------ ------
3,388 5,544
------ ------
Sold - Class D 227
Issued for distributions reinvested - Class D 8
Repurchased - Class D (6)
------ ------
229
------ ------
</TABLE>
(a) Class D shares were initially offered on July 1, 1994.
See notes to financial statements.
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1995
NOTE 1. ACCOUNTING POLICIES
--------------------------------------------------------------------------------
ORGANIZATION: Colonial U.S. Fund for Growth (the Fund), a series of Colonial
Trust VI, is a Massachusetts business trust, registered under the Investment
Company Act of 1940, as amended, as a diversified, open-end, management
investment company. The Fund may issue an unlimited number of shares. The Fund
offers three classes of shares: Class A, Class B and Class D. Class A shares are
sold with a front-end sales charge and Class B shares which are subject to an
annual distribution fee and a contingent deferred sales charge. Class B shares
will convert to Class A shares when they have been outstanding approximately
eight years. Class D shares are subject to a reduced front-end sales charge, a
contingent deferred sales charge on redemptions made within one year after
purchase, and a continuing distribution fee. The following significant
accounting policies are consistently followed by the Fund in the preparation of
its financial statements and conform to generally accepted accounting
principles.
SECURITY VALUATION AND TRANSACTIONS: Equity securities are valued at the last
sale price or, in the case of unlisted or listed securities for which there were
no sales during the day, at current quoted bid prices.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
Portfolio positions which cannot be valued as set forth above are valued at fair
value under procedures approved by the Trustees.
Security transactions are accounted for on the date the securities are purchased
or sold.
Cost is determined and gains and losses are based upon the specific identifi-
cation 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 B and Class D distribution fee), realized and un-
realized gains (losses) are allocated to each class proportionately on a daily
basis for purposes of determining the net asset value of each class.
Per share data was calculated using the average shares outstanding during the
period. In addition, Class B and Class D net investment income per share data
reflects the distribution fee per share applicable to Class B and Class D shares
only.
Class B and Class D ratios are calculated by adjusting the expense and net
investment income ratios for the Fund for the entire period by the distribution
fee applicable to Class B and Class D shares only.
FEDERAL INCOME TAXES: Consistent with the fund's policy to qualify as a
regulated investment company and to distribute all of its taxable income, no
federal income tax has been accrued.
15
<PAGE>
Notes to Financial Statements/June 30, 1995
--------------------------------------------------------------------------------
ACCOUNTING POLICIES - CONT.
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. The difference is primarily due to the characterization
of income.
DEFERRED ORGANIZATION EXPENSES: The Fund incurred expenses of $90,095 in
connection with its organization, initial registration with the Securities and
Exchange Commission and with various states, and the initial public offering of
its shares. These expenses were deferred and are being amortized on a
straight-line basis over five years.
OTHER: Corporate actions are recorded on the ex-date. Interest income is
recorded on the accrual basis.
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: Colonial Management Associates, Inc. (the Adviser) oversees the
Fund's management and furnishes accounting and other services and office
facilities for a monthly fee equal to 0.80% annually of the Fund's average net
assets. State Street Bank and Trust Company (the sub-adviser) furnishes the Fund
with investment management and received an effective fee rate from the Adviser
of 0.40% for the year ended June 30, 1995.
BOOKKEEPING FEE: The Adviser provides bookkeeping and pricing services for
$27,000 per year plus 0.035% of the Fund's average net assets over $50 million.
TRANSFER AGENT: Colonial Investors Service Center, Inc., (the Transfer Agent),
an affiliate of the Adviser, provides shareholder services for a monthly fee
equal to 0.25% annually of the Fund's average net assets, and receives a
reimbursement for certain out of pocket expenses.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES: The Adviser, through
Colonial Investment Services, Inc., (the Distributor), is the Fund's principal
underwriter. For the year ended June 30, 1995, the Distributor retained net
underwriting discounts of $46,736 on sales of the Fund's Class A shares and
received contingent deferred sales charges (CDSC) of $501,453 and $2,578 on
Class B and Class D share redemptions, respectively.
16
<PAGE>
Notes to Financial Statements/June 30, 1995
--------------------------------------------------------------------------------
The Fund has adopted a 12b-1 plan which requires it to pay the Distributor a
service fee equal to 0.25% annually of the Fund's net assets, as of the 20th of
each month. The plan also requires the payment of a distribution fee to the
Distributor equal to 0.75% annually of the average net assets attributable to
Class B shares and Class D shares, respectively.
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 Adviser has agreed, until further notice, to waive fees and
bear certain Fund expenses to the extent that total expenses (exclusive of the
service fees, distribution fees, brokerage commissions, interest, taxes and
extraordinary expenses, if any) exceed 1.25% annually of the Fund's average net
assets.
For the year ended June 30, 1995, the Fund's operating expenses did not exceed
the 1.25% expense limit.
OTHER: The Fund pays no compensation to its officers, all of whom are employees
of the Adviser.
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 June 30, 1995, purchases and sales of
investments, other than short-term obligations, were $262,701,539 and
$235,086,911, respectively.
Unrealized appreciation (depreciation) at June 30, 1995, based on cost of
investments for federal income tax purposes was:
<TABLE>
<S> <C>
Gross unrealized appreciation $ 49,871,107
Gross unrealized depreciation ( 1,734,681)
-----------------
Net unrealized appreciation $ 48,136,426
-----------------
</TABLE>
OTHER: The Fund may focus its investments in certain industries, subjecting it
to greater risk than a fund that is more diversified.
NOTE 4. MERGER INFORMATION
--------------------------------------------------------------------------------
On December 17, 1993, Colonial U.S. Equity Index Trust (CUSEIT) was merged into
the Fund by a non-taxable exchange of 3,552,164 shares of the Fund (valued at
$42,692,626) for the 1,885,911 of CUSEIT's shares then outstanding. The assets
of CUSEIT acquired included unrealized appreciation of $13,953,550. The
aggregate net assets of the Fund and CUSEIT immediately after the merger were
$227,715,458.
17
<PAGE>
Notes to Financial Statements/June 30, 1995
--------------------------------------------------------------------------------
NOTE 5. RESULTS OF SPECIAL SHAREHOLDER MEETING (UNAUDITED)
--------------------------------------------------------------------------------
On February 15, 1995, a special meeting of shareholders was held and a new
Management Agreement between the Trust and Colonial Management Associates, Inc.
was approved that became effective upon the completion of the merger of The
Colonial Group, Inc. and Apple Merger Corporation, a subsidiary of Liberty
Financial Companies, Inc. on March 24, 1995. Out of the shares of beneficial
interest outstanding on December 9, 1994, 14,532,714 voted for the new
Management Agreement, 239,814 voted against and 495,477 abstained. Of the shares
of beneficial interest outstanding that abstained, 80,676 represented broker
non-votes.
Also, a new Sub-advisory agreement was approved between Colonial Management
Associates, Inc., and State Street Bank and Trust Company that became effective
upon completion of the merger. Out of the shares outstanding on December 9,
1994, 14,500,528 voted for the new Sub-Advisory Agreement, 233,365 voted against
and 534,111 abstained. Of the shares of beneficial interest outstanding that
abstained, 293,147 represented broker non-votes.
18
<PAGE>
FINANCIAL HIGHLIGHTS (a)
Selected data for a share of each class outstanding throughout each period are
as follows:
<TABLE>
<CAPTION>
Year ended June 30
----------------------------------
1995
Class A Class B Class D (b)
--------- --------- ----------
<S> <C> <C> <C>
Net asset value -
Beginning of period $ 11.460 $ 11.400 $ 11.460
--------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.165 0.075 0.074
Net realized and unrealized gain 2.530 2.513 2.534
--------- --------- ---------
Total from Investment Operations 2.695 2.588 2.608
--------- --------- ---------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.160) (0.073) (0.093)
From net realized gains (0.735) (0.735) (0.735)
--------- --------- ---------
Total Distributions
Declared to Shareholders (0.895) (0.808) (0.828)
--------- --------- ---------
Net asset value -
End of period $ 13.260 $ 13.180 $ 13.240
--------- --------- ---------
Total return (c) 24.84% 23.94% 24.01%
--------- --------- ---------
RATIOS TO AVERAGE NET ASSETS
Expenses 1.46% 2.21% 2.21%
Net investment income 1.37% 0.62% 0.62%
Portfolio turnover 84% 84% 84%
Net assets at end of period (000) $ 124,171 $218,201 $ 3,028
</TABLE>
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Class D shares were initially offered on July 1, 1994. Per share amounts
reflect activity from that date.
(c) Total return at net asset value assuming all distributions reinvested and no
initial sales charge or contingent deferred sales charge.
19
<PAGE>
FINANCIAL HIGHLIGHTS (a) - continued
<TABLE>
<CAPTION>
Year ended June 30
-----------------------------------------------
1994 1993 (b)
Class A Class B Class A Class B
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value -
Beginning of period $ 11.820 $ 11.770 $ 10.000 $ 10.000
--------- --------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.142 0.053 0.103 (c) 0.020 (c)
Net realized and unrealized gain (0.119) (0.122) 1.784 1.763
--------- --------- --------- ---------
Total from Investment Operations 0.023 (0.069) 1.887 1.783
--------- --------- --------- ---------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.138) (0.056) (0.067) (0.013)
--------- --------- --------- ---------
From net realized gains (0.245) (0.245) --- ---
--------- --------- --------- ---------
Total Distributions
Declared to Shareholders (0.383) (0.301) (0.067) (0.013)
--------- --------- --------- ---------
Net asset value -
End of period $ 11.460 $ 11.400 $ 11.820 $ 11.770
--------- --------- --------- ---------
Total return (d) 0.05% (0.71)% 18.90% (e) 17.84% (e)
--------- --------- --------- ---------
RATIOS TO AVERAGE NET ASSETS
Expenses 1.49% 2.24% 1.50% 2.25%
Fees waived by the adviser 0.01% 0.01%
Net investment income 1.19% 0.44% 0.93% 0.18%
Portfolio turnover 117% 117% 98% 98%
Net assets at end of period (000) $ 97,180 $ 150,121 $ 44,009 $ 89,737
</TABLE>
(a) Per share data was calculated using average shares outstanding during the
period.
(b) The Fund commenced investment operations on July 1, 1992.
(c) Net of fees and expenses waived or borne by the adviser which amounted to
$0.001 and $0.001, respectively.
(d) Total return at net asset value assuming all distributions reinvested and no
initial sales charge or contingent deferred sales charge.
(e) Had the adviser not waived or reimbursed a portion of expenses, total return
would have been reduced.
20
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
T0 THE TRUSTEES OF COLONIAL TRUST VI AND THE SHAREHOLDERS OF
COLONIAL U.S. FUND FOR GROWTH
In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Colonial U.S. Fund for Growth (a
series of Colonial Trust VI) at June 30, 1995, the results of its operations,
the changes in its net assets and the financial highlights for the periods
indicated, in conformity with generally accepted accounting principles. These
financial statements and the financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of portfolio positions
at June 30, 1995 by correspondence with the custodian, provide a reasonable
basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
August 11, 1995
21
<PAGE>
SHAREHOLDER SERVICES
TO MAKE INVESTING EASIER
Colonial has one of the most extensive selections of shareholder services
available. Your financial adviser can help you activate any of these services,
or call Colonial directly at 1-800-345-6611.
AFFORDABLE ADDITIONAL INVESTMENTS: Add to your account with as little as $50;
$25 for an IRA account.
FREE EXCHANGES*: Exchange all or part of your account into the same share class
of another Colonial fund, by phone or mail, as your needs change over time.
EASY ACCESS TO YOUR MONEY*: Make withdrawals from your account by phone, by mail
or, for certain funds, by check.
ONE-YEAR REINSTATEMENT PRIVILEGE: If you need access to your money, but then
choose to return it to Colonial within one year, you can reinvest in any
Colonial fund of the same share class without any penalty or sales charges.
FUNDAMATIC: Make periodic investments as low as $50 from your checking account
to your Colonial account.
SYSTEMATIC WITHDRAWAL PLAN (SWP): Receive monthly, quarterly, or semiannual
payments via check or bank transmission. There is a $5,000 account value
required, but no minimum for the payment amount. SWPs by check are processed on
the 10th of each month, including the April 1995 payment.
AUTOMATED DOLLAR COST AVERAGING: Transfer money on a monthly basis from any
Colonial fund with a balance of $5,000 into the same share class of up to four
other Colonial funds. Minimum for each transfer is $100.
LOW COST IRAS: Choose from a broad range of retirement plans,
including IRAs.
* Redemptions and exchanges are made at the next determined net asset value
after the request is received by Colonial. Proceeds may be more or less than
your original cost. The exchange privilege may be terminated at any time.
Investors who purchase Class B or Class D shares, or $1 million or more of Class
A shares, may be subject to a contingent deferred sales charge.
22
<PAGE>
SHAREHOLDER SERVICES AND TRANSFER AGENT
Colonial Investors Service Center, Inc.
P.O. Box 1722
Boston, MA 02105-1722
1-800-345-6611
Colonial U.S. Fund for Growth mails one shareholder report to each shareholder
address. If you would like more than one report, please call our Literature
Department at 1-800-248-2828 and additional reports will be sent to you.
This report has been prepared for shareholders of Colonial U.S. Fund for Growth.
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.
23
