COLONIAL VALUE FUND
Supplement to the November 2, 1998 Prospectus
(Replacing Supplement dated January 15, 1999)
The Fund's Prospectus is amended as follows:
(1) The first sentence of the paragraph under the sub-caption Annual
Operating Expenses is revised in its entirety as follows:
The Advisor has agreed, until further notice, to waive fees and bear
certain Fund expenses to the extent that total operating expenses
(exclusive of 12b-1 fees, brokerage commissions, interest, taxes and
extraordinary expenses, if any) will not exceed 0.75% annually of the
Fund's average net assets.
(2) The fourth paragraph under the caption HOW THE FUND PURSUES ITS OBJECTIVE
AND CERTAIN RISK FACTORS is revised in its entirety as follows:
Debt Securities Generally. The Fund may invest in debt securities
without regard to quality or rating. The values of debt securities
generally fluctuate inversely with changes in interest rates.
(3) The caption MANAGEMENT DISCUSSION OF FUND
PERFORMANCE is revised in its entirety as follows:
Colonial Value Fund Investment Performance vs. the S&P 500
Change in Value of $10,000 from 3/31/96 to 6/30/98
[MOUNTAIN CHART - COMPARING THE INITIAL ACCOUNT VALUE AND SUBSEQUENT ACCOUNT
VALUES AT THE END OF EACH FISCAL YEAR END ASSUMING A
$10,000 INVESTMENT.]
<TABLE>
<CAPTION>
Class A Class A Class B Class B Class C Class C
S&P 500 NAV POP NAV W/CDSC NAV W/CDSC
<S> <C> <C> <C> <C> <C> <C> <C>
3/31/96 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000
4/30/96 10147 10050 9472 10050 10050 10050 10050
5/31/96 10409 10171 9586 10161 10161 10161 10161
6/30/96 10448 10342 9747 10322 10322 10322 10322
7/31/96 9987 9865 9302 9849 9849 9849 9849
8/31/96 10198 10161 9577 10131 10131 10131 10131
9/30/96 10771 10533 9928 10493 10493 10493 10493
10/31/96 11068 10825 10203 10775 10775 10775 10775
11/30/96 11904 11419 10762 11358 11358 11358 11358
12/31/96 11668 11226 10581 11168 11168 11168 11168
1/31/97 12397 11645 10975 11574 11574 11574 11574
2/28/97 12494 11767 11091 11686 11686 11686 11686
3/31/97 11982 11400 10744 11320 11320 11320 11320
4/30/97 12697 11686 11014 11584 11584 11584 11584
5/31/97 13473 12339 11629 12234 12234 12234 12234
6/30/97 14072 12951 12206 12823 12823 12823 12823
7/31/97 15191 13768 12976 13635 13635 13635 13635
8/31/97 14341 13431 12658 13290 13290 13290 13290
9/30/97 15126 14217 13399 14051 14051 14051 14051
10/31/97 14621 13553 12774 13391 13391 13391 13391
11/30/97 15297 14023 13216 13848 13848 13848 13848
12/31/97 15560 14554 13717 14361 14361 14361 14361
1/31/98 15732 14485 13652 14281 14281 14281 14281
2/28/98 16866 15735 14830 15505 15505 15505 15505
3/31/98 17729 16441 15496 16192 16192 16192 16192
4/30/98 17910 16221 15289 15974 15974 15974 15974
5/31/98 17603 16140 15212 15883 15883 15883 15883
6/30/98 $18,317 $16,187 $15,257 $15,917 $15,617 $15,917 $15,917
</TABLE>
- --------------------------[END OF MOUNTAIN CHART]-------------------------------
Based on NAV and POP for Class A Shares
Value of a $10,000 investment made on 3/31/96
Class A Shares Class B Shares Class C Shares
NAV POP NAV W/CDSC NAV W/CDSC
$16,187 $15,257 $15,917 $15,617 $15,917 $15,917
Average Annual Total Returns as of 6/30/98
Class A Shares Class B Shares Class C Shares
Inception (3/31/96) (3/31/96) (3/31/96)
NAV POP NAV W/CDSC NAV W/CDSC
1 Year 24.99% 17.80% 24.13% 19.13% 24.13% 23.13%
Life of Fund 23.88% 20.66% 22.95% 21.92% 22.95% 22.95%
Net asset value (NAV) returns do not include sales charges or contingent
deferred sales charges (CDSC). Public offering price (POP) returns include the
maximum sales charge of 5.75% for Class A shares. The CDSC returns reflect the
maximum charges of 5% for one year, 3% for life for Class B shares, and 1% for
one year for Class C shares.
Management Discussion
The following is a discussion of the Fund's performance for the 12-month period
ended June 30, 1998. During this period, John Lennon, Michael Rega,
Vice Presidents, and Richard Petrino, Assistant Vice President of Colonial
Management Associates, Inc. served as the Fund's portfolio managers.
Despite the slowdown in Asia and its negative impact on worldwide markets in
late 1997 and the first half of 1998, U.S. stock prices, as measured by the S&P
500 Index, posted an impressive 30.17% return over the 12-month period.
For the 12-month period, the Fund generated a return of 24.99% for Class A
shares, based on net asset value. This compares favorably with the performance
of the Lipper Equity Income category, which averaged 20.98% during the period.*
The Fund's strong performance can be attributed mainly to two factors - asset
allocation and good stock selection. The Fund remained committed to investing in
equity securities for the period with no exposure to bonds.
We continue to believe that over the long-term a portfolio that focuses on
income producing equity securities will continue to provide an attractive
vehicle for investors interested in seeking current income and long-term growth.
Please note that the Fund has the ability to invest up to 35% in bonds.
Past performance cannot guarantee 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. Performance for different share classes
will vary based on differences in sales charges and fees associated with each
class.
Performance results reflect any voluntary waivers or reimbursement of Fund
expenses by the Advisor. Absent these waivers or reimbursement arrangements,
performance results would have been lower.
The Standard & Poor's 500 Index is an unmanaged index that tracks the
performance of widely held, large-capitalization U.S. stocks. Unlike mutual
funds, indexes are not investments, do not incur fees or expenses and are not
professionally managed. It is not possible to invest directly in an index.
* Lipper Analytical Services, Inc., a widely respected data provider in the
industry, calculates an average total return for mutual funds with similar
investment objectives as the Fund.
CV-36/268H-0699 June 8, 1999
