<PAGE>
COLONIAL U.S.
FUND FOR GROWTH
ANNUAL REPORT
JUNE 30, 1996
[PHOTO MONTAGE]
NOT FDIC- | MAY LOSE VALUE
INSURED | NO BANK GUARANTEE
<PAGE>
COLONIAL U.S. FUND FOR GROWTH HIGHLIGHTS
JULY 1, 1995 - JUNE 30, 1996
INVESTMENT OBJECTIVE: Colonial U.S. Fund for Growth seeks growth exceeding the
Standard & Poor's 500 Index of 500 common stocks.
THE FUND IS DESIGNED TO OFFER:
x Maximum long-term growth potential
x Growth and value investments in stocks chosen to outperform
the S&P 500
x Disciplined quantitative investment strategy
x Expert portfolio management from a premier institutional
investment manager
PORTFOLIO MANAGEMENT TEAM COMMENTARY: "The last 12 months have been great for
the S&P 500. The Fund benefited from this rising stock market because it invests
primarily in large capitalization stocks like those that comprise the S&P 500."
COLONIAL U.S. FUND FOR GROWTH PERFORMANCE
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS D
<S> <C> <C> <C>
Inception dates 7/1/92 7/1/92 7/1/94
Distributions declared per share $1.203 $1.102 $1.114
Total returns, assuming reinvestment
of all distributions and no sales
charge or contingent deferred
sales charge (CDSC) --
12 months 18.85% 17.91% 17.84%
Net asset value per share at 6/30/96 $14.47 $14.36 $14.41
</TABLE>
TOP FIVE HOLDINGS* TOP FIVE SECTORS*
1.Exxon Corporation .......... 3.6% 1.Consumer Cyclicals ........ 14.9%
2.PepsiCo, Inc. .............. 3.0% 2.Financials ................ 14.4%
3.Merck & Company, Inc. ...... 3.0% 3.Utilities ................. 14.3%
4.Bristol-Myers Squibb ....... 2.8% 4.Technologies .............. 10.9%
5.Chrysler Corporation ....... 2.6% 5.Health Care ............... 10.4%
*Industry sectors 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. Because the Fund is actively managed, holdings
and sector breakdowns will change. Holdings and sector breakdowns are based on
net assets.
2
<PAGE>
PRESIDENT'S MESSAGE
TO FUND SHAREHOLDERS
I am pleased to present your Fund's annual report for the period ended June 30,
1996. First, however, I would like to extend my thanks to President John A.
McNeice, Jr., who has retired after a career with Colonial that spanned 40
years. We look forward to his continued involvement on the executive committee
of the board of directors at our parent company, Liberty Financial Companies,
Inc.
[PHOTO]
Harold W. Cogger
President
In my new position, I am directing Colonial's focus
on the delivery of investment performance over the long term. To achieve this
mission, we will continue to seek the optimal combination of talented people and
effective investment disciplines.
The receipt of your annual report is a good time to reflect on market
conditions and the performance of your Fund during the past year. The
second half of 1995 saw a combination of falling interest rates and controlled
inflation helping the economy grow at a comfortable pace. Interest rates rose
fairly steadily during the first half of 1996. This increase was caused in part
by unemployment statistics that proved to be lower than anticipated, causing a
decline in bond prices.
While there may be some current stock market volatility, we expect
corporate earnings to continue to make progress, but at a slower pace than in
1995. We also anticipate growth opportunities in certain foreign markets. In the
following pages, you'll find detailed information on your Fund's performance as
well as an in-depth discussion with the portfolio manager.
With over 12 years of service at Colonial and more than 25 years in the
industry, I am enthusiastic about -- and dedicated to achieving -- Colonial's
mission of providing you with superior investment returns. In my new role, I
look forward to communicating with you about your Colonial investment. We
appreciate the opportunity to help you meet your investment goals.
Respectfully,
/s/Harold W. Cogger
- ---------------------
Harold W. Cogger
President
August 12, 1996
Because market conditions change frequently, there can be no assurance that the
trends described here will continue, come to pass or affect Fund performance.
3
<PAGE>
PORTFOLIO MANAGEMENT REPORT
Colonial U.S. Fund for Growth's portfolio is sub-advised by State Street Global
Advisors, a division of State Street Bank and Trust Company. JEFFREY ADAMS, vice
president of State Street Global Advisors, is a member of the sub-adviser's
portfolio team which makes the investment decisions for the Fund.
Q: HOW DID THE FUND PERFORM DURING THE 12-MONTH PERIOD?
JA: Colonial U.S. Fund for Growth performed well. The total return for Class A
shares was 18.85%, based on net asset value. The Fund did underperform its
benchmark, the Standard and Poor's 500 Index (S&P 500), which had a return of
25.97% for the year.
Q: CAN YOU EXPLAIN THE REASONS FOR THIS PERFORMANCE?
JA: When you look closely at the performance of the stocks within the Index, you
find that last year's market was very narrow -- with much of the strong
performance being driven by a few stocks.
When we select a stock for the portfolio, we focus on an issue's fundamental
value and growth potential. We believe that many of the stocks that caused the
Index's strong performance experienced price increases driven by the market
rather than by their value. While not owning some of these stocks did hamper the
Fund's performance, especially in the first half of the Fund's fiscal year, we
believe that this strategy will serve investors better over time.
Q: HOW DID THE FUND'S HOLDINGS IMPACT PERFORMANCE OVER THE PERIOD?
JA: Technology stocks were extremely volatile in the first half of the period,
particularly in the fourth quarter of 1995. The Fund's performance was hurt by
the negative performance in this sector. However, the Fund's neutral sector
weightings -- designed to mirror those of the S&P 500 -- provided a degree of
insulation. Positive performance of financial stocks including NationsBank and
Bank of America, as well as service providers like Hilton Hotels, helped the
Fund's performance during the year.
Q: WHAT IS YOUR OUTLOOK FOR THE FUND?
JA: We've seen earnings growth slow over the past several months and we think
that economic growth will also slow. We'll probably continue to see positive
total returns for large capitalization stocks, although returns will not be in
the range we have seen over the last 12 months. We'll be watching for signs of
inflation and changes in the Federal Reserve Board's position on interest rates,
as well as other factors that typically affect the market.
4
<PAGE>
COLONIAL U.S. FUND FOR GROWTH INVESTMENT PERFORMANCE VS. THE S&P 500 INDEX
Change in Value of $10,000 from 7/92 - 6/96
Based on Maximum Offering Price (MOP) for Class A Shares
and Applicable Contingent Deferred Sales Charge (CDSC) for Class B Shares
<TABLE>
<CAPTION>
CLASS A SHARES
<S> <C> <C> <C>
Label A B C
- -----------------------------------------------------------------
Label NAV MOP S & P 500 Mnth
1 10,000 9,425 10,000
2 10,420 9,821 10,408
3 10,140 9,557 10,196
4 10,210 9,623 10,315
5 10,290 9,698 10,351
6 10,660 10,047 10,702
7 10,957 10,327 10,834
8 11,088 10,450 10,924
9 11,078 10,441 11,073
10 11,599 10,932 11,306
11 11,358 10,705 11,033
12 11,749 11,074 11,328
13 11,890 11,206 11,361
14 11,789 11,111 11,315
15 12,232 11,528 11,743
16 12,413 11,699 11,653
17 12,493 11,775 11,894
18 12,282 11,576 11,781
19 12,512 11,793 11,923
20 12,770 12,036 12,328
21 12,471 11,754 11,994
22 12,016 11,325 11,472
23 12,037 11,345 11,619
24 12,182 11,481 11,809
25 11,896 11,212 11,520
26 12,145 11,446 11,898
27 12,685 11,955 12,384
28 12,529 11,808 12,082
29 12,695 11,965 12,353
30 12,280 11,574 11,904
31 12,469 11,752 12,080
32 12,781 12,046 12,393
33 13,382 12,612 12,875
34 13,704 12,916 13,255
35 14,005 13,199 13,645
36 14,583 13,744 14,189
37 14,851 13,997 14,518
38 15,333 14,451 14,999
39 15,243 14,366 15,037
40 15,769 14,863 15,671
41 15,668 14,768 15,615
42 16,240 15,306 16,300
43 16,147 15,218 16,614
44 16,584 15,631 17,179
45 16,852 15,883 17,338
46 16,864 15,894 17,505
47 17,483 16,478 17,763
48 17,921 16,890 18,820
49 17,651 16,636 18,290
</TABLE>
<TABLE>
<CAPTION>
CLASS B SHARES
<S> <C> <C> <C>
Label C D E
- -------------------------------------------------
Label S & P 500 Mnth NAV Class B W/CDSC Class B
1 10,000 10,000 10,000
2 10,408 10,420 10,420
3 10,196 10,140 10,140
4 10,315 10,210 10,210
5 10,351 10,280 10,280
6 10,702 10,630 10,630
7 10,834 10,908 10,908
8 10,924 11,028 11,028
9 11,073 11,008 11,008
10 11,306 11,508 11,508
11 11,033 11,268 11,268
12 11,328 11,648 11,648
13 11,361 11,784 11,784
14 11,315 11,674 11,674
15 11,743 12,104 12,104
16 11,653 12,285 12,285
17 11,894 12,345 12,345
18 11,781 12,124 12,124
19 11,923 12,342 12,342
20 12,328 12,599 12,599
21 11,994 12,291 12,291
22 11,472 11,841 11,841
23 11,619 11,861 11,861
24 11,809 11,984 11,984
25 11,520 11,700 11,700
26 11,898 11,936 11,936
27 12,384 12,449 12,449
28 12,082 12,295 12,295
29 12,353 12,460 12,460
30 11,904 12,039 12,039
31 12,080 12,213 12,213
32 12,393 12,509 12,509
33 12,875 13,090 13,090
34 13,255 13,397 13,397
35 13,645 13,682 13,682
36 14,189 14,241 14,241
37 14,518 14,501 14,501
38 14,999 14,952 14,952
39 15,037 14,853 14,853
40 15,671 15,370 15,370
41 15,615 15,260 15,260
42 16,300 15,799 15,799
43 16,614 15,697 15,697
44 17,179 16,114 16,114
45 17,338 16,364 16,364
46 17,505 16,376 16,376
47 17,763 16,959 16,959
48 18,220 17,375 17,375
49 18,290 17,097 16,797
</TABLE>
A $10,000 investment in Class D shares made on July 1, 1994 (inception), at the
applicable MOP would have grown to $14,467 on June 30, 1996.
AVERAGE ANNUAL TOTAL RETURNS
As of June 30, 1996 (most recent quarter end)
- --------------------------------------------------------------------------------
CLASS A SHARES CLASS B SHARES CLASS D SHARES
INCEPTION 7/1/92 7/1/92 7/1/94
NAV MOP NAV W/CDSC NAV MOP W/CDSC
- --------------------------------------------------------------------------------
1 YEAR 18.85% 12.02% 17.91% 12.91% 17.84% 15.66%
- --------------------------------------------------------------------------------
SINCE INCEPTION 15.25% 13.56% 14.34% 13.83% 20.85% 20.25%
- --------------------------------------------------------------------------------
The Standard & Poor's 500 Index is an unmanaged index that tracks the
performance of a selection of widely held common stocks. Unlike mutual funds,
indexes are not investments, do not incur fees or charges and are not
professionally managed.
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) returns do not
include sales charges or CDSC. MOP returns for Class A shares include the
maximum sales charge of 5.75% and 1% for Class D shares. The CDSC returns
reflect the maximum charge of 5% for 1 year and 3% since inception for Class B
shares and 1% for Class D shares.
5
<PAGE>
INVESTMENT PORTFOLIO
JUNE 30, 1996 (IN THOUSANDS)
<TABLE>
<CAPTION>
COMMON STOCKS - 98.0% SHARES VALUE
- -----------------------------------------------------------------------------
CONSTRUCTION - 0.0%
Heavy Construction - Non Building Construction
<S> <C> <C>
Halliburton Co. 1 $ 67
------------
- -----------------------------------------------------------------------------
FINANCE, INSURANCE & REAL ESTATE - 14.4%
DEPOSITORY INSTITUTIONS - 7.8%
BankAmerica Corp. 103 7,795
Chase Manhattan Corp. 45 3,171
Comerica, Inc. 86 3,838
First Union Corp. 178 10,842
J.P. Morgan & Co., Inc. 13 1,083
NationsBank Corp. 133 10,956
-----------
37,685
-----------
INSURANCE AGENTS & BROKERS - 0.6%
Marsh & McLennan Cos., Inc. 31 2,972
-----------
INSURANCE CARRIERS - 2.5%
American Re Corp. 120 5,363
Old Republic International Corp. 141 3,038
Travelers Group, Inc. 69 3,127
Wellpoint Health Networks, Inc., Class A 12 379
-----------
11,907
-----------
NONDEPOSITORY CREDIT INSTITUTIONS - 0.1%
Beneficial Corp. 11 606
-----------
SECURITY BROKERS & DEALERS - 3.4%
A.G. Edwards, Inc. 48 1,307
Bear Stearns Cos., Inc. 362 8,551
Lehman Brothers Holdings, Inc. 266 6,588
-----------
16,446
-----------
- -----------------------------------------------------------------------------
MANUFACTURING - 57.6%
CHEMICALS & ALLIED PRODUCTS - 15.1%
Abbott Laboratories 17 744
Albemarle Corp. 93 1,697
Bristol-Myers Squibb Co. 151 13,599
Clorox Co. 39 3,430
Eastman Chemical Co. 59 3,579
Georgia Gulf Corp. 25 725
Johnson & Johnson 174 8,603
Merck & Co., Inc. 225 14,515
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Investment Portfolio/June 30, 1996
- -----------------------------------------------------------------------------
<S> <C> <C>
Procter & Gamble Co. 88 $ 7,948
Rohm & Haas Co. 97 6,074
Schering-Plough Corp. 185 11,596
Terra Industries, Inc. 56 692
-----------
73,202
-----------
ELECTRONIC & ELECTRICAL EQUIPMENT - 1.9%
Cypress Semiconductor Corp. (a) 63 751
Integrated Device Technology, Inc. (a) 44 463
Komag, Inc. (a) 277 7,306
Read-Rite Corp. (a) 35 492
-----------
9,012
-----------
FOOD & KINDRED PRODUCTS - 6.1%
Archer Daniels Midland Co. 165 3,161
Campbell Soup Co. 6 451
Heinz (H.J.) Co. 2 55
IBP, Inc. 222 6,144
Lancaster Colony Corp. 27 1,020
PepsiCo, Inc. 415 14,666
Phillip Morris Co., Inc. 37 3,858
-----------
29,355
-----------
FURNITURE & FIXTURES - 1.0%
Johnson Controls, Inc. 9 605
Leggett & Platt, Inc. 154 4,276
-----------
4,881
-----------
MACHINERY & COMPUTER EQUIPMENT - 10.9%
Applied Materials, Inc. (a) 238 7,262
Case Corp. 52 2,472
Caterpillar, Inc. 21 1,402
Cisco Systems, Inc. (a) 24 1,359
Compaq Computer Corp. (a) 78 3,842
Dell Computer Corp. (a) 181 9,183
Dover Corp. 6 263
Hewlett-Packard Co. 62 6,177
Kennametal, Inc. 15 510
Lam Research Corp. (a) 156 4,059
Novellus Systems, Inc. (a) 25 882
Storage Technology Corp. (a) 99 3,798
Tecumseh Products Co.,
Class A 20 1,059
Western Digital Corp. (a) 405 10,573
-----------
52,841
-----------
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
Investment Portfolio/June 30, 1996
- -----------------------------------------------------------------------------
COMMON STOCKS - CONT. SHARES VALUE
- -----------------------------------------------------------------------------
MANUFACTURING - CONT.
MEASURING & ANALYZING INSTRUMENTS - 2.5%
<S> <C> <C>
KLA Instruments Corp. (a) 7 $ 153
Litton Industries, Inc. (a) 9 391
Millipore Corp. 142 5,930
Raytheon Co. 12 609
Tektronix, Inc. 102 4,565
Xerox Corp. 12 626
-----------
12,274
-----------
MISCELLANEOUS MANUFACTURING - 1.0%
Callaway Golf Co. 112 3,737
Jostens, Inc. (a) 59 1,169
-----------
4,906
-----------
PETROLEUM REFINING - 8.9%
Amoco Corp. 63 4,567
Atlantic Richfield Co. 45 5,273
Exxon Corp. 202 17,584
Mobil Corp. 64 7,187
Pennzoil Co. 29 1,318
USX-Marathon Group 345 6,941
-----------
42,870
-----------
PRINTING & PUBLISHING - 1.1%
Tribune Co. 53 3,813
Washington Post Co. 5 1,652
-----------
5,465
-----------
STONE, CLAY, GLASS & CONCRETE - 1.8%
Owens-Corning Fiberglas Corp. (a) 196 8,432
-----------
TRANSPORTATION EQUIPMENT - 7.3%
Chrysler Corp. 201 12,443
Ford Motor Co. 348 11,267
McDonnell Douglas Corp. 180 8,711
Teledyne, Inc. 76 2,735
-----------
35,156
-----------
- -----------------------------------------------------------------------------
RETAIL TRADE - 5.2%
APPAREL & ACCESSORY STORES - 2.9%
TJX Companies, Inc. 286 9,649
Woolworth Corp. 198 4,444
-----------
14,093
-----------
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Investment Portfolio/June 30, 1996
- -----------------------------------------------------------------------------
GENERAL MERCHANDISE STORES - 2.1%
<S> <C> <C>
Consolidated Stores Corp. (a) 19 $ 680
Dayton Hudson Corp. 27 2,815
Dillard Department Stores, Inc. 170 6,194
Mercantile Stores Co., Inc. 2 135
-----------
9,824
-----------
MISCELLANEOUS RETAIL - 0.0%
Eckerd Corp. (a) 4 86
-----------
RESTAURANTS - 0.2%
Luby's Cafeterias, Inc. 42 998
-----------
- -----------------------------------------------------------------------------
SERVICES - 1.6%
Business Services - 1.5%
BMC Software, Inc. (a) 20 1,183
Computer Associates International, Inc. 22 1,560
Interpublic Group of Cos., Inc. 91 4,284
-----------
7,027
-----------
Health Services - 0.1%
Tenet Healthcare Corp. (a) 27 581
-----------
- -----------------------------------------------------------------------------
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES - 18.9%
AIR TRANSPORTATION - 2.3%
Delta Air Lines, Inc. 15 1,245
Northwest Airlines Corp. Class A (a) 107 4,215
UAL, Inc. (a) 109 5,870
-----------
11,330
-----------
COMMUNICATIONS - 9.7%
Alltel Corp. 25 760
Ameritech Corp. 175 10,408
BellSouth Corp. 174 7,360
Century Telephone Enterprises, Inc. 102 3,245
Compuware Corp. (a) 40 1,596
GTE Corp. 21 926
NYNEX Corp. 38 1,810
Pacific Telesis Group, Inc. 43 1,465
Southern New England
Telecommunications Corp. 20 857
Southwestern Bell Corp. 188 9,279
Sprint Corp. 222 9,337
-----------
47,043
-----------
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
Investment Portfolio/June 30, 1996
- -----------------------------------------------------------------------------
COMMON STOCKS - CONT. SHARES VALUE
- -----------------------------------------------------------------------------
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES - CONT.
ELECTRIC, GAS & SANITARY SERVICES - 0.4%
<S> <C> <C>
Enova Corp. 86 $ 1,991
------------
ELECTRIC SERVICES - 1.6%
Boston Edison Co. 7 168
Central & South West Corp. 182 5,264
Consolidated Edison Co. of New York 22 644
Northern States Power Co. 2 118
Ohio Edison Co. 81 1,776
-----------
7,970
-----------
GAS SERVICES - 2.9%
Consolidated Natural Gas Co. 96 5,026
National Fuel Gas Co. 7 248
Williams Companies, Inc. 172 8,529
-----------
13,803
-----------
RAILROAD - 0.0%
Illinois Central Corp. 1 21
-----------
WATER TRANSPORTATION - 2.0%
Tidewater, Inc. 225 9,859
-----------
- -----------------------------------------------------------------------------
WHOLESALE TRADE - 0.3%
NONDURABLE GOODS - 0.3%
McKesson Corp. 13 610
Supervalu, Inc. 29 907
-----------
1,517
-----------
TOTAL COMMON STOCKS (cost of $398,897) 474,220
-----------
PREFERRED STOCKS - 0.0%
- -----------------------------------------------------------------------------
MANUFACTURING - 0.0%
TRANSPORTATION EQUIPMENT
Teledyne, Inc. Series E (cost of $11) 1 12
-----------
TOTAL INVESTMENTS - 98.0% (cost of $398,908)(b) 474,232
-----------
SHORT-TERM OBLIGATIONS - 1.8% PAR
- -----------------------------------------------------------------------------
Repurchase agreement with Chase
Securities Inc., dated 6/28/96, due 7/01/96
at 5.40% collateralized by U.S. Treasury notes
with various maturities to 1998, market value $8,771
(repurchase proceeds $8,583) $8,579 8,579
-----------
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Investment Portfolio/June 30, 1996
- -----------------------------------------------------------------------------
<S> <C>
OTHER ASSETS & LIABILITIES, NET - 0.2% $ 919
- ------------------------------------------------------------------------------
NET ASSETS - 100.0% $483,730
------------
NOTES TO INVESTMENT PORTFOLIO:
- -----------------------------------------------------------------------------
</TABLE>
(a) Non-incoming producing.
(b) Cost for federal income tax purposes is approximately the same.
See notes to financial statements.
11
<PAGE>
STATEMENT OF ASSETS & LIABILITIES
JUNE 30, 1996
<TABLE>
(in thousands except for per share amounts and footnotes)
ASSETS
<S> <C> <C>
Investments at value (cost $398,908) $ 474,232
Short-term obligations 8,579
---------
482,811
Receivable for:
Fund shares sold $ 959
Dividends 593
Interest 4
Deferred organization expense 18
Other 6 1,580
--------- ---------
Total Assets 484,391
LIABILITIES
Payable for:
Fund shares repurchased 526
Distributions 91
Accrued:
Deferred Trustees fees 3
Transfer agent Out-of-Pocket fees 20
Other 21
---------
Total Liabilities 661
---------
NET ASSETS $ 483,730
---------
Net asset value & redemption price per share - Class A
($168,554/11,653) $ 14.47
---------
Maximum offering price per share - Class A
($14.47/0.9425) $ 15.35(a)
---------
Net asset value & offering price per share - Class B
($306,718/21,363) $ 14.36(b)
---------
Net asset value & redemption price per share - Class D
($8,458/587) $ 14.41(b)
---------
Maximum offering price per share - Class D
($14.41/0.9900) $ 14.56
---------
COMPOSITION OF NET ASSETS
Capital paid in $ 387,485
Overdistributed net investment income (3)
Accumulated net realized gains 20,924
Net unrealized appreciation 75,324
---------
$ 483,730
---------
</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.
12
<PAGE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 1996
<TABLE>
(in thousands)
INVESTMENT INCOME
<S> <C> <C>
Dividends $ 9,043
Interest 644
-------
9,687
EXPENSES
Management fee $ 3,342
Service fee 1,045
Distribution fee - Class B 1,978
Distribution fee - Class D 42
Transfer agent 1,262
Bookkeeping fee 156
Trustees fee 30
Custodian fee 22
Audit fee 32
Legal fee 13
Registration fee 88
Reports to shareholders 17
Amortization of deferred
organization expense 18
Other 27 8,072
------- -------
Net Investment Income 1,615
-------
NET REALIZED & UNREALIZED GAIN ON PORTFOLIO POSITIONS
Net realized gain 40,109
Net unrealized appreciation 27,088
-------
Net Gain 67,197
-------
Net Increase in Net Assets from Operations $68,812
-------
</TABLE>
See notes to financial statements.
13
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED
(in thousands) JUNE 30
--------------------------
INCREASE (DECREASE) IN NET ASSETS 1996 1995
Operations:
<S> <C> <C>
Net investment income $ 1,615 $ 2,546
Net realized gain 40,109 13,643
Net unrealized appreciation 27,088 47,177
--------- ---------
Net Increase from Operations 68,812 63,366
Distributions:
From net investment income - Class A (1,271) (1,420)
From net realized gains - Class A (10,933) (6,157)
From net investment income - Class B (325) (1,133)
From net realized gains - Class B (19,657) (10,279)
From net investment income - Class D (13) (16)
From net realized gains - Class D (409) (76)
--------- ---------
36,204 44,285
--------- ---------
Fund Share Transactions:
Receipts for shares sold - Class A 44,237 25,072
Value of distributions reinvested - Class A 11,527 7,015
Cost of shares repurchased - Class A (24,333) (21,509)
--------- ---------
31,431 10,578
--------- ---------
Receipts for shares sold - Class B 81,529 53,700
Value of distributions reinvested - Class B 18,826 10,796
Cost of shares repurchased - Class B (34,620) (24,021)
--------- ---------
65,735 40,475
--------- ---------
Receipts for shares sold - Class D 5,591 2,741
Value of distributions reinvested - Class D 409 90
Cost of shares repurchased - Class D (1,040) (70)
--------- ---------
4,960 2,761
--------- ---------
Net Increase from Fund Share
Transactions 102,126 53,814
--------- ---------
Total Increase 138,330 98,099
NET ASSETS
Beginning of period 345,400 247,301
--------- ---------
End of period (net of overdistributed and including
undistributed net investment income of $3 and
$32, respectively) $ 483,730 $ 345,400
--------- ---------
</TABLE>
Continued on next page.
See notes to financial statements.
14
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
(continued)
<TABLE>
<CAPTION>
Year ended
June 30
----------------------------
1996 1995
<S> <C> <C>
NUMBER OF FUND SHARES
Sold - Class A 3,189 2,049
Issued for distributions reinvested - Class A 851 614
Repurchased - Class A (1,750) (1,779)
------ ------
2,290 884
------ ------
Sold - Class B 5,910 4,431
Issued for distributions reinvested - Class B 1,403 957
Repurchased - Class B (2,509) (2,000)
------ ------
4,804 3,388
------ ------
Sold - Class D 403 227
Issued for distributions reinvested - Class D 30 8
Repurchased - Class D (75) (6)
------ ------
358 229
------ ------
</TABLE>
See notes to financial statements.
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
NOTE 1. ACCOUNTING POLICIES
- --------------------------------------------------------------------------------
ORGANIZATION: Colonial U.S. Fund for Growth (the Fund), a series of Colonial
Trust VI, is a diversified portfolio of a Massachusetts business trust,
registered under the Investment Company Act of 1940, as amended, as an open-end,
management investment company. The Fund's objective is to seek growth exceeding
the performance of the Standard & Poor's 500 index of 500 common stocks. 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 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 preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. The following is a summary of
significant accounting policies consistently followed by the Fund in the
preparation of its financial statements.
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, sold or mature.
Cost is determined and gains and losses are based upon the specific
identification method for both financial statement and federal income tax
purposes.
DETERMINATION OF CLASS NET ASSET VALUES AND FINANCIAL HIGHLIGHTS: All income,
expenses (other than the Class B and Class D distribution fees), realized and
unrealized gains (losses) are allocated to each class proportionately on a daily
basis for purposes of determining the net asset value of each class.
16
<PAGE>
Notes to Financial Statements/June 30, 1996
- --------------------------------------------------------------------------------
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
fees 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.
DISTRIBUTIONS TO SHAREHOLDERS: Distributions to shareholders are recorded on the
ex-date.
The amount and character of income and gains to be distributed are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles. Reclassifications are made to the Fund's capital accounts
to reflect income and gains available for distribution (or available capital
loss carryforwards) under income tax regulations.
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, 1996.
17
<PAGE>
Notes to Financial Statements/June 30, 1996
- --------------------------------------------------------------------------------
NOTE 2. FEES AND COMPENSATION PAID TO AFFILIATES - CONT.
- --------------------------------------------------------------------------------
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: Colonial Investment
Services, Inc. (the Distributor), an affiliate of the Adviser, is the Fund's
principal underwriter. For the year ended June 30, 1996, the Fund has been
advised that the Distributor retained net underwriting discounts of $139,177 on
sales of the Fund's Class A shares and received contingent deferred sales
charges (CDSC) of $137,949 and $315 on Class B and Class D share redemptions,
respectively.
The Fund has adopted a 12b-1 plan which requires it to pay the Distributor a
service fee equal to 0.25% annually 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, only.
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, 1996, 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.
18
<PAGE>
Notes to Financial Statements/June 30, 1996
- --------------------------------------------------------------------------------
NOTE 3. PORTFOLIO INFORMATION
- --------------------------------------------------------------------------------
INVESTMENT ACTIVITY: During the year ended June 30, 1996, purchases and sales of
investments, other than short-term obligations, were $436,865,135 and
$362,373,880, respectively.
Unrealized appreciation (depreciation) at June 30, 1996 based on cost of
investments for federal income tax purposes was:
Gross unrealized appreciation $91,466,986
Gross unrealized depreciation (16,142,827)
Net unrealized appreciation $75,324,159
OTHER: The Fund may focus its investments in certain industries,
subjecting it to greater risk than a fund that is more diversified.
NOTE 4. LINE OF CREDIT
- --------------------------------------------------------------------------------
The Fund may borrow up to 10% of its net assets under a line of credit for
temporary or emergency purposes. Any borrowings bear interest at one of the
following options determined at the inception of the loan: (1) federal funds
rate plus 1/2 of 1%, (2) the lending bank's base rate or (3) IBOR offshore loan
rate plus 1/2 of 1%. There were no borrowings under the line of credit during
the year ended June 30, 1996.
19
<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
------------------------------------------------------------------
1996
Class A Class B Class D
------------ ------------ ----------
<S> <C> <C> <C>
Net asset value -
Beginning of period $ 13.260 $ 13.180 $ 13.240
------------ ------------ ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment
income 0.121 0.017 0.016
Net realized and
unrealized gain 2.292 2.265 2.268
------------ ------------ ----------
Total from Investment
Operations 2.413 2.282 2.284
------------ ------------ ----------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment
income (0.118) (0.017) (0.029)
From net realized
gains (1.085) (1.085) (1.085)
------------ ------------ ----------
Total Distributions
Declared to
Shareholders (1.203) (1.102) (1.114)
------------ ------------ ----------
Net asset value -
End of period $ 14.470 $ 14.360 $ 14.410
------------ ------------ ----------
Total return (c) 18.85% 17.91% 17.84%
------------ ------------ ----------
RATIOS TO AVERAGE NET ASSETS
Expenses 1.45%(d) 2.20%(d) 2.20%(d)
Net investment
income 0.87%(d) 0.12%(d) 0.12%(d)
Portfolio turnover 89% 89% 89%
Average commission rate (e) $ 0.046 $ 0.046 $ 0.046
Net assets at end
of period (000) $ 168,554 $ 306,718 $ 8,458
</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.
(d) The benefits derived from custody credits and directed brokerage
arrangements had no impact. Prior years' ratios are net of
benefits received, if any.
(e) For the fiscal years beginning on or after September 1, 1995, a
fund is required to disclose its average commission rate per
share for trades on which commissions are charged.
20
<PAGE>
FINANCIAL HIGHLIGHTS (a) - CONT.
<TABLE>
<CAPTION>
Year ended June 30
- -------------------------------------------------------------------
1995
Class A Class B Class D (b)
- ------------ ------------ ----------
<C> <C> <C>
$ 11.460 $ 11.400 $ 11.460
- ------------ ------------ ----------
0.165 0.075 0.074
2.530 2.513 2.534
- ------------ ------------ ----------
2.695 2.588 2.608
- ------------ ------------ ----------
(0.160) (0.073) (0.093)
(0.735) (0.735) (0.735)
- ------------ ------------ ----------
(0.895) (0.808) (0.828)
- ------------ ------------ ----------
$ 13.260 $ 13.180 $ 13.240
- ------------ ------------ ----------
24.84% 23.94% 24.01%
- ------------ ------------ ----------
1.46% 2.21% 2.21%
1.37% 0.62% 0.62%
84% 84% 84%
- - -
- ------------ ------------ ----------
$ 124,171 $ 218,201 $ 3,028
</TABLE>
21
<PAGE>
FINANCIAL HIGHLIGHTS (a) - CONT.
<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.
22
<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, 1996, 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, 1996 by correspondence with the custodian, provide a reasonable
basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
August 12, 1996
23
<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 arrange for any of these
services, or you can 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 charge.
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. The maximum annual withdrawal
is 12% of account balance at time SWP is established. SWPs by check are
processed on the 10th of each month.
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 (for applicable funds), or $1
million or more of Class A shares, may be subject to a contingent deferred sales
charge.
24
<PAGE>
HOW TO REACH COLONIAL
BY PHONE OR BY MAIL
BY TELEPHONE
COLONIAL CUSTOMER CONNECTION - 1-800-345-6611
For 24-hour account information, call from your touch-tone phone. (Rotary
callers will be automatically connected to a representative during business
hours.) A recorded message will guide you through the menu:
For fund prices, dividends, and capital gains information .......... press 1
For account information ............................................ press 2
To speak to a Colonial representative .............................. press 3
For yield and total return information ............................. press 4
For duplicate statements or new supply of checks ................... press 5
To order duplicate tax forms and year-end statements ............... press 6
(February through May)
To review your options at any time during your call ................ press *
To speak with a shareholder services representative about your account, call
Monday to Friday, 8:00 am to 8:00 pm ET.
COLONIAL TELEPHONE TRANSACTION DEPARTMENT - 1-800-422-3737
To purchase, exchange, or sell shares by telephone, call Monday to Friday,
9:00 am to 8:00 pm ET. Transactions received after the close of the New York
Stock Exchange will receive the next business day's closing price.
COLONIAL LITERATURE DEPARTMENT - 1-800-248-2828
To request literature on any Colonial fund, call Monday to Friday, 8:30 am to
6:30 pm ET.
BY MAIL
COLONIAL INVESTORS SERVICE CENTER, INC.
P.O. BOX 1722
BOSTON, MA 02105-1722
25
<PAGE>
SHAREHOLDER COMMUNICATIONS
TO KEEP YOU INFORMED
To make recordkeeping easy and keep you up-to-date on the performance of your
investments, you can expect to receive the following information about your
Colonial account:
TRANSACTION CONFIRMATIONS: Each time you make a purchase, sale, or exchange, you
receive a confirmation statement within just a few days.
QUARTERLY STATEMENTS: Every three months, if any transactions are made that
affect your share balance, this statement reports on your account activity
during the quarter (including any reinvestment of dividends). This statement
also provides year-to-date information.
COLONIAL SHAREHOLDER NEWS: Mailed with your quarterly account statements, this
newsletter highlights timely investment strategies, portfolio manager
commentary, and shareholder service updates.
TAX FORMS AND YEAR-END TAX GUIDE: Easy-to-use forms and timely information are
designed to make tax reporting simpler. (Usually mailed in January.)
AVERAGE COST BASIS STATEMENTS: If you sold or exchanged shares during the year,
this statement may help you calculate your gain/loss for tax purposes. (Usually
mailed in February.)
26
<PAGE>
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Colonial U.S. Fund for Growth is:
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.
27
<PAGE>
[COLONIAL MUTUAL FUNDS LOGO]
Mutual Funds for
Planned Portfolios
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, Shore Bank
& 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)
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., Distributor (C) 1996
One Financial Center, Boston, Massachusetts 02111-2621, 617-426-3750
US-02/493C-0696 M (8/96)
