August 25, 1998, Revised May 14, 1999
NEWPORT
ASIA PACIFIC
FUND
PROSPECTUS
BEFORE YOU INVEST
Colonial Management Associates, Inc. (Administrator) and your full-service
financial advisor want you to understand both the risks and benefits of mutual
fund investing.
While mutual funds offer significant opportunities and are professionally
managed, they also carry risks including possible loss of principal. Unlike
savings accounts and certificates of deposit, mutual funds are not insured or
guaranteed by any financial institution or government agency.
Please consult your full-service financial advisor to determine how investing in
this mutual fund may suit your unique needs, time horizon and risk tolerance.
NEWPORT ASIA PACIFIC FUND (Fund), a non-diversified portfolio of Colonial Trust
VI (Trust), an open-end management investment company, SEEKS CAPITAL
APPRECIATION. THE FUND SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE BY INVESTING
NORMALLY AT LEAST 80% OF ITS TOTAL ASSETS IN EQUITY SECURITIES OF COMPANIES
WHOSE PRINCIPAL ACTIVITIES ARE LOCATED IN ASIA OR THE PACIFIC BASIN.
The Fund is managed by Newport Fund Management, Inc. (Advisor), an investment
advisor since 1984 and an affiliate of the Administrator.
This Prospectus explains concisely what you should know before investing in the
Fund. Read it carefully and retain it for future reference. More detailed
information about the Fund is in the August 25, 1998 Statement of Additional
Information (SAI) which has been filed with the Securities Exchange Commission
(SEC) and is obtainable free of charge by calling the Administrator at
1-800-426-3750. The SAI is incorporated by reference in (which means it is
considered to be a part of) this Prospectus.
The Fund offers three classes of shares. Class A shares are offered at net asset
value plus a sales charge imposed at the time of purchase; Class B shares are
offered at net asset value and are subject to an annual distribution fee and a
declining contingent deferred sales charge on redemptions made within six years
after purchase; and Class C shares are offered at net asset value and are
subject to an annual distribution fee and a contingent deferred sales charge on
redemptions made within one year after purchase. Class A, B and C shares are all
subject to a contingent redemption fee on redemptions and exchanges made within
five business days of purchase. Class B shares automatically convert to Class A
shares after approximately eight years. See "How to Buy Shares."
CONTENTS PAGE
Summary of Expenses 2
The Fund's Investment Objective 3
How the Fund Pursues its Objective
and Certain Risk Factors 3
How the Fund Measures its Performance 5
How the Fund is Managed 6
Year 2000 7
How the Fund Values its Shares 7
Distributions and Taxes 7
How to Buy Shares 7
How to Sell Shares 9
How to Exchange Shares 10
Telephone Transactions 11
12b-1 Plan 11
Organization and History 12
The SEC maintains a Web site (http:\\www.sec.gov) that contains the SAI,
materials that are incorporated by reference into this Prospectus and the SAI,
and other information regarding the Fund.
NOT FDIC-INSURED MAY LOSE VALUE
NO BANK GUARANTEE
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC NOR HAS THE
SEC PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
SUMMARY OF EXPENSES
Expenses are one of several factors to consider when investing in the Fund. The
following tables summarize your maximum transaction costs and your estimated
annual expenses for an investment in each class of shares of the Fund. "Other
expenses" are based on estimated amounts for the current fiscal year. See "How
the Fund is Managed" and "12b-1 Plan" for more complete descriptions of the
Fund's various costs and expenses.
SHAREHOLDER TRANSACTION EXPENSES (1)(2)
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Maximum Initial Sales Charge Imposed on a Purchase (as a % of offering
price) (3) 5.75% 0.00%(4) 0.00%(4)
Maximum Contingent Deferred Sales Charge (as a % of offering price) (3) 1.00%(5) 5.00% 1.00%
Maximum Contingent Redemption Fee (3)(6) 2.00% 2.00% 2.00%
</TABLE>
(1) For accounts less than $1,000 an annual fee of $10 may be deducted. See
"How to Buy Shares."
(2) Redemption proceeds exceeding $500 sent via federal funds wire will be
subject to a $7.50 charge per transaction.
(3) Does not apply to reinvested distributions.
(4) Because of the distribution fee applicable to Class B and Class C
shares, long-term Class B and Class C shareholders may pay more in
aggregate sales charges than the maximum initial sales charge permitted
by the National Association of Securities Dealers, Inc. However,
because Class B shares automatically convert to Class A shares after
approximately 8 years, this is less likely for Class B shares than for
a class without a conversion feature.
(5) Only with respect to any portion of purchases of $1 million to $5
million redeemed within approximately 18 months after purchase. See
"How to Buy Shares."
(6) A contingent redemption fee in the amount of 2.00% is imposed on
redemptions and exchanges of Fund shares purchased and held for five
business days or less. See "Contingent Redemption Fee" under the
caption "How to Sell Shares."
ESTIMATED ANNUAL OPERATING EXPENSES (as a % of average net assets)
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Management and administration fees (after expense reimbursement)(7) 0.00% 0.00% 0.00%
12b-1 fees 0.25 1.00 1.00
Other expenses (after expense reimbursement)(7) 1.90 1.90 1.90
Total operating expenses (after expense reimbursement)(7) 2.15% 2.90% 2.90%
==== ==== ====
</TABLE>
(7) The Advisor and Administrator have voluntarily agreed until further
notice to bear a portion of the management fees and/or other expenses
so that the Fund's total annual operating expenses, excluding
commissions, taxes, 12b-1 fees and any extraordinary expenses will not
exceed 1.90%. Absent such fee waiver, "Management and administration
fees" and "Other expenses" would be 1.25% and 4.33%, respectively, for
each Class of shares and "Total operating expenses" would be 5.83%
(Class A) and 6.58% (Classes B and C).
EXAMPLE
The following Example shows the cumulative transaction and operating expenses
attributable to a hypothetical $1,000 investment in each Class of shares of the
Fund for the periods specified, assuming a 5% annual return and, unless
otherwise noted, redemption at period end. THE 5% RETURN AND EXPENSES USED IN
THIS EXAMPLE SHOULD NOT BE CONSIDERED INDICATIVE OF ACTUAL OR EXPECTED FUND
PERFORMANCE OR EXPENSES, BOTH OF WHICH WILL VARY:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C> <C> <C>
PERIOD: (8) (9) (8) (9)
1 year $ 78 $ 79 $ 29 $ 39 $ 29
3 years $ 121 $ 120 $ 90 $ 90(10) $ 90
</TABLE>
(8) Assumes redemption at period end.
(9) Assumes no redemption.
(10) Class C shares do not incur a contingent deferred sales charge on
redemptions made after one year.
Without voluntary fee reductions, the amounts would be $112 and $220 for Class A
shares for 1 and 3 years, respectively; $115 and $223 for Class B shares
assuming redemptions for 1 and 3 years, respectively; $65 and $193 for Class B
shares assuming no redemptions for 1 and 3 years, respectively; $75 and $193 for
Class C shares assuming redemptions for 1 and 3 years, respectively; and $65 and
$193 for Class C shares assuming no redemptions for 1 and 3 years, respectively.
2
<PAGE>
THE FUND'S INVESTMENT OBJECTIVE
The Fund seeks capital appreciation.
HOW THE FUND PURSUES ITS OBJECTIVE AND CERTAIN RISK FACTORS
The Fund normally invests at least 80% of its total assets in equity securities
of companies whose principal activities are in Asia or the Pacific Basin. Such
countries may include Australia, Hong Kong, India, Indonesia, Japan, Malaysia,
New Zealand, the People's Republic of China, the Philippines, Singapore, South
Korea, Taiwan and Thailand. Many of these countries do not have highly developed
economies and securities markets (emerging market countries). See "Emerging
Markets" below. Although the amount of the Fund's assets invested in emerging
market countries will vary over time, the Fund may invest all of its assets in
emerging markets securities. Normally, the Fund expects to invest its assets in
a number of countries and issuers. Under normal conditions, a significant
portion of the Fund's assets will be invested in issuers whose principal
activities are in Japan and Hong Kong (including Chinese issuers whose
securities trade principally in Hong Kong markets).
The Fund will not limit its investments to any particular type of company. The
Fund may invest in the equity securities of companies, large or small, whose
earnings, the Advisor believes, are in a relatively strong growth trend, or in
companies whose securities the Advisor believes are undervalued. These companies
may present greater opportunities for capital appreciation, but also may involve
greater risk. See "Small Companies" below.
The Advisor determines where an issuer's principal activities are located by
considering such factors as its country of organization, the principal trading
market for its securities and the source of its revenues and location of its
assets.
EQUITY SECURITIES. The equity securities in which the Fund may invest generally
include common and preferred stock, warrants (rights) to purchase such stock,
debt securities convertible into such stock, sponsored and unsponsored American
Depositary Receipts (receipts issued in the U.S. by banks or trust companies
evidencing ownership of underlying foreign securities), and Global Depositary
Receipts (receipts issued by foreign banks or trust companies evidencing
ownership of underlying foreign securities).
REGIONAL CONCENTRATION AND TRENDS. Because the Fund, under normal circumstances,
will invest substantially all of its assets in a single region, the Asia and
Pacific Basin region, the Fund's investments will be susceptible to regional
trends. The prices of the Fund's portfolio securities, and, therefore, the net
asset value of Fund shares, may be adversely affected by negative economic or
political events in any of the countries in the Asian and Pacific Basin region
and in the region as a whole. In addition, recent events in a number of the
Tiger countries of Asia (i.e., Hong Kong, Singapore, South Korea, Taiwan,
Malaysia, Thailand, Indonesia, the People's Republic of China and the
Philippines) have highlighted the financial interdependence of the region and
demonstrated that negative financial events in one such country may have
far-reaching negative effects throughout the region. The uncertainty surrounding
the effects of these events may negatively impact the Fund's return and the
value of the Fund's shares.
FOREIGN INVESTMENTS. Investments in foreign securities have special risks
related to political, economic and legal conditions outside of the U.S. As a
result, the prices of such securities and, therefore, the net asset value of
Fund shares, may fluctuate substantially more than the prices of securities of
issuers based in the U.S. Special risks associated with foreign securities
include, among others, the possibility of unfavorable movements in currency
exchange rates, difficulties in enforcing judgments abroad, the existence of
less liquid and less regulated markets, the unavailability of reliable
information about issuers, the existence of different accounting, auditing and
legal standards in foreign
3
<PAGE>
countries, the existence (or potential imposition) of exchange control
regulations (including currency blockage), and political and economic
instability. In addition, transactions in foreign securities may be more costly
due to currency conversion costs and higher brokerage and custodial costs. See
"Foreign Securities" and "Foreign Currency Transactions" in the SAI for more
information about foreign investments.
EMERGING MARKETS. A portion of the Fund's investments normally will consist of
securities issued by companies located in the Tiger countries, whose economies,
political systems or securities markets are not yet highly developed. Special
risks associated with these investments (in addition to the considerations
regarding foreign investments generally) may include, among others, greater
political uncertainties, an economy's dependence on revenues from particular
commodities or on international aid or development assistance, highly limited
numbers of potential buyers for such securities, heightened volatility of
security prices, restrictions on repatriation of capital invested abroad and
delays and disruptions in securities settlement procedures. Although securities
markets of the Tiger and other Asian countries have grown and evolved over the
last several years, political, legal, economic and regulatory systems continue
to lag behind those of more developed countries. Accordingly, the risks that
restrictions on repatriation of Fund investments may be imposed unexpectedly or
other limitations on the Fund's ability to realize on its investments may be
instituted are greater with respect to investments in these or other emerging
markets.
INVESTMENTS IN ONE OR A LIMITED NUMBER OF COUNTRIES. The Fund will seek to
reduce risk by investing its assets in a number of markets and issuers. However,
the Fund may invest a substantial amount of its net assets in issuers located in
a single country. Under normal conditions, the Fund intends to invest a
significant portion of its assets in issuers whose principal activities are in
Japan and Hong Kong (including Chinese issuers whose securities trade
principally in Hong Kong markets). To the extent that the Fund invests a
significant portion of its assets in a single or limited number of countries,
the Fund's investment performance correspondingly will be more dependent upon
the economic, political and social conditions and changes in that country or
countries, and the risks associated with investments in such country or
countries will be particularly significant. The ability of the Fund to focus its
investments in one or a limited number of countries may have the effect of
increasing the volatility (fluctuations in share value) of the Fund. The Fund's
performance or investments may be particularly sensitive to the economic,
political and social conditions in Japan and Hong Kong as a result of
significant investment of assets in Japanese and Hong Kong issuers and issuers
in other Asian and Pacific Basin countries, many of which are directly affected
by Japanese and Hong Kong capital investments in the region and by consumer
demands in Japan and Hong Kong. In Japan economic growth has weakened since
1990. With the current unsettled political situation and low consumer
confidence, it is possible that the Japanese economy may experience further
weakness before its fundamental problems are addressed and a more normal growth
rate is achieved.
SMALL COMPANIES. The smaller, less established companies in which the Fund may
invest may offer greater opportunities for capital appreciation than larger,
better-established companies, but may also involve certain special risks. Such
companies often have limited product lines, markets or financial resources and
depend heavily on a small management group. Their securities may trade less
frequently, in smaller volumes, and fluctuate more sharply in value than
exchange-listed securities of larger companies.
FOREIGN CURRENCY TRANSACTIONS. In connection with its investments in foreign
securities, the Fund may purchase and sell (i) foreign currencies on a spot or
forward basis, (ii) foreign currency futures contracts, and (iii) options on
foreign currencies and foreign currency futures. Such transactions will be
entered into (i) to lock in a particular foreign exchange rate pending
settlement of a purchase or sale of a foreign security or pending the receipt of
interest,
4
<PAGE>
principal or dividend payments on a foreign security held by the Fund, or (ii)
to hedge against a decline in the value, in U.S. dollars or in another currency,
of a foreign currency in which securities held by the Fund are denominated. The
Fund will not attempt, nor would it be able, to eliminate all foreign currency
risk. Further, although hedging may lessen the risk of loss if the hedged
currency's value declines, it limits the potential gain from currency value
increases. See the SAI for information relating to the Fund's obligations in
entering into such transactions.
STOCK INDEX, FUTURES CONTRACTS AND OPTIONS. The Fund may purchase and sell
foreign stock index futures contracts and options on such contracts. Such
transactions will be entered into to gain exposure to a particular foreign
equity market pending investment in individual securities or to hedge against
market declines. A futures contract creates an obligation by the seller to
deliver and the buyer to take delivery of a type of instrument at the time and
in the amount specified in the contract. A sale of a futures contract can be
terminated in advance of the specified delivery date by subsequently purchasing
a similar contract; a purchase of a futures contract can be terminated by a
subsequent sale. Gain or loss on a contract generally is realized upon such
termination. An option on a futures contract generally gives the option holder
the right, but not the obligation, to purchase or sell the futures contract
prior to the option's specified expiration date. If the option expires
unexercised, the holder will lose any amount it paid to acquire the option.
Transactions in futures and related options may not precisely achieve the goals
of hedging or gaining market exposure to the extent there is an imperfect
correlation between the price movements of the contracts and of the underlying
securities. In addition, if the Advisor's prediction of stock market movements
is inaccurate, the Fund may be worse off than if it had not hedged.
TEMPORARY/DEFENSIVE INVESTMENTS. Temporarily available cash may be invested in
U.S. dollar or foreign currency denominated demand deposits, certificates of
deposit, bankers' acceptances, and high-quality, short-term debt securities, as
well as in Treasury bills and repurchase agreements. Some or all of the Fund's
assets may be invested in such investments during periods of unusual market
conditions. Under a repurchase agreement, the Fund buys a security from a bank
or dealer, which is obligated to buy it back at a fixed price and time. The
security is held in a separate account at the Fund's custodian and constitutes
the Fund's collateral for the bank's or dealer's repurchase obligation.
Additional collateral will be added so that the obligation will at all times be
fully collateralized. However, if the bank or dealer defaults or enters
bankruptcy, the Fund may experience costs and delays in liquidating the
collateral and may experience a loss if it is unable to demonstrate its right to
the collateral in a bankruptcy proceeding. Not more than 15% of the Fund's net
assets will be invested in repurchase agreements maturing in more than seven
days and other illiquid assets.
OTHER. The Fund may not always achieve its investment objective. The Fund's
investment objective and non-fundamental investment policies may be changed
without shareholder approval. The Fund's fundamental investment policies listed
in the SAI cannot be changed without the approval of a majority of the Fund's
outstanding voting securities. Additional information concerning certain of the
securities and investment techniques described above is contained in the SAI.
HOW THE FUND MEASURES ITS PERFORMANCE
Performance may be quoted in sales literature and advertisements. Each Class's
average annual total returns are calculated in accordance with the SEC's formula
and assume the reinvestment of all distributions, the maximum initial sales
charge of 5.75% on Class A shares and the contingent deferred sales charge
applicable to the time period quoted on Class B and Class C shares. Other total
returns differ from the average annual total return only in that they may relate
to different time periods, may represent aggregate as opposed to average annual
total returns, and may not reflect the initial or contingent deferred sales
charges.
5
<PAGE>
Each Class's performance may be compared to various indices. Quotations from
various publications may be included in sales literature and advertisements. See
"Performance Measures" in the SAI.
All performance information is historical and does not predict future results.
HOW THE FUND IS MANAGED
The Trustees formulate the Fund's general policies and oversee the Fund's
affairs as conducted by the Advisor and the Administrator.
Liberty Funds Distributor, Inc. (Distributor), a subsidiary of the
Administrator, serves as the distributor for the Fund's shares. Liberty Funds
Services, Inc. (Transfer Agent), an affiliate of the Administrator, serves as
the shareholder services and transfer agent for the Fund. Each of the Advisor,
the Administrator, the Distributor and the Transfer Agent is an indirect
subsidiary of Liberty Financial Companies, Inc. (Liberty Financial) which in
turn is an indirect subsidiary of Liberty Mutual Insurance Company (Liberty
Mutual). Liberty Mutual is considered to be the controlling entity of the
Advisor, the Administrator and their affiliates. Liberty Mutual is an
underwriter of workers' compensation insurance and a property and casualty
insurer in the U.S.
The Advisor furnishes the Fund with investment management services at the
Advisor's expense. For these services, the Fund pays the Advisor a monthly fee
at an annual rate of 1.00% of the Fund's average daily net assets.
Christopher Legallet, Senior Vice President of the Advisor, co-manages the Fund.
Mr. Legallet also co-manages Newport Greater China Fund. Prior to his
affiliation with the Advisor, Mr. Legallet was a Managing Director of Jupiter
Tyndall (Asia) Ltd. in Hong Kong serving as lead manager for investment in Asia
since 1992.
David Smith, Senior Vice President of the Advisor, co-manages the Fund and has
managed other funds or accounts on behalf of Newport Pacific Management, Inc.
(Newport Pacific), the Advisor's immediate parent, since 1994. Prior to 1996,
Mr. Smith was Director of North Asian Strategies at Newport Pacific, an
Executive Vice President at Carnegie Investor Services, and a Vice President at
Global Strategies.
The Administrator provides certain administrative services to the Fund, for
which the Fund pays the Administrator a monthly fee at the annual rate of 0.25%
of the Fund's average daily net assets. The Administrator also provides pricing
and bookkeeping services to the Fund for a monthly fee of $2,250 plus a
percentage of the Fund's average net assets over $50 million.
The Transfer Agent provides transfer agency and shareholder services to the Fund
for a monthly fee at the annual rate of 0.236% of average daily net assets plus
certain out-of-pocket expenses.
Each of the foregoing fees is subject to any reimbursement or fee waiver to
which the Advisor and its affiliates may agree.
The Advisor places all orders for the purchase and sale of portfolio securities.
In selecting broker-dealers, the Advisor may consider research and brokerage
services furnished by such broker-dealers to the Advisor and its affiliates. In
recognition of the research and brokerage services provided, the Advisor may
cause the Fund to pay the selected broker-dealer a higher commission than would
have been charged by another broker-dealer not providing such services. Subject
to seeking best execution, the Advisor may consider sales of shares of the Fund
(and of certain other mutual funds advised by the Advisor, the Administrator and
their affiliates) in selecting broker-dealers for portfolio security
transactions.
Fund expenses consist of management, administration, pricing and bookkeeping,
shareholder service and transfer agent fees discussed above, Rule 12b-1 service
and distribution fees discussed under the caption "12b-1 Plan," and all other
expenses, fees,
6
<PAGE>
charges, taxes, organization costs and liabilities incurred or arising in
connection with the management thereof, including but not limited to, Trustees'
compensation and expenses and auditing, counsel, custodian and other expenses
deemed necessary and proper by the Board of Trustees.
YEAR 2000
The Fund's Advisor, Administrator, Distributor and Transfer Agent (Liberty
Companies) are actively coordinating, managing and monitoring Year 2000
readiness for the Fund. A central program office at the Liberty Companies is
working within the Liberty Companies and with vendors who provide services,
software and systems to the Fund to ensure that date-related information and
data can be properly processed and calculated on and after January 1, 2000. Many
Fund service providers and vendors, including the Liberty Companies, are in the
process of making Year 2000 modifications to their services, software and
systems and believe that such modifications will be completed on a timely basis
prior to January 1, 2000. However, no assurances can be given that all
modifications required to ensure proper data processing and calculation on and
after January 1, 2000 will be timely made or that services to the Fund will not
be adversely affected.
HOW THE FUND VALUES ITS SHARES
Per share net asset value is calculated by dividing the total value of each
Class's net assets by its number of outstanding shares. Shares of the Fund are
generally valued as of the close of regular trading (normally 4:00 p.m. Eastern
time) on the New York Stock Exchange (Exchange) each day the Exchange is open.
Portfolio securities for which market quotations are readily available are
valued at current market value. Short-term investments maturing in 60 days or
less are valued at amortized cost when the Advisor determines, pursuant to
procedures adopted by the Trustees, that such cost approximates current market
value. In certain countries, the Fund may hold shares designated for foreign
ownership. If market quotations for such shares are not readily available as a
result of limited trading activity, the securities are valued at the last sale
price of the local shares in the principal market in which such securities are
normally traded. The Board of Trustees has adopted procedures to value at their
fair value (i) all other securities and (ii) foreign securities if the values of
such securities have been materially affected by events occurring after the
closing of a foreign market.
DISTRIBUTIONS AND TAXES
The Fund intends to qualify as a "regulated investment company" under the
Internal Revenue Code and to distribute to shareholders net income and any net
realized gain, at least annually.
Distributions are invested in additional shares of the same Class of the Fund at
net asset value unless the shareholder elects to receive cash. Regardless of the
shareholder's election, distributions of $10 or less will not be paid in cash to
shareholders but will be invested in additional shares of the same Class of the
Fund at net asset value. If a shareholder has elected to receive dividends
and/or capital gain distributions in cash and the postal or other delivery
service selected by the Transfer Agent is unable to deliver checks to the
shareholder's address of record, such shareholder's distribution option will
automatically be converted to having all dividend and other distributions
reinvested in additional shares. No interest will accrue on amounts represented
by uncashed distribution or redemption checks. To change your election, call the
Transfer Agent for information.
Whether you receive distributions in cash or in additional Fund shares, you must
report them as taxable income unless you are a tax-exempt institution. If you
buy shares shortly before a distribution is declared, the distribution will be
taxable although it is, in effect, a partial return of the amount invested. Each
January,
7
<PAGE>
information on the amount and nature of distributions for the prior year is sent
to shareholders.
HOW TO BUY SHARES
Shares of the Fund are offered continuously. Orders received in good form prior
to the time at which the Fund values its shares (or placed with the financial
service firm before such time and transmitted by the financial service firm
before the Fund processes that day's share transactions) will be processed based
on that day's closing net asset value, plus any applicable initial sales charge.
The minimum initial investment is $1,000; subsequent investments may be as small
as $50. The minimum initial investment for the Fundamatic program is $50; and
the minimum initial investment for retirement accounts sponsored by the
Distributor is $25. Certificates will not be issued for Class B or Class C
shares and there are some limitations on the issuance of Class A share
certificates. The Fund may refuse any purchase order for its shares. See the SAI
for more information.
CLASS A SHARES. Class A shares are offered at net asset value plus an initial
sales charge as follows:
<TABLE>
<CAPTION>
INITIAL SALES CHARGE
------------------------------
RETAINED
BY
FINANCIAL
SERVICE
AS % OF FIRM AS
--------------------- % OF
AMOUNT OFFERING OFFERING
AMOUNT PURCHASED INVESTED PRICE PRICE
<S> <C> <C> <C>
Less than $50,000 6.10% 5.75% 5.00%
$50,000 to less than
$100,000 4.71% 4.50% 3.75%
$100,000 to less than
$250,000 3.63% 3.50% 2.75%
$250,000 to less than
$500,000 2.56% 2.50% 2.00%
$500,000 to less than
$1,000,000 2.04% 2.00% 1.75%
$1,000,000 or more 0.00% 0.00% 0.00%
</TABLE>
On purchases of $1 million or more, the Distributor pays the financial service
firm a cumulative commission as follows:
<TABLE>
<CAPTION>
AMOUNT PURCHASED COMMISSION
<S> <C>
First $3,000,000 1.00%
Next $2,000,000 0.50%
Over $5,000,000 0.25%(1)
</TABLE>
(1) Paid over 12 months but only to the extent the shares remain
outstanding.
In determining the sales charge and commission applicable to a new purchase
under the above schedules, the amount of the current purchase is added to the
current value of shares previously purchased and still held by an investor. If a
purchase results in an account having a value from $1 million to $5 million,
then the portion of the shares purchased that caused the account value to exceed
$1 million will be subject to a 1.00% contingent deferred sales charge, payable
to the Distributor, if redeemed within 18 months after the end of the month in
which the purchase was accepted. If the purchase results in an account having a
value in excess of $5 million, the contingent deferred sales charge will not
apply to the portion of the purchased shares comprising such excess amount.
CLASS B SHARES. Class B shares are offered at net asset value, without an
initial sales charge, and are subject to a 0.75% annual distribution fee for
approximately eight years (at which time they automatically convert to Class A
shares not bearing a distribution fee) and a declining contingent deferred sales
charge if redeemed within six years after purchase. As shown below, the amount
of the contingent deferred sales charge depends on the number of years after
purchase that the redemption occurs:
8
<PAGE>
YEARS AFTER CONTINGENT DEFERRED
PURCHASE SALES CHARGE
0-1 5.00%
1-2 4.00%
2-3 3.00%
3-4 3.00%
4-5 2.00%
5-6 1.00%
More than 6 0.00%
Year one ends one year after the end of the month in which the purchase was
accepted and so on. The Distributor pays financial service firms a commission of
5.00% on Class B share purchases.
CLASS C SHARES. Class C shares are offered at net asset value and are subject to
a 0.75% annual distribution fee and a 1.00% contingent deferred sales charge on
redemptions made within one year after the end of the month in which the
purchase was accepted.
The Distributor pays financial service firms an initial commission of 1.00% on
purchases of Class C shares and an ongoing commission of 0.75% annually,
commencing after the shares purchased have been outstanding for one year.
Payment of the ongoing commission is conditioned on receipt by the Distributor
of the 0.75% annual distribution fee referred to above. The commission may be
reduced or eliminated by the Distributor at any time.
GENERAL. All contingent deferred sales charges are deducted from the amount
redeemed, not the amount remaining in the account, and are paid to the
Distributor. Shares issued upon distribution reinvestment and amounts
representing appreciation are not subject to a contingent deferred sales charge.
The contingent deferred sales charge is imposed on redemptions which result in
the account value falling below its Base Amount (the total dollar value of
purchase payments in the account, reduced by prior redemptions on which a
contingent deferred sales charge was paid and any exempt redemptions). When a
redemption subject to a contingent deferred sales charge is made, generally,
older shares will be redeemed first. See the SAI for more information.
Which Class is more beneficial to an investor depends on the amount and intended
length of the investment. Large investments, qualifying for a reduced Class A
sales charge, avoid the distribution fee. Investments in Class B shares have
100% of the purchase invested immediately. Investors investing for a relatively
short period of time might consider Class C shares. Purchases of $250,000 or
more must be for Class A or Class C shares. Purchases of $1,000,000 or more must
be for
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Class A shares. Consult your financial service firm.
Financial service firms may receive different compensation rates for selling
different classes of shares. The Distributor may pay additional compensation to
financial service firms which have made or may make significant sales. See the
SAI for more information.
SPECIAL PURCHASE PROGRAMS. The Fund allows certain investors or groups of
investors to purchase shares with reduced or without initial or contingent
deferred sales charges. These programs are described in the SAI under "Programs
for Reducing or Eliminating Sales Charges."
SHAREHOLDER SERVICES AND ACCOUNT FEES. A variety of shareholder services are
available. For more information about these services or your account call
1-800-345-6611. Some services are described in the attached account application.
A shareholder's manual explaining all available services will be provided upon
request.
In June of any year, the Fund may deduct $10 (payable to the Transfer Agent)
from accounts valued at less than $1,000 unless the account value has dropped
below $1,000 solely as a result of share value depreciation. Shareholders will
receive 60 days' written notice to increase the account value before the fee is
deducted. The Fund may also deduct annual maintenance and processing fees
(payable to the Transfer Agent) in connection with certain retirement plan
accounts sponsored by the Distributor. See "Special Purchase Programs/Investor
Services" in the SAI for more information.
HOW TO SELL SHARES
Shares of the Fund may be sold on any day the Exchange is open, either directly
to the Fund or through your financial service firm. Sale proceeds generally are
sent within seven days (usually on the next business day after your request is
received in good form). However, for shares recently purchased by check, the
Fund will delay sending proceeds for up to 15 days in order to protect the Fund
against financial losses and dilution in net asset value caused by dishonored
purchase payment checks. To avoid delay in payment, investors are advised to
purchase shares unconditionally, such as by certified check or other immediately
available funds.
CONTINGENT REDEMPTION FEE. The Fund can experience substantial price
fluctuations and is intended for long-term investors. Short-term "market timers"
who engage in frequent purchases and redemptions can disrupt the Fund's
investment program and create additional transaction costs that are borne by all
shareholders. For these reasons, the Fund will assess a redemption fee in the
amount of 2.00% on redemptions and exchanges of Fund shares purchased and held
for five business days or less.
The contingent redemption fee will be paid to the Fund to help offset
transaction costs. The Fund will use the "first-in, first-out" (FIFO) method to
determine the five business day holding period. Under this method, the date of
the redemption or exchange will be compared with the earliest purchase date of
shares held in the account. If this holding period is five business days or
less, the contingent redemption fee will be assessed.
The contingent redemption fee does not apply to any shares purchased through the
reinvestment of dividends. The fee may not apply to omnibus accounts and wrap
fee programs.
SELLING SHARES DIRECTLY TO THE FUND. Send a signed letter of instruction or
stock power form to the Transfer Agent, along with any certificates for shares
to be sold. The sale price is the net asset value (less any applicable
contingent deferred sales charge) next calculated after the Fund receives the
request in proper form. Signatures must be guaranteed by a bank, a member firm
of a national stock exchange or another eligible guarantor institution. Stock
power forms are available from financial service firms, the Transfer Agent and
many banks. Additional documentation is required for sales by corporations,
agents, fiduciaries, surviving joint owners and individual
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retirement account holders. For details contact:
LIBERTY FUNDS SERVICES, INC.
P.O. BOX 1722
BOSTON, MA 02105-1722
1-800-345-6611
SELLING SHARES THROUGH FINANCIAL SERVICE FIRMS. Financial service firms must
receive requests prior to the time at which the Fund values its shares to
receive that day's price, are responsible for furnishing all necessary
documentation to the Transfer Agent and may charge for this service.
GENERAL. The sale of shares is a taxable transaction for income tax purposes and
may be subject to a contingent deferred sales charge. The contingent deferred
sales charge may be waived under certain circumstances. See the SAI for more
information. Under unusual circumstances, the Fund may suspend repurchases or
postpone payment for up to seven days or longer, as permitted by federal
securities law. No interest will accrue on amounts represented by uncashed
distributions or redemption checks.
HOW TO EXCHANGE SHARES
Except as described below with respect to money market funds, Fund shares may be
exchanged at net asset value for shares of other mutual funds distributed by the
Distributor, including funds advised by the Advisor, the Administrator and their
affiliates. Generally, such exchanges must be between the same classes of
shares. Consult your financial service firm or the Transfer Agent for
information regarding what funds are available.
Shares will continue to age without regard to the exchange for purposes of
conversion and in determining the contingent deferred sales charge, if any, upon
redemption. Carefully read the prospectus of the fund into which the exchange
will go before submitting the request. Call 1-800-426-3750 to receive a
prospectus. Call 1-800-422-3737 to exchange shares by telephone. An exchange is
a taxable capital transaction. The exchange service may be changed, suspended or
eliminated on 60 days' written notice. The Fund will terminate the exchange
privilege as to a particular shareholder if the Advisor determines, in its sole
and absolute discretion, that the shareholder's exchange activity is likely to
adversely impact the Advisor's ability to manage the Fund's investments in
accordance with its investment objective or otherwise harm the Fund or its
remaining shareholders. All exchanges within five business days after a purchase
are subject to a 2.00% contingent redemption fee. See "How to Sell Shares
- --Contingent Redemption Fee."
CLASS A SHARES. An exchange from a money market fund into a non-money market
fund will be at the applicable offering price next determined (including sales
charge), except for amounts on which an initial sales charge was paid. Non-money
market fund shares must be held for five months before qualifying for exchange
to a fund with a higher sales charge, after which time exchanges are made at the
net asset value next determined.
CLASS B SHARES. Exchanges of Class B shares are not subject to the contingent
deferred sales charge. However, if shares are redeemed within six years after
the original purchase, a contingent deferred sales charge will be assessed using
the schedule of the fund in which the original investment was made.
CLASS C SHARES. Exchanges of Class C shares are not subject to the contingent
deferred sales charge. However, if shares are redeemed within one year after the
original purchase, a 1.00% contingent deferred sales charge will be assessed.
Only one "round-trip" exchange of the Fund's Class C shares may be made per
three-month period, measured from the date of the initial purchase. For example,
an exchange from Fund X to Fund Y and back to Fund X would be permitted only
once during each three-month period.
TELEPHONE TRANSACTIONS
All shareholders and/or their financial advisors are automatically eligible to
exchange Fund shares and redeem up to $100,000 of the
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Fund's shares by calling 1-800-422-3737 toll-free any business day between 9:00
a.m. and the time at which the Fund values its shares. Telephone redemptions are
limited to a total of $100,000 in a 30-day period. Telephone redemption
privileges may be elected on the account application. The Transfer Agent will
employ reasonable procedures to confirm that instructions communicated by
telephone are genuine and may be liable for losses related to unauthorized or
fraudulent transactions in the event reasonable procedures are not employed.
Such procedures include restrictions on where proceeds of telephone redemptions
may be sent, limitations on the ability to redeem by telephone shortly after an
address change, recording of telephone lines and requirements that the redeeming
shareholder and/or his or her financial advisor provide certain identifying
information. Shareholders and/or their financial advisors wishing to redeem or
exchange shares by telephone may experience difficulty in reaching the Fund at
its toll-free telephone number during periods of drastic economic or market
changes. In that event, shareholders and/or their financial advisors should
follow the procedures for redemption or exchange by mail as described above
under "How to Sell Shares." The Advisor, the Administrator, the Transfer Agent
and the Fund reserve the right to change, modify or terminate the telephone
redemption or exchange services at any time upon prior written notice to
shareholders. Shareholders and/or their financial advisors are not obligated to
transact by telephone.
12B-1 PLAN
Under its 12b-1 Plan, the Fund pays the Distributor monthly a service fee at an
annual rate of 0.25% of the Fund's net assets attributed to each Class of
shares. The 12b-1 Plan also requires the Fund to pay the Distributor monthly a
distribution fee at an annual rate of 0.75% of the average daily net assets
attributed to its Class B and Class C shares. Because the Class B and Class C
shares bear additional distribution fees, their dividends will be lower than the
dividends of Class A shares. Class B shares automatically convert to Class A
shares, approximately eight years after the Class B shares were purchased. Class
C shares do not convert. The multiple class structure could be terminated should
certain Internal Revenue Service rulings be rescinded. See the SAI for more
information. The Distributor uses the fees to defray the cost of commissions and
service fees paid to financial service firms which have sold Fund shares, and to
defray other expenses such as sales literature, prospectus printing and
distribution, shareholder servicing costs and compensation to wholesalers.
Should the fees exceed the Distributor's expenses in any year, the Distributor
would realize a profit. The Plan also authorizes other payments to the
Distributor and its affiliates (including the Advisor and the Administrator)
which may be construed to be indirect financing of sales of Fund shares.
ORGANIZATION AND HISTORY
The Trust is a Massachusetts business trust organized in 1991. The Fund
commenced investment operations in 1998 as a separate portfolio of the Trust.
As of the date of this Prospectus the Administrator owned 100% of the Fund and,
therefore, may be deemed to "control" the Fund.
The Trust is not required to hold annual shareholder meetings, but special
meetings may be called for certain purposes. Shareholders receive one vote for
each Fund share. Shares of the Fund and of any other series of the Trust that
may be in existence from time to time generally vote together except when
required by law to vote separately by fund or by class. Shareholders owning in
the aggregate ten percent of Trust shares may call meetings to consider removal
of Trustees. Under certain circumstances, the Trust will provide information to
assist shareholders in calling such a meeting. See the SAI for more information.
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INVESTMENT ADVISOR
Newport Fund Management, Inc.
580 California Street, Suite 1960
San Francisco, CA 94104
ADMINISTRATOR
Colonial Management Associates, Inc.
One Financial Center
Boston, MA 02111-2621
DISTRIBUTOR
Liberty Funds Distributor, Inc.
One Financial Center
Boston, MA 02111-2621
CUSTODIAN
The Chase Manhattan Bank
270 Park Avenue
New York, NY 10017-2070
SHAREHOLDER SERVICES AND TRANSFER AGENT
Liberty Funds Services, Inc.
One Financial Center
Boston, MA 02111-2621
1-800-345-6611
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
160 Federal Street
Boston, MA 02110-2624
LEGAL COUNSEL
Ropes & Gray
One International Place
Boston, MA 02110-2624
August 25, 1998, Revised May 14, 1999
NEWPORT
ASIA PACIFIC
FUND
PROSPECTUS
NEWPORT ASIA PACIFIC FUND seeks capital appreciation. The Fund seeks to achieve
its investment objective by investing normally at least 80% of its total assets
in equity securities of companies whose principal activities are located in Asia
or the Pacific Basin.
For more detailed information about the Fund, call the Administrator at
1-800-426-3750 for the August 25, 1998 SAI.
NOT FDIC-INSURED MAY LOSE VALUE
NO BANK GUARANTEE
YOUR FINANCIAL SERVICE FIRM IS:
Printed in U.S.A.
