COLONIAL SMALL CAP VALUE FUND ANNUAL REPORT
June 30, 1997
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Not FDIC May Lose Value
Insured No Bank Guarantee
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COLONIAL SMALL CAP VALUE FUND HIGHLIGHTS
JULY 1, 1996 - JUNE 30, 1997
INVESTMENT OBJECTIVE: Colonial Small Cap Value Fund seeks long-term growth by
investing primarily in smaller capitalization equities.
THE FUND IS DESIGNED TO OFFER:
* Diversification
* Dynamic investment opportunities
* Disciplined investment strategy
PORTFOLIO MANAGER COMMENTARY: "We believe there are excellent values to be
found in all sectors of the small cap market and we expect the investment
environment for small company stocks to remain favorable in the year ahead."
-- James Haynie & Michael Rega
COLONIAL SMALL CAP VALUE FUND PERFORMANCE(1)
CLASS A CLASS B CLASS D(2)
Inception dates 7/25/86 11/9/92 1/15/96
12-month total returns, 19.54% 18.63% 18.64%
assuming reinvestment
of all distributions
and no sales charge or
contingent deferred
sales charge (CDSC)
Net asset value per $30.57 $29.49 $30.24
share on 6/30/97
(1) Formerly Colonial Small Stock Fund. Name changed 3/3/97 and investment
policies changed 11/2/92.
(2) Effective July 1, 1997, Class D shares were converted to Class C shares.
TOP FIVE HOLDINGS(3) TOP FIVE SECTORS(3)
(as of 6/30/97) (as of 6/30/97)
- ----------------------------------- ----------------------------------
1. Fremont General Corp. ......2.1% 1. Financials ...............17.1%
2. Capital Re Corp. ...........1.8% 2. Consumer Cyclicals .......16.3%
3. Penncorp Financial 3. Technologies .............14.5%
Group, Inc. ................1.7% 4. Health Care ..............10.6%
4. Universal Health 5. Capital Goods ............ 6.0%
Services, Inc. .............1.5%
5. Furniture Brands
International, Inc. ........1.4%
(3) Because the Fund is actively managed, holdings and sectors will change.
Holding and sector weightings are calculated as a percent of total net assets.
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's defined criteria as used in the investment process.
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2
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PRESIDENT'S MESSAGE
TO FUND SHAREHOLDERS
I am pleased to present your Fund's annual report for
the year ended June 30, 1997. This report discusses
the investment environment of the last 12 months and
the performance of your Fund.
In the U.S. stock market, generally favorable conditions [PHOTO]
prevailed through the year, despite the decline in prices
during July of 1996. Stocks and bonds experienced volatility again in March of
1997, when the Federal Reserve Board raised short-term interest rates as a
preemptive strike against inflation. Since then, large and small stocks have
rebounded nicely with the Dow Jones Industrial and NASDAQ Averages both setting
several new records.
During the last year, your Fund has continued to provide solid growth
generated by well-researched investments in broadly diversified small cap
value stocks. And, for the fiscal year ahead, we expect moderate economic
growth and low inflation, resulting in a favorable investment environment.
The following report will provide you with specific information on your
Fund's performance, as well as an in-depth discussion with your portfolio
managers. As always, we thank you for the opportunity to help meet your
investment goals.
Respectfully,
/s/ Harold W. Cogger
Harold W. Cogger
President
August 12, 1997
Because market conditions change frequently, there can be no assurance that the
trends described here will continue.
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3
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PORTFOLIO MANAGEMENT REPORT
JAMES HAYNIE and MICHAEL REGA, Vice Presidents of Colonial Management
Associates, Inc., co-manage Colonial Small Cap Value Fund.
SEEKING GOOD VALUES IN ALL SECTORS
We continued to manage the Fund with the investment strategy that has
generated solid returns for the last five years. We carefully research all
market sectors for companies whose stock is reasonably priced and offers
above average growth potential. Since value-oriented stocks can be found
throughout the small cap market, the Fund's strategy offers broad
diversification and protection from volatile performance that may result
from placing specific sector bets.
A FAVORABLE INVESTMENT ENVIRONMENT
Conditions in the equity market were favorable for most of the last 12
months, with significant gains in large and small stock indexes. There was
a drop in small stock prices in July of 1996, with the NASDAQ posting its
largest one-day decline since 1987. The stock markets also declined briefly
in March of 1997, when the Federal Reserve Board raised short-term interest
rates as a preemptive strike against inflation. Since then, both small and
large stocks have risen sharply, with the S&P 500 and NASDAQ averages
setting several new records. While small stocks continued the recent trend of
underperforming relative to large stocks, small stocks, as represented by
the Russell 2000 Index, still posted a gain of over 16% for the year.
OUTPERFORMED THE AVERAGES -- AGAIN
As it did last year, the Fund outperformed the Russell 2000 Index, an
unmanaged index that tracks the performance of small company stocks traded
on the New York Stock Exchange, the American Stock Exchange and NASDAQ. The
total return for Class A shares, based on net asset value, was 19.54% while
the Russell 2000 posted a total return of 16.33%. The Fund was able to
outperform the Index through superior stock selection across a wide range of
market sectors.
KNOWING WHAT TO BUY -- AND WHAT TO SELL
The Fund benefited from investments in the financial, technology and consumer
cyclical sectors over the last year. Fremont General, a financial company, was
the single largest Fund holding at the end of the fiscal year. It performed
well, due in part to an improved interest rate environment compared to the year
before, registering solid earnings growth. Furniture Brands International and
Airborne Freight were other stocks that contributed to the strong performance of
the portfolio, rising 43% and 101%, respectively, during their holding periods.
In addition, the Fund benefited from the sale of stocks that we believed had
reached their full value. One such stock was JLG Industries, a hydraulic lifts
producer, that increased 396% in value since we purchased it in the spring of
1995. The stock was sold last fall, several months before lower sales figures
resulted in a much wider selloff by investors.
OUTLOOK: SMALL CAPS BENEFIT DURING PERIODS OF MODERATE GROWTH
We take a guarded positive outlook of the year ahead as we expect moderate
economic growth and continued low inflation. There may be a small interest
rate hike, which could negatively affect the stock market. However, in
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4
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general, small cap stocks currently have more attractive valuations, and we
could see a closing of the performance gap between large and small stocks
over the next year.
On March 3, 1997, the Fund's name changed to COLONIAL SMALL CAP VALUE FUND to
better reflect the Fund's value-oriented management style. There was not a
change to the Fund's objective or to the investment discipline that has
generated attractive returns since 1992.
<TABLE>
COLONIAL SMALL CAP VALUE FUND INVESTMENT PERFORMANCE VS. THE RUSSELL 2000 INDEX
Change in Value of $10,000 from 6/30/87 - 6/30/97
Based on NAV and MOP for Class A Shares
<CAPTION>
CSCVF NAV MOP RUSSELL 2000 IX
<S> <C> <C> <C>
Jun 30, 87 10000 9425 10000
Sep 30, 87 10578.77 9970.493 10424
Dec 31, 87 7341.949 6919.787 7395
Mar 31, 88 8964.271 8448.826 8807
Jun 30, 88 9782.464 9219.973 9390
Sep 30, 88 9563.229 9013.343 9304
Dec 31, 88 9341.832 8804.677 9245
Mar 31, 89 10299.37 9707.156 9958
Jun 30, 89 10571.75 9963.872 10592
Sep 30, 89 10954.33 10324.46 11305
Dec 31, 89 10443.2 9842.718 10748
Mar 31, 90 10325.86 9732.125 10507
Jun 30, 90 10623.3 10012.46 10906
Sep 30, 90 8131.993 7664.403 8238
Dec 31, 90 7973.335 7514.868 8655
Mar 31, 91 9558.585 9008.967 11229
Jun 30, 91 9099.49 8576.27 11050
Sep 30, 91 9366.891 8828.294 11954
Dec 31, 91 9484.861 8939.481 12640
Mar 31, 92 11097.13 10459.05 13587
Jun 30, 92 9697.209 9139.619 12657
Sep 30, 92 9767.992 9206.333 13021
Dec 31, 92 11443.18 10785.2 14967
Mar 31, 93 12465.59 11748.82 15607
Jun 30, 93 12473.46 11756.23 15949
Sep 30, 93 13157.69 12401.12 17344
Dec 31, 93 13598.11 12816.22 17793
Mar 31, 94 13755.41 12964.47 17319
Jun 30, 94 13110.5 12356.65 16641
Sep 30, 94 14305.94 13483.35 17797
Dec 31, 94 14455.37 13624.19 17468
Mar 31, 95 15564.3 14669.35 18275
Jun 30, 95 17506.88 16500.24 19988
Sep 30, 95 20165.16 19005.67 21962
Dec 31, 95 19882.91 18739.65 22438
Mar 31, 96 21299.57 20074.85 23583
Jun 30, 96 21937.48 20676.08 24763
Sep 30, 96 22434.55 21144.57 24847
Dec 31, 96 23531.11 22178.07 26139
Mar 31, 97 22210 20932.93 24788
Jun 30, 97 26224.79 24716.86 28806
</TABLE>
A $10,000 investment in Class B shares made on November 9, 1992 (inception) at
net asset value (NAV) would have been valued at $24,781 on June 30, 1997. A
$10,000 investment in Class B shares made on November 9, 1992 (inception) after
incurring applicable contingent deferred sales charges (CDSC) would have grown
to $24,581 on June 30, 1997. A $10,000 investment in Class D shares made on
January 15, 1996 (inception), at NAV would have been valued at $13,889 on June
30, 1997. The same investment after deducting the applicable sales charge would
have grown to $13,750 on June 30, 1997. The Russell 2000 Index is an unmanaged
index that tracks the performance of small capitalization stocks traded on the
New York Stock Exchange, the American Stock Exchange and the NASDAQ. Unlike
mutual funds, indexes are not investments, do not incur fees or charges and are
not professionally managed.
AVERAGE ANNUAL TOTAL RETURNS
As of June 30, 1997 (most recent quarter end)
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CLASS A SHARES CLASS B SHARES CLASS D SHARES
INCEPTION 7/25/86(1) 11/9/92 1/15/96
MOP
NAV MOP NAV w/CDSC NAV w/CDSC
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1 YEAR 19.54% 12.67% 18.63% 13.63% 18.64% 16.45%
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5 YEARS 22.01 20.58 -- -- -- --
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10 YEARS 10.12 9.47 -- -- -- --
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SINCE INCEPTION -- -- 21.58 21.37 25.23 24.37
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SINCE POLICY CHANGE(1) 22.73 21.18 -- -- -- --
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(1) Investment policies changed 11/2/92.
Past performance cannot predict future results. Returns and value of an
investment will vary, resulting in a gain or loss on sale. All results shown
assume reinvestment of distributions. NAV returns do not include sales charges
or CDSC. MOP returns include the maximum sales charge of 5.75% for Class A
shares. The applicable CDSC for Class B shares is 5% for 1 year and 2% since
inception and 1% for Class D shares for 1 year.
Effective July 1, 1997, Class D Shares were converted to Class C Shares.
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5
<PAGE>
INVESTMENT PORTFOLIO
JUNE 30, 1997 (IN THOUSANDS)
COMMON STOCKS - 90.9% SHARES VALUE
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CONSTRUCTION - 2.4%
BUILDING CONSTRUCTION - 1.9%
Champion Enterprises, Inc. (a) 280 $ 4,200
Continental Homes Holding Corp. 20 352
Toll Brothers, Inc. (a) 87 1,599
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6,151
-----------
SPECIAL TRADE CONTRACTORS - 0.5%
Apogee Enterprises, Inc. 78 1,679
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FINANCE, INSURANCE & REAL ESTATE - 17.1%
DEPOSITORY INSTITUTIONS - 1.9%
1st United Bancorp (a) 47 817
NBT Bancorp, Inc. (a) 10 269
New York Bancorp, Inc. 15 521
ONBANCorp, Inc. 22 1,094
Peoples Heritage Financial Group, Inc. 13 490
Zions Bancorporation 76 2,859
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6,050
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INSURANCE CARRIERS - 12.6%
American Bankers Insurance Group, Inc. 42 2,657
AmVestors Financial Corp. 40 750
Bankers Corp. 20 563
Capital Re Corp. 106 5,644
Centris Group, Inc. 37 777
Conseco, Inc. 67 2,492
Enhance Financial Services Group, Inc. 99 4,352
Fremont General Corp. 165 6,641
Horace Mann Educators Corp. 25 1,225
Medical Assurance, Inc. (a) 9 353
MFC Bancorp Ltd. (a)(b) 40 340
NAC Re Corp. 70 3,386
Orion Capital Corp. 26 1,902
Penncorp Financial Group, Inc. 140 5,371
USBANCorp. 8 409
Vesta Insurance Group, Inc. 83 3,585
-----------
40,447
-----------
NONDEPOSITORY CREDIT INSTITUTIONS - 1.7%
Aames Financial Corp. 161 2,981
Imperial Credit Industries, Inc. (a) 64 1,312
The Money Store, Inc. 46 1,316
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5,609
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6
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Investment Portfolio/June 30, 1997
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SECURITY BROKERS & DEALERS - 0.9%
Alex Brown, Inc. 42 $ 2,952
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MANUFACTURING - 28.3%
APPAREL - 1.0%
Kellwood Co. 56 1,557
Nautica Enterprises, Inc. (a) 62 1,639
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3,196
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CHEMICALS & ALLIED PRODUCTS - 3.5%
Church & Dwight Co., Inc. 52 1,399
Dexter Corp. 41 1,315
Ferro Corp. 116 4,288
Medicis Pharmaceutical Corp., Class A (a) 44 2,170
Rexall Sundown, Inc. (a) 57 2,215
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11,387
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ELECTRONIC & ELECTRICAL EQUIPMENT - 4.6%
Brooktrout Technology Corp. (a) 72 850
Checkpoint Systems, Inc. (a) 100 1,606
Computer Products, Inc. (a) 90 2,273
Innovex, Inc. 91 2,650
Jabil Circuit, Inc. (a) 18 1,514
Sanmina Corp. (a) 60 3,810
Technitrol, Inc. 76 2,081
Xicor, Inc. (a) 19 112
-----------
14,896
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FABRICATED METAL - 0.7%
Barnes Group, Inc. 20 578
BMC Industries, Inc. 51 1,746
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2,324
-----------
FOOD & KINDRED PRODUCTS - 0.2%
Hudson Foods, Inc. 45 734
-----------
FURNITURE & FIXTURES - 2.3%
Bush Industries, Inc., Class A 2 48
Furniture Brands International, Inc. (a) 240 4,631
Herman Miller, Inc. 54 1,951
LA-Z-Boy, Inc. 16 576
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7,206
-----------
LUMBER & WOOD PRODUCTS - 0.2%
Oakwood Homes Corp. 22 533
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7
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Investment Portfolio/June 30, 1997
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COMMON STOCKS - CONT. SHARES VALUE
- ------------------------------------------------------------------------------
MANUFACTURING - CONT.
MACHINERY & COMPUTER EQUIPMENT - 1.5%
Autotote Corp., Class A (a) 3 $ 4
Camco International, Inc. 42 2,257
Kaydon Corp. 30 1,489
STB Systems, Inc. (a) 35 1,146
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4,896
-----------
MEASURING & ANALYZING INSTRUMENTS - 5.4%
Advanced Technology Laboratories, Inc. (a) 84 3,591
Coherent, Inc. (a) 50 2,225
Esterline Technologies Corp. (a) 66 2,337
Invacare Corp. 50 1,169
Lunar Corp. (a) 34 739
Maxxim Medical, Inc. (a) 23 391
Mentor Corp. 45 1,333
Perceptron, Inc. (a) 20 542
Respironics, Inc. (a) 58 1,232
Tracor, Inc. (a) 121 2,997
Zygo Corp. (a) 26 806
-----------
17,362
-----------
MISCELLANEOUS MANUFACTURING - 0.4%
ESC Medical Systems Ltd. (a) 45 1,135
K2, Inc. 6 190
-----------
1,325
-----------
PAPER PRODUCTS - 1.1%
ACX Technologies, Inc. (a) 75 1,688
Mosinee Paper Corp. 24 595
Shorewood Packaging Corp. (a) 60 1,365
-----------
3,648
-----------
PRIMARY METAL - 2.1%
Inland Steel Industries, Inc. 100 2,613
Mueller Industries, Inc. (a) 35 1,531
Precision Castparts Corp. 17 996
Quanex Corp. 35 1,074
Wolverine Tube, Inc. (a) 22 613
-----------
6,827
-----------
PRINTING & PUBLISHING - 1.5%
Bowne & Co., Inc. 49 1,723
Day Runner, Inc. (a) 93 3,105
-----------
4,828
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8
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Investment Portfolio/June 30, 1997
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RUBBER & PLASTIC - 0.5%
Carlisle Cos., Inc. 44 $ 1,531
-----------
STONE, CLAY, GLASS & CONCRETE - 0.5%
Global Industrial Technologies, Inc. (a) 10 211
Libbey, Inc. 43 1,495
-----------
1,706
-----------
TEXTILE MILL PRODUCTS - 0.8%
Culp, Inc. 70 1,269
Interface, Inc. 56 1,245
-----------
2,514
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TRANSPORTATION EQUIPMENT - 2.0%
Arvin Industries, Inc. 41 1,117
Borg-Warner Automotive, Inc. 60 3,244
Coachmen Industries, Inc. 70 1,200
Varlen Corp. 29 775
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6,336
-----------
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MINING & ENERGY - 4.0%
COAL MINING - 0.3%
Zeigler Coal Holding Co. 48 1,122
-----------
METAL MINING - 0.7%
Cleveland-Cliffs, Inc. 53 2,160
-----------
OIL & GAS EXTRACTION - 2.2%
Chesapeake Energy Corp. 80 781
Devon Energy Corp. 42 1,544
Parker and Parsley Petroleum 30 1,061
Pride Petroleum Services, Inc. (a) 100 2,400
Swift Energy Co. (a) 60 1,442
-----------
7,228
-----------
OIL & GAS FIELD SERVICES - 0.8%
Marine Drilling Companies, Inc. (a) 94 1,843
Pool Energy Services Co. (a) 38 689
-----------
2,532
-----------
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RETAIL TRADE - 7.3%
APPAREL & ACCESSORY STORES - 3.5%
Claire's Stores, Inc. 141 2,475
Finish Line, Inc., Class A (a) 104 1,534
Genesco, Inc. (a) 114 1,617
Ross Stores, Inc. 120 3,923
9
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Investment Portfolio/June 30, 1997
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COMMON STOCKS - CONT. SHARES VALUE
- ------------------------------------------------------------------------------
RETAIL TRADE - CONT.
APPAREL & ACCESSORY STORES - CONT.
Wet Seal, Inc., Class A (a) 52 $ 1,632
-----------
11,181
-----------
BUILDING, HARDWARE & GARDEN SUPPLY - 0.3%
Griffon Corp. (a) 85 1,163
-----------
FOOD STORES - 0.4%
Ruddick Corp. 72 1,191
-----------
GENERAL MERCHANDISE STORES - 0.3%
Waban, Inc. (a) 29 933
-----------
HOME FURNISHINGS & EQUIPMENT - 0.5%
CompUSA, Inc. (a) 80 1,720
-----------
MISCELLANEOUS RETAIL - 0.7%
Insight Enterprises, Inc. (a) 10 301
Tiffany & Co. 30 1,384
Vitalink Pharmacy Services (a) 33 629
-----------
2,314
-----------
RESTAURANTS - 1.6%
Applebee's International, Inc. 60 1,605
CKE Restaurants, Inc. 34 1,059
Foodmaker, Inc. (a) 150 2,456
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5,120
-----------
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SERVICES - 14.0%
AMUSEMENT & RECREATION - 0.3%
Anchor Gaming (a) 19 883
-----------
Business Services - 3.3%
Compucom Systems, Inc. (a) 175 1,247
Interim Services, Inc. (a) 40 1,780
Logicon, Inc. 67 3,572
Norrell Corp. 50 1,650
Robert Half International, Inc. (a) 40 1,883
Uniforce Services, Inc. 25 450
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10,582
-----------
COMPUTER RELATED SERVICES - 1.6%
National Data Corp. 45 1,949
Sotheby's Holdings, Inc., Class A 115 1,942
Sterling Commerce, Inc. (a) 37 1,207
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5,098
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10
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Investment Portfolio/June 30, 1997
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COMPUTER SOFTWARE - 2.6%
Barra, Inc. (a) 18 $ 592
Computer Horizons Corp. (a) 56 1,906
Hyperion Software Corp. (a) 75 1,669
McAfee Associates, Inc. (a) 31 1,941
Remedy Corp. (a) 36 1,436
SPSS, Inc. (a) 25 725
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8,269
-----------
ENGINEERING, ACCOUNTING, RESEARCH & MANAGEMENT - 0.4%
Jacobs Engineering Group, Inc. (a) 55 1,486
-----------
HEALTH SERVICES - 4.6%
Grancare, Inc. (a) 100 1,081
Lincare Holdings, Inc. (a) 20 860
Regency Health Services, Inc. (a) 63 969
Renal Treatment Centers, Inc. (a) 145 3,897
Rotech Medical Corp. (a) 158 3,170
Universal Health Services, Inc., Class B (a) 128 4,916
-----------
14,893
-----------
HOTELS, CAMPS & LODGING - 0.8%
Hospitality Franchise Systems, Inc. (a) 45 2,637
-----------
MOTION PICTURES - 0.4%
Regal Cinemas, Inc. (a) 38 1,238
-----------
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TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES - 10.3%
AIR TRANSPORTATION - 2.3%
Airborne Freight Corp. 82 3,430
Alaska Air Group 60 1,538
Comair Holdings, Inc. 27 745
Ogden Corp. 86 1,834
-----------
7,547
-----------
COMMUNICATIONS - 1.0%
Billing Information Concepts (a) 70 2,450
Black Box Corp. (a) 23 906
-----------
3,356
-----------
ELECTRIC, GAS & SANITARY SERVICES - 0.9%
Newpark Resources, Inc. (a) 52 1,768
Unit Corp. (a) 121 1,259
-----------
3,027
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11
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Investment Portfolio/June 30, 1997
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COMMON STOCKS - CONT. SHARES VALUE
- ------------------------------------------------------------------------------
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES - CONT.
ELECTRIC SERVICES - 3.7%
Central Hudson Gas & Electric Corp. 60 $ 2,059
Commonwealth Energy System Cos. 22 527
Orange & Rockland Utilities, Inc. 33 1,114
Public Service Company of New Mexico (a) 240 4,290
Sierra Pacific Resources 100 3,200
TNP Enterprises, Inc. 26 612
-----------
11,802
-----------
GAS SERVICES - 0.7%
ONEOK, Inc. 65 2,092
-----------
MOTOR FREIGHT & WAREHOUSING - 1.1%
CNF Transportation, Inc. 23 748
Consolidated Freightways Corp. (a) 12 190
Roadway Express, Inc. 70 1,610
Werner Enterprises, Inc. 50 969
-----------
3,517
-----------
PIPELINES - 0.6%
Lakehead Pipe Line Partners, LP 48 1,828
-----------
- --------------------------------------------------------------------------------
WHOLESALE TRADE - 7.5%
Durable Goods - 4.4%
Ethan Allen Interiors, Inc. 60 3,420
Fisher Scientific International 63 2,988
Graham-Field Health Products, Inc. (a) 113 1,534
Kent Electronics Corp. (a) 80 2,935
Marshall Industries (a) 22 819
Patterson Dental Co. (a) 58 1,990
Physician Sales & Service, Inc. (a) 20 371
-----------
14,057
-----------
NONDURABLE GOODS - 3.1%
Chemed Corp. 41 1,520
Fleming Co., Inc. 84 1,522
Herbalife International, Inc. 76 1,235
Inacom Corp. (a) 70 2,170
Richfood Holdings, Inc. 62 1,617
Universal Corp. 60 1,905
-----------
9,969
-----------
TOTAL COMMON STOCKS (cost of $223,108)(c) 293,082
-----------
12
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Investment Portfolio/June 30, 1997
- ------------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS - 9.9%
- -----------------------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
6.000% (d) 07/01/97 $ 31,878 $ 31,873
-----------
OTHER ASSETS & LIABILITIES, NET - (0.8)% (2,551)
- -----------------------------------------------------------------------------
NET ASSETS - 100.0% $ 322,404
===========
NOTES TO INVESTMENT PORTFOLIO:
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(a) Non-incoming producing.
(b) This is a Canadian security. Market value is stated in U.S. dollars.
(c) Cost for federal income tax purposes is $223,083.
(d) Rate represents yield at date of purchase.
See notes to financial statements.
13
<PAGE>
STATEMENT OF ASSETS & LIABILITIES
JUNE 30, 1997
(in thousands except for per share amounts and footnotes)
ASSETS
Investments at value (cost $223,108) $ 293,082
Short-term obligations 31,873
---------------
324,955
Receivable for:
Fund shares sold $ 2,318
Investments sold 2,130
Dividends 129
Receivable due from Transfer Agent 21
Other 12 4,610
--------------- ---------------
Total Assets 329,565
LIABILITIES
Payable for:
Investments purchased 6,631
Fund shares repurchased 502
Accrued:
Transfer Agent Out-of-Pocket fees 19
Deferred Trustees fees 3
Other 6
---------------
Total Liabilities 7,161
---------------
NET ASSETS $ 322,404
===============
Net asset value & redemption price per share - Class A
($131,151/4,291) $ 30.57
===============
Maximum offering price per share - Class A
($30.57/0.9425) $ 32.44(a)
===============
Net asset value & offering price per share - Class B
($178,234/6,044) $ 29.49(b)
===============
Net asset value & redemption price per share - Class D
($8,194/271) $ 30.24(b)
===============
Maximum offering price per share - Class D
($30.24/0.9900) $ 30.55
===============
Net asset value, offering and redemption
price per share - Class Z ($4,825/157) $ 30.74
===============
COMPOSITION OF NET ASSETS
Capital paid in $ 245,249
Undistributed net investment income 26
Accumulated net realized gains 7,155
Net unrealized appreciation 69,974
---------------
$ 322,404
===============
(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.
14
<PAGE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 1997
(in thousands)
INVESTMENT INCOME
Dividends $ 1,743
Interest 1,368
---------------
3,111
EXPENSES
Management fee $ 1,428
Service fee - Class A, Class B, Class D 589
Distribution fee - Class B 957
Distribution fee - Class D 35
Transfer agent 785
Bookkeeping fee 93
Trustees fee 20
Custodian fee 9
Audit fee 28
Legal fee 5
Registration fee 91
Reports to shareholders 16
Other 55 4,111
--------------- ---------------
Net Investment Loss (1,000)
---------------
NET REALIZED & UNREALIZED GAIN ON PORTFOLIO POSITIONS
Net realized gain 12,663
Net unrealized appreciation 37,333
---------------
Net Gain 49,996
---------------
Net Increase in Net Assets from Operations $ 48,996
===============
See notes to financial statements.
15
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
(in thousands) Year ended June 30
-----------------------------------
INCREASE (DECREASE) IN NET ASSETS 1997 1996
Operations:
Net investment loss $ (1,000) $ (246)
Net realized gain 12,663 6,194
Net unrealized appreciation 37,333 16,571
--------------- ---------------
Net Increase from Operations 48,996 22,519
Distributions:
From net realized gains - Class A (3,482) (2,786)
From net realized gains - Class B (4,515) (2,652)
From net realized gains - Class D (160) -
From net realized gains - Class Z (133) (127)
--------------- ---------------
40,706 16,954
--------------- ---------------
Fund Share Transactions (a):
Receipts for shares sold - Class A 359,182 181,243
Value of distributions reinvested - Class A 3,095 2,440
Cost of shares repurchased - Class A (339,178) (143,861)
--------------- ---------------
23,099 39,822
--------------- ---------------
Receipts for shares sold - Class B 99,839 85,137
Value of distributions reinvested - Class B 4,261 2,027
Cost of shares repurchased - Class B (43,089) (27,703)
--------------- ---------------
61,011 59,461
--------------- ---------------
Receipts for shares sold - Class D 9,132 2,803
Value of distributions reinvested - Class D 127 -
Cost of shares repurchased - Class D (4,522) (186)
--------------- ---------------
4,737 2,617
--------------- ---------------
Receipts for shares sold - Class Z 1,208 3,511
Value of distributions reinvested - Class Z 133 127
Cost of shares repurchased - Class Z (773) (328)
--------------- ---------------
568 3,310
--------------- ---------------
Net Increase from Fund Share
Transactions 89,415 105,210
--------------- ---------------
Total Increase 130,121 122,164
NET ASSETS
Beginning of period 192,283 70,119
--------------- ---------------
End of period (including undistributed
net investment income of $26 and
none, respectively) $ 322,404 $ 192,283
=============== ===============
(a) Class D shares were initially offered on January 15, 1996.
Continued on next page.
See notes to financial statements.
16
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
(continued)
Year ended June 30
-----------------------------------
1997 1996
NUMBER OF FUND SHARES (a)
Sold - Class A 13,304 7,161
Issued for distributions reinvested - Class A 112 101
Repurchased - Class A (12,520) (5,693)
--------------- ---------------
896 1,569
--------------- ---------------
Sold - Class B 3,812 3,410
Issued for distributions reinvested - Class B 159 86
Repurchased - Class B (1,659) (1,113)
--------------- ---------------
2,312 2,383
--------------- ---------------
Sold - Class D 337 105
Issued for distributions reinvested - Class D 5 -
Repurchased - Class D (169) (7)
--------------- ---------------
173 98
--------------- ---------------
Sold - Class Z 44 144
Issued for distributions reinvested - Class Z 5 5
Repurchased - Class Z (28) (13)
--------------- ---------------
21 136
--------------- ---------------
(a) Class D shares were initially offered on January 15, 1996.
See notes to financial statements.
17
<PAGE>
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997
NOTE 1. ACCOUNTING POLICIES
- --------------------------------------------------------------------------------
ORGANIZATION: Colonial Small Cap Value Fund (the Fund), formerly Colonial Small
Stock 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
investment objective is to seek long-term growth by investing primarily in
smaller capitalization equities. The Fund may issue an unlimited number of
shares. The Fund offers four classes of shares: Class A, Class B, Class D and
Class Z. 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. Class Z shares
are offered continuously at net asset value. There are certain restrictions on
purchasing Class Z shares, please refer to a prospectus.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the 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 A, Class B and Class D service fee and Class B
and Class D distribution fees) and 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.
18
<PAGE>
Notes to Financial Statements/June 30, 1997
- --------------------------------------------------------------------------------
Per share data was calculated using the average shares outstanding during the
period. In addition, Class A, Class B, and Class D net investment income per
share data reflects the service fee applicable to Class A, Class B and Class D
shares and the distribution fee applicable to Class B and Class D shares only.
Class A, 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 service
fee applicable to Class A, Class B and Class D shares and 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.
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.
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) is the
investment adviser of the Fund and furnishes accounting and other services and
office facilities for a monthly fee equal to 0.60% annually of the Fund's
average net assets.
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 reimbursement
for certain out-of-pocket expenses.
19
<PAGE>
Notes to Financial Statements/June 30, 1997
- --------------------------------------------------------------------------------
NOTE 2. FEES AND COMPENSATION PAID TO AFFILIATES - CONT.
- --------------------------------------------------------------------------------
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES: Colonial Investment
Services, Inc. (the Distributor), an affiliate of the Adviser, is the Fund's
principal underwriter. During the year ended June 30, 1997, the Fund has been
advised that the Distributor retained net underwriting discounts of $120,046 on
sales of the Fund's Class A shares and received contingent deferred sales
charges (CDSC) of $310,152 and $10,272, on Class B and Class D share
redemptions, respectively.
The Fund has adopted a 12b-1 plan which requires the payment of a service fee to
the Distributor equal to 0.25% annually of the Fund's net assets attributable to
Class A, Class B and Class D, 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.
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, 1997, purchases and sales of
investments, other than short-term obligations, were $193,554,960 and
$115,246,526, respectively.
Unrealized appreciation (depreciation) at June 30, 1997, based on cost of
investments for federal income tax purposes was:
Gross unrealized appreciation $ 77,804,538
Gross unrealized depreciation (7,805,798)
--------------------
Net unrealized appreciation $ 69,998,740
====================
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, 1997.
20
<PAGE>
FINANCIAL HIGHLIGHTS
Selected data for a share of each class outstanding throughout each period
are as follows:
<TABLE>
<CAPTION>
Year ended June 30
-------------------------------------------------------------
1997
Class A Class B Class D Class Z
----------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
Net asset value -
Beginning of period $ 26.480 $ 25.770 $ 26.400 $ 26.550
----------- ----------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment
income (loss) (a) (0.003) (0.199) (0.208) 0.065
Net realized and
unrealized gain (a) 5.073 4.899 5.028 5.105
----------- ----------- ---------- ----------
Total from Investment
Operations 5.070 4.700 4.820 5.170
----------- ----------- ---------- ----------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net realized
gains (0.980) (0.980) (0.980) (0.980)
----------- ----------- ---------- ----------
Net asset value -
End of period $ 30.570 $ 29.490 $ 30.240 $ 30.740
=========== =========== ========== ==========
Total return (b) 19.54% 18.63% 18.64% 19.87%
=========== =========== ========== ==========
RATIOS TO AVERAGE NET ASSETS
Expenses (c) 1.32% 2.07% 2.07% 1.07%
Net investment
income (loss) (c) (0.01)% (0.76)% (0.76)% 0.24%
Portfolio turnover 54% 54% 54% 54%
Average commission
rate (d) $ 0.0422 $ 0.0422 $ 0.0422 $ 0.0422
Net assets at end
of period (000) $ 131,151 $ 178,234 $ 8,194 $ 4,825
</TABLE>
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Total return at net asset value assuming all distributions reinvested and no
initial sales charge or contingent deferred sales charge.
(c) The benefits derived from custody credits and directed brokerage arrange-
ments had no impact.
(d) For 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.
21
<PAGE>
FINANCIAL HIGHLIGHTS - CONT.
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 (b) Class Z (c)
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Net asset value -
Beginning of period $ 22.260 $ 21.840 $ 22.550 $ 24.790
----------- ---------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment
income (loss) (a) 0.036 (e) (0.147) (e) (0.072) (e) 0.096 (e)
Net realized and
unrealized gain (a) 5.479 5.372 3.922 2.959
----------- ---------- ----------- -----------
Total from Investment
Operations 5.515 5.225 3.850 3.055
----------- ---------- ----------- -----------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net realized
gains (1.295) (1.295) - (1.295)
----------- ---------- ----------- -----------
Net asset value -
End of period $ 26.480 $ 25.770 $ 26.400 $ 26.550
=========== ========== =========== ===========
Total return (f) 25.31% 24.44% 17.07% (g) 12.81% (g)
=========== ========== =========== ===========
RATIOS TO AVERAGE NET ASSETS
Expenses 1.38% (h) 2.13% (h) 2.15% (h)(i) 1.13% (h)(i)
Interest expense - - - -
Net investment
income (loss) 0.15% (h) (0.60)% (h) (0.54)% (h)(i) 0.41% (h)(i)
Portfolio turnover 46% 46% 46% 46%
Average commission
rate (j) $ 0.0440 $ 0.0440 $ 0.0440 $ 0.0440
Net assets at end
of period (000) $ 89,924 $ 96,158 $ 2,585 $ 3,616
</TABLE>
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Class D shares were initially offered on January 15, 1996. Per share data
reflects activity from that date.
(c) Class Z shares were initially offered on July 31, 1995. Per share data
reflects activity from that date.
(d) Class B shares were initially offered on November 9, 1992. Per share data
reflects activity from that date.
(e) Includes distribution from Advo, Inc., which amounted to $0.047 per share.
(f) Total return at net asset value assuming all distributions reinvested and no
initial sales charge or contingent deferred sales charge.
(g) Not annualized
(h) The benefits derived from custody credits and directed brokerage
arrangements had no impact. Prior years' ratios are net of benefits
received, if any.
(i) Annualized.
(j) For 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.
22
<PAGE>
FINANCIAL HIGHLIGHTS - CONT.
<TABLE>
<CAPTION>
Year ended June 30
- --------------------------------------------------------------------------------------------------
1995 1994 1993
Class A Class B Class A Class B Class A Class B (d)
- ------------- ------------- ------------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C>
$ 16.670 $ 16.470 $ 15.860 $ 15.790 $ 12.330 $ 13.010
- ------------- ------------- ------------- ----------- ------------- ------------
0.002 (0.139) (0.047) (0.176) (0.083) (0.100)
5.588 5.509 0.857 0.856 3.613 2.880
- ------------- ------------- ------------- ----------- ------------- ------------
5.590 5.370 0.810 0.680 3.530 2.780
- ------------- ------------- ------------- ----------- ------------- ------------
- - - - - -
- ------------- ------------- ------------- ----------- ------------- ------------
$ 22.260 $ 21.840 $ 16.670 $ 16.470 $ 15.860 $ 15.790
============= ============= ============= =========== ============= ============
33.53% 32.60% 5.11% 4.31% 28.63% 21.37% (g)
============= ============= ============= =========== ============= ============
1.45% 2.20% 1.56% 2.31% 1.88% 2.63% (i)
- - - - 0.01% 0.01%
0.01% (0.74)% (0.27)% (1.02)% (0.60)% (1.35)% (i)
64% 64% 35% 35% 29% 29%
- - - - - -
$ 40,661 $ 29,458 $ 24,760 $ 8,489 $ 23,716 $ 1,665
- --------------------------------------------------------------------------------------------------
</TABLE>
Federal income tax information (unaudited)
100% of the gain distribution paid by the Fund in December 1996 was derived
from long term gains.
23
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
T0 THE TRUSTEES OF COLONIAL TRUST VI AND THE SHAREHOLDERS OF
COLONIAL SMALL CAP VALUE FUND
In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Colonial Small Cap Value Fund,
formerly Colonial Small Stock Fund, (the "Fund") (a series of Colonial Trust VI)
at June 30, 1997, 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, 1997 by
correspondence with the custodian and brokers and the application of alternative
auditing procedures where confirmations from brokers were not received, provide
a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
August 12, 1997
24
<PAGE>
SHAREHOLDER SERVICES
TO MAKE INVESTING EASIER
Colonial has one of the most extensive selections of shareholder services
available. Your financial advisor can help you arrange for any of these
services, or you can call Colonial directly at 1-800-345-6611.
AFFORDABLE ADDITIONAL INVESTMENTS: Add to your account with as little as $50 on
most funds; $25 for an IRA account.
FREE EXCHANGES(1): Exchange all or part of your account into the same share
class of another Colonial fund, by phone or mail.
EASY ACCESS TO YOUR MONEY (1): Make withdrawals from your account by phone, by
mail or, for certain funds, by check.
ONE-YEAR REINSTATEMENT PRIVILEGE: If you need access to your money, but then
choose to return it 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 calendar day of each month unless the 10th falls on a
non-business day or the first business day of the week. If this occurs, the
payable date will be the previous business day. Dividends and capital gains must
be reinvested.
AUTOMATED DOLLAR COST AVERAGING: Transfer money on a monthly basis from any
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.
COLONIAL RETIREMENT PLANS: Choose from a broad range of retirement plans,
including IRAs.
1 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.
Exchanges are not available on all funds. Investors who purchase Class B or
Class C shares (for applicable funds), or $1 million or more of Class A shares,
may be subject to a contingent deferred sales charge.
25
<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 a.m. to 8:00 p.m. ET, and Saturdays from February
through mid-April, 10:00 a.m. to 2:00 p.m. ET.
COLONIAL TELEPHONE TRANSACTION DEPARTMENT - 1-800-422-3737
To purchase, exchange or sell shares by telephone, call Monday to Friday,
9:00 a.m. to 7:00 p.m. ET. Transactions received after the close of the New
York Stock Exchange will receive the next business day's closing price.
LITERATURE - 1-800-426-3750
To request literature on any Colonial fund, call Monday to Friday, 8:30 a.m.
to 6:30 p.m. ET.
BY MAIL
COLONIAL INVESTORS SERVICE CENTER, INC.
P.O. BOX 1722
BOSTON, MA 02105-1722
26
<PAGE>
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Colonial Small Cap Value Fund is:
Colonial Investors Service Center, Inc.
P.O. Box 1722
Boston, MA 02105-1722
1-800-345-6611
Colonial Small Cap Value Fund mails one shareholder report to each
shareholder address. If you would like more than one report, please call
Colonial at 1-800-426-3750 and additional reports will be sent to you.
This report has been prepared for shareholders of Colonial Small Cap Value
Fund. This report may also be used as sales literature when preceded or
accompanied by the current prospectus which provides details of sales
charges, investment objectives and operating policies of the Fund.
27
<PAGE>
[logo] COLONIAL
MUTUAL FUNDS
Mutual Funds for
Planned Portfolios
- --------------------------------------------------------------------------------
TRUSTEES
ROBERT J. BIRNBAUM
Retired (formerly Special Counsel, Dechert, Price & Rhoads; President and Chief
Operating Officer, New York Stock Exchange, Inc.)
TOM BLEASDALE
Retired (formerly Chairman of the Board and Chief Executive Officer, Shore Bank
& Trust Company)
LORA S. COLLINS
Attorney (formerly Attorney, Kramer, Levin, Naftalis, Nessen, Kamin & Frankel)
JAMES E. GRINNELL
Private Investor (formerly Senior Vice President--Operations, The Rockport
Company)
WILLIAM D. IRELAND, JR.
Retired (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
Partner, Development Capital, L.L.C. (formerly Dean, College of Business and
Management, University of Maryland; Dean, Simon Graduate School of Business,
University of Rochester; Chairman and Chief Executive Officer, CS First Boston
Merchant Bank; and President and Chief Executive Officer, The First Boston
Corporation)
JAMES L. MOODY, JR.
Retired (formerly Chairman of the Board and 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
Retired Partner, Peat Marwick Main & Co. (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) 1997
A Liberty Financial Company (NYSE:L)
One Financial Center, Boston, Massachusetts 02111-2621, 617-426-3750
SC-02/904D-0697 M (8/97)
- --------------------------------------------------------------------------------
