<PAGE>
- ----------------------------------------------
NEWPORT ASIA PACIFIC FUND ANNUAL REPORT
- ----------------------------------------------
JUNE 30, 1999
[Graphic Omitted]
SEARCHING ASIA AND
THE PACIFIC BASIN TO
SELECT QUALITY INVESTMENT
OPPORTUNITIES FOR GLOBAL INVESTORS.
<PAGE>
TABLE OF CONTENTS
1 HIGHLIGHTS
2 PORTFOLIO MANAGERS' REPORT
4 PERFORMANCE
5 PORTFOLIO OF INVESTMENTS
7 FINANCIAL STATEMENTS
9 NOTES TO FINANCIAL STATEMENTS
12 FINANCIAL HIGHLIGHTS
- -------------------------------
Not FDIC May Lose Value
Insured No Bank Guarantee
- -------------------------------
<PAGE>
PRESIDENT'S MESSAGE
[Photo of Stephen E. Gibson]
Dear Shareholder:
We are pleased to welcome you as shareholders of Newport Asia Pacific Fund. This
is the Fund's first report since it opened to new investors in May. It covers
the period from the Fund's inception on August 19, 1998 through June 30, 1999.
Two years ago, some of the world's most promising emerging Asian financial
markets were rocked by currency troubles and economic upheaval. Coupled with an
extended recession in Japan, the crisis in Asia depressed values for investors
and raised questions about the region's prospects. Now, there are signs of
recovery. In fact, Japan surprised the world with positive economic growth in
the first quarter of 1999 and a solid comeback of its equity markets.
The Fund capitalized on these improving economic and business conditions and
delivered strong performance for the period. It is worth noting that the Fund
has gained more than 90% since its inception in August 1998. While this period
has been positive for investors in Asian markets, and past performance cannot
predict future results, we believe the Fund's positive results also reflect the
extensive experience of our portfolio managers. Their years of research and
relationship-building have enabled them to target areas of opportunity for the
Fund. On the pages that follow, your Fund's managers discuss the investment
strategies that helped generate these very favorable returns.
We thank you for investing in Newport Asia Pacific Fund, and we look forward to
continuing to serve your investment needs.
Sincerely,
/s/ Stephen E. Gibson
Stephen E. Gibson
President
August 11, 1999
Because market and economic conditions change frequently, there can be no
assurance that the trends described above or on the following pages will
continue.
<PAGE>
Highlights
o LOWER RATES THROUGHOUT ASIA.
A multi-billion dollar infusion from the International Monetary Fund over a
two-year period -- 1998 and 1999 -- enabled countries throughout Asia to
ease their monetary policies. The dramatic declines in interest rates turned
out to be the decisive catalyst behind the surge in Asian markets this
spring.
o A WELCOME RECOVERY IN JAPAN.
Japan's economy, which had declined by 2.6% in 1998, grew by 1.9% in the
first quarter of 1999. This first-quarter growth, though not necessarily
sustainable on a quarter-by-quarter basis, was an important indication that
a domestic economic recovery may finally be underway.
o SUPERIOR PERFORMANCE FROM MEDIUM-SIZED COMPANIES.
Grass-roots factors such as new industries and new technologies are
increasingly important in leading Pacific Basin economies out of recession.
As a result, the Fund's investments have emphasized "medium-cap" companies,
which have performed especially well in 1999.
o STRONG PERFORMANCE SINCE INCEPTION.
Good stock selection and improving economic conditions helped the Fund turn
in a very good performance during the reporting period.
NEWPORT ASIA PACIFIC FUND PERFORMANCE VS.
MSCI AC ASIA PACIFIC FREE INDEX 8/31/98 - 6/30/99
Newport Asia Pacific Fund (Class A shares without sales charge) 102.4%
MSCI AC Asia Pacific Free Index 59.5%
The Morgan Stanley Capital International (MSCI) All Country Asia Pacific Free
Index is an unmanaged index that invests in stocks in the Pacific Basin. Unlike
mutual funds, indexes are not investments, do not incur fees or charges and are
not professionally managed. It is not possible to invest directly in an index.
CUMULATIVE TOTAL RETURNS FOR THE PERIOD BEGINNING 8/19/98 (FUND INCEPTION DATE)
AND ENDING 6/30/99
Without With
Sales Charge Sales Charge(1)
------------ ---------------
Class A 91.64% 80.62%
- ----------------------------------------------------------------------
Class B 90.36% 85.36%
- ----------------------------------------------------------------------
Class C 90.36% 89.36%
- ----------------------------------------------------------------------
NET ASSET VALUE PER SHARE AS OF 6/30/99
Class A $19.01
- ----------------------------------------------------------------------
Class B $18.90
- ----------------------------------------------------------------------
Class C $18.90
- ----------------------------------------------------------------------
DISTRIBUTIONS DECLARED PER SHARE FOR THE PERIOD FROM 8/19/98 - 6/30/99
Class A $0.106
- ----------------------------------------------------------------------
Class B $0.094
- ----------------------------------------------------------------------
Class C $0.094
- ----------------------------------------------------------------------
Past performance cannot predict future investment results. Returns and value of
an investment will vary, resulting in a gain or loss on sale. All results shown
assume reinvestment of distributions.
(1) The "with sales charge" returns include the maximum 5.75% charge for Class A
shares and the contingent deferred sales charge (CDSC) maximum charge of 5%
since inception for Class B shares and 1% since inception for Class C
shares.
<PAGE>
ANNUAL REPORT: NEWPORT ASIA PACIFIC FUND
PORTFOLIO MANAGERS' REPORT
FUND OUTPERFORMS FOR THE PERIOD
This Fund has only been open to new investors since May 14, 1999, but already it
has shown very favorable performance. The Fund was up over 20% since mid-May,
including a 17.6% advance in the month of June alone. Overall, the Fund's Class
A cumulative total return without a sales charge was up 91.64% since its
inception on August 19, 1998.
JAPANESE HOLDINGS PLAY KEY ROLE
Newport Asia Pacific Fund has maintained a significant position in Japan
throughout 1999. At the end of the period, 44% of the Fund's net assets were
invested in Japan. The other major positions of the Fund are in Hong Kong and
Singapore, which account for 33% and 10% of net assets, respectively.
As the fundamentals of the Japanese market have improved on several levels, we
have increased our emphasis on Japanese equities. For the first time, Japanese
companies are actively seeking ways to streamline and create shareholder value,
reminiscent of U.S. restructuring efforts during the 1980s. Sony, for example,
announced layoffs and other unprecedented cost-cutting moves during 1999.
Although the economy remains sluggish, the trend toward streamlining is a
welcome development.
EMPHASIS ON MEDIUM-CAPITALIZATION ISSUES
The market capitalization of the Fund's Japan holdings averages approximately $5
billion. Companies of this size are certainly well-established, but are still
considerably smaller than the large capitalization issues found in the Nikkei
index. Medium-cap issues dramatically outperformed the Nikkei during the first
half of 1999.
One core medium-cap holding is Shohkoh Fund (2.7% of net assets), a non-bank
consumer finance company that has thrived even as the major Japanese banks have
struggled. Shohkoh has achieved compound annual growth in excess of 40% over the
last 14 years, an impressive figure given that Japan's economy has struggled for
the past decade. Softbank Corp. (3.0% of net assets) is another important Fund
holding. It is a leader in Internet-related businesses, as evidenced by its
joint venture with Yahoo! Japan. Softbank is also a major shareholder in Yahoo!,
the parent company of Yahoo! Japan.
TRICKLE-DOWN EFFECT THROUGHOUT SOUTHEAST ASIA
The improvement of Japan's economy has had favorable consequences throughout the
region, because the bulk of Japan's imports come from elsewhere in Asia. Exports
from Taiwan to Japan increased by 30% in May. In addition, as Japan tries to
become more globally cost-competitive, it is outsourcing more and more of its
manufacturing. Taiwan, The People's Republic of China and Indonesia are direct
beneficiaries of this trend, in such industries as electronics, textiles and
chemicals. Taiwan has in turn outsourced much of its production to China, the
region's low-cost producer.
The stock markets of Hong Kong and China have lagged their Asian neighbors, but
the markets of both countries have benefited in 1999 from sharp declines in
interest rates. China's government has directed banks to expand their
involvement with individual mortgages, the overall goal being to stimulate
consumption. With savings rates now under 2%, the groundwork is being set for a
significant upswing in consumer spending. Consumers have been cautious in the
wake of the Asian financial crisis, although Singapore has recently witnessed an
improvement in retail spending.
EARNINGS DRIVE STOCK MARKET ADVANCES
One final, important point: stock prices throughout the region are now being
driven by earnings, not just global liquidity. We consider this healthy
situation a sharp contrast to the Asian stock market booms of the late 1980s and
early 1990s, when global monetary flows pushed stock prices beyond what could be
justified by actual earnings results.
/s/ Chris Legallet /s/ David Smith
CHRIS LEGALLET and DAVID SMITH are co-managers of Newport Asia Pacific Fund. Mr.
Legallet is Chief Investment Officer of Newport Fund Management, Inc., and Mr.
Smith is a senior vice president of Newport Fund Management.
COUNTRY BREAKDOWN(1)
Japan 43.5%
- -----------------------------------
Hong Kong 33.1%
- -----------------------------------
Singapore 9.7%
- -----------------------------------
Korea 2.3%
- -----------------------------------
Taiwan 0.9%
- -----------------------------------
Philippines 0.7%
- -----------------------------------
(1) Country weightings are calculated as a percentage of net assets. Because
the Fund is actively managed, there can be no guarantee the Fund will
continue to maintain these country weightings in the future.
TOP 5 HOLDINGS(1)
China Telecom 5.4%
- -----------------------------------
Development Bank of Singapore 3.9%
- -----------------------------------
Cheung Kong Holdings 3.8%
- -----------------------------------
Sun Hung Kai Properties 3.4%
- -----------------------------------
Hutchison Whampoa Ltd. 3.2%
- -----------------------------------
(1) Top five holdings are calculated as a percentage of net assets. Because the
Fund is actively managed, there can be no guarantee the Fund will continue
to maintain these holdings in the future.
TOP 5 SECTORS AS OF 6/30/99(1)
Financials 24.2%
- -----------------------------------
Manufacturing 16.9%
- -----------------------------------
Services 10.3%
- -----------------------------------
Telecommunications 9.0%
- -----------------------------------
Real Estate 8.0%
- -----------------------------------
(1) Industry sector weightings are calculated as a percentage of net assets.
Because the Fund is actively managed, there can be no guarantee the Fund
will continue to maintain these sector weightings in the future.
<PAGE>
ANNUAL REPORT: NEWPORT ASIA PACIFIC FUND
PERFORMANCE INFORMATION
NEWPORT ASIA PACIFIC FUND CLASS A SHARE INVESTMENT
PERFORMANCE VS. MSCI AC ASIA PACIFIC FREE INDEX
Change in Value of $10,000 from 8/31/98 - 6/30/99
With and Without Sales Charge
Without Charge With Charge MSCI
----------------------------------------------
8/98 $10,000 $10,000 $10,000
9/98 10,771 10,151 10,038
10/98 12,809 12,072 11,709
11/98 13,590 12,808 12,326
12/98 13,935 13,133 12,667
1/99 13,636 12,851 12,753
2/99 13,838 13,043 12,517
3/99 15,797 14,888 14,027
4/99 18,139 17,096 15,106
5/99 17,213 16,223 14,460
6/99 20,236 19,072 15,953
CHANGE IN VALUE OF A $10,000 INVESTMENT IN ALL SHARE CLASSES
FROM 8/31/89 - 6/30/99
Share Class A B C
- -------------------------------------------------------------------------------
Without Sales Charge $20,236 $20,102 $20,102
- -------------------------------------------------------------------------------
With Sales Charge $19,072 $19,602 $20,002
CUMULATIVE TOTAL RETURNS AS OF 6/30/99
<TABLE>
<CAPTION>
Share Class A B C
Inception 8/19/98 8/19/98 8/19/98
- -------------------------------------------------------------------------------------------
Without With Without With Without With
Sales Sales Sales Sales Sales Sales
Charge Charge Charge Charge Charge Charge
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Life of Fund 91.64% 80.62% 90.36% 85.36% 90.36% 89.36%
- -------------------------------------------------------------------------------------------
</TABLE>
Past performance cannot predict future investment results. Returns and value of
an investment will vary, resulting in a gain or loss on sale. All results shown
assume reinvestment of distributions. The "with sales charge" returns include
the maximum 5.75% charge for Class A shares and the contingent deferred sales
charge (CDSC) maximum charge of 5% since inception for Class B shares and 1%
since inception for Class C shares.
The Morgan Stanley Capital International All Country Asia Pacific Free Index is
an unmanaged index that tracks the performance of stocks traded on stock
exchanges in Pacific Basin countries, including Australia, Hong Kong, India,
Indonesia, Japan, Malaysia, New Zealand, The People's Republic of China, the
Philippines, Singapore, South Korea, Taiwan and Thailand. Unlike mutual funds,
indexes are not investments, do not incur fees or charges and are not
professionally managed. It is not possible to invest directly in an index.
<PAGE>
INVESTMENT PORTFOLIO
June 30, 1999
(In thousands)
COMMON STOCKS - 90.3% COUNTRY SHARES VALUE
- -------------------------------------------------------------------------------
CONSTRUCTION - 1.2%
SPECIAL TRADE CONTRACTORS
Zhejiang Expressway Co., Ltd. HK 328 $ 65
-------
- -------------------------------------------------------------------------------
FINANCE, INSURANCE & REAL ESTATE - 32.2%
DEPOSITORY INSTITUTIONS - 11.2%
Development Bank of Singapore Ltd. Si 17 208
HSBC Holdings PLC (a) HK 5 170
Hang Seng Bank HK 14 157
Oversea-Chinese Banking Corp., Ltd. Si 7 59
-------
594
-------
FINANCIAL SERVICES - 0.7%
Aeon Credit Service Ltd. Ja (b) 38
-------
HOLDING COMPANIES - 5.1%
Hutchison Whampoa Ltd. HK 19 172
Singapore Technologies Engineering Ltd. Si 86 98
-------
270
-------
NONDEPOSITORY CREDIT INSTITUTIONS - 7.2%
Acom Co., Ltd. Ja 1 69
Aiful Corp. Ja 1 110
Shohkoh Fund Ja (b) 143
Takefuji Corp. Ja 1 62
-------
384
-------
REAL ESTATE - 8.0%
Cheung Kong Holdings Ltd. HK 23 204
SM Prime Holdings Inc. Ph 170 39
Sun Hung Kai Properties Ltd. HK 20 182
-------
425
-------
- -------------------------------------------------------------------------------
MANUFACTURING - 16.9%
CHEMICALS & ALLIED PRODUCTS - 1.8%
Fujimi Inc. Ja 1 50
Takeda Chemical Industries Ltd. Ja 1 46
-------
96
-------
COMMUNICATIONS EQUIPMENT - 3.2%
Matsushita Communication Industrial Co. Ja 1 71
Sony Corp. Ja 1 97
-------
168
-------
ELECTRICAL INDUSTRIAL EQUIPMENT - 1.4%
Nidec Corp. Ja 1 75
-------
ELECTRONIC COMPONENTS - 0.8%
Minebea Co., Ltd. Ja 4 45
-------
FOOD & KINDRED PRODUCTS - 2.6%
Ito En Ltd. Ja 1 67
Kirin Brewery Co., Ltd. Ja 2 24
Nissin Food Products Co., Ltd. Ja 2 49
-------
140
-------
HOUSEHOLD APPLIANCES - 0.9%
Guangdong Kelon Electric Holdings, Class H HK 42 49
-------
MACHINERY & COMPUTER EQUIPMENT - 2.6%
Canon Inc. Ja 2 58
Union Tool Ja 1 82
-------
140
-------
MEASURING & ANALYZING INSTRUMENTS - 0.7%
Fuji Photo Film Co., Ltd. Ja 1 38
-------
PRINTING & PUBLISHING - 2.9%
Singapore Press Holdings Ltd. Si 9 153
-------
- -------------------------------------------------------------------------------
RETAIL TRADE - 7.1%
FOOD STORES - 0.9%
President Chain Store Corp. Tw 14 47
-------
GENERAL MERCHANDISE STORES - 4.2%
Don Quijote Co., Ltd. Ja (b) 100
Ryohin Keikaku Co., Ltd. Ja 1 126
-------
226
-------
HOME FURNISHINGS & EQUIPMENT - 2.0%
Yamada Denki Co. Ja 2 109
-------
- -------------------------------------------------------------------------------
SERVICES - 10.3%
AMUSEMENT & RECREATION - 1.0%
People Co., Ltd. Ja 1 51
-------
AUTO REPAIR, RENTAL & PARKING - 0.2%
Park24 Co., Ltd. Ja (b) 13
-------
COMPUTER RELATED SERVICES - 5.5%
Bellsystem 24 Inc. Ja (b) 82
Fujitsu Support & Services Inc. Ja 1 151
Orix Corp. Ja 1 62
-------
295
-------
COMPUTER SOFTWARE - 2.5%
Fuji Soft ABC Inc. Ja 2 131
-------
ENGINEERING, ACCOUNTING, RESEARCH &
MANAGEMENT - 1.1%
Meitec Corp. Ja 2 57
-------
- ------------------------------------------------------------------------------
TRANSPORTATION, COMMUNICATIONS,
ELECTRIC, GAS & SANITARY SERVICES - 15.2%
ELECTRIC SERVICES - 3.2%
CLP Holdings Ltd. HK 18 87
Korea Eletric Power Corp., ADR (c) Ko 4 82
-------
169
-------
GAS SERVICES - 3.0%
Hong Kong and China Gas Co., Ltd. HK 109 158
-------
TELECOMMUNICATION - 9.0%
China Telecom Ltd. (a) (c) HK 101 288
Korea Telecom Corp., ADR Ko 1 40
NTT Data Communications Systems Co. Ja (b) 79
Nippon Telegraph & Telephone Corp. Ja (b) 70
-------
477
-------
- -------------------------------------------------------------------------------
WHOLESALE TRADE - 7.4%
DURABLE GOODS
Johnson Electric Holdings Ltd. HK 34 140
Li & Fung Ltd. HK 38 91
Softbank Corp. Ja 1 162
-------
393
-------
TOTAL COMMON STOCKS
(cost of $2,668)(d) 4,806
-------
SHORT-TERM OBLIGATIONS - 5.8% PAR VALUE
- ------------------------------------------------------------------------------
Repurchase agreement with SBC Warburg Ltd.,
dated 06/30/99, due 07/01/99 at 4.800%,
collateralized by U.S. Treasury bonds
and/or notes with various maturities to
2027, market value $318 (repurchase
proceeds $307) $ 307 $ 307
-------
OTHER ASSETS & LIABILITIES, NET - 3.9% 210
- ------------------------------------------------------------------------------
NET ASSETS - 100% $ 5,323
-------
NOTES TO INVESTMENT PORTFOLIO:
- ------------------------------------------------------------------------------
(a) The value of this security represents fair value as determined in good
faith under the directions of the Trustees.
(b) Rounds to less than one.
(c) Non-income producing.
(d) Cost for federal income tax purposes is $2,711.
SUMMARY OF
SECURITIES BY COUNTRY COUNTRY VALUE % OF TOTAL
- -----------------------------------------------------------------------------
Japan Ja $2,317 48.2
Hong Kong HK 1,763 36.7
Singapore Si 518 10.8
Korea Ko 122 2.5
Taiwan Tw 47 1.0
Phillippines Ph 39 0.8
------ -----
$4,806 100.0
------ -----
Certain securities are listed by country of underlying exposure but may trade
predominantly on other exchanges.
ACRONYM NAME
- ------------------------------------------------------
ADR American Depositary Receipt
<PAGE>
STATEMENT OF ASSETS AND LIABILIIES
June 30, 1999
(In thousands except for per share amounts and footnotes)
ASSETS
Investments at value (cost $2,668) $ 4,806
Short-term obligations 307
-------
5,113
Cash including foreign currencies
(cost $60) $ 60
Receivable for:
Fund shares sold 146
Dividends 7
Expense reimbursement due from Advisor/Administrator 14 227
---- -------
Total Assets 5,340
LIABILITIES
Accrued:
Management fee 4
Administration fee 1
Transfer agent fee 1
Bookkeeping fee 2
Other 9
----
Total liabilities 17
-------
Net Assets $ 5,323
-------
CLASS A
Net asset value & redemption price per share ($4,606/242) $ 19.01(a)
-------
Maximum offering price per share ($19.01/0.9425) $ 20.17(b)
-------
CLASS B
Net asset value & offering price per share ($515/27) $ 18.90(a)
-------
CLASS C
Net asset value & offering price per share ($202/11) $ 18.90(a)
-------
COMPOSITION OF NET ASSETS
Capital paid in $ 3,031
Overdistributed net investment income (28)
Accumulated net realized gain 182
Net unrealized appreciation 2,138
-------
$ 5,323
-------
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
(b) On sales of $50,000 or more the offering price is reduced.
See notes to financial statements.
<PAGE>
STATEMENT OF OPERATIONS
(In thousands)
For the Period Ended June 30, 1999(e)
INVESTMENT INCOME
Dividends:
Cheung Kong Holdings Ltd $ 3
CLP Holdings Ltd. 3
Hang Seng Bank 6
Hong Kong and China Gas Co., Ltd. 4
Hutchinson Whampoa Ltd. 3
Singapore Press Holdings Ltd. 9
Sun Hung Kai Properties Ltd. 4
Other 22
Interest 6
--------
Total Investment Income
(net of nonreclaimable foreign
taxes withheld at source which
amounted to $3) 60
EXPENSES
Management fee $ 30
Administration fee 8
Service fee 8
Distribution fee - Class B 1
Distribution fee - Class C 1
Transfer agent fee 7
Bookkeeping fee 23
Trustees fee 5
Custodian fee 10
Audit fee 4
Registration fee 59
Reports to shareholders 2
Other 1
-----
159
Fees and expenses waived or borne by the
Advisor/Administrator (92) 67
----- --------
Net Investment Loss (7)
--------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON PORTFOLIO POSITIONS
Net realized gain (loss) on:
Investments 193
Foreign currency transactions (8)
-----
Net realized gain 185
Net change in unrealized appreciation/
depreciation 2,138
--------
Net Gain 2,323
--------
INCREASE IN NET ASSETS FROM OPERATIONS $ 2,316
--------
(a) The Fund commenced investment operations on August 19, 1998.
See notes to financial statements.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
(In thousands)
PERIOD ENDED
JUNE 30,
INCREASE (DECREASE) IN NET ASSETS 1999(a)
- -------------------------------------------------------------------------------
OPERATIONS
Net investment loss $ (7)
Net realized gain 185
Net unrealized appreciation 2,138
------
Net increase from operations 2,316
DISTRIBUTIONS
In excess of net investment income -- Class A (24)
In excess of net investment income -- Class B (1)
In excess of net investment income -- Class C (1)
------
2,290
------
FUND SHARE TRANSACTIONS
Receipts for shares sold -- Class A 2,479
Value of distributions reinvested -- Class A 24
------
2,503
------
Receipts for shares sold -- Class B 416
Value of distributions reinvested -- Class B 1
------
417
------
Receipts for shares sold -- Class C 112
Value of distributions reinvested -- Class C 1
------
113
------
Net increase from fund share transactions 3,033
------
Total increase 5,323
NET ASSETS
Beginning of period --
------
End of period (net of overdistributed net
investment income of $28) $5,323
======
NUMBER OF FUND SHARES
Sold -- Class A 240
Issued for distributions reinvested -- Class A 2
------
242
------
Sold -- Class B 27
Issued for distributions reinvested -- Class B (b)
------
27
------
Sold -- Class C 11
Issued for distributions reinvested -- Class C (b)
------
11
------
(a) The Fund commenced investment operations on August 19, 1998.
(b) Rounds to less than one.
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
June 30, 1999
NOTE 1. ACCOUNTING POLICIES
ORGANIZATION
Newport Asia Pacific Fund, a series of Liberty Funds Trust VI, formerly Colonial
Trust VI, is a non-diversified portfolio of a Massachusetts business trust,
registered under the Investment Company Act of 1940, as amended, as an open-end
management investment company. The Fund's investment objective is to seek
capital appreciation by investing primarily in equity securities of companies
located in or which derive a substantial portion of their revenue from business
activity with or in the Asian Pacific Region. The Fund may issue an unlimited
number of shares. The Fund offers three classes of shares: Class A, Class B and
Class C. Class A shares are sold with a front-end sales charge. A 1.00%
contingent deferred sales charge is assessed on redemptions made within eighteen
months on an original purchase of $1 million to $5 million. 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 C shares are subject to a contingent deferred
sales charge on redemptions made within one year after purchase and an annual
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 period. Actual results
could differ from those estimates. The following is a summary of significant
accounting policies that are consistently followed by the Fund in the
preparation of its financial statements.
SECURITY VALUATION AND TRANSACTIONS
Equity securities generally 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. In certain countries, the Fund may hold foreign
designated shares. If the foreign share prices are not readily available as a
result of limited share 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. Korean equity securities that have reached the limit for
aggregate foreign ownership and for which premiums to the local exchange
prices may be paid by foreign investors are valued by applying a broker quoted
premium to the local share price. In addition, if the values of foreign
securities have been materially affected by events occurring after the closing
of the market, the foreign securities may be valued at their current value.
Forward currency contracts are valued based on the weighted value of the
exchange traded contracts with similar durations.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
The value of all assets and liabilities quoted in foreign currencies are
translated into U.S. dollars at that day's exchange rates.
In certain countries, the Fund may hold portfolio positions for which market
quotations are not readily available. Such securities are valued at fair value
under procedures approved by the Trustees.
Security transactions are accounted for on the date the securities are
purchased, sold or mature.
Cost is determined and gains and losses are based upon the specific
identification method for both financial statement and federal income tax
purposes.
DETERMINATION OF CLASS NET ASSET VALUES
AND FINANCIAL HIGHLIGHTS
All income, expenses (other than the Class A, Class B and Class C service fees
and the Class B and Class C 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.
The per share data was calculated using average shares outstanding during the
period. In addition, Class A, Class B and Class C net investment income per
share data reflects the service fee per share applicable to Class A, Class B
and Class C shares and the distribution fee applicable to Class B and Class C
shares only.
Class A, Class B and Class C ratios are calculated by adjusting the expense
and net investment income ratios for the Fund for the entire period by the
service fee applicable to Class A, Class B and Class C shares and the
distribution fee applicable to Class B and Class C 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.
FOREIGN CURRENCY TRANSACTIONS
Net realized and unrealized gains (losses) on foreign currency transactions
includes the gains (losses) arising from the fluctuation in exchange rates
between trade and settlement dates on securities transactions, gains (losses)
arising from the disposition of foreign currency and currency gains (losses)
between the accrual and payment dates on dividends and interest income and
foreign withholding taxes.
The Fund does not distinguish that portion of gains (losses) on investments
which is due to changes in foreign exchange rates from that which is due to
changes in market prices of the investments. Such fluctuations are included
with the net realized and unrealized gains (losses) from investments.
FORWARD CURRENCY CONTRACTS
The Fund may enter into forward currency contracts to purchase or sell foreign
currencies at predetermined exchange rates in connection with the settlement
of purchases and sales of securities. The Fund may also enter into forward
currency contracts to hedge certain other foreign currency denominated assets.
The contracts are used to minimize the exposure to foreign exchange rate
fluctuations during the period between trade and settlement date of the
contracts. All contracts are marked-to-market daily, resulting in unrealized
gains (losses) which become realized at the time the forward currency
contracts are closed or mature. Realized and unrealized gains (losses) arising
from such transactions are included in net realized and unrealized gains
(losses) on foreign currency transactions. Forward currency contracts do not
eliminate fluctuations in the prices of the Fund's portfolio securities. While
the maximum potential loss from such contracts is the aggregate face value in
U.S. dollars at the time the contract is opened, the actual exposure is
typically limited to the change in value of the contract (in U.S. dollars)
over the period it remains open. Risks may also arise if counterparties fail
to perform their obligations under the contracts.
OTHER
Corporate actions are recorded on the ex-date (except for certain foreign
securities which are recorded as soon after ex-date as the Fund becomes aware
of such), net of nonreclaimable tax withholdings. Where a high level of
uncertainty as to collection exists, income on securities is recorded net of
all tax withholdings with any rebates recorded when received.
The Fund's custodian takes possession through the federal book-entry system of
securities collateralizing repurchase agreements. Collateral is marked-to-
market daily to ensure that the market value of the underlying assets remains
sufficient to protect the Fund. The Fund may experience costs and delays in
liquidating the collateral if the issuer defaults or enters bankruptcy.
NOTE 2. FEES AND COMPENSATION PAID TO AFFILIATES
MANAGEMENT FEE
Newport Fund Management, Inc. (the Advisor), is the investment Advisor of the
Fund and receives a monthly fee equal to 1.00% annually of the Fund's average
net assets.
ADMINISTRATION FEE
Colonial Management Associates, Inc. (the Administrator), an affiliate of the
Advisor, provides accounting and other services for a monthly fee equal to
0.25% annually of the Fund's average net assets.
BOOKKEEPING FEE
The Administrator provides bookkeeping and pricing services for a monthly fee
equal to $27,000 annually plus 0.035% annually of the Fund's average net
assets over $50 million.
TRANSFER AGENT
Liberty Funds Services, Inc. (the Transfer Agent), an affiliate of the
Administrator, provides shareholder services for a monthly fee equal to 0.236%
annually of the Fund's average net assets and receives reimbursement for
certain out of pocket expenses.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES
Liberty Funds Distributor, Inc. (the Distributor), a subsidiary of the
Administrator, is the Fund's principal underwriter. For the period ended June
30, 1999, the Fund has been advised that the Distributor retained no net
underwriting discounts on sales of the Fund's Class A shares and received no
contingent deferred sales charges (CDSC) on Class A, Class B and Class C share
redemptions.
The Fund has adopted a 12b-1 plan which requires it to pay the Distributor a
service fee equal to 0.25% annually on Class A, Class B and Class C 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% of the average net assets
attributable to Class B and Class C shares.
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 Advisor/Administrator have agreed, until further notice, to waive fees and
bear certain Fund expenses to the extent that total annual operating expenses
(exclusive of service fees, distribution fees, brokerage commissions,
interest, taxes and extraordinary expenses, if any) exceed 1.90% annually of
the Fund's average net assets.
OTHER
The Fund pays no compensation to its officers, all of whom are employees of
the Advisor or Administrator.
The Fund's Trustees may participate in a deferred compensation plan which may
be terminated at any time. Obligations of the plan will be paid solely out of
the Fund's assets.
NOTE 3. PORTFOLIO INFORMATION
INVESTMENT ACTIVITY
During the period ended June 30, 1999, purchases and sales of investments,
other than short-term obligations, were $3,282,833 and $807,559, respectively.
Unrealized appreciation (depreciation) at June 30, 1999, based on cost of
investments for federal income tax purposes was:
Gross unrealized appreciation $2,102,774
Gross unrealized depreciation (8,063)
----------
Net unrealized appreciation $2,094,711
==========
OTHER
There are certain additional risks involved when investing in foreign
securities that are not inherent with investments in domestic securities.
These risks may involve foreign currency exchange rate fluctuations, adverse
political and economic developments and the possible prevention of currency
exchange or other foreign governmental laws or restrictions.
The Fund may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
NOTE 4. LINE OF CREDIT
The Fund may borrow up to 33 1/3% 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 period ended June 30, 1999.
NOTE. 5. OTHER RELATED PARTY TRANSACTIONS
At June 30, 1999, Colonial Management Associates, Inc. owned 89.9% of the
Fund's outstanding shares.
<PAGE>
FINANCIAL HIGHLIGHTS
Selected data for a share of each class outstanding
throughout each period are as follows:
<TABLE>
<CAPTION>
PERIOD ENDED JUNE 30, 1999(b)
---------------------------------------------------------------
CLASS A CLASS B CLASS C
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.000 $ 10.000 $ 10.000
--------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (a)(c)(d) (0.019) (0.107) (0.107)
Net realized and unrealized gain 9.135 9.101 9.101
--------- --------- ---------
Total from Investment Operations 9.116 8.994 8.994
--------- --------- ---------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
In excess of net investment income (0.106) (0.094) (0.094)
--------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 19.010 $ 18.900 $ 18.900
--------- --------- ---------
Total return (e)(f)(g) 91.64% 90.36% 90.36%
--------- --------- ---------
RATIOS TO AVERAGE NET ASSETS
Expenses (h)(i) 2.15% 2.90% 2.90%
Net investment loss (h)(i) (0.15)% (0.90)% (0.90)%
Fees and expenses waived or borne by the Advisor/
Administrator (h)(i) 3.10% 3.10% 3.10%
Portfolio turnover (g) 26% 26% 26%
Net assets at end of period (000) $ 4,606 $ 515 $ 202
(a) Net of fees and expenses waived or borne by the
Advisor/Administrator which amounted to: $ 0.365 $ 0.365 $ 0.365
(b) The Fund commenced investment operations on August 19, 1998.
(c) Per share data was calculated using average shares outstanding during the period.
(d) Includes distributions from securities listed on the Statement of Operations which amounted to $0.014, $0.012, $0.024, $0.018,
$0.012, $0.034 and $0.014 per share, respectively.
(e) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales
charge.
(f) Had the Advisor/Administrator not waived or reimbursed a portion of expenses, total return would have been reduced.
(g) Not annualized.
(h) The benefits derived from custody credits and directed brokerage arrangements had no impact.
(i) Annualized.
</TABLE>
- -------------------------------------------------------------------------------
Federal Income Tax information (unaudited).
Foreign taxes paid during the fiscal year ended June 30, 1999 amounting to
$2,715 ($0.0098 per share) are expected to be passed through to the shareholders
as 100% allowable foreign tax credits on Form 1099-DIV for the year ending
December 31, 1999. Gross income derived from sources within foreign countries
amounted to $56,249 ($0.2029 per share) for the fiscal year ended June 30, 1999.
- ------------------------------------------------------------------------------
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE TRUSTEES OF LIBERTY FUNDS TRUST VI AND THE SHAREHOLDERS OF
NEWPORT ASIA PACIFIC FUND
In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Newport Asia Pacific Fund (the
"Fund") (a series of Liberty Funds Trust VI, formerly Colonial Trust VI), at
June 30, 1999, the results of its operations, the changes in its net assets and
the financial highlights for the period from August 19, 1998 (commencement of
operations) through June 30, 1999 in conformity with generally accepted
accounting principles. These financial statements and the financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audit. We conducted our audit of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit, which included
confirmation of portfolio positions at June 30, 1999 by correspondence with the
custodian, provides a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
August 11, 1999
<PAGE>
ANNUAL REPORT: NEWPORT ASIA PACIFIC FUND
TRUSTEES & TRANSFER AGENT
ROBERT J. BIRNBAUM
Consultant (formerly Special Counsel, Dechert, Price & Rhoads; President and
Chief Operating Officer, New York Stock Exchange, Inc.; President, American
Stock Exchange Inc.)
TOM BLEASDALE
Retired (formerly Chairman of the Board and Chief Executive Officer, Shore Bank
& Trust Company)
JOHN V. CARBERRY
Senior Vice President of Liberty Financial Companies, Inc. (formerly Managing
Director, Salomon Brothers)
LORA S. COLLINS
Attorney (formerly Attorney, Kramer, Levin, Naftalis & Frankel)
JAMES E. GRINNELL
Private Investor (formerly Senior Vice President-Operations, The Rockport
Company)
RICHARD W. LOWRY
Private Investor (formerly Chairman and Chief Executive Officer, U.S. Plywood
Corporation)
SALVATORE MACERA
Private Investor (formerly Executive Vice President of Itek Corp. and President
of Itek Optical & Electronic Industries, Inc.)
WILLIAM E. MAYER
Partner, Development Capital, LLC (formerly Dean, College of Business and
Management, University of Maryland; Dean, Simon Graduate School of Business,
University of Rochester; Chairman and Chief Executive Officer, CS First Boston
Merchant Bank; and President and Chief Executive Officer, The First Boston
Corporation)
JAMES L. MOODY, JR.
Retired (formerly Chairman of the Board, Chief Executive Officer and Director
Hannaford Bros. Co.)
JOHN J. NEUHAUSER
Dean, Boston College School of Management
THOMAS E. STITZEL
Professor of Finance, College of Business, Boise State University; Business
Consultant and Author
ROBERT L. SULLIVAN
Retired Partner, KPMG LLP (formerly Management Consultant, Saatchi and Saatchi
Consulting Ltd. and Principal and International Practice Director, Management
Consulting, Peat Marwick Main & Co.)
ANNE-LEE VERVILLE
Consultant (formerly General Manager, Global Education Industry, and President,
Applications Solutions Division, IBM Corporation)
- --------------------------------------------------------------------------------
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Newport Asia Pacific Fund is:
Liberty Funds Services, Inc.
P.O. Box 1722
Boston, MA 02105-1722
1-800-345-6611
The Fund mails one shareholder report to each shareholder address. If you would
like more than one report, please call 1-800-426-3750 and additional reports
will be sent to you.
This report has been prepared for shareholders of Newport Asia Pacific Fund.
This report may also be used as sales literature when preceded or accompanied by
the current prospectus which provides details of sales charges, investment
objectives and operating policies of the Fund, and with the most recent copy of
the Liberty Funds Distributor, Inc. Performance Update.
<PAGE>
- --------------------------------------------------------------------------------
CHOOSE LIBERTY
- --------------------------------------------------------------------------------
BECAUSE NO SINGLE INVESTMENT MANAGER CAN BE ALL THINGS TO ALL INVESTORS.(SM)
- --------------------------------------------------------------------------------
L I B E R T Y
- --------------------------------------------------------------------------------
[Graphic Omitted] Colonial has long been a recognized leader in fixed-income
investing. In addition, Colonial has distinguished itself
with both a traditional value and a more contemporary
approach to equity investing.
- --------------------------------------------------------------------------------
[Graphic Omitted] Crabbe Huson's contrarian investment style seeks long-term
performance by investing in stocks from high-quality,
out-of-favor companies. This risk-averse strategy
capitalizes on the potential of these companies to regain
market popularity.
- --------------------------------------------------------------------------------
[Graphic Omitted] LAMCO brings institutional money management to individual
investors through a disciplined multi-manager investment
process that seeks to deliver consistent long-term returns.
- --------------------------------------------------------------------------------
[Graphic Omitted] A leader in Asian investing(TM), Newport has an unparalleled
knowledge of Asian economies, business and culture.
- --------------------------------------------------------------------------------
[Graphic Omitted] Stein Roe's growth management style emphasizes companies
with the ability to create, maintain and grow earnings in
different market environments.
- --------------------------------------------------------------------------------
BOSTON o CHICAGO o NEW YORK o PORTLAND o SAN FRANCISCO
- --------------------------------------------------------------------------------
That's why each of these affiliated managers has excelled in a particular
investment style. These managers not only specialize in a distinct investment
style, they hold a passion for their style along with a demonstrated track
record.
Each of these managers is a member of the Liberty Financial Companies (NYSE: L),
a diversified asset accumulation and management organization with over $62.7
billion in assets under management for more than 1.7 million investors. Many of
the affiliated managers' products are offered by prospectus through Liberty
Funds Distributor, Inc.
Ask your financial advisor to help you develop an investment strategy that
blends the complementary disciplines of different managers into a well-balanced
program tailored to your goals.
- --------------------------------------------------------------------------------
NEWPORT ASIA PACIFIC FUND ANNUAL REPORT, JUNE 30, 1999
- --------------------------------------------------------------------------------
[Graphic ALL-STAR o COLONIAL o CRABBE HUSON o NEWPORT o STEIN ROE ADVISOR
Omitted] Liberty Funds Distributor, Inc. (C)1999
One Financial Center, Boston, MA 02111-2621, 1-800-426-3750
Visit us at www.libertyfunds.com
NP-02/414H-0699 (8/99) 99/952
