<PAGE>
[Logo]
Liberty
Growth & Income Fund
Annual Report, June 30, 2000
[graphic omitted]
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PRESIDENT'S MESSAGE
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[Photo of Stephen E. Gibson]
Dear Shareholder:
You may have noticed that your Fund has a new name. Beginning July 14, the names
of our funds changed to include Liberty. Rest assured, the investment objectives
and strategies employed by the Fund's managers are not affected by this name
change. We believe the new name better reflects that your Fund is part of the
Liberty Funds, a diverse family of funds representing a wide selection of
investment styles and specialized money management. The goal of all Liberty
funds is to help you reach for financial freedom -- however you define it.
The Fund's fiscal year proved to be one of significant fluctuation as investor
sentiment seemed to shift from continued optimism to one of concern in just a
matter of months. As 1999 came to a close, stocks again showed strength,
particularly larger-cap stocks, which ended the year with another double-digit
return. Early in 2000, the environment began to change. First, large-company
stocks started losing ground while smaller-cap technology names came to the
forefront. As the year progressed, a broad range of stocks, including technology
stocks, struggled to regain their footing.
The volatile and somewhat shaky market environment was spurred on in large part
by growing concerns about the rapid pace of economic growth in the U.S. The
economy's surprising strength increased the threat of higher inflation, a trend
that is historically negative for stocks and bonds. The Federal Reserve (the
Fed) paid significant attention to the economy's rapid expansion, and raised
interest rates on short-term securities by 1.5% from 1999 through the end of the
Fund's fiscal year. The Fed's ongoing efforts seemed to encourage investors that
inflation would remain under control, and stock markets began to stabilize by
the end of the Fund's fiscal year.
The following report provides a discussion of your Fund and the economic and
market factors that have had an impact on its performance. Thank you for
including Liberty Growth & Income Fund as part of your portfolio and allowing us
to help you meet your investment goals.
Respectfully,
/s/ Stephen E. Gibson
Stephen E. Gibson
President
August 10, 2000
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PERFORMANCE HIGHLIGHTS (AS OF 6/30/00)
NET ASSET VALUE PER SHARE
Class A $20.60
Class B $19.88
Class C $19.99
Class Z $20.70
DISTRIBUTIONS DECLARED PER SHARE (7/1/99 - 6/30/00)
Class A $1.500
Class B $1.500
Class C $1.500
Class Z $1.500
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Because economic and market conditions change frequently, there can be no
assurance that the trends described in this report will continue or come to
pass.
<PAGE>
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PERFORMANCE INFORMATION
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Change in Value of a
$10,000 Investment for Class A Shares
7/1/92 - 6/30/00
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CHANGE IN VALUE OF A $10,000 INVESTMENT
IN ALL SHARE CLASSES
FROM 7/1/92 - 6/30/00
With Without
Sales Sales
Charge Charge
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Class A $32,693 $34,688
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Class B $32,606 $32,606
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Class C $32,626 $32,626
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Class Z -- $34,849
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The Standard & Poor's 500 Index is an unmanaged index that tracks the
performance of 500 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.
<TABLE>
Average Annual Total Returns as of 6/30/00
<CAPTION>
Share Class A B C Z
Inception Date 7/1/92 7/1/92 7/1/94 1/11/99
--------------------------------------------------------------------------------------------------------------------
Without With Without With Without With Without
sales sales sales sales sales sales sales
charge charge charge charge charge charge charge
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 1.43% -4.40% 0.64% -4.03% 0.68% -0.25% 1.72%
--------------------------------------------------------------------------------------------------------------------
5 years 18.49% 17.10% 17.59% 17.38% 17.59% 17.59% 18.60%
--------------------------------------------------------------------------------------------------------------------
Life of Fund 16.81% 15.95% 15.91% 15.91% 15.92% 15.92% 16.88%
Past performance cannot predict future results. Returns and value of an investment will vary resulting in a gain or a
loss on sale. All results shown assume reinvestment of distributions. The "with sales charge" returns include the
maximum 5.75% sales charge for Class A shares, the appropriate Class B contingent deferred sales charge for the
holding period after purchase as follows: through first year-5%, second year-4%, third year-3%, fourth year-3%, fifth
year-2%, sixth year-1%, thereafter-0% and the Class C contingent deferred sales charge of 1% for the first year only.
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 reimbursements of Fund expenses by the Advisor or its
affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower.
Classes C and Z share performance information includes returns of the Fund's Class B and Class A shares respectively
(as their expense structure more closely resembles that of the newer classes) for periods prior to the inception of
the newer classes. Share class returns are not restated to reflect any expense differential (e.g., Rule 12b-1 fees)
between the older and newer class shares. Had the expense differential been reflected, the returns for the periods
prior to the inception of the newer classes would have been different.
</TABLE>
LGIF without LGIF with
sales charge sales charge S&P 500 Index
----------------------------------------------------------
07/01/92 $10,000 $ 9,425 $10,000
07/31/92 10,421 9,821 10,408
08/31/92 10,140 9,557 10,195
09/31/92 10,210 9,623 10,315
10/31/92 10,289 9,698 10,351
11/30/92 10,660 10,047 10,703
12/31/92 10,957 10,327 10,834
01/31/93 11,088 10,450 10,925
02/28/93 11,078 10,441 11,074
03/31/93 11,599 10,932 11,307
04/30/93 11,359 10,706 11,034
05/31/93 11,750 11,074 11,328
06/30/93 11,891 11,207 11,361
07/31/93 11,790 11,112 11,316
08/31/93 12,232 11,529 11,745
09/30/93 12,413 11,699 11,654
10/31/93 12,494 11,775 11,895
11/30/93 12,283 11,576 11,782
12/31/93 12,512 11,793 11,925
01/31/94 12,770 12,036 12,331
02/28/94 12,471 11,754 11,996
03/31/94 12,017 11,326 11,474
04/30/94 12,038 11,345 11,621
05/31/94 12,182 11,482 11,811
06/30/94 11,896 11,212 11,521
07/31/94 12,144 11,446 11,899
08/31/94 12,684 11,954 12,386
09/30/94 12,528 11,807 12,084
10/31/94 12,694 11,964 12,355
11/30/94 12,297 11,573 11,905
12/31/94 12,469 11,752 12,081
01/31/95 12,781 12,046 12,394
02/28/95 13,382 12,612 12,876
03/31/95 13,704 12,916 13,256
04/30/95 14,005 13,199 13,646
05/31/95 14,583 13,744 14,190
06/30/95 14,851 13,997 14,519
07/31/95 15,332 14,451 15.000
08/31/95 15,244 14,367 15,037
09/30/95 15,769 14,863 15,672
10/31/95 15,669 14,768 15,616
11/30/95 16,240 15,307 16,300
12/31/95 16,148 15,219 16,614
01/31/96 16,585 15,632 17,179
02/29/96 16,852 15,883 17,339
03/31/96 16,864 15,895 17,505
04/30/96 17,483 16,478 17,763
05/31/96 17,920 16,890 18,219
06/30/96 17,650 16,635 18,288
07/31/96 16,698 15,738 17,480
08/31/96 17,223 16,232 17,849
09/30/96 17,979 16,945 18,852
10/31/96 18,443 17,382 19,372
11/30/96 19,796 18,658 20,835
12/31/96 19,325 18,214 20,422
01/31/97 20,651 19,463 21,697
02/28/97 20,690 19,500 21,868
03/31/97 19,960 18,812 20,972
04/30/97 21,167 19,950 22,222
05/31/97 22,427 21,137 23,579
06/30/97 23,319 21,978 24,629
07/31/97 25,446 23,983 26,587
08/31/97 24,489 23,081 25,098
09/30/97 25,858 24,371 26,471
10/31/97 24,622 23,206 25,587
11/30/97 25,553 24,084 26,771
12/31/97 26,123 24,621 27,232
01/31/98 26,392 24,874 27,531
02/28/98 28,311 26,683 29,516
03/31/98 29,703 27,995 31,028
04/30/98 29,689 27,981 31,344
05/31/98 28,926 27,262 30,805
06/30/98 30,004 28,279 32,056
07/31/98 29,464 27,770 31,716
08/31/98 24,700 23,280 27,133
09/30/98 25,794 24,311 28,872
10/31/98 27,922 26,317 31,216
11/30/98 29,645 27,940 33,108
12/31/98 31,362 29,558 35,015
01/31/99 32,193 30,342 36,479
02/28/99 30,847 29,073 35,344
03/31/99 31,865 30,033 36,758
04/30/99 32,741 30,859 38,181
05/31/99 32,286 30,430 37,280
06/30/99 34,197 32,231 39,341
07/31/99 33,305 31,390 38,118
08/31/99 32,929 31,035 37,927
09/30/99 31,677 29,856 36,888
10/31/99 33,008 31,110 39,223
11/30/99 33,367 31,449 40,019
12/31/99 34,939 32,930 42,372
01/31/00 33,070 31,168 40,245
02/29/00 31,790 29,962 39,485
03/31/00 35,360 33,327 43,346
04/30/00 35,360 33,327 42,042
05/31/00 35,123 33,104 41,180
06/30/00 34,688 32,693 42,193
<PAGE>
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TOP 10 HOLDINGS AS OF 6/30/00
GENERAL ELECTRIC 2.9%
CITIGROUP 2.7%
INTEL 2.7%
CISCO SYSTEMS 2.5%
EXXON MOBIL 2.5%
PFIZER 1.6%
SBC COMMUNICATIONS 1.5%
ROYAL DUTCH PETROLEUM 1.3%
AMERICAN INT'L GROUP 1.3%
IBM 1.2%
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 HOLD THESE SECURITIES IN THE FUTURE.
HELD
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ENERGY (10.3% OF NET ASSETS)
HIGHER OIL PRICES HAVE ENCOURAGED INCREASED DRILLING ACTIVITY TO TRY
TO SATISFY RISING DEMAND. THIS HAS BOOSTED BUSINESS FOR A NUMBER OF
OIL SERVICE COMPANIES, INCLUDING SCHLUMBERGER (1.0% OF NET ASSETS)
WHICH PROVIDES EQUIPMENT AND SERVICES THAT ARE USED IN THE DRILLING
PROCESS. SCHLUMBERGER IS WELL POSITIONED TO TAKE ADVANTAGE OF THE
INCREASE IN OIL EXPLORATION AND RECOVERY.
HELD
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INTEL (2.7% OF NET ASSETS)
SEMICONDUCTOR STOCKS HAVE BEEN PERFORMING WELL, AND THE INDUSTRY
LEADER, INTEL, CONTINUES TO ROLL ALONG. ITS STRONG FOOTHOLD IN THE
PERSONAL COMPUTER MARKETPLACE IS ONLY PART OF THE STORY. INTEL IS
EXPERIENCING ITS MOST SIGNIFICANT GROWTH BY PROVIDING SEMICONDUCTORS
USED FOR THE FAST-GROWING WIRELESS COMMUNICATIONS INDUSTRY. A RECENT
TREND OF TIGHTER SUPPLIES FOR SEMICONDUCTORS SHOULD IMPROVE PRICING
AND PROFITABILITY FOR INTEL THROUGH 2001, ALLOWING THE COMPANY TO
MAINTAIN ITS SOLID POSITION OF STRENGTH IN THE INDUSTRY.
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PORTFOLIO MANAGERS' REPORT
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MAINTAINED STRATEGY IN A
CHALLENGING ENVIRONMENT
For the 12-month period ended June 30, 2000, the Fund's Class A shares had a
total return of 1.43%, not including the sales charge. This return was much
better than comparable large capitalization value funds ranked by Morningstar
(TM), which earned a return of negative 5.21% for the same period. Both the
Fund and its peer group lagged the S&P 500 Index, which had a total return of
7.24% for the 12 months.
The past year again proved challenging for the disciplined investment style we
employ. Our focus continues to be on finding stocks within the S&P 500 Index
with strong potential for return that offer currently attractive prices. Our
bias toward value stocks proved to be out of favor through most of the year.
Also, the Fund's highly diversified approach, investing in each segment of the
S&P 500 Index without placing major emphasis in a particular sector, prevented
us from taking full advantage of the most attractive areas of the market. In
the first half of the fiscal year, technology stocks again proved to be the
dominant force. Those stocks slowed their pace early in 2000, but by then, the
market as a whole pulled back a bit from the significant rise it has enjoyed
in recent years.
HELPED BY GOOD STOCK SELECTION
The Fund's return benefited from our disciplined investment strategy and our
ability to identify and purchase some of the best stocks within different
industries represented in the S&P 500 Index. Another reason we were able to
maintain solid performance in this difficult environment was a slightly
heavier-than-average weighting in energy and semiconductor stocks.
(C) 2000 by Morningstar, Inc. All rights reserved. The information contained
herein is the proprietary information of Morningstar, Inc., may not be copied
or redistributed for any purpose and may only be used for non-commercial,
personal purposes. The information contained herein is not represented or
warranted to be accurate, correct, complete or timely. Morningstar, Inc. shall
not be responsible for investment decisions, damages or other losses resulting
from use of this information. Past performance is no guarantee of future
performance. Morningstar, Inc. has not granted consent for it to be considered
or deemed an "expert" under the Securities Act of 1933.
FINANCIAL STOCKS SUFFER DUE TO RATE HIKES
One of the most significant trends of the past year was that the Federal
Reserve raised short-term interest rates by 1.5%. This led to volatility for
most of the bond market, and the interest rate hikes had a negative effect on
financial companies. The bottom line of these firms can be negatively affected
by rising interest rates, and the upward trend in rates generally drove
investors away from stocks of financial firms, depressing their prices.
A PERIOD OF MODEST EXPECTATIONS
Many investors may have come to expect the markets to continue to deliver
double-digit returns, which has been the case for several years. There has
been an unprecedented run of strength, but it appears that, for the near term,
it may make sense to maintain more modest expectations. The first half of 2000
was generally a difficult period for stocks, notable for extreme market
volatility. While we anticipate that the volatility will continue, we expect
the environment to improve slightly for stocks through the rest of 2000. The
Federal Reserve appears to be finished raising interest rates for now,
assuming their efforts to date are successful in slowing economic growth and
keeping inflation under control. If that scenario occurs, investors are likely
to breathe easier. However, the sustained bull run in the stock market has
resulted in high stock prices relative to company earnings. This adds a
certain amount of risk to the environment. We believe the best way to cope
with that risk is to maintain a broadly diversified portfolio, a strategy we
will continue to employ in this Fund.
An investment in the Fund offers significant long-term growth potential, but
also involves certain risks. The Fund may be affected by stock market
fluctuations that occur in response to economic and business developments.
Changes in interest rates, changes in financial strength of issuers of lower
rated bonds, and foreign, political and economic developments also may affect
Fund performance.
Effective August 1, 2000, Harvey B. Hirshhorn and Scott Schermerhorn became
managers of the Fund, replacing Mark Stoeckle. Mr. Hirschhorn and Mr.
Schermerhorn are senior vice presidents of Colonial Management Associates,
Inc.
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SECTOR BREAKDOWN (AS OF 6/30/00)
-------------------------------------------------------------------------------
Technologies: 22.2%
Financials: 19.0%
Consumer Staples: 10.4%
Energy: 10.3%
Healthcare: 9.6%
Capital Goods: 8.4%
Comm. Services: 6.6%
Consumer Cyclical: 6.0%
Basic Materials: 3.4%
Utilities: 2.6%
Trnasportation: 1.5%
INDUSTRY SECTORS IN THE FOLLOWING FINANCIAL STATEMENTS ARE BASED UPON THE
STANDARD INDUSTRIAL CLASSIFICATIONS (SIC) AS PUBLISHED BY THE U.S. OFFICE OF
MANAGEMENT AND BUDGET. THE SECTOR CLASSIFICATIONS USED ON THIS PAGE ARE BASED
UPON THE ADVISOR'S DEFINED CRITERIA AS USED IN THE INVESTMENT PROCESS.
BECAUSE THE FUND IS ACTIVELY MANAGED, THERE CAN BE NO GUARANTEE THE FUND WILL
CONTINUE TO MAINTAIN THESE SECTOR ALLOCATIONS IN THE FUTURE.
<PAGE>
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INVESTMENT PORTFOLIO
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June 30, 2000
(In thousands)
COMMON STOCKS - 94.4% SHARES VALUE
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AGRICULTURE, FORESTRY & FISHING - 0.3%
FORESTRY
Canadian National Railway Co. 133 $ 3,885
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FINANCE, INSURANCE & REAL ESTATE - 19.5%
DEPOSITORY INSTITUTIONS - 5.9%
Bank of America Corp. 231 9,943
Chase Manhattan Corp. 186 8,588
City National Corp. 120 4,242
FleetBoston Financial Corp. 349 11,852
Golden State Bancorp, Inc. (a) 171 3,083
Golden West Financial Corp. 89 3,636
J.P. Morgan & Co., Inc. 55 6,068
MBNA Corp. 210 5,704
PNC Bank Corp. 105 4,917
Pacific Century Financial Corp. 146 2,128
Sovereign Bancorp, Inc. 505 3,552
UnionBanCal Corp. 155 2,879
Wells Fargo & Co. 58 2,240
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68,832
----------
FINANCIAL SERVICES - 0.7%
AXA Financial, Inc. 61 2,057
Cincinnati Financial Corp. 188 5,920
----------
7,977
----------
INSURANCE CARRIERS - 8.2%
Ace, Ltd. 82 2,288
Ambac Financial Group, Inc. 41 2,220
American International Group, Inc. 132 15,542
Citigroup, Inc. 523 31,529
HCA-The Healthcare Corp. 346 10,513
Loews Corp. 42 2,520
MGIC Investment Corp. 123 5,597
Nationwide Financial Services, Inc., Class A 229 7,519
PMI Group, Inc. 131 6,227
United Healthcare Corp. 127 10,865
----------
94,820
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NONDEPOSITORY CREDIT INSTITUTIONS - 2.6%
American Express Co. 144 7,506
Capital One Financial Corp. 72 3,217
Fannie Mae 163 8,527
Freddie Mac 108 4,386
Household International, Inc. 83 3,462
Providian Financial Corp. 30 2,709
----------
29,807
----------
SECURITY BROKERS & DEALERS - 2.1%
Bear Stearns Cos., Inc. 30 1,256
Lehman Brothers Holdings, Inc. 101 9,541
Morgan Stanley Dean Witter & Co. 166 13,811
----------
24,608
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MANUFACTURING - 48.8%
CHEMICALS & ALLIED PRODUCTS - 8.4%
Amgen, Inc. 81 $ 5,676
Bristol-Myers Squibb Co. 166 9,681
Dow Chemical Co. 351 10,581
E.I. du Pont de Nemours & Co. 60 2,634
Eli Lilly & Co. 115 11,436
FMC Corp. (a) 43 2,506
Johnson & Johnson 70 7,121
Merck & Co., Inc. 156 11,938
Mylan Laboratories, Inc. 239 4,355
Pfizer, Inc. 389 18,657
Procter & Gamble Co. 157 9,006
Schering-Plough Corp. 86 4,363
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97,954
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COMMUNICATIONS EQUIPMENT - 1.5%
ADC Telecommunications, Inc. (a) 82 6,836
Comverse Technology, Inc. (a) 32 2,995
Lucent Technologies, Inc. 43 2,536
Nokia Oyj ADR 112 5,613
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17,980
----------
ELECTRICAL INDUSTRIAL EQUIPMENT - 2.9%
General Electric Co. 641 33,947
----------
ELECTRONIC & ELECTRICAL EQUIPMENT - 0.5%
Applied Micro Circuits Corp. (a) 12 1,145
Atmel Corp. (a) 117 4,311
----------
5,456
----------
ELECTRONIC COMPONENTS - 5.1%
Analog Devices, Inc. (a) 83 6,300
Intel Corp. 233 31,122
LSI Logic Corp. (a) 53 2,879
Microchip Technology, Inc. (a) 116 6,747
PMC-Sierra, Inc. (a) 17 2,985
RF Micro Devices, Inc. (a) 47 4,153
Texas Instruments, Inc. 78 5,385
----------
59,571
----------
FOOD & KINDRED PRODUCTS - 5.5%
Anheuser Busch Cos., Inc. 163 12,144
Bestfoods 191 13,199
The Coca Cola Co. 20 1,132
PepsiCo, Inc. 263 11,678
Philip Morris Cos., Inc. 280 7,448
Quaker Oats Co. 121 9,090
The Pepsi Bottling Group, Inc. 325 9,480
----------
64,171
----------
HOUSEHOLD APPLIANCES - 0.3%
Whirlpool Corp. 85 3,968
----------
LUMBER & WOOD PRODUCTS - 0.2%
Weyerhaeuser Co. 51 2,184
----------
MACHINERY & COMPUTER EQUIPMENT - 8.0%
Apple Computer, Inc. 50 2,598
Applied Materials, Inc. (a) 129 11,709
Cisco Systems, Inc. (a) 456 28,997
EMC Corp. (a) 108 8,340
Gateway, Inc. (a) 51 2,894
Hewlett-Packard Co. 90 11,289
International Business Machines Corp. 131 14,331
International Game Technology 61 1,624
Sun Microsystems, Inc. (a) 124 11,258
----------
93,040
----------
MEASURING & ANALYZING INSTRUMENTS - 1.8%
Agilent Technologies, Inc. (a) 29 2,138
Bausch & Lomb, Inc. 125 9,687
Beckman Coulter, Inc. 29 1,699
Honeywell International, Inc. 77 2,609
Teradyne, Inc. (a) 62 4,586
----------
20,719
----------
PAPER PRODUCTS - 1.5%
International Paper Co. 181 5,387
Kimberly-Clark Corp. 66 3,787
Temple-Inland, Inc. 25 1,037
Westvaco Corp. 269 6,665
----------
16,876
----------
PETROLEUM REFINING - 5.7%
BP Amoco PLC ADR 150 8,484
Chevron Corp. 119 10,110
Exxon Mobil Corp. 365 28,665
Lyondell Petrochemical Co. 211 3,539
Royal Dutch Petroleum Co. 254 15,655
----------
66,453
----------
PRIMARY METAL - 0.3%
Alcoa, Inc. 111 3,231
----------
RUBBER & PLASTIC - 0.4%
Grant Prideco, Inc. (a) 165 4,120
----------
STONE, CLAY, GLASS & CONCRETE - 1.6%
Corning, Inc. 21 5,694
Minnesota Mining &
Manufacturing Co. 130 10,750
USG Corp. 63 1,923
----------
18,367
----------
TRANSPORTATION EQUIPMENT - 5.1%
Boeing Co. 333 13,915
Delphi Automotive Systems Corp. 254 3,693
Ford Motor Co. 266 11,451
Johnson Controls, Inc. 82 4,182
Lockheed Martin Corp. 422 10,481
PACCAR, Inc. 137 5,441
United Technologies Corp. 171 10,038
Visteon Corp. (a) 35 404
----------
59,605
----------
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MINING & ENERGY - 4.2%
CRUDE PETROLEUM & NATURAL GAS - 0.3%
Burlington Resources, Inc. 76 2,907
----------
OIL & GAS EXTRACTION - 1.2%
Falcon Drilling Co., Inc. (a) 522 12,295
Transocean Sedco Forex, Inc. 31 1,675
----------
13,970
----------
OIL & GAS FIELD SERVICES - 2.7%
Coflexip SA, ADR 23 1,408
Diamond Offshore Drilling, Inc. 196 6,877
Petroleum Geo-Services ADR (a) 239 4,080
Schlumberger Ltd. 162 12,082
Weatherford International, Inc. (a) 165 6,561
----------
31,008
----------
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RETAIL TRADE - 3.6%
BUILDING, HARDWARE & GARDEN SUPPLY - 0.3%
Home Depot, Inc. 69 3,453
----------
GENERAL MERCHANDISE STORES - 1.1%
Target Corp. 61 3,561
Wal-Mart Stores, Inc. 151 8,684
----------
12,245
----------
HOME FURNISHINGS & EQUIPMENT - 1.4%
Best Buy Co., Inc. (a) 129 8,128
Circuit City Stores, Inc. 101 3,342
RadioShack Corp. 94 4,439
----------
15,909
----------
MISCELLANEOUS RETAIL - 0.5%
CVS Corp. 159 6,368
----------
RESTAURANTS - 0.3%
Darden Restaurants, Inc. 206 3,348
----------
SERVICES - 7.0%
AMUSEMENT & RECREATION - 0.5%
Brunswick Corp. 227 3,766
Harrah's Entertainment, Inc. (a) 89 1,853
----------
5,619
----------
BUSINESS SERVICES - 0.4%
Manpower, Inc. 129 4,115
----------
COMPUTER RELATED SERVICES - 1.7%
America Online, Inc. 113 5,961
Automatic Data Processing, Inc. 106 5,656
First Data Corp. 130 6,431
Network Appliance, Inc. 15 1,240
----------
19,288
----------
COMPUTER SOFTWARE - 3.1%
Adobe Systems, Inc. 74 9,555
Check Point Software
Technologies Ltd. (a) 6 1,207
Microsoft Corp. (a) 159 12,696
Oracle Corp. (a) 148 12,475
----------
35,933
----------
ENGINEERING, ACCOUNTING, RESEARCH &
MANAGEMENT - 0.5%
Dun & Bradstreet Corp. 215 6,149
----------
MOTION PICTURES - 0.8%
The Walt Disney Co. 156 6,035
Time Warner, Inc. 16 1,246
USA Networks, Inc. (a) 102 2,195
----------
9,476
----------
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TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES - 10.3%
AIR TRANSPORTATION - 0.6%
Delta Air Lines, Inc. 80 4,025
UAL, Inc. 56 3,259
----------
7,284
----------
ELECTRIC SERVICES - 2.5%
Duke Energy Corp. 60 3,388
Edison International 236 4,832
Entergy Corp. 252 6,862
PG&E Corp. 116 2,857
TXU Corp. 165 4,853
Unicom Corp. 160 6,205
----------
28,997
----------
RAILROAD - 0.4%
Union Pacific Corp. 138 5,128
----------
TELECOMMUNICATION - 6.8%
AT&T Corp. 348 11,009
AT&T Wireless Group 178 4,967
Bell Atlantic Corp. 123 6,230
BellSouth Corp. 147 6,279
Chris-Craft Industries, Inc. (a) 62 4,083
Comcast Corp., Class A, Special 47 1,883
GTE Corp. 201 12,537
SBC Communications, Inc., Class A 409 17,707
Sprint Corp. 189 9,649
Telephone and Data Systems, Inc. 24 2,436
US Cellular Corp. (a) 30 1,871
----------
78,651
----------
-------------------------------------------------------------------------------
WHOLESALE TRADE - 0.7%
NONDURABLE GOODS - 0.7%
Sysco Corp. 183 7,692
----------
Total Common Stocks (cost of $946,122) (b) 1,095,111
----------
SHORT-TERM OBLIGATIONS - 2.2%
PAR
-------------------------------------------------------------------------------
Repurchase agreement with SBC Warburg Ltd., dated
6/30/00, due 07/03/00 at 6.600% collateralized by
U.S. Treasury notes with various maturities to
2026, market value $26,476 (repurchase
proceeds $25,946) $25,932 25,932
----------
OTHER ASSETS &
LIABILITIES, NET - 3.4%
39,407
-------------------------------------------------------------------------------
NET ASSETS - 100.0% $1,160,450
==========
NOTES TO INVESTMENT PORTFOLIO:
(a) Non-income producing.
(b) Cost for federal income tax purposes is $947,514.
ACRONYM NAME
------- ---------------------------
ADR American Depositary Receipt
<PAGE>
-------------------------------------------------------------------------------
STATEMENT OF ASSETS & LIABILITIES
-------------------------------------------------------------------------------
June 30, 2000
(In thousands except for per share amounts and footnotes)
ASSETS
Investments at value (cost $946,122) $ 1,095,111
Short-term obligations 25,932
------------
1,121,043
RECEIVABLE FOR:
Investments sold 79,285
Dividends 1,427
Fund shares sold 782
Interest 5
Other 5 81,505
----------- ------------
Total Assets 1,202,548
LIABILITIES
PAYABLE FOR:
Investments purchased 38,262
Fund shares repurchased 2,927
ACCRUED:
Management fee 414
Bookkeeping fee 34
Transfer agent fee 351
Deferred Trustees' fees 10
Other 100
-----------
Total Liabilities 42,098
------------
NET ASSETS $ 1,160,450
------------
Net asset value & redemption price
per share - Class A ($309,129/15,004) $ 20.60(a)
------------
Maximum offering price per share -
Class A ($20.60/0.9425) $ 21.86(b)
------------
Net asset value & offering price per
share - Class B ($822,017/41,344) $ 19.88(a)
------------
Net asset value & offering price per
share - Class C ($29,303/1,466) $ 19.99(a)
------------
Net asset value, offering and redemption
price per share - Class Z ($1/c) $ 20.70
------------
COMPOSITION OF NET ASSETS
Capital paid in $ 863,170
Overdistributed net investment income (42)
Accumulated net realized gains 148,333
Net unrealized appreciation 148,989
------------
$ 1,160,450
------------
(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.
(c) Rounds to less than one.
See notes to financial statements.
<PAGE>
-------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
-------------------------------------------------------------------------------
For the Year Ended June 30, 2000
(In thousands)
INVESTMENT INCOME
Dividends $ 15,573
Interest 1,967
---------
17,540
EXPENSES
Management fee $ 9,580
Service fee - Class A, B, C 3,100
Distribution fee - Class B 6,593
Distribution fee - Class C 245
Transfer agent fee 3,533
Bookkeeping fee 420
Trustees fee 56
Custodian fee 14
Audit fee 55
Legal fee 9
Registration fee 48
Reports to shareholders 67
Other 170
--------
Fees waived by the
Manager (242) 23,648
-------- ---------
Net Investment Loss (6,108)
---------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON PORTFOLIO POSITIONS
Net Realized Gain 183,532
Net Change in Unrealized Appreciation/
Depreciation During the Period (170,106)
---------
Net Gain 13,426
---------
Increase in Net Assets from Operations $ 7,318
---------
See notes to financial statements.
<PAGE>
<TABLE>
------------------------------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
------------------------------------------------------------------------------------------------------
(In thousands)
<CAPTION>
YEAR ENDED JUNE 30,
-------------------------------------
2000 1999
------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment loss $ (6,108) $ (3,897)
Net realized gain 183,532 94,674
Net change in unrealized appreciation/depreciation (170,106) 62,504
---------- ----------
Net Increase from Operations 7,318 153,281
---------- ----------
DISTRIBUTIONS:
From net realized gains - Class A (23,656) (13,375)
From net realized gains - Class B (65,520) (32,785)
From net realized gains - Class C (2,406) (1,307)
From net realized gains - Class Z (a) --
---------- ----------
(84,264) 105,814
---------- ----------
FUND SHARE TRANSACTIONS:
Receipts for shares sold - Class A 116,351 102,537
Value of distributions reinvested - Class A 22,474 12,287
Cost of shares repurchased - Class A (161,615) (98,667)
---------- ----------
(22,790) 16,157
---------- ----------
Receipts for shares sold - Class B 158,253 306,775
Value of distributions reinvested - Class B 61,244 30,794
Cost of shares repurchased - Class B (255,162) (152,433)
---------- ----------
(35,665) 185,136
---------- ----------
Receipts for shares sold - Class C 6,542 11,739
Value of distributions reinvested - Class C 2,315 1,245
Cost of shares repurchased - Class C (12,520) (8,663)
---------- ----------
(3,663) 4,321
---------- ----------
Receipts for shares sold - Class Z -- 1
Value of distributions reinvested - Class Z (a) --
Cost of shares repurchased - Class Z (a) --
---------- ----------
(a) --
---------- ----------
Net Increase (Decrease) from Fund Share Transactions (62,118) 205,615
---------- ----------
Total Increase (Decrease) (146,382) 311,429
NET ASSETS
Beginning of period 1,306,832 995,403
---------- ----------
End of period (net of overdistributed net investment income of
$42 and $29, respectively) 1,160,450 1,306,832
---------- ----------
NUMBER OF FUND SHARES
Sold - Class A 5,606 5,206
Issued for distributions reinvested - Class A 1,129 631
Repurchased - Class A (7,844) (5,051)
---------- ----------
(1,109) 786
---------- ----------
Sold - Class B 7,858 15,926
Issued for distributions reinvested - Class B 3,174 1,617
Repurchased - Class B (12,885) (7,905)
---------- ----------
(1,853) 9,638
---------- ----------
Sold - Class C 326 603
Issued for distributions reinvested - Class C 119 65
Repurchased - Class C (630) (445)
---------- ----------
(185) 223
---------- ----------
Sold - Class Z -- (a)
Issued for distributions reinvested - Class Z (a) --
Repurchased - Class Z (a) --
---------- ----------
(a) (a)
---------- ----------
(a) Rounds to less than one.
See notes to financial statements.
</TABLE>
<PAGE>
-------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------
NOTE 1. ACCOUNTING POLICIES
ORGANIZATION:
Liberty Growth & Income Fund (formerly Colonial U.S. Growth & Income Fund)
(the Fund), a series of Liberty Funds Trust VI, is a diversified portfolio of
a Massachusetts business trust, registered under the Investment Company Act of
1940, as amended, as an open-end management company. The Fund's investment
objective is to seek long-term growth and income. The Fund may issue an
unlimited number of shares. The Fund offers four classes of shares: Class A,
Class B, Class C, and Class Z. Class A shares are sold with a front-end sales
charge. A 1.00% contingent deferred sales charge is assessed to Class A shares
purchased without an initial sales charge on redemptions made within eighteen
months on an original purchase of $1 million to $25 million. Class B shares
are subject to an annual distribution fee and a contingent deferred sales
charge. Effective February 1, 2000, class B shares will convert to class A
shares as follows:
CONVERTS TO
ORIGINAL PURCHASE CLASS A SHARES
----------------- --------------
Less than $250,000 8 years
$250,000 to less than $500,000 4 years
$500,000 to less than $1,000,000 3 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. Class Z shares are offered continuously at net asset value. There are
certain restrictions on the purchase of Class Z shares, as described in the
Fund's prospectus.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. The following is a summary
of significant accounting policies consistently followed by the Fund in the
preparation of its financial statements.
SECURITY VALUATION AND TRANSACTIONS:
Equity securities 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.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
Portfolio positions for which market quotations are not readily available 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 (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 Class A, Class B and Class C service fees and
the Class B and Class C distribution fees), and realized and unrealized gains
(losses) are allocated to each class proportionately on a daily basis for
purposes of determining the net asset value of each class.
Per share data was calculated using the 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 per share 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 fees 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.
INTEREST INCOME, DEBT DISCOUNT AND PREMIUM:
Interest income is recorded on the accrual basis. Original issue discount is
accreted to interest income over the life of a security with a corresponding
increase in the cost basis; premium and market discount are not amortized or
accreted.
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions to shareholders are recorded on the ex-date.
The amount and character of income and gains to be distributed are determined
in accordance with income tax regulations which may differ from generally
accepted accounting principles. Reclassifications are made to the Fund's
capital accounts to reflect income and gains available for distribution (or
available capital loss carryforwards) under income tax regulations.
OTHER:
Corporate actions are recorded on the ex-date.
The Fund's custodian takes possession through the federal book-entry system of
securities collateralizing repurchase agreements. Collateral is marked-to-
market daily to ensure that the market value of the underlying assets remains
sufficient to protect the Fund. The Fund may experience costs and delays in
liquidating the collateral if the issuer defaults or enters bankruptcy.
NOTE 2. FEES AND COMPENSATION PAID TO AFFILIATES
MANAGEMENT FEE:
Colonial Management Associates, Inc. (the Advisor) is the investment Advisor
of the Fund and furnishes accounting and other services and office facilities
for a monthly fee based on the Fund's average net assets as follows:
AVERAGE NET ASSETS ANNUAL FEE RATE
------------------ ---------------
First $1 billion 0.80%
Over $1 billion 0.70%
The Manager has voluntarily agreed, until further notice, to waive a portion
of the 0.70% management fees in excess of $1 billion so that it does not
exceed 0.60% annually.
BOOKKEEPING FEE:
The Advisor provides bookkeeping and pricing services for a monthly fee equal
to $27,000 annually plus a percentage of the Fund's average net assets as
follows:
AVERAGE NET ASSETS ANNUAL FEE RATE
------------------ ---------------
First $50 million No Charge
Next $950 million 0.035%
Next $1 billion 0.025%
TRANSFER AGENT FEE:
Liberty Funds Services, Inc. (the Transfer Agent), an affiliate of the
Advisor, provided 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 through December 31, 1999.
Effective January 1, 2000, the Transfer Agent fee was changed to a monthly fee
comprised of 0.07% annually of average net assets plus charges based on the
number of shareholder accounts and transactions. The Transfer Agent continues
to receive reimbursement for certain out-of-pocket expenses.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES:
Liberty Funds Distributor, Inc. (the Distributor), a subsidiary of the
Advisor, is the Fund's principal underwriter. For year ended June 30, 2000,
the Fund has been advised that the Distributor retained net underwriting
discounts of $86,259 on sales of the Fund's Class A shares and received
contingent deferred sales charges (CDSC) of $10,339, $3,368,614 and $9,588 on
Class A, Class B and Class C share redemptions, respectively.
The Fund has adopted a 12b-1 plan which requires it to pay the Distributor a
monthly 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 monthly distribution fee to the Distributor equal to 0.75% annually of the
average net assets attributable to Class B shares and Class C shares, only.
The CDSC and the fees received from the 12b-1 plan are used principally as
repayment to the Distributor for amounts paid by the Distributor to dealers
who sold such shares.
OTHER:
The Fund pays no compensation to its officers, all of whom are employees of
the Advisor.
The Fund's Trustees may participate in a deferred compensation plan which may
be terminated at any time. Obligations of the plan will be paid solely out of
the Fund's assets.
NOTE 3. PORTFOLIO INFORMATION
INVESTMENT ACTIVITY:
During the year ended June 30, 2000, purchases and sales of investments, other
than short-term obligations, were $967,460,800 and $1,154,682,352,
respectively.
Unrealized appreciation (depreciation) at June 30, 2000 based on cost of
investments for federal income tax purposes was:
Gross unrealized appreciation $242,154,581
Gross unrealized depreciation (94,556,978)
------------
Net unrealized appreciation $147,597,602
------------
OTHER:
The Fund may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
NOTE 4. LINE OF CREDIT
The Fund may borrow up to 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 year ended June 30, 2000.
NOTE 5. OTHER RELATED PARTY TRANSACTIONS
During the year ended June 30, 2000, the Fund used Alphatrade, a wholly owned
subsidiary of Colonial Management Associates, Inc., as a broker. Total
commissions paid to Alphatrade during the year were $295,063.
<PAGE>
<TABLE>
--------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------------------------------------------------
Selected data for a share of each class outstanding throughout each period are as follows:
<CAPTION>
YEAR ENDED JUNE 30, 2000
CLASS A CLASS B CLASS C CLASS Z
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 21.840 $ 21.290 $ 21.390 $ 21.880
-------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(a)(b) 0.011 (0.137) (0.138) 0.062
Net realized and unrealized gain 0.249 0.227 0.238 0.258
-------- -------- -------- --------
Total from Investment Operations 0.260 0.090 0.100 0.320
-------- -------- -------- --------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net realized gains (1.500) (1.500) (1.500) (1.500)
-------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 20.600 $ 19.880 $ 19.990 $ 20.700
======== ======== ======== ========
Total return(c) 1.43% 0.64% 0.68% 1.72%
======== ======== ======== ========
RATIOS TO AVERAGE NET ASSETS
Expenses(b) 1.35% 2.10% 2.10% 1.10%
Net investment income (loss)(b) 0.06% (0.69)% (0.69)% 0.31%
Portfolio turnover 81% 81% 81% 81%
Net assets at end of period (000) $309,129 $822,017 $ 29,303 $ 1
(a) Per share data was calculated using average shares outstanding during the period.
(b) Net of fees waived by the Manager which amounted to $0.004 and 0.10%.
(c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent
deferred sales charge.
(d) The benefits derived from custody credits and directed brokerage arrangements had no impact.
--------------------------------------------------------------------------------------------------------------------------
Federal Income Tax information (unaudited)
For the fiscal year ended June 30, 2000 the Fund earned $150,278 of long term capital gains all of which is 20% rate gain.
--------------------------------------------------------------------------------------------------------------------------
<CAPTION>
YEAR ENDED JUNE 30, 1999
CLASS A CLASS B CLASS C CLASS Z(a)
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 20.020 $ 19.680 $ 19.780 $ 20.670
-------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(b) 0.036 (0.109) (0.110) 0.028
Net realized and unrealized gain 2.654 2.589 2.590 1.182
-------- -------- -------- --------
Total from Investment Operations 2.690 2.480 2.480 1.210
-------- -------- -------- --------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net realized gains (0.870) (0.870) (0.870) --
-------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 21.840 $ 21.290 $ 21.390 $ 21.880
======== ======== ======== ========
Total return(c) 13.97% 13.12% 13.05% 5.85%(d)
======== ======== ======== ========
RATIOS TO AVERAGE NET ASSETS
Expenses(e) 1.41% 2.16% 2.16% 1.21%(f)
Net investment income(loss) (e) 0.19% (0.56)% (0.56)% 0.30%(f)
Portfolio turnover 79% 79% 79% 79%
Net assets at end of period (000) $351,972 $919,542 $ 35,317 $ 1
(a) Class Z shares were initially offered on January 11, 1999. Per share amounts reflect activity from that date.
(b) Per share data was calculated using average shares outstanding during the period.
(c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent
deferred sales charge.
(d) Not annualized.
(e) The benefits derived from custody credits and directed brokerage arrangements had no impact.
(f) Annualized.
</TABLE>
<PAGE>
<TABLE>
--------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
--------------------------------------------------------------------------------------------------------------------------
Selected data for a share of each class outstanding throughout each period are as follows:
<CAPTION>
YEAR ENDED JUNE 30, 1998
CLASS A CLASS B CLASS C(b)
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 17.550 $ 17.370 $ 17.440
-------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(a) 0.097 (0.043) (0.044)
Net realized and unrealized gain 4.620 4.553 4.584
-------- -------- --------
Total from Investment Operations 4.717 4.510 4.540
-------- -------- --------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.010) -- --
In excess of net investment income (0.037) -- --
From net realized gains (2.200) (2.200) (2.200)
-------- -------- --------
Total Distributions Declared to Shareholders (2.247) (2.200) (2.200)
-------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 20.020 $ 19.680 $ 19.780
======== ======== ========
Total return(c) 28.66% 27.67% 27.73%
======== ======== ========
RATIOS TO AVERAGE NET ASSETS
Expenses(d) 1.41% 2.16% 2.16%
Net investment income (loss)(d) 0.53% (0.22)% (0.22)%
Portfolio turnover 53% 53% 53%
Net assets at end of period (000) $306,864 $660,305 $ 28,234
(a) Per share data was calculated using average shares outstanding during the period.
(b) Class D shares were redesignated to Class C shares on July 1, 1997.
(c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or
contingent deferred sales charge.
(d) The benefits derived from custody credits and directed brokerage arrangements had no impact.
<CAPTION>
YEAR ENDED JUNE 30, 1997
CLASS A CLASS B CLASS C
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.470 $ 14.360 $ 14.410
-------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(a) 0.099 (0.015) (0.015)
Net realized and unrealized gain 4.314 4.275 4.295
-------- -------- --------
Total from Investment Operations 4.413 4.260 4.280
-------- -------- --------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.072) -- --
In excess of net investment income (0.011) -- --
From net realized gains (1.250) (1.250) (1.250)
-------- -------- --------
Total distributions Declared to Shareholders (1.333) (1.250) (1.250)
-------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 17.550 $ 17.370 $ 17.440
-------- -------- --------
Total return(b) 32.13% 31.21% 31.24%
-------- -------- --------
RATIOS TO AVERAGE NET ASSETS
Expenses(c) 1.45% 2.20% 2.20%
Net investment income (loss)(c) 0.65% (0.10)% (0.10)%
Portfolio turnover 83% 83% 83%
Net assets at end of period (000) $215,680 $411,670 $ 11,553
(a) Per share data was calculated using average shares outstanding during the period.
(b) Total return at net asset value assuming all distributions reinvested and no initial sales charge or
contingent deferred sales charge.
(c) The benefits derived from custody credits and directed brokerage arrangements had no impact.
</TABLE>
<PAGE>
<TABLE>
--------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
--------------------------------------------------------------------------------------------------------------------------
Selected data for a share of each class outstanding throughout each period are as follows:
<CAPTION>
YEAR ENDED JUNE 30, 1996
CLASS A CLASS B CLASS C
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.260 $ 13.180 $ 13.240
-------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(a) 0.121 0.017 0.016
Net realized and unrealized gain 2.292 2.265 2.268
-------- -------- --------
Total from Investment Operations 2.413 2.282 2.284
-------- -------- --------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.118) (0.017) (0.029)
From net realized gains (1.085) (1.085) (1.085)
-------- -------- --------
Total distributions Declared to Shareholders (1.203) (1.102) (1.114)
-------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 14.470 $ 14.360 $ 14.410
-------- -------- --------
Total return(b) 18.85% 17.91% 17.84%
-------- -------- --------
RATIOS TO AVERAGE NET ASSETS
Expenses(c) 1.45% 2.20% 2.20%
Net investment income (loss)(c) 0.87% 0.12% 0.12%
Portfolio turnover 89% 89% 89%
Net assets at end of period (000) $168,554 $306,718 $ 8,458
(a) Per share data was calculated using average shares outstanding during the period.
(b) Total return at net asset value assuming all distributions reinvested and no initial sales charge or
contingent deferred sales charge.
(c) The benefits derived from custody credits and directed brokerage arrangements had no impact. Prior years'
ratios are net of benefits received, if any.
</TABLE>
<PAGE>
-------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
-------------------------------------------------------------------------------
TO THE TRUSTEES OF LIBERTY FUNDS TRUST VI AND THE SHAREHOLDERS OF
LIBERTY GROWTH & INCOME 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 Liberty Growth & Income Fund
(formerly Colonial U.S. Growth & Income Fund) (the "Fund") (a series of Liberty
Funds Trust VI), at June 30, 2000, the results of its operations, the changes in
its net assets and the financial highlights for the periods indicated, in
conformity with accounting principles generally accepted in the United States.
These financial statements and the financial highlights (hereafter referred to
as "financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States which require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of portfolio positions at June 30, 2000 by correspondence with the custodian,
provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
August 10, 2000
<PAGE>
-------------------------------------------------------------------------------
TRUSTEE & TRANSFER AGENT
-------------------------------------------------------------------------------
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
Academic Vice President and Dean of Faculties, Boston College (formerly Dean,
Boston College School of Management)
THOMAS E. STITZEL
Business Consultant and Chartered Financial Analyst
(formerly Professor of Finance, College of Business, Boise State University)
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 Liberty Growth & Income Fund is:
Liberty Funds Services, Inc.
P.O. Box 1722
Boston, MA 02105-1722
800-345-6611
The Funds mail one shareholder report to each shareholder address. If you
would like more than one report, please call 800-426-3750 and additional
reports will be sent to you.
This report has been prepared for shareholders of Liberty Growth & Income
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 Funds and with
the most recent copy of the Liberty Funds Performance Update.
Annual Report:
Liberty Growth & Income Fund
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GIVE ME LIBERTY.(SM)
WE BELIEVE IN FINANCIAL CHOICE
At Liberty, its our job to help you achieve your financial goals. So
whether it's saving for your kids education, building your retirement nest egg,
or managing your income . . . we can help. We offer a diverse family of mutual
funds representing a wide selection of investment styles and specialized money
management. It's all designed to help you reach for financial freedom however
you define it.
WE BELIEVE IN PROFESSIONAL ADVICE
Today's ever-changing financial markets can challenge even the most
seasoned investors. That's why we recommend working with a financial advisor.
With an advisor you have an experienced, knowledgeable professional looking out
for your best interests. Your advisor can help you establish a plan for reaching
your personal financial goals and help you stay on track over the long-term.
It's a relationship that's focused on you and your needs.
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Liberty Growth & Income Fund ANNUAL REPORT, JUNE 30, 2000
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