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COLONIAL U.S.
FUND FOR GROWTH
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SEMIANNUAL REPORT
DECEMBER 31, 1996
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[graphic omitted]
NOT FDIC- MAY LOSE VALUE
INSURED NO BANK GUARANTEE
<PAGE>
COLONIAL U.S. FUND FOR GROWTH HIGHLIGHTS
JULY 1, 1996 - DECEMBER 31, 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] Disciplined value investment strategy
[x] Expert portfolio management
Effective November 18, 1996, Mark Stoeckle and Peter Wiley were named portfolio
co-managers of Colonial U.S. Fund for Growth.
PORTFOLIO MANAGEMENT TEAM COMMENTARY: "As the Fund's new managers, we are
excited about the opportunity to enhance the Fund's performance by applying a
disciplined, value-oriented strategy to its pursuit of long-term growth."
-- Mark Stoeckle & Peter Wiley
COLONIAL U.S. FUND FOR GROWTH PERFORMANCE
CLASS A CLASS B CLASS D
Inception dates 7/1/92 7/1/92 7/1/94
Distributions declared per share $1.30 $1.25 $1.25
6-month total returns, assuming 9.49% 9.08% 9.12%
reinvestment of all distributions and
no sales charge or contingent
deferred sales charge (CDSC)
Net asset value per share on 12/31/96 $14.57 $14.44 $14.50
TOP FIVE HOLDINGS* TOP FIVE SECTORS*
(as of 12/31/96) (as of 12/31/96)
1. Merck & Company .............. 3.4% 1. Technologies ........... 18.8%
2. Exxon Corporation ............ 3.3% 2. Financials ............. 13.8%
3. Intel Corporation ............ 3.1% 3. Consumer Cyclicals ..... 12.2%
4. Bristol-Myers Squibb ......... 2.1% 4. Utilities .............. 10.8%
5. Procter & Gamble ............. 2.0% 5. Health Care ............ 10.8%
*Holdings and sector breakdowns are calculated as a percent of total net assets.
Because the Fund is actively managed, holdings and sector weightings will
change. 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 on this page are based upon
Colonial's defined criteria as used in the investment process.
<PAGE>
PRESIDENT'S MESSAGE
TO FUND SHAREHOLDERS
[Photo of Harold W. Cogger]
I am pleased to present your Fund's semiannual report for the six months ended
December 31, 1996. This report reflects on the investment environment of the
past six months and on the performance of your Fund.
Long-term interest rates were rising during most of the period, having a
negative effect on fixed income investments. However, with recent statistics
suggesting an easing pace of economic activity and a continued benign inflation
outlook, we are hopeful that bond market volatility will be somewhat reduced in
the months ahead.
There was some good news for the tax-exempt sector. Low supply and strong retail
market support enabled municipal bonds to outperform Treasury bonds for much of
the period. The post-election conditions should promote a period of stability
for the tax-exempt market as the flat tax initiative is now a receding memory.
In the domestic stock market, generally favorable conditions prevailed in 1996,
until July, when a price-based correction took place. Since then, the market has
rebounded nicely with the Dow Jones Industrial Average setting several new
records. Internationally, the Tiger countries of the Pacific Rim continue to
offer a good combination of growth and value. In the European markets,
short-term interest rates continue to be much lower than long-term rates. We
expect these conditions to prevail until we see an increase in economic
activity.
Our economic expectations include growth continuing at a slower, but more
sustainable rate, and our outlook for 1997 is relatively bright.
The following report will provide you with specific information on your Fund's
performance as well as an in-depth discussion with your portfolio manager. As
always, we thank you for the opportunity to help you meet your investment goals
through the Colonial family of funds.
Respectfully,
/s/ Harold W. Cogger
Harold W. Cogger
President
February 10, 1997
Because market conditions change frequently, there can be no assurance that the
trends described here will continue, come to pass or affect Fund performance.
<PAGE>
PORTFOLIO MANAGEMENT REPORT
MARK STOECKLE and PETER WILEY are vice presidents of Colonial Management
Associates, Inc. The Fund was previously sub-advised by State Street Global
Advisors, a division of State Street Bank and Trust Company.
Q. AS NEW MANAGERS FOR THE FUND, WHAT WILL YOUR INVESTMENT STRATEGY BE?
A. The Fund will be managed as a large capitalization, value-oriented portfolio.
Our stock selection process will be based on Colonial's "New Value" investment
philosophy. We employ a systematic approach to screening a broad universe of
potential investments. After the initial screening, we concentrate on the
remaining small number of investments to identify the best candidates for
purchase. New Value takes the best from the traditional value investment themes
of low price-to-earnings, low price-to-book and yield, and expands upon them.
Going beyond the absolute measurements practiced by traditional value managers,
New Value incorporates a relative valuation concept. Valuation in context
expands the potential investment candidates list allowing for opportunities
across all sectors. By paying careful attention to risk-and-value relationships
within sectors, we will invest in those companies representing what we consider
the best values. This will allow us to overweight sectors where we believe we
can find uncommon values.
Q. HOW HAVE YOU BEGUN TO IMPLEMENT YOUR STRATEGY?
A. Our primary objective over the short term has been to increase the Fund's
average market capitalization. Because this is a large capitalization fund, we
are committed to investing its assets in stocks that are true to this objective.
As a result, we spent the last part of 1996 selling stocks that were more
accurately defined as middle capitalization and eliminated a number of small
positions that did not provide a lot of promise. By year end, we had reduced the
number of stocks in the Fund from 170 to 128, reinvesting those assets in larger
capitalization stocks.
Q. HOW DID THE FUND PERFORM DURING THE PAST SIX MONTHS?
A. The total return for Class A shares, based on net asset value, was 9.49%.
This performance may be attributable to a portion of the Fund's assets being
invested in some underperforming stocks with smaller capitalizations.
Q. HOW WILL YOUR STRATEGIC CHANGES BENEFIT THE FUND?
A. First of all, our commitment to large capitalization stocks will reposition
the Fund to be better aligned with its objectives. Second, our disciplined
investment process should allow us to better identify stocks that represent a
blend of traditional value and growth potential at a reasonable price, allowing
the Fund to capture value across all sectors.
Q. WHAT IS YOUR OUTLOOK FOR 1997?
A. We anticipate that the pace of economic growth will be moderate, making stock
selection more critical than it may have been during 1996. A fast-growing
economy tends to carry many companies along with it, regardless of their
financial and operating fundamentals. Therefore, the market should be more
willing to reward companies with strong fundamental characteristics whose growth
continues to outpace that of the economy.
Effective March 3, 1997, the Fund's name will be changed to COLONIAL U.S. STOCK
FUND and the Fund's primary objective will be changed from "seeks growth
exceeding the S&P 500 Index performance" to "seeks long-term growth by investing
primarily in large capitalization equities." These changes more accurately
reflect Colonial's value-oriented management style and give the Fund's managers
additional flexibility to pursue total return by slightly overweighting
portfolio holdings in those sectors offering attractive relative value.
<PAGE>
COLONIAL U.S. FUND FOR GROWTH INVESTMENT PERFORMANCE VS. THE S&P 500 INDEX
Change in Value of $10,000 from 7/1/92 - 12/31/96
CLASS A SHARES
Based on NAV and MOP
Date Class A NAV Class A MOP S&P 500
---- ----------- ----------- -------
Jul 1, 92 10000 9425 10000
Jul 31, 92 10420 9820.85 10408
Aug 31, 92 10140 9556.95 10196
Sep 30, 92 10210 9622.925 10315
Oct 31, 92 10290 9698.325 10351
Nov 30, 92 10660 10047.05 10702
Dec 31, 92 10957.3 10327.25 10834
Jan 31, 93 11087.62 10450.09 10924
Feb 28, 93 11077.6 10440.64 11073
Mar 31, 93 11598.9 10931.96 11306
Apr 30, 93 11358.3 10705.2 11033
May 31, 93 11749.27 11073.69 11328
Jun 30, 93 11889.76 11206.1 11361
Jul 31, 93 11789.17 11111.29 11315
Aug 31, 93 12231.77 11528.44 11743
Sep 30, 93 12412.83 11699.09 11653
Oct 31, 93 12493.3 11774.94 11894
Nov 30, 93 12282.06 11575.84 11781
Dec 31, 93 12511.96 11792.52 11923
Jan 31, 94 12770.05 12035.77 12328
Feb 28, 94 12470.67 11753.6 11994
Mar 31, 94 12016.44 11325.49 11472
Apr 30, 94 12037.08 11344.95 11619
May 31, 94 12181.61 11481.17 11809
Jun 30, 94 11895.62 11211.62 11520
Jul 31, 94 12144.74 11446.42 11898
Aug 31, 94 12684.51 11955.15 12384
Sep 30, 94 12528.81 11808.4 12082
Oct 31, 94 12694.89 11964.93 12353
Nov 30, 94 12279.68 11573.6 11904
Dec 31, 94 12469.49 11752.49 12080
Jan 31, 95 12780.95 12046.04 12393
Feb 28, 95 13381.62 12612.17 12875
Mar 31, 95 13704.2 12916.21 13255
Apr 30, 95 14004.53 13199.27 13645
May 31, 95 14582.96 13744.44 14189
Jun 30, 95 14850.91 13996.99 14518
Jul 31, 95 15332.5 14450.89 14999
Aug 31, 95 15242.91 14366.44 15037
Sep 30, 95 15769.3 14862.56 15671
Oct 31, 95 15668.5 14767.56 15615
Nov 30, 95 16239.69 15305.91 16300
Dec 31, 95 16146.94 15218.49 16614
Jan 31, 96 16584.33 15630.73 17179
Feb 28, 96 16851.62 15882.65 17338
Mar 31, 96 16863.77 15894.11 17505
Apr 30, 96 17483.41 16478.11 17763
May 31, 96 17920.8 16890.35 18220
Jun 30, 96 17650.76 16635.84 18290
Jul 31, 96 16699.3 15739.09 17482
Aug 31, 96 17223.82 16233.45 17852
Sep 30, 96 17980.11 16946.25 18855
Oct 31, 96 18443.64 17383.13 19375
Nov 30, 96 19797.63 18659.27 20839
Dec 31, 96 19326.51 18215.23 20426
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CLASS B SHARES
Based on NAV and Maximum CDSC
Date Class B NAV Class B MOP S&P 500
---- ----------- ----------- -------
Jul 1, 92 10000 10000 10000
Jul 31, 92 10420 10420 10408
Aug 31, 92 10140 10140 10196
Sep 30, 92 10210 10210 10315
Oct 31, 92 10280 10280 10351
Nov 30, 92 10630 10630 10702
Dec 31, 92 10907.58 10907.58 10834
Jan 31, 93 11027.67 11027.67 10924
Feb 28, 93 11007.65 11007.65 11073
Mar 31, 93 11508 11508 11306
Apr 30, 93 11267.83 11267.83 11033
May 31, 93 11648.1 11648.1 11328
Jun 30, 93 11783.91 11783.91 11361
Jul 31, 93 11673.78 11673.78 11315
Aug 31, 93 12104.29 12104.29 11743
Sep 30, 93 12284.5 12284.5 11653
Oct 31, 93 12344.57 12344.57 11894
Nov 30, 93 12124.31 12124.31 11781
Dec 31, 93 12342.46 12342.46 11923
Jan 31, 94 12598.53 12598.53 12328
Feb 28, 94 12291.25 12291.25 11994
Mar 31, 94 11840.57 11840.57 11472
Apr 30, 94 11861.06 11861.06 11619
May 31, 94 11983.97 11983.97 11809
Jun 30, 94 11700.2 11700.2 11520
Jul 31, 94 11936.26 11936.26 11898
Aug 31, 94 12449.42 12449.42 12384
Sep 30, 94 12295.47 12295.47 12082
Oct 31, 94 12459.69 12459.69 12353
Nov 30, 94 12038.89 12038.89 11904
Dec 31, 94 12213.11 12213.11 12080
Jan 31, 95 12509.12 12509.12 12393
Feb 28, 95 13090.18 13090.18 12875
Mar 31, 95 13397.15 13397.15 13255
Apr 30, 95 13682.2 13682.2 13645
May 31, 95 14241.32 14241.32 14189
Jun 30, 95 14501 14501 14518
Jul 31, 95 14952.1 14952.1 14999
Aug 31, 95 14853.08 14853.08 15037
Sep 30, 95 15370.18 15370.18 15671
Oct 31, 95 15260.16 15260.16 15615
Nov 30, 95 15799.27 15799.27 16300
Dec 31, 95 15697.21 15697.21 16614
Jan 31, 96 16113.74 16113.74 17179
Feb 28, 96 16363.65 16363.65 17338
Mar 31, 96 16375.55 16375.55 17505
Apr 30, 96 16958.7 16958.7 17763
May 31, 96 17375.22 17375.22 18220
Jun 30, 96 17097.49 17097.49 18290
Jul 31, 96 16168.79 16168.79 17482
Aug 31, 96 16668.86 16668.86 17852
Sep 30, 96 17383.24 17383.24 18855
Oct 31, 96 17823.77 17823.77 19375
Nov 30, 96 19121.56 19121.56 20839
Dec 31, 96 18649.75 18449.75 20426
- --------------------------------------------------------------------------------
A $10,000 investment in Class D shares made on July 1, 1994 (inception), at net
asset value (NAV) would have grown to $15,945 on December 31, 1996. The same
investment after deducting the applicable initial sales charge would have been
valued at $15,786 on December 31, 1996. 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.
AVERAGE ANNUAL TOTAL RETURNS
As of December 31, 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 19.69% 12.81% 18.81% 13.81% 18.76% 16.57%
- --------------------------------------------------------------------------------
SINCE INCEPTION 15.74% 14.23% 14.83% 14.56% 20.46% 19.98%
- --------------------------------------------------------------------------------
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 charges of 5.75% for Class A
shares and 1% for Class D shares. The CDSC returns reflect the maximum charges
of 5% for one year and 2% since inception for Class B shares and 1% for one year
for Class D shares.
<PAGE>
INVESTMENT PORTFOLIO
DECEMBER 31, 1996 (UNAUDITED, IN THOUSANDS)
COMMON STOCKS - 94.2% SHARES VALUE
- ------------------------------------------------------------------------------
AGRICULTURE, FORESTRY & FISHING - 0.1%
AGRICULTURE - CROPS
RJR Nabisco Holdings Corp. 15 $ 503
--------
..............................................................................
FINANCE, INSURANCE & REAL ESTATE - 14.1%
DEPOSITORY INSTITUTIONS - 6.6%
BankAmerica Corp. 103 10,264
Charter One Financial, Inc. 63 2,631
Chase Manhattan Corp. 94 8,407
Comerica, Inc. 86 4,504
First Union Corp. 99 7,304
Nations Bank Corp. 13 1,261
--------
34,371
--------
INSURANCE AGENTS & BROKERS - 0.6%
Marsh & McLennan Cos., Inc. 31 3,203
--------
INSURANCE CARRIERS - 3.1%
AMBAC, Inc. 14 923
Cigna Corp. 40 5,424
Mercury General Corp. 39 2,021
Old Republic International Corp. 141 3,780
Travelers Group, Inc. 91 4,147
--------
16,295
--------
NONDEPOSITORY CREDIT INSTITUTIONS - 3.3%
American Express Co. 108 6,119
ITT Hartford Group, Inc. 73 4,955
Student Loan Marketing Association 68 6,295
--------
17,369
--------
SECURITY BROKERS & DEALERS - 0.5%
Bear Stearns Cos., Inc. 17 472
Donaldson, Lufkin & Jenrette, Inc. 51 1,832
--------
2,304
--------
..............................................................................
MANUFACTURING - 51.2%
APPAREL - 0.6%
VF Corp. 48 3,233
--------
CHEMICALS & ALLIED PRODUCTS - 15.9%
Abbott Laboratories 79 4,004
Alberto Culver Co. Class B 56 2,693
American Home Products Corp. 93 5,429
Amgen, Inc. (a) 50 2,708
Bristol-Myers Squibb Co. 98 10,690
Clorox Co. 39 3,885
Dow Chemical Co. 69 5,431
Goodrich (B.F.) Co. 36 1,462
International Specialty Products, Inc. (a) 33 408
Johnson & Johnson 55 2,716
Jones Medical Industries, Inc. 69 2,509
Merck & Co., Inc. 225 17,800
PPG Industries, Inc. 111 6,202
Procter & Gamble Co. 99 10,599
Schering-Plough Corp. 100 6,455
--------
82,991
--------
ELECTRONIC & ELECTRICAL EQUIPMENT - 6.2%
General Electric Co. 101 10,026
Intel Corp. 123 16,158
Maytag Corp. 71 1,404
Pairgain Technologies, Inc. (a) 45 1,370
SCI Systems, Inc. (a) 79 3,512
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32,470
--------
FABRICATED METAL - 0.3%
Parker-Hannifin Corp. 35 1,341
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FOOD & KINDRED PRODUCTS - 4.0%
Coca Cola Co. 143 7,541
Conagra, Inc. 40 1,965
Hershey Foods Corp. 119 5,206
Interstate Bakeries Corp. 72 3,557
Philip Morris Co., Inc. (b) 34
Sara Lee Corp. 67 2,511
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20,814
--------
FURNITURE & FIXTURES - 1.1%
Herman Miller, Inc. 57 3,222
Hillenbrand Industries, Inc. 65 2,360
--------
5,582
--------
LUMBER & WOOD PRODUCTS - 0.3%
Georgia Pacific Corp. 23 1,656
--------
MACHINERY & COMPUTER EQUIPMENT - 8.1%
Case Corp. 52 2,807
Caterpillar, Inc. 59 4,425
Compaq Computer Corp. (a) 99 7,366
Cooper Cameron Corp. (a) 40 3,037
Dell Computer Corp. (a) 159 8,468
Gateway 2000, Inc. (a) 111 5,956
Storage Technology Corp. (a) 24 1,143
Sun Microsystems, Inc. (a) 108 2,784
Western Digital Corp. (a) 105 5,983
--------
41,969
--------
MEASURING & ANALYZING INSTRUMENTS - 3.1%
Beckman Instruments, Inc. 63 2,433
Honeywell, Inc. 95 6,253
Tektronix, Inc. 146 7,462
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16,148
--------
MISCELLANEOUS MANUFACTURING - 0.6%
Callaway Golf Co. 112 3,231
--------
PAPER PRODUCTS - 0.9%
Fort Howard Corp. (a) 74 2,052
Mead Corp. 49 2,836
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4,888
--------
PETROLEUM REFINING - 6.5%
Amerada Hess Corp. 32 1,864
Exxon Corp. 175 17,179
Mobil Corp. 64 7,836
Texaco, Inc. 24 2,345
USX-Marathon Group 199 4,756
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33,980
--------
PRIMARY METAL - 0.3%
USX-US Steel Group 41 1,296
--------
PRINTING & PUBLISHING - 0.8%
American Greetings Corp., Class A 47 1,336
Tribune Co. 37 2,918
--------
4,254
--------
STONE, CLAY, GLASS & CONCRETE - 0.3%
USG Corp. (a) 44 1,504
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TRANSPORTATION EQUIPMENT - 2.2%
Chrysler Corp. 160 5,293
McDonnell Douglas Corp. 75 4,787
Northrop Grumman Corp. (b) 25
Trinity Industries, Inc. 31 1,151
--------
11,256
--------
..............................................................................
MINING & ENERGY - 1.4%
CRUDE PETROLEUM & NATURAL GAS - 1.0%
Apache Corp. 150 5,310
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NONMETALLIC, EXCEPT FUELS - 0.4%
Vulcan Materials Co. 32 1,936
--------
..............................................................................
RETAIL TRADE - 7.5%
APPAREL & ACCESSORY STORES - 2.5%
GAP, Inc. 44 1,326
TJX Companies, Inc. 150 7,116
Woolworth Corp. 198 4,320
--------
12,762
--------
BUILDING, HARDWARE & GARDEN SUPPLIES - 0.9%
Lowes Companies, Inc. 135 4,796
--------
FOOD STORES - 0.1%
Vons Companies, Inc. (a) 8 503
--------
GENERAL MERCHANDISE STORES - 2.7%
Dayton Hudson Corp. 159 6,237
Federated Department Stores, Inc. (a) 163 5,569
Sears, Roebuck & Co. 49 2,279
--------
14,085
--------
HOME FURNISHINGS & EQUIPMENT - 0.2%
CompUSA, Inc. (a) 59 1,221
--------
MISCELLANEOUS RETAIL - 1.1%
Borders Group, Inc. (a) 123 4,398
Eckerd Corp. (a) (b) 5
Tiffany & Co. 37 1,348
--------
5,751
--------
..............................................................................
SERVICES - 5.8%
BUSINESS SERVICES - 4.0%
BMC Software, Inc. (a) 59 2,458
Cadence Design Systems, Inc. (a) 68 2,703
Computer Associates International, Inc. 91 4,535
Interpublic Group of Cos., Inc. 4 190
Microsoft Corp. (a) 70 5,784
Novell, Inc. (a) 166 1,569
The Learning Company, Inc. (a) 260 3,743
--------
20,982
--------
HEALTH SERVICES - 0.7%
Tenet Healthcare Corp. (a) 167 3,655
--------
HOTELS, CAMPS & LODGING - 0.6%
MGM Grand, Inc. (a) 89 3,107
--------
PERSONAL SERVICES - 0.5%
Service Corporation International 89 2,486
--------
..............................................................................
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES - 13.5%
AIR TRANSPORTATION - 0.5%
AMR Corp. (a) 30 2,644
--------
COMMUNICATIONS - 8.5%
Ameritech Corp. 170 10,288
AT&T Corp. 32 1,375
BellSouth Corp. 55 2,209
Century Telephone Enterprises, Inc. 102 3,143
Compuware Corp. (a) 111 5,549
GTE Corp. 97 4,391
Lucent Technologies, Inc. 35 1,621
NYNEX Corp. 40 1,910
Pacific Telesis Group, Inc. 60 2,201
Southern New England
Telecommunications Corp. 16 622
Southwestern Bell Corp. 85 4,383
Sprint Corp. 169 6,731
--------
44,423
--------
ELECTRIC, GAS & SANITARY SERVICES - 0.4%
Enova Corp. 86 1,959
--------
ELECTRIC SERVICES - 2.7%
Central & South West Corp. 165 4,231
Consolidated Edison Co. of New York 22 643
Entergy Corp. 76 2,101
GPU, Inc. 55 1,846
Long Island Lighting Co. 29 642
MidAmerican Energy Co. 88 1,394
Ohio Edison Co. 81 1,847
Public Service Enterprise Group, Inc. 55 1,485
Texas Utilities Co. 3 114
--------
14,303
--------
GAS SERVICES - 0.6%
Williams Companies, Inc. 78 2,931
--------
RAILROAD - 0.8%
CSX Corp. 48 2,032
Kansas City Southern Industries, Inc. 43 1,940
--------
3,972
--------
..............................................................................
WHOLESALE TRADE - 0.6%
NONDURABLE GOODS
Richfood Holdings, Inc 123 2,994
--------
TOTAL COMMON STOCKS (cost of $403,028) (c) 490,478
--------
SHORT-TERM OBLIGATIONS - 5.6% PAR
- ------------------------------------------------------------------------------
Repurchase agreement with Lehman Brothers Inc.,
dated 12/31/96, due 1/02/97 at 6.90% collateralized
by U.S. Treasury notes with various maturities
to 2022, market value $29,748
(repurchase proceeds $29,356) $ 29,345 29,345
--------
OTHER ASSETS & LIABILITIES, NET - 0.2% 1,188
- ------------------------------------------------------------------------------
NET ASSETS - 100.0% $521,011
========
NOTES TO INVESTMENT PORTFOLIO:
- ------------------------------------------------------------------------------
(a) Non-incoming producing.
(b) Rounds to less than one.
(c) Cost for federal income tax purposes is approximately the same.
See notes to financial statements.
<PAGE>
STATEMENT OF ASSETS & LIABILITIES
DECEMBER 31, 1996 (UNAUDITED)
(in thousands except for per share amounts and footnotes)
ASSETS
Investments at value (cost $403,028) $490,478
Short-term obligations 29,345
--------
519,823
Receivable for:
Dividends $ 764
Fund shares sold 628
Investments sold 412
Interest 6
Deferred organization expense 9
Other 6 1,825
------- --------
Total Assets 521,648
LIABILITIES
Payable for:
Fund shares repurchased 579
Accrued:
Deferred Trustees fees 3
Other 55
-------
Total Liabilities 637
--------
NET ASSETS $521,011
========
Net asset value & redemption price per share - Class A
($180,620/12,398) $ 14.57
========
Maximum offering price per share - Class A
($14.57/0.9425) $ 15.46(a)
========
Net asset value & offering price per share - Class B
($331,057/22,921) $ 14.44(b)
========
Net asset value & redemption price per share - Class D
($9,334/644) $ 14.50(b)
========
Maximum offering price per share - Class D
($14.50/0.9900) $ 14.65
========
COMPOSITION OF NET ASSETS
Capital paid in $421,651
Undistributed net investment income 105
Accumulated net realized gains 11,805
Net unrealized appreciation 87,450
--------
$521,011
========
(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.
<PAGE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1996
(UNAUDITED)
(in thousands)
INVESTMENT INCOME
Dividends $ 5,178
Interest 219
-------
5,397
EXPENSES
Management fee $ 1,974
Service fee 621
Distribution fee - Class B 1,179
Distribution fee - Class D 34
Transfer agent 721
Bookkeeping fee 91
Trustees fee 16
Custodian fee 12
Audit fee 17
Legal fee 6
Registration fee 34
Reports to shareholders 8
Amortization of deferred
organization expense 9
Other 12 4,734
------- -------
Net Investment Income 663
-------
NET REALIZED & UNREALIZED GAIN ON PORTFOLIO
POSITIONS
Net realized gain 32,230
Net unrealized appreciation 12,126
-------
Net Gain 44,356
-------
Net Increase in Net Assets from Operations $45,019
=======
See notes to financial statements.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
(Unaudited)
Six months ended Year ended
(in thousands) December 31 June 30
----------- ---------
INCREASE (DECREASE) IN NET ASSETS 1996 1996
Operations:
Net investment income $ 663 $ 1,615
Net realized gain 32,230 40,109
Net unrealized appreciation 12,126 27,088
-------- --------
Net Increase from Operations 45,019 68,812
Distributions:
From net investment income - Class A (564) (1,271)
From net realized gains - Class A (14,099) (10,933)
From net investment income - Class B - (325)
From net realized gains - Class B (26,520) (19,657)
From net investment income - Class D - (13)
From net realized gains - Class D (730) (409)
-------- --------
3,106 36,204
-------- --------
Fund Share Transactions:
Receipts for shares sold - Class A 21,812 44,237
Value of distributions reinvested - Class A 13,756 11,527
Cost of shares repurchased - Class A (24,812) (24,333)
-------- --------
10,756 31,431
-------- --------
Receipts for shares sold - Class B 28,443 81,529
Value of distributions reinvested - Class B 25,069 18,826
Cost of shares repurchased - Class B (30,894) (34,620)
-------- --------
22,618 65,735
-------- --------
Receipts for shares sold - Class D 3,053 5,591
Value of distributions reinvested - Class D 689 409
Cost of shares repurchased - Class D (2,941) (1,040)
-------- --------
801 4,960
-------- --------
Net Increase from Fund Share
Transactions 34,175 102,126
-------- --------
Total Increase 37,281 138,330
NET ASSETS
Beginning of period 483,730 345,400
-------- --------
End of period (including undistributed and
net of overdistributed net investment
income of $105 and $3, respectively) $521,011 $483,730
======== ========
Continued on next page.
See notes to financial statements.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
(continued)
(Unaudited)
Six months ended Year ended
December 31 June 30
----------- ----------
NUMBER OF FUND SHARES 1996 1996
Sold - Class A 1,488 3,189
Issued for distributions reinvested - Class A 925 851
Repurchased - Class A (1,668) (1,750)
-------- --------
745 2,290
-------- --------
Sold - Class B 1,957 5,910
Issued for distributions reinvested - Class B 1,699 1,403
Repurchased - Class B (2,098) (2,509)
-------- --------
1,558 4,804
-------- --------
Sold - Class D 210 403
Issued for distributions reinvested - Class D 46 30
Repurchased - Class D (199) (75)
-------- --------
57 358
-------- --------
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 (UNAUDITED)
NOTE 1. INTERIM FINANCIAL STATEMENTS
................................................................................
In the opinion of management of Colonial U.S. Fund for Growth (the Fund), a
series of Colonial Trust VI, the accompanying financial statements contain all
normal and recurring adjustments necessary for the fair presentation of the
financial position of the Fund at December 31, 1996, and the results of its
operations, the changes in net assets and the financial highlights for the six
months then ended.
NOTE 2. ACCOUNTING POLICIES
................................................................................
ORGANIZATION: The Fund 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.
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 3. FEES AND COMPENSATION PAID TO AFFILIATES
................................................................................
MANAGEMENT FEE: On October 18, 1996, the Trustees voted to terminate the
sub-advisory agreement with State Street Bank and Trust Company effective no
later than December 31, 1996. Following termination, Colonial Managment
Associates, Inc. (Colonial) has provided the Fund with investment management
services under it's current management agreement, without involvement by any
sub-adviser. Colonial (the Adviser) furnishes the Fund with investment
management, accounting and other services and office facilities for a monthly
fee equal to 0.80% 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.
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 six months ended December 31, 1996, the Fund has
been advised that the Distributor retained net underwriting discounts of $38,007
on sales of the Fund's Class A shares and received contingent deferred sales
charges (CDSC) of $360,909 and $2,519 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 six months ended December 31, 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.
NOTE 4. PORTFOLIO INFORMATION
................................................................................
INVESTMENT ACTIVITY: During the six months ended December 31, 1996, purchases
and sales of investments, other than short-term obligations, were $310,621,314
and $338,731,345, respectively.
Unrealized appreciation (depreciation) at December 31, 1996 based on cost of
investments for federal income tax purposes was approximately:
Gross unrealized appreciation $ 94,636,000
Gross unrealized depreciation (7,186,000)
------------
Net unrealized appreciation $ 87,450,000
============
OTHER: The Fund may focus its investments in certain industries, subjecting it
to greater risk than a fund that is more diversified.
NOTE 5. 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 six months ended December 31, 1996.
<PAGE>
FINANCIAL HIGHLIGHTS (a)
Selected data for a share of each class outstanding throughout each period
are as follows:
(Unaudited)
Six months ended December 31
----------------------------------------
1996
Class A Class B Class D
------- ------- -------
Net asset value -
Beginning of period $14.470 $14.360 $14.410
------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.056 0.001 0.001
Net realized and unrealized gain 1.344 1.329 1.339
------- ------- -------
Total from Investment
Operations 1.400 1.330 1.340
------- ------- -------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.050) - -
From net realized gains (1.250) (1.250) (1.250)
------- ------- -------
Total Distributions
Declared to Shareholders (1.300) (1.250) (1.250)
------- ------- -------
Net asset value -
End of period $14.570 $14.440 $14.500
======= ======= =======
Total return (c) 9.49%(d) 9.08%(d) 9.12%(d)
======= ======= =======
RATIOS TO AVERAGE NET ASSETS
Expenses 1.43%(e)(f) 2.18%(e)(f) 2.18%(e)(f)
Net investment income 0.76%(e)(f) 0.01%(e)(f) 0.01%(e)(f)
Portfolio turnover 64%(d) 64%(d) 64%(d)
Average commission rate (g) $0.0345 $0.0345 $0.0345
Net assets at end
of period (000) $180,620 $331,057 $ 9,334
(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) Not annualized.
(e) Annualized.
(f) The benefits derived from custody credits and directed brokerage
arrangements had no impact. Prior years' ratios are net of benefits
received, if any.
(g) 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.
<PAGE>
FINANCIAL HIGHLIGHTS (a) - CONT.
Year ended June 30
- --------------------------------------------------------------------------------
1996 1995
Class A Class B Class D Class A Class B Class D (b)
- ------- ------- ------- ------- ------- -------
$13.260 $13.180 $13.240 $11.460 $11.400 $11.460
- ------- ------- ------- ------- ------- -------
0.121 0.017 0.016 0.165 0.075 0.074
2.292 2.265 2.268 2.530 2.513 2.534
- ------- ------- ------- ------- ------- -------
2.413 2.282 2.284 2.695 2.588 2.608
- ------- ------- ------- ------- ------- -------
(0.118) (0.017) (0.029) (0.160) (0.073) (0.093)
(1.085) (1.085) (1.085) (0.735) (0.735) (0.735)
- ------- ------- ------- ------- ------- -------
(1.203) (1.102) (1.114) (0.895) (0.808) (0.828)
- ------- ------- ------- ------- ------- -------
$14.470 $14.360 $14.410 $13.260 $13.180 $13.240
======= ======= ======= ======= ======= =======
18.85% 17.91% 17.84% 24.84% 23.94% 24.01%
======= ======= ======= ======= ======= =======
1.45%(f) 2.20%(f) 2.20%(f) 1.46% 2.21% 2.21%
0.87%(f) 0.12%(f) 0.12%(f) 1.37% 0.62% 0.62%
89% 89% 89% 84% 84% 84%
$0.0461 $0.0461 $0.0461
- - -
$168,554 $306,718 $ 8,458 $124,171 $218,201 $ 3,028
<PAGE>
FINANCIAL HIGHLIGHTS (a) - CONT.
Year ended June 30
---------------------------------------------------
1994 1993 (b)
Class A Class B Class A Class B
------- ------- ------- -------
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
(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.
<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
Colonial at 1-800-426-3750 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.
<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, 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) 1997
A Liberty Financial Company (NYSE: L)
One Financial Center, Boston, Massachusetts 02111-2621, 617-426-3750
US-03/191D-1296 M (2/97)
